UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 3, 2022, the registrant had
Table of Contents
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Page |
PART I. |
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Item 1. |
1 |
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2 |
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3 |
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4 |
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6 |
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7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
Item 3. |
31 |
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Item 4. |
31 |
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PART II. |
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Item 1. |
34 |
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Item 1A. |
34 |
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Item 2. |
34 |
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Item 3. |
34 |
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Item 4. |
34 |
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Item 5. |
34 |
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Item 6. |
36 |
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37 |
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i
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. For example, all statements we make relating to: our ability to grow our business, expand access to our patients and our payors and invest in our platform; our plan to partner with additional hospital systems, large primary care groups and other specialist groups; our expectation that we will continue to open de novo center and acquire new centers; our growth rates and financial results; our plans and objectives for future operations, growth or initiatives; and strategies are forward-looking statements.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, factors and assumptions described in Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the "SEC") on March 17, 2022, including, among other things:
The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this report. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.
ii
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
LIFESTANCE HEALTH GROUP, INC.
CONSOLIDATED FINANCIAL STATEMENTS
For the quarterly period ended June 30, 2022
1
LIFESTANCE HEALTH GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AS OF June 30, 2022 AND December 31, 2021
(unaudited)
(In thousands, except for par value)
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June 30, 2022 |
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December 31, 2021 |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Patient accounts receivable, net |
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Prepaid expenses and other current assets |
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Total current assets |
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NONCURRENT ASSETS |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Other noncurrent assets |
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Total noncurrent assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
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$ |
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Accrued payroll expenses |
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Other accrued expenses |
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Current portion of contingent consideration |
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Other current liabilities |
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Total current liabilities |
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NONCURRENT LIABILITIES |
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Long-term debt, net |
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Other noncurrent liabilities |
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Contingent consideration, net of current portion |
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Deferred tax liability, net |
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Total noncurrent liabilities |
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Total liabilities |
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$ |
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$ |
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STOCKHOLDERS’ EQUITY |
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Preferred stock – par value $ |
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Common stock – par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.
2
LIFESTANCE HEALTH GROUP, INC.
consolidated statements of operations
FOR THE three and six months ended June 30, 2022 and 2021
(unaudited)
(In thousands, except for Net Loss per Share)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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TOTAL REVENUE |
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$ |
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$ |
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$ |
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$ |
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OPERATING EXPENSES |
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Center costs, excluding depreciation and |
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General and administrative expenses |
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Depreciation and amortization |
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Total operating expenses |
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$ |
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$ |
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$ |
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$ |
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LOSS FROM OPERATIONS |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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OTHER EXPENSE |
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Loss on remeasurement of contingent consideration |
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( |
) |
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( |
) |
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( |
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( |
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Transaction costs |
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( |
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( |
) |
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( |
) |
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( |
) |
Interest expense |
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( |
) |
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( |
) |
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( |
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( |
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Other expense |
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( |
) |
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( |
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Total other expense |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
LOSS BEFORE INCOME TAXES |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
INCOME TAX (PROVISION) BENEFIT |
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( |
) |
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NET LOSS |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Accretion of Redeemable Class A units |
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( |
) |
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NET LOSS AVAILABLE TO COMMON |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
NET LOSS PER SHARE, BASIC AND DILUTED |
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( |
) |
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( |
) |
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( |
) |
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( |
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Weighted-average shares used to compute basic and |
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The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.
3
LIFESTANCE HEALTH GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE three and six months ended June 30, 2022 AND CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE UNITS AND STOCKHOLDERS'/MEMBERS’ EQUITY FOR THE three and six months ended June 30, 2021
(unaudited)
(In thousands)
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Common Stock |
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Additional |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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Balances at March 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
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Issuance of common stock upon vesting of restricted |
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( |
) |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Balances at June 30, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Class A Redeemable Units |
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Class A-1 Common Units |
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Class A-2 Common Units |
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Class B Common Units |
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Common Stock |
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Additional |
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Accumulated |
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Total Stockholders'/ |
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Units |
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Amount |
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Units |
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Amount |
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Units |
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Amount |
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Units |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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Balances at March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Issuance of common units for |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Vested Class B Profits Interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of Redeemable |
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( |
) |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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||||
Conversion of common units into |
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
|
( |
) |
|
— |
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— |
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— |
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— |
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|||
Conversion of vested Class B |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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— |
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— |
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||
Conversion of unvested Class B |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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Issuance of common stock upon |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Endowment of shares to the |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock and unit-based |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Balances at June 30, 2021 |
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$ |
|
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$ |
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$ |
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$ |
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|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||||||||||
The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.
4
LIFESTANCE HEALTH GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE three and six months ended June 30, 2022 AND CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE UNITS AND STOCKHOLDERS'/MEMBERS’ EQUITY FOR THE three and six months ended June 30, 2021
(unaudited)
(In thousands)
|
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Common Stock |
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Additional |
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Accumulated |
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Total Stockholders' |
|
||||||||
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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|||||
Balances at December 31, 2021 |
|
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|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
|
||||
Net loss |
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— |
|
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— |
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— |
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( |
) |
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( |
) |
Issuance of common stock upon |
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( |
) |
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— |
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( |
) |
||
Forfeitures |
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( |
) |
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— |
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( |
) |
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— |
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( |
) |
Stock-based compensation expense |
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— |
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— |
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— |
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||
Balances at June 30, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
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||||
|
Class A Redeemable Units |
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Class A-1 Common Units |
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Class A-2 Common Units |
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Class B Common Units |
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Common Stock |
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Additional |
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Accumulated |
|
Total Stockholders'/ |
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|||||||||||||||||||||||
|
Units |
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Amount |
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|
Units |
|
Amount |
|
Units |
|
Amount |
|
Units |
|
Amount |
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Units |
|
Amount |
|
Capital |
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Deficit |
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Equity |
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|||||||||||||
Balances at December 31, 2020 |
|
|
$ |
|
|
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|
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$ |
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$ |
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$ |
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|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||||||||||
Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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|
— |
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|
— |
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( |
) |
|
( |
) |
Issuance of common units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Accretion of Redeemable Class A |
|
— |
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— |
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|
— |
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— |
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— |
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— |
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— |
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|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
Issuance of common units for |
|
— |
|
|
— |
|
|
|
|
— |
|
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Vested Class B Profits Interests |
|
— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of Redeemable |
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( |
) |
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( |
) |
|
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— |
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— |
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|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
||||
Conversion of common units into |
|
— |
|
|
— |
|
|
|
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|||
Conversion of vested Class B |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
||
Conversion of unvested Class B |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
||
Issuance of common stock upon |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
||||
Endowment of shares to the |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
||||
Stock and unit-based |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Balances at June 30, 2021 |
|
|
$ |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||||||||||
The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.
5
LIFESTANCE HEALTH GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE six months ended June 30, 2022 and 2021
(unaudited)
(In thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Stock and unit-based compensation |
|
|
|
|
|
|
||
Loss on debt extinguishment |
|
|
|
|
|
|
||
Amortization of discount and debt issue costs |
|
|
|
|
|
|
||
Loss on remeasurement of contingent consideration |
|
|
|
|
|
|
||
Endowment of shares to LifeStance Health Foundation |
|
|
|
|
|
|
||
Change in operating assets and liabilities, net of businesses acquired: |
|
|
|
|
|
|
||
Patient accounts receivable, net |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Accrued payroll expenses |
|
|
( |
) |
|
|
|
|
Other accrued expenses |
|
|
|
|
|
|
||
Net cash provided by (used in) operating activities |
|
|
|
|
|
( |
) |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Acquisitions of businesses, net of cash acquired |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from initial public offering, net of underwriters |
|
|
|
|
|
|
||
Issuance of common units to new investors |
|
|
|
|
|
|
||
Proceeds from long-term debt, net of discount |
|
|
|
|
|
|
||
Payments of debt issue costs |
|
|
( |
) |
|
|
( |
) |
Payments of long-term debt |
|
|
( |
) |
|
|
( |
) |
Prepayment for debt paydown |
|
|
( |
) |
|
|
|
|
Payments of contingent consideration |
|
|
( |
) |
|
|
( |
) |
Taxes related to net share settlement of equity awards |
|
|
( |
) |
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
( |
) |
|
|
|
|
Cash and Cash Equivalents - Beginning of period |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS – END OF PERIOD |
|
$ |
|
|
$ |
|
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for taxes, net of refunds |
|
$ |
|
|
$ |
|
||
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND |
|
|
|
|
|
|
||
Unpaid deferred offering costs included in accounts payable and |
|
$ |
|
|
$ |
|
||
Equipment financed through capital leases |
|
$ |
|
|
$ |
|
||
Contingent consideration incurred in acquisitions of businesses |
|
$ |
|
|
$ |
|
||
Acquisition of property and equipment included in liabilities |
|
$ |
|
|
$ |
|
||
Issuance of common units for acquisitions of businesses |
|
$ |
|
|
$ |
|
||
The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.
6
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
NOTE 1 NATURE OF THE BUSINESS
Description of Business
LifeStance Health Group, Inc. (“LifeStance Health Group”) was formed as a Delaware corporation on
The Company operates as a provider of outpatient mental health services, spanning psychiatric evaluations and treatment, psychological and neuropsychological testing, and individual, family and group therapy.
Initial Public Offering
On June 14, 2021, the Company completed its IPO in which it issued and sold
Prior to the IPO, each of the holders of partnership interests in LifeStance TopCo contributed its partnership interests to LifeStance Health Group in exchange for shares of common stock (including shares of common stock issued as restricted stock subject to vesting) of LifeStance Health Group (the "Organizational Transactions"). Following the contribution of partnership interests, LifeStance TopCo became wholly-owned by LifeStance Health Group. The number of shares of common stock that each such holder of partnership interests in LifeStance TopCo received was determined based on the value that such holder would have received under the distribution provisions of the limited partnership agreement of LifeStance TopCo, with shares of common stock valued by reference to the IPO price. All
In connection with the IPO, the Company established the LifeStance Health Foundation, a non-profit organization that focuses on youth mental health, and the mental health of underrepresented minority communities, the underemployed and the uninsured. Concurrently with the closing of the IPO, the Company endowed the LifeStance Health Foundation through a combination of $
Following the effective date of the IPO, LifeStance Health Group consolidates the financial results of LifeStance TopCo, its wholly-owned subsidiaries and variable interest entities ("VIEs") and the financial statements for the periods prior to the IPO have been adjusted to combine the previously separate entities for presentation purposes. Prior to the IPO restructuring transactions, LifeStance Health Group had no operations.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's significant accounting policies are discussed in Note 2 "Summary of Significant Accounting Policies" in Item 15 of its Annual Report on Form 10-K for the year ended December 31, 2021. During the six months ended June 30, 2022, there have been no significant changes to these policies other than the additions to the stock and unit-based compensation policy further described below.
Basis of Presentation and Principles of Consolidation
The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC regarding interim financial reporting, which include the accounts of LifeStance Health Group, LifeStance TopCo, its wholly-owned subsidiaries and VIEs in which LifeStance TopCo has an interest and is the primary beneficiary. Pursuant to these rules and regulations, the Company has omitted certain information and footnote disclosures it normally includes in its annual consolidated
7
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its consolidated financial condition, results of operations and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s audited financial statements for the year ended December 31, 2021 in the Company's Annual Report on Form 10-K.
On May 14, 2020, affiliates of TPG acquired the majority of the equity interests of LifeStance Health Holdings, Inc. through certain newly formed subsidiaries ("TPG Acquisition"). Periods subsequent to the acquisition and prior to the IPO and restructuring transactions reflect the financial statements of LifeStance TopCo. Periods subsequent to the IPO and restructuring transactions reflect the financial statements of LifeStance Health Group. All periods subsequent to the TPG Acquisition have been presented as the financial statements of LifeStance Health Group.
Use of Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Variable Interest Entities
The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a VIE. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available information. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change.
The Company acquires and operates certain care centers which are deemed to be Friendly-Physician Entities (“FPEs”). As part of an FPE acquisition, the Company acquires
The contractual arrangements described above allow the Company to direct the activities that most significantly affect the economic performance of the FPEs. Accordingly, the Company is the primary beneficiary of the FPEs and consolidates the FPEs under the VIE model. Furthermore, as a direct result of nominal initial equity contributions by the physicians, the financial support the Company provides to the FPEs (e.g., loans) and the provisions of the contractual arrangements and nominee shareholder succession arrangements described above, the interests held by noncontrolling interest holders lack economic substance and do not provide them with the ability to participate in the residual profits or losses generated by the FPEs. Therefore, all income and expenses recognized by the FPEs are allocated to the Company. The Company does not hold interests in any VIEs for which the Company is not deemed to be the primary beneficiary.
8
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
As noted previously, the Company acquires 100% of the non-medical assets of the VIEs. The aggregate carrying values of the VIEs total assets and total liabilities not purchased by the Company but included on the consolidated balance sheets were not material at June 30, 2022 and December 31, 2021.
Stock and Unit-Based Compensation
Beginning in 2022, the Company granted restricted stock units ("RSUs") to certain employees and other service providers subject to certain service-based or service- and performance-based vesting conditions. The ultimate number of shares that are issued in respect of the performance-based RSUs are based on actual performance over a three or four-year performance period and ranging from zero to 100% of the performance-based RSUs subject to the award. Each fiscal year within the award period represents a separately vesting tranche of the award. For a portion of the performance-based RSUs, as the performance conditions have not been established beyond the first year of the award, a grant date has not yet been established for the remaining annual periods of these performance-based RSUs.
The performance-based RSUs are measured at fair value on their grant date. The related compensation expense for the performance awards is recognized on a straight line basis over the requisite service period for each separately vesting tranche of the award if and when the Company concludes that it is probable that the performance conditions will be achieved. At the end of each reporting period, the Company reevaluates the probability that the performance conditions will be achieved.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's unaudited consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
New Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and also issued subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20, ASU 2019-01, ASU 2020-02, and ASU 2020-05 (collectively, “ASC 842”). ASC 842 outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. ASC 842 is effective for private entities for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, inclusive of a one year deferral provided by ASU 2020-05. ASC 842 must be adopted using a modified retrospective method and early adoption is permitted. The Company is in the process of determining the impact of the adoption of ASC 842 on the Company’s consolidated financial statements and disclosures. The Company has organized an implementation group to ensure the completeness of its lease information, analyze the appropriate classification of leases under the new standard, and develop new processes to execute, approve and classify leases on an ongoing basis. However, given the Company’s current operating lease portfolio (see Note 13 and Note 14) the Company expects the recognition of the right-of-use assets and lease liabilities to have a material impact on the Company’s consolidated balance sheets.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for private entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASU 2016-03 will apply as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company’s consolidated financial statements and disclosures.
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments
9
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for private entities for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued and all other entities for periods for which financial statements have not yet been made available for issuance. The Company is in the process of evaluating the impact of the adoption of ASU 2019-12 on the Company’s consolidated financial statements and disclosures.
NOTE 3 ACQUISITIONS
During the three and six months ended June 30, 2022 and 2021, the Company completed the acquisitions of
Total consideration transferred for these acquisitions consisted of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cash consideration |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cash consideration to be paid |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration, at initial fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Class A-2 common units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consideration transferred |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The results of the acquired businesses have been included in the Company’s consolidated financial statements beginning as of their acquisition dates. It is impracticable to provide historical supplemental pro forma financial information along with revenue and earnings subsequent to the acquisition dates for acquisitions during the period due to a variety of factors, including access to historical information and the operations of acquirees being integrated within the Company shortly after closing and not operating as discrete entities within the Company’s organizational structure.
Fair Values of Assets Acquired and Liabilities Assumed
The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the dates of acquisition:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Allocation of Purchase Price |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cash |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Patient accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other noncurrent assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets acquired |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities assumed |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of net assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The fair value of assets and liabilities other than intangible assets approximate the carrying amounts as of acquisition dates.
10
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
The following table summarizes the fair values of acquired intangible assets as of the dates of acquisition:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Regional trade names (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Non-competition agreements (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Contingent Consideration
Under the provisions of the acquisition agreements, the Company may pay additional cash consideration in the form of earnouts, contingent upon the acquirees achieving certain performance and operational targets (see Note 6).
The following table summarizes the maximum contingent consideration based on the acquisition agreements:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Contingent consideration |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Maximum contingent consideration based on |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Goodwill
Goodwill represents the excess of the purchase price over the net identifiable assets acquired and liabilities assumed. Goodwill is primarily attributable to the assembled workforce, customer and payor relationships and anticipated synergies and economies of scale expected from the integration of the businesses. The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the acquisition. Goodwill deductible for tax purposes is $
NOTE 4 INTANGIBLE ASSETS
Intangible assets consists of the following:
June 30, 2022 |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
Regional trade names |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
LifeStance trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Non-competition agreements |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
December 31, 2021 |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
Regional trade names |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
LifeStance trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Non-competition agreements |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Gross carrying amount is based on the fair value of the intangible assets determined at acquisitions. Total intangible asset amortization expense consists of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
11
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
NOTE 5 PROPERTY AND EQUIPMENT
Property and equipment, net consists of the following:
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||
Leasehold improvements |
|
$ |
|
|
$ |
|
||
Computers and peripherals |
|
|
|
|
|
|
||
Furniture, fixtures and equipment |
|
|
|
|
|
|
||
Medical equipment |
|
|
|
|
|
|
||
Construction in process |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Less: Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense consists of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Depreciation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
NOTE 6 FAIR VALUE MEASUREMENTS
The Company measures its contingent consideration liability at fair value on a recurring basis using Level 3 inputs. The Company estimates the fair value of the contingent consideration liability based on the likelihood and timing of the contingent earn-out payments. The valuation methodology differs depending on the type of earn-out target.
Valuation Technique |
|
Range of Significant Assumptions |
||||
|
|
|
|
June 30, 2022 |
|
December 31, 2021 |
Probability-weighted analysis |
|
Probability |
|
|
||
based earn-outs |
|
Discount rate |
|
|
||
As of June 30, 2022 and December 31, 2021, the Company adjusted the fair value of the contingent consideration liability due to remeasurement at the reporting date. See Note 14 for discussion of payment of contingent consideration made related to acquisitions, fair value adjustments, and a roll-forward of the contingent consideration balance from the prior year.
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis:
June 30, 2022 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Instrument |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
December 31, 2021 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Instrument |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As disclosed in Note 3, the Company acquired several outpatient mental health practices during the three and six months ended June 30, 2022 and 2021. The values of net tangible assets acquired, and the resulting goodwill and other intangible assets, were recorded at fair value. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were estimated by management or with the assistance of a third-party valuation expert primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. The Company developed estimates for the expected future cash flows and discount rates used in the present value calculations. Other than assets acquired and liabilities assumed in these acquisitions, there were
12
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
NOTE 7 GOODWILL
Goodwill consists of the following:
|
|
Amount |
|
|
Balance as of December 31, 2021 |
|
$ |
|
|
Business acquisitions (Note 3) |
|
|
|
|
Measurement period adjustments |
|
|
( |
) |
Balance as of June 30, 2022 |
|
$ |
|
|
NOTE 8 LONG-TERM DEBT
On May 14, 2020, in connection with the TPG Acquisition, the Company entered into the Credit Agreement among LifeStance Health Holdings, Inc., Lynnwood Intermediate Holdings, Inc., Capital One, National Association, and each lender party thereto (the “May 2020 Credit Agreement”). The term loans and delayed draw loans were payable in quarterly principal and interest payments through
On May 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) among LifeStance Health Holdings, Inc., Lynnwood Intermediate Holdings, Inc., Capital One, National Association, and each lender party thereto. The 2022 Credit Agreement established commitments in respect of a term loan facility of $
The proceeds from the 2022 Credit Agreement term loans were used to repay in full and extinguish the May 2020 Credit Agreement. The 2022 Credit Agreement term loans are treated as a new issuance of debt. In relation to the May 2020 Credit Agreement, the Company recognized an extinguishment of debt charge within interest expense of $
The 2022 Credit Agreement requires the Company to maintain compliance with certain restrictive financial covenants related to earnings, leverage ratios, and other financial metrics. The Company was in compliance with all debt covenants at June 30, 2022 and December 31, 2021.
Long-term debt consists of the following:
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||
Term loans |
|
$ |
|
|
$ |
|
||
Delayed Draw loans |
|
|
|
|
|
|
||
Revolving loan |
|
|
|
|
|
|
||
Total long-term debt |
|
|
|
|
|
|
||
Less: Current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Less: Unamortized discount and debt issue costs (1) |
|
|
( |
) |
|
|
( |
) |
Total Long-Term Debt, Net of Current Portion |
|
$ |
|
|
$ |
|
||
The current portion of long-term debt is included within other current liabilities on the unaudited consolidated balance sheets.
13
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
Interest expense consists of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Future principal payments on long-term debt are as follows:
Year Ended December 31, |
|
Amount |
|
|
Remainder of 2022 |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
The fair value of long-term debt is based on the present value of future payments discounted by the market interest rates or the fixed rates based on current rates offered to the Company for debt with similar terms and maturities, which is a Level 2 fair value measurement. Long-term debt is presented at carrying value on the unaudited consolidated balance sheets. The fair value of long-term debt at June 30, 2022 and December 31, 2021 was $
Revolving Loan
Under the May 2020 Credit Agreement, the Company had a revolving loan commitment from Capital One in the amount of $
Under the 2022 Credit Agreement, the Company has a revolving loan commitment from Capital One in the amount of $
In June 2022, the Company drew $
NOTE 9 TOTAL REVENUES
The Company’s total revenues are dependent on a series of contracts with third-party payors, which is typical for providers in the health care industry. The Company has determined that the nature, amount, timing and uncertainty of revenue and cash flows are affected by the payor mix with third-party payors, which have different reimbursement rates.
The payor mix of fee-for-service revenue from patients and third-party payors consists of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||||||||||||||||||
|
|
Amount |
|
|
% of Total Revenue |
|
|
Amount |
|
|
% of Total Revenue |
|
|
Amount |
|
|
% of Total Revenue |
|
|
Amount |
|
|
% of Total Revenue |
|
||||||||
Commercial |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
Government |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Self-pay |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Total patient service |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Nonpatient service |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
14
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
Among the commercial payors, the table below represents insurance companies that individually represented
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Top one payor |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Top two payor |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Top three payor |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
NOTE 10 INCOME TAXES
The provision (benefit) for income taxes is as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Provision (benefit) for income taxes |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
The effective tax rates are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Effective tax rate |
|
|
( |
)% |
|
|
% |
|
|
% |
|
|
% |
|||
The difference between the Company’s effective tax rate and the U.S. statutory tax rate of
NOTE 11 STOCK AND UNIT-BASED COMPENSATION
2021 Equity Incentive Plan
Effective June 9, 2021, the Company’s Board of Directors (the "Board") and its stockholders as of that date adopted and approved the LifeStance Health Group, Inc. 2021 Equity Incentive Plan (the “2021 Equity Incentive Plan”). All equity-based awards subsequent to June 9, 2021 will be granted under the 2021 Plan. The 2021 Equity Incentive Plan permits the grant of awards or restricted or unrestricted common stock, stock options, stock appreciation rights, restricted stock units, performance awards, and other stock-based awards to employees and directors of, and consultants and advisors to, the Company and its affiliates.
The maximum number of shares of the Company’s common stock that may be delivered in satisfaction of awards under the 2021 Equity Incentive Plan was initially reserved at
Restricted Stock
The RSAs were issued as part of the Organizational Transactions (see Note 1).
The following is a summary of RSA transactions as of and for the six months ended June 30, 2022:
|
|
Unvested Shares |
|
|
Weighted-Average |
|
||
Unvested, December 31, 2021 |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Unvested, June 30, 2022 |
|
|
|
|
$ |
|
||
15
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
Restricted Stock Units
The RSUs were granted in connection with the IPO and subsequent to the IPO. RSUs are accounted for as equity using the fair value method, which requires measurement and recognition of compensation expense for all awards granted to employees, directors and consultants based upon the grant-date fair value.
The following is a summary of RSU transactions as of and for the six months ended June 30, 2022:
|
|
Unvested Shares |
|
|
Weighted-Average |
|
||
Outstanding, December 31, 2021 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Canceled and forfeited |
|
|
( |
) |
|
|
|
|
Outstanding, June 30, 2022 |
|
|
|
|
$ |
|
||
Stock and Unit-Based Compensation Expense
The Company recognized stock and unit-based compensation expense related to RSAs, RSUs and the Class B Profits Interests within general and administrative expenses in the unaudited consolidated statements of operations as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Stock and unit-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of June 30, 2022, the Company had $
2021 Employee Stock Purchase Plan
Effective June 9, 2021, the Board and its stockholders as of that date adopted and approved the LifeStance Health Group, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP permits the grant to eligible employees of the Company and its participating subsidiaries of options to purchase shares of the Company’s common stock.
The aggregate number of shares of the Company common stock initially available for purchase pursuant to the exercise of options under the ESPP is
The ESPP will generally be implemented by a series of separate offerings referred to as “Option Periods”. Unless otherwise determined by the administrator, the Option Periods will be successive periods of approximately six months commencing on the first business day in January and July of each year, anticipated to be on or around January 1 and July 1, and ending approximately six months later on the last business day in June or December, as applicable, of each year, anticipated to be on or around June 30 and December 31. The last business day of each Option Period will be an “Exercise Date”. The administrator may change the Exercise Date, the commencement date, the ending date and the duration of each Option Period, in each case, to the extent permitted by Section 423 of the Internal Revenue Code; provided, however, that no option may be exercised after 27 months from its grant date.
As of June 30, 2022,
NOTE 12 STOCKHOLDERS’/MEMBERS’ EQUITY
Common Stock – Post-IPO
As discussed in Note 1, upon completion of the Company’s IPO in June 2021, the Company sold
16
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
In connection with the IPO, the Company increased its authorized shares from
Common Units - Pre-IPO
The chief executive officer (“CEO”) had
Class A-1 Common Units had equal voting rights. Class A-2 and Class B Common Units were nonvoting units.
Preferred Stock
In connection with the Company’s IPO, the Company authorized the issuance of
NOTE 13 RELATED PARTY TRANSACTIONS
The Company leases
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Rent expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
A summary of non-cancelable future minimum operating lease payments under these leases as of June 30, 2022 is as follows:
Year Ended December 31, |
|
Amount |
|
|
Remainder of 2022 |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
In addition, management fees to TPG and certain executives of the Company were identified as related party transactions. For the three and six months ended June 30, 2021, the Company incurred related-party management fees of $
As part of the 2022 Credit Agreement restructuring, TPG provided arrangement and structuring services. The Company incurred related party fees of $
NOTE 14 COMMITMENTS AND CONTINGENCIES
Contingent Consideration relating to Acquisitions
For the six months ended June 30, 2022, there were post-closing payments contingent upon the future performance of the Company’s recently acquired targets achieving certain agreed-upon performance metrics. Contingent consideration is recorded at fair value and was recognized in the purchase price allocation (see Note 3) of the acquired company.
17
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
The following table presents changes to the Company’s contingent consideration balance:
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Additions related to acquisitions |
|
|
|
|
|
|
||
Payments of contingent consideration |
|
|
( |
) |
|
|
( |
) |
Loss on remeasurement |
|
|
|
|
|
|
||
Ending balance |
|
$ |
|
|
$ |
|
||
Leases with Third Parties
The Company leases its office facilities under operating leases expiring through
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Center costs, excluding depreciation and amortization |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total rent expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
A summary of non-cancellable future minimum third-party operating lease payments under these leases as of June 30, 2022 is as follows:
Year Ended December 31, |
|
Amount |
|
|
Remainder of 2022 |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Professional Liability Insurance
The medical malpractice insurance coverage is subject to a $
Health Care Industry
The health care industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, and government health care program participation requirements, reimbursement for patient services, and Medicare fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by health care providers. Violation of these laws and regulations could result in expulsion from government health care programs together with imposition of significant fines and penalties, as well as significant repayments for patient services billed.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by governmental agencies, various health care companies have received requests for information and notices regarding alleged noncompliance with those laws and regulations, which, in some instances, have resulted in companies entering into significant settlement agreements. Compliance with such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties, and potential exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge the Company’s compliance with these laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties would have upon the Company. In addition, the contracts the Company has with commercial payors also provide for retroactive audit and review of claims.
18
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
Management believes that the Company is in substantial compliance with fraud and abuse as well as other applicable government laws and regulations. While no regulatory inquiries have been made, compliance with such laws and regulations is subject to government review and interpretation, as well as regulatory actions unknown or unasserted at this time.
General Contingencies
The Company is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions, injuries to employees, and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. There has been no significant reduction in insurance coverage from the previous year in any of the Company’s policies.
Litigation
The Company may be involved from time-to-time in legal actions relating to the ownership and operations of its business. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on the financial condition, results of operations, or cash flows of the Company.
In March 2020, the Company received a Civil Investigative Demand from the U.S. Attorney’s Office of the Northern District of Georgia involving an investigation of a laboratory arrangement. The Company does not believe that it is a target of the investigation or that there is any material exposure based on its internal review. The Company does not know how the investigation will be resolved, to what extent it may be expanded, or whether the Company or its employees will be subject to further investigation, enforcement action or related penalties that could have an adverse impact on its business, results of operations and financial condition.
NOTE 15 NET LOSS PER SHARE
Prior to the IPO, as discussed in Note 1, the partnership interests of LifeStance TopCo included Redeemable Class A, Class A common and Class B units. The Class B Units were intended to be "profits interests" for U.S. federal income tax purposes. Prior to the IPO, each of the holders of partnership interests in LifeStance TopCo contributed its partnership interest to LifeStance Health Group in exchange for shares of common stock (including shares of common stock issued as RSAs subject to vesting) of LifeStance Health Group, with no changes in relative equity holder rights, rank or value before or after this exchange. As a result, the LifeStance TopCo equity exchange of common units was considered equivalent to a stock split and requires retrospective treatment for net loss per share purposes. All share and per share information has been retroactively adjusted to reflect the equity exchange for all periods presented. Vested Class B Profits Interests Units outstanding prior to the equity exchange were considered compensatory arrangements that were settled with shares of common stock at the time of the exchange and have been included as outstanding shares subsequent to that date.
The following table presents the calculation of basic and diluted net loss per share (“EPS”) for the Company’s common shares (on an as-converted basis):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss available to common stockholders'/members' |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted-average shares used to compute basic and |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
19
LIFESTANCE HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(In thousands, except per share/unit amounts)
The Company has issued potentially dilutive instruments in the form of RSAs and the RSUs. The Company did not include any of these instruments in its calculation of diluted loss per share (on an as-converted basis) for the three and six months ended June 30, 2022 and 2021 because to include them would be anti-dilutive due to the Company’s net loss during the period. See Note 11 for the issued, vested and unvested RSAs and RSUs.
|
|
As of June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
RSAs |
|
|
|
|
|
|
||
RSUs |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
NOTE 16 SUBSEQUENT EVENTS
Acquisitions
Subsequent to June 30, 2022, the Company completed acquisitions of several outpatient mental health practices. The allocation of purchase price, including any fair value of contingent consideration, to the assets acquired and liabilities assumed as of the acquisition dates have not been completed.
For acquisitions completed subsequent to June 30, 2022, total contractual consideration included cash consideration of $
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and the accompanying notes as well as "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2021. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth under “Risk Factors” Part II, Item 1A in this Quarterly Report on Form 10-Q as well as those discussed in the Annual Report on Form 10-K for the year ended December 31, 2021, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
LifeStance Health Group, Inc. was formed as a Delaware corporation on January 28, 2021 for the purpose of completing an initial public offering (“IPO”) and related transactions in order to carry on the business of LifeStance TopCo, L.P. (“LifeStance TopCo”) and its consolidated subsidiaries and affiliated practices. LifeStance Health Group, Inc. wholly-owns the equity interest of LifeStance TopCo and operates and controls all of the business and affairs and consolidates the financial results of LifeStance TopCo and its wholly owned subsidiaries and affiliated practices. Unless the context otherwise indicates or requires, the terms "LifeStance Health Group", "LifeStance Health", "LifeStance", “we”, and “our” as used herein refer to LifeStance Health Group and its consolidated subsidiaries and affiliated practices.
Our Business
We are dedicated to improving the lives of our patients by reimagining mental health through a disruptive, tech-enabled in-person and virtual care delivery model built to expand access and affordability, improve outcomes and lower overall health care costs. We are one of the nation’s largest outpatient mental health platforms based on the number of clinicians we employ through our subsidiaries and our affiliated practices and our geographic scale, employing 5,226 licensed mental health clinicians as of June 30, 2022. We combine a personalized, digitally-powered patient experience with differentiated clinical capabilities and in-network insurance relationships to fundamentally transform patient access to mental health treatment. By revolutionizing the way mental health care is delivered, we believe we have an opportunity to improve the lives and health of millions of individuals.
Our model is built to empower each of the healthcare ecosystem’s key stakeholders—patients, clinicians, payors and primary care and specialist physicians—by aligning around our shared goal of delivering better outcomes for patients and providing high-quality mental health care.
21
COVID-19 Impact
With the COVID-19 pandemic placing an unprecedented strain on daily life, existing trends in mental health care have worsened dramatically since the beginning of the pandemic—41% of adults reported at least one adverse mental health condition, including symptoms of mental illness or substance abuse related to the pandemic. Quarantining and lockdown measures have resulted in furloughs and layoffs, dramatically increasing stressors and leading to poorer overall mental and physical health.
While the impact of the COVID-19 pandemic has increased stressors associated with mental health, we believe that a combination of factors contribute to our total patient visits and related revenue, including, among others, long-term trends in reduced stigmatization of mental health. Even before the pandemic, we saw the need to have a platform supported by leading technology to give us the ability to treat patients virtually or in-person. Our prior investment in our technology platform, most notably in our digital capabilities, became an essential component for continuing to deliver care to our patients during the pandemic. We observed an impact on appointments in mid-March 2020 as patients moved to shelter-at-home and increased cancellations. By the end of March 2020, appointments and visits had returned to normal levels. Since then, as the pandemic has surged and waned, we believe there has been some impact due to patient and clinician illness, resulting in cancelations of appointments, deferrals and fewer appointments initially scheduled. However, as we are unable to quantify deferrals or appointments that were not scheduled, we are unable to specifically measure the impact. Our clinician recruitment opportunities have also increased as a result of the pandemic, driven by an increase in clinician supply from those seeking more stable employment models. While we continue to take advantage of clinician recruitment opportunities, recent changes in the labor market dynamics driven by pandemic-related burnout have also impacted retention.
We believe COVID-19 represents a paradigm shift in the importance of and focus on mental health care. We have seen significant increase in patient demand as well as payor and employer adoption of mental health coverage options during the pandemic and it is now integrated into health care offerings more than ever before. We feel the spotlight the pandemic has put on the need for mental health care will have a positive impact on our industry and business for years to come.
Key Factors Affecting Our Results
Expanding Center Capacity and Visits Within Existing Centers
We have built a powerful organic growth engine that enables us to drive growth within our existing footprint.
Our Clinicians
As of June 30, 2022, we employed 5,226 psychiatrists, advanced practice nurses, psychologists and therapists through our subsidiaries and affiliated practices. We generate revenue on a per visit basis as clinical services are rendered by our clinicians. As our existing centers mature, we grow our physical capacity by leveraging our hybrid clinical model to increase our average clinicians per center, effectively expanding the four walls of our centers. Recruiting new clinicians and retaining existing clinicians in our existing centers enables us to see more patients per center by expanding our patient visit capacity. We believe our fully employed model offers a superior value proposition compared to independent practice. Our network relationships provide clinicians with ready access to patients. We also enable clinicians to manage their own patient volumes. Our platform promotes a clinically-driven professional culture and streamlines patient access and care delivery, while optimizing practice administration processes through technology. We believe we are an employer of choice in mental health, allowing us to employ highly qualified clinicians.
We believe we have significant opportunity to grow our employed clinician base—we estimate there are approximately 650,000 mental health clinicians in the United States, providing us with a meaningful runway to grow from our current base of 5,226 clinicians employed through our subsidiaries and affiliated practices, as of June 30, 2022. To capitalize on this opportunity, we have developed a rigorous and exclusive in-house national clinician recruiting model that works closely with our regional clinical teams to select the best candidates and fulfill capacity in a timely manner. As we grow our clinician base, we can grow our business, expand access to our patients and our payors and invest in our platform to further reinforce our differentiated offering to clinicians. We have available physical capacity to add clinicians to our existing centers, as well as an opportunity to add new clinicians with the roll-out of de novo centers and acquire additional clinicians through our acquisition strategy. Our virtual care offering also allows clinicians to see more patients without investments in incremental physical space, expanding our patient visit capacity beyond in-person only levels.
Our Patients
We believe our ability to attract and retain patients to drive growth in our visits and meet the availability of our clinician base will enable us to grow our revenue. We believe we have a significant opportunity to increase the number of patients we serve in our existing markets. In 2021, our clinicians treated more than 570,000 unique patients through 4.6 million visits. We believe our ability to deliver more accessible, flexible, affordable and effective mental health care is a key driver of our patient growth. We believe we provide a superior and differentiated mental health care experience that integrates virtual and in-person care to deliver care in a convenient way for our patients, meeting our patients where they are. Our in-network payor relationships allow our patients to access care without significant out-of-pocket cost or delays in receiving treatment. We treat mental health conditions across the clinical spectrum through a clinical approach that delivers improved patient outcomes. We support our patients throughout their care
22
continuum with purpose-built technological capabilities, including online assessments, digital provider communication, and seamless internal referral and follow-up capabilities.
We utilize multiple strategies to add new patients to our platform, including our primary care and specialist physician relationships, internal referrals from our clinicians, our payor relationships and our dedicated marketing efforts. We have established a large network of national, regional and local payors that enables their members to be referred to us as patients. Payors refer patients to our platform to drive improvement in health outcomes for their members, reduction in total medical costs and increased member satisfaction and retention. Within our markets, we partner with primary care practice groups, specialists, health systems and academic institutions to refer patients to our centers and clinicians. Our local marketing teams build and maintain relationships with our referring partner networks to create awareness of our platform and services, including the opening of new centers and the introduction of newly hired clinicians with appointment availability. We also use online marketing to develop our national brand to increase brand awareness and promote additional channels of patient recruitment.
Our Primary Care and Specialist Physician Referral Relationships
We have built a powerful patient referral network through partnerships with primary care physicians and specialist physician groups across the country. We deliver value to our provider partners by offering a more efficient referral base, delivering improved outcomes for our mutual patients, and enabling more integrated care and lower total health care costs. As we continue to scale nationally, we plan to partner with additional hospital systems, large primary care groups and other specialist groups to help streamline their mental health network needs and drive continued patient growth across our platform. Our vision over time is to further integrate our mental health care services with those of our medical provider partners. By co-locating and driving towards integration with primary care providers, we can enhance our clinician’s access to patients. We anticipate that we will continue to grow these relationships while evolving our offering toward a fully-integrated care model in which primary care and our mental health clinicians work together to develop and provide personalized treatment plans for shared patients. We believe these efforts will help to further align our model with that of other health care providers, increasing our value to them and driving new opportunities to partner to grow our patient base.
