(xi) (A) no Note Party will be required to take any action required under the Federal Assignment of Claims Act and (B) no Secured Party will be permitted to exercise any right of setoff in respect of any account maintained solely for the purpose of receiving and holding government receivables,
(xii) for the avoidance of doubt, (A) in no event shall any Affiliated Practice and/or any other person that is not a subsidiary be required to provide a Guarantee of any Secured Obligation and (B) in no event shall any Affiliated Practice and/or any other person that is not a subsidiary (other than the Issuer) be required to comply with any other requirement of this Section 5.12,
(xiii) the Required Purchasers shall not require the Purchaser Representative to take a Lien on, or require the perfection of any Lien granted in, any asset as to which the cost of obtaining or perfecting such Lien (including any mortgage, stamp, intangibles or other tax or expenses relating to such Lien) is excessive in relation to the benefit to the Purchasers of the security afforded thereby as reasonably determined in writing by the Issuer and the Required Purchasers,
(xiv) each Management Services Agreement, each other agreement constituting an Acceptable Practice Management Arrangement, and the proceeds thereof, shall be included in the Collateral, and
(xv) until the First Lien Credit Agreement Obligations Payment Date, the representations and covenants made in this Agreement with respect to delivery to the Purchaser Representative of any Collateral, the security interest in which may be perfected only by possession or control, shall be deemed satisfied by the delivery and possession or control of such Collateral to or by the First Lien Credit Agreement Agent as bailee for the Secured Parties.
Section 5.13.
[Reserved].
Section 5.14.
Further Assurances. Promptly upon request of the Purchaser Representative (at the direction of the Required Purchasers) and subject to the limitations described in
Section 5.12:
(a) The Issuer will, and will cause each other Note Party to, execute any and all further documents, financing statements, agreements, instruments, certificates, notices and acknowledgments and take all such further actions (including the filing and recordation of financing statements, fixture filings, Mortgages and/or amendments thereto and other documents), in each case that (i) may be required under any applicable Requirements of Law and (ii) the Required Purchasers may reasonably request to ensure the creation, perfection and priority of the Liens created or intended to be created under the Collateral Documents, all at the expense of the relevant Note Parties.
(b) The Issuer will, and will cause each other applicable Note Party to, (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts (including notices to third parties), deeds, certificates, assurances and other instruments, in each case as the Required Purchasers may reasonably request from time to time in order to ensure the creation, perfection and priority of the Liens created or intended to be created under the Collateral Documents.
Section 5.15.
Post-Closing Covenant. The Issuer shall, and shall cause each Note Party to, take the actions required by
Schedule 5.15 in each case within the time periods specified therein (or, in each case, such longer period to which the Required Purchasers may reasonably agree).
Section 5.16. Affiliated Practices
(a) The Issuer shall, and shall cause each Note Party to, enforce its material rights under each Management Services Agreement, each Securities Transfer Restriction Agreement, each Therapy Director Agreement and each Practice Loan Agreement, in each case, where failure to do so could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) If any Person acquired by a Note Party or a Consolidated APC in a Permitted Acquisition becomes a Consolidated APC or is amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets to or is liquidated into any Consolidated APC or if any assets are purchased by or transferred to any Consolidated APC (other than as part of any Permitted Practice Subsidiary Restructuring), in each case, on or before the date on which financial statements are required to be delivered pursuant to Sections 5.01(a) or (b), as applicable, for the Fiscal Quarter in which such transaction occurs, such Note Party or the relevant APC Manager, as applicable, shall use commercially reasonable efforts to cause the relevant Consolidated APC (the “Relevant APC”) or the Person into which the relevant Consolidated APC is amalgamated, merged or consolidated or to which the Relevant APC transfers substantially all of its assets, to transfer to a Note Party substantially all of the assets of the Relevant APC (other than Accounts (as defined in the UCC), employment agreements, payor contracts, other assets which the Relevant APC must retain, in the reasonable judgment of the Issuer, to comply with any Requirement of Law and any other asset with respect to which the Issuer has determined in its reasonable business judgment that the cost, burden, difficulty or consequence (including any adverse tax consequence, any third party consent and any effect on the ability of the Issuer and/or any subsidiary and/or any Affiliated Practice to conduct their respective operations and business in the ordinary course) of transferring such assets outweighs or is excessive in light of, the practical benefit to the Secured Parties afforded thereby).
Section 5.17.
Cash Flow Consultant. During the Cash Flow Reporting Period, the Issuer or Opco shall, if either (a) requested by the Required Purchasers or (b) required at such time under the First Lien Credit Agreement, appoint and retain a Cash Flow Consultant. The scope of services provided by, and cost of, such Cash Flow Consultant must be reasonably acceptable to the Required Purchasers and the Issuer or Opco, as applicable.
ARTICLE 6 NEGATIVE COVENANTS
From the Closing Date and until the Termination Date, the Issuer covenants and agrees with the Purchasers that:
Section 6.01.
Indebtedness. The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the Secured Obligations (including
the First Amendment Notes, any Delayed Draw Note or any Additional Note);
(b) Indebtedness of the Issuer any Restricted Subsidiary and/or of any Restricted Subsidiary to the Issuer or any other Restricted Subsidiary; provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Note Party owing to any Restricted Subsidiary that is a Note Party, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of any Note Party to any Restricted Subsidiary that is not a Note Party must be unsecured and expressly subordinated to the Obligations of such Note Party on terms that are reasonably acceptable to the Required Purchasers (it being understood that the subordination terms set forth in the Intercompany Note are acceptable to the Required Purchasers);
(c) Indebtedness owing in respect of any loan made by any Affiliated Practice to the Issuer and/or any Note Party so long as, except as the Required Purchasers may otherwise agree, (i) the obligations of any Note Party in respect of any such Indebtedness are subordinated to the Obligations, (ii) the relevant Affiliated Practice agrees to waive any right to set off management fees owing in respect of any Management Services Agreement and (iii) the cash used to fund any such loan to the Issuer and/or any Note Party is from internally generated cash of an Affiliated Practice;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Issuer or any such Restricted Subsidiary pursuant to any such agreement;
(e) �� Indebtedness of the Issuer and/or any Restricted Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Issuer and/or any Restricted Subsidiary in respect of commercial credit cards, stored value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the foregoing and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and incentive, supplier finance or similar programs, in each case, entered into in the ordinary course of business;
(g) (i) guaranties by the Issuer and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Issuer and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities, in each case, entered into in the ordinary course of business;
(h) Guarantees by the Issuer and/or any Restricted Subsidiary of Indebtedness or other obligations of the Issuer, any Restricted Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or other obligations not prohibited by this Agreement; provided that (i) in the case of any Guarantee by any Note Party of the obligations of any non-Note Party, the related Investment is permitted under Section 6.06 and (ii) any Guarantee by any Restricted Subsidiary that is not a Note Party of any Indebtedness (other than the Obligations) of any Note Party is subject to the Non-Note Party Debt Cap;
(i) Indebtedness of the Issuer and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing Date and described on Schedule 6.01;
(j) Indebtedness of Restricted Subsidiaries that are not Note Parties in an aggregate outstanding principal amount not to exceed $12,000,000; provided that the aggregate outstanding principal amount of any such Indebtedness incurred or guaranteed in reliance on this Section 6.01(j) shall not, at any time, together with the aggregate amount of Indebtedness incurred or guaranteed by Restricted Subsidiaries that are not Note Parties in reliance on Section 6.01(u), exceed the Non-Note Party Debt Cap;
(k) Indebtedness of the Issuer and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Issuer and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Issuer and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $7,800,000 and 12.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed in connection with an acquisition permitted hereunder after the Closing Date; provided that
(i) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof;
(ii) no Event of Default under Section 7.01(a), (f) or (g) exists; and
(iii) either (A) Opco is in compliance with the then applicable Financial Covenant (as defined in the First Lien Credit Agreement as in effect on the Signing Date) calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period or (B) such Indebtedness is in an aggregate principal amount outstanding not to exceed the greater of $7,800,000 and 12.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Issuer or any Restricted Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Issuer or any subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (i), (m), (n), (r), (u), (w), and (y) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided that
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred pursuant to this Section 6.01 (provided that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (with additional amounts incurred in reliance on this clause (C) constituting a utilization of the relevant basket or exception pursuant to which such additional amount is permitted) and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (m), (n), (u) and/or (y), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Indebtedness (x) has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced, refunded or replaced (without giving effect to any prepayments thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Notes at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (other than Indebtedness of the type described in Section 6.01(m)) (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Issuer), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which are then-current market terms for the applicable type of Indebtedness or (C) any covenants or other provisions which are conformed (or added) to the Note Documents for the benefit of the Purchasers or, as applicable, the Purchaser Representative pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m), (n), (r), (u), (w) (solely as it relates to the Non-Note Party Debt Cap) and (y) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness, and
(v) (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Notes, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Notes on terms not materially less favorable (as reasonably determined by the Issuer), taken as a whole, to the Purchasers than those (x) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (x) such Indebtedness is contractually subordinated to the Obligations in right of payment, or (y) if not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists;
(q) [reserved];
(r) Indebtedness of the Issuer and/or any Restricted Subsidiary that is a Note Party in an aggregate outstanding principal amount not to exceed 100% of the amount of Net Proceeds received in cash by the Issuer from (i) the issuance or sale of Qualified Capital Stock or (ii) any cash contribution to its common equity with the Net Proceeds from the issuance and sale by any Parent Company of its Qualified Capital Stock or a contribution to the common equity of any Parent Company, in each case, (A) other than any Net Proceeds received from the sale of Capital Stock to, or contributions from, the Issuer or any of its Restricted Subsidiaries or any Affiliated Practice, (B) to the extent the relevant Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt Payments hereunder and (C) other than any Cure Amount and/or any Available Excluded Contribution Amount; provided, that (x) immediately before and after giving effect to the incurrence of such Indebtedness, no Event of Default under Section 7.01(a), (f) or (g) exists, (y) such Indebtedness shall be unsecured and (z) such Indebtedness must be incurred within 30 days of receipt of the relevant issuance or contribution (the amount of any Net Proceeds or contribution utilized to incur Indebtedness in reliance on this clause (r), a “Contribution Indebtedness Amount”);
(s) Indebtedness of the Issuer and/or any Restricted Subsidiary under any Derivative Transaction not entered into for speculative purposes;
(t) Indebtedness of the Issuer and/or any Restricted Subsidiary representing (i) deferred compensation to current or former directors, officers, employees, members of management, managers, and consultants of any Parent Company, the Issuer and/or any Restricted Subsidiary in the ordinary course of business and (ii) deferred compensation or other similar arrangements in connection with the Transactions, any Permitted Acquisition or any other Investment permitted hereby;
(u) Indebtedness of the Issuer and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed $4,200,000; provided that the aggregate outstanding principal amount of any such Indebtedness incurred or guaranteed in reliance on this Section 6.01(u) by Restricted Subsidiaries that are not Note Parties shall not, at any time, together with the aggregate amount of Indebtedness incurred or guaranteed by Restricted Subsidiaries that are not Note Parties in reliance on Section 6.01(j), exceed the Non-Note Party Debt Cap
(v) [reserved];
(w) (i) Indebtedness of the Issuer and/or any Restricted Subsidiary that is a Note Party incurred in respect of any First Lien Facility (including, without limitation, the First Lien Credit Agreement and/or any First Lien Incremental Facility) in an aggregate outstanding principal amount that does not exceed (A)(1)115% multiplied by (2)(x) $560,000,000 less (y) the amount of Term Loans (as defined in the First Lien Credit Agreement as in effect on the Signing Date) purchased by the Issuer pursuant to the Master Assignment Agreement and cancelled plus (B) an amount equal to the First Lien Incremental Cap plus (C) any interest payable in kind with respect to any such Indebtedness incurred pursuant to this Section 6.01(w)(i), (ii) any refinancing and/or replacement of any First Lien Facility or any such First Lien Incremental Facility after the Closing Date so long as the aggregate outstanding principal amount of such Indebtedness does not exceed the amount permitted to be incurred under preceding clause (i), plus (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon and (B) the amount of any underwriting discount, any other reasonable and customary fee, commission and/or expense (including any upfront fee, original issue discount and/or initial yield payment) incurred in connection with the relevant refinancing and (iii) Indebtedness in respect of Banking Services Obligations (as defined in the First Lien Credit Agreement as in effect on the Signing Date or the corresponding term in the documentation governing any First Lien Facility to the extent not less favorable to the Purchasers) and Secured Hedging Obligations (as defined in the First Lien Credit Agreement as in effect on the Signing Date or the corresponding term in the documentation governing any First Lien Facility to the extent not less favorable to the Purchasers);
(x) [reserved];
(y) Indebtedness of the Issuer and/or any Restricted Subsidiary incurred in connection with Sale and Lease-Back Transaction permitted pursuant to Section 6.07(bb);
(z) [reserved];
(aa) Indebtedness (including obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments with respect to such Indebtedness) incurred by the Issuer and/or any Restricted Subsidiary in respect of workers compensation claims, unemployment, insurance (including premiums related thereto), other types of social security, pension obligations, vacation pay, health, disability or other employee benefits;
(bb) unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Issuer and/or any Restricted Subsidiary in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default under Section 7.01(i);
(cc) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business; and
(dd) without duplication of any other Indebtedness, all premiums (if any), interest (including post-petition interest and payment in kind interest), accretion or amortization of original issue discount, fees, expenses and charges with respect to Indebtedness of the Issuer and/or any Restricted Subsidiary hereunder.
Notwithstanding the foregoing, the Issuer shall not permit any Consolidated APC, Non-Consolidated APC or any other Affiliated Practice to guarantee any Indebtedness of the Issuer and its subsidiaries (other than the Secured Obligations).
Section 6.02.
Liens. The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur or assume any Lien on or with respect to any property of any kind owned by it, whether now owned or hereafter acquired, or any income or profits therefrom, except:
(a) Liens securing the Secured Obligations created pursuant to the Note Documents;
(b) Liens for Taxes which (i) are not then due, (ii) if due, are not at such time required to be paid pursuant to Section 5.03 or (iii) are being contested in accordance with Section 5.03;
(c) statutory Liens (and rights of set-off) of landlords, banks, carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by applicable Requirements of Law, in each case incurred in the ordinary course of business (i) for amounts not yet overdue by more than 30 days, (ii) for amounts that are overdue by more than 30 days and that are being contested in good faith by appropriate proceedings, so long as any reserves or other appropriate provisions required by GAAP have been made for any such contested amounts or (iii) with respect to which the failure to make payment could not reasonably be expected to have a Material Adverse Effect;
(d) Liens incurred (i) in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security laws and regulations, (ii) in the ordinary course of business to secure the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), (iii) pursuant to pledges and deposits of Cash or Cash Equivalents in the ordinary course of business securing (x) any liability for reimbursement or indemnification obligations of insurance carriers providing property, casualty, liability or other insurance to the Issuer and its subsidiaries or (y) leases or licenses of property otherwise permitted by this Agreement and (iv) to secure obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments posted with respect to the items described in clauses (i) through (iii) above;
(e) Liens consisting of easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not, in the aggregate, materially interfere with the ordinary conduct of the business of the Issuer and/or its Restricted Subsidiaries, taken as a whole, or the use of the affected property for its intended purpose;
(f) Liens consisting of any (i) interest or title, a lessor or sub-lessor under any lease of real estate permitted hereunder, (ii) landlord lien permitted by the terms of any lease, (iii) restriction or encumbrance to which the interest or title of such lessor or sub-lessor may be subject or (iv) subordination of the interest of the lessee or sub-lessee under such lease to any restriction or encumbrance referred to in the preceding clause (iii);
(g) Liens (i) solely on any Cash earnest money deposits (including as part of any escrow arrangement) made by the Issuer and/or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement with respect to any Investment permitted hereunder and (ii) consisting of (A) an agreement to Dispose of any property in a Disposition permitted under Section 6.07 and/or (B) the pledge of Cash as part of an escrow arrangement required in any Disposition permitted under Section 6.07;
(h) (i) purported Liens evidenced by the filing of UCC financing statements relating solely to operating leases or consignment or bailee arrangements entered into in the ordinary course of business, and (ii) Liens arising from precautionary UCC financing statements or similar filings;
(i) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(j) Liens in connection with any zoning, building or similar Requirement of Law or right reserved to or vested in any Governmental Authority to control or regulate the use of any or dimensions of real property or the structure thereon, including Liens in connection with any condemnation or eminent domain proceeding or compulsory purchase order;
(k) Liens securing Indebtedness permitted pursuant to Section 6.01(p) (solely with respect to the permitted refinancing of (x) Indebtedness permitted pursuant to Sections 6.01(a), (i), (m), (n), (u), (w), and (y) and (y) Indebtedness that is secured in reliance on Section 6.02(u) (provided that the granting of the relevant Lien shall be without duplication of any Lien outstanding under Section 6.02(u) such that the amount available under Section 6.02(u) shall be reduced by the amount of the applicable Lien granted in reliance on this clause (y)); provided that (i) no such Lien extends to any asset not covered by the Lien securing the Indebtedness that is being refinanced and (ii) if the Lien securing the Indebtedness being refinanced was subject to intercreditor arrangements, then (A) the Lien securing any refinancing Indebtedness in respect thereof shall be subject to intercreditor arrangements that are not materially less favorable to the Secured Parties, taken as a whole, than the intercreditor arrangements governing the Lien securing the Indebtedness that is refinanced or (B) the intercreditor arrangements governing the Lien securing the relevant refinancing Indebtedness shall be set forth in an Intercreditor Agreement and (iii) no such Lien shall be senior in priority as compared to the Lien securing the Indebtedness being refinanced;
(l) Liens described on Schedule 6.02 and any modification, replacement, refinancing, renewal or extension thereof; provided that (i) no such Lien extends to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 6.01 and (B) proceeds and products thereof, replacements, accessions or additions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 6.01(m) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates) and (ii) any such modification, replacement, refinancing, renewal or extension of the obligations secured or benefited by such Liens, if constituting Indebtedness, is permitted by Section 6.01;
(m) Liens arising out of Sale and Lease-Back Transactions permitted under Section 6.07(bb);
(n) Liens securing Indebtedness permitted pursuant to Section 6.01(m); provided that any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness and proceeds and products thereof, replacements, accessions or additions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 6.01(m) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates);
(o) Liens securing Indebtedness permitted pursuant to Section 6.01(n) on the relevant acquired assets or on the Capital Stock and assets of the relevant newly acquired Restricted Subsidiary; provided that no such Lien (x) extends to or covers any other assets (other than the proceeds or products thereof, replacements, accessions or additions thereto and improvements thereon) or (y) was created in contemplation of the applicable acquisition of assets or Capital Stock;
(p) (i) Liens that are contractual rights of setoff or netting relating to (A) the establishment of depositary relations with banks not granted in connection with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Issuer or any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer or any Restricted Subsidiary, (C) purchase orders and other agreements entered into with customers of the Issuer or any Restricted Subsidiary in the ordinary course of business and (D) commodity trading or other brokerage accounts incurred in the ordinary course of business, (ii) Liens encumbering reasonable customary initial deposits and margin deposits, (iii) bankers Liens and rights and remedies as to Deposit Accounts, (iv) Liens of a collection bank arising under Section 4-208 of the UCC on items in the ordinary course of business, (v) Liens in favor of banking or other financial institutions arising as a matter of law or under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution and that are within the general parameters customary in the banking industry or arising pursuant to such banking institution’s general terms and conditions and (vi) Liens on the proceeds of any Indebtedness incurred in connection with any transaction permitted hereunder, which proceeds have been deposited into an escrow account on customary terms to secure such Indebtedness pending the application of such proceeds to finance such transaction;
(q) Liens on assets owned by Restricted Subsidiaries that are not Note Parties securing Indebtedness of Restricted Subsidiaries that are not Note Parties permitted pursuant to Section 6.01;
(r) Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of the Issuer and/or its Restricted Subsidiaries;
(s) Liens securing Indebtedness incurred in reliance on, and subject to the provisions set forth in, Section 6.01(w); provided, that any such Lien on the Collateral may be senior to the Lien on the Collateral securing the Secured Obligations subject to an Intercreditor Agreement;
(t) [reserved];
(u) Liens on assets securing Indebtedness or other obligations in an aggregate principal amount at any time outstanding not to exceed $4,200,000; provided, that any Lien on any Collateral granted in reliance on this clause (u) shall be junior to the Lien on the Collateral securing the Secured Obligations and be subject to an Intercreditor Agreement;
(v) (i) Liens on assets securing judgments, awards, attachments and/or decrees and notices of lis pendens and associated rights relating to litigation being contested in good faith not constituting an Event of Default under Section 7.01(h) and (ii) any pledge and/or deposit securing any settlement of litigation;
(w) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not secure any Indebtedness;
(x) Liens on Securities that are the subject of repurchase agreements constituting Investments permitted under Section 6.06 arising out of such repurchase transaction;
(y) Liens securing obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments permitted under Sections 6.01(d), (e), (g) and (aa);
(z) Liens arising (i) out of conditional sale, title retention, consignment or similar arrangements for the sale of any asset in the ordinary course of business and permitted by this Agreement or (ii) by operation of law under Article 2 of the UCC (or similar Requirement of Law under any jurisdiction);
(aa) Liens (i) in favor of any Note Party and/or (ii) granted by any non-Note Party in favor of any Restricted Subsidiary that is not a Note Party, in the case of clauses (i) and (ii), securing intercompany Indebtedness permitted (or not restricted) under Section 6.01 or Section 6.09;
(bb) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(cc) Liens on specific items of inventory or other goods and the proceeds thereof securing the relevant Person’s obligations in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;
(dd) Liens securing (i) obligations of the type described in Section 6.01(f) and/or (ii) obligations of the type described in Section 6.01(s);
(ee) (i) Liens on Capital Stock of joint ventures securing capital contributions to, or obligations of, such Persons and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements with respect to non-Wholly-Owned Subsidiaries;
(ff) Liens on cash or Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(gg) Liens consisting of the prior rights of consignees and their lenders under consignment arrangements entered into in the ordinary course of business; and
(hh) Liens disclosed in any Mortgage Policy delivered pursuant to Section 5.12 with respect to any Material Real Estate Asset and any replacement, extension or renewal thereof; provided that no such replacement, extension or renewal Lien shall cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal (and additions thereto, improvements thereon and the proceeds thereof).
Notwithstanding the foregoing, in no event shall any Lien on patient records securing Indebtedness for borrowed money (other than the Obligations) be permitted.
Section 6.03.
[Reserved].
Section 6.04. Restricted Payments; Restricted Debt Payment.