Our Payors
Our payor relationships, including national contracts with multiple payors, allow payors access to our services through in-network coverage for their members. We believe the alignment of our model with our payor partners’ population health objectives encourages third-party payors to partner with us. We believe we deliver value to our payor partners in several ways, including access to a national clinician employee base, lower total medical costs, measurable outcomes, and stronger member and client value proposition through the offering of in-network mental health services. The strength of our payor relationships and our value proposition allowed us to secure rate parity between in-person and virtual visits, either by contract or payor policy. To expand this network and grow access to covered patients, we continue to establish new payor relationships and national contracts while also seeking to drive regional rate improvement for our patients and clinicians. We believe our payor relationships differentiate us from our competitors and are a critical factor in our ability to expand our market footprint in new regions by leveraging our existing national payor relationships. As we continue to grow, we believe our scale, breadth and access will continue to be enhanced, further strengthening the value of our platform to payors.
Expand our Center Base Within Existing and New Markets
We believe we have developed a highly replicable playbook that allows us to enter new markets and pursue growth through multiple vectors. We typically identify new markets based on the core characteristics of patient population demographics, substantial clinician recruiting opportunities, untreated patient communities and a diverse group of payors. To enter new markets, we seek to open de novo centers or acquire high-quality practices with a track record of clinical excellence and in-network payor relationships. Once we enter a new market, our powerful organic growth engine drives our growth through de novo openings, center expansions, clinician recruiting and tuck-in acquisitions. We anticipate focusing on continued expansion, both in our existing markets and in new geographies, where mental health care remains a large unmet need.
De Novo Builds
Our de novo center strategy is a central component of our organic growth engine to build our capacity and increase density in our existing MSAs. From our inception in 2017 through June 30, 2022, we have successfully opened 294 de novo centers, including 68 de novo centers in 2022, 106 de novo centers in 2021 and 78 de novo centers in 2020. We believe there is a significant opportunity to use de novo center openings to address potential patient need in our existing markets and new markets that we have determined are attractive to enter. We systematically locate our centers within a given market to ensure convenient coverage for in-person access to care. We believe our successful de novo program and national clinician recruiting team can support additions of new centers and clinicians.
In 2021, we transitioned to a more sustainable design for all new de novo centers going forward that reimagines the mental healthcare experience for both patients and clinicians while reinforcing our commitment to sustainability.
23
Acquisitions
We have built a proprietary pipeline of acquisition targets, providing us with significant opportunities to scale through potential acquisitions. We believe the highly fragmented nature of the mental health market provides us with a meaningful opportunity to execute on our acquisition playbook. We seek to acquire select practices that meet our standards of high-quality clinical care and align with our mission. We believe our guiding principle of creating a national platform built with a patient and clinician focus makes us a partner of choice for smaller, independent practices. Our acquisition strategy is deployed both to enter new markets and in our existing markets. In new markets, acquisitions allow us to establish a presence with high-quality practices with a track record of clinical excellence and in-network payor relationships that can be integrated into our national platform. In existing markets, acquisitions allow us to grow our geographic reach and clinician base to expand patient access. For newly acquired centers, we typically fully integrate them into our operational and technology infrastructure within four to six months following an acquisition.
Center Margin
As we grow our platform, we seek to generate consistent returns on our investments. See “—Key Metrics and Non-GAAP Financial Measures—Center Margin” for our definition of Center Margin and reconciliation to loss from operations. We believe this metric best reflects the economics of our model as it includes all direct expenses associated with our patients’ care. We seek to grow our Center Margin through a combination of (i) growing revenue through clinician hiring and retention, patient growth and engagement, hybrid virtual and in-person care, existing office expansion, and in-network reimbursement levels, and (ii) leveraging on our fixed cost base at each center. For acquired centers, we also seek to realize operational, technology and reimbursement synergies to drive Center Margin growth.
Investments in Growth
We will continue to focus on long-term growth through investments in our centers and technology. In addition, we expect our general and administrative expenses to increase in the foreseeable future due to our planned investments in growth initiatives and public company infrastructure.
Key Metrics and Non-GAAP Financial Measures
We evaluate the growth of our footprint through a variety of metrics and indicators. The following table sets forth a summary of the key financial metrics we review to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
209,527 |
|
|
$ |
160,549 |
|
|
$ |
412,622 |
|
|
$ |
303,681 |
|
Revenue growth |
|
|
31 |
% |
|
* |
|
|
|
36 |
% |
|
* |
|
||
Loss from operations |
|
|
(60,472 |
) |
|
|
(47,045 |
) |
|
|
(125,323 |
) |
|
|
(47,926 |
) |
Center Margin |
|
|
59,830 |
|
|
|
51,208 |
|
|
|
114,032 |
|
|
|
95,206 |
|
Net loss |
|
|
(68,727 |
) |
|
|
(70,033 |
) |
|
|
(131,055 |
) |
|
|
(78,715 |
) |
Adjusted EBITDA |
|
|
14,632 |
|
|
|
14,535 |
|
|
|
27,114 |
|
|
|
27,119 |
|
* Denotes not meaningful due to lack of comparability between partial periods.
Center Margin and Adjusted EBITDA are not measures of financial performance under GAAP and are not intended to be substitutes for any GAAP financial measures, including revenue, loss from operations or net loss, and, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. Therefore, non-GAAP measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
Center Margin
We define Center Margin as loss from operations excluding depreciation and amortization and general and administrative expenses. Therefore, Center Margin is computed by removing from loss from operations the costs that do not directly relate to the delivery of care and only including center costs, excluding depreciation and amortization. We consider Center Margin to be an important measure to monitor our performance relative to the direct costs of delivering care. We believe Center Margin is useful to investors to measure whether we are sufficiently controlling the direct costs of delivering care.
Center Margin is not a financial measure of, nor does it imply, profitability. The relationship of loss from operations to center costs, excluding depreciation and amortization is not necessarily indicative of future profitability from operations. Center Margin excludes certain expenses, such as general and administrative expenses, and depreciation and amortization, which are considered normal, recurring operating expenses and are essential to support the operation and development of our centers. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole, and Center Margin should be
24
reviewed in conjunction with our GAAP financial results. Other companies that present Center Margin may calculate it differently and, therefore, similarly titled measures presented by other companies may not be directly comparable to ours. In addition, Center Margin has limitations as an analytical tool, including that it does not reflect depreciation and amortization or other overhead allocations.
The following table provides a reconciliation of loss from operations, the most closely comparable GAAP financial measure, to Center Margin:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
$ |
(60,472 |
) |
|
$ |
(47,045 |
) |
|
$ |
(125,323 |
) |
|
$ |
(47,926 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
16,743 |
|
|
|
12,774 |
|
|
|
32,427 |
|
|
|
25,002 |
|
General and administrative expenses (1) |
|
|
103,559 |
|
|
|
85,479 |
|
|
|
206,928 |
|
|
|
118,130 |
|
Center Margin |
|
$ |
59,830 |
|
|
$ |
51,208 |
|
|
$ |
114,032 |
|
|
$ |
95,206 |
|
Adjusted EBITDA
We present Adjusted EBITDA, a non-GAAP performance measure, to supplement our results of operations presented in accordance with GAAP. We believe Adjusted EBITDA is useful in evaluating our operating performance, and may be helpful to securities analysts, institutional investors and other interested parties in understanding our operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. Therefore, our Adjusted EBITDA should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, such as net income or loss.
We define Adjusted EBITDA as net loss excluding interest expense, depreciation and amortization, income tax provision (benefit), loss on remeasurement of contingent consideration, stock and unit-based compensation, management fees, transaction costs, offering related costs and other expenses. We include Adjusted EBITDA in this Quarterly Report because it is an important measure upon which our management assesses, and believes investors should assess, our operating performance. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
However, Adjusted EBITDA has limitations as an analytical tool, including:
25
A reconciliation of net loss to Adjusted EBITDA is presented below for the three and six months ended June 30, 2022 and 2021. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Adjusted EBITDA in conjunction with net loss.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(68,727 |
) |
|
$ |
(70,033 |
) |
|
$ |
(131,055 |
) |
|
$ |
(78,715 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
7,133 |
|
|
|
23,174 |
|
|
|
10,574 |
|
|
|
31,806 |
|
Depreciation and amortization |
|
|
16,743 |
|
|
|
12,774 |
|
|
|
32,427 |
|
|
|
25,002 |
|
Income tax provision (benefit) |
|
|
923 |
|
|
|
(3,788 |
) |
|
|
(5,753 |
) |
|
|
(6,549 |
) |
Loss on remeasurement of contingent consideration |
|
|
180 |
|
|
|
250 |
|
|
|
614 |
|
|
|
557 |
|
Stock and unit-based compensation expense |
|
|
57,510 |
|
|
|
29,515 |
|
|
|
117,365 |
|
|
|
30,120 |
|
Management fees (1) |
|
|
— |
|
|
|
1,356 |
|
|
|
— |
|
|
|
1,445 |
|
Transaction costs (2) |
|
|
19 |
|
|
|
1,996 |
|
|
|
297 |
|
|
|
3,530 |
|
Offering related costs (3) |
|
|
— |
|
|
|
8,747 |
|
|
|
— |
|
|
|
8,747 |
|
Endowment to the LifeStance Health Foundation |
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
Other expenses (4) |
|
|
851 |
|
|
|
544 |
|
|
|
2,645 |
|
|
|
1,176 |
|
Adjusted EBITDA |
|
$ |
14,632 |
|
|
$ |
14,535 |
|
|
$ |
27,114 |
|
|
$ |
27,119 |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquired center integration (1) |
|
$ |
615 |
|
|
$ |
414 |
|
|
$ |
1,213 |
|
|
$ |
915 |
|
Former owner fees (2) |
|
|
60 |
|
|
|
72 |
|
|
|
287 |
|
|
|
156 |
|
Other (3) |
|
|
176 |
|
|
|
58 |
|
|
|
1,145 |
|
|
|
105 |
|
Total |
|
$ |
851 |
|
|
$ |
544 |
|
|
$ |
2,645 |
|
|
$ |
1,176 |
|
26
Results of Operations
The following table sets forth a summary of our financial results for the three and six months ended June 30, 2022 and 2021:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
TOTAL REVENUE |
|
$ |
209,527 |
|
|
$ |
160,549 |
|
|
$ |
412,622 |
|
|
$ |
303,681 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Center costs, excluding depreciation and |
|
|
149,697 |
|
|
|
109,341 |
|
|
|
298,590 |
|
|
|
208,475 |
|
General and administrative expenses |
|
|
103,559 |
|
|
|
85,479 |
|
|
|
206,928 |
|
|
|
118,130 |
|
Depreciation and amortization |
|
|
16,743 |
|
|
|
12,774 |
|
|
|
32,427 |
|
|
|
25,002 |
|
Total operating expenses |
|
$ |
269,999 |
|
|
$ |
207,594 |
|
|
$ |
537,945 |
|
|
$ |
351,607 |
|
LOSS FROM OPERATIONS |
|
$ |
(60,472 |
) |
|
$ |
(47,045 |
) |
|
$ |
(125,323 |
) |
|
$ |
(47,926 |
) |
OTHER EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on remeasurement of contingent consideration |
|
|
(180 |
) |
|
|
(250 |
) |
|
|
(614 |
) |
|
|
(557 |
) |
Transaction costs |
|
|
(19 |
) |
|
|
(1,996 |
) |
|
|
(297 |
) |
|
|
(3,530 |
) |
Interest expense |
|
|
(7,133 |
) |
|
|
(23,174 |
) |
|
|
(10,574 |
) |
|
|
(31,806 |
) |
Other expense |
|
|
— |
|
|
|
(1,356 |
) |
|
|
— |
|
|
|
(1,445 |
) |
Total other expense |
|
$ |
(7,332 |
) |
|
$ |
(26,776 |
) |
|
$ |
(11,485 |
) |
|
$ |
(37,338 |
) |
LOSS BEFORE INCOME TAXES |
|
|
(67,804 |
) |
|
|
(73,821 |
) |
|
|
(136,808 |
) |
|
|
(85,264 |
) |
INCOME TAX (PROVISION) BENEFIT |
|
|
(923 |
) |
|
|
3,788 |
|
|
|
5,753 |
|
|
|
6,549 |
|
NET LOSS |
|
$ |
(68,727 |
) |
|
$ |
(70,033 |
) |
|
$ |
(131,055 |
) |
|
$ |
(78,715 |
) |
Total Revenue
Total revenue increased $49.0 million, or 31%, to $209.5 million for the three months ended June 30, 2022 from $160.5 million for the three months ended June 30, 2021. This was primarily due to an increase composed of $47.5 million of patient service revenue due to the increase in patient visits and $1.5 million of nonpatient revenue.
Total revenue increased $108.9 million, or 36%, to $412.6 million for the six months ended June 30, 2022 from $303.7 million for the six months ended June 30, 2021. This was primarily due to an increase composed of $106.5 million of patient service revenue due to the increase in patient visits and $2.4 million of nonpatient revenue.
Operating Expenses
Center costs, excluding depreciation and amortization
Center costs, excluding depreciation and amortization increased $40.4 million, or 37%, to $149.7 million for the three months ended June 30, 2022 from $109.3 million for the three months ended June 30, 2021. This was primarily due to a $33.9 million increase in center-based compensation due to the increase in clinicians and visits and a $6.5 million increase in occupancy costs consisting of center rent and utilities and other operating expenses consisting of office supplies and insurance due to the increase in centers.
Center costs, excluding depreciation and amortization increased $90.1 million, or 43%, to $298.6 million for the six months ended June 30, 2022 from $208.5 million for the six months ended June 30, 2021. This was primarily due to a $75.1 million increase in center-based compensation due to the increase in clinicians and visits and a $15.0 million increase in occupancy costs consisting of center rent and utilities and other operating expenses consisting of office supplies and insurance due to the increase in centers.
General and administrative
General and administrative expenses increased $18.1 million, or 21%, to $103.6 million for the three months ended June 30, 2022 from $85.5 million for the three months ended June 30, 2021. This was primarily due to increases of $35.8 million in salaries, wages and employee benefits, which included an increase of $28.0 million in stock and unit-based compensation expense primarily relating to RSAs and the RSUs granted at the time of IPO and $1.4 million in occupancy costs, slightly offset by a decrease of $19.2 million in other operating expenses, including professional services and insurance related to our IPO.
General and administrative expenses increased $88.8 million, or 75%, to $206.9 million for the six months ended June 30, 2022 from $118.1 million for the six months ended June 30, 2021. This was primarily due to increases of $104.2 million in salaries, wages and employee benefits, which included an increase of $87.2 million in stock and unit-based compensation expense primarily relating to RSAs and the RSUs granted at the time of IPO and $3.5 million in occupancy costs and slightly offset by a decrease of $18.9 million in other operating expenses, including professional services and insurance related to our IPO.
27
Depreciation and amortization
Depreciation and amortization expense increased $3.9 million to $16.7 million for the three months ended June 30, 2022 from $12.8 million for the three months ended June 30, 2021. This was primarily due to the amortization of intangibles and depreciation during the periods.
Depreciation and amortization expense increased $7.4 million to $32.4 million for the six months ended June 30, 2022 from $25.0 million for the six months ended June 30, 2021. This was primarily due to the amortization of intangibles and depreciation during the periods.
Other Expense
Loss on remeasurement of contingent consideration
Loss on remeasurement of contingent consideration decreased $0.1 million to a $0.2 million loss for the three months ended June 30, 2022 from a $0.3 million loss for the three months ended June 30, 2021. This was primarily due to changes in the weighted probability of achieving the performance and operational targets.
Loss on remeasurement of contingent consideration increased $0.06 million to a $0.6 million loss for the six months ended June 30, 2022 from a $0.6 million loss for the six months ended June 30, 2021. This was primarily due to changes in the weighted probability of achieving the performance and operational targets.
Transaction costs
Transaction costs decreased $2.0 million to $0.02 million for the three months ended June 30, 2022 from $2.0 million for the three months ended June 30, 2021. Transaction costs decreased primarily due to lower fees related to corporate transactions.
Transaction costs decreased $3.2 million to $0.3 million for the six months ended June 30, 2022 from $3.5 million for the six months ended June 30, 2021. Transaction costs decreased primarily due to lower fees related to corporate transactions.
Interest Expense
Interest expense decreased $16.1 million to $7.1 million for the three months ended June 30, 2022 from $23.2 million for the three months ended June 30, 2021. This decrease was primarily due to lower borrowings outstanding during the period.
Interest expense decreased $21.2 million to $10.6 million for the six months ended June 30, 2022 from $31.8 million for the six months ended June 30, 2021. This decrease was primarily due to lower borrowings outstanding during the period.
Other Expense
Other expense decreased to $0 for the three months ended June 30, 2022 from $1.4 million for the three months ended June 30, 2021 primarily due to the termination of the management services as a result of our IPO during the second quarter of 2021.
Other expense decreased to $0 for the six months ended June 30, 2022 from $1.4 million for the six months ended June 30, 2021 primarily due to the termination of the management services as a result of our IPO during the second quarter of 2021.
Income Tax (Provision) Benefit
Income tax provision decreased $4.7 million to $0.9 million for the three months ended June 30, 2022 from a $3.8 million benefit for the three months ended June 30, 2021 primarily due to taxable loss and non-deductible equity awards for the three months ended June 30, 2022.
Income tax benefit decreased $0.8 million to $5.8 million for the six months ended June 30, 2022 from $6.5 million for the six months ended June 30, 2021 primarily due to taxable loss for the six months ended June 30, 2022.
Liquidity and Capital Resources
We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital needs, capital expenditures, including to execute on our de novo strategy, contractual obligations, debt service, acquisitions, settlement of contingent considerations obligations, and other commitments with cash flows from operations and other sources of funding. Our principal sources of liquidity to date have included cash from operating activities, cash on hand and amounts available under the 2022 Credit Agreement. We had cash and cash equivalents of $96.7 million and $148.0 million as of June 30, 2022 and December 31, 2021.
We believe that our existing cash and cash equivalents will be sufficient to fund our operating and capital needs for at least the next 12 months. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary because of, and our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to acquire new centers and expand into new markets and the expansion of marketing activities. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies. We have based this estimate on assumptions that may prove to be wrong, and
28
we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations and financial condition would be adversely affected.
Our future obligations primarily consist of our debt and lease obligations. We expect our cash generation from operations and future ability to refinance or secure additional financing facilities to be sufficient to repay our outstanding debt obligations and lease payment obligations. As of December 31, 2021 and June 30, 2022, there was an aggregate principal amount of $161.2 million outstanding under the May 2020 Credit Agreement and $211.0 million outstanding under the 2022 Credit Agreement, respectively. As of June 30, 2022, our non-cancellable future minimum operating third-party lease payments totaled $296.5 million, and our non-cancellable future minimum operating related-party lease payments totaled $4.4 million.
Debt
May 2020 Credit Agreement
On May 14, 2020 and in connection with the TPG Acquisition, LifeStance Health Holdings, Inc., one of our subsidiaries, entered into the May 2020 Credit Agreement. The May 2020 Credit Agreement provides for senior secured credit facilities in the form of (i) $37.5 million original and delayed draw principal amount of Closing Date Term B-1 Loans and $222.5 million original and delayed draw principal amount of Closing Date Term B-2 Loans, and (ii) $20.0 million of Revolving Commitments. On November 4, 2020, we entered into the First Amendment to the May 2020 Credit Agreement which, among other things, provided for incremental credit facilities in the form of $16.6 million original principal amount of First Amendment Term B-1 Loans and $98.4 million original principal amount of First Amendment Term B-2 Loans. On February 1, 2021, we entered into the Second Amendment to the Credit Agreement, which provided for incremental delayed draw term loans in the aggregate principal amount of $50.0 million. On April 30, 2021, we entered into the Third Amendment to the Credit Agreement, which provided for incremental delayed draw term loans in the aggregate principal amount of $70.0 million. On May 16, 2022, in connection with the closing of the 2022 Credit Agreement, the outstanding debt on the May 2020 Credit Agreement was repaid in full.
Borrowings under the May 2020 Credit Agreement were subject to variable interest rates determined at LIBOR plus 3.00% to 7.09%. We were required to make quarterly principal and interest payments through May 14, 2026. Under the terms of the May 2020 Credit Agreement, we were subject to a requirement to maintain a Total Net Leverage Ratio as of the last day of each fiscal quarter to not exceed 8.00:1.00, which maximum level steps down to 7.25:1.00 beginning with the fiscal quarter ending June 30, 2022 and to 7.00:1.00 beginning with the fiscal quarter ending June 30, 2023. We were in compliance with the financial covenants since the inception of the May 2020 Credit Agreement through payoff.
2022 Credit Agreement
On May 4, 2022, LifeStance Health Holdings, Inc., one of our subsidiaries, entered into the 2022 Credit Agreement. The 2022 Credit Agreement establishes commitments in respect of a senior secured term loan facility of $200.0 million (the “Term Loan Facility”), a senior secured revolving loan facility of up to $50.0 million (the “Revolving Facility”) and a senior secured delayed draw term loan facility of up to $100.0 million (the “Delayed Draw Term Loan Facility”).
The loans under the Term Loan Facility and the Delayed Draw Term Loan Facility bear interest at a rate per annum equal to (x) adjusted term SOFR (which adjusted term SOFR is subject to a minimum of 0.75%) plus an applicable margin of 4.50% or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% above the federal funds effective rate and (iii) one-month adjusted term SOFR (which adjusted term SOFR is subject to a minimum of 0.75%) plus 1.00%) plus an applicable margin of 3.50%. The loans under the Revolving Facility bear interest at a rate per annum equal to (x) adjusted term SOFR plus an applicable margin of 3.25% or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% above the federal funds effective rate and (iii) one-month adjusted term SOFR plus 1.00%) plus an applicable margin of 2.25%.
The 2022 Credit Agreement also contains a maximum First Lien Net Leverage Ratio financial maintenance covenant that requires the First Lien Net Leverage Ratio as of the last day of each fiscal quarter to not exceed 8.50:1.00. First Lien Net Leverage Ratio means the ratio of (a) Consolidated First Lien Secured Debt outstanding as of the last day of the test period, minus the Unrestricted Cash Amount on such last day, to (b) Consolidated EBITDA for such Test Period, in each case on a pro forma basis. As of June 30, 2022, we were in compliance with all financial covenants under the 2022 Credit Agreement.
29
Cash Flows
The following table summarizes our cash flows for the periods indicated:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Net cash provided by (used in) operating activities |
|
$ |
11,141 |
|
|
$ |
(7,006 |
) |
Net cash used in investing activities |
|
|
(88,893 |
) |
|
|
(70,929 |
) |
Net cash provided by financing activities |
|
|
26,409 |
|
|
|
335,293 |
|
Net (decrease) increase in cash and cash equivalents |
|
$ |
(51,343 |
) |
|
$ |
257,358 |
|
Cash and cash equivalents, beginning of period |
|
|
148,029 |
|
|
|
18,829 |
|
Cash and cash equivalents, end of period |
|
$ |
96,686 |
|
|
$ |
276,187 |
|
Cash Flows Provided By (Used In) Operating Activities
During the six months ended June 30, 2022, operating activities provided $11.1 million of cash, primarily impacted by our $131.1 million net loss and $154.5 million in non-cash charges. This was partially offset by changes in our operating assets and liabilities of $12.3 million. During the six months ended June 30, 2021, operating activities used $7.0 million of cash, primarily impacted by our $78.7 million net loss and $71.4 million in non-cash charges. This was partially offset by changes in our operating assets and liabilities of $0.3 million.
Cash Flows Used In Investing Activities
During the six months ended June 30, 2022, investing activities used $88.9 million of cash, primarily resulting from our business acquisitions totaling $35.1 million and purchases of property and equipment of $53.8 million. During the six months ended June 30, 2021, investing activities used $70.9 million of cash, primarily resulting from our business acquisitions of $39.1 million and purchases of property and equipment of $31.8 million.
Cash Flows Provided By Financing Activities
During the six months ended June 30, 2022, financing activities provided $26.4 million of cash, resulting primarily from net borrowings of $228.0 million under the 2022 Credit Agreement, partially offset by payments of loan obligations of $181.2 million, a prepayment for the debt paydown under the May 2020 Credit Agreement of $1.6 million, payments of debt issue costs of $7.2 million and payments of contingent consideration of $11.1 million. During the six months ended June 30, 2021, financing activities provided $335.3 million of cash, resulting primarily from our IPO of net proceeds of $554.2 million, which is offset by unpaid deferred offering costs of $5.3 million, borrowings of $98.8 million under the May 2020 Credit Agreement, partially offset by payments of loan obligations of $310.7 million, payments of debt issue costs of $2.4 million and payments of contingent consideration of $5.6 million.
Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with GAAP. The consolidated financial statements included elsewhere in this Quarterly Report include the results of (i) LifeStance TopCo, L.P., its wholly-owned subsidiaries and variable interest entities consolidated by LifeStance TopCo, L.P. in which LifeStance TopCo, L.P. has an interest and is the primary beneficiary for the period prior to the completion of the IPO and (ii) LifeStance Health Group, Inc., its wholly-owned subsidiaries and variable interest entities consolidated by LifeStance Health Group, Inc. in which LifeStance Health Group, Inc. has an interest and is the primary beneficiary for the period ended June 30, 2022. Preparation of the consolidated financial statements requires our management to make judgments, estimates and assumptions that impact the reported amount of total revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting estimate to be critical when (1) the estimate made in accordance with GAAP is complex in nature or involves a significant level of estimation uncertainty and (2) the use of different judgments, estimates and assumptions have had or are reasonably likely to have a material impact on the financial condition or results of operations in our consolidated financial statements. Actual results could differ materially from those estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. For a description of our policies regarding our critical accounting estimates, see “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in our critical accounting estimates or methodologies to our consolidated financial statements.
Recently Adopted and Issued Accounting Pronouncements
Recently issued and adopted accounting pronouncements are described in Note 2 to our unaudited consolidated financial statements.
Emerging Growth Company Status
We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards
30
apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our unaudited consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
We will remain an emerging growth company until the earlier to occur of: (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we have total annual gross revenue of $1.07 billion or more, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th; and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.
Interest Rate Risk
Our primary market risk exposure is changing prime rate-based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.
As of June 30, 2022, we had an aggregate principal amount of $211.0 million under our credit facilities. As of June 30, 2022, a 100 basis point increase or decrease in market interest rates over a twelve-month period would result in a change to interest expense of $2.1 million.
Inflation Risk
Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, as a result of the material weaknesses in internal control over financial reporting described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2022 due to the material weaknesses described below.
Previously Reported Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. As previously reported in the Annual Report on Form 10-K for the year ended December 31, 2021, in connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2019, we identified material weaknesses in our internal control over financial reporting, which continue to exist as of June 30, 2022. The material weaknesses we identified were as follows:
31
We did not design and maintain an effective control environment commensurate with our financial reporting requirements due to an insufficient complement of resources in the accounting/finance and IT functions, with an appropriate level of knowledge, experience and training. This material weakness contributed to the following additional material weaknesses:
• |
We did not maintain formal accounting policies and procedures, and did not design and maintain controls related to significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over account reconciliations, segregation of duties and the preparation and review of journal entries. |
|
|
|
These material weaknesses resulted in material misstatements related to the identification and valuation of intangible assets acquired in business combinations that impacted the classification of intangible assets and goodwill, related impacts to amortization and income tax expense, and the restatement of our previously issued annual consolidated financial statements as of and for the years ended December 31, 2019 and 2018 with respect to such intangibles assets acquired in business combinations. Additionally, these material weaknesses could result in a misstatement of substantially all of the financial statement accounts and disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected. |
|
|
• |
We did not design and maintain effective controls over IT general controls for information systems that are relevant to the preparation of our consolidated financial statements. Specifically, we did not design and maintain: (i) program change management controls for financial systems to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored; and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. |
These IT deficiencies did not result in a material misstatement to our consolidated financial statements; however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, we have determined these deficiencies in the aggregate constitute a material weakness.
Remediation Plan for Material Weaknesses
We are in the process of designing and implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies which led to the material weaknesses. As of June 30, 2022, our remediation measures are ongoing and include the following:
• |
hired additional accounting and IT personnel to enhance our technical reporting, transactional accounting, and IT capabilities. We designed and implemented controls to support training, development, and technical research capabilities for those resources along with development and implementation of policies and procedures to support the external financial reporting functions. We continue to evaluate our staffing needs and plan to hire additional resources as necessary to support our operations; |
|
|
• |
performed detailed risk assessments for significant financial processes to identify, design, and implement control activities related to internal control over financial reporting; |
|
|
• |
developed and implemented controls related to the formalization of our accounting policies and procedures and financial reporting; |
|
|
• |
development and implementation of controls related to significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over account reconciliations, segregation of duties and the preparation and review of journal entries; |
|
|
• |
developed and implemented IT security and governance controls to address program change of internally and externally developed system and computer operations associated with information systems impacting the preparation of our consolidated financial statements; and |
|
|
• |
developed and implemented controls related to the periodic monitoring and review of user access rights, the identification and risk ranking of segregation of duties conflicts, and, where it is determined there is a need for an individual to have conflicting access, a periodic review of the underlying activities is performed by an independent person who does not have such conflicting access. |
We have made progress towards designing and implementing the plan to remediate the material weaknesses and will continue to review, revise, and improve the design and implementation of our internal controls as appropriate. Although we have made
32
enhancements to our control procedures, these material weaknesses will not be considered remediated until our controls are operational for a sufficient period of time, tested, and management concludes that these controls are operating effectively.
We intend to evaluate current and projected resource needs on a regular basis and hire additional qualified resources as needed. Our ability to maintain qualified and adequate resources to support our business and our projected growth will be a critical component of our internal control environment.
Changes in Internal Control over Financial Reporting
We are taking actions to remediate the material weaknesses relating to our internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Disclosure Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
33
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
Item 1A. Risk Factors.
There have been no material changes to our risk factors as previously disclosed under Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Use of Proceeds from Initial Public Offering of Common Stock
On June 14, 2021, we completed the initial public offering of our common stock pursuant to a Registration Statement (File No. 333-256202), which was declared effective on June 9, 2021.
There has been no material change in the use of proceeds as described in the final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, with the SEC, on June 11, 2021 and our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Severance and Change in Control Policy
On August 9, 2022, the Board approved a Severance and Change in Control Policy (the “Severance & CIC Policy”) pursuant to which certain employees of the Company and our subsidiaries selected by the Board or its delegate will be eligible to participate (each, an “Eligible Employee”), including each of our currently employed named executive officers, Michael K. Lester (President and Chief Executive Officer) and J. Michael Bruff (Chief Financial Officer and Treasurer) (the “Named Executive Officers”). The terms “Cause,” “Good Reason” and “Change in Control” referred to below are defined in the Severance & CIC Policy.
Under the Severance & CIC Policy, an Eligible Employee whose employment is terminated by the Company without Cause or who resigns for Good Reason (a “Qualifying Termination”), in either case other than during the period beginning six months before a Change in Control and ending 12 months after the Change in Control, will be eligible to receive the following severance benefits: (a) 12 months (the “Severance Period”) of continued base salary; (b) monthly payments during the Severance Period equal to the Eligible Employee’s premium costs for continued coverage under the Company’s health, dental and other insurance plans; and (c) for the Chief Executive Officer (“CEO”) only, a pro-rata portion of the CEO’s annual cash bonus for the year of termination based on actual performance, generally payable at the same time as annual bonuses are paid to our other executives.
Under the Severance & CIC Policy, if the Eligible Employee’s Qualifying Termination occurs during the period beginning six months before a Change in Control and ending 12 months after the Change in Control, the Eligible Employee will be eligible to receive the following severance benefits instead of the benefits described in the previous paragraph: (a) a lump sum payment equal to 12 months of the Eligible Employee’s base salary (or 24 months for the CEO); (ii) a lump sum amount equal to the Eligible Employee’s target annual bonus for the year of termination, (iii) 12 monthly payments (or 24 for the CEO) equal to the Eligible Employee’s premium costs for continued coverage under the Company’s health, dental and other insurance plans; and (iv) except to the extent that an award agreement or applicable employment agreement entered into before the effective date of the plan provides for more favorable vesting terms or the terms of an award agreement or employment agreement entered after the effective date of the plan provides otherwise (x) full acceleration of the vesting of all of the Eligible Employee’s unvested and outstanding time-based equity
34
awards and performance-based equity awards originally granted on or after June 9, 2021 (it being understood that such performance-based awards shall be deemed earned at the Change in Control assuming target performance and shall thereafter be converted into time-based equity awards) and (y) vesting of the Eligible Employee’s unvested and outstanding performance-based equity awards originally granted prior to June 9, 2021 based on actual performance through the Change in Control.
Receipt and retention of any severance benefits provided under the Severance & CIC Policy will be conditioned on (i) the Eligible Employee signing a release of claims in favor of the Company and our affiliates and on (ii) the Eligible Employee’s continued compliance with all non-competition, non-solicitation and confidentiality obligations contained in any agreement between the Eligible Employee and the Company or any of our affiliates.
The Board or its delegate will administer the Severance & CIC Policy. The Company generally may amend or terminate the Severance & CIC Policy in our discretion without the consent of participants, except that we may not, without an Eligible Employee’s consent, alter the terms of the Severance & CIC Policy so as to affect materially and adversely the Eligible Employee’s rights under the Severance & CIC Policy.
The terms of the Severance and CIC Policy reflect recommendations from an independent compensation consultant to the compensation committee of the Board, following a review of various executive compensation policies including the level of cash severance and equity treatment for a not-for-cause termination and a termination following a change in control, in accordance with market-based pay practices.
The foregoing is only a summary of the Severance & CIC Policy and is qualified in its entirety by reference to the full and complete terms of the Severance & CIC Policy, a copy of which is attached to this Periodic Report on Form 10-Q as Exhibit 10.6 and is incorporated herein by reference.
Base Salary and Target Bonus Increases
On August 8, 2022, the compensation committee of the Board approved an increase to the base salary for Mr. Lester (to $611,200 per year) retroactive to July 1, 2022. The compensation committee of the Board also approved an increase to Mr. Lester’s target annual bonus to 100% of his annual base salary (as in effect at the end of the year), effective for 2022. These adjustments reflect recommendations from an independent compensation consultant to the compensation committee of the Board, following a review of various executive compensation policies including the level of cash compensation and total direct compensation, in accordance with market-based pay practices.
35
Item 6. Exhibits.
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Description of Exhibit Incorporated Herein by Reference |
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Exhibit Number |
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Description |
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Form |
File No. |
Exhibit |
Filing Date |
Filed Herewith |
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10.1* |
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X |
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10.2*+ |
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X |
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10.3*+ |
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X |
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10.4*+ |
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X |
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10.5* |
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X |
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10.6*+ |
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X |
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31.1* |
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X |
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31.2* |
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|
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X |
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32.1* |
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X |
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32.2* |
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X |
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|
101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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* Filed herewith.
+ Indicates a management contract or compensatory plan, contract or arrangement.
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
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LifeStance Health Group, Inc. |
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Date: August 10, 2022 |
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By: |
/s/ J. Michael Bruff |
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J. Michael Bruff |
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Chief Financial Officer and Treasurer (principal financial and accounting officer) |
37
Exhibit 10.1
Execution Version
CREDIT AGREEMENT
Dated as of May 4, 2022 among
LIFESTANCE HEALTH HOLDINGS, INC.,
as the Borrower,
LYNNWOOD INTERMEDIATE HOLDINGS, INC.,
as Holdings,
CAPITAL ONE, NATIONAL ASSOCIATION
as Administrative Agent, Collateral Agent, Revolver Agent, Issuing Bank and Swing Line Lender, and
THE OTHER LENDERS PARTY HERETO
Table of Contents
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Page |
Article I Definitions and Accounting Terms |
1 |
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Section 1.01 |
Defined Terms |
1 |
Section 1.02 |
Other Interpretive Provisions |
114 |
Section 1.03 |
Accounting Terms |
116 |
Section 1.04 |
Rounding |
117 |
Section 1.05 |
References to Agreements, Laws, Etc. |
117 |
Section 1.06 |
Times of Day and Timing of Payment and Performance |
117 |
Section 1.07 |
Pro Forma and Other Calculations |
117 |
Section 1.08 |
Available Amount Transaction |
122 |
Section 1.09 |
Guaranties of Hedging Obligations |
123 |
Section 1.10 |
Currency Generally |
123 |
Section 1.11 |
Letters of Credit |
123 |
Section 1.12 |
Term Benchmark Replacement |
123 |
Section 1.13 |
Divisions |
125 |
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Article II The Commitments and Borrowings |
125 |
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Section 2.01 |
The Loans |
125 |
Section 2.02 |
Borrowings, Conversions and Continuations of Loans |
126 |
Section 2.03 |
Letters of Credit |
128 |
Section 2.04 |
Swing Line Loans |
138 |
Section 2.05 |
Prepayments |
141 |
Section 2.06 |
Termination or Reduction of Commitments |
153 |
Section 2.07 |
Repayment of Loans |
154 |
Section 2.08 |
Interest |
155 |
Section 2.09 |
Fees |
155 |
Section 2.10 |
Computation of Interest and Fees |
156 |
Section 2.11 |
Evidence of Indebtedness |
156 |
Section 2.12 |
Payments Generally |
157 |
Section 2.13 |
Sharing of Payments |
159 |
Section 2.14 |
Incremental Facilities |
159 |
Section 2.15 |
Refinancing Amendments |
170 |
Section 2.16 |
Extensions of Loans |
172 |
Section 2.17 |
Defaulting Lenders |
177 |
Section 2.18 |
Prepayment Premium |
178 |
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Article III Taxes, Increased Costs Protection and Illegality |
179 |
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Section 3.01 |
Taxes |
179 |
Section 3.02 |
Illegality |
182 |
Section 3.03 |
Inability to Determine Rates |
183 |
Section 3.04 |
Increased Cost and Reduced Return; Capital Adequacy; Reserves on Term Benchmark Rate Loans |
184 |
Section 3.05 |
Funding Losses |
185 |
Section 3.06 |
Matters Applicable to All Requests for Compensation |
185 |
Section 3.07 |
Replacement of Lenders under Certain Circumstances |
186 |
Section 3.08 |
Survival |
188 |
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Article IV Conditions Precedent |
188 |
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Section 4.01 |
Conditions to Effectiveness on Effective Date |
188 |
Section 4.02 |
Conditions to Credit Extensions on Closing Date |
189 |
Section 4.03 |
Conditions to Credit Extensions after the Closing Date |
190 |
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Page |
Article V Representations and Warranties |
191 |
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Section 5.01 |
Existence, Qualification and Power; Compliance with Laws |
191 |
Section 5.02 |
Authorization; No Contravention |
192 |
Section 5.03 |
Governmental Authorization and Third Party Authorization |
192 |
Section 5.04 |
Binding Effect |
193 |
Section 5.05 |
Financial Statements; No Material Adverse Effect |
193 |
Section 5.06 |
Litigation |
193 |
Section 5.07 |
Labor Matters |
193 |
Section 5.08 |
Ownership of Property; Liens |
193 |
Section 5.09 |
Environmental Matters |
194 |
Section 5.10 |
Taxes |
194 |
Section 5.11 |
ERISA Compliance |
194 |
Section 5.12 |
Subsidiaries |
194 |
Section 5.13 |
Margin Regulations; Investment Company Act |
195 |
Section 5.14 |
Disclosure |
195 |
Section 5.15 |
Intellectual Property; Licenses, Etc. |
195 |
Section 5.16 |
Solvency |
196 |
Section 5.17 |
USA PATRIOT Act; Anti-Terrorism Laws; Anti-Money Laundering Laws |
196 |
Section 5.18 |
Collateral Documents |
196 |
Section 5.19 |
HIPAA |
197 |
Section 5.20 |
Regulatory Matters |
197 |
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Article VI Affirmative Covenants |
198 |
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Section 6.01 |
Financial Statements |
198 |
Section 6.02 |
Certificates; Other Information |
199 |
Section 6.03 |
Notices |
201 |
Section 6.04 |
Payment of Taxes |
201 |
Section 6.05 |
Preservation of Existence, Etc. |
202 |
Section 6.06 |
Maintenance of Properties |
202 |
Section 6.07 |
Maintenance of Insurance |
202 |
Section 6.08 |
Compliance with Laws |
202 |
Section 6.09 |
Books and Records |
203 |
Section 6.10 |
Inspection Rights |
203 |
Section 6.11 |
Covenant to Guarantee Obligations and Give Security |
203 |
Section 6.12 |
Further Assurances and Post-Closing Covenant |
206 |
Section 6.13 |
Use of Proceeds |
206 |
Section 6.14 |
Regulatory Matters |
207 |
Section 6.15 |
Transactions with Affiliates |
207 |
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Article VII Negative Covenants |
211 |
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Section 7.01 |
Liens |
211 |
Section 7.02 |
Indebtedness |
212 |
Section 7.03 |
Fundamental Changes |
221 |
Section 7.04 |
Asset Sales |
225 |
Section 7.05 |
Restricted Payments |
226 |
Section 7.06 |
Change in Nature of Business |
235 |
Section 7.07 |
Burdensome Agreements |
236 |
Section 7.08 |
Accounting Changes |
238 |
Section 7.09 |
Holdings |
239 |
Section 7.10 |
Financial Covenant |
239 |
Section 7.11 |
Amendments to Organization Documents and Services Agreements |
240 |
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Article VIII Events of Default and Remedies |
240 |
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Section 8.01 |
Events of Default |
240 |
Section 8.02 |
Remedies upon Event of Default |
242 |
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Page |
Section 8.03 |
Application of Funds |
243 |
Section 8.04 |
Right to Cure |
244 |
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Article IX The Agents |
246 |
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Section 9.01 |
Appointment and Authorization |
246 |
Section 9.02 |
Rights as a Lender |
248 |
Section 9.03 |
Exculpatory Provisions |
248 |
Section 9.04 |
Lack of Reliance on the Agent |
249 |
Section 9.05 |
Certain Rights of the Agreement |
250 |
Section 9.06 |
Reliance by the Agent |
250 |
Section 9.07 |
Delegation of Duties |
250 |
Section 9.08 |
Indemnification |
251 |
Section 9.09 |
The Agent in Its Individual Capacity |
251 |
Section 9.10 |
No Other Duties, Etc. |
252 |
Section 9.11 |
Resignation by the Agent |
252 |
Section 9.12 |
Collateral Matters |
254 |
Section 9.13 |
Administrative Agent May File Proofs of Claim |
254 |
Section 9.14 |
Appointment of Supplemental Administrative Agents |
256 |
Section 9.15 |
Intercreditor Agreements |
256 |
Section 9.16 |
Secured Cash Management Agreements and Secured Hedge Agreements |
257 |
Section 9.17 |
Withholding Tax |
257 |
Section 9.18 |
Return of Payments |
258 |
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Article X Miscellaneous |
260 |
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Section 10.01 |
Amendments, Etc. |
260 |
Section 10.02 |
Notices and Other Communications; Facsimile Copies |
269 |
Section 10.03 |
No Waiver; Cumulative Remedies |
270 |
Section 10.04 |
Costs and Expenses |
271 |
Section 10.05 |
Indemnification by the Borrower |
271 |
Section 10.06 |
Marshaling; Payments Set Aside |
273 |
Section 10.07 |
Successors and Assigns |
273 |
Section 10.08 |
Resignation of Issuing Bank and Swing Line Lender |
281 |
Section 10.09 |
Confidentiality |
282 |
Section 10.10 |
Setoff |
283 |
Section 10.11 |
Interest Rate Limitation |
284 |
Section 10.12 |
Counterparts; Integration; Effectiveness |
284 |
Section 10.13 |
Electronic Execution of Assignments and Certain Other Documents |
284 |
Section 10.14 |
Survival of Representations and Warranties |
284 |
Section 10.15 |
Severability |
284 |
Section 10.16 |
GOVERNING LAW |
285 |
Section 10.17 |
WAIVER OF RIGHT TO TRIAL BY JURY |
285 |
Section 10.18 |
Binding Effect |
286 |
Section 10.19 |
Lender Action |
286 |
Section 10.20 |
Use of Name, Logo, Etc. |
286 |
Section 10.21 |
USA PATRIOT Act |
286 |
Section 10.22 |
Service of Process |
286 |
Section 10.23 |
No Advisory or Fiduciary Responsibility |
286 |
Section 10.24 |
Release of Collateral and Guarantee Obligations; Subordination of Liens |
287 |
Section 10.25 |
Separate Obligations |
288 |
Section 10.26 |
Purchase Option |
289 |
Section 10.27 |
Acknowledgement and Consent to Bail-In of Affected Financial Institutions |
290 |
Section 10.28 |
Acknowledgement Regarding Any Supported QFCs |
291 |
iii
SCHEDULES |
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1.01(1) |
Closing Date Subsidiary Guarantors |
1.01(2) |
Cash Management Banks |
1.01(4) |
Hedge Banks |
1.01(5) |
Mortgaged Properties |
1.01(6) |
Affiliated Practices |
2.01 |
Commitments |
4.01(1)(b) |
Certain Collateral Documents |
4.01(1)(e) |
Local Counsel |
5.12 |
Subsidiaries and Other Equity Investments |
6.12(2) |
Post-Closing Matters |
7.01 |
Existing Liens |
7.02 |
Existing Indebtedness |
7.05 |
Existing Investments |
10.02 |
Administrative Agent's Office, Certain Addresses for Notices |
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EXHIBITS |
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Form Of |
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A-1 |
Committed Loan Notice |
A-2 |
Swing Line Loan Notice |
B-1 |
Term Note |
B-2 |
Revolving Note |
B-3 |
Swing Line Note |
B-4 |
Delayed Draw Term Note |
C |
Compliance Certificate |
D-1 |
Assignment and Assumption |
D-2 |
Affiliated Lender Assignment and Assumption |
E |
Guaranty |
F |
Pledge and Security Agreement |
G-1 |
Equal Priority Intercreditor Agreement |
G-2 |
Junior Priority Intercreditor Agreement |
H-1 |
United States Tax Compliance Certificate (Foreign Non-Partnership Lenders) |
H-2 |
United States Tax Compliance Certificate (Foreign Partnership Lenders) |
H-3 |
United States Tax Compliance Certificate (Foreign Non-Partnership Participant) |
H-4 |
United States Tax Compliance Certificate (Foreign Partnership Participant) |
I |
Solvency Certificate |
J |
Discount Range Prepayment Notice |
K |
Discount Range Prepayment Offer |
L |
Solicited Discounted Prepayment Notice |
M |
Acceptance and Prepayment Notice |
N |
Specified Discount Prepayment Notice |
O |
Solicited Discount Prepayment Offer |
P |
Specified Discount Prepayment Response |
Q |
Intercompany Note |
R-1 |
Letter of Credit Report |
R-2 |
Swing Line Loan Report |
iv
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of May 4, 2022, by and among LifeStance Health Holdings, Inc., a Delaware corporation (the “Borrower”), Lynnwood Intermediate Holdings, Inc., a Delaware corporation (“Holdings”), Capital One, National Association (“Capital One”), as administrative agent (in such capacity, including any successor thereto, the “Administrative Agent”) and as revolver agent (in such capacity, including any successor thereto, the “Revolver Agent”) under the Loan Documents, as collateral agent (in such capacity, including any successor thereto, the “Collateral Agent”) under the Loan Documents, as an Issuing Bank and a Swing Line Lender, Unitranche Loan Transaction II, LLC (“ULTra”) and each other lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”).
PRELIMINARY STATEMENTS
The Borrower has requested that (a) the Lenders extend credit to the Borrower in the form of (i) $200,000,000 of Closing Date Term Loans, (ii) $100,000,000 of Delayed Draw Term Loan Commitments and (iii) $50,000,000 of Revolving Commitments on the Closing Date as senior secured credit facilities, (b) from time to time on and after the Closing Date, (i) the Lenders lend Revolving Loans to the Borrower and (ii) the Issuing Banks issue Letters of Credit for the account of the Borrower, each to provide working capital for, and for other general corporate purposes of, the Borrower and its Subsidiaries, pursuant to the Revolving Commitments hereunder and pursuant to the terms of, and subject to the conditions set forth in, this Agreement and (c) from time to time after the Closing Date, the Lenders lend to the Borrower Delayed Draw Term Loans pursuant to the Delayed Draw Term Loan Commitments hereunder and pursuant to the terms of, and subject to the conditions set forth in, this Agreement.
The proceeds of the Closing Date Term Loans and the Closing Date Revolving Borrowings, together with cash on hand, will be used on the Closing Date to fund the Transactions.
The Lenders have indicated their willingness to make Loans, and the Issuing Banks have indicated their willingness to issue Letters of Credit, in each case on the terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
Article I
Definitions and Accounting Terms
SECTION 1.01 Defined Terms. As used in this Agreement (including the introductory paragraph hereof and the preliminary statements hereto), the following terms have the meanings set forth below:
“Acceptable Discount” has the meaning specified in Section 2.05(1)(e)(D)(2).
“Acceptable Prepayment Amount” has the meaning specified in Section 2.05(1)(e)(D)(3).
“Acceptance and Prepayment Notice” means a notice of the Borrower’s acceptance of the Acceptable Discount in substantially the form of Exhibit M.
“Acceptance Date” has the meaning specified in Section 2.05(1)(e)(D)(2).
“Acquired Indebtedness” means, with respect to any specified Person,
“Additional Lender” means, at any time, any bank, other financial institution or institutional lender or investor that, in any case, is not an existing Lender and that agrees to provide any portion of any (a) Incremental Loan in accordance with Section 2.14, (b) Other Loans pursuant to a Refinancing Amendment in accordance with Section 2.15 or (c) Replacement Loans pursuant to Section 10.01; provided that each Additional Lender shall be subject to the approval of the Administrative Agent, such approval not to be unreasonably withheld, conditioned or delayed, in each case solely to the extent that any such consent would be required from the Administrative Agent under Section 10.07(2)(c)(ii) for an assignment of Loans to such Additional Lender, and in the case of Incremental Revolving Commitments and Other Revolving Commitments, the Swing Line Lender and the Issuing Bank, each such approval not to be unreasonably withheld, conditioned or delayed, in each case solely to the extent such consent would be required for any assignment to such Additional Lender under Section 10.07(2)(c), provided further that any Additional Lender will be subject to the limitations set forth in Section 10.07(8) as if it was becoming a Lender by way of assignment.
“Additional Letter of Credit Facility” means any facility established by the Borrower and/or any Restricted Subsidiary to obtain letters of credit, bank guarantees, bankers acceptances or other similar instruments required by customers, suppliers or landlords or otherwise required in the ordinary course of business or consistent with industry practice.
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to Term SOFR for such calculation; provided, that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent” has the meaning specified in the introductory paragraph to this
Agreement.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For
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purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
“Affiliate Transaction” has the meaning specified in Section 6.15(1).
“Affiliated Lender” means, at any time, any Lender that is an Investor or Co-Investor or an Affiliate of an Investor or Co-Investor (other than (a) Holdings, the Borrower or any Subsidiary, (b) any Debt Fund Affiliate or (c) any natural person) at such time.
“Affiliated Lender Assignment and Assumption” has the meaning specified in Section 10.07(8)(vi).
“Affiliated Lender Cap” has the meaning specified in Section 10.07(8)(iv).
“Affiliated Practice” means any Person (a) that provides medical, healthcare or related professional services, (b) the Equity Interests of which are not owned by the Borrower or any Restricted Subsidiary, (c) that is a party to an administrative services, practice support or management agreement with the Borrower or a Restricted Subsidiary pursuant to which the Borrower or any Restricted Subsidiary provides administrative, management, practice support or other non-clinical services to such Person, without exercising any professional medical judgment (including as to the day-to-day non-clinical, administrative operations of such Person) (each, a “Services Agreement”), (d) that pays the Borrower or such Restricted Subsidiary fees pursuant to any Services Agreement to which such Person is a party and (e) to the extent permitted by applicable law, the Equity Interests of which are owned by Persons party to a customary stock transfer agreement with the Borrower or such Restricted Subsidiary. Schedule 1.01(6) lists each Person which is an “Affiliated Practice” as of the Effective Date.
“Agent Parties” has the meaning specified in Section 10.02(4).
“Agent-Related Distress Event” means, with respect to the Administrative Agent or any other Person that directly or indirectly controls the Administrative Agent (each, a “Distressed Agent”), (a) that such Distressed Agent is or becomes subject to a voluntary or involuntary case under any Debtor Relief Law, (b) a custodian, conservator, receiver or similar official is appointed for such Distressed Agent or any substantial part of such Distressed Agent’s assets or (c) such Distressed Agent is subject to a forced liquidation, makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Agent or its assets to be, insolvent or bankrupt; provided that an Agent-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interests in the Administrative Agent or any Person that directly or indirectly controls the Administrative Agent by a Governmental Authority or an instrumentality thereof so long as such ownership interest does not result in or provide the Administrative Agent with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit the Administrative Agent (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with the Administrative Agent.
“Agent-Related Persons” means, in respect of any Agent, such Agent’s (or in the case of the Administrative Agent, the Administrative Agent’s and the Collateral Agent’s) respective Affiliates, and the officers, directors, employees, agents, attorney-in-fact, partners, trustees and advisors of such Persons and of such Persons’ Affiliates.
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“Agent Vote Requirements” has the meaning specified in Section 10.01(1)(k)(iii).
“Agents” means, collectively, the Administrative Agent, the Collateral Agent, the Revolver Agent and the Supplemental Administrative Agents (if any).
“Aggregate Commitments” means the Commitments of all the Lenders.
“Agreement” means this Credit Agreement, as amended, restated, amended and restated, modified or supplemented from time to time in accordance with the terms hereof.
“AHYDO Payment” means any mandatory prepayment or redemption pursuant to the terms of any Indebtedness that is intended or designed to cause such Indebtedness not to be treated as an “applicable high yield discount obligation” within the meaning of Section 163(i) of the Code.
“All-In Yield” means, as to any Indebtedness, the yield thereof, whether in the form of interest rate, margin, OID, upfront fees, an Adjusted Term SOFR floor or Base Rate floor (with such increased amount being determined in the manner described in the final proviso of this definition), or otherwise, in each case, incurred or payable by the Borrower ratably to all lenders of such Indebtedness; provided that OID and upfront fees shall be equated to interest rate assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of incurrence of the applicable Indebtedness); provided further that “All-In Yield” shall not include arrangement fees, structuring fees, commitment fees, underwriting fees, success fees, advisory fees, ticking fees, consent or amendment fees and any similar fees (regardless of how such fees are computed and whether shared or paid, in whole or in part, with or to any or all lenders) and any other fees not generally paid ratably to all lenders of such Indebtedness; provided, further, that, with respect to any Loans of an applicable Class that includes an Adjusted Term SOFR floor or Base Rate floor, (1) to the extent that the Reference Rate on the date that the All-In Yield is being calculated is less than such floor, the amount of such difference shall be deemed added to the Applicable Rate for such Loans of such Class for the purpose of calculating the All-In Yield and (2) to the extent that the Reference Rate on the date that the All-In Yield is being calculated is greater than such floor, then the floor shall be disregarded in calculating the All-In Yield.
“Anti-Money Laundering Laws” shall mean the Bank Secrecy Act, as amended by the Patriot Act, and any other similar laws or regulations concerning or relating to terrorism financing or money laundering.
“Applicable Agent” means with respect to Term Lenders and Term Loans and all payments and matters relating thereto, the Administrative Agent, and with respect to the Revolving Credit Facility, Revolving Lenders, Revolving Loans, Swing Line Loans and Letters of Credit and all payments and matters relating thereto, the Revolver Agent.
“Applicable Asset Sale” has the meaning specified in Section 2.05(2)(b)(i).
“Applicable Discount” has the meaning specified in Section 2.05(1)(e)(C)(2).
“Applicable Indebtedness” has the meaning specified in the definition of “Weighted Average Life to Maturity.”
“Applicable Percentage” means, in respect of (x) any Revolving Facility, with respect to any Revolving Lender under such Revolving Facility at any time, the percentage (carried out to the ninth decimal place) of such Revolving Facility represented by such Revolving Lender’s Revolving Commitments under such Revolving Facility at such time, subject to adjustment as provided in Section
4
2.17 and (y) any Delayed Draw Term Loan Facility, with respect to any Delayed Draw Term Lender at any time, the percentage (carried out to the ninth decimal place) of such Delayed Draw Term Loan Facility represented by such Delayed Draw Term Lender’s Delayed Draw Term Loan Commitments thereunder at such time, subject to adjustment as provided in Section 2.17. If the commitment of each Revolving Lender under a Revolving Facility to make Revolving Loans and the obligation of the Issuing Banks to make L/C Credit Extensions under such Revolving Facility or the commitment of each Delayed Draw Term Lender to make Delayed Draw Term Loans , as applicable, have been terminated pursuant to Section 8.02, or if the Revolving Commitments under such Revolving Facility or Delayed Draw Term Loan Commitments have otherwise expired in full, then the Applicable Percentage of each Revolving Lender in respect of such Revolving Facility or any Delayed Draw Term Lender in respect of the applicable Delayed Draw Term Loan Facility, as applicable, shall be determined based on the Applicable Percentage of such Revolving Lender in respect of such Revolving Facility or such Delayed Draw Term Lender in respect of the applicable Delayed Draw Term Loan Facility, as applicable, most recently in effect, giving effect to any subsequent assignments.
“Applicable Rate” means a percentage per annum equal to:
“Appropriate Lender” means, at any time, (1) with respect to Loans of any Class, the Lenders of such Class, (2) with respect to Letters of Credit, (a) the relevant Issuing Banks and (b) the relevant Revolving Lenders and (3) with respect to the Swing Line Facility, (x) the relevant Swing Line Lender and (y) if any Swing Line Loans are outstanding pursuant to Section 2.04(1), the Revolving Lenders.
“Approved Bank” has the meaning specified in clause (4) of the definition of “Cash
Equivalents.”
“Approved Commercial Bank” means a commercial bank with a consolidated combined capital and surplus of at least $5,000,000,000.
“Approved Fund” means, with respect to any Lender, any Fund that is administered, advised or managed by (1) such Lender, (2) an Affiliate of such Lender or (3) an entity or an Affiliate of an entity that administers, advises or manages such Lender.
“Arrangers” means Capital One and HPS, each in their capacity as arranger under this
Agreement.
“Asset Sale” means:
5
third parties to the extent required by applicable Law) of any Restricted Subsidiary (other than to the Borrower or another Restricted Subsidiary), whether in a single transaction or a series of related transactions;
in each case, other than:
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8
(aa) the conversion of any Restricted Subsidiary into an Affiliated Practice in a manner permitted under this Agreement and subject to the requirements under the Loan Documents with respect to Affiliated Practices.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit D-1 or any other form approved by the Applicable Agent.
“Attorney Costs” means all reasonable fees, expenses and disbursements of any law firm or other external legal counsel, to the extent documented in reasonable detail and invoiced.
“Attributable Indebtedness” means, on any date, in respect of any Capitalized Lease Obligation of any Person, the amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Auction Agent” means (1) the Administrative Agent or (2) any other financial institution or advisor engaged by the Borrower (whether or not an Affiliate of the Administrative Agent) to act as an arranger in connection with any Discounted Term Loan Prepayment pursuant to Section 2.05(1)(e); provided that the Borrower shall not designate the Administrative Agent as the Auction Agent without the written consent of the Administrative Agent (it being understood that the Administrative Agent shall be under no obligation to agree to act as the Auction Agent); provided further that neither the Borrower nor any of its Affiliates may act as the Auction Agent.
“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(2)(c).
“Available Incremental Amount” has the meaning specified in Section 2.14(4)(c).
“Available Incremental Revolver Cap” has the meaning specified in Section 2.14(5)(b)(xii).
“Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
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“Bankruptcy Code” has the meaning specified in Section 8.02.
“Base Rate” means, for any day, a floating interest rate per annum equal to the highest of (a) the rate of interest from time to time announced by the Administrative Agent at its principal office as its prime commercial lending rate (it being understood that such prime commercial rate is a reference rate and does not necessarily represent the lowest or best rate being charged by the Administrative Agent to any customer and such rate is set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors), (b) the sum of one half of one percent (0.50%) per annum and the Federal Funds Rate and (c) the sum of (x) Adjusted Term SOFR calculated for each such day based on an Interest Period of one month determined two (2) Business Days prior to such day, plus (y) 1.00%. Any change in the Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the Administrative Agent’s prime commercial lending rate, the Federal Funds Rate or Adjusted Term SOFR for an Interest Period of one month.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Basket” means any amount, threshold, exception or value (including by reference to the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Total Net Leverage Ratio, Consolidated EBITDA or Total Assets) permitted or prescribed with respect to any Lien, Indebtedness, Asset Sale, Investment, Restricted Payment, transaction, action, judgment or amount under any provision in this Agreement or any other Loan Document.
“Benchmark” means, initially, Adjusted Term SOFR; provided that if a Benchmark Transition Event and a replacement of the applicable Benchmark has occurred pursuant to Section 1.12(1) have occurred with respect to the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 1.12(1).
“Benchmark Replacement” means with respect to any Benchmark Transition Event, the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body, (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then- current Benchmark for U.S. dollar-denominated syndicated credit facilities or (C) any impact to Borrower under proposed U.S. Treasury Regulation § 1.1001-6 as of the date thereof and any successor or final regulation or other guidance relating thereto and (ii) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities.
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“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” or any similar or analogous definition (or the addition of a concept of “interest period”), the definition of “U.S. Government Securities Business Day,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in consultation with the Borrower may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in consultation with the Borrower that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides in consultation with the Borrower is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the then-current Benchmark:
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
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Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that is satisfactory to the Administrative Agent that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” means in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day (or such other date selected by the Administrative Agent and the Borrower) prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days (or such other date selected by the Administrative Agent and the Borrower) after such statement or publication, the date of such statement or publication).
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BHC Act Affiliate” means, with respect to any given party, an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Big Boy Letter” means a letter from a Lender acknowledging that (1) an assignee may have information regarding Holdings, the Borrower and any Subsidiary of Holdings, their businesses, their ability to perform the Obligations or any other material information that has not previously been disclosed to the Administrative Agent and the Lenders (“Excluded Information”), (2) the Excluded Information may not be available to such Lender, (3) such Lender has independently and without reliance on any other party made its own analysis and determined to assign Term Loans to such assignee pursuant to Section 10.07(8) or (12) notwithstanding its lack of knowledge of the Excluded Information and (4) such Lender waives and releases any claims it may have against the Administrative Agent, such assignee,
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Holdings, the Borrower and the Subsidiaries of the Borrower with respect to the nondisclosure of the Excluded Information; or otherwise in form and substance reasonably satisfactory to such assignee, the Administrative Agent and assigning Lender.
“Board of Directors” means, for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single Person, the Board of Directors of such Person, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Borrower.
“Borrower” has the meaning specified in the introductory paragraph to this Agreement. Upon consummation of any transaction permitted by Section 7.03(4), “Borrower” shall mean (or include, as applicable) a Successor Borrower.
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrower Offer of Specified Discount Prepayment” means any offer by any Borrower Party to make a voluntary prepayment of Loans at a specified discount to par pursuant to Section 2.05(1)(e)(B).
“Borrower Parties” means the collective reference to Holdings, the Borrower and each Subsidiary of the Borrower and “Borrower Party” means any of them.
“Borrower Solicitation of Discount Range Prepayment Offers” means the solicitation by any Borrower Party of offers for, and the corresponding acceptance by a Lender of, a voluntary prepayment of Loans at a specified range of discounts to par pursuant to Section 2.05(1)(e)(C).
“Borrower Solicitation of Discounted Prepayment Offers” means the solicitation by any Borrower Party of offers for, and the subsequent acceptance, if any, by a Lender of, a voluntary prepayment of Loans at a discount to par pursuant to Section 2.05(1)(e)(D).
“Borrowing” means a borrowing consisting of Loans of the same Class and Type made, converted or continued on the same date and, in the case of Term Benchmark Rate Loans, having the same Interest Period.
“Broker-Dealer Regulated Subsidiary” means any Subsidiary of the Borrower that is registered as a broker-dealer under the Exchange Act or any other applicable Laws requiring such registration.
“Business Day” means any day that is not a Legal Holiday.
“Capital Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capitalized Lease Obligations) by the Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on the consolidated statement of cash flows of the Borrower and the Restricted Subsidiaries.
“Capital One” has the meaning specified in the introductory paragraph to this Agreement.
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“Capital Stock” means:
“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP in accordance with Section 1.03.
“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.
“Captive Insurance Subsidiary” means any Subsidiary of the Borrower that is subject to regulation as an insurance company (or any Subsidiary thereof).
“Cash Collateral” has the meaning specified in the definition of “Cash Collateralize.”
“Cash Collateral Account” means an account held in the name of a Loan Party at, and subject to the sole dominion and control of, the Collateral Agent.
“Cash Collateralize” means, in respect of an Obligation, to provide and pledge cash or Cash Equivalents in Dollars as collateral, at a location and pursuant to documentation in form and substance reasonably satisfactory to the relevant Issuing Bank with respect to any Letter of Credit, as applicable. “Cash Collateral” has a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means:
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In the case of Investments by any Foreign Subsidiary or Investments made in a country outside the United States, Cash Equivalents will also include (i) investments of the type and maturity described in clauses (1) through (15) above of foreign obligors, which investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (15) and in this paragraph.
Notwithstanding the foregoing, Cash Equivalents will include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts, except amounts used to pay non-Dollar denominated obligations of the Borrower or any Restricted Subsidiary in the ordinary course of business, are expected by the Borrower to be converted into any currency listed in clause (1) or (2) above as promptly as practicable and in any event within ten (10) Business Days following the receipt of such amounts (and solely to the extent so converted on or prior to such tenth (10th) Business Day).
“Cash Management Agreement” means any agreement entered into from time to time by Holdings, the Borrower or any Restricted Subsidiary in connection with cash management services for collections, other Cash Management Services and for operating, payroll and trust accounts of such Person, including automatic clearing house services, controlled disbursement services, electronic funds transfer services, information reporting services, lockbox services, stop payment services and wire transfer services.
“Cash Management Bank” means (1) any Person set forth on Schedule 1.01(2), (2) any Person that is an Agent, a Lender or an Affiliate of an Agent or Lender party to a Cash Management Agreement, whether or not such Person subsequently ceases to be an Agent, a Lender or an Affiliate of an Agent or Lender or (3) any Person from time to time approved by the Administrative Agent (such approval not to be unreasonably withheld, delayed or conditioned) and specifically designated in writing as a “Cash Management Bank” by the Borrower to the Administrative Agent and Revolver Agent.
“Cash Management Obligations” means obligations owed by Holdings, the Borrower or any Restricted Subsidiary to any Cash Management Bank in connection with, or in respect of, any Cash Management Services.
“Cash Management Services” means (1) commercial credit cards, merchant card services, purchase or debit cards, including non-card e-payables services, (2) treasury management services (including controlled disbursement, overdraft, automatic clearing house fund transfer services, return items and interstate depository network services), (3) foreign exchange, netting and currency
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management services and (4) any other demand deposit or operating account relationships or other cash management services, including under any Cash Management Agreements.
“Casualty Event” means any event that gives rise to the receipt by the Borrower or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or real property (including any improvements thereon) to replace or repair such equipment, fixed assets or real property.
“Change in Law” means the occurrence, after the Effective Date, of any of the following: (1) the adoption of any law, rule, regulation or treaty (excluding the taking effect after the Effective Date of a law, rule, regulation or treaty adopted prior to the Effective Date), (2) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (3) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority. It is understood and agreed that (a) the Dodd–Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203, H.R. 4173), all Laws relating thereto and all interpretations and applications thereof and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall, for the purpose of this Agreement, be deemed to be adopted subsequent to the Effective Date.
“Change of Control” means the occurrence of any of the following after the Effective Date:
unless, in the case of clause (1) or (2) above, the Permitted Holders have, at such time, directly or indirectly, the right or the ability by voting power, contract or otherwise to elect or designate for election at least a majority of the board of directors of the Borrower. Notwithstanding anything to the contrary herein, (x) for purposes of this definition the phrase “Person” or “group” shall exclude any employee benefit plan of such “Person” or “group” and its subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan and (y) notwithstanding anything to the contrary in this definition or any provision of the Exchange Act, (A) a Person or group shall be deemed not to beneficially own securities subject to an equity or asset purchase agreement, merger agreement, option agreement, warrant agreement or similar agreement (or voting or option or similar agreement
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related thereto) until the consummation of the acquisition of the securities in connection with the transactions contemplated by such agreement and (B) a Person or group (other than Permitted Holders) will not be deemed to beneficially own Voting Stock of another Person as a result of its ownership of equity interests or other securities of such other Person’s direct or indirect parent holding companies (or related contractual rights) unless it owns more than 50% of the total voting power of the Voting Stock of such Person’s direct or indirect parent holding companies.
“Charge” means any charge, fee, expense, expenditure, cost, loss, accrual, reserve of any kind and any other deduction included in the calculation of Consolidated Net Income.
“Class” (1) when used with respect to Lenders, refers to whether such Lenders have Loans or Commitments with respect to a particular Class of Loans or Commitments, (2) when used with respect to Commitments, refers to whether such Commitments are Closing Date Term Loan Commitments, Delayed Draw Term Loan Commitments, Revolving Commitments, Incremental Revolving Commitments, Other Revolving Commitments, Incremental Term Commitments, Commitments in respect of any Class of Replacement Loans, Extended Revolving Commitments of a given Extension Series or Other Term Loan Commitments of a given Class of Other Loans, in each case not designated part of another existing Class and (3) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Closing Date Term Loans, Revolving Loans under the Closing Date Revolving Facility, Incremental Term Loans, Incremental Revolving Loans, Other Revolving Loans, Replacement Loans, Extended Term Loans, Loans made pursuant to Extended Revolving Commitments, or Other Term Loans, in each case not designated part of another existing Class. Commitments (and, in each case, the Loans made pursuant to such Commitments) that have different terms and conditions shall be construed to be in different Classes. Commitments (and, in each case, the Loans made pursuant to such Commitments) that have identical terms and conditions shall be construed to be in the same Class. For the avoidance of doubt, after a Delayed Draw Term Loan Funding Date, the Closing Date Term Loans and the Delayed Draw Term Loans that have been funded hereunder shall be treated as a single Class under this Agreement for all purposes.
“Clinical Facility” means any clinical facility or medical or healthcare practice owned by the Borrower or a Restricted Subsidiary.
“Closing Date” means the first date on which all the conditions precedent in Section 4.02 are satisfied or waived in accordance with Section 10.01, and the Closing Date Term Loans are made to the Borrower pursuant to Section 2.01(1).
“Closing Date Loans” means the Closing Date Term Loans and any Closing Date Revolving Borrowing.
“Closing Date Refinancing” means the repayment of all outstanding Indebtedness under the Existing Credit Agreement.
“Closing Date Revolving Borrowing” means one or more Borrowings of Revolving Loans on the Closing Date, if any, pursuant to Section 2.01(2) in accordance with the requirements specified or referred to in Section 6.13; provided, that, without limitation, Letters of Credit may be issued on the Closing Date to backstop or replace letters of credit, bank guarantees, bankers’ acceptances or other similar instruments outstanding on the Closing Date (including deemed issuances of Letters of Credit under this Agreement resulting from an existing issuer of letters of credit, bank guarantees, bankers’ acceptances or other similar instruments outstanding on the Closing Date agreeing to become an Issuing Bank under this Agreement).
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“Closing Date Revolving Facility” means the Revolving Facility made available by the Revolving Lenders as of the Closing Date.
“Closing Date Term Loan Commitment” means, as to each Term Lender, its obligation to make a Closing Date Term Loan to the Borrower in an aggregate amount not to exceed the amount specified opposite such Term Lender’s name on Schedule 2.01 under the caption “Closing Date Term Loan Commitment” or in the Assignment and Assumption (or Affiliated Lender Assignment and Assumption) pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including pursuant to Sections 2.14, 2.15 or 2.16). As of the Effective Date, the initial aggregate amount of the Closing Date Term Loan Commitments (excluding, for the avoidance of doubt, any Delayed Draw Term Loan Commitment) is $200,000,000.
“Closing Date Term Loans” means the Term Loans made by the Term Lenders on the Closing Date to the Borrower pursuant to Section 2.01(1) and shall include, when funded, any Delayed Draw Term Loans made to the Borrower pursuant to Section 2.01(3).
“Closing Outside Date” has the meaning specified in Section 4.02(7).
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Co-Investor” means each of (x) Summit Partners, L.P. and its Affiliates and (y) Silversmith Capital Partners and its Affiliates.
“Collateral” means all the “Collateral” (or equivalent term, including “Pledged Collateral”) as defined in any Collateral Document and the Mortgaged Properties, if any.
“Collateral Agent” has the meaning specified in the introductory paragraph to this
Agreement.
“Collateral and Guarantee Requirement” means, at any time, the requirement that:
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clause (3) above),
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The foregoing definition shall not require, and the Loan Documents shall not contain any requirements as to, the creation, perfection or maintenance of pledges of, or security interests in, Mortgages on, or the obtaining of Mortgage Policies, surveys, abstracts or appraisals or taking other actions with respect to, any Excluded Assets.
The Collateral Agent may grant extensions of time for the creation, perfection or maintenance of security interests in, or the execution or delivery of any Mortgage and the obtaining of title insurance, surveys or Opinions of Counsel with respect to, particular assets (including extensions beyond the Effective Date for the creation, perfection or maintenance of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with the Borrower, that creation, perfection or maintenance cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.
There shall be (I) no actions required by the Laws of any non-U.S. jurisdiction under the Loan Documents in order to create any security interests in any assets or to perfect or make enforceable such security interests in any assets (including any IP Rights registered or applied for in any non-U.S. jurisdiction) and (II) no Guaranties or Collateral Documents (including security agreements and pledge agreements) governed under the laws of any non-U.S. jurisdiction. Notwithstanding anything else provided in the Loan Documents, the Borrower may, in its sole discretion, elect to join any Foreign Subsidiary, any non-wholly-owned Domestic Subsidiary or any Excluded Subsidiary (other than, in each case, an Unrestricted Subsidiary) as a Guarantor subject to, in the case of a Foreign Subsidiary, (x) the jurisdiction of incorporation of such Foreign Subsidiary being reasonably satisfactory to the Administrative Agent in light of legal permissibility and the policies and procedures of the Administrative Agent and the Lenders for similarly situated companies (as reasonably determined by the Administrative Agent) and (y) collateral and security provisions reasonably acceptable to the Administrative Agent to be negotiated in good faith (such election to so join the “Excluded Subsidiary Joinder Exception”); provided that, so long as no Event of Default has occurred and is continuing, the Borrower may elect to release (a “Guarantor Release Election”) any such Foreign Subsidiary, non-wholly-owned Domestic Subsidiary or Excluded Subsidiary (a “Released Subsidiary”) from its obligations as a Guarantor in its sole discretion (so long as such release(A) shall be subject to the Borrower or its Restricted Subsidiaries having capacity to make an Investment in such Released Subsidiary once it is no longer a Guarantor and shall be deemed an Investment in such Released Subsidiary, (B) shall be subject to such Released Subsidiary having capacity to incur any Indebtedness or Liens once it is no longer a Guarantor (either (x) at the time such Indebtedness or Liens were incurred or (y) at the time of such release)) and (C) shall be subject to such Released Subsidiary not owning or exclusively licensing any Material Intellectual
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Property) (it being understood and agreed that such right to elect to release any such Foreign Subsidiary, non-wholly-owned Domestic Subsidiary or Excluded Subsidiary in accordance with the immediately preceding clauses (A), (B) and (C) shall be in addition to any other right to release any such Foreign Subsidiary, non-wholly-owned Domestic Subsidiary or Excluded Subsidiary from its obligations as a Guarantor pursuant to Section 10.24); provided further that to the extent any Foreign Subsidiary is joined pursuant to the Excluded Subsidiary Joinder Exception, any requirements under this Collateral and Guarantee Requirement and any related provisions under the Loan Documents as applied to such Foreign Subsidiary (solely to the extent any such provision would not otherwise have applied in respect of such Foreign Subsidiary if it were a Restricted Subsidiary that did not constitute a Loan Party) may be modified (including with respect to the addition of “agreed security principles” or other customary limitations applicable to the provision of guarantees and collateral in the applicable non-U.S. jurisdiction and providing for the granting of collateral customary for secured financings in such non-U.S. jurisdiction) as reasonably determined by the Borrower and the Administrative Agent.
No perfection through control agreements or perfection by “control” shall be required with respect to any assets (other than to the extent required under clause (4)(a)(i) above) under the Loan Documents. There shall be no (x) requirement to obtain any landlord waivers, estoppels, collateral access letters or similar rights and agreements or (y) requirement to perfect a security interest in any letter of credit rights, other than by the filing of a UCC financing statement.
“Collateral Documents” means, collectively, the Security Agreement, the Intellectual Property Security Agreements, the Mortgages (if any), each of the collateral assignments, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent, Collateral Agent or the Lenders pursuant to Sections 4.01(1)(b), 4.01(1)(c), 6.11 or 6.12 and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.
“Commitment” means a Revolving Commitment, Incremental Revolving Commitment, Closing Date Term Loan Commitment, Delayed Draw Term Loan Commitment, Incremental Term Commitment, Other Revolving Commitment, Other Term Loan Commitment, Extended Revolving Commitment of a given Extension Series, or any commitment in respect of Replacement Loans, as the context may require.
“Commitment Fee Rate” means 0.50% per annum.
“Committed Loan Notice” means a notice of (1) a Borrowing with respect to a given Class of Loans, (2) a conversion of Loans of a given Class from one Type to the other or (3) a continuation of Term Benchmark Rate Loans of a given Class, pursuant to Section 2.02(1), which, if in writing, shall be substantially in the form of Exhibit A-1, or such other form as may be approved by the Applicable Agent and the Borrower (including any form on an electronic platform or electronic transmission system as shall be approved by the Applicable Agent, appropriately completed and signed by a Responsible Officer of the Borrower).
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time and any successor statute.
“Compensation Period” has the meaning specified in Section 2.12(3)(b).