(a) The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Issuer may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay (I) reasonable and customary general administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company) and franchise Taxes, and similar fees and expenses, required to maintain the organizational existence of such Parent Company, in each case, which are incurred in the ordinary course of business to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Issuer and/or its subsidiaries) and/or its subsidiaries; provided, that the aggregate amount of Restricted Payments made pursuant to this clause (I) shall not exceed $500,000 in any Fiscal Year, and (II) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company (but excluding for the avoidance of doubt, the portion of any such indemnification claims, if any, that are attributable to the ownership or operations of any subsidiary of such Parent Company other than the Issuer and/or its subsidiaries) and/or its subsidiaries;
(B) (x) for any taxable period for which the Issuer is a member of a consolidated, combined, unitary or similar tax group for U.S. federal and/or applicable state or local tax purposes of which such Parent Company is the common parent, to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the income of the Issuer and/or any subsidiary; provided that the amount of such payments in respect of any taxable year do not exceed the amount of such Tax liabilities that the Issuer and/or its applicable subsidiaries would have paid had such Tax liabilities been paid as standalone companies or as a standalone group and (y) for any taxable period for which the Issuer is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local tax purposes, distributions to any direct or indirect parent of the Issuer in an amount not to exceed the amount of any Tax that the Issuer and/or its applicable subsidiaries would have paid had such Tax been paid as stand alone companies or as a standalone group (and assuming for purposes of such calculation that the Issuer is classified as a domestic corporation for U.S. federal income tax purposes);
(C) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Issuer and/or its subsidiaries), the Issuer and its subsidiaries;
(D) (x) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Issuer and/or its subsidiaries), the Issuer and its subsidiaries, (y) for the payment of legal and other professional fees of any Parent Company (but excluding, for the avoidance of doubt, the portion of any legal and other professional fees, if any, that are attributable to the ownership or operations of any subsidiary of such Parent Company other than the Issuer and/or its subsidiaries) and (z) Public Company Costs;
(E) to pay customary fees and expenses of third parties related to debt or equity offerings, investments or acquisitions (whether or not consummated) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role;
(F) to finance any Investment permitted under Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) the relevant Parent Company shall, promptly following the closing thereof, cause (I) all property acquired to be contributed to the Issuer or one or more of its Restricted Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Issuer or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Issuer or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Issuer and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Issuer may (or may make Restricted Payments to allow any Parent Company to) repurchase, redeem, retire or otherwise acquire or retire for value the Capital Stock of any Parent Company or any subsidiary held by any future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Issuer or any subsidiary:
(A) with Cash and Cash Equivalents (and including, to the extent constituting a Restricted Payment, amounts paid in respect of promissory notes issued to evidence any obligation to repurchase, redeem, retire or otherwise acquire or retire for value the Capital Stock of any Parent Company or any subsidiary held by any future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Issuer or any subsidiary) in an amount not to exceed $6,000,000 in any Fiscal Year, which, if not used in such Fiscal Year, shall be carried forward to succeeding Fiscal Years;
(B) with the proceeds of any sale or issuance of, or any capital contribution in respect of, the Capital Stock of the Issuer or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Issuer or any Restricted Subsidiary) in each case, (1) other than any Net Proceeds received from the sale of Capital Stock to, or contributions from, the Issuer, any of its Restricted Subsidiaries or any Affiliated Practice, (2) to the extent the relevant Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt Payments hereunder and (3) other than any Cure Amount, any Available Excluded Contribution Amount and/or any Contribution Indebtedness Amount; or
(C) with the net proceeds of any key-man life insurance policies;
(iii) the Issuer may make Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Issuer elects to apply to this clause (iii)(A) and/or (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Issuer elects to apply to this clause (iii)(B);
(iv) the Issuer may make Restricted Payments (i) to any Parent Company to enable such Parent Company to make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former officers, directors, employees, members of management, managers or consultants of the Issuer, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in subclause (A) above, including demand repurchases in connection with the exercise of stock options;
(v) the Issuer may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital Stock upon the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock;
(vi) the Issuer may make Restricted Payments, the proceeds of which are applied on the Closing Date solely to effect the consummation of the Transactions or pay Transaction Costs;
(vii) each Restricted Subsidiary may make Restricted Payments with respect to any shares of any class of its Capital Stock; provided, that in the case of any Restricted Subsidiary that is not a Wholly-Owned Subsidiary, the share of the foregoing made or paid to the Issuer or any of the Restricted Subsidiaries is at least pro rata to the percentage of such class of Capital Stock in such Restricted Subsidiary that is not a Wholly-Owned Subsidiary owned by the Issuer and its other Restricted Subsidiaries;
(viii) the Issuer may make Restricted Payments to (i) redeem, repurchase, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Issuer and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Issuer and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Issuer or any Parent Company to the extent any such proceeds are contributed to the capital of the Issuer and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any Treasury Capital Stock out of the proceeds of the substantially concurrent sale (other than to the Issuer or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Issuer may consummate any transaction permitted by Section 6.06 (other than Sections 6.06(j) and (t)), Section 6.07 (other than Section 6.07(g)) and Section 6.09 (other than Sections 6.09(a), (d), (j) and (o));
(x) [reserved];
(xi) the Issuer may make Restricted Payments so long as (i) no Event of Default exists at the time of the declaration of such Restricted Payment and (ii) the Total Net Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 4.00:1.00;
(xii) the Issuer may make Restricted Payments the proceeds of which are applied, directly or indirectly, to repay or redeem the Series A Preferred Shares, so long as (i) the Total Net Leverage Ratio, calculated on a Pro Forma Basis as of the most recently completed Test Period does not exceed 4.00:1.00 and (ii) no Event of Default has occurred and is continuing;
(xiii) from and after February 24, 2025, the Issuer may, directly or indirectly, pay cash dividends on the Series A Preferred Shares to the extent that the Issuer has elected (or is required) to pay such dividends in cash in accordance with the Series A Certificate of Designation, so long as (A) the Total Net Leverage Ratio, calculated on a Pro Forma Basis as of the most recently completed Test Period does not exceed 4.75:1.00 and (B) no Event of Default has occurred and is continuing; and
(xiv) to the extent constituting a Restricted Payment, the transfer by the Issuer of Capital Stock of the Issuer in connection with (A) the Transactions and/or (B) the conversion of any Note to Capital Stock of the Issuer;
(b) the Issuer shall not, nor shall it permit any Restricted Subsidiary to, make any prepayment in Cash in respect of principal of or interest on (x) any Junior Lien Indebtedness, (y) any Junior Indebtedness or (z) any unsecured Indebtedness of the types described in clauses (a) and (c) of the definition of “Indebtedness” (other than Indebtedness among the Issuer and/or its subsidiaries) (the Indebtedness described in clauses (x) through (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) with respect to any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement thereof made by exchange for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01;
(ii) as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest (including any penalty interest, if applicable) and payments of fees, expenses and indemnification obligations as and when due (other than payments with respect to Junior Indebtedness that are prohibited by the subordination provisions thereof);
(iv) Restricted Debt Payments in an aggregate amount not to exceed the RP/RDP Shared Cap;
(v) (A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Issuer and/or any capital contribution in respect of Qualified Capital Stock of the Issuer, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Issuer and/or Capital Stock of any Parent Company and (C) to the extent constituting a Restricted Debt Payment, payment-in-kind interest with respect to any Restricted Debt that is permitted under Section 6.01;
(vi) Restricted Debt Payments in an aggregate amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Issuer elects to apply to this clause (vi)(A) and/or (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Issuer elects to apply to this clause (vi)(B); and
(vii) Restricted Debt Payments in an unlimited amount; provided that (A) no Event of Default exists at the time of delivery of irrevocable notice of such Restricted Debt Payment and (B) the Total Net Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 4.00:1.00.
Section 6.05. Burdensome Agreements. Except as provided herein or in any other Note Document, any First Lien Credit Document, the Series A Certificate of Designation (solely with respect to clause (x) below) and/or any agreement with respect to any refinancing, renewal or replacement of such Indebtedness that is permitted by Section 6.01 or the Series A Preferred Shares, as applicable, the Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into or cause to exist any agreement restricting the ability of (x) any Restricted Subsidiary of the Issuer that is not a Note Party to pay dividends or other distributions to the Issuer or any Note Party or (y) any Note Party to create, permit or grant a Lien on any of its properties or assets to secure the Secured Obligations, except restrictions:
(a) set forth in any agreement evidencing (i) Indebtedness of a Restricted Subsidiary that is not a Note Party permitted by Section 6.01, (ii) Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien if the relevant restriction applies only to the Person obligated under such Indebtedness and its Restricted Subsidiaries or the assets intended to secure such Indebtedness and (iii) Indebtedness permitted pursuant to clauses (j), (m), (p) (as it relates to Indebtedness in respect of clauses (a), (m), (r), (u), (w) and/or (y) of Section 6.01), (r), (u), (w) and/or (y) of Section 6.01;
(b) arising under customary provisions restricting assignments, subletting or other transfers (including the granting of any Lien) contained in leases, subleases, licenses, sublicenses, joint venture agreements and other agreements entered into in the ordinary course of business;
(c) that are or were created by virtue of any Lien granted upon, transfer of, agreement to transfer or grant of, any option or right with respect to any assets or Capital Stock not otherwise prohibited under this Agreement;
(d) that are assumed in connection with any acquisition of property or the Capital Stock of any Person, so long as the relevant encumbrance or restriction relates solely to the Person and its subsidiaries (including the Capital Stock of the relevant Person or Persons) and/or property so acquired and was not created in connection with or in anticipation of such acquisition;
(e) set forth in any agreement for any Disposition of any Restricted Subsidiary (or all or substantially all of the assets thereof) that restricts the payment of dividends or other distributions or the making of cash loans or advances by such Restricted Subsidiary pending such Disposition;
(f) set forth in provisions in agreements or instruments which prohibit the payment of dividends or the making of other distributions with respect to any class of Capital Stock of a Person other than on a pro rata basis;
(g) imposed by customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements;
(h) on Cash, other deposits or net worth or similar restrictions imposed by any Person under any contract entered into in the ordinary course of business or for whose benefit such Cash, other deposits or net worth or similar restrictions exist;
(i) set forth in documents which exist on the Closing Date and were not created in contemplation thereof;
(j) arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be incurred after the Closing Date if the relevant restrictions, taken as a whole, are not materially less favorable to the Purchasers than the restrictions contained in this Agreement, taken as a whole (as determined in good faith by the Issuer);
(k) arising under or as a result of applicable Requirements of Law or the terms of any license, authorization, concession or permit;
(l) arising in any Hedge Agreement and/or any agreement relating to any Banking Services Obligation (and/or any other obligation of the type described in Section 6.01(f));
(m) relating to any asset (or all of the assets) of and/or the Capital Stock of the Issuer and/or any Restricted Subsidiary which is imposed pursuant to an agreement entered into in connection with any Disposition of such asset (or assets) and/or all or a portion of the Capital Stock of the relevant Person that is permitted or not restricted by this Agreement;
(n) set forth in any agreement relating to any Permitted Lien that limits the right of the Issuer and/or any Restricted Subsidiary to Dispose of or encumber the assets subject thereto; and/or
(o) imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of any contract, instrument or obligation referred to in clauses (a) through (n) above; provided that no such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in the good faith judgment of the Issuer, more restrictive with respect to such restrictions, taken as a whole, than those in existence prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
Section 6.06.
Investments. The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, make or own any Investment in any other Person except:
(a) Cash or Investments that were Cash Equivalents at the time made;
(b) Investments:
(i) existing on the Closing Date in the Issuer or in any subsidiary,
(ii) made after the Closing Date among the Issuer and/or one or more Restricted Subsidiaries that are Note Parties,
(iii) made after the Closing Date by any Note Party in any Restricted Subsidiary that is not a Note Party in an aggregate outstanding amount, together with the aggregate amount of (A) consideration paid in reliance on clause (a) of the proviso to the definition of “Permitted Acquisition” and (B) Investments made in Persons that are not Note Parties pursuant to Section 6.06(b)(aa), not to exceed the Specified Investment Cap,
(iv) made by any Restricted Subsidiary that is not a Note Party in any Note Party and/or any other Restricted Subsidiary that is not a Note Party, and/or
(v) in the form of loans or advances made in the ordinary course of business in any Affiliated Practice in connection with the provision of services to such Affiliated Practice under Acceptable Practice Management Arrangements, including any Investment contemplated by any Practice Loan Agreement and/or any Management Services Agreement (other than an Investment contemplated by clause (e) below) and/or the proceeds of which are used to pay management fees to the relevant APC Manager, working capital purposes or payroll or other ordinary course business expenses of such Affiliated Practice; provided, that any loans or advances made pursuant to this clause (b)(v) to any Non-Consolidated APC shall not exceed $6,000,000 at any time outstanding,
(c) Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining, maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors and licensees, in each case, in the ordinary course of business or, in the case of clause (iii), to the extent necessary to maintain the ordinary course of supplies to the Issuer or any Restricted Subsidiary;
(d) Investments in any joint ventures in an aggregate outstanding amount not to exceed $4,200,000;
(e) (i) Permitted Acquisitions, (ii) any Investment in any Restricted Subsidiary that is not a Note Party in an amount required to permit such Restricted Subsidiary to consummate a Permitted Acquisition, which amount is actually applied by such Restricted Subsidiary to consummate, directly or indirectly, through one or more other Restricted Subsidiaries, such Permitted Acquisition and (iii) any Investment in any Consolidated APC in an amount required to permit such Consolidated APC to consummate, directly or indirectly, a Permitted Acquisition;
(f) Investments (i) existing on, or contractually committed to or contemplated as of, the Closing Date and described on Schedule 6.06 and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so long as no such modification, renewal or extension increases the amount of such Investment except by the terms thereof or as otherwise permitted by this Section 6.06;
(g) Investments received in lieu of Cash in connection with any Disposition permitted by Section 6.07 or any other disposition of assets not constituting a Disposition;
(h) loans or advances to present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company, the Issuer, its subsidiaries and/or any joint venture to the extent permitted by Requirements of Law, in connection with such Person’s purchase of Capital Stock of any Parent Company, either (i) in an aggregate principal amount not to exceed $1,200,000 at any one time outstanding or (ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed to the Issuer for the purchase of such Capital Stock;
(i) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business;
(j) Investments consisting of (or resulting from) Indebtedness permitted under Section 6.01 (other than Indebtedness permitted under Sections 6.01(b) and (h)), Permitted Liens, Restricted Payments permitted under Section 6.04 (other than Section 6.04(a)(ix)), Restricted Debt Payments permitted by Section 6.04 and mergers, consolidations, amalgamations, liquidations, windings up, dissolutions or Dispositions permitted by Section 6.07 (other than Section 6.07(a), Section 6.07(b) (if made in reliance on clause (ii) therein), Section 6.07(c)(ii) (if made in reliance on clause (B) therein), Section 6.07(g), Section 6.07(o), and Section 6.07(t));
(k) Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers;
(l) Investments (including debt obligations and Capital Stock) received (i) in connection with the bankruptcy or reorganization of any Person, (ii) in settlement of delinquent obligations of, or other disputes with, customers, suppliers and other account debtors arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration or other disputes;
(m) loans and advances of payroll payments or other compensation to present or former employees, directors, members of management, officers, managers or consultants of any Parent Company (to the extent such payments or other compensation relate to services provided to such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Issuer and/or its subsidiaries)), the Issuer and/or any subsidiary in the ordinary course of business;
(n) Investments to the extent that payment therefor is made solely with Capital Stock of any Parent Company or Qualified Capital Stock of the Issuer or any Restricted Subsidiary, in each case, to the extent not resulting in a Change of Control;
(o) (i) Investments of any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into or consolidated or amalgamated with, the Issuer or any Restricted Subsidiary after the Closing Date, in each case as part of an Investment otherwise permitted by this Section 6.06 to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant acquisition, merger, amalgamation or consolidation and (ii) any modification, replacement, renewal or extension of any Investment permitted under clause (i) of this Section 6.06(o) so long as no such modification, replacement, renewal or extension thereof increases the original amount of such Investment except as otherwise permitted by this Section 6.06;
(p) Investments on the Closing Date made in connection with the Transactions;
(q) Investments made after the Closing Date by the Issuer and/or any of its Restricted Subsidiaries in an aggregate amount at any time outstanding not to exceed:
(i) (A) the greater of $7,800,000 and 12.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, plus (B) at the election of the Issuer, the amount of Restricted Payments then permitted to be made by the Issuer or any Restricted Subsidiary in reliance on Section 6.04(a)(x) or, without duplication, Restricted Debt Payments then permitted to be made in reliance on Section 6.04(b)(iv) (it being understood that any amount utilized under this clause (B) to make an Investment shall result in a reduction in availability under Section 6.04(a)(x) and Section 6.04(b)(iv)), plus
(ii) in the event that (A) the Issuer or any of its Restricted Subsidiaries makes any Investment after the Closing Date in any Person that is neither a Restricted Subsidiary nor a Consolidated APC and (B) such Person subsequently becomes a Note Party, an amount equal to 100% of the fair market value of such Investment as of the date on which such Person becomes a Note Party;
(r) Investments made after the Closing Date by the Issuer and/or any of its Restricted Subsidiaries in an aggregate outstanding amount not to exceed (i) the portion, if any, of the Available Amount on such date that the Issuer elects to apply to this clause (r)(i) and/or (ii) the portion, if any, of the Available Excluded Contribution Amount on such date that the Issuer elects to apply to this clause (r)(ii);
(s) (i) Guarantees of leases (other than Capital Leases) or of other obligations not constituting Indebtedness and (ii) Guarantees of the lease obligations of suppliers, customers, franchisees and licensees of the Issuer and/or its Restricted Subsidiaries, in each case, in the ordinary course of business;
(t) Investments in any Parent Company in amounts and for purposes for which Restricted Payments to such Parent Company are permitted under Section 6.04(a); provided that any Investment made as provided above in lieu of any such Restricted Payment shall reduce availability under the applicable Restricted Payment basket under Section 6.04(a);
(u) [reserved];
(v) Investments in subsidiaries in connection with internal reorganizations and/or restructurings and activities related to tax planning; provided that, after giving effect to any such reorganization, restructuring or activity, neither the Note Guaranty, taken as a whole, nor the security interest of the Purchaser Representative in the Collateral, taken as a whole, is materially impaired;
(w) Investments under any Derivative Transaction of the type permitted under Section 6.01(s);
(x) Investments made in connection with any Permitted Practice Subsidiary Restructuring; provided that the aggregate amount of Investments made in Non-Consolidated APCs pursuant to this clause (x), shall not exceed $6,000,000;
(y) Investments made in joint ventures as required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture agreements and similar binding arrangements entered into in the ordinary course of business;
(z) Investments made in connection with any nonqualified deferred compensation plan or arrangement for any present or former employee, director, member of management, officer, manager or consultant or independent contractor (or any Immediate Family Member thereof) of any Parent Company, the Issuer, its subsidiaries and/or any joint venture;
(aa) Investments in the Issuer, any Restricted Subsidiary and/or joint venture in connection with intercompany cash management arrangements and related activities in the ordinary course of business; provided that the aggregate amount of Investments made in Persons that are not Note Parties under this Section 6.06(b)(aa), together with the aggregate amount of (A) consideration paid in reliance on clause (a) of the proviso to the definition of “Permitted Acquisition” and (B) Investments made in Persons that are not Note Parties under Section 6.06(b)(iii), shall not exceed the Specified Investment Cap;
(bb) Investments so long as, after giving effect thereto on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 4.50:1.00;
(cc) [reserved]
(dd) [reserved]; and
(ee) Investments consisting of the non-exclusive licensing in the ordinary course of business or contribution of IP Rights pursuant to joint marketing arrangements with other Persons.
Notwithstanding anything to the contrary in this Section 6.06, this Section 6.06 shall not permit any IP Separation and Transaction.
Section 6.07.
Fundamental Changes; Disposition of Assets. Other than as part of any Permitted Practice Subsidiary Restructuring, the Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any transaction of merger, consolidation or amalgamation, or liquidate, wind up or dissolve themselves (or suffer any liquidation or dissolution), or make any Disposition of any assets having a fair market value in excess of $1,200,000 in a single transaction or a series of related transactions and in excess of $3,000,000 in the aggregate for all such transactions, except:
(a) any Restricted Subsidiary may be merged, consolidated or amalgamated with or into the Issuer or any other Restricted Subsidiary; provided that (i) in the case of any such merger, consolidation or amalgamation with or into the Issuer or any Delaware LLC Division relating to the Issuer, (A) the Issuer shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger, consolidation or amalgamation or Delaware LLC Division is not the Issuer (any such Person, the “Successor Issuer”), (x) the Successor Issuer shall be an entity organized or existing under the law of the U.S., any state thereof or the District of Columbia, (y) the Successor Issuer shall expressly assume the Obligations of the Issuer in a manner reasonably satisfactory to the Required Purchasers and (z) except as the Required Purchasers may otherwise agree, each Guarantor, unless it is the other party to such merger, consolidation or amalgamation, shall have executed and delivered a reaffirmation agreement with respect to its obligations under the Note Guaranty and the other Note Documents, it being understood and agreed that if the foregoing conditions under clauses (x) through (z) are satisfied, the Successor Issuer will succeed to, and be substituted for, the Issuer under this Agreement and the other Note Documents, and (ii) in the case of any such merger, consolidation or amalgamation with or into any Subsidiary Guarantor or any Delaware LLC Division relating to any Subsidiary Guarantor, either (A) the Issuer or a Subsidiary Guarantor shall be the continuing or surviving Person or the continuing or surviving Person shall expressly assume the obligations of such Subsidiary Guarantor in a manner reasonably satisfactory to the Required Purchasers or (B) the relevant transaction shall be treated as an Investment and shall comply with Section 6.06;
(b) Dispositions (including of Capital Stock) among the Issuer and/or any Restricted Subsidiary (upon voluntary liquidation or otherwise); provided that any such Disposition made by any Note Party to any Person that is not a Note Party shall be (i) for fair market value (as reasonably determined by the Issuer) with at least 75% of the consideration for such Disposition consisting of Cash or Cash Equivalents at the time of such Disposition or (ii) treated as an Investment and otherwise made in compliance with Section 6.06 (other than in reliance on clause (j) thereof);
(c) (i) the liquidation, dissolution or Delaware LLC Division of any Restricted Subsidiary if the Issuer determines in good faith that such liquidation, dissolution or Delaware LLC Division is in the best interests of the Issuer, is not materially disadvantageous to the Purchasers and the Issuer or any Restricted Subsidiary receives any assets of the relevant dissolved or liquidated Restricted Subsidiary; provided that in the case of any liquidation, dissolution or Delaware LLC Division of any Note Party that results in a distribution of assets to any Restricted Subsidiary that is not a Note Party, such distribution shall be treated as an Investment and shall comply with Section 6.06 (other than in reliance on clause (j) thereof); (ii) any merger, amalgamation, dissolution, liquidation, consolidation or Delaware LLC Division, the purpose of which is to effect (A) any Disposition otherwise permitted under this Section 6.07 (other than clause (a), clause (b) or this clause (c)) or (B) any Investment permitted under Section 6.06; and (iii) the conversion of the Issuer or any Restricted Subsidiary into another form of entity, so long as such conversion does not adversely affect the value of the Note Guaranty or Collateral, if any;
(d) (i) Dispositions of inventory or equipment or immaterial assets in the ordinary course of business (including on an intercompany basis) and (ii) the leasing or subleasing of real property in the ordinary course of business;
(e) Dispositions of surplus, obsolete, used or worn out property or other property that, in the reasonable judgment of the Issuer, is (i) no longer useful in its business (or in the business of any Restricted Subsidiary of the Issuer) or (ii) otherwise economically impracticable to maintain;
(f) Dispositions in the ordinary course of business of Cash and/or Cash Equivalents and/or other assets that were Cash Equivalents when the relevant original Investment was made;
(g) Dispositions, mergers, amalgamations, consolidations or conveyances that constitute (i) Investments permitted pursuant to Section 6.06 (other than Section 6.06(j)), (ii) Permitted Liens and (iii) Restricted Payments permitted by Section 6.04(a) (other than Section 6.04(a)(ix));
(h) Dispositions for fair market value; provided that at least 75% of the consideration for such Disposition shall consist of Cash or Cash Equivalents; provided, further, that (A) immediately prior to and after giving effect to such Disposition, as determined on the date on which the agreement governing such Disposition is executed, no Event of Default exists, (B) [reserved] and (C) this Section 6.07(h) shall not permit a Disposition of all or substantially all of the assets of the Issuer and its Restricted Subsidiaries;
(i) to the extent that (i) the relevant property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of the relevant Disposition are promptly applied to the purchase price of such replacement property;
(j) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between joint venture or similar parties set forth in the relevant joint venture arrangements and/or similar binding arrangements;
(k) Dispositions of notes receivable or accounts receivable in the ordinary course of business (including any discount and/or forgiveness thereof) or in connection with the collection or compromise thereof; provided that factoring or similar arrangements shall not be permitted pursuant to this clause (k);
(l) Dispositions and/or terminations of leases, subleases, licenses or sublicenses (including the provision of software under any open source license), (i) the Disposition or termination of which will not materially interfere with the business of the Issuer and its Restricted Subsidiaries or (ii) which relate to closed facilities or the discontinuation of any product line;
(m) (i) any termination of any lease in the ordinary course of business, (ii) any expiration of any option agreement in respect of real or personal property and (iii) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or litigation claims (including in tort) in the ordinary course of business;
(n) Dispositions of property subject to foreclosure, casualty, eminent domain or condemnation proceedings (including in lieu thereof or any similar proceeding);
(o) Dispositions or consignments of equipment, inventory or other assets (including leasehold interests in real property) with respect to facilities that are temporarily not in use, held for sale or closed;
(p) to the extent applicable, the consummation of the Transactions on the Closing Date;
(q) Dispositions of non-core assets acquired in connection with any acquisition permitted hereunder and sales of Real Estate Assets acquired in any acquisition permitted hereunder which, within 90 days of the date of such acquisition, are designated in writing to the Purchaser Representative as being held for sale and not for the continued operation of the Issuer or any of its Restricted Subsidiaries or any of their respective businesses; provided that (A) no Event of Default exists on the date on which the definitive agreement governing the relevant Disposition is executed and (B) such Dispositions are for fair market value;
(r) exchanges or swaps, including transactions covered by Section 1031 of the Code (or any comparable provision of any foreign jurisdiction), of assets so long as any such exchange or swap is made for fair value (as reasonably determined by the Issuer) for like assets; provided that upon the consummation of any such exchange or swap by any Note Party, to the extent the assets received do not constitute an Excluded Asset, the Purchaser Representative has a perfected Lien with the same priority as the Lien held on the Real Estate Assets so exchanged or swapped;
(s) [reserved];
(t) (i) non-exclusive licensing and cross-licensing arrangements involving any technology, intellectual property or IP Rights of the Issuer or any Restricted Subsidiary in the ordinary course of business and (ii) Dispositions, abandonments, cancellations or lapses of IP Rights, or issuances or registrations, or applications for issuances or registrations, of IP Rights, which, in the reasonable good faith determination of the Issuer, are not material to the conduct of the business of the Issuer and its Restricted Subsidiaries, or are no longer economical to maintain in light of its use;
(u) terminations or unwinds of Derivative Transactions;
(v) [reserved];
(w) Dispositions of Real Estate Assets and related assets in the ordinary course of business in connection with relocation activities for directors, officers, employees, members of management, managers or consultants of any Parent Company, the Issuer and/or any Restricted Subsidiary; provided that such Dispositions do not exceed $6,000,000 in the aggregate;
(x) Dispositions made to comply with any order of any Governmental Authority or any applicable Requirement of Law;
(y) any merger, consolidation, Disposition or conveyance the sole purpose of which is to reincorporate or reorganize (i) any Domestic Subsidiary in another jurisdiction in the U.S. and/or (ii) any Foreign Subsidiary in the U.S. or any other jurisdiction;
(z) any sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter;
(aa) [reserved]; and
(bb) Dispositions in connection with Sale and Lease-Back Transactions; provided that, in the case of this clause (bb), the fair market value of all property so Disposed of after the Closing Date shall not exceed the greater of $6,000,000 and 9.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period.
Dispositions in connection with Sale and Lease-Back Transactions may be made solely under clause (bb) of this Section 6.07 and not under any other clause.
To the extent that any Collateral is Disposed of as expressly permitted by this Section 6.07, such Collateral shall be sold free and clear of the Liens created by the Note Documents, which Liens shall be automatically released upon the consummation of such Disposition; it being understood and agreed that the Purchaser Representative shall be authorized to take, and shall take, any actions reasonably requested by the Note Parties in order to effect the foregoing in accordance with Article 8 hereof; provided, that in the case of a Disposition made to any Note Party, the relevant transferred assets shall become part of the Collateral of the transferee Note Party (except to the extent such assets constitute Excluded Assets of such transferee Note Party).
Notwithstanding the foregoing, this Section 6.07 shall not permit any IP Separation Transaction.
Section 6.08.
[Reserved].
Section 6.09.
Transactions with Affiliates. The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) involving payment in excess of $1,200,000 in any individual transaction (it being understood that the threshold set forth above shall not apply to exempt more than $6,000,000 of payments (excluding, for the avoidance of doubt, any payment permitted in reliance on the proviso below) from the application of this
Section 6.09) with any of their respective Affiliates on terms that are less favorable to the Issuer or such Restricted Subsidiary, as the case may be (as reasonably determined by the Issuer), than those that might be obtained at the time in a comparable arm’s-length transaction from a Person who is not an Affiliate;
provided that the foregoing restriction shall not apply to:
(a) any transaction between or among the Issuer and/or one or more Restricted Subsidiaries and/or Affiliated Practices (or any entity that becomes a Restricted Subsidiary or Affiliated Practice as a result of such transaction) to the extent permitted or not restricted by this Agreement;
(b) any issuance, sale or grant of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of employment arrangements, stock options and stock ownership plans approved by the board of directors (or equivalent governing body) of any Parent Company or of the Issuer or any Restricted Subsidiary;
(c) (i) any collective bargaining, employment or severance agreement or compensatory (including profit sharing) arrangement entered into by the Issuer or any of its Restricted Subsidiaries with their respective current or former officers, directors, members of management, managers, employees, consultants or independent contractors or those of any Parent Company, (ii) any subscription agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former officers, directors, members of management, managers, employees, consultants or independent contractors and (iii) transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent contractors or any employment contract or arrangement;
(d) (i) transactions permitted by Sections 6.01(d), (o) and (ee), 6.04 and 6.06(h), (m), (o), (t), (v), (y), (z) and (aa) and (ii) issuances of Capital Stock and issuances and incurrences of Indebtedness not restricted by this Agreement;
(e) transactions in existence on the Closing Date and any amendment, modification or extension thereof to the extent such amendment, modification or extension, taken as a whole, is not (i) materially adverse to the Purchasers or (ii) more disadvantageous to the Purchasers than the relevant transaction in existence on the Closing Date;
(f) the payment of all indemnification obligations owed to any Investor and any of their respective directors, officers, members of management, managers, employees and consultants, and (ii) the payment or reimbursement of all expenses owed to any Investor and any of their respective directors, officers, members of management, managers, employees and consultants, whether currently due or paid in respect of accruals from prior periods, provided that the aggregate amount of expenses that may be paid in any Fiscal Year in reliance on this clause (f)(ii) shall not exceed $500,000;
(g) the Transactions, including the payment of Transaction Costs;
(h) [reserved];
(i) Guarantees permitted by Section 6.01 or Section 6.06;
(j) transactions among the Issuer, its Restricted Subsidiaries and/or any Affiliated Practice that are otherwise permitted (or not restricted) under this Article 6;
(k) the payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the board of directors (or similar governing body), officers, employees, members of management, managers, consultants and independent contractors of the Issuer and/or any of its Restricted Subsidiaries in the ordinary course of business and, in the case of payments to such Person in such capacity on behalf of any Parent Company, to the extent attributable to the operations of the Issuer or its subsidiaries;
(l) transactions with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other labor entered into in the ordinary course of business, which are (i) fair to the Issuer and/or its applicable Restricted Subsidiary in the good faith determination of the board of directors (or similar governing body) of the Issuer or the senior management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate;
(m) the payment of reasonable out-of-pocket costs and expenses related to registration rights and customary indemnities provided to shareholders under any shareholder agreement;
(n) [reserved];
(o) [reserved];
(p) any transaction consummated in connection with any Permitted Practice Subsidiary Restructuring;
(q) any transaction (or series of related transactions) approved by a majority of the disinterested directors (or members of any similar governing body) of the Issuer;
(r) any investment by any Investor or Parent Company in securities or Indebtedness of the Issuer and/or any Guarantor;
(s) any payment to or from, and/or any transaction with, any joint venture in the ordinary course of business or consistent with past practice, industry practice or industry norms (including, any cash management activity related thereto);
(t) the Transactions and the incurrence of any Indebtedness hereunder; and
(u) (i) any Investment by any Affiliate in the Notes, loans, securities or other Indebtedness of the Issuer and/or any Restricted Subsidiary (and payment of reasonable out-of-pocket expenses incurred by such Affiliates in connection therewith) so long as the investment is being offered by the Issuer or such Restricted Subsidiary generally to other investors on the same or more favorable terms and (ii) payments and/or distributions to Affiliates in respect of the Notes, loans, securities or Indebtedness of the Issuer or any Restricted Subsidiary in connection with the securities and other Indebtedness contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Issuer and the Restricted Subsidiaries, in each case, in accordance with the terms of such securities or Indebtedness.
Section 6.10.
Conduct of Business. From and after the Closing Date, the Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, engage in any material line of business other than (a) the businesses engaged in by the Issuer or any Restricted Subsidiary on the Closing Date and similar, incidental, complementary, ancillary or related businesses and (b) such other lines of business to which the Required Purchasers may consent.
Section 6.11.
Amendments or Waivers of Certain Documents.
(a) The Issuer shall not, nor shall it permit any Subsidiary Guarantor to, amend or modify their respective Organizational Documents, in each case in a manner that is materially adverse to the Purchasers (in their capacities as such), taken as a whole, without obtaining the prior written consent of the Required Purchasers; provided that, for purposes of clarity, it is understood and agreed that the Issuer and/or any Subsidiary Guarantor may effect a change to its organizational form and/or consummate any other transaction that is permitted under Section 6.07.
(b) Except as may be required in accordance with any applicable Requirement of Law, the Issuer shall not, nor shall it permit any Subsidiary Guarantor to, amend or modify any Management Services Agreement, Therapy Director Agreement, any Securities Transfer Restriction Agreement and/or any Practice Loan Agreement, in any case, in a manner that (i) is materially adverse to the business of the Issuer and its subsidiaries, taken as a whole, or (ii) is materially adverse to the interests of the Purchasers in their respective capacities as such; provided that it is understood and agreed for the avoidance of doubt that (A) any amendment, modification or other change to the management or other similar fee owing under any Management Services Agreement made in the reasonable business judgment of the relevant Note Party, (B) any amendment, modification or change to any interest rate or repayment and/or prepayment provision in any Practice Loan Agreement and/or (C) any amendment, modification or change to any Management Services Agreement, Therapy Director Agreement, any Securities Transfer Restriction Agreement and/or any Practice Loan Agreement made in the ordinary course of business shall not, in each case, be restricted by this Section 6.11(b)(ii).
(c) [Reserved].
(d) The Issuer shall not permit any amendment or modification to the Series A Certificate of Designation in a manner that is materially adverse to the Purchasers (in their capacities as such), taken as a whole, without obtaining the prior written consent of the Required Purchasers. It is understood and agreed that the amendments to the Series A Certificate of Designation made on the Closing Date in connection with the Transactions is not prohibited by this clause (d).
Section 6.12.
Amendments of or Waivers with Respect to Restricted Debt. The Issuer shall not, nor shall it permit any of its Restricted Subsidiaries to, amend or otherwise modify the terms of any Restricted Debt (or the documentation governing any Restricted Debt) (a) if the effect of such amendment or modification, together with all other amendments or modifications made, is materially adverse to the interests of the Purchasers (in their capacities as such) or (b) in violation of any Intercreditor Agreement or the subordination terms set forth in the definitive documentation governing any Restricted Debt;
provided that, for purposes of clarity, it is understood and agreed that the foregoing limitation shall not otherwise prohibit any Refinancing Indebtedness or any other replacement, refinancing, amendment, supplement, modification, extension, renewal, restatement or refunding of any Restricted Debt, in each case, that is permitted under this Agreement in respect thereof.
Section 6.13.
Fiscal Year. The Issuer shall not change its Fiscal Year-end to a date other than December 31;
provided that the Issuer may, upon written notice to the Purchaser Representative, change the Fiscal Year-end of the Issuer to another date, in which case the Issuer and the Purchaser Representative will, and are hereby authorized to, make any adjustments to this Agreement that are necessary to reflect such change in Fiscal Year.
ARTICLE 7 EVENTS OF DEFAULT
Section 7.01.
Events of Default. If any of the following events (each, an “
Event of Default”) shall occur after the Closing Date:
(a) Failure To Make Payments When Due. Failure by the Issuer to pay (i) any installment of principal of any Note when due, whether at stated maturity, by acceleration, by notice of voluntary redemption, by mandatory redemption or otherwise; or (ii) any interest on any Note or any fee or any other amount due hereunder within five Business Days after the date due; or
(b) Default in Other Agreements. Any of the following:
(i) failure by the Issuer or any of its Restricted Subsidiaries to pay when due any principal of or interest on or any other amount payable in respect of one or more items of third party Indebtedness for borrowed money of such Person (other than Indebtedness referred to in clause (a) above) with an aggregate outstanding principal amount exceeding the Threshold Amount, in each case beyond the grace period, if any, provided therefor; provided that, with respect to the Loans (as defined in the First Lien Credit Agreement) under the First Lien Facility, such non-payment shall not result in an Event of Default pursuant to this Section 7.01(b)(i) unless such non-payment has resulted in an acceleration of the Loans (as defined in the First Lien Credit Agreement) in accordance with Article 7 of the First Lien Credit Agreement; or
(ii) breach or default by the Issuer or any of its Restricted Subsidiaries with respect to any other term of (A) one or more items of third-party Indebtedness for borrowed money of such Person with an aggregate outstanding principal amount exceeding the Threshold Amount or (B) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness (other than, for the avoidance of doubt, with respect to Indebtedness consisting of Hedging Obligations, termination events or equivalent events pursuant to the terms of the relevant Hedge Agreement which are not the result of any default thereunder by any Note Party or any Restricted Subsidiary), in each case beyond the grace period, if any, provided therefor, if the effect of such breach or default is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (with the giving of notice, if required) such Indebtedness to become or be declared due and payable (or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; provided that, with respect to the Loans (as defined in the First Lien Credit Agreement) under the First Lien Facility, such breach or default shall not result in an Event of Default pursuant to this Section 7.01(b)(i) unless such breach or default has resulted in an acceleration of the Loans (as defined in the First Lien Credit Agreement) in accordance with Article 7 of the First Lien Credit Agreement;
provided that (x) clause (ii) of this paragraph (b) shall not apply to any secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property securing such Indebtedness if such sale or transfer is permitted hereunder and (y) any failure described under clauses (i) or (ii) above is unremedied and is not waived by the holders of such Indebtedness prior to any termination of the Commitments or acceleration of the Notes pursuant to Article 7; or
(c) Breach of Certain Covenants. Failure of any Note Party, as required by the relevant provision, to perform or comply with any term or condition contained in (A) Section 5.01(e)(i), Section 5.02 (as it applies to the preservation of the existence of the Issuer), Section 5.11 or Article 6 or (B) Sections 5.01(j) or (l) which default has not been remedied or waived within 15 days after receipt by the Issuer of written notice from the Purchaser Representative; or
(d) Breach of Representations, Etc. Any representation, warranty or certification made or deemed made by any Note Party in any Note Document or in any certificate required to be delivered in connection herewith or therewith (including, for the avoidance of doubt, any Perfection Certificate) being untrue in any material respect as of the date made or deemed made; it being understood and agreed that any breach of any representation, warranty or certification resulting from the failure of the Purchaser Representative (at the direction of the Required Purchasers) to file any Uniform Commercial Code continuation statement shall not result in an Event of Default under this Section 7.01(d) or any other provision of any Note Document; or
(e) Other Defaults Under Note Documents. Default by any Note Party in the performance of or compliance with any term contained herein or any of the other Note Documents, other than any such term referred to in any other Section of this Article 7, which default has not been remedied or waived within 30 days after receipt by the Issuer of written notice thereof from the Purchaser Representative (at the direction of the Required Purchasers); or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry by a court of competent jurisdiction of a decree or order for relief in respect of the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) in an involuntary case under any Debtor Relief Law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal, state or local Requirements of Law, which relief is not stayed; or (ii) the commencement of an involuntary case against the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) under any Debtor Relief Law; the entry by a court having jurisdiction in the premises of a decree or order for the appointment of a receiver, receiver and manager, (preliminary) insolvency receiver, liquidator, sequestrator, trustee, administrator, custodian or other officer having similar powers over the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary), or over all or a material part of its property; or the involuntary appointment of an interim receiver, trustee or other custodian of the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) for all or a material part of its property, which remains, in any case under this clause (f), undismissed, unvacated, unbounded or unstayed pending appeal for 60 consecutive days; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry against the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of an order for relief, the commencement by the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a voluntary case under any Debtor Relief Law, or the consent by the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case, under any Debtor Relief Law, or the consent by the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the appointment of or taking possession by a receiver, receiver and manager, insolvency receiver, liquidator, sequestrator, trustee, administrator, custodian or other like official for or in respect of itself or for all or a material part of its property; (ii) the making by the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a general assignment for the benefit of creditors; or (iii) the admission by the Issuer or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) in writing of their inability to pay their respective debts as such debts become due; or
(h) Judgments and Attachments. The entry or filing of one or more final money judgments, orders, writs or warrants of attachment or similar process (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order, writ or warrant of attachment or similar process) against the Issuer or any of its Restricted Subsidiaries or any of their respective assets involving in the aggregate at any time an amount in excess of the Threshold Amount (in either case to the extent not adequately covered by indemnity from a third party or by insurance as to which, in each case, the relevant third party indemnifier or insurance company has been notified and not denied coverage), which judgment, writ, warrant or similar process or settlement remains unpaid, undischarged, unvacated, unbonded or unstayed pending appeal for a period of 60 consecutive days; or
(i) Employee Benefit Plans. The occurrence of one or more ERISA Events, which individually or in the aggregate result in liability of the Issuer or any of its Restricted Subsidiaries in an aggregate amount which would reasonably be expected to result in a Material Adverse Effect; or
(j) Change of Control. The occurrence of a Change of Control; or
(k) Guaranties, Collateral Documents and Other Note Documents. At any time after the execution and delivery thereof, (i) any material Note Guaranty for any reason, other than the occurrence of the Termination Date, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared, by a court of competent jurisdiction, to be null and void or any Note Guarantor shall repudiate in writing its obligations thereunder (in each case, other than as a result of the discharge of such Note Guarantor in accordance with the terms thereof and other than as a result of any act or omission by the Purchaser Representative or any Purchaser), (ii) this Agreement or any material Collateral Document ceases to be in full force and effect or shall be declared, by a court of competent jurisdiction, to be null and void or any Lien on a material portion of the Collateral created under any Collateral Document ceases to be perfected with respect to a material portion of the Collateral (other than (A) Collateral consisting of Material Real Estate Assets to the extent that the relevant losses are covered by a lender’s title insurance policy and such insurer has not denied coverage or (B) solely by reason of (w) such perfection not being required pursuant to the Collateral and Guarantee Requirement, the Collateral Documents, this Agreement or otherwise, (x) the failure of the Purchaser Representative or the First Lien Credit Agreement Agent to maintain possession of any Collateral actually delivered to it or the failure of the Purchaser Representative to file Uniform Commercial Code financing statement, amendment or continuation statements (so long as, in the case of any financing statement or amendment, the Purchaser Representative shall have received written notice from the Issuer of the event giving rise to the requirement to file such financing statement or amendment, as applicable, within the time periods therefor set forth in Section 5.12 (in the case of events giving rise to the requirement to file a new financing statement) or Section 5.01(i) (in the case of events giving rise to the requirement to file such an amendment) (it being understood and agreed that any notice delivered pursuant to Section 5.01(i) and receipt by the Purchaser Representative of the applicable Joinder Agreement in connection with the requirements of Section 5.12 shall satisfy such notice obligations), (y) a release of Collateral in accordance with the terms hereof or thereof or (z) the occurrence of the Termination Date or any other termination of such Collateral Document in accordance with the terms thereof) or (iii) other than in any bona fide, good faith dispute as to the scope of Collateral or whether any Lien has been, or is required to be released, any Note Party shall contest in writing, the validity or enforceability of any material provision of any Note Document (or any Lien purported to be created by the Collateral Documents on any material portion of the Collateral or any Note Guaranty) or deny in writing that it has any further liability (other than by reason of the occurrence of the Termination Date or any other termination of any other Note Document in accordance with the terms thereof), including with respect to future advances by the Purchasers, under any Note Document to which it is a party; it being understood and agreed that the failure of the Purchaser Representative to file any Uniform Commercial Code financing statement, amendment or continuation statement (so long as, in the case of any financing statement or amendment, the Purchaser Representative shall have received written notice from the Issuer of the event giving rise to the requirement to file such financing statement or amendment, as applicable, within the time periods therefor set forth in Section 5.12 (in the case of events giving rise to the requirement to file a new financing statement) or Section 5.01(i) (in the case of events giving rise to the requirement to file such an amendment) (it being understood and agreed that any notice delivered pursuant to Section 5.01(i) and receipt by the Purchaser Representative of the applicable Joinder Agreement in connection with the requirements of Section 5.12 shall satisfy such notice obligations) and/or maintain possession of any physical Collateral shall not result in an Event of Default under this Section 7.01(k) or any other provision of any Note Document;
(l) Subordination. The Secured Obligations ceasing or the assertion in writing by any Note Party that the Obligations cease to constitute senior indebtedness under the subordination provisions of any document or instrument evidencing any Junior Lien Indebtedness in excess of the Threshold Amount or any such subordination provision being invalidated by a court of competent jurisdiction in a final non-appealable order, or otherwise ceasing, for any reason, to be valid, binding and enforceable obligations of the parties thereto;
(m) Conversion of Notes. Failure by the Issuer to comply with its obligation to convert any Notes in accordance with this Agreement upon exercise of a holder’s Conversion Right pursuant to Article 10 and such failure continues for five Business Days.
then, and in every such event (other than an event with respect to the Issuer described in clause (f) or (g) of this Article), and at any time thereafter during the continuance of such event, the Purchaser Representative, at the request of the Required Purchasers shall, by notice to the Issuer, take any of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon such Commitments shall terminate immediately and (ii) declare the Notes then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Notes so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Issuer accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Issuer; provided that upon the occurrence of an event with respect to the Issuer described in clauses (f) or (g) of this Article, any such Commitments shall automatically terminate and the principal of the Notes then outstanding, together with accrued interest thereon and all fees and other obligations of the Issuer accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Issuer without further action of the Purchaser Representative or any Purchaser.
ARTICLE 8 THE PURCHASER REPRESENTATIVE
Section 8.01.
Appointment and Authorization of Purchaser Representative. Each of the Purchasers, on behalf of itself and its applicable Affiliates, and in their respective capacities as such, hereby irrevocably appoints Wilmington Savings Bank Society, FSB (or any successor appointed pursuant hereto) as Purchaser Representative and authorizes the Purchaser Representative to take such actions on its behalf, including execution of the other Note Documents, and to exercise such powers as are delegated to the Purchaser Representative by the terms of the Note Documents, together with such actions and powers as are reasonably incidental thereto.