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“Compliance Certificate” means a certificate substantially in the form of Exhibit C and which certificate shall in any event be a certificate of a Financial Officer of the Borrower:
“Conforming Accounting Report” has the meaning specified in Section 6.01(1).
“Consolidated Current Assets” means, as at any date of determination, the total assets of the Borrower and the Restricted Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding cash and Cash Equivalents, amounts related to current or deferred taxes based on income or profits, assets held for sale, loans (permitted) to third parties, pension assets, deferred bank fees, derivative financial instruments and any assets in respect of Hedge Agreements, and excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of the Borrower and the Restricted Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding (1) the current portion of any Funded Debt, (2) the current portion of interest, (3) accruals for current or deferred taxes based on income or profits, (4) accruals of any costs or expenses related to restructuring reserves or severance, (5) Revolving Loans, Swing Line Loans and L/C Obligations under this Agreement or any other revolving loans, swingline loans and letter of credit obligations under any other revolving credit facility, (6) the current portion of any Capitalized Lease Obligation, (7) deferred revenue arising from cash receipts that are earmarked for specific projects, (8) liabilities in respect of unpaid earnouts, (9) the current portion of any other long-term liabilities, (10) accrued litigation settlement costs and (11) any liabilities in respect of Hedge Agreements, and, furthermore, excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
“Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense of such Person and its Restricted Subsidiaries, including the amortization of intangible assets, deferred financing fees, debt issuance costs, commissions, fees and expenses and the amortization of Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
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“Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period:
plus
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consulting, transaction, advisory and other fees (including transaction and termination fees) and indemnities and expenses paid or accrued in such period to the Sponsor or any Co-Investor or otherwise to the extent permitted under Section 6.15 and (ii) the amount of payments made to optionholders of such Person or any Parent Company in connection with, or as a result of, any distribution being made to equityholders of such Person or its Parent Companies, which payments are being made to compensate such optionholders as though they were equityholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted hereunder; plus
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savings, synergies or operating expense reductions had been realized in full on the first day of such period and (II) net of the amount of actual benefits realized from such actions during such period (it is understood and agreed that “run-rate” means the full recurring benefit that is associated with any action taken or with respect to which substantial steps have been taken or are expected to be taken, whether prior to or following the Effective Date) (which adjustments may be incremental to (but not duplicative of) pro forma cost savings, synergies or operating expense reduction adjustments made pursuant to
Section 1.07); plus
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Notwithstanding the foregoing, amounts added back pursuant to clauses (1)(l), (1)(s) and 1(t) above, when aggregated with the amounts excluded from Consolidated Net Income pursuant to clause
27
(1)(b) thereof and any “run rate” cost savings, synergies and operating expense reductions and synergies added back to Consolidated EBITDA pursuant to Section 1.07(3) for such Test Period, in each case, other than amounts added back in connection with the Transactions, shall not in the aggregate exceed an amount equal to 35.0% of Consolidated EBITDA of the Borrower (calculated after giving effect to any such addback and all other permitted add-backs and adjustments) for such Test Period on a pro forma basis.
Notwithstanding the foregoing, it is agreed that for all purposes hereunder (including the calculation of the First Lien Net Leverage Ratio, Secured Net Leverage Ratio and Total Net Leverage Ratio) for any period that includes the fiscal quarters ended on March 31, 2021, June 30, 2021, September 30, 2021 or December 31, 2021, respectively, (i) Consolidated EBITDA for the fiscal quarter ended on March 31, 2021 shall be deemed to be $20,494,576.00, (ii) Consolidated EBITDA for the fiscal quarter ended on June 30, 2021 shall be deemed to be $21,003,270.00, (iii) Consolidated EBITDA for the fiscal quarter ended on September 30, 2021 shall be deemed to be $15,316,037.00, and (iv) Consolidated EBITDA for the fiscal quarter ended on December 31, 2021 shall be deemed to be $15,737,434.00, in each case, as adjusted on a pro forma basis. For the avoidance of doubt, Consolidated EBITDA shall be calculated, including pro forma adjustments, in accordance with Section 1.07.
“Consolidated First Lien Secured Debt” means, as of any date of determination, subject to the definition of “Designated Revolving Commitments,” the aggregate principal amount of Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, in an amount that would be reflected on a balance sheet on a consolidated basis in accordance with GAAP, consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations and purchase money Indebtedness, in each case, solely to the extent secured, in whole or in part, by a first priority Lien on the Collateral (or in the case of Capitalized Lease Obligations, any asset of the Borrower or any Subsidiary Guarantor), in each case that ranks pari passu with or senior to the Liens securing the First Lien Obligations (without regard to control of remedies); provided that Consolidated First Lien Secured Debt will not include Non- Recourse Indebtedness, undrawn amounts under revolving credit facilities and Indebtedness in respect of any (1) letter of credit, bank guarantees, bankers’ acceptances and performance or similar bonds, except to the extent of obligations in respect of drawn standby letters of credit which have not been reimbursed within three (3) Business Days and (2) Hedging Obligations. The Dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar-equivalent principal amount of such Indebtedness.
“Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the cash interest expense (including that attributable to Capitalized Lease Obligations), net of cash interest income, with respect to Indebtedness of such Person and its Restricted Subsidiaries for such period, other than Non-Recourse Indebtedness, including commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs under hedging agreements (other than in connection with the early termination thereof);
excluding, in each case:
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For the avoidance of doubt, interest on a Capitalized Lease Obligation will be deemed to accrue in accordance with Section 1.07(5).
“Consolidated Net Income” means, with respect to any Person for any period, the net income (loss) of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding (and excluding the effect of), without duplication,
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special items (including, without limitation attorneys’ and experts’ fees and expenses and all other costs, liabilities (including all damages, penalties, fines and indemnification and settlement payments) and expenses paid or payable in connection with any threatened, pending, completed or future claim, demand, action, suit, proceeding, inquiry or investigation (whether civil, criminal, administrative, governmental or investigative) either (i) arising from, or related to, facts and circumstances existing on or prior to the Effective Date or (ii) arising out of or related to securities law); and (b) Charges in connection with the redevelopment, relocation or acquisition of an Affiliated Practice or Clinical Facility; restructuring and similar Charges; accruals or reserves (including restructuring and integration costs related to acquisitions and adjustments to existing reserves, and in each case, whether or not classified as such under GAAP); Charges related to any reconstruction, decommissioning, recommissioning or reconfiguration of facilities and fixed assets for alternative uses; Public Company Costs; Charges related to the integration, consolidation, and closing of facilities and fixed assets; severance and relocation costs and expenses; special compensation Charges, consulting fees; charges in connection with third-party advisory support to implement new accounting standards; signing, retention or completion bonuses and charges, and executive recruiting costs; Charges incurred in connection with strategic initiatives; transition Charges and duplicative running and operating Charges; Charges in connection with non-ordinary course product development; Charges incurred in connection with acquisitions (or purchases of assets) prior to or after the Effective Date (including integration costs); business optimization Charges (including Charges relating to business optimization programs, non-ordinary course intellectual property development, new systems design and information technology and similar upgrades, signing costs, Charges related to systems establishment, implementation, integration and upgrades and project start-up and wind-down) accruals and reserve; Charges related to implementing operation or reporting systems or technology initiatives; Charges attributable to the implementation of cost-savings initiatives and operating improvements and consolidations; and curtailments and modifications to pension and post-employment employee benefit plans (including any settlement of pension liabilities and charges resulting from changes in estimates, valuations and judgments); provided that amounts excluded pursuant to this clause (1)(b), when aggregated with amounts added back to Consolidated EBITDA pursuant to clauses (1)(l), (1)(s) and (1)(t) of the definition thereof and any “run rate” cost savings, synergies and operating expense reductions and synergies added back to Consolidated EBITDA pursuant to Section 1.07(3) for such Test Period, in each case, other than amounts added back in connection with the Transactions, shall not in the aggregate exceed an amount equal to 35.0% of Consolidated EBITDA of the Borrower (calculated after giving effect to any such addback and all other permitted add-backs and adjustments) for such Test Period on a pro forma basis; provided, further, that in no event shall the items set forth in clause (1)(r) of the definition of Consolidated EBITDA be permitted as adjustments under this clause (1);
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that the Consolidated Net Income of a Person will be increased by the amount of dividends or distributions or other payments that are actually paid in cash or Cash Equivalents (or to the extent converted into cash or Cash Equivalents) to such Person or a Restricted Subsidiary thereof in respect of such period;
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indirect parent of the Borrower), recapitalization, refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of any Indebtedness, including the Loan Documents) and including, in each case, any such transaction whether consummated on, after or prior to the Effective Date and any such transaction undertaken but not completed, and any charges or nonrecurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful or consummated (including, for the avoidance of doubt, the effects of expensing all transaction related expenses in accordance with Accounting Standards Codification Topic No. 805, Business Combinations);
In addition, to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries, Consolidated Net Income will include the amount of proceeds received, or reasonably projected by the Borrower in good faith to be receivable within one year after the end of such period, from business interruption insurance (with a deduction to Consolidated Net Income in any subsequent period for any amount so added back pursuant to this sentence to the extent not so paid or reimbursed within such one year period, and to the extent any such amount is paid or reimbursed during any subsequent period, such amount shall not be included in the calculation of Consolidated Net Income for such subsequent period), the amount of any expenses or charges incurred by such Person or its
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Restricted Subsidiaries during such period that are, directly or indirectly, reimbursed, or reasonably projected by the Borrower in good faith to be reimbursable within one year after the end of such period, by a third party (with a deduction to Consolidated Net Income in any subsequent period for any amount so added back pursuant to this sentence to the extent not so paid or reimbursed within such one year period, and to the extent any such amount is paid or reimbursed during any subsequent period, such amount shall not be included in the calculation of Consolidated Net Income for such subsequent period), and amounts that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder.
Notwithstanding the foregoing, for the purpose of Section 7.05(1) (other than clause (b)(iv) of Section 7.05(1)), there will be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by such Person and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from such Person and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by such Person or any Restricted Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under clause (b)(iv) of Section 7.05(1).
“Consolidated Secured Debt” means, as of any date of determination, subject to the definition of “Designated Revolving Commitments,” the aggregate principal amount of Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, in an amount that would be reflected on a balance sheet on a consolidated basis in accordance with GAAP, consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations and purchase money Indebtedness, in each case secured by a Lien on the Collateral (or in the case of Capitalized Lease Obligations, any asset of the Borrower or any Subsidiary Guarantor); provided that Consolidated Secured Debt will not include Non-Recourse Indebtedness, undrawn amounts under revolving credit facilities and Indebtedness in respect of any (1) letter of credit, bank guarantees, bankers’ acceptances and performance or similar bonds, except to the extent of obligations in respect of drawn standby letters of credit which have not been reimbursed within three (3) Business Days and (2) Hedging Obligations. The Dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar-equivalent principal amount of such Indebtedness.
“Consolidated Total Debt” means, as of any date of determination, subject to the definition of “Designated Revolving Commitments,” the aggregate principal amount of Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, in an amount that would be reflected on a balance sheet on a consolidated basis in accordance with GAAP, consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations and purchase money Indebtedness; provided that Consolidated Total Debt will not include Non-Recourse Indebtedness, undrawn amounts under revolving credit facilities and Indebtedness in respect of any (1) letter of credit, bank guarantees and performance or similar bonds, except to the extent of obligations in respect of drawn standby letters of credit which have not been reimbursed within three (3) Business Days and (2) Hedging Obligations. The Dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar-equivalent principal amount of such Indebtedness.
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“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.
“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other monetary obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent:
“Contract Consideration” has the meaning specified in clause (2)(j) of the definition of “Excess Cash Flow.”
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Controlled Investment Affiliate” means, as to any Person, any other Person, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity or debt investments in the Borrower or other companies.
“Convertible Indebtedness” means Indebtedness of the Borrower or any Restricted Subsidiary (which may be guaranteed by the Guarantors) permitted to be incurred hereunder that is either
“Corrective Extension Amendment” has the meaning specified in Section 2.16(6).
“Covered Entity” means any of the following:
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C.F.R. § 382.2(b).
“Covered Party” has the meaning specified in Section 10.28.
“Credit Agreement Refinanced Debt” has the meaning assigned to such term in the definition of “Credit Agreement Refinancing Indebtedness.”
“Credit Agreement Refinancing Indebtedness” means (1) Permitted Equal Priority Refinancing Debt, (2) Permitted Junior Priority Refinancing Debt or (3) Permitted Unsecured Refinancing Debt; provided that, in each case, such Indebtedness is issued, incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) to Refinance, in whole or in part, existing Loans (or, if applicable, unused Commitments) or any then-existing Credit Agreement Refinancing Indebtedness (“Credit Agreement Refinanced Debt”); provided, further, that (a) the terms of any such Indebtedness (excluding, for the avoidance of doubt, interest rates (including through fixed interest rates), interest margins, rate floors, fees, funding discounts, original issue discounts and prepayment or redemption premiums and terms) shall either, at the option of the Borrower, (i) [reserved], (ii) if otherwise not consistent with the terms of such Credit Agreement Refinanced Debt, not be materially more restrictive to the Borrower (as determined by the Borrower in good faith), when taken as a whole, than the terms of such Credit Agreement Refinanced Debt, except, in each case under this clause (ii), with respect to (I) covenants and other terms applicable to any period after the Latest Maturity Date of the Loans in effect immediately prior to such Refinancing or (II) a Previously Absent Financial Maintenance Covenant (so long as, (A) to the extent that such Indebtedness includes a Previously Absent Financial Maintenance Covenant that is in effect prior to the Latest Maturity Date of the Closing Date Revolving Facility and consists solely of a revolving credit facility (whether or not the documentation therefor includes any other facilities) and the applicable Previously Absent Financial Maintenance Covenant is included only for the benefit of such revolving credit facility, such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Revolving Facility and (B) to the extent that such Indebtedness includes a Previously Absent Financial Maintenance Covenant that is in effect prior to the Latest Maturity Date of the Closing Date Term Loans and does not consist solely of a revolving credit facility (whether or not the documentation therefor includes any other facilities), such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Term Loans or (iii) such terms shall be reasonably satisfactory to the Administrative Agent and the Specified Representative (provided that, at Borrower’s election, to the extent any term or provision is added for the benefit of (I) the lenders of any such Indebtedness that consists of term facilities, no consent shall be required from the Administrative Agent (or any Lender) to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Closing Date Term Loans or (II) the lenders of any such Indebtedness that consists of revolving credit facilities, no consent shall be required from the Revolver Agent or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Revolving Facility), (b) any such Indebtedness shall have (i) a maturity date that is no earlier than the earlier of (I) the maturity date of the Credit Agreement Refinanced Debt and (II) the Latest Maturity Date of (in the case of Credit Agreement Refinancing Indebtedness consisting of revolving credit facilities) the Closing Date Revolving Facility or (in the case of Credit Agreement Refinancing Indebtedness consisting of term facilities) the Closing Date Term Loans and (ii) if the Credit Agreement Refinancing Indebtedness consists of term facilities, a Weighted Average Life to Maturity equal to or greater than the lesser of (I) the Weighted Average Life to Maturity of the Credit Agreement Refinanced Debt and (II) the Weighted Average Life to Maturity of the Closing Date Term Loans, in each case as of the date of determination (provided, that any Credit Agreement Refinancing Debt that is subordinated in right of payment or security to the Closing Date Term Loans or Closing Date Revolving Facility shall not mature earlier than 91 days after the then-Latest Maturity Date of the Closing
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Date Term Facility or Closing Date Revolving Facility, as applicable), (c) such Indebtedness shall not have a greater principal amount (or shall not have a greater accreted value, if applicable) than the principal amount (or accreted value, if applicable) of the Credit Agreement Refinanced Debt plus accrued interest, fees and premiums (including tender premium) and penalties (if any) thereon and fees, expenses, original issue discount and upfront fees incurred in connection with such Refinancing plus the amount of any other Indebtedness permitted under one or more other Baskets under Section 7.02 (which shall be deemed a utilization of any such Baskets), (d) such Credit Agreement Refinanced Debt shall be repaid, defeased or satisfied and discharged, and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, within five (5) Business Days after the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained with the Net Proceeds received from the incurrence or issuance of such Indebtedness and (e) any mandatory prepayments of (i) any Permitted Junior Priority Refinancing Debt or Permitted Unsecured Refinancing Debt may not be made except to the extent that prepayments are not prohibited hereunder and, to the extent required hereunder or pursuant to the terms of any Permitted Equal Priority Refinancing Debt, first made or offered to the holders of the Term Loans constituting First Lien Obligations and any such Permitted Equal Priority Refinancing Debt and (ii) any Permitted Equal Priority Refinancing Debt in respect of events described in Section 2.05(2)(a), (b) and (c)(i), may be made on a pro rata basis, less than a pro rata basis or greater than a pro rata basis (but not greater than a pro rata basis as compared to any Class of Term Loans constituting First Lien Obligations with an earlier maturity date unless the Credit Agreement Refinanced Debt was so entitled to participate on a greater than a pro rata basis) with each Class of Term Loans constituting First Lien Obligations under Section 2.05(2)(a), (b) and (c)(i), provided, further, that “Credit Agreement Refinancing Indebtedness” may be incurred in the form of a bridge or other interim credit facility intended to be Refinanced with (or which converts into or is exchanged for) long-term indebtedness (and such bridge or other interim credit facility shall be deemed to satisfy clause (b) of the second proviso in this definition so long as (x) such credit facility includes customary “rollover” provisions and (y) assuming such credit facility were to be extended pursuant to such “rollover” provisions, such extended credit facility would comply with clause (b) above) and in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other interim credit facility, clause (e) of the second proviso in this definition shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions.
“Credit Extension” means each of the following: (1) a Borrowing and (2) an L/C Credit
Extension.
“Cure Amount” has the meaning specified in Section 8.04(1).
“Cure Expiration Date” has the meaning specified in Section 8.04(1)(a).
“Cured Default” has the meaning specified in Section 1.02(9).
“Debt Fund Affiliate” means any Affiliate of an Investor or Co-Investor that is a bona fide diversified debt fund that is separately managed from such Investor or Co-Investor, as applicable, and that is not (1) a natural person or (2) Holdings, the Borrower or any Subsidiary of the Borrower.
“Debt Representative” means, with respect to any series of Indebtedness, the trustee, administrative agent, collateral agent, security agent or similar agent or representative under the indenture or agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
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rearrangement, receivership, insolvency, reorganization or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Declined Proceeds” has the meaning specified in Section 2.05(2)(f).
“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“Default Rate” means an interest rate equal to (1) the Base Rate plus (2) the Applicable Rate applicable to Base Rate Loans that are Revolving Loans plus (3) 2.00% per annum; provided that with respect to the outstanding principal amount of any Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan (giving effect to Section 2.02(3)) plus 2.00% per annum, in each case, to the fullest extent permitted by applicable Laws.
“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.
“Defaulting Lender” means, subject to Section 2.17(2), any Lender that (1) has refused (which refusal may be given verbally or in writing and has not been retracted) or failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of L/C Obligations, within one (1) Business Day of the date required to be funded by it hereunder, (2) has failed to pay over to the Administrative Agent, Revolver Agent, any Issuing Bank or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute, (3) has notified the Borrower, the Revolver Agent or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or generally under other agreements in which it commits to extend credit, (4) has failed, within three (3) Business Days after request by the Administrative Agent or the Revolver Agent, to confirm in a manner satisfactory to the Administrative Agent or the Revolver Agent (as applicable) that it will comply with its funding obligations, or (5) has, or has a direct or indirect parent company that has, either (a) admitted in writing that it is insolvent or (b) become subject to a Lender-Related Distress Event. Any determination by the Administrative Agent as to whether a Lender is a Defaulting Lender shall be conclusive absent manifest error.
“Deferred Net Proceeds Date” has the meaning specified in Section 2.05(2)(b)(ii).
“Delayed Draw Term Loan Commitment Expiration Date” means the earlier of (i) the date on which the Closing Date Delayed Draw Term Loan Facility has been reduced to zero and (ii) the second anniversary of the Closing Date.
“Delayed Draw Term Borrowing” means a Borrowing of any Delayed Draw Term
Loans.
“Delayed Draw Term Loan” means a Loan made pursuant to Section 2.01(3).
“Delayed Draw Term Loan Commitment” means, as to each Delayed Draw Term Lender, its obligation to make a Delayed Draw Term Loan to the Borrower in an aggregate amount not to exceed the amount specified opposite such Delayed Draw Term Lender’s name on Schedule 2.01 under the caption “Delayed Draw Term Loan Commitment” or in the Assignment and Assumption (or Affiliated Lender Assignment and Assumption) pursuant to which such Delayed Draw Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this
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Agreement (including pursuant to Sections 2.14, 2.15 or 2.16) or, with respect to Incremental Delayed Draw Term Loan Commitments, the amount specified in the applicable Incremental Amendment, as such amount may be adjusted from time to time in accordance with this Agreement (including pursuant to Sections 2.14, 2.15 or 2.16). The initial aggregate amount of the Delayed Draw Term Loan Commitments made available as of the Closing Date is $100,000,000.
“Delayed Draw Term Loan Facility” means the Delayed Draw Term Loan Commitments and the Delayed Draw Term Loans made thereunder.
“Delayed Draw Term Loan First Lien Leverage Condition” has the meaning specified in Section 2.14(4)(c)(iii)(I).
“Delayed Draw Term Loan Funding Date” means any date on which Delayed Draw Term Loans are made by a Delayed Draw Term Loan Lender.
“Delayed Draw Term Loan Lender” means, at any time, any Lender that has a Delayed Draw Term Loan Commitment or a Delayed Draw Term Loan at such time.
“Delayed Draw Term Loan Secured Leverage Condition” has the meaning specified in Section 2.14(4)(c)(iii)(II).
“Delayed Draw Term Note” means a promissory note of the Borrower payable to any Delayed Draw Term Lender or its registered assigns, in substantially the form of Exhibit B-4 hereto, evidencing the aggregate Indebtedness of the Borrower to such Delayed Draw Term Lender resulting from the Delayed Draw Term Loans made by such Delayed Draw Term Lender.
“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of, or collection or payment on, such Designated Non-Cash Consideration.
“Designated Preferred Stock” means Preferred Stock of the Borrower, any Restricted Subsidiary or any Parent Company (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Borrower or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on or promptly after the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (b) of Section 7.05(1).
“Designated Revolving Commitments” means any commitments to make loans or extend credit on a revolving basis (or delayed draw basis) to the Borrower or any Restricted Subsidiary by any Person other than the Borrower or any Restricted Subsidiary that have been designated in an Officer’s Certificate delivered to the Administrative Agent and Revolver Agent as “Designated Revolving Commitments” until such time as the Borrower subsequently delivers an Officer’s Certificate to the Administrative Agent and Revolver Agent to the effect that such commitments will no longer constitute “Designated Revolving Commitments”; provided that, during such time (including at the time of the incurrence of such Designated Revolving Commitments), (1) except for purposes of the First Lien Net Leverage Ratios set forth in Section 2.05(2)(a) and Section 2.05(2)(b) and determining actual compliance with the Financial Covenant, such Designated Revolving Commitments will be deemed an incurrence of Indebtedness on such date and will be deemed outstanding for purposes of calculating the Total Net
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Leverage Ratio, Secured Net Leverage Ratio, First Lien Net Leverage Ratio and the availability of any Baskets hereunder and (2) commencing on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of the Indebtedness thereunder (but without netting any cash proceeds thereof), such committed amount under such Designated Revolving Commitments may thereafter be borrowed (and reborrowed, if applicable), in whole or in part, from time to time, without further compliance with any Basket or financial ratio or test under this Agreement (including the Total Net Leverage Ratio, Secured Net Leverage Ratio or First Lien Net Leverage Ratio).
“Discharge” means, with respect to any Indebtedness, the repayment, prepayment, repurchase (including pursuant to an offer to purchase), redemption, defeasance or other discharge of such Indebtedness, in any such case in whole or in part.
“Discount Prepayment Accepting Lender” has the meaning assigned to such term in Section 2.05(1)(e)(B)(2).
“Discount Range” has the meaning assigned to such term in Section 2.05(1)(e)(C)(1).
“Discount Range Prepayment Amount” has the meaning assigned to such term in Section 2.05(1)(e)(C)(1).
“Discount Range Prepayment Notice” means a written notice of a Borrower Solicitation of Discount Range Prepayment Offers made pursuant to Section 2.05(1)(e)(C)(1) substantially in the form of Exhibit J.
“Discount Range Prepayment Offer” means the written offer by a Lender, substantially in the form of Exhibit K, submitted in response to an invitation to submit offers following the Auction Agent’s receipt of a Discount Range Prepayment Notice.
“Discount Range Prepayment Response Date” has the meaning assigned to such term in Section 2.05(1)(e)(C)(1).
“Discount Range Proration” has the meaning assigned to such term in Section 2.05(1)(e)(C)(3).
“Discounted Prepayment Determination Date” has the meaning assigned to such term in Section 2.05(1)(e)(D)(3).
“Discounted Prepayment Effective Date” means in the case of a Borrower Offer of Specified Discount Prepayment, Borrower Solicitation of Discount Range Prepayment Offer or Borrower Solicitation of Discounted Prepayment Offer, five (5) Business Days following the Specified Discount Prepayment Response Date, the Discount Range Prepayment Response Date or the Solicited Discounted Prepayment Response Date, as applicable, in accordance with Section 2.05(1)(e)(B),
Section 2.05(1)(e)(C) or Section 2.05(1)(e)(D), respectively, unless a shorter period is agreed to between the Borrower and the Auction Agent.
“Discounted Term Loan Prepayment” has the meaning assigned to such term in Section 2.05(1)(e)(A).
“Disinterested Director” means, with respect to any Affiliate Transaction, a member of the Board of Directors of the Borrower or any Parent Company thereof having no material direct or
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indirect financial interest in or with respect to such Affiliate Transaction. A member of the Board of Directors of the Borrower or any Parent Company thereof shall not be deemed to have such a financial interest by reason of such member’s holding Capital Stock of the Borrower or any options, warrants or other rights in respect of such Capital Stock.
“disposition” has the meaning set forth in the definition of “Asset Sale.”
“Disqualified Institution” means (1) those particular banks, financial institutions, other institutional lenders and other Persons that were identified in writing by the Borrower or the Investor to the Initial Lenders on or prior to the Effective Date (or, after the Effective Date, that are identified in writing by the Borrower or the Investor to, and with the consent (not to be unreasonably withheld, conditioned or delayed) of, the Administrative Agent), (2) any competitor of the Borrower or its Subsidiaries and their Affiliates that is identified in writing by or on behalf of the Borrower or the Investor to the Initial Lender on or prior to the Effective Date (which competitor list may be updated after the Effective Date upon written notice to the Administrative Agent (without retroactive effect)), (3) any competitor of the Investor that (a) is identified in writing by or on behalf of the Borrower or the Investor to the Administrative Agent after the Effective Date (without retroactive effect) and (b) has a debt platform (or an affiliated debt platform) that the Investor reasonably believes does not have sufficient customary barriers in place regarding not sharing information with Affiliates that are competitors of the Investor as of such date of designation pursuant to clause (3)(a) above (including, for each of the foregoing Persons described in this clause (3), their respective Affiliates (other than Affiliates that constitute bona fide diversified debt funds primarily investing in loans that represent in their respective marketing materials that they do not share information with their Affiliates that are competitors of the Investor), that are (x) reasonably identifiable as such on the basis of their name in public disclosures or otherwise commonly known by financial institutions that act as arrangers or agents in similar credit facilities or by investors in similar loans or otherwise identified in writing by the Borrower or the Investor to be an Affiliate or (y) otherwise identified in writing to the Administrative Agent to be an Affiliate) and (4) any Affiliate (other than Affiliates that constitute bona fide diversified debt funds primarily investing in loans) of the Persons described in the preceding clauses (1) or (2) that are either (i) reasonably identifiable as such on the basis of their name in public disclosures or otherwise commonly known by financial institutions that act as arrangers or agents in similar credit facilities or by investors in similar loans or otherwise identified in writing by the Borrower or the Investor to be an Affiliate or (ii) are identified as such in writing by or on behalf of the Borrower or the Investor; provided that any Person that is a Lender or Participant and subsequently becomes a Disqualified Institution (but was not a Disqualified Institution at the time it became a Lender or a Participant, as applicable) shall be deemed to not be a Disqualified Institution hereunder (in the case of any such Participant that is not a Lender, solely with respect to the participations held by such Participant). The identity of Disqualified Institutions may be communicated by the Administrative Agent to a Lender upon request, but will not be otherwise posted or distributed to any Person.
“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than (1) for any Qualified Equity Interests or (2) solely as a result of a change of control, asset sale, casualty, condemnation or eminent domain) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than (1) for any Qualified Equity Interests or (2) solely as a result of a change of control, asset sale, casualty, condemnation or eminent domain), in whole or in part, in each case prior to the date 91 days after the earlier of the then Latest Maturity Date or the date the Loans are no longer outstanding and the Commitments have been terminated; provided that if such Capital Stock is issued pursuant to any plan for the benefit of future, current or former employees, directors, officers, members of management, consultants, Related Professionals or independent
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contractors (or their respective Controlled Investment Affiliates or Immediate Family Members or any permitted transferees thereof) of the Borrower or its Subsidiaries, any Parent Company or any Affiliated Practice or by any such plan to such employees, directors, officers, members of management, consultants, Related Professionals or independent contractors (or their respective Controlled Investment Affiliates or Immediate Family Members or any permitted transferees thereof), such Capital Stock will not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s, consultant’s, Related Professional’s or independent contractor’s termination, death or disability; provided further any Capital Stock held by any future, current or former employee, director, officer, member of management, consultant, Related Professional or independent contractor (or their respective Controlled Investment Affiliates or Immediate Family Members or any permitted transferees thereof) of the Borrower, any of its Subsidiaries, any Parent Company, any Affiliated Practice, or any other Person in which the Borrower or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors (or the compensation committee thereof), in each case pursuant to any equity subscription or equity holders’ agreement, management equity plan or stock option plan or any other management or employee benefit plan or agreement will not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or any Subsidiary in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s, consultant’s, Related Professional’s or independent contractor’s termination, death or disability. For the purposes hereof, the aggregate principal amount of Disqualified Stock will be deemed to be equal to the greater of its voluntary or involuntary liquidation preference and maximum fixed repurchase price, determined on a consolidated basis in accordance with GAAP, and the “maximum fixed repurchase price” of any Disqualified Stock that does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which the Consolidated Total Debt, Consolidated Secured Debt or Consolidated First Lien Secured Debt, as applicable, will be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value shall be determined in good faith by the Borrower.
“Distressed Agent” shall have the meaning provided in the definition of the term “Agent-Related Distress Event.”
“Distressed Person” shall have the meaning provided in the definition of the term “Lender-Related Distress Event.”
“Dollar” and “$” mean lawful money of the United States.
“Domestic Subsidiary” means any direct or indirect Subsidiary of the Borrower that is organized under the Laws of the United States, any state thereof or the District of Columbia.
“ECF Payment Amount” has the meaning specified in Section 2.05(2)(a).
“ECF Payment Deductions” has the meaning specified in Section 2.05(2)(a).
“ECF Percentage” has the meaning specified in Section 2.05(2)(a).
“ECF Threshold” has the meaning specified in Section 2.05(2)(a).
“EEA Financial Institution” means (1) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution
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Authority, (2) any entity established in an EEA Member Country which is a parent of an institution described in clause (1) of this definition or (3) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (1) or (2) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the first date on which all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01, which date was May 4, 2022.
“Eligible Assignee” has the meaning specified in Section 10.07(1).
“EMU” means the economic and monetary union as contemplated in the Treaty on European Union.
“Environment” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and sub-surface strata, sediments and natural resources such as wetlands, flora and fauna.
“Environmental Laws” means any and all Laws relating to pollution or the protection of the Environment or, to the extent relating to exposure to Hazardous Materials, worker health and safety.
“Environmental Liability” means any liability (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities) of any Loan Party or any of its Subsidiaries resulting from or based upon (1) violation of or non-compliance with any Environmental Law, (2) the generation, use, handling, management, transportation, storage, treatment or disposal of any Hazardous Materials, (3) exposure to any Hazardous Materials, (4) the Release or threatened Release of any Hazardous Materials or (5) any contract or other written agreement to the extent liability is assumed or imposed with respect to any of the foregoing.
“Equal Priority Intercreditor Agreement” means, to the extent executed in connection with the incurrence of Indebtedness secured by Liens on the Collateral which are intended to rank equal in priority to the Liens on the Collateral securing the First Lien Obligations under this Agreement (but without regard to the control of remedies) (the “Pari Passu Indebtedness”), at the option of the Borrower, the Administrative Agent and the Specified Representative acting together in good faith, either (1) an intercreditor agreement substantially in the form of Exhibit G-1, together with any changes thereto which are reasonably acceptable to the Borrower, the Administrative Agent and the Specified Representative or (2) a customary intercreditor agreement in form and substance reasonably acceptable to the Borrower, the Administrative Agent and the Specified Representative, in each case, which agreement shall provide that (x) the Liens on the Collateral securing such Indebtedness shall rank equal in priority to the Liens on the Collateral securing the First Lien Obligations under this Agreement (but without regard to the control of remedies) and (y) contain provisions setting forth super-priority nature of the Revolving Loans and other Revolving Commitment on terms reasonably satisfactory to the Revolver Agent.
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“Equity Interests” means, with respect to any Person, the Capital Stock of such Person and all warrants, options or other rights to acquire Capital Stock of such Person, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock of such Person.
“Equity Offering” means any public or private sale of common Equity Interest or Preferred Stock of the Borrower or any Parent Company (excluding Disqualified Stock), other than:
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that together with Holdings or the Borrower is treated as a single employer within the meaning of Section 414(b) or (c) of the Code (and, solely with respect to Section 412 of the Code, within the meaning of Section 414(m) or (o) of the Code) or Section 4001 of ERISA.
“ERISA Event” means (1) a Reportable Event with respect to a Pension Plan; (2) a withdrawal by the Borrower, Holdings or any of their respective ERISA Affiliates from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (3) a complete or partial withdrawal by the Borrower, Holdings or any of their respective ERISA Affiliates from a Multiemployer Plan or written notification is provided to the Borrower, Holdings or any of their respective ERISA Affiliates concerning the imposition of withdrawal liability; (4) written notification that a Multiemployer Plan is “insolvent” (within the meaning of Section 4245 of ERISA) or has been determined to be in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (5) the filing under Section 4041(c) of ERISA of a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement in writing of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (6) the imposition of any liability under Title IV of ERISA, other than for the payment of PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower, Holdings, or any of their respective ERISA Affiliates; (7) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (8) a failure to satisfy the minimum funding standard (within the meaning of Section 302 of ERISA or Section 412 of the Code) with respect to a Pension Plan, whether or not waived; (9) the application for a minimum funding waiver under Section 302(c) of ERISA with respect to a Pension Plan; (10) the imposition of a lien under Section 303(k) of ERISA or Section 430(k) of the Code with respect to any Pension Plan; (11) a determination that any Pension Plan is in “at risk” status (within the meaning of Section 303 of ERISA or Section 430 of the Code); (12) the occurrence of an event, transaction or failure that results in or would reasonably be expected to result in liability to the Borrower or Holdings under Title I of ERISA or a tax under any of Sections 4971 through 5000 of the Code; or (13) disqualification by the Internal Revenue Service of a Plan that is intended to qualify under Section 401(a) of the Code, or the imposition of a sanction in lieu of disqualification.
“Escrow” has the meaning specified in the definition of “Indebtedness.”
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“Escrowed Proceeds” means the proceeds from the offering of any debt securities or other Indebtedness paid into an escrow account with an independent escrow agent on the date of the applicable offering or incurrence pursuant to escrow arrangements that permit the release of amounts on deposit in such escrow account upon satisfaction of certain conditions or the occurrence of certain events. The term “Escrowed Proceeds” shall include any interest earned on the amounts held in escrow.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Euro” or “euro” means the single currency of participating member states of the EMU.
“Event of Default” has the meaning specified in Section 8.01.
“Excess Cash Flow” means, for any period, an amount equal to the excess of:
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ordinary course by the Borrower or any Restricted Subsidiary during such period or the application of recapitalization or purchase accounting),
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fiscal quarters is less than the Contract Consideration and Planned Expenditures (excluding in each case any amount financed with the proceeds of long-term Indebtedness (other than revolving Indebtedness) of the Borrower or any Restricted Subsidiary (unless such Indebtedness has been repaid prior to the date that the Excess Cash Flow payment for such period is due (except to the extent such repayment was financed with the proceeds of long-term Indebtedness (other than revolving Indebtedness))), the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive fiscal quarters,
Notwithstanding anything else provided in this Agreement, (x) the amounts deducted under clause (2) above shall in no event be duplicative of amounts deducted under clauses (i) through (v) of Section 2.05(2)(a) and (y) to the extent an amount is eligible to be deducted under either clause (2) above or clauses (i) through (v) of Section 2.05(2)(a), such amounts shall be deemed to have been deducted under clauses (i) through (v) of Section 2.05(2)(a) (and not, for the avoidance of doubt, clause
(2) above).