Section 8.02.
Rights as a Purchaser. Any Person serving as Purchaser Representative hereunder shall have the same rights and powers in its capacity as a Purchaser as any other Purchaser and may exercise the same as though it were not the Purchaser Representative, and the term “Purchaser” or “Purchasers” shall, unless otherwise expressly indicated, unless the context otherwise requires or unless such Person is in fact not a Purchaser, include each Person serving as Purchaser Representative hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Note Party or any subsidiary of any Note Party or other Affiliate thereof as if it were not the Purchaser Representative hereunder. The Purchasers acknowledge that, pursuant to such activities, the Purchaser Representative or its Affiliates may receive information regarding any Note Party or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of such Note Party or such Affiliate) and acknowledge that the Purchaser Representative shall not be under any obligation to provide such information to them.
Section 8.03.
Exculpatory Provisions. The Purchaser Representative shall not have any duties or obligations except those expressly set forth in the Note Documents. Without limiting the generality of the foregoing, (a) the Purchaser Representative shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default exists, and the use of the term “agent” or “representative” herein and in the other Note Documents with reference to the Purchaser Representative is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Requirements of Law; it being understood that such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties, (b) the Purchaser Representative shall not have any duty to take any discretionary action or exercise any discretionary power, except discretionary rights and powers that are expressly contemplated by the Note Documents and which the Purchaser Representative is required to exercise as directed in writing by the Required Purchasers (or such other number or percentage of the Purchasers as shall be necessary under the relevant circumstances as provided in
Section 9.02);
provided that the Purchaser Representative shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Purchaser Representative to liability or that is contrary to any Note Document or applicable Requirements of Law and (c) except as expressly set forth in the Note Documents, the Purchaser Representative shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Issuer or any of its Restricted Subsidiaries that is communicated to or obtained by the Person serving as Purchaser Representative or any of its Affiliates in any capacity. The Purchaser Representative shall not be liable to the Purchasers or any other Secured Party for any action taken or not taken by it with the consent or at the request or direction of the Required Purchasers (or such other number or percentage of the Purchasers as is necessary, or as the Purchaser Representative believes in good faith shall be necessary under the relevant circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein. The Purchaser Representative shall not be deemed to have knowledge of any Default or Event of Default or any other matter unless and until written notice thereof is given to the Purchaser Representative by the Issuer or any Purchaser, and the Purchaser Representative shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Note Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Note Document, (iii) the performance or observance of any covenant, agreement or other term or condition set forth in any Note Document or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Note Document or any other agreement, instrument or document, (v) the creation, perfection or priority of any Lien on the Collateral or the existence, value or sufficiency of the Collateral or to assure that the Liens granted to the Purchaser Representative pursuant to any Note Document have been or will continue to be properly or sufficiently or lawfully created, perfected or enforced or are entitled to any particular priority or that the Collateral and Guarantee Requirement or the Perfection Requirements are complied with, (vi) the satisfaction of any condition set forth in
Article 4 or elsewhere in any Note Document, other than to confirm receipt of items expressly required to be delivered to the Purchaser Representative or (vii) any property, book or record of any Note Party or any Affiliate thereof. The Purchaser Representative shall not (i) be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default exists, (ii) be liable for the failure to disclose any information relating to the Issuer or any of its Restricted Subsidiaries or (iii) be liable to the Purchasers or any other Secured Party for any action taken or not taken by it with the consent or at the request of the Required Purchasers (or such other number or percentage of the Purchasers as is necessary under the relevant circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein. The Purchaser Representative shall have no liability for, or obligation to ascertain, monitor, confirm or inquire as to, compliance by any Purchaser, any Note Party or any other Person with the Securities Act, federal or state securities laws or any other applicable law or restrictions relating to the Notes, including without limitation, with respect to the sale or transfer of any Notes. The Purchaser Representative shall not have any duty or responsibility in respect of (i) the acquisition or maintenance of any insurance or (ii) the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral. No provision of this Agreement or any other Note Document shall require the Purchaser Representative to expend or risk its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder or thereunder or in the exercise of any of its rights or powers, if it shall have grounds to believe that repayment of such funds or indemnity reasonably satisfactory to it against such risk or liability is not assured to it. The rights, privileges, protections, immunities and benefits given to the Purchaser Representative, including, without limitation, the right to be indemnified, are extended to, and shall be enforceable: (i) by the Purchaser Representative in each Note Document and any other document related hereto or thereto to which it is a party and (ii) the entity serving as the Purchaser Representative in each of its capacities hereunder and in each of its capacities under any Note Document whether or not specifically set forth therein. In no event shall the Purchaser Representative be liable for any failure or delay in the performance of its obligations under this Agreement or any other Note Document because of circumstances beyond its control, including, but not limited to, a failure, termination, or suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes, political unrest, explosion, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, epidemics or pandemics or other health crises, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Agreement or the other Note Documents, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond such the Purchaser Representative’s control whether or not of the same class or kind as specified above. Notwithstanding anything herein to the contrary, the Purchaser Representative shall not be liable for any indirect, special, punitive or consequential damages (including but not limited to lost profits) whatsoever, even if it has been informed of the likelihood thereof and regardless of the form of action. The Purchaser Representative shall not be liable for interest on any money received by it and any amounts on deposit with it shall remain uninvested. Notwithstanding anything in this Agreement or any Note Document to the contrary, the Purchaser Representative: (a) shall not be responsible for, or chargeable with knowledge of, the terms and conditions of any other agreement, instrument, or document to which it is not a party (including, without limitation, the First Lien Credit Agreement, the Transaction Support Agreement and the Master Assignment and Assumption Agreement), whether or not an original or a copy of such agreement has been provided to it, (b) shall have no liability or responsibility with respect to the Term Loan Exchange or any other transactions contemplated with respect to the exchange of the Exchanged Term Loans and (c) shall have no duty or responsibility to monitor or otherwise confirm the performance or observance of any of the covenants, agreements or other terms or conditions applicable to the First Lien Credit Agreement Agent under any agreement or document.
Section 8.04. Exclusive Right to Enforce Rights and Remedies. Notwithstanding anything to the contrary contained herein or in any of the other Note Documents, the Issuer, the Purchaser Representative and each Secured Party agree that:
(a) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce the provisions of any Note Document, including this Agreement, the Security Agreement and/or the Note Guaranty; it being understood that any right to enforce any such provision (including to realize upon the Collateral or enforce any Note Guaranty against any Note Party pursuant hereto or pursuant to any other Note Document may be exercised solely by the Purchaser Representative on behalf of the Secured Parties in accordance with the terms hereof or thereof and (ii) in the event of a foreclosure by the Purchaser Representative on any of the Collateral pursuant to a public or private sale or in the event of any other Disposition (including pursuant to Section 363 of the Bankruptcy Code), (A) the Purchaser Representative, as agent for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale, to use and apply all or any portion of the Obligations as a credit on account of the purchase price for any Collateral payable by the Purchaser Representative at such Disposition and (B) the Purchaser Representative or any Purchaser may be the purchaser or licensor of all or any portion of such Collateral at any such Disposition.
(b) Each Secured Party agrees that the Purchaser Representative may (either directly or through one or more acquisition vehicles) upon instruction by the Required Purchasers, but is under no obligation to, credit bid any part or all of the Secured Obligations (other than any Secured Obligations owing to the Purchaser Representative) to purchase or retain or acquire any portion of the Collateral.
Section 8.05.
Reliance by Purchaser Representative. The Purchaser Representative shall be entitled to conclusively rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) that it believes to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Purchaser Representative also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the purchasing of a Note, that by its terms must be fulfilled to the satisfaction of a Purchaser, the Purchaser Representative may presume that such condition is satisfactory to such Purchaser unless the Purchaser Representative has received notice to the contrary from such Purchaser prior to the purchasing of such Note. The Purchaser Representative may consult with legal counsel (who may be counsel for the Issuer), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Notwithstanding anything contained in this Agreement or the other Note Documents to the contrary, without limiting any rights, protections, immunities or indemnities afforded to the Purchaser Representative hereunder, phrases such as “satisfactory to the Purchaser Representative,” “approved by the Purchaser Representative,” “acceptable to the Purchaser Representative,” “as determined by the Purchaser Representative,” “consented to by the Purchaser Representative”, “designed by the Purchaser Representative”, “specified by the Purchaser Representative”, “in the Purchaser Representative’s discretion,” “selected by the Purchaser Representative,” “elected by the Purchaser Representative,” “requested by the Purchaser Representative,” “in the opinion of the Purchaser Representative,” and phrases of similar import that authorize or permit the Purchaser Representative to approve, disapprove, determine, act, evaluate or decline to act in its discretion shall be subject to the Purchaser Representative receiving written direction from the Required Purchasers (or such other number or percentage of the Purchasers as shall be required by the express terms of this Agreement) to take such action or to exercise such rights. The right of the Purchaser Representative to perform any discretionary act enumerated in this Agreement or any Note Document shall not be construed as a duty.
Section 8.06. Delegation of Duties. The Purchaser Representative may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. The Purchaser Representative and any such sub-agent may perform any and all of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Purchaser Representative and any such sub-agent and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Purchaser Representative. The Purchaser Representative shall not be responsible for the acts or omissions of any agents, sub-agents, delegates, co-security trustees or attorneys-in-fact selected by it without gross negligence or willful misconduct.
Section 8.07.
Successor Purchaser Representative.
(a) The Purchaser Representative shall have the right to resign at any time by giving thirty days’ prior written notice thereof to the Purchasers and the Issuer. If the Purchaser Representative delivers any such notice of resignation, the Required Purchasers shall have the right to appoint a financial institution which shall be a commercial bank, trust company or other Person reasonably acceptable to the Issuer with offices in the U.S. having combined capital and surplus in excess of $1,000,000,000, subject to the consent of the Issuer (such consent not to be unreasonably withheld or delayed); provided, that during the existence and during the continuation of an Event of Default under Section 7.01(a), or with respect to the Issuer, Sections 7.01(f) or (g), no consent of the Issuer shall be required. The Purchaser Representative’s resignation shall become effective on the earliest of (i) thirty (30) days after delivery of the notice of resignation (regardless of whether a successor has been appointed), and (ii) the acceptance of such successor Purchaser Representative by the Issuer and the Required Purchasers.
(b) If, upon notice of resignation, the Required Purchasers have not appointed a successor Purchaser Representative, the Required Purchasers shall be deemed to have succeeded to and become vested with all the rights, powers, privileges and duties of the retiring Purchaser Representative; provided that, until a successor Purchaser Representative reasonably satisfactory to the Issuer is so appointed by the Required Purchasers, any collateral security held by the Purchaser Representative shall continue to be held by it until such time as a successor agent is appointed and the Purchaser Representative shall continue to be entitled to all of its rights, protections and indemnities hereunder and under the other Note Documents during such time. If a successor Purchaser Representative is not appointed within 30 days after the retiring or removed Purchaser Representative provides a notice of resignation or is given a notice of removal, such retiring or removed Purchaser Representative may, at the Issuer’s expense, petition any court of competent jurisdiction for the appointment of a successor Purchaser Representative. Upon the acceptance of any appointment as the Purchaser Representative hereunder by a successor Purchaser Representative, that successor Purchaser Representative shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Purchaser Representative and the retiring or removed Purchaser Representative shall promptly (i) transfer to such successor Purchaser Representative all sums, Securities and other items of Collateral held under the Note Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Purchaser Representative under the Note Documents, and (ii) at the expense of the Issuer, execute and deliver to such successor Purchaser Representative such amendments to financing statements provided to it, and take such other actions, as may be reasonably requested of it in connection with the assignment to such successor Purchaser Representative of the security interests created under the Note Documents, whereupon such retiring Purchaser Representative shall be discharged from its duties and obligations hereunder (other than its obligations under Section 9.13 hereof).
(c) The fees payable by the Issuer to any successor Purchaser Representative shall be the same as those payable to its predecessor unless otherwise agreed between the Issuer and such successor Purchaser Representative.
(d) After the Purchaser Representative’s resignation or removal hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring or removed Purchaser Representative, its sub-agents and their respective Related Parties in respect of any action taken or omitted to be taken by any of them while the relevant Person was acting as Purchaser Representative (including for this purpose holding any collateral security following the retirement or removal of the Purchaser Representative).
(e) Any corporation into which the Purchaser Representative may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Purchaser Representative shall be a party, or any corporation succeeding to the business of the Purchaser Representative, shall be the successor of the Purchaser Representative hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
(f) Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be appointed as a successor Purchaser Representative.
Section 8.08.
Non-Reliance On Purchaser Representative. Each Purchaser acknowledges that it has, independently and without reliance upon the Purchaser Representative or any other Purchaser or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of each Purchaser also acknowledges that it will, independently and without reliance upon the Purchaser Representative or any other Purchaser or any of their respective Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Note Document or related agreement or any document furnished hereunder or thereunder. Except for notices, reports and other documents expressly required to be furnished to the Purchasers by the Purchaser Representative herein, the Purchaser Representative shall not have any duty or responsibility to provide any Purchaser with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Note Parties or any of their respective Affiliates which may come into the possession of the Purchaser Representative or any of its Related Parties.
Section 8.09.
Collateral and Guaranty Matters. Each Purchaser and each other Secured Party irrevocably authorizes and instructs the Purchaser Representative to, and the Purchaser Representative shall:
(a) release (or evidence the release of) any Lien on any property granted to or held by Purchaser Representative under any Note Document (i) upon the occurrence of the Termination Date, (ii) that is sold or otherwise Disposed of (other than pursuant to a lease, sublease, license or sublicense) as part of or in connection with any Disposition permitted under (or not restricted by) the Note Documents (subject to the last paragraph of Section 6.07), (iii) that does not constitute (or ceases to constitute) Collateral (and/or otherwise becomes an Excluded Asset), (iv) if the property subject to such Lien is owned by a Subsidiary Guarantor, upon the release of such Subsidiary Guarantor from its Note Guaranty otherwise in accordance with the Note Documents, (v) as required under clause (d) below, (vi) pursuant to the provisions of any applicable Note Document or (vii) if approved, authorized or ratified in writing by the Required Purchasers in accordance with Section 9.02;
(b) subject to Section 9.22, release (or evidence the release of) any Subsidiary Guarantor from its obligations under the Note Guaranty (i) if such Person ceases to be a Restricted Subsidiary or is an Excluded Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of related transactions not prohibited hereunder, including for the avoidance of doubt, any Permitted Practice Subsidiary Restructuring) and/or (ii) in the case of any Discretionary Guarantor, at the election of the Issuer, upon notice from the Issuer to the Purchaser Representative at any time so long as, in the case of this clause (ii), after giving pro forma effect to such release and, if applicable, the relevant transaction, the Issuer is deemed to have made a new Investment in such Person (as if such Person was then newly acquired) on the date of such release and such Investment is not otherwise prohibited by the Note Documents; provided that if any Subsidiary Guarantor ceases to constitute a Wholly-Owned Subsidiary, such Subsidiary Guarantor shall not be released from its Note Guaranty unless (A) such Subsidiary Guarantor is no longer a direct or indirect subsidiary of the Issuer or (B) after giving pro forma effect to such release and the consummation of the relevant transaction, the Issuer is deemed to have made a new Investment in such Person (as if such Person was then newly acquired) and such Investment is not otherwise prohibited by the Note Documents; it being understood that this proviso shall not limit the release of any Subsidiary Guarantor that otherwise constitutes an Excluded Subsidiary for any reason other than not constituting a Wholly-Owned Subsidiary of the Issuer (this proviso, the “Specified Guarantor Release Provision”);
(c) subordinate any Lien on any property granted to or held by the Purchaser Representative under any Note Document to the holder of any Lien on such property that is permitted by Sections 6.02(d), 6.02(e), 6.02(g)(i), 6.02(l), 6.02(m), 6.02(n), 6.02(o)(i) (other than any Lien on the Capital Stock of any Subsidiary Guarantor), 6.02(q), 6.02(r), 6.02(s), 6.02(x), 6.02(y), 6.02(z)(i), 6.02(bb), 6.02(cc), 6.02(dd) (in the case of clause (ii), to the extent the relevant Lien covers cash collateral posted to secure the relevant obligation), 6.02(ee), 6.02(ff), 6.02(gg) and/or 6.02(hh) (and any Refinancing Indebtedness in respect of any thereof to the extent such Refinancing Indebtedness is permitted to be secured under Section 6.02(k));
(d) enter into subordination, intercreditor, collateral trust and/or similar agreements with respect to Indebtedness (including any Intercreditor Agreement and/or any amendment to any Intercreditor Agreement) that is (i) required or permitted to be subordinated hereunder and/or (ii) secured by Liens, and with respect to which Indebtedness, this Agreement contemplates an intercreditor, subordination, collateral trust or similar agreement, with each of the Purchasers and the other Secured Parties irrevocably agreeing to the treatment of the Lien on the Collateral securing the Secured Obligations as set forth in any such agreement and it will be bound by and will take no action contrary to the provisions of any such agreement; and
(e) execute and/or deliver, as applicable, any amendment to any UCC financing statement and/or any other document evidencing the security interest granted pursuant to the Collateral Documents to indicate that Excluded Assets and/or other assets that do not constitute and are not required to constitute Collateral are not subject to the security interest granted pursuant to the Collateral Documents.
Upon the request of the Purchaser Representative at any time, the Required Purchasers will confirm in writing the Purchaser Representative’s authority to release or subordinate its interest in particular types or items of property, or to release any Note Party from its obligations under the Note Guaranty or its Lien on any Collateral pursuant to this Article 8. In each case as specified in this Article 8, the Purchaser Representative will (and each Purchaser hereby authorizes the Purchaser Representative to), at the Issuer’s expense, execute and deliver to the applicable Note Party such documents as such Note Party may prepare and reasonably request to evidence, effectuate or confirm the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents, to subordinate its interest therein, or to evidence, effectuate or confirm the release of such Note Party from its obligations under the Note Guaranty, in each case in accordance with the terms of the Note Documents and this Article 8; provided, that upon the request of the Purchaser Representative, the Issuer shall deliver a certificate of a Responsible Officer certifying that the relevant transaction has been consummated in compliance with the terms of this Agreement and that the execution by the Purchaser Representative of any documents or instruments evidencing or authorizing such release or subordination is authorized or permitted by the terms of this Agreement and the Note Documents.
Each of the Purchasers hereby direct and authorize the Purchaser Representative to execute and deliver any releases presented to it by the First Lien Credit Agreement Agent in accordance with the terms of the Second Lien Intercreditor and Subordination Agreement or by any other applicable agent in accordance with the terms of any Intercreditor Agreement, or otherwise presented to the Purchaser Representative for execution in accordance with the terms of Second Lien Intercreditor and Subordination Agreement or any other Intercreditor Agreement, and the Purchaser Representative shall have no obligations to investigate or determine whether any such release is permitted by the Note Documents or any other related document and shall incur no liability for executing and delivering any such release.
It is understood and agreed that, notwithstanding anything to the contrary herein, in any other Note Document, (a) unless otherwise agreed to by the Issuer, the obligations of the Issuer or any subsidiary under any such agreement shall be secured and guaranteed pursuant to the Collateral Documents and the Note Guaranty only to the extent that, and for so long as, the Obligations are so secured and guaranteed and (b) any release of any Lien on any Collateral and/or any Subsidiary Guarantor effected in a manner permitted by this Agreement and/or any other Note Document shall not require the consent of any such counterparty.
Section 8.10. Intercreditor Agreements. The Purchaser Representative is authorized by the Purchasers and each other Secured Party to, and shall, enter into the Second Lien Intercreditor and Subordination Agreement, any other Intercreditor Agreement and any other intercreditor, subordination, collateral trust or similar agreement contemplated hereby with respect to any (a) Indebtedness that is (i) required or permitted to be subordinated hereunder and/or (ii) secured by any Lien permitted hereunder and (b) which contemplates an intercreditor, subordination, collateral trust or similar agreement (any such other intercreditor, subordination, collateral trust and/or similar agreement, which intercreditor, subordination, collateral trust and/or similar agreement shall be reasonably acceptable to the Required Purchasers, an “Additional Agreement”), and the Secured Parties party hereto acknowledge that any Intercreditor Agreement and any other Additional Agreement is binding upon them. Each Purchaser and each other Secured Party party hereto hereby (a) agrees that it will be bound by, and will not take any action contrary to, the provisions of any Intercreditor Agreement or any other Additional Agreement and (b) authorizes and instructs the Purchaser Representative to enter into any Intercreditor Agreement and/or any other Additional Agreement and to subject the Liens on the Collateral securing the Secured Obligations to the provisions thereof. The foregoing provisions are intended as an inducement to the Purchasers and other Secured Parties to extend credit to the Issuer, and the Purchasers and the other Secured Parties are intended third-party beneficiaries of such provisions and the provisions of any Intercreditor Agreement and/or any other Additional Agreement.
Section 8.11. Indemnification of Purchaser Representative. To the extent that the Purchaser Representative (or any Affiliate thereof) and each of its Related Parties is not reimbursed and indemnified by the Issuer in accordance with and to the extent required by
Section 9.03 hereof, the Purchasers will reimburse and indemnify the Purchaser Representative (and any Affiliate thereof) and each of its Related Parties in proportion to their respective Applicable Percentages (determined as if there were no Defaulting Purchasers) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Purchaser Representative (or any Affiliate thereof) in performing its duties hereunder or under any other Note Document or in any way relating to or arising out of this Agreement or any other Note Document;
provided that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Purchaser Representative’s (or such Affiliate’s) or such Related Party’s gross negligence, bad faith or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). Notwithstanding anything to the contrary set forth in the Note Documents and for the avoidance of doubt, any restriction set forth in any Intercreditor Agreement with respect to the Purchaser Representative’s ability to seek reimbursement of its fees, expenses and indemnities from the Issuer shall not affect each Purchaser’s requirement to reimburse and indemnify the Purchaser Representative (and any Affiliate thereof) and each of its Related Parties pursuant to this Section 8.11 and in such event the Purchaser Representative shall not be required to make demand on the Issuer prior to seeking reimbursement and indemnification from the Purchasers pursuant to this Section 8.11
Section 8.12.
Withholding Taxes. To the extent required by any applicable Requirement of Law (as determined in good faith by the Purchaser Representative), the Purchaser Representative may withhold from any payment to any Purchaser under any Note Document an amount equivalent to any applicable withholding Tax. Without limiting or expanding the provisions of
Section 2.20, each Purchaser shall indemnify and hold harmless the Purchaser Representative against, and shall make payable in respect thereof within ten days after demand therefor, any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Purchaser Representative) incurred by or asserted against the Purchaser Representative by the IRS or any other Governmental Authority as a result of the failure of the Purchaser Representative to properly withhold Tax from amounts paid to or for the account of such Purchaser for any reason (including because the appropriate form was not delivered or not properly executed, or because such Purchaser failed to notify the Purchaser Representative of a change in circumstance that rendered the exemption from, or reduction of withholding Tax ineffective). A certificate as to the amount of such payment or liability delivered to any Purchaser by the Purchaser Representative shall be conclusive absent manifest error. Each Purchaser hereby authorizes the Purchaser Representative to set off and apply any and all amounts at any time owing to such Purchaser under this Agreement or any other Note Document against any amount due the Purchaser Representative under this paragraph. The agreements in this paragraph shall survive the resignation or replacement of the Purchaser Representative or any assignment of rights by, or the replacement of, any Purchaser, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Note Document.