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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Excluded Assets” means (1) (a) any fee-owned real property with a fair market value (as reasonably estimated by the Borrower in good faith) not to exceed $10,000,000, (b) any leasehold interest in real property and (c) any fee-owned real property (whether already mortgaged, or required or intended to be mortgaged, at any time of determination) located in a flood hazard area or such property or mortgage thereon which would be subject to any flood insurance due diligence (other than in respect of initial flood hazard determinations as to whether any property is located in a flood hazard area or as otherwise permitted under this clause (c) with respect to flood insurance), flood insurance requirements or compliance with any Flood Insurance Laws (it being agreed that if it is subsequently determined that any such improved real property subject to, or otherwise required or intended to be subject to, a mortgage is located in a flood hazard area, such property shall be deemed to be an Excluded Asset until a determination is made that such property is not located in a flood hazard area and does not require flood insurance, and (ii) if there is an existing mortgage on such property, such mortgage shall be released if located in a special flood hazard area and would require flood insurance or if it cannot be determined whether such fee owned real property is located in a special flood hazard area or would require flood insurance if the time or information necessary to make such determination would (as determined by the Borrower in good faith) delay or impair the intended date of funding any Loan or effectiveness of any amendment or supplement under this Agreement), (2) motor vehicles, airplanes and other assets subject to certificates of title, except to the extent a security interest therein can be perfected by the filing of a UCC financing statement, (3) any commercial tort claim that is not expected to result in a judgment or settlement payment in favor of a Loan Party in excess of $10,000,000 (as determined by the Borrower in good faith) and commercial tort claims for which no compliant or counterclaim has been filed in a court of competent jurisdiction, (4) any governmental or regulatory licenses, authorizations, certificates, charters, franchises, approvals and consents (whether Federal, State, or otherwise) to the extent a security interest therein is prohibited or restricted thereby or requires any consent, acknowledgment or authorization from a Governmental Authority not obtained (without any requirement to obtain such consent, acknowledgment or authorization) other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition, (5) assets to the extent the pledge thereof or grant of security interests therein (a) is prohibited or restricted by any applicable Law, rule or regulation or would require any consent, approval or authorization of any governmental or regulatory authority not obtained (without any requirement to obtain such any consent, approval or authorization) after giving effect to the applicable anti-assignment provisions of the UCC and other applicable Law (other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition), (b) would cause the destruction, invalidation or abandonment of such asset under applicable Law (solely with respect to any intellectual property) or (c) is prohibited by any contract or would require any consent, approval, license or other authorization of any third party (other than Holdings or its Subsidiaries) (provided that such requirement existed on the Effective Date or at the time of the acquisition of such asset, as applicable, and was not incurred in contemplation thereof (other than in the case of capital leases and purchase money financings)) or governmental or regulatory authority not obtained (without any requirement to obtain such consent, approval, license or other authorization), other than to the extent such prohibition or restriction is ineffective under the UCC and other applicable Law, (6) margin stock and Equity Interests in any Person that is not the Borrower or a wholly owned Material Subsidiary of the Borrower that is a Restricted Subsidiary, (7) Equity Interests in Immaterial Subsidiaries and Excluded Subsidiaries other than Subsidiaries that are (x) Excluded Subsidiaries solely pursuant to clause (2) or (3) of the definition of “Excluded Subsidiaries” and (y) directly owned by a Loan Party (provided that if a pledge of the Equity Interests in any Foreign Subsidiary or Foreign Subsidiary Holdco is required pursuant to this Agreement, the pledge of the Equity Interests of such Subsidiary shall be limited to no more than 65% of the total issued and outstanding voting Equity Interests (and 100% of the issued and outstanding non-voting
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Equity Interests) of such first tier Foreign Subsidiary or Foreign Subsidiary Holdco, as applicable), (8) any lease, license, sublicense or agreement (not otherwise subject to clause (5) above) or any property that is subject to a capital lease, purchase money security interest or similar arrangement, in each case permitted by this Agreement, to the extent that a grant of a security interest therein (a) would violate or invalidate such lease, license, sublicense or agreement or purchase money security interest or similar arrangement or create a right of termination in favor of any other party thereto (other than Holdings or any of its Subsidiaries) after giving effect to the applicable anti-assignment provisions of the UCC and other applicable Law (other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition) or (b) would require governmental or regulatory approval, consent or authorization not obtained (without any requirement to obtain such approval, consent or authorization), other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition, (9)(x) cash and Cash Equivalents, deposit, securities, commodities and other accounts, securities entitlements and related assets, except, in each case, to the extent constituting identifiable proceeds of Collateral a security interest in which is perfected by the filing of an “all assets” UCC financing statement by the Administrative Agent or automatically without any further action or filing by the Administrative Agent and (y) any deposit account maintained and used exclusively as a payroll account, withholding tax account, or fiduciary or escrow account that holds funds solely for the benefit of third parties (other than the Borrower or any of its Subsidiaries that is a Guarantor), (10) letter of credit rights, except to the extent consisting of supporting obligations for other Collateral, a security interest in which can be perfected by the filing of an “all assets” UCC financing statement, (11) any intent-to-use trademark applications filed in the United States Patent and Trademark Office, pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, prior to the accepted filing of a “Statement of Use” and issuance of a “Certificate of Registration” pursuant to Section 1(d) of the Lanham Act or an accepted filing of an “Amendment to Allege Use” whereby such intent-to-use trademark application is converted to a “use in commerce” application pursuant to Section 1(c) of the Lanham Act, (12) assets where the burden or cost (including any adverse tax consequences to the Borrower, any Parent Company or any Subsidiary that are not de minimis) of obtaining a security interest therein or perfection thereof exceeds the practical benefit to the Lenders afforded thereby as reasonably determined between the Borrower and the Administrative Agent,
(13) any assets to the extent a security interest in such assets or perfection thereof would result in adverse tax consequences to the Borrower, any Parent Company or any Subsidiary (that is not de minimis) as determined by the Borrower in good faith, in consultation with the Administrative Agent and (14) any assets located in or governed by any non-U.S. jurisdiction law or regulation (other than (a) Equity Interests and intercompany debt of Foreign Subsidiaries otherwise required to be pledged pursuant to the Collateral Documents and (b) assets that can be perfected by the filing of a UCC financing statement), including any intellectual property located in a non-U.S. jurisdiction, in each case of the foregoing clauses
“Excluded Contribution” means net cash proceeds or the fair market value of marketable securities or the fair market value of Qualified Proceeds received by the Borrower from:
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in each case, designated as Excluded Contributions pursuant to an Officer’s Certificate and that are excluded from the calculation set forth in clause (b) of Section 7.05(1); provided that Excluded Contributions shall not include Cure Amounts.
“Excluded Information” has the meaning specified in the definition of “Big Boy
Letter.”
“Excluded Proceeds” means, with respect to any Asset Sale or Casualty Event, the sum of, (1) any Net Proceeds therefrom that constitute Declined Proceeds and (2) any Net Proceeds therefrom that or otherwise are waived by the Required Facility Lenders from the requirement to be applied to prepay the applicable Term Loans pursuant to Section 2.05(2)(b).
“Excluded Subsidiaries” means all of the following and “Excluded Subsidiary” means any of them (in each case, subject to the Excluded Subsidiary Joinder Exception):
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“Excluded Subsidiary Joinder Exception” has the meaning set forth in the definition of “Collateral and Guarantee Requirement.”
“Excluded Swap Obligation” means, with respect to any Loan Party, (1) any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act (each such obligation, a “Swap Obligation”), if, and to the extent that, all or a portion of the guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 3.02 of the Guaranty and any other “keepwell, support or other agreement” for the benefit of such Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act) at the time the guarantee of such Loan Party, or a grant by such Loan Party of a security interest, becomes effective with respect to such Swap Obligation or (b) in the case of a Swap Obligation that is subject to a clearing requirement pursuant to section 2(h) of the Commodity Exchange Act, because such Loan Party is a “financial entity,” as defined in section 2(h)(7)(C) of the Commodity Exchange Act, at the time the guarantee of (or grant of such security interest by, as applicable) such Loan Party becomes or would become effective with respect to such Swap Obligation or (2) any other Swap Obligation designated as an “Excluded Swap Obligation” of such Loan Party as specified in any agreement between the relevant Loan Parties and hedge counterparty applicable to such Swap Obligations. If a Swap Obligation arises under a Master Agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest becomes excluded in accordance with the first sentence of this definition.
“Excluded Taxes” means, with respect to each Agent and each Lender,
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Law in effect on the date such Lender (a) acquires such interest in the applicable Commitment or, if such Lender did not fund the applicable Loan pursuant to a prior Commitment, on the date such Lender acquires the applicable interest in such Loan (or where the Lender is a partnership for
U.S. federal income Tax purposes, pursuant to a Law in effect on the later of the date on which such Lender acquires such interest or the date on which the affected partner becomes a partner of such Lender) or (b) designates a new Lending Office except, in the case of a Lender that designates a new Lending Office or is an assignee, to the extent that such Lender or partner (or its assignor, if any) was entitled, immediately prior to the time of designation of a new Lending Office (or assignment), to receive additional amounts from a Loan Party with respect to such U.S. federal Tax pursuant to Section 3.01,
“Exigent Circumstances” means (i) an event or circumstance that materially and imminently threatens the ability of any Agent or any Lender to realize upon all or any material portion of the Collateral, such as, without limitation, fraud, fraudulent or intentional removal, concealment, or abscondment thereof, destruction or material waste thereof (other than to the extent covered by insurance), material breach of the covenant set forth in Sections 6.15, Section 7.02 and Section 7.05, the occurrence of a material adverse change in, or a material adverse effect upon, the operations, business, Properties, condition (financial or otherwise) or prospects of any Loan Party or the Loan Parties and the Restricted Subsidiaries taken as a whole, (ii) an exercise by another creditor of enforcement rights or remedies with respect to all or a material portion of the Collateral, or (iii) an event or circumstance that any Agent reasonably believes renders necessary or appropriate action or exercise or remedies to prevent or mitigate the destruction of, physical harm to, impairment of or decrease in value of a material portion of the Collateral or the rights and interests of the Secured Parties (including without limitation any loss of priority of the Liens securing the Obligations).
“Existing Credit Agreement” means that certain Credit Agreement, dated as of May 14, 2020, among the Borrower, Holdings, Capital One, National Association, as administrative agent and as collateral agent, HPS Investment Partners, LLC, as AAL Last Out Representative (as defined therein) and the lenders and other parties from time to time party thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time on or prior to the date hereof.
“Existing Revolving Class” has the meaning specified in Section 2.16(2).
“Existing Term Loan Class” has the meaning specified in Section 2.16(1).
“Expiring Credit Commitment” has the meaning specified in Section 2.04(7).
“Extended Revolving Commitments” has the meaning specified in Section 2.16(2).
“Extended Term Loans” has the meaning specified in Section 2.16(1).
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“Extending Lender” means an Extending Revolving Lender or an Extending Term Lender, as the case may be.
“Extending Revolving Lender” has the meaning specified in Section 2.16(3).
“Extending Term Lender” has the meaning specified in Section 2.16(3).
“Extension” means the establishment of an Extension Series by amending a Loan pursuant to Section 2.16 and the applicable Extension Amendment.
“Extension Amendment” has the meaning specified in Section 2.16(4).
“Extension Election” has the meaning specified in Section 2.16(3).
“Extension Minimum Condition” means a condition to consummating any Extension that a minimum amount (to be determined and specified in the relevant Extension Request, in the Borrower’s sole discretion) of any or all applicable Classes be submitted for Extension.
“Extension Request” means any Term Loan Extension Request or any Revolving Extension Request, as the case may be.
“Extension Series” means any Term Loan Extension Series or a Revolving Extension Series, as the case may be.
“Facilities” means the Closing Date Term Loans, the Revolving Facility, the Closing Date Revolving Facility, the Delayed Draw Term Loan Facility, a given Extension Series of Extended Revolving Commitments, a given Class of Other Term Loans, a given Extension Series of Extended Term Loans, a given Class of Incremental Term Loans, a given Class of Incremental Revolving Commitments, any Other Revolving Loan (or Commitment) or a given Class of Replacement Loans, as the context may require, and “Facility” means any of them.
“fair market value” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Borrower in good faith.
“FATCA” means Sections 1471 through 1474 of the Code as in effect on the date hereof or any amended or successor version thereof that is substantively comparable and not materially more onerous to comply with (and, in each case, any current or future regulations promulgated thereunder or official interpretations thereof), any applicable intergovernmental agreement entered into in respect thereof, and any provision of law or administrative guidance implementing or interpreting such provisions, including any agreements entered into pursuant to any such intergovernmental agreement or Section 1471(b)(1) of the Code as of the date hereof (or any amended or successor version described above).
“FCPA” has the meaning specified in Section 5.01.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that
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such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) of the quotations for the day for such transactions received by the Administrative Agent from three depository institutions of recognized standing selected by it. For the avoidance of doubt, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.
“Fee Letter” means that certain fee letter, dated as of the Effective Date, between the Borrower, HPS and Capital One.
“Financial Covenant” means the covenant specified in Section 7.10(1).
“Financial Covenant Event of Default” has the meaning specified in Section 8.01(2).
“Financial Incurrence Test” has the meaning specified in Section 1.07(8).
“Financial Officer” means, with respect to a Person, the chief financial officer, accounting officer, treasurer, controller or other senior financial or accounting officer of such Person, as appropriate.
“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of
1989.
“First Lien Net Leverage Ratio” means, with respect to any Test Period, the ratio of (1) Consolidated First Lien Secured Debt outstanding as of the last day of such Test Period, minus the Unrestricted Cash Amount on such last day to (2) Consolidated EBITDA of the Borrower for such Test Period, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with Section 1.07.
“First Lien Obligations” means the Obligations, the Permitted Incremental Equivalent Debt and the Credit Agreement Refinancing Indebtedness, in each case, that are, or are purported to be, secured by the Collateral on an equal priority basis (but without regard to the control of remedies) with Liens on the Collateral securing the Closing Date Term Loans. For the avoidance of doubt, “First Lien Obligations” shall include the Closing Date Term Loans.
“Fixed Basket” has the meaning specified in Section 1.07(8).
“Floor” means (a) with respect to the Closing Date Term Loans (including the Delayed Draw Term Loans), 0.75% per annum and (b) with respect to Revolving Loans or any other Facility (other than as set forth in clause (a) above), 0.00% per annum.
“floor” means, with respect to any reference rate of interest, any fixed minimum amount specified for such rate.
“Foreign Asset Sale” has the meaning specified in Section 2.05(2)(g).
“Foreign Casualty Event” has the meaning specified in Section 2.05(2)(g).
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“Foreign Lender” means a Lender that is not a United States person within the meaning of Section 7701(a)(30) of the Code.
“Foreign Plan” means any employee benefit plan, program or agreement maintained or contributed to by, or entered into with, the Borrower or any Subsidiary of the Borrower with respect to employees employed outside the United States (other than benefit plans, programs or agreements that are mandated by applicable Laws).
“Foreign Subsidiary” means any direct or indirect Restricted Subsidiary that is not a Domestic Subsidiary.
“Foreign Subsidiary Holdco” means a Subsidiary substantially all of whose assets consists (directly or indirectly) of the Capital Stock and/or indebtedness (and related or similar assets) of one or more (1) Foreign Subsidiaries or (2) Foreign Subsidiary Holdcos.
“Free and Clear Incremental Amount” has the meaning specified in Section
2.14(4)(c)(i).
“Fronting Exposure” means, at any time there is a Defaulting Lender, (1) with respect to an Issuing Bank, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations, other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (2) with respect to any Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans, other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funded Debt” means all Indebtedness of the Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, as in effect from time to time. The Borrower will give notice of any such election made in accordance with this definition to the Administrative Agent. Notwithstanding any other provision contained herein, (1) the amount of any Indebtedness under GAAP with respect to Capitalized Lease Obligations and Attributable Indebtedness shall be determined in accordance with Section 1.03 and
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case, would affect the computation of any financial ratio or financial requirement, or compliance with any covenant, set forth in any Loan Document (including, but not limited to, the impact of Accounting Standards Update 2016-2, Revenue from Contracts with Customers (Topic 606) or similar revenue recognition policies promulgated after the Effective Date), and the Borrower shall so request (regardless of whether any such request is given before or after such change), the Administrative Agent, the Lenders and the Borrower will negotiate in good faith to amend (subject to the approval of the Required Lenders) such ratio, requirement or covenant to preserve the original intent thereof in light of such change in GAAP; provided that until so amended, (a) such ratio, requirement or covenant shall continue to be computed in accordance with GAAP without giving effect to such change therein and (b) if reasonably requested by the Administrative Agent with respect to periods ending prior to the date that is one year after the effectiveness of such change, the Borrower shall provide to the Administrative Agent (for distribution to the Lenders), together with any financial statements to be delivered pursuant to Section 6.01, a summary reconciliation between calculations of any such ratios or requirements required to be included in the corresponding Compliance Certificate to be delivered pursuant to Section 6.02(4) made before and after giving effect to such change in GAAP. For the avoidance of doubt, subject to the requirements of the foregoing clause (b), the operation of this paragraph shall otherwise have no effect with respect to any financial statements required to be delivered pursuant to Section 6.01 unless the Borrower otherwise elects.
“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority thereof exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
“Governmental Programs” means (i) the Medicare and Medicaid Programs, and (ii) any other Federal health care program, as defined in 42 U.S.C. § 1320a-7b(f).
“Granting Lender” has the meaning specified in Section 10.07(7).
“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business or consistent with industry practice), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
“Guarantee” means, as to any Person, without duplication, (1) any obligation, contingent or otherwise, of such Person guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation or (d) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (2) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any
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such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business or consistent with industry practice, or customary and reasonable indemnity obligations in effect on the Effective Date or entered into in connection with the Transactions or any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantor Release Election” has the meaning specified in the definition of “Collateral and Guarantee Requirement.”
“Guarantors” has the meaning specified in clause (2) of the definition of “Collateral and Guarantee Requirement.” For avoidance of doubt, the Borrower may, in its sole discretion, cause any Parent Company or Restricted Subsidiary that is not required to be a Guarantor to Guarantee the Obligations by causing such Parent Company or Restricted Subsidiary to execute a joinder to the Guaranty (substantially in the form provided therein or as the Administrative Agent, the Borrower and such Guarantor may otherwise agree), and any such Parent Company or Restricted Subsidiary shall be a Guarantor hereunder for all purposes; provided that the Administrative Agent shall have received at least two (2) Business Days prior to the effectiveness of such joinder (or such later date as reasonably agreed by the Administrative Agent) all documentation and other information in respect of such Guarantor required under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act. For the avoidance of doubt, no Affiliated Practice shall be a Guarantor.
“Guaranty” means (1) the Guaranty substantially in the form of Exhibit E made by Holdings and each Subsidiary Guarantor, (2) each other guaranty and guaranty supplement delivered pursuant to Section 6.11 and (3) each other guaranty and guaranty supplement delivered by any Parent Company or Restricted Subsidiary pursuant to the second sentence of the definition of “Guarantor.”
“Hazardous Materials” means substances, wastes, pollutants, contaminants and chemicals, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas and infectious or medical wastes, to the extent any of the foregoing are regulated pursuant to, or can form the basis for liability under, any Environmental Law due to their dangerous or deleterious properties or characteristics.
“Health Care Laws” means, collectively, any and all Laws, relating to any of the following: (a) fraud and abuse (including the following statutes, as amended, modified or supplemented from time to time and any successor statutes thereto and regulations promulgated from time to time thereunder: the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn and § 1395(q)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the federal health care program exclusion provisions (42 U.S.C. § 1320a-7), the Eliminating Kickbacks in Recovery Act (18
U.S.C. §220) and the Civil Monetary Penalties Act (42 U.S.C. § 1320a-7a)); (b) the billing, coding, documentation or submission of claims or collection of accounts receivable or reporting and refunding of overpayments; (c) Medicare and Medicaid program requirements for participation and payment; (d) the restrictions on the corporate practice of medicine and other applicable health care professions; (e) the privacy and security of health care information (including HIPAA); (f) healthcare facility and professional fee-splitting prohibitions; (g) federal and state laws related to facility licensure; and (h) state laws related to certificate of need requirements.
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“Hedge Agreement” means (1) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement and
“Hedge Bank” means (1) any Person set forth on Schedule 1.01(4), (2) any Person party to a Secured Hedge Agreement that is an Agent, a Lender, an Arranger or an Affiliate of any of the foregoing on the Effective Date or at the time it enters into such Secured Hedge Agreement, in its capacity as a party thereto, whether or not such Person subsequently ceases to be an Agent, a Lender, an Arranger or an Affiliate of any of the foregoing or (3) any Person from time to time approved by the Administrative Agent (such approval not to be unreasonably withheld, delayed or conditioned) and specifically designated in writing as a “Hedge Bank” by the Borrower to the Administrative Agent.
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under any Hedge Agreement. For the avoidance of doubt, any Permitted Convertible Indebtedness Call Transaction will not constitute Hedging Obligations.
“HIPAA” means the (a) Health Insurance Portability and Accountability Act of 1996, (b) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009) and (c) any state and local Laws regulating the privacy and/or security of individually identifiable health information, including state laws providing for notification of breach of privacy or security of individually identifiable health information, in each case, as amended, modified or supplemented from time to time, and together with all successor statutes thereto and all rules and regulations promulgated from time to time thereunder.
“Historical Financial Statements” means the audited consolidated balance sheets and related consolidated statements of income, changes in redeemable units and stockholders’/members’ equity and cash flows of LifeStance Health Group, Inc. and its Subsidiaries for the fiscal year ended December 31, 2021.
“Holdings” has the meaning specified in the introductory paragraph to this Agreement. “Honor Date” has the meaning specified in Section 2.03(3)(a).
“HPS” means HPS Investment Partners, LLC.
“Identified Participating Lenders” has the meaning specified in Section 2.05(1)(e)(C)(3).
“Identified Qualifying Lenders” has the meaning specified in Section 2.05(1)(e)(D)(3).
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“Immaterial Subsidiary” means any Restricted Subsidiary that is not a Material
Subsidiary.
“Immediate Family Members” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including, in each case, adoptive relationships) and any trust, partnership or other bona fide estate- planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.
“Incremental Amendment” has the meaning specified in Section 2.14(6).
“Incremental Amounts” has the meaning specified in clause (a) of the definition of “Refinancing Indebtedness.”
“Incremental Commitments” has the meaning specified in Section 2.14(1).
“Incremental Delayed Draw Term Loan Commitments” has the meaning specified in
Section 2.14(1).
“Incremental Delayed Draw Term Loan” has the meaning specified in Section 2.14(2).
“Incremental Delayed Draw Term Loan Funding Date” has the meaning specified in
Section 2.14(2).
“Incremental Facility Closing Date” has the meaning specified in Section 2.14(4).
“Incremental Lenders” has the meaning specified in Section 2.14(3).
“Incremental Loan” has the meaning specified in Section 2.14(2).
“Incremental Loan Request” has the meaning specified in Section 2.14(1).
“Incremental Ratio Basket” has the meaning specified in Section 2.14(4)(c)(iii).
“Incremental Revolving Commitments” has the meaning specified in Section 2.14(1).
“Incremental Revolving Facility” has the meaning specified in Section 2.14(1).
“Incremental Revolving Lender” has the meaning specified in Section 2.14(3).
“Incremental Revolving Loan” has the meaning specified in Section 2.14(2).
“Incremental Term Commitments” has the meaning specified in Section 2.14(1).
“Incremental Term Lender” has the meaning specified in Section 2.14(3).
“Incremental Term Loan” has the meaning specified in Section 2.14(2).
“incur” and “incurrence” have the meanings specified in Section 7.02(1)(a).
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“Indebtedness” means, with respect to any Person, without duplication:
if and to the extent that any of the foregoing Indebtedness (other than obligations in respect of letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that Indebtedness of any Parent Company appearing upon the balance sheet of Holdings or the Borrower, as applicable, solely by reason of push-down accounting under GAAP will be excluded;
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provided further that (x) Indebtedness will be calculated without giving effect to the effects of Accounting Standards Codification Topic No. 815, Derivatives and Hedging, and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Indebtedness and (y) for all purposes of the Loan Documents, the Indebtedness of any Person shall not include, with respect to any Non-Wholly Owned Subsidiary, such portion of the Indebtedness (or guarantee obligations in respect of obligations) of such Non-Wholly Owned Subsidiary that corresponds to the equity interest share of Persons other than the Borrower or its Restricted Subsidiaries in such Non-Wholly Owned Subsidiary.
For the avoidance of doubt, Indebtedness will be deemed to not include obligations (“Escrowed Obligations”) incurred in advance of, and the proceeds of which are to be applied in connection with, the consummation of a transaction (including any repayment, prepayment or redemption as to which a notice thereof has been delivered to the applicable holders thereof), solely to the extent that the proceeds thereof are and continue to be held in an escrow, trust, collateral or similar account or arrangement (collectively, an “Escrow”) and are not otherwise made available for any other purpose and are used for such purpose (it being understood that in any event, any such proceeds held in such Escrow shall be deemed not to constitute part of the Unrestricted Cash Amount).
“Indemnified Liabilities” has the meaning specified in Section 10.05.
“Indemnitees” has the meaning specified in Section 10.05.
“Independent Assets or Operations” means, with respect to any Parent Company, that the Parent Company’s total assets, revenues, income from continuing operations before income taxes and cash flows from operating activities (excluding in each case amounts related to its investment in the Borrower and the Subsidiaries), determined in accordance with GAAP and as shown on the most recent
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balance sheet of such Parent Company, is more than 5.0% of such Parent Company’s corresponding consolidated amount.
“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant of nationally recognized standing that, in the good faith judgment of the Borrower, is qualified to perform the task for which it has been engaged.
“Information” has the meaning specified in Section 10.09.
“Initial Default” has the meaning specified in Section 1.02(9).
“Initial Lender” means Capital One, HPS and ULTra.
“Intellectual Property Security Agreements” has the meaning specified in the Security
Agreement.
“Intercompany Note” means the Intercompany Note, dated as of the Effective Date, substantially in the form of Exhibit Q executed by the Borrower and each Restricted Subsidiary party thereto.
“Intercreditor Agreement” means, as applicable, any Junior Priority Intercreditor Agreement and any Equal Priority Intercreditor Agreement.
“Interest Payment Date” means, (1) as to any Loan of any Class other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the applicable Maturity Date of the Loans of such Class; provided that if any Interest Period for a Term Benchmark Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (2) as to any Base Rate Loan of any Class, the last Business Day of each March, June, September and December and the applicable Maturity Date of the Loans of such Class.
“Interest Period” means, as to each Term Benchmark Rate Loan, the period commencing on the Business Day such Term Benchmark Rate Loan is disbursed or converted to or continued as a Term Benchmark Rate Loan and ending on the date one, three or six months thereafter (or such other period as may be consented to by each applicable Lender and the Applicable Agent), as selected by the Borrower in its Committed Loan Notice; provided that:
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aggregate principal amount of such Loan represented by Base Rate Loans or by SOFR Loans having Interest Periods that will expire on or before such date, if any, is equal to or in excess of the amount of such principal payment.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency selected by the Borrower.
“Investment Grade Securities” means:
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, credit card and debit card receivables, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, members of management, consultants and independent contractors, in each case made in the ordinary course of business or consistent with industry practice), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person or any transaction that results in a Person becoming an Affiliated Practice. For purposes of the definitions of “Permitted Investments” and “Unrestricted Subsidiary” and Section 7.05,
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The amount of any Investment outstanding at any time will be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Borrower or a Restricted Subsidiary in respect of such Investment. An Investment will be deemed to have been made at the time of making any such loans, advance or capital contribution, purchase or other acquisition for consideration of Indebtedness, Equity Interests or other securities.
“Investor” means TPG Capital, L.P. and any of its Affiliates, limited partners and funds or partnerships managed or advised by its or any of its Affiliates or limited partners, in each case, not including any portfolio company of any of the foregoing.
“IP Rights” has the meaning specified in Section 5.15.
“IRS” means the Internal Revenue Service of the United States.
“ISDA CDS Definitions” has the meaning specified in Section 10.01(1).
“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the International Chamber of Commerce publication no. 950 (or such later version thereof as may be in effect at the time of issuance).
“Issuing Bank” means (a) Capital One or its Affiliates or designees, together with its permitted successors and assigns, (b) one or more banks, trust companies or other Persons in each case expressly identified by the Revolver Agent from time to time and reasonably acceptable to the Borrower and (c) any other Revolving Lender that becomes an Issuing Bank in accordance with Section 2.03(11); provided no Issuing Bank shall be required to issue either (x) letters of guarantee or bankers acceptances or (y) Letters of Credit other than standby letters of credit, in each case without its consent. Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates or designees of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate or designee with respect to Letters of Credit issued by such Affiliate or designee. Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by any Affiliate of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.03 with respect to such Letters of Credit).
“Issuing Bank Document” means with respect to any Letter of Credit, the L/C Application, and any other document, agreement and instrument entered into by any Issuing Bank and the Borrower (or any of its respective Subsidiaries) or in favor of such Issuing Bank and relating to such Letter of Credit in the case of Letters of Credit (including, for the avoidance of doubt, if applicable, the Master Agreement for Standby Letters of Credit and the Master Agreement for Documentary Letters of Credit).
“Junior Indebtedness” means any (x) Indebtedness of any Loan Party that by its terms is contractually subordinated in right of payment to the Obligations of such Loan Party arising under the Loans or the Guaranty, (y) Indebtedness of any Loan Party that is secured by a Lien on the Collateral and that by its terms is contractually subordinated in right of lien priority to the Lien on the Collateral securing the First Lien Obligations and (z) Indebtedness of any Loan Party that is unsecured, in each case, excluding (i) Indebtedness arising from agreements providing for indemnification, adjustment of purchase
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price, earnouts, other contingent consideration obligations and other deferred purchase price or similar obligations and seller-provided financing and (ii) intercompany debt.
“Junior Lien Debt” has the meaning specified in clause (39) of the definition of “Permitted Liens.”
“Junior Priority Intercreditor Agreement” means any of (1) an intercreditor agreement substantially in the form of Exhibit G-2, together with any changes thereto which are reasonably acceptable to the Borrower, the Administrative Agent and the Specified Representative or (2) a customary intercreditor agreement in form and substance reasonably acceptable to the Administrative Agent, the Specified Representative and the Borrower, which agreement shall provide that the Liens on the Collateral securing such Indebtedness shall rank junior in priority to the Liens on the Collateral securing the Obligations under this Agreement, in each case with such modifications thereto as the Administrative Agent, the Specified Representative and the Borrower may agree.
“L/C Advance” means, with respect to each Revolving Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.
“L/C Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the relevant Issuing Bank.
“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed prior to the Honor Date or refinanced as a Revolving Borrowing.
“L/C Commitment” means, with respect to any Person, the amount set forth opposite the name of such Person on Schedule 2.01 under the caption “L/C Commitment” or in the relevant Assignment and Assumption, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Expiration Date” means the day that is five (5) Business Days prior to the scheduled Maturity Date then in effect for the applicable Revolving Facility (or, if such day is not a Business Day, the next preceding Business Day).
“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be the maximum amount available to be drawn under such Letter of Credit (not to exceed the stated amount thereof in effect at such time, or, with respect to any Letter of Credit that, by its terms or the terms of any L/C Application related thereto, provides for one or more automatic increases in the stated amount thereof, the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time). For all purposes of this Agreement (but, if applicable, subject to the Master Agreement for Standby Letters of Credit and the Master Agreement for Documentary Letters of Credit), if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.13 or Rule 3.14 of the ISP, article 29 of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce publication no. 600,
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such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“L/C Sublimit” means an amount equal to the sum of (1) the lesser of (a) $10,000,000, as adjusted from time to time in accordance with Section 2.14 and (b) the aggregate amount of the Revolving Commitments, less (2) the principal amount of Indebtedness in connection with commercial letters of credit incurred and outstanding under Section 7.02(2)(b) at such time. The L/C Sublimit is part of, and not in addition to, the Revolving Facility.
“Latest Maturity Date” means, at any date of determination, the latest maturity or expiration date applicable to any Loan or Commitment hereunder at such time, including the latest maturity or expiration date of any Incremental Loan, any Incremental Revolving Commitment, any Other Loan, any Other Revolving Commitments, any Replacement Loan, any Extended Term Loan or any Extended Revolving Commitment, in each case as extended in accordance with this Agreement from time to time.
“Laws” means, collectively, all international, foreign, federal, state and local laws (including common law), statutes, treaties, rules, legally binding guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities and executive orders, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority.
“LCT Election” has the meaning specified in Section 1.07(11).
“LCT Test Date” has the meaning specified in Section 1.07(11).
“Legal Holiday” means Saturday, Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment.
“Lender” has the meaning specified in the introductory paragraph to this Agreement and, as context requires (including for purposes of the definition of “Secured Parties” and for purposes of Sections 3.01 and 3.04), includes any Issuing Bank, Swing Line Lender and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a “Lender.” For the avoidance of doubt, each Additional Lender is a Lender to the extent any such Person has executed and delivered a Refinancing Amendment, an Incremental Amendment or an amendment in respect of Replacement Loans, as the case may be, and to the extent such Refinancing Amendment, Incremental Amendment or amendment in respect of Replacement Loans shall have become effective in accordance with the terms hereof and thereof, and each Extending Lender shall continue to be a Lender. As of the Effective Date, Schedule 2.01 sets forth the name of each Lender. Notwithstanding the foregoing, no Disqualified Institution that purports to become a Lender hereunder (notwithstanding the provisions of this Agreement that prohibit Disqualified Institutions from becoming Lenders) without the Borrower’s written consent shall be entitled to any of the rights or privileges enjoyed by the other Lenders with respect to voting, information and lender meetings; provided that the Loans of any such Disqualified Institution shall not be excluded for purposes of making a determination of Required Lenders if the action in question affects such Disqualified Institution in a disproportionately adverse manner than its effect on the other Lenders; provided, further, that if any assignment or participation is made to any Disqualified Institution without the Borrower’s prior written consent in violation of clause (e) of Section 10.07(2) the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Institution and the Applicable Agent, (1) terminate any Revolving Commitment of such Disqualified Institution and repay all obligations of the Borrower owing to such Disqualified Institution in connection with such Revolving
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Commitment by paying the lesser of (a) the principal amount thereof and (b) the amount that such Disqualified Institution paid to acquire such obligations owing in respect of such Revolving Commitment, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder, (2) in the case of outstanding Term Loans held by Disqualified Institutions, purchase or prepay such Term Loan by paying the lesser of (a) the principal amount thereof and (b) the amount that such Disqualified Institution paid to acquire such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or
“Lender-Related Distress Event” means, with respect to any Lender or any direct or indirect parent company of such Lender (each, a “Distressed Person”), (1) that such Distressed Person is or becomes subject to a voluntary or involuntary case under any Debtor Relief Law, (2) a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, (3) such Distressed Person is subject to a forced liquidation, makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Person or its assets to be, insolvent or bankrupt or (4) that such Distressed Person becomes the subject of a Bail-in Action or other similar proceeding (including a proceeding under a U.S. Special Resolution Regime); provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interests in any Lender or any direct or indirect parent company of a Lender by a Governmental Authority or an instrumentality thereof so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“Letter of Credit” means any letter of credit, letter of guarantee or bankers’ acceptance issued hereunder.
“Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event will an operating lease be deemed to constitute a Lien.
“LifeStance Health Holdings, Inc.” means LifeStance Health Holdings, Inc., a Delaware corporation.
“Limited Condition Transactions” means (1) any Permitted Acquisition or other Investment (whether by merger, amalgamation, consolidation or other business combination or the
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acquisition of Capital Stock or otherwise) permitted hereunder by the Borrower or one or more of its Restricted Subsidiaries (or any Affiliated Practice of the Borrower or one or more of its Restricted Subsidiaries) (including any transaction resulting in a Person becoming an Affiliated Practice or a Subsidiary of an Affiliated Practice), (2) any redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness requiring irrevocable notice in advance thereof (which notice, for the avoidance of doubt, may be conditioned upon the occurrence of refinancing or any other transaction),
“Loan” means an extension of credit under Article II by a Lender (1) to the Borrower in the form of a Term Loan, (2) to the Borrower in the form of a Revolving Loan, (3) to the Borrower in the form of a Swing Line Loan or (4) to the Borrower in the form of a Delayed Draw Term Loan.
“Loan Documents” means, collectively, (1) this Agreement, (2) the Notes, (3) any Refinancing Amendment, Incremental Amendment, Extension Amendment or amendment in respect of Replacement Loans, (4) the Guaranty, (5) the Collateral Documents, (6) the Intercreditor Agreements, (7) the Master Agreement for Standby Letters of Credit and the Master Agreement for Documentary Letters of Credit, (8) the Fee Letter and (9) any other agreement entered into by the Borrower or any other Loan Party in connection with the foregoing to the extent such agreement states that it is a Loan Document.
“Loan Increase” means a Term Loan Increase or Revolving Commitment Increase.
“Loan Parties” means, collectively, (1) Holdings, (2) the Borrower and (3) each Subsidiary Guarantor.
“Management Services Agreement” means the management services agreement or similar agreements among the Investor or certain of the management companies associated with it or their respective advisors, if applicable, and the Borrower, any Restricted Subsidiary or any Parent Company.
“Management Stockholders” means the members of management (and their Controlled Investment Affiliates and Immediate Family Members and any permitted transferees thereof) of the Borrower (or a Parent Company or Affiliated Practice) who are holders of Equity Interests of any Parent Company.
“Margin Stock” has the meaning set forth in Regulation U of the Board of Governors of the United States Federal Reserve System, or any successor thereto.
“Master Agreement” has the meaning specified in the definition of “Hedge Agreement.”
“Master Agreement for Documentary Letters of Credit” means that certain Master Agreement for Documentary Letters of Credit, dated as of the Effective Date between the Borrower on behalf of all Loan Parties and Capital One, as an Issuing Bank.
“Master Agreement for Standby Letters of Credit” means that certain Master Agreement for Standby Letters of Credit, dated as of the Effective Date between the Borrower on behalf of all Loan Parties and Capital One, as an Issuing Bank.
“Material Adverse Effect” means any event, circumstance or condition that has had a materially adverse effect on (a) the business, operations, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Loan Parties (taken as a whole) to perform their
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payment obligations under the Loan Documents or (c) the rights and remedies of the Lenders, the Collateral Agent, the Revolver Agent or the Administrative Agent under the Loan Documents.
“Material Domestic Subsidiary” means any Domestic Subsidiary that is a Material
Subsidiary.
“Material Intellectual Property” means any IP Rights material to the business of the Borrower and the Restricted Subsidiaries, taken as a whole.
“Material Foreign Subsidiary” means any Foreign Subsidiary that is a Material
Subsidiary.
“Material Real Property” means any fee-owned real property located in the United States and owned by any Loan Party and not constituting an Excluded Asset pursuant to clause (1)(a) of the definition thereof.
“Material Subsidiary” means, as of the Effective Date and thereafter at any date of determination, each Restricted Subsidiary of the Borrower (1) whose total assets at the last day of the most recent Test Period (when taken together with the total assets of the Restricted Subsidiaries of such Subsidiary at the last day of the most recent Test Period) were equal to or greater than 5.0% of Total Assets at such date or (2) whose gross revenues for such Test Period (when taken together with the gross revenues of the Restricted Subsidiaries of such Subsidiary for such Test Period) were equal to or greater than 5.0% of the consolidated gross revenues of the Borrower and the Restricted Subsidiaries for such Test Period, in each case determined in accordance with GAAP; provided that if at any time and from time to time after the date which is 30 days after the Closing Date (or such longer period as the Administrative Agent may agree in its reasonable discretion), all Restricted Subsidiaries that are not Guarantors solely because they do not meet the thresholds set forth in the preceding clause (1) or (2) comprise in the aggregate more than (when taken together with the total assets of the Restricted Subsidiaries of such Subsidiaries at the last day of the most recent Test Period) 7.5% of Total Assets as of the last day of the most recent Test Period or more than (when taken together with the gross revenues of the Restricted Subsidiaries of such Subsidiaries for such Test Period) 7.5% of the consolidated gross revenues of the Borrower and the Restricted Subsidiaries for such Test Period, then the Borrower shall, not later than sixty (60) days after the date by which financial statements for such Test Period were required to be delivered pursuant to this Agreement (or such longer period as the Administrative Agent may agree in its reasonable discretion), (a) designate in writing to the Administrative Agent one or more Restricted Subsidiaries as “Material Subsidiaries” to the extent required such that the foregoing condition ceases to be true and (b) comply with the provisions of Section 6.11 with respect to any such Restricted Subsidiaries (to the extent applicable), in each case, other than any Restricted Subsidiaries that otherwise constitute Excluded Subsidiaries. At all times prior to the delivery of the aforementioned financial statements, such determinations shall be made based on the Historical Financial Statements (as adjusted by the Borrower (in its good faith judgment) on a pro forma basis to give effect to the Transactions as if the Transactions had occurred at the beginning of such period).
“Maturity Date” means (1) with respect to the Closing Date Term Loans and the Delayed Draw Term Loans that have not been extended pursuant to Section 2.16, the sixth anniversary of the Closing Date (the “Original Term Loan Maturity Date”), (2) with respect to the Closing Date Revolving Facility, to the extent not extended pursuant to Section 2.16, the fifth anniversary of the Closing Date (the “Original Revolving Facility Maturity Date”), (3) with respect to any Class of Extended Term Loans or Extended Revolving Commitments, the final maturity date as specified in the applicable Extension Amendment, (4) with respect to any Other Term Loans or Other Revolving Commitments, the final maturity date as specified in the applicable Refinancing Amendment, (5) with
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respect to any Class of Replacement Loans, the final maturity date as specified in the applicable amendment to this Agreement in respect of such Replacement Loans and (6) with respect to any Incremental Loans or Incremental Revolving Commitments, the final maturity date as specified in the applicable Incremental Amendment; provided, in each case, that if such day is not a Business Day, the applicable Maturity Date shall be the Business Day immediately succeeding such day.
“Maximum Rate” has the meaning specified in Section 10.11.
“MFN Provision” has the meaning specified in Section 2.14(5)(c).
“Medicare and Medicaid Programs” means the programs established under Title XVIII and XIX of the Social Security Act and any successor programs performing similar functions.
“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.
“Mortgage” means a mortgage customary in the jurisdiction to which it is to be filed in form and substance reasonably acceptable to the Administrative Agent and the Borrower, in each case with such modifications thereto as the Administrative Agent and the Borrower may agree, in each case, including such modifications as may be required by local laws, pursuant to Section 6.13(2), and any other deeds of trust, trust deeds, hypothecs, deeds to secure debt or mortgages executed and delivered pursuant to Section 6.11.
“Mortgage Policies” has the meaning specified in Section 6.11(2)(b)(ii).
“Mortgaged Properties” has the meaning specified in paragraph (5) of the definition of “Collateral and Guarantee Requirement”.
“Multiemployer Plan” means any multiemployer plan as defined in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which any Borrower, Holdings or any of their respective ERISA Affiliates makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions for which any obligation or liability remains outstanding.
“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
“Net Proceeds” means:
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paid or payable by the Borrower or any Restricted Subsidiary, in either case in respect of such Asset Sale or Casualty Event, any relocation expenses incurred as a result thereof, costs and expenses in connection with unwinding any Hedging Obligation in connection therewith, other fees and expenses, including title and recordation expenses, Taxes paid or reasonably estimated to be payable (including any additional distributions with respect to Taxes pursuant to Section 7.05(2)(n) to be made as a result of the transactions giving rise to such cash and Cash Equivalents received) as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Agreement, amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness (other than the First Lien Obligations and Indebtedness secured by Liens that are expressly subordinated to the Liens securing the Obligations) secured by a Lien on such assets and required to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Borrower or any Restricted Subsidiary as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Borrower or any Restricted Subsidiary after such sale or other disposition thereof, including pension and other post- employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction; provided that (a) no net cash proceeds calculated in accordance with the foregoing realized in a single transaction or series of related transactions shall constitute Net Proceeds unless such net cash proceeds shall exceed the greater of (I) $7,300,000 and (II) 10.0% of Consolidated EBITDA of the Borrower for the most recently ended Test Period (calculated on a pro forma basis) and (b) no net cash proceeds with respect to any other Asset Sale or Casualty Event not excluded from the requirements of this clause (1) pursuant to subclause (a) above shall constitute Net Proceeds under this clause (1) in any fiscal year until the aggregate amount of all such non-excluded net cash proceeds in such fiscal year shall exceed the greater of (I) $10,950,000 million and (II) 15.0% of Consolidated EBITDA of the Borrower for the most recently ended Test Period (calculated on a pro forma basis) (and thereafter only net cash proceeds in excess of such amount shall constitute Net Proceeds under this clause (1)); and
“Net Short Lender” has the meaning specified in Section 10.01(1)(VII).
“Non-Consenting Lender” has the meaning specified in Section 3.07.
“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender.
“Non-Excluded Taxes” means all Taxes, other than Excluded Taxes and Other Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document.
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“Non-Expiring Credit Commitment” has the meaning specified in Section 2.04(7).
“Non-Extension Notice Date” has the meaning specified in Section 2.03(2)(c).
“Non-Finance Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP (for the avoidance of doubt, subject to Section 1.03(1)(y)), is not and is not required to be accounted for as a capital lease or finance lease on the balance sheet of that Person. For the avoidance of doubt, a straight- line or operating lease shall be considered a Non-Finance Lease.
“Non-Fixed Basket” has the meaning specified in Section 1.07(8).
“Non-Recourse Indebtedness” means Indebtedness that is non-recourse to the Borrower and the Restricted Subsidiaries.
“Non-Wholly Owned Subsidiary” shall mean any Subsidiary of any Person that does not constitute a wholly owned Subsidiary.
“Note” means a Term Note, Revolving Note or Swing Line Note, as the context may
require.
“Notice of Intent to Cure” has the meaning specified in Section 8.04(1).
“Obligations” means all:
Notwithstanding the foregoing, (a) unless otherwise agreed to by the Borrower and any applicable Hedge Bank or Cash Management Bank, the obligations of Holdings, the Borrower or any Subsidiary under any Secured Hedge Agreement and under any Secured Cash Management Agreement shall be secured and guaranteed pursuant to the Collateral Documents and the Guaranty only to the extent that, and only for so long as, the other Obligations are so secured and guaranteed and (b) any release of Collateral or Guarantors effected in the manner permitted by this Agreement and any other Loan
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Document shall not require the consent of the holders of Hedging Obligations under Secured Hedge Agreements or of the holders of Cash Management Obligations under Secured Cash Management Agreements.
“OFAC” has the meaning specified in Section 5.17.
“Offered Amount” has the meaning specified in Section 2.05(1)(e)(D)(1).
“Offered Discount” has the meaning specified in Section 2.05(1)(e)(D)(1).
“Officer” means the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of a Borrower or any other Person, as the case may be.
“Officer’s Certificate” means a certificate signed on behalf of a Person by an Officer of
such Person.
“OID” means original issue discount.
“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Administrative Agent. Counsel may be an employee of or counsel to the Borrower if reasonably acceptable to the Administrative Agent.
“ordinary course of business” means activity conducted in the ordinary course of business of the Borrower and any Restricted Subsidiary.
“Organizational Documents” means:
“Original Revolving Facility Maturity Date” has the meaning specified in the definition of “Maturity Date.”
“Original Term Loan Maturity Date” has the meaning specified in the definition of “Maturity Date.”
“Other Applicable ECF” means Excess Cash Flow or a comparable measure as determined in accordance with the documentation governing Other Applicable Indebtedness.
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“Other Applicable Indebtedness” means Permitted Incremental Equivalent Debt, Credit Agreement Refinancing Indebtedness or any other Indebtedness secured on a pari passu basis with the Obligations, together with Refinancing Indebtedness in respect of any of the foregoing that is secured on a pari passu basis with the Obligations (in each case without regard to the control of remedies).
“Other Applicable Net Proceeds” means Net Proceeds or a comparable measure as determined in accordance with the documentation governing Other Applicable Indebtedness.
“Other Commitments” means Other Revolving Commitments and/or Other Term Loan
Commitments.
“Other Loans” means one or more Classes of Other Revolving Loans and/or Other Term Loans that result from a Refinancing Amendment.
“Other Revolving Commitments” means one or more Classes of Revolving Commitments hereunder that result from a Refinancing Amendment.
“Other Revolving Loans” means one or more Classes of Revolving Loans that result from a Refinancing Amendment.
“Other Taxes” means all present or future stamp or documentary Taxes, intangible, recording, filing, property or similar Taxes arising from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are imposed with respect to an assignment, grant of participation, designation of a new office for receiving payments by or on account of the Borrower or other transfer (other than an assignment, designation or other transfer at the request of the Borrower pursuant to Section 3.07) as a result of any connection between the assignee or assignor and the jurisdiction imposing such Tax (other than connections resulting solely from such assignee or assignor having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to any Loan or Loan Document).
“Other Term Loan Commitments” means one or more Classes of Term Loan commitments hereunder that result from a Refinancing Amendment.
“Other Term Loans” means one or more Classes of Term Loans that result from a Refinancing Amendment.
“Outstanding Amount” means (1) with respect to the Term Loans, Revolving Loans and Swing Line Loans on any date, the outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Loans (including any refinancing of outstanding Unreimbursed Amounts under Letters of Credit or L/C Credit Extensions as a Revolving Borrowing) and Swing Line Loans, as the case may be, occurring on such date; and (2) with respect to any L/C Obligations on any date, the outstanding principal amount thereof (or in the case any undrawn Letter of Credit, the maximum amount available for drawing thereunder) on such date after giving effect to any related L/C Credit Extension occurring on such date and any other changes thereto as of such date, including as a result of any reimbursements of outstanding Unreimbursed Amounts under related Letters of Credit (including any refinancing of outstanding Unreimbursed Amounts under related Letters of Credit or related L/C Credit Extensions as a Revolving Borrowing) or any reductions in the maximum amount available for drawing under related Letters of Credit taking effect on such date.
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“Overnight Rate” means, for any day, the greater of (1) the Federal Funds Rate and (2) an overnight rate determined by the Administrative Agent, an Issuing Bank or a Swing Line Lender, as applicable, in accordance with banking industry rules on interbank compensation.
“Parent Company” means any Person that is a direct or indirect parent (which may be organized as, among other things, a partnership) of Holdings and/or the Borrower (for the avoidance of doubt, in the case of the Borrower, including Holdings), as applicable.
“Pari Passu Lien Debt” has the meaning specified in clause (39) of the definition of “Permitted Liens.”
“Participant” has the meaning specified in Section 10.07(4).
“Participant Register” has the meaning specified in Section 10.07(5).
“Participating Lender” has the meaning specified in Section 2.05(1)(e)(C)(2).
“Payment Block” has the meaning specified in Section 2.05(2)(g).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower, Holdings, or any of their respective ERISA Affiliates or to which the Borrower, Holdings, or any of their respective ERISA Affiliates contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time in the preceding five plan years and with respect to which any obligation or liability remains outstanding.
“Perfection Certificate” has the meaning specified in the Security Agreement.
“Permitted Acquisition” has the meaning specified in clause (3) of the definition of “Permitted Investments.”
“Permitted Acquisition Debt” has the meaning specified in Section 7.02(2)(n).
“Permitted Asset Swap” means the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Borrower or any Restricted Subsidiary or any Affiliated Practice and another Person; provided that any cash or Cash Equivalents received in connection with a Permitted Asset Swap that constitutes an Asset Sale must be applied in accordance with Section 2.05(2)(b)(i).
“Permitted Bond Hedge Transaction” means any call or capped call option (or substantively equivalent derivative transaction) on the Borrower’s common equity purchased by the Borrower in connection with the issuance of any Convertible Indebtedness; provided that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Borrower from the sale of such Convertible Indebtedness issued in connection with the Permitted Bond Hedge Transaction.
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“Permitted Convertible Indebtedness Call Transaction” means any Permitted Bond Hedge Transaction and any Permitted Warrant Transaction.
“Permitted Equal Priority Refinancing Debt” means any secured Indebtedness incurred by the Borrower and/or any Guarantor in the form of one or more series of senior secured notes, bonds or debentures or first lien secured loans (and, if applicable, any Registered Equivalent Notes issued in exchange therefor); provided that (1) such Indebtedness is secured by Liens on all or a portion of the Collateral on a basis that is equal in priority to the Liens on the Collateral securing the First Lien Obligations under this Agreement (but without regard to the control of remedies) and is not secured by any property or assets of the Borrower or any Restricted Subsidiary other than the Collateral, (2) such Indebtedness satisfies the applicable requirements set forth in the provisos to the definition of “Credit Agreement Refinancing Indebtedness,” (3) such Indebtedness is not at any time guaranteed by any Subsidiary of the Borrower other than Subsidiaries that are Guarantors and (4) the applicable Loan Parties, the holders of such Indebtedness (or their Debt Representative) and the Administrative Agent, the Revolver Agent and/or Collateral Agent shall be party to an Intercreditor Agreement providing that the Liens on the Collateral securing such obligations shall rank equal in priority to the Liens on the Collateral securing the First Lien Obligations under this Agreement (but without regard to the control of remedies).
“Permitted Equity Issuance” means any sale or issuance of any Qualified Equity Interests of the Borrower or any Parent Company.
“Permitted Holder” means (1) any of the Investor, Co-Investors and Management Stockholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) of which any of the foregoing are members; provided that in the case of such group and without giving effect to the existence of such group or any other group, such Investor, Co-Investors and Management Stockholders, collectively, have, directly or indirectly, beneficial ownership of more than 50.0% of the total voting power of the Voting Stock of Holdings or any Permitted Parent held by such group, (2) any Parent Company not formed in connection with, or in contemplation of, a transaction that, assuming such parent was not formed, after giving effect thereto would constitute a Change of Control and (3) any Person acting in the capacity of an underwriter (solely to the extent that and for so long as such Person is acting in such capacity) in connection with a public or private offering of Capital Stock of the Borrower or any Parent Company.
“Permitted Incremental Equivalent Debt” means Indebtedness issued, incurred or otherwise obtained by the Borrower and/or any Restricted Subsidiary in respect of one or more series of senior unsecured notes, senior secured first lien or junior lien notes or subordinated notes (in each case in respect of the issuance of notes, whether issued in a public offering, Rule 144A or other private placement or otherwise), first lien or junior lien loans, unsecured or subordinated loans or any bridge financing in lieu of the foregoing (and any Registered Equivalent Notes issued in exchange therefor) or secured or unsecured mezzanine Indebtedness; provided that:
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Maintenance Covenant that is in effect prior to the Latest Maturity Date of the Closing Date Revolving Facility and consists solely of a revolving credit facility (whether or not the documentation therefor includes any other facilities) and the applicable Previously Absent Financial Maintenance Covenant is included only for the benefit of such revolving credit facility, such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Revolving Facility and (B) to the extent that such Indebtedness includes a Previously Absent Financial Maintenance Covenant that is in effect prior to the Latest Maturity Date and does not consist solely of a revolving credit facility (whether or not the documentation therefor includes any other facilities), such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Term Loans and the Delayed Draw Term Loans) or (ii) such terms shall be reasonably satisfactory to the Administrative Agent and the Specified Representative (provided that, at the Borrower’s election, to the extent any term or provision is added for the benefit of (I) the lenders of any such Indebtedness that consists of term facilities, no consent shall be required from the Administrative Agent (or any Lender) to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Closing Date Term Loans and Delayed Draw Term Loans or (II) the lenders of any such Indebtedness that consists of revolving credit facilities, no consent shall be required from the Revolver Agent or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Revolving Facility);
(i) for customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith), would either be automatically converted into or required to be exchanged for permanent financing that does not provide for an earlier maturity date or a shorter Weighted Average Life to Maturity than the Original Term Loan Maturity Date or the remaining Weighted Average Life to Maturity of the Closing Date Term Loans and the Delayed Draw Term Loans, as applicable or (ii) pursuant to an escrow or similar arrangement with respect to the
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proceeds of such Permitted Incremental Equivalent Debt, to the extent such Permitted Incremental Equivalent Debt, upon release of such proceeds from such escrow or similar arrangement (other than a release effectuated in order to repay such Permitted Incremental Equivalent Debt) does not provide for an earlier maturity date or a shorter Weighted Average Life to Maturity than the Original Term Loan Maturity Date or the remaining Weighted Average Life to Maturity of the Closing Date Term Loans, as applicable (provided, that any such Indebtedness that is subordinated in right of payment or security to the Closing Date Term Loans or Closing Date Revolving Facility shall not be subject to amortization or mature earlier than 91 days after the then-Latest Maturity Date of the Closing Date Term Facility or Closing Date Revolving Facility, as applicable);
provided, further, that “Permitted Incremental Equivalent Debt” may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long term indebtedness (so long
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as such credit facility includes customary “rollover provisions” that satisfy the requirements of clause (4) above following such rollover or upon the release of such debt from such escrow arrangements), in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, clause (4) of the first proviso in this definition shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions.
“Permitted Indebtedness” means Indebtedness permitted to be incurred in accordance with Section 7.02.
“Permitted Investments” means:
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Section 8.01(6) (with respect to the Borrower) shall have occurred and be continuing, (y) any such Investment shall not be hostile, (z) to the extent all or a portion of the target of such acquisition is or is to become an Affiliated Practice and is not subject to an existing Services Agreement upon consummation of such acquisition, the Borrower or a Restricted Subsidiary shall enter into a Services Agreement with the target or the Affiliated Practice(s) to which such target provides management services, as applicable, concurrently with, or within thirty (30) days after (or such longer period after as is agreed by the Administrative Agent) such target is acquired; provided, further, that the aggregate amount of Investments outstanding at any time under this clause (3)(a) made by Loan Parties in Persons that are not (or do not become) Loan Parties or Affiliated Practices (or Subsidiaries of Affiliated Practices) as to which a Loan Party has entered into a Services Agreement and assets that are not (or do not become) owned by Loan Parties or Affiliated Practices (or Subsidiaries of Affiliated Practices) as to which a Loan Party has entered into a Services Agreement, in each case made with the proceeds of consideration provided by a Loan Party shall, to the extent of such consideration, not exceed the greater of (x) $30,000,000 and (y) 40.0% of Consolidated EBITDA of the Borrower for the most recently ended Test Period (calculated on a pro forma basis) determined at the time of making of such Investment (it being understood and agreed that the cap described in sub-clauses (x) and (y) of this clause (3) above shall not apply to any Permitted Acquisition to the extent the Person so acquired (or the Person owning the assets so acquired) becomes a Loan Party or an Affiliated Practice (or a Subsidiary of an Affiliated Practice) as to which a Loan Party has entered into a Services Agreement even though such Person owns Equity Interests in Persons that are not otherwise required to become Loan Parties or in Persons that would otherwise constitute Excluded Subsidiaries of the Borrower, if not less than 80% (the “Specified Loan Party Acquisition Threshold”) of the Consolidated EBITDA of the Person(s) acquired in such Permitted Acquisition (for this purpose and for the component definitions used therein, determined on a consolidated basis for such Persons and their respective Restricted Subsidiaries) (or, if less than the Specified Loan Party Acquisition Threshold, the percentage of Consolidated EBITDA of the Borrower attributable to the Loan Parties immediately prior to giving effect to such Permitted Acquisition) on either (at the Borrower’s election) the date of consummation of such Permitted Acquisition or the date the definitive agreement for such Permitted Acquisition is entered into is generated by Person(s) that will become Loan Parties or Affiliated Practices (or Subsidiaries of Affiliated Practices) as to which a Loan Party will enter into a Services Agreement; it being understood that any such consideration so provided by any Restricted Subsidiary that is not a Loan Party shall either not have been furnished to such Restricted Subsidiary by a Borrower or a Subsidiary Guarantor or, if so furnished by a Borrower or a Subsidiary Guarantor, shall have been otherwise permitted to have been so furnished under Section 7.05); provided further that in the event the amount available under this proviso is reduced as a result of any acquisition or other Investment made by Loan Parties in Persons that are not (or do not become) Loan Parties or Affiliated Practices (or Subsidiaries of Affiliated Practices) as to which a Loan Party has entered into a Services Agreement or assets that are not (or do not become) owned by Loan Parties or Affiliated Practices (or Subsidiaries of Affiliated Practices) as to which a Loan Party has entered into a Services Agreement and such Restricted Subsidiary subsequently becomes a Loan Party (or such assets are subsequently transferred to a Loan Party), the amount available under such limit shall be proportionately increased as a result thereof (up to the original amount of such cap);
(b) any Investment held by such Person described in the preceding clause (a); provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation, transfer or conveyance;
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(b) the creation of Liens on the assets of the Borrower or any Restricted Subsidiary in compliance with Section 7.01;
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Borrower, any Subsidiary of the Borrower, any Affiliated Practice or any Subsidiary of any Affiliated Practice in connection with such director’s, officer’s, employee’s consultant’s, Related Professional’s or independent contractor’s acquisition of Equity Interests of the Borrower or any direct or indirect parent of the Borrower, to the extent no cash is actually advanced by the Borrower or any Restricted Subsidiary to such directors, officers, employees, consultants, Related Professionals or independent contractors in connection with the acquisition of any such obligations;
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applicable, and (Y) all Investments made in an Affiliated Practice by a Restricted Subsidiary (other than a Loan Party) pursuant to this clause (37) shall be in the form of indebtedness owed to such Restricted Subsidiary; and
“Permitted Junior Priority Refinancing Debt” means secured Indebtedness incurred by the Borrower and/or any Guarantor in the form of one or more series of junior lien secured notes, bonds or debentures or junior lien secured loans (and, if applicable, any Registered Equivalent Notes issued in exchange therefor); provided that (i) such Indebtedness is secured by a Lien on all or a portion of the Collateral on a junior priority basis to the Liens on Collateral securing the First Lien Obligations under this Agreement and is not secured by any property or assets of the Borrower or any Restricted Subsidiary other than the Collateral, (ii) such Indebtedness satisfies the applicable requirements set forth in the provisos in the definition of “Credit Agreement Refinancing Indebtedness,” (iii) the holders of such Indebtedness (or their Debt Representative) and the Administrative Agent, Revolver Agent and/or the Collateral Agent shall be party to an Intercreditor Agreement providing that the Liens on Collateral securing such obligations shall rank junior to the Liens on Collateral securing the First Lien Obligations under this Agreement and (iv) such Indebtedness is not at any time guaranteed by any Subsidiary of the Borrower other than Subsidiaries that are Guarantors.
“Permitted Liens” means, with respect to any Person:
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shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition) and (iii) the proceeds and products thereof);
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Indebtedness, Disqualified Stock or Preferred Stock described under such clauses (7), (8), (9), (10) or this clause (19) at the time the original Lien became a Permitted Lien hereunder, plus (ii) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased, plus (iii) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness, Preferred Stock or Disqualified Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees, underwriting, arrangement and similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness, Preferred Stock or Disqualified Stock, (c) to the extent required by the terms hereof in connection with the original incurrence of Indebtedness so modified, refinanced, refunded, extended, renewed or replaced, to the extent such Indebtedness as modified, refinanced, refunded, extended, renewed or replaced is secured by Liens on the Collateral, such Liens shall be subject to an applicable Intercreditor Agreement and (d) such Liens have the same or junior priority as the original Liens (or the priority of such Lien shall otherwise be permitted under the applicable initial Basket);
(b) Liens arising out of conditional sale, title retention or similar arrangements for the sale of goods in the ordinary course of business or consistent with industry practice and (c) Liens arising by operation of law under Article 2 of the Uniform Commercial Code;
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provided that such satisfaction or discharge is permitted under this Agreement;
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1.00 or (III) if such Indebtedness, Disqualified Stock or Preferred Stock is secured by Liens on property not constituting Collateral, the Total Net Leverage Ratio for the Test Period most recently ended calculated on a pro forma basis after giving effect to any such incurrence or issuance does not exceed 3.75 to 1.00 and (ii) such Liens, to the extent on the Collateral, are in each case subject the applicable Intercreditor Agreement(s)) and (b) Refinancing Indebtedness thereof;
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by a statutory provision, to terminate any such lease, license, sublicense, franchise, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;
provided that the covenants are complied with;
For purposes of this definition, the term “Indebtedness” will be deemed to include interest and other obligations payable on or with respect to such Indebtedness.
Any Liens incurred to refinance Liens incurred pursuant to clauses (8), (21) and (39) above will be permitted to secure additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay (1) any accrued and unpaid interest on the associated Indebtedness, any accrued and unpaid dividends on the associated Preferred Stock, and any accrued and unpaid dividends on the associated
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Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased and (2) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such associated refinanced Indebtedness, Preferred Stock or Disqualified Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such associated refinanced Indebtedness, Preferred Stock or Disqualified Stock (and with respect to associated Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced, extended, replaced, refunded, renewed or defeased to the extent permanently terminated at the time of incurrence of such Liens in connection with such Refinancing Indebtedness).
“Permitted Parent” means any direct or indirect parent of the Borrower that at the time it became a parent of the Borrower was a Permitted Holder pursuant to clause (1) of the definition thereof.
“Permitted Ratio Debt” has the meaning specified in Section 7.02(1).
“Permitted Unsecured Refinancing Debt” means unsecured Indebtedness incurred by the Borrower and/or the Guarantors in the form of one or more series of senior unsecured notes, bonds or debentures or unsecured loans (and, if applicable, any Registered Equivalent Notes issued in exchange therefor); provided that (1) such Indebtedness satisfies the applicable requirements set forth in the provisos in the definition of “Credit Agreement Refinancing Indebtedness” and (2) such Indebtedness is not at any time guaranteed by any Subsidiary of the Borrower other than Subsidiaries that are Guarantors.
“Permitted Warrant Transaction” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) on the Borrower’s or a Parent Company’s common equity sold by the Borrower or a Parent Company substantially concurrently with a related Permitted Bond Hedge Transaction.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA), other than a Foreign Plan or a Multiemployer Plan, established or maintained by any Borrower or Holdings or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any of their respective ERISA Affiliates.
“Plan Assets” means (1) “plan assets” of an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (2) a “plan” as defined in Section 4975 of the Code or (3) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan” within the meaning of U.S. Department of Labor Regulation 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.
“Planned Expenditures” has the meaning specified in the definition of Excess Cash
Flow.
“Platform” has the meaning specified in Section 6.02.
“Pledged Collateral” has the meaning specified in the Security Agreement.
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“Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution or winding up.
“Previously Absent Financial Maintenance Covenant” means, at any time, (1) any financial maintenance covenant that is not contained in this Agreement at such time and (2) any financial maintenance covenant, a corresponding version of which is already contained in this Agreement at such time but with covenant levels and component definitions (to the extent relating to such corresponding version) that are less restrictive as to the Borrower and the Restricted Subsidiaries than those in the applicable Incremental Amendment, Refinancing Amendment, Extension Amendment or amendment in respect of Replacement Loans or any documents relating to Credit Agreement Refinancing Indebtedness, Permitted Incremental Equivalent Debt or Refinancing Indebtedness.
“primary obligations” has the meaning specified in the definition of “Contingent
Obligations”.
“primary obligor” has the meaning specified in the definition of “Contingent
Obligations”.
“Priming Indebtedness” has the meaning specified in Section 10.01(1)(IX).
“Priming Transaction” has the meaning specified in Section 10.01(1)(IX).
“Private-Side Information” means any information with respect to Holdings and its Subsidiaries that is not Public-Side Information.
“Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitments of any Class (or, if the Revolving Commitments have terminated in full, Revolving Exposure) and, if applicable and without duplication, Term Loans of any Class of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments of such Class (or, if the Revolving Commitments have terminated in full, Revolving Exposure) and, if applicable and without duplication, Term Loans of such Class at such time; provided that when used with respect to (1) Commitments, Loans, interest and fees under any Class of a Revolving Facility or Delayed Draw Term Loan Facility, “Pro Rata Share,” shall mean with respect to any Lender such Lender’s Applicable Percentage and (2) Commitments, Loans and interest under any Term Facility, “Pro Rata Share,” shall mean, with respect to each Lender at any time a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Term Commitments and Term Loans of such Lender under such Term Facility at such time and the denominator of which is the amount of the aggregate Term Commitments and Term Loans under such Term Facility at such time.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Company Costs” means costs relating to compliance with the provisions of the Sarbanes-Oxley Act of 2002, the Securities Act and the Exchange Act, as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, costs relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’ insurance and other executive costs, legal and other professional fees, listing fees and other expenses, in each case to the extent arising out of or incidental to an entity’s status as an SEC registered reporting company.
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“Public Lender” has the meaning specified in Section 6.02.
“Public-Side Information” means information that does not constitute material non- public information (within the meaning of United States federal and state securities laws) with respect to Holdings or any of its Subsidiaries or any of their respective securities.
“Purchase Money Obligations” means any Indebtedness incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (other than Capital Stock), and whether acquired through the direct acquisition of such property or assets, or otherwise.
“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).
“QFC Credit Support” has the meaning specified in Section 10.28.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Qualified Equity Interests” means any Equity Interests that are not Disqualified Stock.
“Qualified Proceeds” means the fair market value of assets that are used or useful in, or
Capital Stock of any Person engaged in, a Similar Business.
“Qualified Securitization Facility” means any Securitization Facility (1) constituting a securitization financing facility that meets the following conditions: (a) the Board of Directors have determined in good faith that such Securitization Facility (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Borrower and the applicable Restricted Subsidiary or Securitization Subsidiary and (b) all sales or contributions of Securitization Assets and related assets to the applicable Person or Securitization Subsidiary are made at fair market value (as determined in good faith by the Borrower) or (2) constituting a receivables financing facility; provided that, in each case, the obligations under such Qualified Securitization Facility are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Borrower or any Restricted Subsidiary (other than a Securitization Subsidiary).
“Qualifying Lender” has the meaning specified in Section 2.05(1)(e)(D)(3).
“Rating Agencies” means Moody’s and S&P, or if Moody’s or S&P (or both) does not make a rating on the relevant obligations publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Borrower that will be substituted for Moody’s or S&P (or both), as the case may be.
“Receivables Financing Transaction” means any transaction or series of transactions entered into by Holdings, the Borrower or any Restricted Subsidiary pursuant to which such party consummates a “true sale” of its receivables to a non-related third party on market terms as determined in good faith by the Borrower; provided that such Receivables Financing Transaction is (1) non-recourse to
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Holdings, the Borrower and the Restricted Subsidiaries and their assets, other than any recourse solely attributable to a breach by Holdings, the Borrower or any Restricted Subsidiary of representations and warranties that are customarily made by a seller in connection with a “true sale” of receivables on a non- recourse basis and (2) consummated pursuant to customary contracts, arrangements or agreements entered into with respect to the “true sale” of receivables on market terms for similar transactions.
“Reference Rate” means (1) with respect to the calculation of the All-In Yield in the case of Loans of an applicable Class that includes a Term Benchmark Rate floor, an interest rate per annum equal to the rate per annum equal to the Term SOFR Reference Rate and (2) with respect to the calculation of the All-In Yield in the case of Loans of an applicable Class that includes a Base Rate floor, the interest rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1.00%, (b) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent) and (c) the Term Benchmark Rate on such day for an Interest Period of one (1) month plus 1.00% (or, if such day is not a Business Day, the immediately preceding Business Day).
“Refinance” has the meaning set forth in the definition of “Refinancing Indebtedness” and “Refinancing” and “Refinanced” have meanings correlative to the foregoing.
“Refinanced Debt” has the meaning set forth in the definition of “Refinancing
Indebtedness.”
“Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent, the Specified Representative and the Borrower executed by each of (1) the Borrower, (2) the Administrative Agent and (3) each Additional Lender and Lender that agrees to provide any portion of the Other Loans or Other Commitments being incurred or provided pursuant thereto, in accordance with Section 2.15.
“Refinancing Indebtedness” means (1) Indebtedness incurred by the Borrower or any Restricted Subsidiary, (2) Disqualified Stock issued by the Borrower or any Restricted Subsidiary or (3) Preferred Stock issued by any Restricted Subsidiary which, in each case, serves to extend, replace, refund, refinance, renew or defease (“Refinance”) any Indebtedness, Disqualified Stock or Preferred Stock, in each case of the foregoing clauses (1), (2) and (3), including any Refinancing Indebtedness, so long as:
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provided that Refinancing Indebtedness will not include:
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provided further that (i) clause (b) of this definition will not apply to any Refinancing of any Indebtedness other than Indebtedness incurred under clause (dd) of Section 7.02(2) (including any successive Refinancings thereof incurred under clause (m) of Section 7.02(2)) and any Junior Indebtedness (other than Junior Indebtedness assumed or acquired in an investment or acquisition and not created in contemplation thereof), Disqualified Stock and Preferred Stock and (ii) Refinancing Indebtedness may be incurred in the form of a bridge or other interim credit facility intended to be Refinanced with long-term indebtedness (and such bridge or other interim credit facility shall be deemed to satisfy clause (b) of this definition so long as (I) such credit facility includes customary “rollover” provisions and (II) assuming such credit facility were to be extended pursuant to such “rollover” provisions, such extended credit facility would comply with clause (b) of this definition).
“Refunding Capital Stock” has the meaning specified in Section 7.05(2)(b)(i).
“Register” has the meaning specified in Section 10.07(3).
“Registered Equivalent Notes” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act, substantially identical notes (having the same Guarantees) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.
“Regulated Bank” means (x) an Approved Commercial Bank that is (i) a U.S. depository institution the deposits of which are insured by the Federal Deposit Insurance Corporation; (ii) a corporation organized under section 25A of the U.S. Federal Reserve Act of 1913; (iii) a branch, agency or commercial lending company of a foreign bank operating pursuant to approval by and under the supervision of the Board of Governors under 12 CFR part 211; (iv) a non-U.S. branch of a foreign bank managed and controlled by a U.S. branch referred to in clause (iii); or (v) any other U.S. or non-U.S. depository institution or any branch, agency or similar office thereof supervised by a bank regulatory authority in any jurisdiction or (y) any Affiliate of a Person set forth in clause (x) above to the extent that (1) all of the Capital Stock of such Affiliate is directly or indirectly owned by either (I) such Person set forth in clause (x) above or (II) a parent entity that also owns, directly or indirectly, all of the Capital Stock of such Person set forth in clause (x) and (2) such Affiliate is a securities broker or dealer registered with the SEC under Section 15 of the Exchange Act.
“Rejection Notice” has the meaning specified in Section 2.05(2)(f).
“Related Business Assets” means assets (other than Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Borrower or a Restricted Subsidiary in exchange for assets transferred by the Borrower or a Restricted Subsidiary will not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person is or would become a Restricted Subsidiary.
“Related Indemnified Person” of an Indemnitee means (1) any controlling Person or controlled Affiliate of such Indemnitee, (2) the respective directors, officers, partners, employees, advisors, other representatives or successors or permitted assigns of such Indemnitee or any of its controlling Persons or controlled Affiliates and (3) the respective agents, trustees and other representatives of such Indemnitee or any of its controlling Persons or controlled Affiliates, in the case of this clause (3), acting at the instructions of such Indemnitee, controlling Person or such controlled
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Affiliate; provided that each reference to a controlled Affiliate or controlling Person in this definition pertains to a controlled Affiliate or controlling Person involved in the negotiation of this Agreement. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
“Related Person” means, with respect to any Person, (1) any Affiliate of such Person,
“Related Professional” means physicians, nurses, physicians assistants, clinicians or independent contractors that own, are employed by, or are under contract with, an Affiliated Practice or a Subsidiary of the Borrower.
“Release” means any release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping, emptying, injection or leaching into the Environment.
“Released Subsidiary” has the meaning specified in the definition of “Collateral and Guarantee Requirement.”
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the purpose of recommending a benchmark rate to replace London Interbank Offered Rate in loan agreements similar to this Agreement.
“Replaced Loans” has the meaning specified in Section 10.01(2).
“Replacement Amendment” has the meaning specified in Section 10.01(2).
“Replacement Loans” has the meaning specified in Section 10.01(2).
“Reportable Event” means, with respect to any Pension Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty
“Request for Credit Extension” means (1) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Loans, a Committed Loan Notice, (2) with respect to an L/C Credit Extension, an L/C Application and (3) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“Required Facility Lenders” means, as of any date of determination, with respect to one or more Facilities, Lenders having more than 50% of the sum of (1) the Total Outstandings under such Facility or Facilities (with the aggregate Dollar amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans, as applicable, under such Facility or Facilities being deemed “held” by such Lender for purposes of this definition) and (2) the aggregate unused Commitments under such Facility or Facilities; provided that the unused Commitments of, and the portion of the Total Outstandings under such Facility or Facilities held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of the Required Facility Lenders; provided, further, that, to the same extent specified in Section 10.07(9) with respect to determination of Required
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Lenders, the Loans of any Affiliated Lender shall in each case be excluded for purposes of making a determination of Required Facility Lenders unless the action in question affects such Affiliated Lender in a disproportionately adverse manner than its effect on the other Lenders ; and provided, further, that the term “Required Facility Lenders” shall include ULTra at all times that it remains a Lender (unless the Unitranche Lenders, collectively, have assigned more than twenty-five (25%) of their Loans and Commitments existing on the Closing Date to any person other than the Unitranche Lenders).
“Required Lenders” means, as of any date of determination, Lenders having more than 50% of the sum of the (1) Total Outstandings (with the aggregate Dollar amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition), (2) aggregate unused Term Commitments and (3) aggregate unused Revolving Commitments; provided that the unused Term Commitment and unused Revolving Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided, further, that the Loans of any Affiliated Lender shall in each case be excluded for purposes of making a determination of Required Lenders unless the action in question affects such Affiliated Lender in a disproportionately adverse manner than its effect on the other Lenders ; and provided, further, that the term “Required Lenders” shall include ULTra at all times that it remains a Lender (unless the Unitranche Lenders, collectively, have assigned more than twenty-five (25%) of their Loans and Commitments existing on the Closing Date to any person other than the Unitranche Lenders).
“Required Revolving Lenders” means at any time (a) Lenders then holding more than fifty percent (50%) of the sum of (x) the Total Outstandings (with the aggregate Dollar amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans) with respect to the Revolving Facility plus (y) the aggregate unused Revolving Commitments, or (b) if the Revolving Commitments have terminated, Lenders then holding more than fifty percent (50%) of the sum of the aggregate outstanding amount of Revolving Loans, outstanding L/C Obligations, amounts of participations in Swing Line Loans and the principal amount of unparticipated portions of Swing Line Loans; provided that the unused Revolving Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.
“Required Term Lenders” means at any time (a) Lenders then holding more than fifty percent (50%) of the sum of the aggregate Term Commitments then in effect, or (b) if the Term Commitments have terminated, Lenders then holding Total Outstandings (other than with respect to the Revolving Facility) of more than fifty percent (50%) of the sum of the aggregate outstanding amount of Term Loans; provided, further, that the term “Required Term Lenders” shall include ULTra at all times that it remains a Lender (unless the Unitranche Lenders, collectively, have assigned more than twenty- five (25%) of their Loans and Commitments existing on the Closing Date to any person other than the Unitranche Lenders); provided, further, that the unused Term Commitment of, and the portion of the Total Outstandings with respect to the Term Facility held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means, with respect to a Person, the chief executive officer, chief operating officer, president, executive vice president, chief financial officer, treasurer or assistant treasurer or other similar officer or Person performing similar functions, of such Person and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other
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officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. With respect to any document delivered by a Loan Party on the Effective Date or the Closing Date, Responsible Officer includes any secretary or assistant secretary of such Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. Unless otherwise specified, all references herein to a “Responsible Officer” shall refer to a Responsible Officer of the Borrower.
“Restricted Investment” means any Investment other than any Permitted Investment(s).
“Restricted Payments” has the meaning specified in Section 7.05.