Section 8.13. Purchaser Representative May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Note Party, the Purchaser Representative (irrespective of whether the principal of any Notes shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Purchaser Representative shall have made any demand on the Note Parties) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Notes and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties and the Purchaser Representative (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and the Purchaser Representative and their respective agents and counsel and all other amounts due the Secured Parties and the Purchaser Representative under Sections 2.14 and 9.03) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party to make such payments to the Purchaser Representative and, in the event that the Purchaser Representative shall consent to the making of such payments directly to the Secured Parties, to pay to the Purchaser Representative any amount due for the reasonable compensation, expenses, disbursements and advances of the Purchaser Representative and its agents and counsel, and any other amounts due the Purchaser Representative under Sections 2.14 and 9.03
Section 8.14.
Erroneous Payments.
(a) If the Purchaser Representative notifies a Purchaser or Secured Party, or any Person who has received funds on behalf of a Purchaser or Secured Party (any such Purchaser, Secured Party or other recipient, a “Payment Recipient”) that the Purchaser Representative has determined in its sole discretion that any funds received by such Payment Recipient from the Purchaser Representative or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Purchaser, Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”), the Purchaser Representative shall, within thirty (30) calendar days of the date of the payment of such Erroneous Payment to the Payment Recipient, notify the Payment Recipient and demand the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Purchaser Representative and shall be segregated by the Payment Recipient and held in trust for the benefit of the Purchaser Representative, and such Purchaser or Secured Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business Days thereafter, return to the Purchaser Representative the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Purchaser Representative in same day funds at the greater of the Federal Funds Rate and a rate determined by the Purchaser Representative in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Purchaser Representative to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error. If a Payment Recipient receives any payment, prepayment or repayment of principal, interest, fees, distribution or otherwise and does not receive a corresponding payment notice or payment advice from the Purchaser Representative, such payment, prepayment or repayment shall be presumed to be in error absent written confirmation from the Purchaser Representative to the contrary.
(b) Each Purchaser or Secured Party hereby authorizes the Purchaser Representative to set off, net and apply any and all amounts at any time owing to such Purchaser or Secured Party under any Note Document, or otherwise payable or distributable by the Purchaser Representative to such Purchaser or Secured Party from any source, against any amount due to the Purchaser Representative under immediately preceding clause (a) or under the indemnification provisions of this Article 8.
(c) For so long as an Erroneous Payment (or portion thereof) has not been returned by any Payment Recipient who received such Erroneous Payment (or portion thereof) (such unrecovered amount, an “Erroneous Payment Return Deficiency”) to the Purchaser Representative after demand therefor in accordance with clause (a) above, (i) the Purchaser Representative may elect, in its sole discretion upon written notice to the relevant Purchaser or Secured Party, that all rights and claims of such Purchaser or Secured Party with respect to the Notes or other Obligations owed to such Person up to the amount of the corresponding Erroneous Payment Return Deficiency in respect of such Erroneous Payment (the “Corresponding Amount”) shall immediately vest in the Purchaser Representative upon such election; after such election, with respect to Notes, the Purchaser Representative (x) may reflect its ownership interest in the relevant Notes in a principal amount equal to the Corresponding Amount in the Register, and (y) upon five business days’ written notice to such Purchaser may sell such Note (or portion thereof) to an Eligible Transferee in accordance with Section 9.05 in respect of the Corresponding Amount, and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by such Purchaser shall be reduced by the net proceeds of the sale of such Note (or portion thereof), and the Purchaser Representative shall retain all other rights, remedies and claims against such Purchaser (and/or against any Payment Recipient that receives funds on its behalf), and (ii) each party hereto agrees that, except to the extent that the Purchaser Representative has sold such Notes, and irrespective of whether the Purchaser Representative may be equitably subrogated, the Purchaser Representative shall be contractually subrogated to all the rights and interests of such Purchaser or Secured Party with respect to the relevant Erroneous Payment Return Deficiency (determined after any reduction as a result of the vesting described in clause (i)) (it being understood and agreed that aggregate Obligations of the Note Parties shall not be increased as a result of the application of this clause (ii)). For the avoidance of doubt, no vesting or sale pursuant to this clause (c) will reduce the Commitments of any Purchaser and such Commitments shall remain available in accordance with the terms of this Agreement.
(d) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Issuer or any other Note Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Purchaser Representative from the Issuer or any other Note Party for the purpose of making such Erroneous Payment.
(e) No Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Purchaser Representative for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
(f) Each party’s obligations, agreements and waivers under this Section 8.14 shall survive the resignation or replacement of the Purchaser Representative, any transfer of rights or obligations by, or the replacement of, a Purchaser, and the occurrence of the Termination Date.
(g) This Section 8.14 shall not apply to the disbursement of any proceeds of a Note to or at the express direction of the Issuer unless otherwise expressly agreed to in writing by the Issuer.
(h) Notwithstanding anything to the contrary herein or in any other Note Document, the Issuer and the Note Parties shall have no obligations or liabilities for any actions, consequences or remediation (including the repayment of any amounts) contemplated by this Section 8.14; provided that under no circumstances shall this Section 8.14(h) affect the Issuer’s or any Note Parties’ obligations or liabilities with respect to any Obligations that remain outstanding.
Section 8.15.
Representations and Warranties of the Purchasers.
Each Purchaser, severally, but not jointly or jointly and severally, represents and warrants to Issuer as to matters affecting itself that:
(a) Securities Law Compliance. Such Purchaser (a) is an “accredited investor”, as that term is defined in Regulation D under the Securities Act and (b) has such knowledge, skill, sophistication and experience in business and financial matters, based on actual participation, that it is capable of evaluating the merits and risks of the purchase and sale of the securities hereunder (including the Notes, Conversion Shares and the shares of Series B Preferred Stock) and the suitability thereof for such Purchaser. The securities to be acquired by such Purchaser pursuant to this Agreement are being or will be acquired for its own account and with no intention of distributing or reselling such securities (within the meaning of the Securities Act) or any part thereof in any transaction that would be in violation of the securities laws of the United States of America, or any state, without prejudice, however, to its right at all times to sell or otherwise dispose of all or any part of the securities under an effective registration statement under the Securities Act, or under an exemption from such registration available under the Securities Act, and subject, nevertheless, to the disposition of its property being at all times within its control. If such Purchaser should in the future decide to dispose of any of the securities, such Purchaser understands and agrees that it may do so only in compliance with the Securities Act and applicable state securities laws, as then in effect. Such Purchaser agrees to the entry of a book entry legend to such effect in respect of its securities on any ledger or other register maintained by the Issuer.
(b) Broker’s, Finder’s or Similar Fees. Such Purchaser did not employ any broker or finder in connection with the transactions contemplated in this Agreement.
(c) Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(i) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(ii) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(iii) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Issuer in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(iv) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Issuer that would cause the QPAM and the Issuer to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Issuer in writing pursuant to this clause (d); or
(v) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Issuer and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Issuer in writing pursuant to this clause (e); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Issuer in writing pursuant to this clause (g); or
(viii) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
(d) Organization and Qualification. Such Purchaser is duly organized and validly existing and in good standing (or the equivalent thereof) under the laws of the jurisdiction in which it is formed, and has the requisite power and authority to own, operate or lease the properties and assets owned, operated or leased by it and to conduct its business as presently conducted. Such Purchaser is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary.
(e) Authorization; Validity; Enforcement. Such Purchaser has the requisite power and authority to enter into and perform its obligations under this Agreement and the applicable Note Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the applicable Note Documents by such Purchaser and the consummation by such Purchaser of the transactions contemplated hereby and thereby have been, or when executed will be, duly authorized by such Purchaser. This Agreement and the applicable Note Documents have been (or will be, upon execution) duly executed and delivered by such Purchaser and shall constitute the legal, valid and binding obligations of such Purchaser, enforceable against such Purchaser in accordance with their respective terms, except as such enforceability may be limited by customary bankruptcy and equitable exceptions.
(f) No Conflicts. The execution, delivery and performance by such Purchaser of this Agreement and the applicable Note Documents do not and will not (i) violate or conflict with the organization certificate, bylaws or similar constitutive documents of such Purchaser; (ii) result in a breach, violation or default of any Law or Order applicable to such Purchaser; or (iii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party.
As used in this Section 8.15(c), the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA. To the extent any Purchaser is relying on clause (viii) of this Section 8.15(c), such Purchaser shall not be in breach of this representation solely by reason of the fact the one or more investors in such Purchaser is, or is investing the assets of, an employee benefit plan subject to ERISA, as long as such Purchaser’s assets are not, and are not deemed to be, “plan assets” for purposes of ERISA.
(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(i) if to any Note Party, to such Note Party in the care of the Issuer at:
ATI Holdings, Inc.
790 Remington Boulevard
Bolingbrook, Illinois 60440
Attention: Joanne Fong and Joseph Jordan
Email: joanne.fong@atipt.com and joseph.jordan@atipt.com
Email: joanne.fong@atipt.com and joseph.jordan@atipt.com
with a copy to (which shall not constitute notice to any Note Party):
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Telephone: +1 (212) 310-8260
Attention: Benton Lewis
Email: benton.lewis@weil.com
(ii) if to the Purchaser Representative, at:
Wilmington Savings Fund Society, FSB
500 Delaware Ave.
Wilmington, DE 19801
Attention: ATI Physical Therapy, Inc.
Email: phealy@wsfsbank.com
With a copy to (which shall not constitute notice):
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
Attention: Gregg Bateman
Email: bateman@sewkis.com
(iii) if to any Purchaser, to it at its address or facsimile number set forth in its Administrative Questionnaire.
All such notices and other communications (A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof or three Business Days after dispatch if sent by certified or registered mail, in each case, delivered, sent or mailed (properly addressed) to the relevant party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01 or (B) sent by facsimile shall be deemed to have been given when sent and when receipt has been confirmed by telephone; provided that notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, such notices or other communications shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in clause (b) below shall be effective as provided in such clause (b).
(b) Notices and other communications to the Purchasers hereunder may be delivered or furnished by electronic communications (including e-mail and Internet or Intranet websites) pursuant to procedures set forth herein or otherwise approved by the Purchaser Representative. The Purchaser Representative or the Issuer (on behalf of any Note Party) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures set forth herein or otherwise approved by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that any such notice or communication not given during the normal business hours of the recipient shall be deemed to have been given at the opening of business on the next Business Day for the recipient or (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying the website address therefor.
(c) Any party hereto may change its address or facsimile number or other notice information hereunder by notice to the other parties hereto; it being understood and agreed that the Issuer may provide any such notice to the Purchaser Representative as recipient on behalf of itself and each Purchaser.
(d) The Issuer hereby acknowledges that (a) the Purchaser Representative will make available to the Purchasers materials and/or information provided by, or on behalf of, the Issuer hereunder (collectively, the “Issuer Materials”) by posting the Issuer Materials on the Platform and (b) certain of the Purchasers may be “public-side” Purchasers (i.e., Purchasers that do not wish to receive material nonpublic information within the meaning of the United States federal securities laws with respect to the Issuer or their respective securities) (each, a “Public Purchaser”). The Issuer hereby agrees that (i) all Issuer Materials that are to be made available to Public Purchasers shall be clearly and conspicuously marked “PUBLIC”, (ii) by marking Issuer Materials “PUBLIC,” the Issuer shall be deemed to have authorized the Purchaser Representative and the Purchasers to treat such Issuer Materials as information of a type that would (A) customarily be made publicly available, as determined in good faith by the Issuer, if the Issuer were to become public reporting companies or (B) would not be material with respect to the Issuer, their respective subsidiaries, any of their respective securities or the Transactions as determined in good faith by the Issuer for purposes of the United States federal securities laws and (iii) the Purchaser Representative shall be required to treat Issuer Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked as “Public Investor.” Notwithstanding the foregoing, the following Issuer Materials shall be deemed to be marked “PUBLIC,” unless the Issuer notifies the Purchaser Representative promptly that any such document contains material nonpublic information (it being understood that the Issuer shall have a reasonable opportunity to review the same prior to distribution and comply with SEC or other applicable disclosure obligations): (1) the Note Documents, (2) any amendment to any Note Document and (3) any information delivered pursuant to Sections 5.01(a) or (b).
Each Public Purchaser agrees to cause at least one individual at or on behalf of such Public Purchaser to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Purchaser or its delegate, in accordance with such Public Purchaser’s compliance procedures and applicable law, including United States federal and state securities laws, to make reference to communications that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Issuer or its securities for purposes of United States federal or state securities laws.
THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE PURCHASER REPRESENTATIVE NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS ON, OR THE ADEQUACY OF, THE PLATFORM, AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN ANY SUCH COMMUNICATION. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE PURCHASER REPRESENTATIVE OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL ANY PARTY HERETO OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY OTHER PARTY HERETO OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY NOTE PARTY’S OR THE PURCHASER REPRESENTATIVE’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (IN THE CASE OF ANY PARTY OTHER THAN THE PURCHASER REPRESENTATIVE) MATERIAL BREACH OF THIS AGREEMENT.
Section 9.02.
Waivers; Amendments.
(a) No failure or delay by the Purchaser Representative or any Purchaser in exercising any right or power hereunder or under any other Note Document shall operate as a waiver thereof except as provided herein or in any Note Document, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Purchaser Representative and the Purchasers hereunder and under any other Note Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Note Document or consent to any departure by any party hereto therefrom shall in any event be effective unless the same is permitted by this Section 9.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which it is given. Without limiting the generality of the foregoing, to the extent permitted by applicable Requirements of Law, the purchase of any Note shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Purchaser Representative or any Purchaser may have had notice or knowledge of such Default or Event of Default at the time.
(b) Subject to Sections 9.02(b) through (d) below and to Section 9.05(f), neither this Agreement nor any other Note Document nor any provision hereof or thereof may be waived, amended or modified, except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Issuer and the Required Purchasers (or the Purchaser Representative with the consent of the Required Purchasers) or (ii) in the case of any other Note Document (other than any waiver, amendment or modification to effectuate any modification thereto expressly contemplated by the terms of such other Note Document), pursuant to an agreement or agreements in writing entered into by the Required Purchasers and each Note Party that is party thereto; provided that, notwithstanding the foregoing:
(A) the consent of each Purchaser directly and adversely affected thereby (but not the consent of the Required Purchasers) shall be required for any waiver, amendment or modification that:
(1) increases the Commitment of such Purchaser (other than with respect to any Additional Note pursuant to Section 2.22 in respect of which such Purchaser has agreed to be an Additional Purchaser); it being understood that no amendment, modification or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default, Event of Default or mandatory reduction of the Commitments shall constitute an increase of any Commitment of such Purchaser;
(2) reduces the principal amount of any Note owed to such Purchaser or any amount due to such Purchaser on the Maturity Date;
(3) (x) extends the scheduled final maturity of any Note held by such Purchaser or (y) postpones any Interest Payment Date with respect to any Note held by such Purchaser hereunder (in each case, other than any extension for administrative reasons agreed by the Purchaser Representative);
(4) reduces the rate of interest (other than to waive any Default or Event of Default or any obligation of the Issuer to pay interest to such Purchaser at the default rate of interest under Section 2.15(d), which shall only require the consent of the Required Purchasers) or the amount of any fee or premium owed to such Purchaser; it being understood that no change in the definition of “Consolidated Adjusted EBITDA” or any other financial test, or in the calculation of any other interest, fee or premium due hereunder (including any component definition thereof) shall constitute a reduction in any rate of interest or fee hereunder;
(5) extends the expiry date of such Purchaser’s Commitment; it being understood that no amendment, modification or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default, Event of Default or mandatory reduction of any Commitment shall constitute an extension of any Commitment of any Purchaser; or
(6) waives, amends or modifies the provisions of (I) Sections 2.21(a) or (c) of this Agreement in a manner that would by its terms alter the pro rata sharing of payments required thereby (except in connection with any transaction permitted under Sections 2.22 and/or 9.05(g) or as otherwise provided in this Section 9.02) or (II) Section 2.21(b);
(7) waives, amends or modifies the provisions of Article 10 that adversely affects the Conversion Rights of any Notes hereunder;
(B) no such agreement shall:
(1) change (x) any of the provisions of Section 9.02(a) or Section 9.02(b) or the definition of “Required Purchasers”, in each case to reduce any voting percentage required to waive, amend or modify any right thereunder or make any determination or grant any consent thereunder, without the prior written consent of each Purchaser, (y) the definition of “Required Delayed Draw Purchasers” without the consent of each Delayed Draw Purchaser (it being understood that neither the consent of the Required Purchasers nor the consent of any other Purchaser shall be required in connection with any change to the definition of “Required Delayed Draw Purchasers”) or (z) the definition of “Required Additional Purchasers” without the consent of each Additional Purchaser (it being understood that neither the consent of the Required Purchasers nor the consent of any other Purchaser shall be required in connection with any change to the definition of “Required Additional Purchasers”);
(2) (A) release all or substantially all of the Collateral from the Lien granted pursuant to the Note Documents (except as otherwise permitted herein or in the other Note Documents, including pursuant to Article 8 or Section 9.22 hereof), without the prior written consent of each Purchaser or (B) subordinate the Lien on any of the Collateral securing the Secured Obligations or subordinate the payment priority of any of the Obligations to any other Indebtedness for borrowed money (other than in connection with (I) any Acceptable Debtor-In-Possession Financing and/or (II) any other financing with respect to which each Purchaser has been offered the opportunity to provide such financing without the prior written consent of each Purchaser, in the case of this clause (II), to the extent such Purchaser is offered a reasonable, bona fide opportunity to participate on a pro rata basis in any such Indebtedness on substantially the same terms as all other Purchasers, which offer shall remain open to such Purchaser for a period of not less than five Business Days; provided, that if any such Purchaser does not accept such offer to provide its pro rata share of such Indebtedness in writing within five Business Days of receipt of such offer, such Purchaser shall be deemed to have declined such offer); provided that the amendment of Section 6.01 and/or Section 6.02 to permit the incurrence of additional obligations that are secured by the Collateral on a pari passu basis with the “Secured Obligations” (or equivalent term) under the First Lien Facility shall not be subject to this clause (B)(2)(B); or
(3) release all or substantially all of the value of the Guarantees under the Note Guaranty (except as otherwise permitted herein or in the other Note Documents, including pursuant to Section 9.22 hereof), without the prior written consent of each Purchaser;
(C) solely with the consent of the Required Additional Purchasers with respect to any Additional Note Commitment (but without the consent of the Required Purchasers or any other Purchaser), any such agreement may waive, amend or modify any condition precedent set forth in Section 4.03 (other than Section 4.03(d)) as it pertains to any Additional Notes Issuance in respect of any Additional Note Commitment;
(D) solely with the consent of the Required Delayed Draw Purchasers (but without the consent of the Required Purchasers or any other Purchaser), any such agreement may waive, amend or modify any condition precedent set forth in Section 4.02 or Section 4.03 (other than Section 4.03(d)) as it pertains to any Issuance of Delayed Draw Notes; and
(E) no such agreement shall amend, modify or otherwise affect the rights or duties of the Purchaser Representative hereunder without the prior written consent of the Purchaser Representative.
(c) [Reserved].
(d) Notwithstanding anything to the contrary contained in this Section 9.02 or any other provision of this Agreement or any provision of any other Note Document:
(i) the Issuer and the Purchaser Representative may, without the input or consent of any Purchaser, amend, supplement and/or waive any provision of this Agreement and/or any guaranty, collateral security agreement, pledge agreement and/or related document (if any) executed in connection with this Agreement to (A) comply with any Requirement of Law or the advice of counsel or (B) cause any such guaranty, collateral security agreement, pledge agreement or other document to be consistent with this Agreement and/or the relevant other Note Documents,
(ii) [reserved],
(iii) [reserved],
(iv) the Purchaser Representative and the Issuer may amend, restate, amend and restate or otherwise modify any Intercreditor Agreement and/or any other Additional Agreement as provided therein,
(v) the Purchaser Representative may amend
Schedule 2.01 to reflect assignments entered into pursuant to
Section 9.05, Commitment reductions or terminations pursuant to
Section 2.11, issuances of
First Amendment Notes pursuant to Section 2.02 and/or Delayed Draw Notes pursuant to
Section 2.03 and reductions or redemptions of any such
First Amendment Notes, Delayed Draw Notes or issuances of Additional Notes pursuant to
Section 2.25 and reductions or redemptions of any such Additional Notes,
(vi) [reserved],
(vii) no Defaulting Purchaser shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except as permitted pursuant to Section 2.24(a) and except that the Commitment of any Defaulting Purchaser may not be increased without the consent of such Defaulting Purchaser (it being understood that any Commitment or Note held or deemed held by any Defaulting Purchaser shall be excluded from any vote hereunder that requires the consent of any Purchaser, except as expressly provided in Section 2.24(a)),
(viii) this Agreement may be amended (or amended and restated) with the written consent of the Required Purchasers and the Issuer (i) to add one or more additional debt facilities to this Agreement and to permit any extension of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the relevant benefits of this Agreement and the other Note Documents and (ii) to include appropriately the Purchasers holding such debt facilities in any determination of the Purchasers on substantially the same basis as the Purchasers prior to such inclusion,
(ix) any amendment, waiver or modification of any term or provision that directly affects Purchasers under one or more Classes and does not directly and adversely affect Purchasers under one or more other Classes may be effected with the consent of Purchasers owning 50% of the aggregate commitments or Notes of such directly affected Class in lieu of the consent of the Required Purchasers, and
(x) [reserved];
(xi) this Agreement may be amended in the manner prescribed in Section 2.25; it being understood and agreed that any such amendment may provide that with respect to any Class of Notes and/or Commitments that is structured as a “delayed draw” or similar facility, (i) any condition precedent to the funding of any Notes thereunder and/or (ii) any Event of Default arising as a result of any inaccuracy of any representation and/or warranty (including any certification) made in connection with the satisfaction of any such condition precedent, in each case, may be waived, amended or modified solely with the consent of a majority of the holders of such Notes and/or Commitments (or such other percentage of such holders as may be required in the amendment implementing such Class of Notes and/or Commitments (and without the consent of the Required Purchasers or any other Purchasers),
(xii) [reserved],
(xiii) except as otherwise provided in Section 9.02(b)(C) above, the Required Purchasers, without the consent of any other Purchaser, may (A) rescind any acceleration of the Notes and/or any other Obligation pursuant to Article 7 hereof and/or (B) agree that the Purchaser Representative and the Purchasers will forbear from exercising any remedy provided under any Note Document with respect to any Event of Default, and
(xiv) [reserved].
Section 9.03.
Expenses; Indemnity.
(a) Subject to Section 9.05(f), if the Closing Date occurs, the Issuer shall pay (i) all reasonable and documented out-of-pocket expenses incurred by each Purchaser, the Purchaser Representative and their respective Affiliates (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of (x) one firm of outside counsel for the Purchaser Representative and (y) one firm of outside counsel for the Purchasers and their respective Affiliates (taken as a whole) and (z) if necessary, one local counsel in any relevant material jurisdiction to all such Persons, taken as a whole) in connection with the preparation, execution, delivery and administration of the Note Documents and any related documentation, including in connection with any amendment, modification or waiver of any provision of any Note Document (whether or not the transactions contemplated thereby are consummated, but only to the extent the preparation of any such amendment, modification or waiver was requested by the Issuer and except as otherwise provided in a separate writing between the Issuer and/or the Purchaser Representative) and (ii) without duplication of the obligation set forth in Section 9.03(b), all reasonable and documented out-of-pocket expenses incurred by the Purchaser Representative or the Purchasers or any of their respective Affiliates (but limited (x) in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of (A) one firm of outside counsel for the Purchaser Representative and (B) one firm of outside counsel for all the Purchasers and their respective Affiliates (taken as a whole) and (C) if necessary, one local counsel in any relevant material jurisdiction to the Purchaser Representative and one local counsel for all such other Persons, taken as a whole, and (y) in the case of other third party advisors, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of only third party advisors the engagement of whom has been approved by the Issuer (such approval not to be unreasonably withheld, delayed or conditioned) in writing) in connection with the enforcement, collection or protection of their respective rights in connection with the Note Documents, including their respective rights under this Section, or in connection with the Notes purchased hereunder. Except to the extent required to be paid on the Closing Date, all amounts due under this paragraph (a) shall be payable by the Issuer within 30 days of receipt by the Issuer of an invoice setting forth such expenses in reasonable detail, together with backup documentation supporting the relevant reimbursement request.