“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of the Borrower (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided that notwithstanding the foregoing, in no event will any Securitization Subsidiary be considered a Restricted Subsidiary for purposes of Section 8.01(5), (6) or (7); provided further that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary will be included in the definition of “Restricted Subsidiary.” Wherever the term “Restricted Subsidiary” is used herein with respect to any Subsidiary of a referenced Person that is not the Borrower, then it will be construed to mean a Person that would be a Restricted Subsidiary of the Borrower on a pro forma basis following consummation of one or a series of related transactions involving such referenced Person and the Borrower (unless such transaction would include a designation of a Subsidiary of such Person as an Unrestricted Subsidiary on a pro forma basis in accordance with this Agreement).
“Retained Excess Cash Flow Amount” means, at any date, the sum of an amount (which amount shall not be less than zero), determined on a cumulative basis, equal to the Retained Percentage of Excess Cash Flow (but not less than zero in any period) for all fiscal years beginning with the fiscal year ending December 31, 2023.
“Retained Percentage” means, with respect to any fiscal year, (a) 100% minus (b) the ECF Percentage with respect to such fiscal year.
“Revolver Agent” has the meaning specified in the introductory paragraph to this
Agreement.
“Revolver Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Revolver Agent may from time to time notify the Borrower and the Lenders.
“Revolving Borrowing” means a borrowing consisting of simultaneous Revolving Loans of the same Type and, in the case of Term Benchmark Rate Loans, having the same Interest Period, made by each of the Revolving Lenders pursuant to Section 2.01(2).
“Revolving Commitment” means, as to each Revolving Lender, its obligation to (1) make Revolving Loans to the Borrower pursuant to Section 2.01(2) and (2) purchase participations in L/C Obligations in respect of Letters of Credit and purchase participations in Swing Line Loans in an aggregate principal amount at any one time outstanding not to exceed the amount specified opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Commitment” or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate Revolving Commitments
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of all Revolving Lenders as of the Effective Date is $50,000,000, as such amount may be adjusted from time to time in accordance with the terms of this Agreement.
“Revolving Commitment Increase” has the meaning specified in Section 2.14(1).
“Revolving Creditor” means each Revolving Lender, the Swing Line Lender, each Issuing Bank, the Revolver Agent and, to the extent its claim arises in connection with the credit facility evidenced by the Revolving Commitments, each other Indemnitee and holder of an Obligation of a Loan Party.
“Revolving Exposure” means, as to each Revolving Lender, the sum of the amount of the Outstanding Amount of such Revolving Lender’s Revolving Loans and its Applicable Percentage of the amount of the L/C Obligations and Swing Line Obligations at such time.
“Revolving Extension Request” has the meaning provided in Section 2.16(2).
“Revolving Extension Series” has the meaning provided in Section 2.16(2).
“Revolving Facility” means, at any time, the aggregate amount of the Revolving Commitments at such time; provided that for the avoidance of doubt, the Revolving Facility shall include the Extended Revolving Commitments.
“Revolving Lender” means, at any time, any Lender that has a Revolving Commitment at such time or, if Revolving Commitments have terminated, Revolving Exposure.
“Revolving Loan” has the meaning specified in Section 2.01(2) and includes Revolving Loans under the Closing Date Revolving Facility, Incremental Revolving Loans, Other Revolving Loans and Loans made pursuant to Extended Revolving Commitments.
“Revolving Loan Obligations” means all Obligations arising under or in respect of the Revolving Commitments.
“Revolving Note” means a promissory note of the Borrower payable to any Revolving Lender or its registered assigns, in substantially the form of Exhibit B-2 hereto, evidencing the aggregate Indebtedness of the Borrower to such Revolving Lender resulting from the Revolving Loans made by such Revolving Lender.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., and any successor to its rating agency business.
“Sale-Leaseback Transaction” means any arrangement providing for the leasing by the Borrower or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by the Borrower or such Restricted Subsidiary to a third Person in contemplation of such leasing.
“Same Day Funds” means disbursements and payments in immediately available funds.
“Sanctions” has the meaning specified in Section 5.17.
“SEC” means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
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“Secured Cash Management Agreement” means any Cash Management Agreement that is (1) entered into by and between Holdings, the Borrower or any Restricted Subsidiary and a Cash Management Bank and (2) designated in writing by the Borrower to the Administrative Agent and Revolver Agent as a “Secured Cash Management Agreement.”
“Secured Hedge Agreement” means any Hedge Agreement with respect to Hedging Obligations permitted under Section 7.02 that is (1) entered into by and between any Loan Party or Restricted Subsidiary and any Hedge Bank and (2) designated in writing by the Borrower to the Administrative Agent and Revolver Agent as a “Secured Hedge Agreement.”
“Secured Indebtedness” means any Indebtedness of the Borrower or any Restricted Subsidiary secured by a Lien.
“Secured Net Leverage Ratio” means, with respect to any Test Period, the ratio of (1) Consolidated Secured Debt outstanding as of the last day of such Test Period, minus the Unrestricted Cash Amount on such last day to (2) Consolidated EBITDA of the Borrower for such Test Period, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with Section 1.07.
“Secured Parties” means, collectively, the Administrative Agent, the Revolver Agent, the Collateral Agent, the Lenders, each Issuing Bank, each Hedge Bank, each Cash Management Bank, each Supplemental Administrative Agent and each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.01(2) or 9.07. For the avoidance of doubt, unless otherwise agreed to by the Borrower and any applicable Hedge Bank or Cash Management Bank, such Hedge Bank or such Cash Management Bank shall be a Secured Party only to the extent that, and only for so long as, the Obligations (other than the obligations of Holdings, a Borrower or any Subsidiary under any Secured Hedge Agreement and under any Secured Cash Management Agreement) are secured and guaranteed pursuant to the Collateral Documents and the Guaranty.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Securitization Assets” means (1) the accounts receivable, royalty or other revenue streams and other rights to payment and other assets related thereto subject to a Qualified Securitization Facility and the proceeds thereof and (2) contract rights, lockbox accounts and records with respect to such accounts receivable and any other assets customarily transferred together with accounts receivable in a securitization financing.
“Securitization Facility” means any transaction or series of securitization financings that may be entered into by the Borrower or any Restricted Subsidiary pursuant to which the Borrower or any such Restricted Subsidiary may sell, convey or otherwise transfer, or may grant a security interest in, Securitization Assets to either (1) a Person that is not the Borrower or a Restricted Subsidiary or (2) a Securitization Subsidiary that in turn sells such Securitization Assets to a Person that is not the Borrower or a Restricted Subsidiary, or may grant a security interest in any Securitization Assets of the Borrower or any of its Subsidiaries.
“Securitization Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees and expenses (including reasonable fees and expenses of legal counsel) paid to a Person that is not a Securitization Subsidiary in connection with, any Qualified Securitization Facility.
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“Securitization Subsidiary” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Qualified Securitization Facilities and other activities reasonably related thereto.
“Security Agreement” means, collectively, the Pledge and Security Agreement executed by the Loan Parties and the Collateral Agent, substantially in the form of Exhibit F, together with supplements or joinders thereto executed and delivered pursuant to Section 6.11.
“Services Agreement” has the meaning specified in the definition of “Affiliated
Practices.”
“Shared Non-Guarantor Debt Cap” means the greater of (x) $30,000,000 and (y) 40% of Consolidated EBITDA of the Borrower for the most recently ended Test Period (calculated on a pro forma basis).
“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X of the SEC, as such regulation is in effect on the Effective Date.
“Similar Business” means (1) any business conducted or proposed to be conducted by the Borrower or any Restricted Subsidiary on the Effective Date or (2) any business or other activities that are reasonably similar, ancillary, incidental, complementary or related to (including non-core incidental businesses acquired in connection with any Permitted Investment), or a reasonable extension, development or expansion of, the businesses that the Borrower and its Restricted Subsidiaries conduct or propose to conduct on the Effective Date.
“SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website (or any successor source) and, in each case, that has been selected or recommended by the Relevant Governmental Body.
“Solicited Discount Proration” has the meaning specified in Section 2.05(1)(e)(D)(3).
“Solicited Discounted Prepayment Amount” has the meaning specified in Section 2.05(1)(e)(D)(1).
“Solicited Discounted Prepayment Notice” means a written notice of the Borrower of Solicited Discounted Prepayment Offers made pursuant to Section 2.05(1)(e)(D) substantially in the form of Exhibit L.
“Solicited Discounted Prepayment Offer” means the written offer by each Lender, substantially in the form of Exhibit O, submitted following the Administrative Agent’s receipt of a Solicited Discounted Prepayment Notice.
“Solicited Discounted Prepayment Response Date” has the meaning specified in Section 2.05(1)(e)(D)(1).
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“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date:
The amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.
“SPC” has the meaning specified in Section 10.07(7).
“Specified Discount” has the meaning specified in Section 2.05(1)(e)(B)(1).
“Specified Discount Prepayment Amount” has the meaning specified in Section 2.05(1)(e)(B)(1).
“Specified Discount Prepayment Notice” means a written notice of the Borrower’s Offer of Specified Discount Prepayment made pursuant to Section 2.05(1)(e)(B) substantially in the form of Exhibit N.
“Specified Discount Prepayment Response” means the written response by each Lender, substantially in the form of Exhibit P, to a Specified Discount Prepayment Notice.
“Specified Discount Prepayment Response Date” has the meaning specified in Section 2.05(1)(e)(B)(1).
“Specified Discount Proration” has the meaning specified in Section 2.05(1)(e)(B)(3).
“Specified Indebtedness” has the meaning specified in Section 10.01(1)(VII).
“Specified Loan Party Acquisition Threshold” has the meaning specified in clause (3) of the definition of “Permitted Investments.”
“Specified Representative” means (i) ULTra or (ii) after the Closing Date, any successor or assign of any Specified Representative that is (A) an ULTra Entity and (B) appointed by the applicable Specified Representative (after which such successor or assign shall fulfill the role of Specified Representative for all purposes hereunder), which appointment shall become effective five (5) Business Days after written notice of such appointment to the Borrower and the Administrative Agent; provided, that if no Lender under this Agreement is an ULTra Entity, then (I) “Specified Representative” shall mean a Lender appointed by the Required Lenders to fulfill the role of the Specified Representative, with the
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consent of the Borrower; provided that at the time of such appointment, such Lender (individually or together with any of its Affiliates that are Lenders at such time) collectively holds more than 50% of the total Outstanding Amount of all then-existing Term Loans, and (II) in the absence of any appointment in accordance with the foregoing clause (I), or if no Lender (individually or together with any of its Affiliates that are Lenders at such time) collectively holds more than 50% of the total Outstanding Amount of all then-existing Term Loans, the term “Specified Representative” shall be deemed to be removed in its entirety and shall have no further force or effect. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document or any reference to “Specified Representative”, in no event shall any consent, approval and/or determination of, or notice to, as applicable, the Specified Representative be required with respect to any matters that directly affect the Lenders under the Revolving Facility and do not directly affect the Lenders under the Term Facilities.
“Specified Transaction” means:
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“Submitted Amount” has the meaning specified in Section 2.05(1)(e)(C)(1).
“Submitted Discount” has the meaning specified in Section 2.05(1)(e)(C)(1).
“Subsidiary” means, with respect to any Person:
which:
Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower. Notwithstanding anything contained to the contrary in this Agreement or any other Loan Document, Affiliated Practices shall not be deemed to constitute a Subsidiary of the Borrower, any other Loan Party or any Subsidiary thereof.
“Subsidiary Guarantor” means any Guarantor other than Holdings. “Successor Borrower” has the meaning specified in Section 7.03(4).
“Successor Holdings” has the meaning specified in Section 7.03(5).
“Supplemental Administrative Agent” and “Supplemental Administrative Agents” have the meanings specified in Section 9.14(1).
“Supported QFC” has the meaning specified in Section 10.28.
“Swap Obligation” has the meaning specified in the definition of “Excluded Swap
Obligation.”
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section
2.04.
“Swing Line Facility” means the swing line facility made available by the Swing Line Lender pursuant to Section 2.04.
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“Swing Line Lender” means Capital One and/or (as the context requires) any other Lender that becomes a Swing Line Lender in accordance with Section 2.04(8), or any successor Swing Line Lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.04(1).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(2), which, if in writing, shall be substantially in the form of Exhibit A-2, or such other form as approved by the Revolver Agent and the Borrower (including any form on an electronic platform or electronic transmission system as shall be approved by the Revolver Agent and the Borrower), appropriately completed and signed by a Responsible Officer of the Borrower.
“Swing Line Note” means a promissory note of the Borrower payable to any Swing Line Lender or its registered assigns, in substantially the form of Exhibit B-3, evidencing the aggregate Indebtedness of the Borrower to the Swing Line Lender resulting from the Swing Line Loans.
“Swing Line Obligations” means, as at any date of determination, the aggregate Outstanding Amount of all Swing Line Loans outstanding.
“Swing Line Sublimit” means an amount equal to the lesser of (1) $10,000,000, as adjusted from time to time in accordance with Section 2.14 and (2) the aggregate amount of the Revolving Commitments. The Swing Line Sublimit is part of, and not in addition to, the Revolving Commitments.
“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding (including backup withholding) of any nature and whatever called, imposed by any Governmental Authority, including any interest, additions to tax and penalties applicable thereto.
“Tax Group” has the meaning specified in Section 7.05(2)(n)(ii).
“Tax Indemnitee” has the meaning specified in Section 3.01(5).
“Term Benchmark” means the Benchmark.
“Term Benchmark Rate” means the Adjusted Term SOFR.
“Term Benchmark Rate Loan” refers to a Loan (or Borrowing) bearing interest at a rate determined by reference to the Adjusted Term SOFR.
“Term Borrowing” means a Borrowing of any Term Loans (including Delayed Draw
Term Loans).
“Term Commitment” means, as to each Term Lender, its obligation to make a Term Loan to the Borrower hereunder, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Term Lender under this Agreement, as such commitment may be (1) reduced from time to time pursuant to this Agreement and (2) reduced or increased from time to time pursuant to (a) assignments by or to such Term Lender pursuant to an Assignment and Assumption, (b) an Incremental Amendment, (c) a Refinancing Amendment, (d) an Extension Amendment or (e) an amendment in respect of Replacement Loans. The initial amount of each Term Lender’s Term Commitment is specified on Schedule 2.01 under the caption “Closing Date Term Loan Commitment”, “Delayed Draw Term Loan Commitment” or, otherwise, in the Assignment and Assumption (or Affiliated
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Lender Assignment and Assumption), Incremental Amendment, Refinancing Amendment, Extension Amendment or amendment in respect of Replacement Loans pursuant to which such Lender shall have assumed its Commitment, as the case may be. For the avoidance of doubt, the term “Term Commitment” includes any Delayed Draw Term Commitments.
“Term Creditor” means each Term Lender and, to the extent its claim arises in connection with the Term Loan, each other Indemnitee and holder of an Obligation of a Loan Party.
“Term Facility” means any Facility consisting of Term Loans of a single Class and/or Term Commitments with respect to such Class of Term Loans. For the avoidance of doubt, the term “Term Facility” includes the Delayed Draw Term Facility.
“Term Lender” means, at any time, any Lender that has a Term Commitment or a Term Loan at such time. For the avoidance of doubt, the term “Term Lender” includes any Delayed Draw Term Commitments.
“Term Loan” means any Closing Date Term Loan, Delayed Draw Term Loan, Incremental Term Loan, Other Term Loan, Extended Term Loan or Replacement Loan, as the context may require.
“Term Loan Extension Request” has the meaning provided in Section 2.16(1).
“Term Loan Extension Series” has the meaning provided in Section 2.16(1).
“Term Loan Increase” has the meaning specified in Section 2.14(1).
“Term Note” means a promissory note of the Borrower payable to any Term Lender or its registered assigns, in substantially the form of Exhibit B-1 hereto, evidencing the aggregate Indebtedness of the Borrower to such Term Lender resulting from the Term Loans made by such Term Lender.
“Term SOFR” means,
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York City time) on any ABR Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding
U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such ABR SOFR Determination Day.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Termination Conditions” means, collectively, (1) the payment in full in cash of the Obligations (other than (a) contingent indemnification obligations not then due and (b) Obligations under Secured Hedge Agreements and Secured Cash Management Agreements), if any, and (2) the termination of the Commitments and the termination or expiration of all Letters of Credit under this Agreement (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized on terms reasonably acceptable to the applicable Issuing Bank, backstopped by a letter of credit reasonably satisfactory to the applicable Issuing Bank or deemed reissued under another agreement reasonably acceptable to the applicable Issuing Bank), if any.
“Test Period” in effect at any time means (1) for purposes of (a) Section 2.05(2)(b), and (b) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant in connection with any Basket), the most recent period of four consecutive fiscal quarters of the Borrower ended on or prior to such time (taken as one accounting period) in respect of which, subject to Section 1.07(1), financial statements for each quarter or fiscal year in such period have been or are required to be delivered pursuant to Section 6.01(1) or (2), as applicable and (2) for all other purposes in this Agreement, the most recent period of four consecutive fiscal quarters of the Borrower ended on or prior to such time (taken as one accounting period) in respect of which financial statements for each such quarter or fiscal year in such period have been or are required to be delivered pursuant to Section 6.01(1) or (2), as applicable (or, at the election of the Borrower, are internally available (as determined in good faith by the Borrower) and have been delivered to the Administrative Agent, (it being understood that for purposes of determining pro forma compliance with the Financial Covenant in connection with any Basket, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level); provided that, prior to the first date that financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2), the Test Period in effect shall be the period of four consecutive full fiscal quarters of the Borrower ended on or about December 31, 2021.
“Third Parties” means any Person that is not Holdings or any of its Restricted
Subsidiaries.
“Third Party Payor” means Medicare and Medicaid programs, any other federal health care program, Blue Cross and/or Blue Shield, private insurers, managed care plans, and any other person or entity which presently or in the future maintains a payment or reimbursement programs in which any Loan Party or any Restricted Subsidiary of a Loan Party participates.
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“Third Party Payor Authorizations” means all participation agreements, provider or supplier agreements, enrollments and billing numbers necessary to participate in and receive reimbursement from a Third Party Payor Program, including the Medicare and Medicaid Programs.
“Third Party Payor Programs” means all payment or reimbursement programs, sponsored or maintained by any Third Party Payor, in which any Loan Party or any Restricted Subsidiary or a Loan Party participates.
“Threshold Amount” means the greater of (1) $15,000,000 and (2) 20% of Consolidated EBITDA of the Borrower for the most recently ended Test Period (calculated on a pro forma basis).
“Total Assets” means, at any time, the total assets of the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the then most recent balance sheet of the Borrower or such other Person as may be available (as determined in good faith by the Borrower) (and, in the case of any determination relating to any Specified Transaction, on a pro forma basis including any property or assets being acquired in connection therewith).
“Total Net Leverage Ratio” means, with respect to any Test Period, the ratio of (1) Consolidated Total Debt outstanding as of the last day of such Test Period, minus the Unrestricted Cash Amount on such last day to (2) Consolidated EBITDA of the Borrower for such Test Period, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with Section 1.07.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and L/C
Obligations.
“Traded Securities” means any debt or equity securities issued pursuant to a public offering or Rule 144A offering.
“Transaction Expenses” means any fees, expenses, costs or charges incurred or paid by the Investor, the Co-Investor, any Parent Company, Holdings, the Borrower or any Restricted Subsidiary in connection with the Transactions, including any expenses in connection with hedging transactions, payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses, charges for repurchase or rollover of, or modifications to, stock options or restricted stock, professional fees and transfer taxes.
“Transactions” means, collectively, the funding of the Closing Date Loans, the Closing Date Refinancing and the payment of Transaction Expenses.
“Treasury Capital Stock” has the meaning specified in Section 7.05(2)(b)(i).
“Trigger Event of Default” means an Event of Default has occurred and is continuing for not less than, other than in the cases of clauses (i) and (v), 15 calendar days under (i) Section 8.01(1), (ii) Section 8.01(3) arising from the failure of a Borrower or other Loan Party to observe or perform obligations under Section 6.01(1) (and the continuation of such failure after an Event of Default has occurred for 15 calendar days in addition to the otherwise applicable 15 calendar day period), Section 6.01(2) (and the continuation of such failure after an Event of Default has occurred for 15 calendar days in addition to the otherwise applicable 15 calendar day period), Section 6.02(1) (and the continuation of such failure after an Event of Default has occurred for 15 calendar days in addition to the otherwise applicable 15 calendar day period in the case of a Compliance Certificate to accompany financial statements deliverable under Section 6.01(1)), Section 6.01(3) (and the continuation of such failure after an Event of Default has occurred for 15 calendar days in addition to the otherwise applicable 15 calendar
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day period) or Section 6.15, (iii) Section 8.01(2) arising from a failure of a Borrower or a Loan Party to comply with the covenants set forth in Section 7.01, Section 7.02, Section 7.03, Section 7.04, Section 7.05 or Section 7.10, (iv) Section 8.01(5), (v) Section 8.01(6), (vi) Section 8.01(7), (vii) Section 8.01(9), (viii) Section 8.01(10) and (ix) Section 8.01(11).
“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Term Benchmark Rate Loan.
“U.S. Lender” means any Lender that is not a Foreign Lender.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday,
(b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Special Resolution Regimes” has the meaning specified in Section 10.28.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“ULTra” as defined in the preamble hereto.
“ULTra Entities” means ULTra, Capital One, HPS and any of their respective Affiliates, and shall include, without limitation, certain funds, accounts and clients managed, or advised by ULTra, Capital One, HPS or any of their respective Affiliates, as the context may require.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code or any successor provision thereof (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to the perfection or priority of any Lien on or otherwise with regard to any item or items of Collateral.
“United States” and “U.S.” mean the United States of America.
“United States Tax Compliance Certificate” means a certificate substantially in the form of Exhibit H-1, H-2, H-3 or H-4, as applicable.
“Unitranche Lenders” means Capital One, ULTra, HPS and each of their respective
Affiliates.
“Unreimbursed Amount” has the meaning specified in Section 2.03(3)(a).
“Unrestricted Cash Amount” means, on any date of determination, the aggregate amount of cash and Cash Equivalents of the Borrower and the Restricted Subsidiaries that (1) would not
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appear as “restricted” on a consolidated balance sheet of the Borrower and the Restricted Subsidiaries or (2) are restricted in favor of the Facilities (which may also secure other Indebtedness secured by a pari passu or junior Lien basis with the Facilities).
“Unrestricted Subsidiary” means:
So long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may designate:
Any such designation by the Borrower will be notified by the Borrower to the Administrative Agent (in the case of clause (a) above, by promptly filing with the Administrative Agent an Officer’s Certificate certifying that such designation complied with clause (a) above). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness and Liens of such Subsidiary existing at such time.
“USA PATRIOT Act” means The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Public Law No. 107-56 (signed into law October 26, 2001)), as amended or modified from time to time.
“Voluntary Prepayment Amount” has the meaning specified in Section 2.14(4)(c)(i).
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
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“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:
provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness (the “Applicable Indebtedness”), the effects of any amortization or prepayments made on such Applicable Indebtedness prior to the date of such determination will be disregarded.
“wholly owned” means, with respect to any Subsidiary of any Person, a Subsidiary of such Person one hundred percent (100%) of the outstanding Equity Interests of which (other than (1) directors’ qualifying shares and (2) shares of Capital Stock of Foreign Subsidiaries issued to foreign nationals as required by applicable Law) is at the time owned by such Person or by one or more wholly owned Subsidiaries of such Person.
“Withdrawal Liability” means the liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding U.S. Branch” means a U.S. branch of a non-U.S. bank treated as a U.S. person for purposes of Treasury Regulations Section 1.1441-1 and described in Treasury Regulations Section 1.1441-1(b)(2)(iv) that agrees, on IRS Form W-8IMY or such other form prescribed by the Treasury or the IRS, to accept responsibility for all U.S. federal income tax withholding and information reporting with respect to payments made to the Administrative Agent for the account of Lenders by or on behalf of any Loan Party under the Loan Documents.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
“Yen” means the lawful currency of Japan.
SECTION 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
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otherwise.
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of such Initial Default and the applicable Loan Party or Subsidiary had actual knowledge at the time of taking any such action that the Initial Default had occurred and was continuing,
SECTION 1.03 Accounting Terms.
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a Pro Forma Basis or in connection with any Specified Transaction) the consolidated financial results or performance of the Borrower and its Restricted Subsidiaries shall include the financial results or performance of the Affiliated Practices, in each case, to the extent such consolidation is required or, at the election of the Borrower, permitted under GAAP.
SECTION 1.04 Rounding. Any financial ratios required to be satisfied in order for a specific action to be permitted under this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05 References to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (1) references to Organizational Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (2) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
SECTION 1.06 Times of Day and Timing of Payment and Performance. Unless otherwise specified, (1) all references herein to times of day shall be references to New York time (daylight or standard, as applicable) and (2) when the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of “Interest Period”) or performance shall extend to the immediately succeeding Business Day.
SECTION 1.07 Pro Forma and Other Calculations.
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such addback and all other permitted add-backs and adjustments) for such Test Period on a pro forma basis.
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under any Non-Fixed Basket or other Fixed Basket or utilization of any Non-Fixed Basket as being incurred under any Fixed Basket or other Non-Fixed Basket) on one or more occasions (based on circumstances existing on the date of any such re-division and re-classification) any such Lien, Indebtedness, Disqualified Stock, Preferred Stock, Asset Sale, Investment, Restricted Payment, or other transaction, action, judgment or amount, in whole or in part, among one or more than one applicable Baskets under this Agreement within the same covenant (other than with respect to re-classification of Restricted Payments to Indebtedness pursuant to the Restricted Payment Capacity Debt Basket) (in the case of re-classification or re-division, so long as the amount so re-classified or re-divided is permitted at the time of such re-classification or re-division to be incurred pursuant to the applicable Basket into which such amount is re-classified or re-divided at such time). For the avoidance of doubt, the amount of any Lien, Indebtedness, Disqualified Stock, Preferred Stock, Asset Sale, Investment, Restricted Payment or other transaction, action, judgment or amount that shall be allocated to each such Basket shall be determined by the Borrower at the time of such division, classification, re-division or re-classification, as applicable. If any Lien, Indebtedness (including any Incremental Loans, Incremental Commitments, Permitted Incremental Equivalent Debt, Other Loans or Other Commitments), Disqualified Stock, Preferred Stock, Asset Sale, Investment, Restricted Payment, or other transaction, action, judgment or amount incurred under any provision in this Agreement or any other Loan Document (or any portion of the foregoing) previously divided and classified (or re-divided and re-classified) as set forth above under any Fixed Basket, could subsequently be re-divided and re-classified under a Non-Fixed Basket, such re- division and re-classification shall be deemed to occur automatically, in each case, unless otherwise elected by the Borrower. Notwithstanding the foregoing, any Indebtedness incurred under this Agreement (including on the Closing Date) will, at all times, be classified as being incurred under Section 7.02(2)(a) and may not be re-classified. For all purposes hereunder, (x) “Fixed Basket” shall mean any Basket that is subject to a fixed-dollar limit (including Baskets based on a percentage of Consolidated EBITDA or Total Assets) and (y) “Non-Fixed Basket” shall mean any Basket that is subject to compliance with a financial ratio or test (including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio or the Total Net Leverage Ratio) (any such ratio or test, a “Financial Incurrence Test”).
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Disqualified Stock or Preferred Stock does not exceed the maximum principal amount, liquidation preference or amount of Refinancing Indebtedness in respect of the Indebtedness, Disqualified Stock or Preferred Stock being refinanced, extended, replaced, refunded, renewed or defeased).
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subsequent fiscal quarters shall have become available, the Borrower may elect, in its sole discretion, to re-determine availability under Baskets on the basis of such financial statements, in which case, such date of redetermination shall thereafter be deemed to be the applicable LCT Test Date for purposes of such Basket and (y) except as contemplated in the foregoing clause (x), compliance with such Baskets (and any related requirements and conditions) shall not be determined or tested at any time after the applicable LCT Test Date for such Limited Condition Transaction, any Indebtedness or other transaction incurred in connection therewith and any actions or transactions related thereto.
SECTION 1.08 Available Amount Transaction. If more than one action occurs on any given date the permissibility of the taking of which is determined hereunder by reference to the amount specified in clause (b) of Section 7.05(1) immediately prior to the taking of such action, the permissibility of the taking of each such action shall be determined independently and in no event may any two or more
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such actions be treated as occurring simultaneously, i.e., each transaction must be permitted under clause (b) of Section 7.05(1) as so calculated.
SECTION 1.09 Guaranties of Hedging Obligations. Notwithstanding anything else to the contrary in any Loan Document, no non-Qualified ECP Guarantor shall be required to guarantee or provide security for Excluded Swap Obligations, and any reference in any Loan Document with respect to such non-Qualified ECP Guarantor guaranteeing or providing security for the Obligations shall be deemed to be all Obligations other than the Excluded Swap Obligations.
SECTION 1.10 Currency Generally.
SECTION 1.11 Letters of Credit. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the maximum amount available to be drawn under such Letter of Credit in effect at such time (not to exceed the stated amount of such Letter of Credit in effect at such time after giving effect to any automatic reductions or increases, as applicable, to such stated amount pursuant to the terms of the applicable Letter of Credit after the occurrence of any applicable condition (including the expiration of any applicable period); provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any L/C Application related thereto, provides for one or more automatic increases in the stated amount thereof, the stated amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time).
SECTION 1.12 Term Benchmark Replacement.
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all Lenders and the Borrower, so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from the Required Lenders stating that such Benchmark Replacement does not constitute a replacement index rate that is widely adopted in the leveraged syndicated loan market (and any such objections shall be conclusive and binding absent manifest error). No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 1.12(1) will occur prior to the applicable Benchmark Transition Start Date.
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SECTION 1.13 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
Article II
The Commitments and Borrowings
SECTION 2.01 The Loans.
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SECTION 2.02 Borrowings, Conversions and Continuations of Loans.
If the Borrower fails to specify a Type of Loan to be made in a Committed Loan Notice, then the applicable Loans shall be made as Term Benchmark Rate Loans with an Interest Period of
one (1) month. If the Borrower fails to give a timely notice requesting a conversion or continuation, then
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the applicable Loans shall be made or continued as the same Type of Loan, which if a Term Benchmark Rate Loan, shall have a one-month Interest Period. Any such automatic continuation of Term Benchmark Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Term Benchmark Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Term Benchmark Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have an identical Interest Period as the Interest Period just ending.
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SECTION 2.03 Letters of Credit.
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accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
An Issuing Bank shall be under no obligation to amend any Letter of Credit if (i) such Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof or (ii) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
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thereunder;
In the case of a request for an amendment of any outstanding Letter of Credit, such L/C Application shall specify in form and detail reasonably satisfactory to the relevant Issuing Bank:
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such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage of the amount of such Letter of Credit.
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any conditions set forth in Section 4.02 or Section 4.03; provided, however, that in no event shall any Lender be obligated to fund in excess of its Revolving Commitment after giving effect to its share of L/C Obligations (and, to the extent not duplicative, any effect to its share of Revolving Exposure), and without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans. Any notice given by an Issuing Bank pursuant to this Section 2.03(3)(a) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
Section 2.03(3), shall be absolute and unconditional and shall not be affected by any circumstance, including:
No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the relevant Issuing Bank for the amount of any payment made by such Issuing Bank under any Letter of Credit, together with interest as provided herein.
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provided that the foregoing shall not excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by the Borrower to the extent permitted by applicable Law) suffered by the Borrower that are caused by acts or omissions by such Issuing Bank constituting gross negligence, bad faith or willful misconduct on the part of such Issuing Bank as determined in a final and non-appealable judgment by a court of competent jurisdiction.
The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to,
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and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Issuing Banks, any Related Persons of such Issuing Banks, nor any of the respective correspondents, participants or assignees of any Issuing Bank, shall be liable or responsible for any of the matters described in clauses (a) through (f) of Section 2.03(5); provided that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against an Issuing Bank, and such Issuing Bank may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by such Issuing Bank’s willful misconduct, bad faith or gross negligence or such Issuing Bank’s willful or grossly negligent, or bad faith, failure to pay under any Letter of Credit after the presentation to it by the beneficiary of document(s) strictly complying with the terms and conditions of a Letter of Credit, in each case as determined in a final and non-appealable judgment by a court of competent jurisdiction. In furtherance and not in limitation of the foregoing, each Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no Issuing Bank shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
Each Revolving Lender shall, ratably in accordance with its Applicable Percentage, indemnify each Issuing Bank, its Related Persons and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ willful misconduct, bad faith or gross negligence or such Issuing Bank’s willful or grossly negligent, or bad faith, failure to pay under any Letter of Credit after the presentation to it by the beneficiary of documents(s) strictly complying with the terms and conditions of a Letter of Credit in each case as determined in a final and non-appealable judgment by a court of competent jurisdiction) that such indemnitees may suffer or incur in connection with this Section 2.03 or any action taken or omitted to be taken by such indemnitees hereunder.
the Borrower will Cash Collateralize, or cause to be Cash Collateralized, the then Outstanding Amount of all relevant L/C Obligations (in an amount equal to 103% of such Outstanding Amount determined as of the date of such Event of Default or the applicable L/C Expiration Date, as the case may be), and shall do so not later than 2:00 p.m., New York time, on (i) in the case of the immediately preceding clauses (a) or (b), (x) the Business Day that the Borrower receives notice thereof, if such notice is received on such day prior to 12:00 p.m., New York time, or (y) if clause (x) above does not apply, the Business Day immediately following the day that the Borrower receives such notice and (ii) in the case of the immediately preceding clause (c), the Business Day on which an Event of Default set forth under
Section 8.01(6) occurs or, if such day is not a Business Day, the Business Day immediately succeeding such day. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Revolver Agent or the applicable Issuing Bank, the Borrower will Cash Collateralize all Fronting
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Exposure (after giving effect to Section 2.17(1)(d) and any Cash Collateral provided by the Defaulting Lender). The Borrower hereby grants to the Revolver Agent, for the benefit of the Issuing Banks and the Revolving Lenders, a security interest in all such Cash Collateral. Cash Collateral shall be maintained in blocked accounts at the Revolver Agent and may be invested in readily available Cash Equivalents selected by the Revolver Agent in its sole discretion. If at any time the Revolver Agent determines that any funds held as Cash Collateral are expressly subject to any right or claim of any Person other than the Loan Parties or the Revolver Agent (in its capacity as the depository bank and on behalf of the Secured Parties) or that the total amount of such funds is less than 103% of the aggregate Outstanding Amount of all relevant L/C Obligations, the Borrower will, forthwith upon demand by the Revolver Agent, pay, or cause to be paid, to the Revolver Agent, as additional funds to be deposited and held in the deposit accounts at the Revolver Agent as aforesaid, an amount equal to the excess of (a) 103% of such aggregate Outstanding Amount over (b) the total amount of funds, if any, then held as Cash Collateral that the Revolver Agent reasonably determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Law, to reimburse the relevant Issuing Bank. To the extent the amount of any Cash Collateral exceeds 103% of the then Outstanding Amount of such relevant L/C Obligations and so long as no Event of Default has occurred and is continuing, the excess shall promptly be refunded to the Borrower. To the extent any Event of Default giving rise to the requirement to Cash Collateralize any Letter of Credit pursuant to this Section 2.03(7) is cured or otherwise waived, then so long as no other Event of Default has occurred and is continuing, the amount of any Cash Collateral pledged to Cash Collateralize such Letter of Credit shall promptly be refunded to the Borrower.
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addition, the Borrower shall pay, or cause to be paid, directly to each Issuing Bank for its own account with respect to each Letter of Credit issued by such Issuing Bank the customary issuance, presentation, amendment and other processing and administrative fees, and other standard costs and charges, of such Issuing Bank relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable within ten (10) Business Days of demand and are nonrefundable.
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reimbursed, the applicable Issuing Bank hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Holdings or any Subsidiary inures to the benefit of the Borrower, and that the Borrower’s businesses derives substantial benefits from the businesses of Holdings and each Subsidiary.
SECTION 2.04 Swing Line Loans.
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reallocation (after giving effect to any repayments of Revolving Loans and any reallocation of Letter of Credit participations as contemplated in Section 2.03(12)) the amount of Swing Line Loans to be reallocated equal to such excess shall be repaid and (b) notwithstanding the foregoing, if a Default has occurred and is continuing, the Borrower shall still be obligated to pay Swing Line Loans allocated to the Revolving Lenders holding the Expiring Credit Commitments at the Maturity Date of the Expiring Credit Commitment or if the Loans have been accelerated prior to the Maturity Date of the Expiring Credit Commitment.
SECTION 2.05 Prepayments.
Each such notice shall specify the date and amount of such prepayment and the Class(es) and Type(s) of Loans to be prepaid. The Applicable Agent will promptly notify each Appropriate Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Term Benchmark Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05 and Section 2.18. In the case of each prepayment of the Loans pursuant to this Section 2.05(1), the Borrower may in its sole discretion select the Borrowing or Borrowings (and the order of maturity of principal payments) to be repaid, and such payment shall be paid to the Appropriate Lenders in accordance with their respective Pro Rata Shares.
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(or such later time as may be agreed by the Swing Line Lender and the Revolver Agent), and (2) any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple amount of $10,000 in excess thereof or, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
2.18 or Section 3.05).
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Class, the Class or Classes of Term Loans subject to such offer and the specific percentage discount to par (the “Specified Discount”) of such Term Loans to be prepaid (it being understood that different Specified Discounts or Specified Discount Prepayment Amounts may be offered with respect to different Classes of Term Loans and, in such event, each such offer will be treated as a separate offer pursuant to the terms of this Section 2.05(1)(e)(B)), (c) the Specified Discount Prepayment Amount shall be in an aggregate amount not less than $1,000,000 and whole increments of $500,000 in excess thereof and (d) each such offer shall remain outstanding through the Specified Discount Prepayment Response Date. The Auction Agent will promptly provide each Appropriate Lender with a copy of such Specified Discount Prepayment Notice and a form of the Specified Discount Prepayment Response to be completed and returned by each such Term Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m., New York time, on the third Business Day after the date of delivery of such notice to such Lenders (the “Specified Discount Prepayment Response Date”).
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that (a) any such solicitation shall be extended, at the sole discretion of such Borrower Party, to (i) each Term Lender or (ii) each Term Lender with respect to any Class of Term Loans on an individual Class basis, (b) any such notice shall specify the maximum aggregate principal amount of the relevant Term Loans (the “Discount Range Prepayment Amount”), the Class or Classes of Term Loans subject to such offer and the maximum and minimum percentage discounts to par (the “Discount Range”) of the principal amount of such Term Loans with respect to each relevant Class of Term Loans willing to be prepaid by such Borrower Party (it being understood that different Discount Ranges or Discount Range Prepayment Amounts may be offered with respect to different Classes of Term Loans and, in such event, each such offer will be treated as a separate offer pursuant to the terms of this Section 2.05(1)(e)(C)), (c) the Discount Range Prepayment Amount shall be in an aggregate amount not less than $1,000,000 and whole increments of $500,000 in excess thereof and (d) unless rescinded, each such solicitation by the applicable Borrower Party shall remain outstanding through the Discount Range Prepayment Response Date (as defined below). The Auction Agent will promptly provide each Appropriate Lender with a copy of such Discount Range Prepayment Notice and a form of the Discount Range Prepayment Offer to be submitted by a responding Term Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m., New York time, on the third Business Day after the date of delivery of such notice to such Lenders (the “Discount Range Prepayment Response Date”). Each Term Lender’s Discount Range Prepayment Offer shall be irrevocable and shall specify a discount to par within the Discount Range (the “Submitted Discount”) at which such Lender is willing to allow prepayment of any or all of its then outstanding Term Loans of the applicable Class or Classes and the maximum aggregate principal amount and Classes of such Lender’s Term Loans (the “Submitted Amount”) such Term Lender is willing to have prepaid at the Submitted Discount. Any Term Lender whose Discount Range Prepayment Offer is not received by the Auction Agent by the Discount Range Prepayment Response Date shall be deemed to have declined to accept a Discounted Term Loan Prepayment of any of its Term Loans at any discount to their par value within the Discount Range.