(b) If the Closing Date occurs, the Issuer shall indemnify the Purchaser Representative and each Purchaser, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages and liabilities (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of (x) one firm of outside counsel for the Purchaser Representative and (y) one firm of outside counsel for the Purchasers and their respective Affiliates (taken as a whole) and solely in the case of an actual or perceived conflict of interest, one additional counsel to all affected Purchasers, taken as a whole, and (z) if necessary, one local counsel in any relevant material jurisdiction to all Indemnitees, taken as a whole, and solely in the case of an actual or perceived conflict of interest, one additional local counsel to all affected Indemnitees, taken as a whole), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Note Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby or thereby and/or the enforcement of the Note Documents, (ii) the use of the proceeds of the Notes, (iii) any actual or alleged Release or presence of Hazardous Materials on, at, under or from any property currently or formerly owned, leased or operated by the Issuer, any of its Restricted Subsidiaries or any other Note Party or any Environmental Liability related to the Issuer, any of its Restricted Subsidiaries or any other Note Party and/or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Issuer, any other Note Party or any of their respective Affiliates); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that any such loss, claim, damage, or liability (i) is determined by a final and non-appealable judgment of a court of competent jurisdiction (or documented in any settlement agreement referred to below) to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or, other than with respect to the Purchaser Representative or its Related Parties, to the extent such judgment finds (or any such settlement agreement acknowledges) that any such loss, claim, damage, or liability has resulted from such Person’s material breach of the Note Documents or (ii) arises out of any claim, litigation, investigation or proceeding brought by such Indemnitee against another Indemnitee (other than any claim, litigation, investigation or proceeding that is brought by or against the Purchaser Representative, acting in its capacity as the Purchaser Representative or its Related Parties) that does not involve any act or omission of the Issuer or any of its subsidiaries. Each Indemnitee shall be obligated to refund or return any and all amounts paid by the Issuer pursuant to this Section 9.03(b) to such Indemnitee for any fees, expenses, or damages to the extent such Indemnitee is not entitled to payment thereof in accordance with the terms hereof. All amounts due under this paragraph (b) shall be payable by the Issuer within 30 days (x) after receipt by the Issuer of a written demand therefor, in the case of any indemnification obligations and (y) in the case of reimbursement of costs and expenses, after receipt by the Issuer of an invoice setting forth such costs and expenses in reasonable detail, together with reasonable backup documentation supporting the relevant reimbursement request. This Section 9.03(b) shall not apply to Taxes other than any Taxes that represent losses, claims, damages or liabilities in respect of a non-Tax claim.
(c) The Issuer shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld, delayed or conditioned) or any losses, claims, damages, liabilities and/or expenses incurred in connection therewith, but if any proceeding is settled with the written consent of the Issuer, or if there is a final judgment against any Indemnitee in any such proceeding, the Issuer agrees to indemnify and hold harmless each Indemnitee to the extent and in the manner set forth above. The Issuer shall not, without the prior written consent of the affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened proceeding in respect of which indemnity could have been sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional release of such Indemnitee from all liability or claims that are the subject matter of such proceeding and (ii) such settlement does not include any statement as to any admission of fault or culpability.
Section 9.04. Waiver of Claim. To the extent permitted by applicable Requirements of Law, no party to this Agreement nor any Secured Party shall assert, and each hereby waives on behalf of itself and its Related Parties, any claim against any other party hereto, any Note Party and/or any Related Party of any thereof, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Note or the use of the proceeds thereof, except, in the case of any claim by any Indemnitee against the Issuer, to the extent such damages would otherwise be subject to indemnification pursuant to the terms of Section 9.03.
Section 9.05.
Transfers of Notes.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided that (i) except as provided under Section 6.07, the Issuer may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Purchaser (and any attempted assignment or transfer by the Issuer without such consent shall be null and void) and (ii) no Purchaser may transfer its rights or obligations hereunder except in accordance with the terms of this Section (any attempted transfer not complying with the terms of this Section shall be null and void and, with respect to any attempted transfer to any Disqualified Institution, subject to Section 9.05(f)). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and permitted transferees, to the extent provided in paragraph (e) of this Section, Participants and, to the extent expressly contemplated hereby, the Related Parties of each of the Purchaser Representative and the Purchasers) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Purchaser may transfer to one or more Eligible Transferees all or a portion of its rights and obligations under this Agreement (including all or a portion of any Note or any Commitment) with the prior written consent of
(A) the Issuer (such consent not to be unreasonably withheld, conditioned or delayed); provided, that (x) the Issuer shall be deemed to have consented to any transfer of Notes (other than any such assignment to a Disqualified Institution) unless it has objected thereto by written notice to the Purchaser Representative within 10 Business Days after receipt of written notice thereof, (y) the consent of the Issuer shall not be required for any transfer of Notes or Commitments (1) to any Affiliate of such Purchaser or an Approved Fund of such Purchaser, in each case under this clause (1), to the extent the relevant transferee constitutes a Permitted Holder or (2) at any time when an Event of Default under Section 7.01(a) or Sections 7.01(f) or (g) (with respect to the Issuer) exists; provided, further, that notwithstanding the foregoing, the Issuer may withhold its consent to any assignment to (1) any Person (other than a Competitor Debt Fund Affiliate, unless the Issuer has other reasonable grounds on which to withhold its consent) that is not a Disqualified Institution but is known by the Issuer to be an Affiliate of a Disqualified Institution regardless of whether such Person is identifiable as an Affiliate of a Disqualified Institution on the basis of such Affiliate’s name and/or (2) any Person, if the effect of such transfer would result in a change of control hereunder or under any other Indebtedness of the Issuer and/or any subsidiary thereof (including any First Lien Facility); and
(B) the Purchaser Representative (such consent not to be unreasonably withheld, conditioned or delayed); provided, that no consent of the Purchaser Representative shall be required for any transfer to another Purchaser, any Affiliate of a Purchaser or any Approved Fund.
(ii) Transfers shall be subject to the following additional conditions:
(A) except in the case of any transfer to another Purchaser, any Affiliate of any Purchaser or any Approved Fund or any transfer of the entire remaining amount of the relevant transferring Purchaser’s Notes or Commitments of any Class, the principal amount of Notes or Commitments of the transferring Purchaser subject to the relevant transfer (determined as of the date on which the Transfer Agreement with respect to such transfer is delivered to the Purchaser Representative and determined on an aggregate basis in the event of concurrent transfers to Related Funds or by Related Funds) shall not be less than $1,000,000 unless the Issuer and the Purchaser Representative otherwise consent;
(B) any partial transfer shall be made as a transfer of a proportionate part of all the relevant transferring Purchaser’s rights and obligations under this Agreement;
(C) the parties to each transfer shall execute and deliver to the Purchaser Representative a Transfer Agreement in the form attached as Exhibit A-1, together with a processing and recordation fee in the amount of $3,500; provided that the Purchaser Representative may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; and
(D) the relevant Eligible Transferee, if it is not a Purchaser, shall deliver on or prior to the effective date of such assignment, to the Purchaser Representative (1) an Administrative Questionnaire and (2) any Internal Revenue Service form required under Section 2.20 and all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.
(iii) Subject to the acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in any Transfer Agreement, the Eligible Transferee thereunder shall be a party hereto and, to the extent of the interest assigned pursuant to such Transfer Agreement, have the rights and obligations of a Purchaser under this Agreement, and the transferring Purchaser thereunder shall, to the extent of the interest transferred by such Transfer Agreement, be released from its obligations under this Agreement (and, in the case of a Transfer Agreement covering all of the transferring Purchaser’s rights and obligations under this Agreement, such Purchaser shall cease to be a party hereto but shall continue to be (A) entitled to the benefits of Sections 2.18, 2.20 and 9.03 with respect to facts and circumstances occurring on or prior to the effective date of such transfer and (B) subject to its obligations thereunder and under Section 9.13).
(iv) The Purchaser Representative, acting for this purpose as a non-fiduciary agent of the Issuer, shall maintain at one of its offices a copy of each Transfer Agreement delivered to it and a register for the recordation of the names and addresses of the Purchasers and their respective successors and assigns, and the commitment of, and principal amount of and interest on the Notes owing to, each Purchaser pursuant to the terms hereof from time to time (the “Register”). Failure to make any such recordation, or any error in such recordation, shall not affect the Issuer’s obligations in respect of such Notes. The entries in the Register shall be conclusive, absent manifest error, and the Issuer, the Purchaser Representative and the Purchasers shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Purchaser hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Issuer and each Purchaser (but only as to its own holdings), at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Transfer Agreement executed by a transferring Purchaser and an Eligible Transferee, the Eligible Transferee’s completed Administrative Questionnaire and any tax certification required by Section 9.05(b)(ii)(D)(2) (unless the transferee is already a Purchaser hereunder), the processing and recordation fee referred to in paragraph (b) of this Section, if applicable, and any written consent to the relevant assignment required by paragraph (b) of this Section, the Purchaser Representative shall promptly accept such Transfer Agreement and record the information contained therein in the Register. No transfer shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(vi) By executing and delivering a Transfer Agreement, the transferring Purchaser and the Eligible Transferee thereunder shall be deemed to confirm and agree with each other and the other parties hereto as follows: (A) the transferring Purchaser warrants that it is the legal and beneficial owner of the interest being transferred thereby free and clear of any adverse claim and that the amount of its commitments, and the outstanding balances of its Notes, in each case without giving effect to any transfer thereof which has not become effective, are as set forth in such Transfer Agreement, (B) except as set forth in clause (A) above, the transferring Purchaser makes no representation or warranty and assumes no responsibility with respect to any statement, warranty or representation made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Note Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Issuer or any Restricted Subsidiary or the performance or observance by the Issuer or any Restricted Subsidiary of any of its obligations under this Agreement, any other Note Document or any other instrument or document furnished pursuant hereto; (C) the transferee represents and warrants that it is an Eligible Transferee, legally authorized to enter into such Transfer Agreement; (D) the transferee confirms that it has received a copy of this Agreement and each applicable Intercreditor Agreement, together with copies of the financial statements referred to in Section 4.01(c) or the most recent financial statements delivered pursuant to Section 5.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Transfer Agreement; (E) the transferee will independently and without reliance upon the Purchaser Representative, the transferring Purchaser or any other Purchaser and based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (F) the transferee appoints and authorizes the Purchaser Representative to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Purchaser Representative, by the terms hereof, together with such powers as are reasonably incidental thereto; and (G) the transferee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Purchaser.
(c) (i) Any Purchaser may, without the consent of the Issuer, the Purchaser Representative or any other Purchaser, sell participations to any bank or other entity (other than to any Disqualified Institution, any natural Person, any holder of Series A Preferred Shares (or any Affiliate of such holder) or, other than with respect to any participation to any Debt Fund Affiliate (any such participations to a Debt Fund Affiliate being subject to the limitation set forth in the first proviso of the final paragraph set forth in Section 9.05(g), as if the limitation applied to such participations), the Issuer or any of its Affiliates) (a “Participant”) in all or a portion of such Purchaser’s rights and obligations under this Agreement (including all or a portion of its commitments and the Notes owing to it); provided, that (A) such Purchaser’s obligations under this Agreement shall remain unchanged, (B) such Purchaser shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Issuer, the Purchaser Representative and the other Purchasers shall continue to deal solely and directly with such Purchaser in connection with such Purchaser’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which any Purchaser sells such a participation shall provide that such Purchaser shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Purchaser will not, without the consent of the relevant Participant, agree to any amendment, modification or waiver described in (x) clause (A) of the first proviso to Section 9.02(b) that directly and adversely affects the Notes or commitments in which such Participant has an interest and (y) clauses (B)(1), (2) or (3) of the first proviso to Section 9.02(b). Subject to paragraph (c)(ii) of this Section, the Issuer agrees that each Participant shall be entitled to the benefits of Sections 2.18 and 2.20 (subject to the limitations and requirements of such Sections and Section 2.22) to the same extent as if it were a Purchaser and had acquired its interest by assignment pursuant to paragraph (b) of this Section and it being understood that the documentation required under Section 2.20(f) shall be delivered to the participating Purchaser, and if additional amounts are required to be paid pursuant to Section 2.20(a) or Section 2.20(c), to the Issuer and the Purchaser Representative). To the extent permitted by applicable Requirements of Law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were a Purchaser; provided that such Participant shall be subject to Section 2.21(c) as though it were a Purchaser.
(i) No Participant shall be entitled to receive any greater payment under Sections 2.18 or 2.20 than the participating Purchaser would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Issuer’s prior written consent (in its sole discretion), expressly acknowledging that such Participant’s entitlement to benefits under Sections 2.18 and 2.20 is not limited to what the participating Purchaser would have been entitled to receive absent the participation.
Each Purchaser that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Issuer, maintain a register on which it enters the name and address of each Participant and their respective successors and registered assigns, and the principal and interest amounts of each Participant’s interest in the Notes or other obligations under the Note Documents (a “Participant Register”); provided that no Purchaser shall have any obligation to disclose all or any portion of any Participant Register (including the identity of any Participant or any information relating to any Participant’s interest in any Commitment, Note or any other obligation under any Note Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Note or other obligation is in registered form under Section 5f.103-1(c) of the U.S. Treasury Regulations or under Section 1.163 5(b) of the proposed U.S. Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and each Purchaser shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Purchaser Representative (in its capacity as Purchaser Representative) shall have no responsibility for maintaining a Participant Register.
(d) (i) Any Purchaser may at any time pledge or transfer a security interest in all or any portion of its rights under this Agreement (other than to any Disqualified Institution or any natural person) to secure obligations of such Purchaser, including without limitation any pledge or assignment to secure obligations to any Federal Reserve Bank or other central bank having jurisdiction over such Purchaser, and this Section 9.05 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release any Purchaser from any of its obligations hereunder or substitute any such pledgee or assignee for such Purchaser as a party hereto.
(i) No Purchaser may at any time enter into a total return swap, total rate of return swap, credit default swap or other derivative instrument under which any Secured Obligation is a reference obligation with any counterparty that is a Disqualified Institution.
(e) Notwithstanding anything to the contrary contained herein, any Purchaser (a “Granting Purchaser”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Purchaser to the Purchaser Representative and the Issuer, the option to purchase from the Issuer all or any part of any Note that such Granting Purchaser would otherwise be obligated to purchase from the Issuer pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to purchase any Note and (ii) if an SPC elects not to exercise such option or otherwise fails to purchase all or any part of such Note, the Granting Purchaser shall be obligated to purchase such Note pursuant to the terms hereof. The purchase of any Note by an SPC hereunder shall utilize the Commitment of the Granting Purchaser to the same extent, and as if, such Note was purchased by such Granting Purchaser. Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Issuer under this Agreement (including its obligations under Sections 2.18 or 2.20) and no SPC shall be entitled to any greater amount under Sections 2.18 or 2.20 or any other provision of this Agreement or any other Note Document that the Granting Purchaser would have been entitled to receive, unless the grant to such SPC is made with the prior written consent of the Issuer (in its sole discretion), expressly acknowledging that such SPC’s entitlement to benefits under Sections 2.18 and 2.20 is not limited to what the Granting Purchaser would have been entitled to receive absent the grant to the SPC, (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Purchaser) and (iii) the Granting Purchaser shall for all purposes including approval of any amendment, waiver or other modification of any provision of the Note Documents, remain the Purchaser of record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the Requirements of Law of the U.S. or any State thereof; provided that (i) such SPC’s Granting Purchaser is in compliance in all material respects with its obligations to the Issuer hereunder and (ii) each Purchaser designating any SPC hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such SPC during such period of forbearance. In addition, notwithstanding anything to the contrary contained in this Section 9.05, any SPC may (i) with notice to, but without the prior written consent of, the Issuer or the Purchaser Representative and without paying any processing fee therefor, transfer all or a portion of its interests in any Note to the Granting Purchaser and (ii) disclose on a confidential basis any non-public information relating to its Notes to any rating agency, commercial paper dealer or provider of any surety, guaranty or credit or liquidity enhancement to such SPC.
(f) (i) Any transfer or participation by a Purchaser (A) to any Disqualified Institution or any Affiliate thereof or (B) to the extent the Issuer’s consent is required under this Section 9.05 (and not deemed to have been given pursuant to Section 9.05(b)(i)(A)) without the Issuer’s consent, to any other Person, shall be null and void, and the Issuer shall be entitled to seek specific performance to unwind any such transfer and/or specifically enforce this Section 9.05(f) in addition to injunctive relief (without posting a bond or presenting evidence of irreparable harm) or any other remedies available to the Issuer at law or in equity; it being understood and agreed that the Issuer and its subsidiaries will suffer irreparable harm if any Purchaser breaches any obligation under this Section 9.05 as it relates to any transfer, participation or pledge of any Note or Commitment to any Disqualified Institution or any Affiliate thereof or any other Person to whom the Issuer’s consent is required but not obtained. Nothing in this Section 9.05(f) shall be deemed to prejudice any right or remedy that the Issuer may otherwise have at law or equity. Upon the request of any Purchaser, the Purchaser Representative may and the Issuer will make the list of Disqualified Institutions (other than any Disqualified Institution that is a reasonably identifiable Affiliate of another Disqualified Institution on the basis of such Person’s name) available to such Purchaser so long as such Purchaser agrees to keep the list of Disqualified Institutions confidential in accordance with the terms hereof.
(i) If any transfer under this Section 9.05 is made to any Disqualified Institution and/or Affiliate of any Disqualified Institution (other than any Competitor Debt Fund Affiliate) and/or any other Person whom the Issuer’s consent is required but not obtained, in each case without the Issuer’s prior written consent (any such person, a “Disqualified Person”), then the Issuer may, at its sole expense and effort, upon notice to the applicable Disqualified Person and the Purchaser Representative, (A) terminate any Commitment of such Disqualified Person and repay all obligations of the Issuer owing to such Disqualified Person, (B) in the case of any outstanding Notes, held by such Disqualified Person, purchase such Notes by paying the lesser of (x) par and (y) the amount that such Disqualified Person paid to acquire such Notes, plus accrued interest thereon, accrued fees and all other amounts payable to it hereunder and/or (C) require such Disqualified Person to transfer, without recourse (in accordance with and subject to the restrictions contained in this Section 9.05), all of its interests, rights and obligations under this Agreement to one or more Eligible Transferees; provided that (I) in the case of clause (B), the applicable Disqualified Person has received payment of an amount equal to the lesser of (1) par and (2) the amount that such Disqualified Person paid for the applicable Notes, plus accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the Issuer, (II) in the case of clause (C), the relevant transfer shall otherwise comply with this Section 9.05 (except that (x) no registration and processing fee required under this Section 9.05 shall be required with any transfer pursuant to this paragraph and (y) [reserved]) and (III) in no event shall such Disqualified Person be entitled to receive amounts set forth in Section 2.15(d). Further, any Disqualified Person identified by the Issuer to the Purchaser Representative (A) shall not be permitted to (x) receive information or reporting provided by any Note Party, the Purchaser Representative or any Purchaser and/or (y) attend and/or participate in conference calls or meetings attended solely by the Purchasers and the Purchaser Representative, (B) (x) shall not for purposes of determining whether the Required Purchasers or the majority Purchasers under any Class have (i) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Note Document or any departure by any Note Party therefrom, (ii) otherwise acted on any matter related to any Note Document, or (iii) directed or required the Purchaser Representative or any Purchaser to undertake any action (or refrain from taking any action) with respect to or under any Note Document, have a right to consent (or not consent), otherwise act or direct or require the Purchaser Representative or any Purchaser to take (or refrain from taking) any such action; it being understood that all Notes held by any Disqualified Person shall be deemed to be not outstanding for all purposes of calculating whether the Required Purchasers, majority Purchasers under any Class or all Purchasers have taken any action, and (y) shall be deemed to vote in the same proportion as Purchasers that are not Disqualified Persons in any proceeding under any Debtor Relief Law commenced by or against the Issuer or any other Note Party and (C) shall not be entitled to receive the benefits of Section 9.03. For the sake of clarity, the provisions in this Section 9.05(f) shall not apply to any Person that is an assignee of any Disqualified Person, if such transferee is not a Disqualified Person.
(ii) Notwithstanding anything to the contrary herein, the Issuer and each Purchaser acknowledges and agrees that the Purchaser Representative shall not have any responsibility or obligation to determine whether any Purchaser or potential Purchaser is a Disqualified Institution or Disqualified Person and the Purchaser Representative shall have no liability with respect to any assignment or participation made to any Disqualified Institution or Disqualified Person (regardless of whether the consent of the Purchaser Representative is required thereto), and none of the Issuer, any Purchaser or their respective Affiliates will bring any claim to such effect.
(g) Notwithstanding anything to the contrary contained herein, any Purchaser may, at any time, transfer all or a portion of its rights and obligations under this Agreement in respect of its Notes to any Affiliated Purchaser on a non-pro rata basis (A) through “Dutch auctions” open to all Purchasers holding the relevant Notes on a pro rata basis or (B) through open market purchases, in each case with respect to clauses (A) and (B), without the consent of the Purchaser Representative; provided that:
(i) (A) any Notes acquired by the Issuer or any of its Restricted Subsidiaries shall, to the extent permitted by applicable Requirements of Law, be retired and cancelled immediately upon the acquisition thereof; provided that upon any such retirement and cancellation, the aggregate outstanding principal amount of the Notes shall be deemed reduced by the full par value of the aggregate principal amount of the Notes so retired and cancelled and (B) in no event shall the Issuer or any of its Restricted Subsidiaries offer to acquire the Notes of any Affiliated Purchaser pursuant to this Section 9.05(g) unless such offer to acquire is made to all Purchasers holding the relevant Class of Notes on a pro rata basis (it being understood and agreed that if such other Purchasers of such Class decline (or fail to respond to) the offer to acquire such Notes within five (5) Business Days of receipt of the offer to acquire such Notes from the Issuer or the applicable Restricted Subsidiary, as applicable, then the Issuer and/or the applicable Restricted Subsidiary shall be permitted to offer the entire amount so declined (or with respect to which there was a failure to respond) to Affiliated Purchasers;
(ii) any Notes acquired by any Non-Debt Fund Affiliate (other than the Issuer or any of its Restricted Subsidiaries) may (but shall not be required to) be contributed to the Issuer or any of its subsidiaries (it being understood that any such Notes shall, to the extent permitted by applicable Requirements of Law, be retired and cancelled promptly upon such contribution); provided that upon any such cancellation, the aggregate outstanding principal amount of the Notes shall be deemed reduced, as of the date of such contribution, by the full par value of the aggregate principal amount of the Notes so contributed and cancelled;
(iii) the relevant Affiliated Purchaser and transferring or purchasing, as applicable, Purchaser shall have executed an Affiliated Purchaser Transfer Agreement;
(iv) [reserved];
(v) in connection with any assignment effected pursuant to a “Dutch auction” and/or open market purchase conducted by the Issuer or any of its Restricted Subsidiaries, no Default or Event of Default exists at the time of acceptance of bids for the “Dutch auction” or the confirmation of such open market purchase, as applicable;
(vi) [reserved]; and
(vii) no Affiliated Purchaser shall be required to represent or warrant that it is not in possession of material non-public information with respect to the Issuer and/or any subsidiary thereof and/or their respective securities in connection with any assignment permitted by this Section 9.05(g).
Notwithstanding anything to the contrary contained herein, any Purchaser may, at any time, assign all or a portion of its rights and obligations under this Agreement in respect of its Notes and/or Commitments to any Debt Fund Affiliate, and any Debt Fund Affiliate may, from time to time, purchase Notes and/or Commitments (x) on a pro rata basis through “Dutch auctions” open to all applicable Purchasers in accordance with customary procedures or (y) on a non-pro rata basis through open market purchases (including, for the avoidance of doubt, negotiated transactions) without the consent of the Purchaser Representative, in each case, notwithstanding the requirements set forth in subclauses (i) through (vii) of this clause (g); provided that the Notes and Commitments held by all Debt Fund Affiliates shall not account for more than 49.9% of the amounts included in determining whether the Required Purchasers have (A) consented to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Note Document or any departure by any Note Party therefrom, (B) otherwise acted on any matter related to any Note Document or (C) directed or required the Purchaser Representative or any Purchaser to undertake any action (or refrain from taking any action) with respect to or under any Note Document; it being understood and agreed that the portion of the Note and/or Commitments that accounts for more than 49.9% of the relevant Required Purchaser action shall be deemed to be voted on pro rata basis in accordance with the votes of Purchasers that are not Debt Fund Affiliates; provided that in determining whether the Purchaser Representative shall be protected in relying on any such request, demand, authorization, direction, notice, consent, or waiver, only Notes for which the Purchaser Representative has received written notice that such Notes are so owned shall be so disregarded. Any Note acquired by any Debt Fund Affiliate may (but shall not be required to) be contributed to the Issuer or any of its subsidiaries for purposes of cancelling such Indebtedness (it being understood that any Note so contributed shall, to the extent permitted by applicable Requirements of Law, be retired and cancelled immediately upon thereof); provided that upon any such cancellation, the aggregate outstanding principal amount of the relevant Class of Notes shall be deemed reduced, as of the date of such contribution, by the full par value of the aggregate principal amount of the Notes so contributed and cancelled. The Purchaser Representative shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Debt Fund Affiliates, and, without limiting the generality of the foregoing, the Purchaser Representative shall not be obligated to ascertain, monitor or inquire as to whether any Purchaser or prospective Purchaser is a Debt Fund Affiliate.
(h) Notwithstanding anything herein to the contrary, no Purchaser shall, directly or indirectly assign, sell, offer to sell, pledge, mortgage, hypothecate, encumber, dispose of or otherwise consummate or permit any like transfer or encumbrance of any Note held by such Purchaser, in each case other than together with a proportional interest in the applicable Stapled Series B Preferred Stock.
Section 9.06.
Survival. All covenants, agreements, representations and warranties made by the Note Parties in the Note Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Note Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Note Documents and the purchase of any Note regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Purchaser Representative may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until the Termination Date. The provisions of
Sections 2.18,
2.20,
9.03 and
9.13 and
Article 8 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Notes, the expiration or termination of each Commitment, the occurrence of the Termination Date or the termination of this Agreement or any provision hereof or the earlier resignation or removal of the Purchaser Representative, but in each case, subject to the limitations set forth in this Agreement.
Section 9.07.
Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Note Documents and each Intercreditor Agreement constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. On and after the Agreement Effective Date, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by email as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart of this Agreement. It is understood and agreed that, subject to any Requirement of Law, the words “execution”, “signed”, “signature”, “delivery” and words of like import in or relating to any Note Document shall be deemed to include any Electronic Signature, delivery or the keeping of any record in electronic form, each of which shall have the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state laws based on the Uniform Electronic Transactions Act.
Section 9.08.
Severability. To the extent permitted by applicable Requirements of Law, any provision of any Note Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.09.
Right of Setoff. At any time when an Event of Default exists, upon the written consent of the Required Purchasers, the Purchaser Representative and each Purchaser is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirements of Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations (in any currency) at any time owing by the Purchaser Representative or such Purchaser to or for the credit or the account of any Note Party against any of and all the Secured Obligations held by the Purchaser Representative or such Purchaser, irrespective of whether or not the Purchaser Representative or such Purchaser has made any demand under the Note Documents and although such obligations may be contingent or unmatured or are owed to a branch or office of such Purchaser or Purchaser Representative different than the branch or office holding such deposit or obligation on such Indebtedness. The applicable Purchaser or Purchaser Representative shall promptly notify the Issuer and the Purchaser Representative of such set-off or application;
provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Purchaser and the Purchaser Representative under this Section are in addition to other rights and remedies (including other rights of setoff) which such Purchaser or Purchaser Representative may have.
Section 9.10. Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER NOTE DOCUMENTS) AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN THE OTHER NOTE DOCUMENTS), WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY NOTE DOCUMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW. EACH PARTY HERETO AGREES THAT THE PURCHASER REPRESENTATIVE RETAINS THE RIGHT TO BRING PROCEEDINGS AGAINST ANY NOTE PARTY IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION WITH THE EXERCISE OF ITS RIGHTS UNDER ANY COLLATERAL DOCUMENT.
(c) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT.
(d) TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01. EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY NOTE DOCUMENT THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.
Section 9.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER NOTE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.12.
Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 9.13.
Confidentiality. Each of the Purchaser Representative and each Purchaser agrees to maintain the confidentiality of the Confidential Information (as defined below), except that Confidential Information may be disclosed (a) to its Affiliates and/or funding and financing sources and its and their respective directors, officers, managers, employees, independent auditors, or other experts and advisors, including accountants, legal counsel and other advisors (collectively, the “
Representatives”) on a “need to know” basis solely in connection with the transactions contemplated hereby and who are informed of the confidential nature of the Confidential Information and are or have been advised of their obligation to keep the Confidential Information of this type confidential;
provided that such Person shall be responsible for its Affiliates’ and funding and financing sources’ and their Representatives’ compliance with this paragraph;
provided,
further, that unless the Issuer otherwise consents, no such disclosure shall be made by the Purchaser Representative, any Purchaser or any Affiliate or Representative thereof to any Affiliate or Representative of the Purchaser Representative or any Purchaser that is a Disqualified Institution, (b) to the extent compelled by legal process in, or reasonably necessary to, the defense of such legal, judicial or administrative proceeding, in any legal, judicial or administrative proceeding or otherwise as required by applicable Requirements of Law (in which case such Person shall (i) to the extent permitted by applicable Requirements of Law, inform the Issuer promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (c) upon the demand or request of any regulatory or governmental authority (including any self-regulatory body) purporting to have jurisdiction over such Person or its Affiliates (in which case such Person shall, except with respect to any audit or examination conducted by bank accountants or any Governmental Authority or regulatory or self-regulatory authority exercising examination or regulatory authority, to the extent permitted by applicable Requirements of Law, (i) inform the Issuer promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any information so disclosed is accorded confidential treatment), (d) [reserved], (e) subject to an acknowledgment and agreement by the relevant recipient that the Confidential Information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as otherwise reasonably acceptable to the Issuer and the Purchaser Representative) in accordance with market standards for dissemination of the relevant type of information, which shall in any event require “click through” or other affirmative action on the part of the recipient to access the Confidential Information and acknowledge its confidentiality obligations in respect thereof, to (i) any Eligible Transferee of or Participant in, or any prospective Eligible Transferee of or prospective Participant in, any of its rights or obligations under this Agreement, including any SPC (in each case other than a Disqualified Institution and/or any Person to whom the Issuer has, at the time of disclosure, affirmatively declined to consent to any transfer), (ii) any pledgee referred to in
Section 9.05 and (iii) any actual or prospective, direct or indirect contractual counterparty (or its advisors) to any Derivative Transaction (including any credit default swap) or similar derivative product to which any Note Party is a party and (g) to the extent the Confidential Information becomes publicly available other than as a result of a breach of this Section by such Person, its Affiliates or their respective Representatives. For purposes of this Section, “
Confidential Information” means all information relating to the Issuer and/or any of its subsidiaries and their respective businesses or the Transactions (including any information obtained by the Purchaser Representative, any Purchaser, or any of their respective Affiliates or Representatives, based on a review of any books and records relating to the Issuer and/or any of its subsidiaries and their respective Affiliates from time to time, including prior to the date hereof) other than any such information that is publicly available to the Purchaser Representative or Purchaser on a non-confidential basis prior to disclosure by the Issuer or any of its subsidiaries. For the avoidance of doubt, in no event shall any disclosure of any Confidential Information be made to Person that is a Disqualified Institution at the time of disclosure
Section 9.14. No Fiduciary Duty. Each of the Purchaser Representative, each Purchaser (in its capacity as such), and their respective Affiliates (collectively, solely for purposes of this paragraph, the “Purchasers”), may have economic interests that conflict with those of the Note Parties, their stockholders and/or their respective affiliates. Each Note Party, in its capacity as such, agrees that nothing in the Note Documents will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Purchaser, on the one hand, and such Note Party, its respective stockholders or its respective affiliates, on the other. Each Note Party acknowledges and agrees that: (i) the transactions contemplated by the Note Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Purchasers, on the one hand, and the Note Parties, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Purchaser, in its capacity as such, has assumed an advisory or fiduciary responsibility in favor of any Note Party, its respective stockholders or its respective affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Purchaser has advised, is currently advising or will advise any Note Party, its respective stockholders or its respective Affiliates on other matters) or any other obligation to any Note Party except the obligations expressly set forth in the Note Documents and (y) each Purchaser, in its capacity as such, is acting solely as principal and not as the agent or fiduciary of such Note Party, its respective management, stockholders, creditors or any other Person. To the fullest extent permitted by applicable Requirements of Law, each Note Party waives any claim that it may have against any Purchaser with respect to any breach or alleged breach of fiduciary duty arising solely by virtue of this Agreement. Each Note Party acknowledges and agrees that such Note Party has consulted its own legal, tax and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto.
Section 9.15.
Several Obligations. The respective obligations of the Purchasers hereunder are several and not joint and the failure of any Purchaser to purchase any Note or perform any of its obligations hereunder shall not relieve any other Purchaser from any of its obligations hereunder.
Section 9.16.
USA PATRIOT Act. Each Purchaser and the Purchaser Representative that is subject to the requirements of the USA PATRIOT Act and the requirements of the Beneficial Ownership Regulation hereby notifies the Note Parties that pursuant to the requirements of the USA PATRIOT Act and the Beneficial Ownership Regulation, it is required to obtain, verify and record information that identifies each Note Party, which information includes the name and address of such Note Party and other information that will allow such Purchaser or Purchaser Representative to identify such Note Party in accordance with the USA PATRIOT Act and the Issuer in accordance with the Beneficial Ownership Regulation.
Section 9.17.
Disclosure of Purchaser Conflicts. Each Note Party and each Purchaser hereby acknowledge and agree that the Purchaser Representative and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Note Parties and their respective Affiliates.
Section 9.18.
Appointment for Perfection. Each Purchaser hereby appoints each other Purchaser as its agent for the purpose of perfecting Liens for the benefit of the Purchaser Representative and the Purchasers, in assets which, in accordance with Article 9 of the UCC or any other applicable Requirement of Law can be perfected only by possession. If any Purchaser (other than the Purchaser Representative) obtains possession of any Collateral, such Purchaser shall notify the Purchaser Representative thereof and, promptly deliver such Collateral to the Purchaser Representative or otherwise deal with such Collateral in accordance with the Purchaser Representative’s instructions (acting at the direction of the Required Purchasers).
Section 9.19. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Note, together with all fees, charges and other amounts which are treated as interest on such Note under applicable Requirements of Law (collectively the “Charged Amounts”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Purchaser holding such Note in accordance with applicable Requirements of Law, the rate of interest payable in respect of such Note hereunder, together with all Charged Amounts payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charged Amounts that would have been payable in respect of such Note but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charged Amounts payable to such Purchaser in respect of other Notes or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, have been received by such Purchaser.
Section 9.20.
Intercreditor Agreement. EACH PURCHASER HEREUNDER AGREES THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTION CONTRARY TO THE PROVISIONS OF THE SECOND LIEN INTERCREDITOR AND SUBORDINATION AGREEMENT AND EACH OTHER INTERCREDITOR AGREEMENT
ENTERED INTO BY THE PURCHASER REPRESENTATIVE AND AUTHORIZES AND INSTRUCTS THE PURCHASER REPRESENTATIVE TO ENTER INTO EACH APPLICABLE INTERCREDITOR AGREEMENT
CONTEMPLATED BY THIS AGREEMENT AS “SECOND LIEN AGENT” OR “SUBORDINATED AGENT” (OR EQUIVALENT) AND ON BEHALF OF SUCH SECURED PARTY. REFERENCE MUST BE MADE TO EACH INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH SECURED PARTY IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF EACH INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE PURCHASER REPRESENTATIVE NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY SECURED PARTY AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN ANY INTERCREDITOR AGREEMENT. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE PURCHASERS OR HOLDERS OF ANY OTHER INDEBTEDNESS SUBJECT TO ANY APPLICABLE INTERCREDITOR AGREEMENT TO EXTEND CREDIT THEREUNDER AND SUCH PURCHASERS AND/OR HOLDERS ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF EACH APPLICABLE INTERCREDITOR AGREEMENT.
Notwithstanding anything herein to the contrary, the priority of payments owing to the holders or lenders under this Agreement and the priority of the lien and security interest granted to the Subordinated Agent (as defined in the Second Lien Intercreditor and Subordination Agreement) pursuant to this Agreement and the exercise of any right or remedy by the Subordinated Agent (as defined in the Second Lien Intercreditor and Subordination Agreement) hereunder are subject to the provisions of the Second Lien Intercreditor and Subordination Agreement.
Section 9.21.
Conflicts. Notwithstanding anything to the contrary contained herein or in any other Note Document, in the event of any conflict or inconsistency between this Agreement and any other Note Document, the terms of this Agreement shall govern and control;
provided that in the case of any conflict or inconsistency between any Intercreditor Agreement and any other Note Document, the terms of such Intercreditor Agreement shall govern and control.
Section 9.22. Release of Guarantors. Notwithstanding anything in Section 9.02(b) to the contrary, (a) any Subsidiary Guarantor shall automatically be released from its obligations hereunder (and its Note Guaranty and any Lien granted by such Subsidiary Guarantor pursuant to any Collateral Document shall be automatically released) (i) upon the consummation of any transaction or series of related transactions not prohibited hereunder if as a result thereof such Subsidiary Guarantor ceases to be a Restricted Subsidiary or is an Excluded Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of related transactions not prohibited hereunder, including, for the avoidance of doubt, any Permitted Practice Subsidiary Restructuring) in each case subject, if applicable, to the Specified Guarantor Release Provision, (ii) upon the occurrence of the Termination Date and/or (iii) with respect to any Discretionary Guarantor, upon notice by the Issuer to the Purchaser Representative at any time as a result of a single transaction or series of related transactions not prohibited hereunder and subject, if applicable, to the Specified Guarantor Release Provision and (b) any Subsidiary Guarantor that meets the definition of “Excluded Subsidiary” shall be released by the Purchaser Representative promptly following the request therefor by the Issuer, subject, if applicable, to the Specified Guarantor Release Provision.
Section 9.23.
Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Note Document or in any other agreement, arrangement or understanding of the parties hereto, each such party acknowledges that any liability of any EEA Financial Institution arising under any Note Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Note Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
Section 9.24.
Certain ERISA Matters. Each Purchaser (x) represents and warrants, as of the date such Person became a Purchaser party hereto, to, and (y) covenants, from the date such Person became a Purchaser party hereto to the date such Person ceases being a Purchaser party hereto, that at least one of the following is and will be true:
(a) such Purchaser is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more benefit plans with respect to such Purchaser’s entrance into, participation in, administration of and performance of the Notes, the Commitments or this Agreement,
(b) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Purchaser’s entrance into, participation in, administration of and performance of the Notes, the Commitments and this Agreement,
(c) (i) such Purchaser is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (ii) such Qualified Professional Asset Manager made the investment decision on behalf of such Purchaser to enter into, participate in, administer and perform the Notes, the Commitments and this Agreement, (iii) the entrance into, participation in, administration of and performance of the Notes, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (iv) to the best knowledge of such Purchaser, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Purchaser’s entrance into, participation in, administration of and performance of the Notes, the Commitments and this Agreement, or
(d) such other representation, warranty and covenant as may be agreed in writing between the Purchaser Representative, acting at the instruction of the Required Purchasers, and such Purchaser.
In addition, unless either (1) sub-clause (i) in the immediately preceding paragraph is true with respect to a Purchaser or (2) a Purchaser has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding paragraph, such Purchaser further (x) represents and warrants, as of the date such Person became a Purchaser party hereto, to, and (y) covenants, from the date such Person became a Purchaser party hereto to the date such Person ceases being a Purchaser party hereto, for the benefit of, the Purchaser Representative and not, for the avoidance of doubt, to or for the benefit of the Issuer or any other Note Party, that the Purchaser Representative is not a fiduciary with respect to the assets of such Purchaser involved in such Purchaser’s entrance into, participation in, administration of and performance of the Notes, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Purchaser Representative under this Agreement, any Note Document or any documents related hereto or thereto). To the extent the Purchaser Representative (or any sub-agent thereof) or any Related Party of any of the foregoing is not reimbursed and indemnified by the Issuer, the Purchasers severally agree to reimburse and indemnify the Purchaser Representative (or any such sub-agent) or such Related Party, as the case may be, in proportion to their respective “pro rata shares” (determined as set forth below) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Purchaser Representative (or such sub-agent) or such Related Party in performing its duties hereunder or under any other Note Document or in any way relating to or arising out of this Agreement or any other Note Document; provided, that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Purchaser Representative’s or such Related Party’s, as applicable, gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). For purposes of this paragraph, a Purchaser’s “pro rata share” shall be determined based upon its share of the sum of, without duplication, unused Commitments and outstanding Notes, in each case, at the time (or most recently outstanding and in effect).
Section 9.25.
Acknowledgement Regarding Any Supported QFCs. To the extent that the Note Documents provide support, through a guarantee or otherwise, for Derivative Transactions or any other agreement or instrument that is a QFC (such support, “
QFC Credit Support” and each such QFC a “
Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “US Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Note Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the US or any other state of the US):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a US Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the US Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the US or a state of the US. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a US Special Resolution Regime, Default Rights under the Note Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the US Special Resolution Regime if the Supported QFC and the Note Documents were governed by the laws of the U.S. or a state of the U.S. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Purchaser shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support;
(b) As used in this Section 9.25, the following terms have the following meanings:
“BHC ACT Affiliate” means an “affiliate” (as defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
Section 9.26.
Termination. This Agreement and all obligations hereunder shall terminate on the date of the valid and legally binding termination of the Transaction Support Agreement with respect to any Company Party (as defined in the Transaction Support Agreement) and/or any Consenting First Lien Lender (as defined in the Transaction Support Agreement), in each case, prior to the Closing Date.
ARTICLE 10 CONVERSION OF NOTES
Section 10.01.
Conversion Privilege. Subject to the conditions and upon compliance with the provisions of this
Article 10, each holder of a Note shall have the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Note at any time prior to the close of business on the Business Day immediately preceding the Maturity Date (the “
Conversion Right”). Upon conversion of a Note, the holder of such Note shall be entitled to receive from the Issuer a number of shares of Common Stock equal to (i) the principal amount of such Note
plus any accrued and unpaid interest thereon (the “
Converted Amount”)
divided by (ii) the Conversion Price (with cash in lieu of any fractional share as provided for herein) (the “
Conversion Shares”).
Section 10.02. Forced Conversion.
(a) On or after the second anniversary of the Closing Date, the Issuer may, at its option, from time to time, elect to convert (a “
Forced Conversion”) a portion of the outstanding Notes into the number of shares of Common Stock issuable upon conversion pursuant to
Section 10.01 (with cash in lieu of any fractional share as provided for herein) based on the Conversion Price then in effect if, and only if (i) the Daily VWAP of the Common Stock has been at least 200% of the Conversion Price then in effect on at least 30 Trading Days (whether or not consecutive) in the period of 45 consecutive Trading Days ending on, and including, the Trading Day immediately preceding the Forced Conversion Notice Date, (ii) the Issuer provides the Forced Conversion Notice on a Trading Day and the Daily VWAP of the Common Stock is at least 200% of the Conversion Price in effect on such Forced Conversion Notice Date and (iii) a registration statement covering the resale of the shares of Common Stock issuable upon such Forced Conversion is effective and available for use by the holders of converted Notes on the Forced Conversion Notice Date and the Issuer in good faith expects such registration statement to remain effective and available for such purpose, without any blackout on the use thereof (any period when a blackout is in effect, a “
Blackout Period”), for a period of at least twenty (20) days after the Forced Conversion Date,
provided, that, in the event that the Issuer provides written notice of any Forced Conversion that would be effective but for the fact that the date of such written notice falls within any Blackout Period, such Forced Conversion shall only be effective if (A) the Daily VWAP of the Common Stock is at least 200% of the Conversion Price then in effect on each of the first two Trading Days immediately following the last day of such Blackout Period, (B) the Issuer provides written confirmation of such Forced Conversion on the second such Trading Day to all holders of the Notes and (C) the foregoing clause (iii) is satisfied on such second Trading Day, and in such event such second Trading Day shall be deemed the Forced Conversion Notice Date. Notwithstanding anything to the contrary herein, the Issuer shall not be permitted to exercise the Forced Conversion right at any one time with respect to a principal amount of Notes exceeding 25% of the aggregate original principal amount of all Initial Notes
, First Amendment Notes and Delayed Draw Notes, if any, that have been issued hereunder (in each case, plus the amount of any interest thereon that has been capitalized thereon), and if the Issuer exercises the Forced Conversion right on any Trading Day, the Issuer may not exercise the Forced Conversion right again until the Trading Day immediately following the date on which the shares of Common Stock issuable in connection with the former Forced Conversion have been delivered to the applicable Purchasers.
(b) In order for the Issuer to exercise its right to elect a Forced Conversion of any portion of the outstanding Notes pursuant to this Section 10.02, the Issuer shall give written notice (the “Forced Conversion Notice”) to all holders of the Notes on a Trading Day (the date of such notice, the “Forced Conversion Notice Date”) stating that the Issuer elects to force conversion of such portion of the outstanding Notes pursuant to this Section 10.02 and shall state therein (i) the outstanding principal amount of such Purchaser’s Notes to be converted, (ii) the Conversion Price on the Forced Conversion Notice Date and (iii) the Issuer’s computation of the number of shares of Common Stock (together with cash in lieu of any fractional share) to be received by the Purchaser. The Issuer shall deliver the shares of Common Stock (together with cash in lieu of any fractional share) issuable upon any Forced Conversion on the third Trading Day immediately following the applicable Forced Conversion Notice Date (the “Forced Conversion Date”). For the avoidance of doubt, the exercise by the Issuer of its Forced Conversion right shall not limit or otherwise affect the right of any holder to convert all or any portion of its Notes at any time prior to the Forced Conversion Date. The Forced Conversion Notice Date with respect to any Forced Conversion shall be deemed to be the Conversion Date with respect to such Forced Conversion.
(c) Any Forced Conversion pursuant to this Section 10.02 shall be made in compliance with the provisions of Section 10.03 and the other applicable provisions of this Article 10.
Section 10.03.
Conversion Procedure; Settlement Upon Conversion.
(a) Upon conversion of any Note, the Issuer shall deliver (or cause to be delivered) to the holder of converted Notes the number of Conversion Shares determined in accordance with Section 10.01 (with cash in lieu of any fractional share) on the second Business Day immediately following the relevant Conversion Date (except as specified in Section 10.02(b)). Such delivery shall be effected through the facilities of The Depository Trust Company and, if applicable, bear a customary legend regarding securities law restrictions registered in the name of the relevant holder (provided such Person must be an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act). Upon the Conversion Date, the holder of converted Notes shall be deemed for all corporate purposes to have become the holder of record of the Conversion Shares with respect to which such Note (or portion thereof) has been converted.
(b) To exercise the Conversion Right with respect to all or any portion of any Note on any date (the “Conversion Date”), the holder of such Note shall transmit by email (or otherwise deliver), for receipt on or prior to 5:00 p.m. New York City time on such date, an unsigned copy of a written holder conversion notice in the form attached hereto as Exhibit S to the offices of the Issuer, at ATI Physical Therapy, Inc., 790 Remington Boulevard, Bolingbrook, Illinois 60440 (Attention: Joseph Jordan, Chief Financial Officer, Email: joseph.jordan@atipt.com), or such other address or email address as the Issuer may designate in writing, and to the Purchaser Representative, at 500 Delaware Ave., Wilmington, DE 19801 (Attention: ATI Holdings Acquisition, Inc., Email: phealy@wsfsbank.com). The Issuer shall maintain records showing the principal converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the relevant holder and the Issuer. The holder of each Note and any assignee, by acceptance of such Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of any Note, the principal amount of any Note may be less than the principal amount stated on the face thereof.
(c) If a Note is converted, the Issuer shall pay any documentary, stamp or similar issue or transfer tax due on the issue of the shares of Common Stock upon conversion, unless the tax is due because the holder requests such shares to be issued in a name other than the holder’s name, in which case the holder shall pay that tax.
(d) The Person in whose name the shares of Common Stock shall be issuable upon conversion shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date.
(e) The Issuer shall not deliver any fractional share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Last Reported Sale Price of the Common Stock on the relevant Conversion Date.
Section 10.04.
Adjustment of Conversion Price. The Conversion Price shall be adjusted from time to time by the Issuer if any of the following events occurs:
(a) If the Issuer exclusively issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Issuer effects a share split or share combination, the Conversion Price shall be adjusted based on the following formula:
| CP0 | = | the Conversion Price in effect immediately prior to the close of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable; |
CP'
| =
| the Conversion Price in effect immediately after the close of business on such Record Date or immediately after the open of business on such Effective Date, as applicable; |
| OS0 | = | the number of shares of Common Stock outstanding immediately prior to the close of business on such Record Date or immediately prior to the open of business on such Effective Date, as applicable (before giving effect to any such dividend, distribution, split or combination); and |
OS'
| =
| the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. |
Any adjustment made under this clause (a) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this clause (a) is declared but not so paid or made, the Conversion Price shall be immediately readjusted, effective as of the date the Issuer determines not to pay such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared.
(b) If the Issuer issues to all or substantially all holders of the Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Price shall be adjusted based on the following formula:
where,
CP0 | = | the Conversion Price in effect immediately prior to the close of business on the Record Date for such issuance; |
| | | |
CP' | = | the Conversion Price in effect immediately after the close of business on such Record Date; |
| | | |
OS0 | = | the number of shares of Common Stock outstanding immediately prior to the close of business on such Record Date; |
| | | |
X | = | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and |
| | | |
Y | = | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. |
Any adjustment made under this clause (b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the Record Date for such issuance. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Price shall be adjusted to the Conversion Price that would then be in effect had the adjustment with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Price shall be adjusted to the Conversion Price that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this clause (b), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Issuer for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Issuer in good faith and in a commercially reasonable manner.
(c) If the Issuer distributes shares of its Capital Stock, evidences of its Indebtedness, other assets or property of the Issuer or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding (i) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 10.04(a) or Section 10.04(b), (ii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 10.04(d) shall apply, and (iii) Spin-Offs as to which the provisions set forth below in this Section 10.04(c) shall apply (any of such shares of Capital Stock, evidences of Indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Price shall be adjusted based on the following formula:
where,
CP0 | = | the Conversion Price in effect immediately prior to the close of business on the Record Date for such distribution; |
| | | |
| CP' | = | the Conversion Price in effect immediately after the close of business on such Record Date; |
| | | |
SP0 | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and |
| | | |
| FMV | = | the fair market value (as determined by the Issuer in good faith and in a commercially reasonable manner) of the Distributed Property with respect to each outstanding share of the Common Stock on the Record Date for such distribution. |
Any adjustment made under the portion of this clause (c) above shall become effective immediately after the close of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Price shall be adjusted to the Conversion Price that would then be in effect if such distribution had not been declared. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, each holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount and kind of Distributed Property such holder would have received if such holder exercised the Conversion Right with respect to such Note in full immediately prior to the Ex-Dividend Date for the distribution. If the Issuer determines the “FMV” (as defined above) of any distribution for purposes of this clause (c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.
With respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Issuer, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Price shall be adjusted based on the following formula:
where,
CP0 | = | the Conversion Price in effect immediately prior to the end of the Valuation Period; |
| | | |
| CP' | = | the Conversion Price in effect immediately after the end of the Valuation Period; |
| | | |
FMV0 | = | the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and |
| | | |
MP0 | = | the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
The adjustment to the Conversion Price under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period.
For purposes of this clause (c) (and subject in all respect to Section 10.09), rights, options or warrants distributed by the Issuer to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Issuer’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this clause (c) (and no adjustment to the Conversion Price under this clause (c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Price shall be made under this clause (c). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Agreement, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this clause (c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Price shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Price shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights, options and warrants had not been issued.
(d) If any cash dividend or distribution is made to all or substantially all holders of the Common Stock, the Conversion Price shall be adjusted based on the following formula:
where,
CP0 | = | the Conversion Price in effect immediately prior to the close of business on the Record Date for such dividend or distribution; |
| | | |
CP' | = | the Conversion Price in effect immediately after the close of business on the Record Date for such dividend or distribution; |
| | | |
SP0 | = | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and |
| | | |
C | = | the amount in cash per share the Issuer distributes to all or substantially all holders of the Common Stock. |
Any adjustment pursuant to this clause (d) shall become effective immediately after the close of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Price shall be adjusted, effective as of the date the Issuer determines not to make or pay such dividend or distribution, to be the Conversion Price that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, each holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such holder would have received if such holder exercised the Conversion Right with respect to such Note in full immediately prior to the Ex-Dividend Date for such cash dividend or distribution.
(e) If the Issuer or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Price shall be adjusted based on the following formula:
where,
CP0 | = | the Conversion Price in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; |
| | | |
| CP' | = | the Conversion Price in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; |
| | | |
| AC | = | the aggregate value of all cash and any other consideration (as determined by the Issuer) paid or payable for shares of Common Stock purchased in such tender or exchange offer; |
| | | |
OS0 | = | the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); |
| | | |
| OS' | = | the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and |
| | | |
| SP' | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. |
The adjustment to the Conversion Price under this clause (e) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires.
(f)
(i) In the event the Issuer shall at any time after the date hereof issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to the terms hereof), without consideration or for a consideration per share less than the Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Conversion Price shall be reduced, concurrently with such issuance or deemed issuance, to the consideration per share received by the Issuer for such issue or deemed issue of the Additional Shares of Common Stock;
provided that if such issuance or deemed issuance was without consideration, then the Issuer shall be deemed to have received an aggregate of one-tenth of a cent ($.001) of consideration for all such Additional Shares of Common Stock issued or deemed to be issued.
(ii) If the Issuer at any time or from time to time after the date hereof shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a Record Date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a Record Date shall have been fixed, as of the close of business on such Record Date.
(iii) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security)
to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Issuer upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a Record Date with respect thereto) shall be readjusted to such Conversion Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Conversion Price that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.
(iv) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price (either because the consideration per share of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price then in effect, or because such Option or Convertible Security was issued before the date hereof), are revised after the date hereof as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security)
to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Issuer upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto shall be deemed to have been issued effective upon such increase or decrease becoming effective.
(v) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Conversion Price, the Conversion Price shall be readjusted to such Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.
(vi) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Issuer upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Conversion Price provided for in this provision shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in the other provisions hereof
). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Issuer upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Conversion Price that would result at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Conversion Price that such issuance or amendment took place at the time such calculation can first be made.
(vii) For purposes of this provision, the consideration received by the Issuer for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(1) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Issuer, excluding amounts paid or payable for accrued interest;
(2) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined by the Issuer in good faith and in a commercially reasonable manner; and
(3) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Issuer for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (1) and (2) above, as determined by the Issuer in good faith and in a commercially reasonable manner.
(B) Options and Convertible Securities. The consideration per share received by the Issuer for Additional Shares of Common Stock deemed to have been issued relating to Options and Convertible Securities shall be determined by dividing:
(1) The total amount, if any, received or receivable by the Issuer as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Issuer upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by
(2) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.
(viii) In the event the Issuer shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Conversion Price pursuant to the terms hereof, and such issuance dates occur within a period of no more than ninety (90) days from the first such issuance to the final such issuance, then, upon the final such issuance, the Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).
(g) In addition to those adjustments required by the foregoing provisions of this Section 10.04, and to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Issuer’s securities are then listed, the Issuer from time to time may decrease the Conversion Price by any amount for a period of at least 20 Business Days if the Issuer determines that such decrease would be in the Issuer’s best interest. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Issuer’s securities are then listed, the Issuer may (but is not required to) decrease the Conversion Price to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares of Common Stock (or rights to acquire shares of Common Stock) or similar event. Whenever the Conversion Price is decreased pursuant to either of the preceding two sentences, the Issuer shall deliver to the holder of each Note a notice of the decrease at least 15 days prior to the date the decreased Conversion Price takes effect, and such notice shall state the decreased Conversion Price and the period during which it will be in effect.
(h) All calculations and other determinations under this Article 10 shall be made by the Issuer and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.
(i) Whenever the Conversion Price is adjusted as herein provided, the Issuer shall promptly deliver to holders of the Notes an Officers’ Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(j) For purposes of this Section 10.04, the number of shares of Common Stock at any time outstanding shall not include shares of Common Stock held in the treasury of the Issuer so long as the Issuer does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Issuer, but shall include shares of Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
Section 10.05. Shares To Be Fully Paid. The Issuer shall provide free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion.
Section 10.06.
Effect of Recapitalizations; Reclassifications and Changes of Common Stock.
(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a stock split, subdivision or combination),
(ii) any consolidation, merger, combination or similar transaction involving the Issuer,
(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Issuer and the Issuer’s Subsidiaries substantially as an entirety or
(iv) any statutory share exchange,
in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “
Merger Event”), then
, at and after the effective time of such Merger Event, the right to convert the Notes shall be changed into a right to convert the Notes at the Conversion Price for the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of one share of Common Stock would have owned or been entitled to receive (the “
Reference Property”) upon such Merger Event.
If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be (x) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. The Issuer shall notify holders of such weighted average as soon as practicable after such determination is made.
Following any Merger Event, the anti-dilution and other adjustments set forth herein shall be applied in a manner as nearly equivalent as is possible to the adjustments provided for in this Article. If, in the case of any Merger Event, the Reference Property includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing corporation, as the case may be, in such Merger Event, then such other Person shall agree to undertake the obligations of the Issuer in this Agreement and shall undertake such additional obligations to protect the interests of the holders of the Notes as the Issuer shall reasonably consider necessary by reason of the foregoing.
(b) If a Merger Event occurs, the Issuer shall promptly deliver to holders of the Notes an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with.
(c) The Issuer shall not become a party to any Merger Event unless its terms are consistent with this Section. None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes prior to the effective date of such Merger Event.
(d) The above provisions of this Section shall similarly apply to successive Merger Events.
Section 10.07.
Certain Covenants.
(a) No later than June 14, 2023, the Issuer shall convene and hold an annual or special meeting of the stockholders of the Issuer (the “Issuance Approval Meeting”) at which the stockholders of the Issuer will be asked to approve the issuance of all shares of Common Stock issuable upon the conversion of the Notes as provided for in this Agreement (the “Issuance Approval”), and the proxy statement related to such Issuance Approval Meeting will include a recommendation by the Issuer’s board of directors (subject to the fiduciary duties of the Issuer’s board of directors) that the stockholders of the Issuer vote in favor of such proposal.
(b) The Issuer covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Issuer and free from all taxes, liens and charges with respect to the issue thereof.
(c) The Issuer covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion, the Issuer will, to the extent then permitted by the rules and interpretations of the SEC, secure such registration or approval, as the case may be.
(d) The Issuer further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system, the Issuer will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.
Section 10.08.
Notice to Holders Prior to Certain Actions. In case of any:
(a) action by the Issuer or one of its Subsidiaries that would require an adjustment in the Conversion Price pursuant to this Article;
(b) Merger Event; or
(c) voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any of its Subsidiaries;
then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Agreement), the Issuer shall deliver to each holder of the Notes, as promptly as possible but in any event at least 20 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Issuer or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Issuer or one of its Subsidiaries, or (ii) the date on which such Merger Event, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Merger Event, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Issuer or one of its Subsidiaries, Merger Event, dissolution, liquidation or winding-up
Section 10.09.
Stockholder Rights Plans. If the Issuer has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable all or substantially all holders of the Distributed Property as provided in
Section 10.04(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.
Section 10.10.
Effect of Conversion. Upon the conversion of all or any portion of any Note in accordance with the provisions of this
Article 10, the relevant Converted Amount shall be deemed to have been paid in full in cash for all purposes under this Agreement, and neither the Issuer nor any other Note Party shall have any further liability with respect to such Converted Amount. In the event of the conversion of all or any portion of any Note in accordance with the provisions of this
Article 10, upon delivery of any Conversion Shares, Common Stock or other cash, securities or property or asset for the Converted Amount, the Issuer will provide the Purchaser Representative with (y) written confirmation of (I) such delivery, and (II) the amount of Converted Amount deemed to have been paid in full in cash for all purposes under this Agreement as a result of such delivery, and (z) an irrevocable instruction to reflect on the Register the payment of the Converted Amount that is deemed so paid in full as a result of such delivery. Other than to update the Register pursuant an instruction pursuant to the preceding sentence, the Purchaser Representative shall have no obligation or duty pursuant to
Article 10 or with respect to the Conversion Shares, Common Stock or any other cash, securities or property or asset distributed pursuant to
Article 10 or any requirements or conditions related to the delivery of, or exchange or conversion thereof, or any other fact or matter in connection with the Conversion Shares, Common Stock or any other cash, securities or property or asset distributed pursuant to
Article 10 or the provisions of this
Article 10. In furtherance of the foregoing, in no event shall the Purchaser Representative have any duties or obligations, nor shall they in any event have any liability, with respect to any Note Party’s or any Purchaser’s compliance with applicable securities laws in respect of the Notes, the Conversion Shares, Common Stock or any other cash, securities or property or asset distributed pursuant to
Article 10.
Section 10.11.
Closing Date. It is understood and agreed for the avoidance of doubt that the provisions of this
Article 10 shall have no effect if the Closing Date does not occur.
ARTICLE 11 SERIES B PREFERRED STOCK
Section 11.01.
Authorization and Issuance of Series B Preferred Stock.
(a) On or prior to the date of Issuance of the Initial Notes, the Issuer shall issue to each Initial Purchaser, and each Initial Purchaser shall acquire and receive from the Issuer, the respective number of Initial Series B Preferred Stock set forth opposite such Initial Purchaser’s name on Schedule 11.01
– Part I hereto in the column labeled “Initial Series B Preferred Stock”.
(b) On or prior to the date of Issuance of the First Amendment Notes, the Issuer shall issue to each First Amendment Purchaser, and each First Amendment Purchaser shall acquire and receive from the Issuer, the respective number of First Amendment Series B Preferred Stock set forth opposite such First Amendment Purchaser’s name on Schedule 11.01 – Part II hereto in the column labeled “First Amendment Series B Preferred Stock”.
(c) (b) On or prior to the date of each Issuance of Delayed Draw Notes or Additional Notes, as applicable, the Issuer shall issue to each Delayed Draw Purchaser or Additional Purchaser, as applicable, and each Delayed Draw Purchaser or Additional Purchaser, as applicable, shall acquire and receive from the Issuer, shares of Additional Series B Preferred Stock in an amount equal to the quotient (rounded down to the nearest whole number) obtained by dividing (A) the aggregate principal amount of Delayed Draw Notes or Additional Notes issued, as applicable, issued to such Delayed Draw Purchaser or Additional Purchaser, as applicable, by (B) $1,000.
(d) (c) On or prior to each Interest Payment Date, the Issuer shall issue to each Purchaser, and each Purchaser shall acquire and receive from the Issuer, shares of PIK Series B Preferred Stock in an amount equal to the quotient (rounded down to the nearest whole number) obtained by dividing (A) the aggregate principal amount of interest paid in kind on such Interest Payment Date to such Purchaser by (B) $1,000.
Notwithstanding anything to the contrary herein, in the event that any holder holds less than $1,000 in principal amount of Notes, such holder will not be entitled to any shares of Series B Preferred Stock and any then-outstanding shares of Series B Preferred Stock held by such holder will be deemed automatically forfeited and cancelled without any further action by the Issuer.
Section 11.02.
Fully paid; Non-assessable; No Encumbrances. The Series B Preferred Stock will be fully paid, non-assessable and free and clear of any Encumbrances (other than any restrictions set forth in the governing documents of the Issuer or Encumbrances created by applicable securities laws) and otherwise in accordance with the terms of this Agreement upon each issuance thereof, and have the designations, rights, preferences, powers, restrictions and limitations to be set forth in the Series B Certificate of Designation and the Charter.
Section 11.03.
Restricted Securities. The Purchasers acknowledge that the shares of Series B Preferred Stock are “restricted securities” and have not been registered under the Securities Act, and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, and that the Issuer is not required to register any of the Notes under the Securities Act or the Trust Indenture Act of 1939. In this connection, each Purchaser represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed by the Securities Act.
Section 11.04.
Restrictive Legend. Each share of Series B Preferred Stock shall bear legends in substantially the following forms:
“THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO OFFER, TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS ATI PHYSICAL THERAPY, INC. (THE “ISSUER”) RECEIVES (OR WAIVES THE REQUIREMENT TO RECEIVE) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.”
Section 11.05.
Book Entry; Series B Preferred Stock Not Certificated.
The Purchasers acknowledge that the Series B Preferred Stock will not be issued in certificated form. The Issuer shall issue the Series B Preferred Stock by book entry registration on the books and records of the Issuer’s transfer agent in the name of each Purchaser, reflecting the number of shares of Series B Preferred Stock then held by each such Purchaser, which book entries shall include the legend set forth in Section 11.04.
Section 11.06. Purchaser Representative. For the avoidance of doubt,
the Purchaser Representative shall have no obligation or duty pursuant to this
Article 11 or with respect to any Series B Preferred Stock or any requirements or conditions related to the delivery thereof, or any other fact or matter in connection with the Series B Preferred Stock or the provisions of this
Article 11. In furtherance of the foregoing, in no event shall the Purchaser Representative have any duties or obligations, nor shall they in any event have any liability, with respect to any Note Party’s or any Purchaser’s compliance with applicable state or federal securities laws in respect of the Series B Preferred Stock or any other cash, securities or property or asset distributed pursuant to
Article 11.
[
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s Intentionally
Left BlankOmitted]
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.| | ATI PHYSICAL THERAPY, INC., as the Issuer |
| | | | |
| | Name: Joseph Jordan
|
| | Title: Chief Financial Officer |
| | ATI HOLDINGS ACQUISITION, INC., as Opco |
| | By:
| | |
| | Name: Joseph Jordan
|
| | Title: Chief Financial Officer |
| | WILCO HOLDCO, INC., as Intermediate Parent |
| | By:
| | |
| | Name: Joseph Jordan
|
| | Title: Chief Financial Officer |
| | WILCO INTERMEDIATE HOLDINGS, INC., as Holdings |
| | By:
| | |
| | Name: Joseph Jordan
|
| | Title: Chief Financial Officer |
[Signature Page to Note Purchase Agreement]
| | WILMINGTON SAVINGS FUND SOCIETY, FSB, as Purchaser Representative |
| | | | |
| | Name: John McNichol
|
| | Title: Assistant Vice President |
[Signature Page to Note Purchase Agreement]
| | OCP CLO 2020-8R, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | | | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2014-5, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | | | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2014-6, LTD, as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | | | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2015-9, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | | | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2015-10, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manger |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2016-12, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2017-14, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2018-15, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | ONEX SENIOR CREDIT II, LP, as a Purchaser |
| | By: Onex Credit Partners, LLC, its investment manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2019-16, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
[Signature Page to Note Purchase Agreement]
| | ONEX SENIOR CREDIT FUND, LP., as a Purchaser |
| | By: Onex Credit Partners, LLC its investment manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2019-17, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2020-18, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2020-19 LIMITED, as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | GORE MUTUAL INSURANCE COMPANY, as a Purchaser |
| | By: Onex Credit Management LLC, as Investment Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | ONEX CAPITAL SOLUTIONS HOLDINGS LP, as a Purchaser |
| | By: Onex Capital Solutions GP, LP, its general partner |
| | By: Onex Capital Solutions GP, LLC, its general partner |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCM LOAN HOLDINGS LLC, as a Purchaser |
| | By: Onex Credit Management LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2021-22, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | OCP CLO 2022-25, LTD., as a Purchaser |
| | By: Onex Credit Partners, LLC, as Portfolio Manager |
| | By:
| | |
| | Name: Steven Gutman
|
| | |
| | MARATHON DISTRESSED CREDIT MASTER FUND, as a Purchaser |
| | By:
| | |
| | Name: Lou Hanover
|
| | |
| | MARATHON DISTRESSED CREDIT FUND, LP as a Purchaser |
| | By:
| | |
| | Name: Lou Hanover
|
| | |
| | MARATHON STEPSTONE MASTER FUND LP, as a Purchaser |
| | By:
| | |
| | Name: Lou Hanover
|
| | |
| | MCSP Sub, LLC, as a Purchaser |
| | By:
| | |
| | Name: Lou Hanover
|
| | |
[Signature Page to Note Purchase Agreement]
| | KHSU SPV LP LLC, as a Purchaser |
| | By:
| | |
| | Name: Laura Torrado
|
| | |
| | KNIGHTHEAD MASTER FUND, L.P., as a Purchaser |
| | By: Knighthead Capital Management, LLC, its investment manager |
| | By:
| | |
| | Name: Laura Torrado
|
| | |
| | KNIGHTHEAD (NY) FUND, L.P., as a Purchaser |
| | By: Knighthead Capital Management, LLC, its investment advisor |
| | By:
| | |
| | Name: Laura Torrado
|
| | |
[Signature Page to Note Purchase Agreement]
| | CASPIAN CAPITAL L.P. in its capacity as manager, advisor, sub-advisor or similar capacity on behalf of certain funds and accounts, as a Purchaser |
| | |
| | By:
| | |
| | Name: Dominick Cromartie
|
| | Title: Authorized Signatory |