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shall be made pro rata among the Identified Participating Lenders in accordance with the Submitted Amount of each such Identified Participating Lender and the Auction Agent (in consultation with such Borrower Party and subject to rounding requirements of the Auction Agent made in its sole reasonable discretion) will calculate such proration (the “Discount Range Proration”). All Discount Range Prepayment Offers including a Submitted Discount at a discount to par greater than the Applicable Discount shall be repaid, and will not be subject to pro-ration. The Auction Agent shall promptly, and in any case within five (5) Business Days following the Discount Range Prepayment Response Date, notify
(a) the relevant Borrower Party of the respective Term Lenders’ responses to such solicitation, the Discounted Prepayment Effective Date, the Applicable Discount, the aggregate principal amount of the Discounted Term Loan Prepayment and the Classes to be prepaid, (b) each Term Lender of the Discounted Prepayment Effective Date, the Applicable Discount and the aggregate principal amount and Classes of Term Loans to be prepaid at the Applicable Discount on such date, (c) each Participating Lender of the aggregate principal amount and Classes of such Term Lender to be prepaid at the Applicable Discount on such date, (d) if applicable, each Identified Participating Lender of the Discount Range Proration and (e) the Administrative Agent to the extent not acting as the Auction Agent. Each determination by the Auction Agent of the amounts stated in the foregoing notices to the relevant Borrower Party and Term Lenders shall be conclusive and binding for all purposes absent manifest error. The payment amount specified in such notice to the applicable Borrower Party shall be due and payable by such Borrower Party on the Discounted Prepayment Effective Date in accordance with subsection (F) below (subject to subsection (J) below).
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Lenders in the Solicited Discounted Prepayment Offers that is acceptable to the applicable Borrower Party (the “Acceptable Discount”), if any. If the applicable Borrower Party elects to accept any Offered Discount as the Acceptable Discount, then as soon as practicable after the determination of the Acceptable Discount, but in no event later than by the third Business Day after the date of receipt by such Borrower Party from the Auction Agent of a copy of all Solicited Discounted Prepayment Offers pursuant to the first sentence of this subsection (2) (the “Acceptance Date”), the applicable Borrower Party shall submit an Acceptance and Prepayment Notice to the Auction Agent setting forth the Acceptable Discount. If the Auction Agent shall fail to receive an Acceptance and Prepayment Notice from the applicable Borrower Party by the Acceptance Date, such Borrower Party shall be deemed to have rejected all Solicited Discounted Prepayment Offers.
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Solicited Discounted Prepayment Notice therefor at its discretion at any time on or prior to the applicable Specified Discount Prepayment Response Date, Discount Range Prepayment Response Date or Solicited Discounted Prepayment Response Date (and if such offer is revoked pursuant to the preceding clauses, any failure by such Borrower Party to make any prepayment to a Lender, as applicable, pursuant to this Section 2.05(1)(e) shall not constitute a Default or Event of Default under Section 8.01 or otherwise).
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with respect to any revolving facility under clause (II) above), to the extent accompanied by a permanent reduction in the corresponding revolving commitments),
in the case of each of the immediately preceding clauses (i), (ii), (iii) and (iv), made during such fiscal year (without duplication of any payments or prepayments, repurchases or redemptions in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to this Section 2.05(2)(a) for any prior fiscal year) or, at the option of the Borrower, after the fiscal year-end but prior to the date a prepayment pursuant to this Section 2.05(2)(a) is required to be made in respect of such fiscal year and in each case to the extent such amounts and/or payments are not funded with the proceeds of long-term Indebtedness (other than any Indebtedness under a Revolving Facility or any other revolving credit facilities); provided that (w) a prepayment of Term Loans pursuant to this Section 2.05(2)(a) in respect of any fiscal year shall only be required in the amount (if any) by which the ECF Payment Amount for such fiscal year exceeds $5,000,000 (the “ECF Threshold”), (x) the ECF Percentage shall be 25% if the First Lien Net Leverage Ratio as of the end of the fiscal year covered by such financial statements was less than or equal to 2.50 to 1.00 and greater than 2.00 to 1.00 (with the ECF Percentage being calculated after giving effect to such prepayment at a rate of 50%) and (y) the ECF Percentage shall be 0% if the First Lien Net Leverage Ratio as of the end of the fiscal year covered by such financial statements was less than or equal to 2.00 to 1.00 (with the ECF Percentage being calculated after giving effect to such prepayment at a rate of 25%); provided further that:
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Term Loans and to the repurchase or prepayment of Other Applicable Indebtedness, and the amount of prepayment of the Term Loans that would have otherwise been required pursuant to this Section 2.05(2)(a) shall be reduced accordingly (provided that the portion of such Excess Cash Flow allocated to the Other Applicable Indebtedness shall not exceed the amount of such Other Applicable ECF required to be allocated to the Other Applicable Indebtedness pursuant to the terms thereof and the remaining amount, if any, of such portion of Excess Cash Flow shall be allocated to the Term Loans to the extent required in accordance with the terms of this Section 2.05(2)(a)); and
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(ii) With respect to any Net Proceeds realized or received with respect to any Applicable Asset Sale or any Casualty Event, the Borrower or any Restricted Subsidiary, at its option, may reinvest all or any portion of such Net Proceeds in assets useful for their business within (I) twelve (12) months following receipt of such Net Proceeds or (II) if the Borrower or any Restricted Subsidiary enters into a legally binding commitment or a signed letter of intent to reinvest such Net Proceeds within twelve (12) months following receipt thereof, within eighteen (18) months following receipt thereof; provided that the Borrower may elect to deem expenditures that otherwise would be permissible reinvestments that occur within 90 days prior to receipt of such Net Proceeds to have been reinvested in accordance with the provisions of this Section 2.05(2)(b)(ii) (it being understood that such deemed expenditures shall have been made no earlier than the earliest of notice to the Administrative Agent, execution of a definitive agreement for such Applicable Asset Sale and consummation of such Applicable Asset Sale or Casualty Event); provided further that to the extent any such Net Proceeds are not reinvested on or prior to the last day of the reinvestment period set forth in this sub-section (ii) (or, if earlier, any date during such reinvestment period that the Borrower determines that such Net Proceeds are no longer intended to be or cannot be so reinvested) (the “Deferred Net Proceeds Date”), subject to clauses (f) and (g) of this Section 2.05(2), such Net Proceeds that are not so reinvested on or prior to the Deferred Net Proceeds Date shall be deemed to be Net Proceeds received on such Deferred Net Proceeds Date for purposes of Section 2.05(2)(b)(i) and shall be applied as set forth in Section 2.05(2)(b)(i) within five Business Days after the Deferred Net Proceeds Date (for the avoidance of doubt, without any further reinvestment right with respect thereto under this Section 2.05(2)(b)(ii)).
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to any such Class of Term Loans without at least a pro rata repayment of any Classes of Term Loans maturing on the same date (except that any Class of Incremental Term Loans, Other Term Loans, Extended Term Loans or Replacement Loans may specify that one or more other Classes of Term Loans with the same Maturity Date may be prepaid prior to such Class of Term Loans maturing on the same date), and
(ii) each prepayment of Term Loans required by Section 2.05(2)(c)(ii) shall be allocated to any Class or Classes of Term Loans being refinanced as directed by the Borrower and shall be applied pro rata to Term Lenders within each such Class, based upon the outstanding principal amounts owing to each such Term Lender under each such Class of Term Loans.
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the applicable local law to permit such repatriation) and (ii) to the extent that the Borrower has determined in good faith that repatriation of any of or all the Net Proceeds of any Foreign Asset Sale or Foreign Casualty Event or Excess Cash Flow would have a material adverse tax consequence for any Loan Party or any of such Loan Party’s Subsidiaries or any Parent Company (taking into account any foreign tax credit or benefit actually realized in connection with such repatriation) with respect to such Net Proceeds or Excess Cash Flow, an amount equal to the Net Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Term Loans at the times provided in this Section 2.05(2) (each, a “Payment Block”), provided that, the Borrower shall not be required to monitor any such Payment Block and/or to reserve cash for any future repatriation after the Borrower has notified the Administrative Agent of the existence of such Payment Block.
Notwithstanding any of the other provisions of this Section 2.05, so long as no Event of Default shall have occurred and be continuing, if any prepayment of Term Benchmark Rate Loans is required to be made under this Section 2.05 prior to the last day of the Interest Period therefor, in lieu of making any payment pursuant to this Section 2.05 in respect of any such Term Benchmark Rate Loan prior to the last day of the Interest Period therefor, the Borrower may, in its discretion, deposit an amount sufficient to make any such prepayment otherwise required to be made thereunder together with accrued interest to the last day of such Interest Period into a Cash Collateral Account until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of such Loans in accordance with this Section 2.05. Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of the outstanding Loans in accordance with the relevant provisions of this Section 2.05. Such deposit shall be deemed to be a prepayment of such Loans by the Borrower for all purposes under this Agreement.
SECTION 2.06 Termination or Reduction of Commitments.
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provided, that any reduction of Delayed Draw Term Loan Commitments pursuant to this Section 2.06(1) must be offered or applied to all of the holders of Delayed Draw Term Loan Commitments on a pro rata basis with respect to their respective Delayed Draw Term Loan Commitments.
Except as provided above, the amount of any such Revolving Commitment reduction shall not be applied to the L/C Sublimit or Swing Line Sublimit unless otherwise specified by the Borrower. Notwithstanding the foregoing, the Borrower may rescind or postpone any notice of termination of any Commitments if such termination would have resulted from a refinancing of all of the applicable Facility or other conditional event, which refinancing or other conditional event shall not be consummated or shall otherwise be delayed.
SECTION 2.07 Repayment of Loans.
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prepayment in respect of such Class such that the Term Lenders holding Closing Date Term Loans and Closing Date Delayed Draw Term Loans comprising part of such Class continue to receive a payment that is not less than the same Dollar amount that such Term Lenders would have received absent the incurrence of such Incremental Term Loans; provided, that if such Incremental Term Loans are to be “fungible” with the Closing Date Term Loans and the Closing Date Delayed Draw Term Loans notwithstanding any other conditions specified in this Section 2.07(1), the amortization schedule for such “fungible” Incremental Term Loan may provide for amortization in such other percentage(s) to be agreed by Borrower and the Administrative Agent to provide that the Incremental Term Loans will be (or will be deemed to be) “fungible” with the Closing Date Term Loans and the Closing Date Delayed Draw Term Loans.
SECTION 2.08 Interest.
SECTION 2.09 Fees.
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Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Borrower prior to such time; and provided further that no commitment fee shall accrue on any of the Commitments under any Revolving Facility of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. The commitment fee on each Revolving Commitment shall accrue at all times from the Closing Date (or date of initial effectiveness, as applicable) (and for the avoidance of doubt, the commitment fee on the Revolving Commitment under the Closing Date Revolving Facility shall accrue from the Closing Date) until the Maturity Date for the applicable Revolving Commitment, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each of March, June, September and December, commencing with December 31, 2022, and on the Maturity Date for such Revolving Facility. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Commitment Fee Rate during any quarter, the actual daily amount shall be computed and multiplied by the Commitment Fee Rate separately for each period during such quarter that such Commitment Fee Rate was in effect.
SECTION 2.10 Computation of Interest and Fees. All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 days or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(1), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.11 Evidence of Indebtedness.
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course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent, as set forth in the Register, in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note payable to such Lender, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and record thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
SECTION 2.12 Payments Generally.
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the case of the Borrower, for the account of any Lender or an Issuing Bank hereunder or, in the case of the Lenders, for the account of any Issuing Bank, Swing Line Lender or the Borrower hereunder), that the Borrower or such Lender, as the case may be, will not make such payment, the Applicable Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Applicable Agent in Same Day Funds, then:
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on any date, such payment shall be distributed by the Applicable Agent and applied by the Applicable Agent and the Lenders in the order of priority set forth in Section 8.03 (or otherwise expressly set forth herein). If the Applicable Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Applicable Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the sum of (i) the Outstanding Amount of all Loans outstanding at such time and (ii) the Outstanding Amount of all L/C Obligations outstanding at such time, in repayment or prepayment of such of the outstanding Loans or other Obligations then owing to such Lender.
SECTION 2.13 Sharing of Payments. Other than as expressly provided elsewhere herein, if any Lender of any Class shall obtain payment in respect of any principal of or interest on account of the Loans of such Class made by it or the participations in L/C Obligations and Swing Line Loans held by it (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (1) notify the Administrative Agent of such fact and (2) purchase from the other Lenders such participations in the Loans of such Class made by them or such sub-participations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of any principal of or interest on such Loans of such Class or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (a) the amount of such paying Lender’s required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. For the avoidance of doubt, the provisions of this Section 2.13 shall not be construed to apply to (i) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement as in effect from time to time (including the application of funds arising from the existence of a Defaulting Lender) or (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant permitted hereunder. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.13 may, to the fullest extent permitted by applicable Law, exercise all its rights of payment (including the right of setoff, but subject to Section 10.10) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.13 and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section 2.13 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased. For purposes of clause (3) of the definition of Excluded Taxes, any participation acquired by a Lender pursuant to this Section 2.13 shall be treated as having been acquired on the earlier date(s) on which the applicable interest(s) in the Commitment(s) or Loan(s) to which such participation relates were acquired by such Lender.
SECTION 2.14 Incremental Facilities.
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request (a) one or more new commitments which may be of the same Class as any outstanding Term Loans, Delayed Draw Term Loans or Delayed Draw Term Loan Commitments (a “Term Loan Increase”) or a new Class of term loans or delayed draw term loan commitments (collectively with any Term Loan Increase, the “Incremental Term Commitments”; such Incremental Term Commitments in respect of delayed draw term loans, the “Incremental Delayed Draw Term Loan Commitments”) and/or (b) one or more increases in the amount of the Revolving Commitments (a “Revolving Commitment Increase”) or the establishment of one or more new revolving credit commitments (each an “Incremental Revolving Facility”; and, collectively with any Revolving Commitment Increases, the “Incremental Revolving Commitments”; any Incremental Revolving Commitments, collectively with any Incremental Term Commitments, the “Incremental Commitments”), whereupon the Applicable Agent shall promptly deliver a copy to each of the Lenders. Each Incremental Loan Request from the Borrower pursuant to this Section 2.14 shall set forth the requested amount and proposed terms of the relevant Incremental Term Commitments or Incremental Revolving Commitments.
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Incremental Commitments from then-existing Lenders (other than Defaulting Lenders) prior to obtaining Incremental Commitments from any other Person (it being understood that Borrower may seek such Incremental Commitments from existing Lenders prior to seeking such Incremental Commitments from other Persons), and such then-existing Lenders shall notify the Borrower and the Administrative Agent in writing of their participation in, and offered commitment with respect to, such Incremental Commitments within five Business Days of the delivery by the Borrower to the Administrative Agent of such notice (it being understood that (A) if any existing Lender fails to so notify the Borrower and the Administrative Agent of its participation in (or not provide) any Incremental Commitments within five Business Days of such notice, it shall be deemed to have declined providing or otherwise participating in such Incremental Commitment, (B) the Borrower shall not be required to accept any Incremental Commitments from existing Lenders pursuant to this clause (i) on any terms and conditions less favorable to the Borrower or its Restricted Subsidiaries than the terms and conditions of any Incremental Commitments to be provided by any other Person and (C) the Borrower shall not be required to accept any Incremental Commitments from existing Lenders pursuant to this proviso to the extent existing Lenders in the aggregate do not provide Incremental Commitments in the amount requested by the Borrower pursuant to such notice), (ii) the Administrative Agent or, in the case of any Incremental Revolving Commitments only, each Swing Line Lender and each Issuing Bank, shall have consented (in each case, not to be unreasonably withheld, conditioned or delayed) to such Additional Lender’s making such Incremental Term Loans or providing such Incremental Revolving Commitments to the extent such consent, if any, would be required under Section 10.07(2) for an assignment of Loans or Revolving Commitments, as applicable, to such Additional Lender, (iii) with respect to Incremental Term Commitments, any Affiliated Lender providing an Incremental Term Commitment shall be subject to the same restrictions set forth in Section 10.07(8) as they would otherwise be subject to with respect to any purchase by or assignment to such Affiliated Lender of Term Loans, (iv) Affiliated Lenders may not provide Incremental Revolving Commitments and
(v) with respect to any Incremental Commitments established pursuant to the Incremental Ratio Basket (or, solely to the extent that the Borrower is able to satisfy the Delayed Draw Term Loan First Lien Leverage Condition or the Delayed Draw Term Loan Secured Leverage Condition on a pro forma basis as of the Incremental Facility Closing Date (or, if applicable, the LCT Test Date), the Free and Clear Incremental Amount), the Incremental Facility Closing Date shall be on or after the Delayed Draw Term Loan Commitment Expiration Date (provided that, for the avoidance of doubt, the Required Facility Lenders under the Delayed Draw Term Loan Facility shall be permitted to waive the requirement set forth in this clause).
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shall be tested (if applicable) solely on the applicable LCT Test Date as selected by the Borrower pursuant to Section 1.07(11);
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Leverage Ratio without netting the cash proceeds from such Incremental Loans then proposed to be incurred) (other than with respect to any such cash proceeds of revolving indebtedness intended to be used for working capital), or
In addition, the Borrower may elect to use clause (iii) of the definition of Available Incremental Amount regardless of whether the Borrower has capacity under clauses (i) or (ii) of the definition of Available Incremental Amount. Further, the Borrower may elect to use clause (iii) of the definition of Available Incremental Amount prior to using clauses (i) or (ii) of the definition of Available Incremental Amount, and if both clause (iii) and clauses (i) or (ii) of the definition of Available Incremental Amount are available, unless otherwise elected by the Borrower, then the Borrower will be deemed to have elected to use clause (iii) of the definition of Available Incremental Amount. In addition, any Indebtedness originally designated as incurred pursuant to clauses (i) or (ii) of the definition of Available Incremental Amount shall be automatically reclassified as incurred under clause (iii) of the definition of Available Incremental Amount at such time as the Borrower would meet the applicable leverage-based incurrence test at such time on a pro forma basis, unless otherwise elected by the Borrower. In the case of any Incremental Delayed Draw Term Loan Commitment or Incremental Equivalent Debt in the form of a delayed draw loan or note, for purposes of determining capacity under, and compliance with the Available Incremental Amount (including for purposes of incurring or establishing such Incremental Delayed Draw Term Loan Commitment (and any associated Incremental Delayed Draw Term Loan) or Incremental Equivalent Debt in the form of a delayed draw term loan or note), such Incremental Delayed Draw Term Loan or Incremental Equivalent Debt shall be incurred as and when the applicable Incremental Delayed Draw Term Loan or Incremental Equivalent Debt is funded (and shall be deemed not to be drawn, or incurred under the Available Incremental Amount, prior to the funding thereof) (for the avoidance of doubt, capacity under the Available Incremental Amount with respect to incurring such Incremental Delayed Draw Term Loan or Incremental Equivalent Debt shall be determined as of the applicable date of funding thereunder (and not as of the date the corresponding delayed draw commitments are established)).
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materially more restrictive to the Borrower (as determined by the Borrower in good faith), when taken as a whole, than the terms of the Closing Date Term Loans or Closing Date Revolving Facility, as applicable, except, in each case under this clause (B), with respect to (x) covenants (including any Previously Absent Financial Maintenance Covenant) and other terms applicable to any period after the Latest Maturity Date of the Closing Date Term Loans or Closing Date Revolving Facility, as applicable, in effect immediately prior to the incurrence of the Incremental Term Loans and Incremental Term Commitments or the Incremental Revolving Loans and Incremental Revolving Commitments, as the case may be or (y) a Previously Absent Financial Maintenance Covenant (so long as, (i) to the extent that any such terms of any Incremental Revolving Loans and Incremental Revolving Commitments contain a Previously Absent Financial Maintenance Covenant that is in effect prior to the applicable Latest Maturity Date of the Closing Date Revolving Facility, such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Revolving Facility, and (ii) to the extent that any such terms of any Incremental Term Loans contain a Previously Absent Financial Maintenance Covenant that is in effect prior to the applicable Latest Maturity Date of the Closing Date Term Loan Facility and the Delayed Draw Term Loan Facility, such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Term Loans and Delayed Draw Term Loans or (C) contain such terms, provisions and documentation as are reasonably satisfactory to the Administrative Agent and the Specified Representative (or in the case of the Revolving Facility, solely to the extent that such terms, provisions and documentation with respect to the Revolving Facility would require consent of any Class of Lenders other than the Revolving Lenders under Section 10.01) (provided that, at the Borrower’s election, to the extent any term or provision is added for the benefit of (i) the Lenders of Incremental Term Loans or Lenders under Incremental Revolving Commitments, no consent shall be required from the Administrative Agent or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Term Loans and the Delayed Draw Term Loan Facility or (ii) the Lenders under Incremental Revolving Commitments, no consent shall be required from the Administrative Agent and the Specified Representative unless the addition of such term or provision (or the provision of the features thereof) to the Revolving Facility would require the consent of any Class of Lenders other than the Revolving Lenders under Section 10.01, in which case the consent of the Administrative Agent and the Specified Representative shall be required or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Revolving Facility); provided that in the case of a Term Loan Increase or a Revolving Commitment Increase, the terms, provisions and documentation of such Term Loan Increase or a Revolving Commitment Increase shall be identical (other than with respect to upfront fees, OID or similar fees, it being understood that, if required to consummate such Loan Increase transaction, the interest rate margins and rate floors may be increased, any call protection provision may be made more favorable to the applicable existing Lenders and additional upfront or similar fees may be payable to the lenders providing the Loan Increase) to the applicable Term Loans or Revolving Commitments being increased, in each case, as existing on the Incremental Facility Closing Date (provided that, if such Incremental Term Loans are intended to be “fungible” with the Closing Date Term Loans, notwithstanding any other conditions specified in this Section 2.14(5), the amortization schedule for such “fungible” Incremental Term Loan may provide for amortization in such other percentage(s) to be agreed by Borrower and the Administrative Agent to provide that such Incremental Term Loans will be (or will be deemed to be) “fungible” with the Closing Date Term Loans). In any event:
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reasonably satisfactory to the Administrative Agent or (B) be unsecured, in each case as applicable pursuant to Section 2.14(4)(c) above,
provided that Incremental Term Loans may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long term Indebtedness (so long as such credit facility includes customary “rollover provisions” that satisfy the requirements of clauses (ii) and (iii) above following such rollover), in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, clauses (ii) and (iii) above shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions;
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(b) the Incremental Revolving Commitments and Incremental Revolving Loans:
(I) with respect to (A) repayments required upon the Maturity Date of any Incremental Revolving Commitments and (B) repayments made in connection with any refinancing of Incremental Revolving Commitments or (II) as compared to any other Revolving Commitments with a later maturity date than such Incremental Revolving Commitments), in each case, with all other Revolving Commitments existing on such Incremental Facility Closing Date,
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provided that Incremental Revolving Commitments and Incremental Revolving Loans may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long term indebtedness (so long as such credit facility includes customary “rollover provisions” that satisfy the requirements of clause (ii) above following such rollover), in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, clause (ii) above shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions;
provided further that on the date of effectiveness of any Incremental Revolving Commitments, the L/C Sublimit and/or Swing Line Sublimit, as applicable, shall increase by an amount, if any, agreed upon by the Required Revolver Lenders, the Borrower and the relevant Issuing Banks and/or the Swing Line Lender, as applicable.
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implementation of, as applicable) the Adjusted Term SOFR or Base Rate floor applicable to such Closing Date Term Loans and Delayed Draw Term Loans) (this proviso, the “MFN Provision”).
(b) at the option of the Borrower in consultation with the Applicable Agent, incorporate terms that would be favorable to existing Lenders of the applicable Class or Classes for the benefit of such existing Lenders of the applicable Class or Classes (including to the extent necessary or advisable to allow any Class of Incremental Commitments to be a Loan Increase), in each case under this clause (b), so long as the Applicable Agent reasonably agrees that such modification is favorable to the applicable Lenders. In connection with any Incremental Amendment, the Borrower shall, if reasonably requested by the Applicable Agent, deliver customary reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by the Applicable Agent in order to ensure that such Incremental Loans are provided with the benefit of the applicable Loan Documents. The Borrower may use the proceeds (if any) of the Incremental Loans for any purpose not prohibited by this Agreement. No Lender shall be obligated to provide any Incremental Commitments or Incremental Loans unless it so agrees.
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SECTION 2.15 Refinancing Amendments.
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the benefit of the Lenders of the Closing Date Revolving Facility). Any Other Term Loans may participate on a pro rata basis, less than a pro rata basis or greater than a pro rata basis in any prepayments of Term Loans hereunder (except that, unless otherwise permitted under this Agreement or unless the Class of Term Loans being refinanced was so entitled to participate on a greater than a pro rata basis in such mandatory prepayments, such Other Term Loans may not participate on a greater than a pro rata basis as compared to any earlier maturing Class of Term Loans constituting First Lien Obligations in any mandatory prepayments under Section 2.05(2)(a), (b) and (c)(i)), as specified in the applicable Refinancing Amendment. All Other Revolving Commitments shall provide that (a) except as provided under sub-clause (b) below, borrowings and repayments (other than permanent repayments) of principal under the applicable Other Revolving Commitments may be made on a pro rata basis, less than a pro rata basis or greater than a pro rata basis and (b) the permanent repayment of Other Revolving Loans in connection with a termination of Other Revolving Commitments may be made on a pro rata basis or less than a pro rata basis (or greater than a pro rata basis (i) with respect to (I) repayments required upon the Maturity Date of any Other Revolving Commitments and (II) repayments made in connection with any refinancing of Other Revolving Commitments or (ii) as compared to any other Revolving Commitments with a later maturity date than such Other Revolving Commitments), in each case, with all other Revolving Commitments. In connection with any Refinancing Amendment, the Borrower shall, if reasonably requested by the Administrative Agent, deliver customary reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by the Administrative Agent in order to ensure that such Other Loans or Other Revolving Commitments are provided with the benefit of the applicable Loan Documents.
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Revolving Facility would require the consent of any Class of Lenders other than the Revolving Lenders under Section 10.01, the consent of the Administrative Agent shall be required for the incorporation of such terms, which consent shall be separate and apart from the Administrative Agent’s concurrence that such terms are favorable to the applicable Lenders).
SECTION 2.16 Extensions of Loans.
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included for the benefit of the Closing Date Term Loans) or (iii) such terms as are reasonably satisfactory to the Administrative Agent (provided that, at Borrower’s election, to the extent any term or provision is added for the benefit of the lenders of Extended Term Loans, no consent shall be required from the Administrative Agent or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Term Loans). No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Class converted into Extended Term Loans pursuant to any Term Loan Extension Request. Any Extended Term Loans extended pursuant to any Term Loan Extension Request shall be designated a series (each, a “Term Loan Extension Series”) of Extended Term Loans for all purposes of this Agreement and shall constitute a separate Class of Loans from the Existing Term Loan Class from which they were extended; provided that any Extended Term Loans amended from an Existing Term Loan Class may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any previously established Term Loan Extension Series with respect to such Existing Term Loan Class.
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faith), (ii) if otherwise not consistent with the Existing Revolving Class subject to such Revolving Extension Request, are not materially more restrictive to the Borrower (as determined by the Borrower in good faith), when taken as a whole, than the terms of such Existing Revolving Class subject to such Revolving Extension Request, except, in each case under this clause (ii), with respect to (I) covenants and other terms applicable solely to any period after the Latest Maturity Date in respect of such Existing Revolving Class subject to such Revolving Extension Request in effect immediately prior to such Extension Amendment or (II) a Previously Absent Financial Maintenance Covenant (so long as, to the extent that any such terms of any Extended Revolving Commitments contain a Previously Absent Financial Maintenance Covenant that is in effect prior to the applicable Latest Maturity Date of the Closing Date Revolving Facility, such Previously Absent Financial Maintenance Covenant shall be included for the benefit of the Closing Date Revolving Facility) or (iii) such terms as are reasonably satisfactory to the Administrative Agent (or in the case of the Revolving Facility, solely to the extent that such terms, provisions and documentation with respect to the Revolving Facility would require consent of any Class of Lenders other than the Revolving Lenders under Section 10.01) (provided that, at Borrower’s election, (A) to the extent any term or provision is added for the benefit of the lenders of Extended Revolving Commitments, no consent shall be required from the Administrative Agent or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Term Loans or (B) to the extent any term or provision is added for the benefit of the Lenders of Extended Revolving Commitments, no consent shall be required from the Administrative Agent unless the addition of such term or provision (or the provision of the features thereof) to the Revolving Facility would require the consent of any Class of Lenders other than the Revolving Lenders under Section 10.01 or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Revolving Facility). No Lender shall have any obligation to agree to have any of its Revolving Commitments of any Existing Revolving Class converted into Extended Revolving Commitments pursuant to any Revolving Extension Request. Any Extended Revolving Commitments extended pursuant to any Revolving Extension Request shall be designated a series (each, a “Revolving Extension Series”) of Extended Revolving Commitments for all purposes of this Agreement and shall constitute a separate Class of Revolving Commitments from the Existing Revolving Class from which they were extended; provided that any Extended Revolving Commitments amended from an Existing Revolving Class may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any previously established Revolving Extension Series with respect to such Existing Revolving Class.
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Revolving Commitments, respectively, requested pursuant to the Extension Request, Term Loans and/or Revolving Commitments, as applicable, subject to Extension Elections shall be converted or exchanged into Extended Term Loans and/or Revolving Commitments, respectively, as directed by the Borrower.
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order to ensure that such Extended Term Loans and/or Extended Revolving Commitments are provided with the benefit of the applicable Loan Documents.
Revolving Commitments existing on the date of the Extension of such Extended Revolving Commitments (and except as provided in Section 2.03(12) and Section 2.04(7), without giving effect to changes thereto on an earlier Maturity Date with respect to Letters of Credit and Swing Line Loans theretofore incurred or issued).
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SECTION 2.17 Defaulting Lenders.
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Non-Defaulting Lender’s Revolving Loans and L/C Obligations shall be computed without giving effect to the Commitment of that Defaulting Lender; provided that the aggregate obligation of each Non- Defaulting Lender to acquire, refinance or fund participations in Letters of Credit or Swing Line Loans shall not exceed the positive difference, if any, of (i) the Revolving Commitment of that Non-Defaulting Lender minus (ii) the aggregate Outstanding Amount of the Revolving Loans of that Non-Defaulting Lender.
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2.00% of the principal amount of the Term Loans so prepaid, accelerated or due and (II) if such prepayment is made in connection with a Change of Control, 1.00% of the principal amount of the Term Loans so prepaid, accelerated or due, (b) if such prepayment is made on or after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, (I) if such prepayment is not made in connection with a Change of Control, 1.00% of the principal amount of the Term Loans so prepaid, accelerated or due and (II) if such prepayment is made in connection with a Change of Control, 0.00% of the principal amount of the Term Loans so prepaid, accelerated or due and (c) if such prepayment is made on or after the second anniversary of the Closing Date, 0.00% of the principal amount of the Term Loans so prepaid, accelerated or due. Notwithstanding anything to the contrary in this Section 2.18, no such prepayment premium shall be owed (i) to any Lender that provides or arranges any replacement financing (or to the extent that any Affiliate of such Lender provides or arranges such replacement financing) the proceeds of which are used to make such prepayment and (ii) if such prepayment was made with internally generated cash.
Article III
Taxes, Increased Costs Protection and Illegality
SECTION 3.01 Taxes.
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Without limiting the foregoing:
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For the avoidance of doubt, if a Lender is an entity disregarded from its owner for U.S. federal income tax purposes, references to the foregoing documentation are intended to refer to documentation with respect to such Lender’s owner and, as applicable, such Lender.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal ineligibility to do so. Notwithstanding anything to the contrary in this Section 3.01(3), no Lender shall be required to deliver any documentation pursuant to this Section 3.01(3) that such Lender is not legally eligible to deliver.
Each Lender hereby authorizes the Administrative Agent to deliver to the Loan Parties and to any successor Administrative Agent, as applicable, any documentation provided by such Lender to the Administrative Agent pursuant to this Section 3.01(3).
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SECTION 3.02 Illegality. If any Lender reasonably determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Term Benchmark Rate, or to determine or charge interest rates based upon the Term Benchmark Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on written notice thereof by such Lender to the Borrower through the Administrative Agent, (1) any obligation of such Lender to make or continue Term Benchmark Rate Loans or to convert Base Rate Loans to Term Benchmark Rate Loans shall be suspended and (2) if such notice asserts the illegality of such Lender making or maintaining
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Base Rate Loans the interest rate on which is determined by reference to the Term Benchmark Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be reasonably determined by the Administrative Agent without reference to the Term Benchmark Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (a) the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Term Benchmark Rate Loans and shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Term Benchmark Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Term Benchmark Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Term Benchmark Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Term Benchmark Rate Loans and (b) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Term Benchmark Rate component of the Base Rate with respect to any Base Rate Loans, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Term Benchmark Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Term Benchmark Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
SECTION 3.03 Inability to Determine Rates.
If the Administrative Agent (in the case of clause (a) or (b) below) or the Required Lenders (in the case of clause (c) below) reasonably determine that for any reason in connection with any request for a Term Benchmark Rate Loan or a conversion to or continuation thereof:
thereof,
the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (i) the obligation of the Lenders to make or maintain Term Benchmark Rate Loans shall be suspended, and (ii) in the event of a determination described in the preceding sentence with respect to the Term Benchmark Rate component of the Base Rate, the utilization of the Term Benchmark Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Term Benchmark Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.
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SECTION 3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Term Benchmark Rate Loans.
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the Term Benchmark Rate (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, from time to time within fifteen (15) days after demand by such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent), the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered; provided that such amounts shall only be payable by the Borrower to the applicable Lender under this Section 3.04(1) so long as such Lender certifies that it is such Lender’s general policy or practice to demand compensation in similar circumstances under comparable provisions of other financing agreements.
Section 3.04(2) so long as it is such Lender’s general policy or practice to demand compensation in similar circumstances under comparable provisions of other financing agreements.
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absent manifest error. The Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.
SECTION 3.05 Funding Losses. Upon written demand of any Lender (with a copy to the Administrative Agent) from time to time, which demand shall set forth in reasonable detail the basis for requesting such amount, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense (excluding loss of anticipated profits or margin) actually incurred by it as a result of:
Notwithstanding the foregoing, no Lender may make any demand under this Section 3.05 with respect to the “floor” specified in the proviso to the definition of “Adjusted Term SOFR.”
SECTION 3.06 Matters Applicable to All Requests for Compensation.
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exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Term Benchmark Rate Loans made by other Lenders, as applicable, are outstanding, such Lender’s Base Rate Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Term Benchmark Rate Loans to the extent necessary so that, after giving effect thereto, all Loans of a given Class held by the Lenders of such Class holding Term Benchmark Rate Loans and by such Lender are held pro rata (as to principal amounts, interest rate basis, and Interest Periods) in accordance with their respective Pro Rata Shares.
SECTION 3.07 Replacement of Lenders under Certain Circumstances. If (1) any Lender requests compensation under Section 3.04 or ceases to make Term Benchmark Rate Loans as a result of any condition described in Section 3.02 or Section 3.04, (2) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 or 3.04, (3) any Lender is a Non-Consenting Lender, (4) any Lender becomes a Defaulting Lender or (5) any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent,
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Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans and (II) deliver any Notes evidencing such Loans to the Borrower or Administrative Agent (or a lost or destroyed note indemnity in lieu thereof); provided that the failure of any such Lender to execute an Assignment and Assumption or deliver such Notes shall not render such sale and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in the Register and the Notes shall be deemed to be canceled upon such failure;
In the event that (1) the Borrower or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (2) the consent, waiver or amendment in question requires the agreement of each Lender, all affected Lenders or all the Lenders or all affected Lenders with respect to a certain Class or Classes of the Loans/Commitments and (3) the Required Lenders or Required Facility Lenders, as applicable, have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender.”
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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 3.08 Survival. All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder and resignation of the Administrative Agent.
Article IV Conditions Precedent
SECTION 4.01 Conditions to Effectiveness on Effective Date. The effectiveness of this Agreement is subject to satisfaction (or waiver) of the following conditions precedent, except as otherwise agreed between the Borrower and the Administrative Agent:
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Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Effective Date specifying its objection thereto.
SECTION 4.02 Conditions to Credit Extensions on Closing Date. The obligation of each Lender to make a Credit Extension hereunder on the Closing Date is subject to satisfaction (or waiver) of the following conditions precedent, except as otherwise agreed between the Borrower and the Administrative Agent:
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provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided, further, that, any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.
SECTION 4.03 Conditions to Credit Extensions after the Closing Date. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, a continuation of Term Benchmark Rate Loans or a Borrowing pursuant to any Incremental Amendment) after the Closing Date is subject to the following conditions precedent:
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giving effect to such Credit Extension and the use of proceeds thereof; provided, that in no event shall the proceeds of any Delayed Draw Term Loans then being incurred be netted in calculating the foregoing First Lien Net Leverage Ratio (other than cash proceeds used to replace or replenish cash previously used to finance an acquisition or other Investment permitted under this Agreement); provided, further, to the extent the proceeds of any Delayed Draw Term Loans will be used to finance a Limited Condition Transaction, at the Borrower’s election, the First Lien Net Leverage Ratio shall be tested in accordance with Sections 1.07(11) and (12).
In addition, solely to the extent the Borrower has delivered to the Administrative Agent a Notice of Intent to Cure pursuant to Section 8.04, no request for a Credit Extension shall be honored after delivery of such notice until the applicable Cure Amount specified in such notice is actually received by the Borrower. For the avoidance of doubt, the preceding sentence shall have no effect on the continuation or conversion of any Loans outstanding.
Article V Representations and Warranties
The Borrower and, in respect of Sections 5.01, 5.02, 5.04, 5.06, 5.13, 5.17 and 5.20 only, Holdings, represent and warrant to the Administrative Agent and the Lenders, on the Effective Date (solely to the extent required to be true and correct pursuant to Section 4.01(4)), on the Closing Date (after giving effect to the Transactions), at the time of each Credit Extension (solely to the extent required to be true and correct for such Credit Extension pursuant to the terms hereof) and as otherwise required hereunder or under any other Loan Document:
SECTION 5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party and each of its respective Restricted Subsidiaries that is a Material Subsidiary (and, in the case of clauses (4) and (5) below, each Affiliated Practice):
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except, in each case referred to in the preceding clauses (1) (with respect to the good standing of a Person other than the Borrower or Holdings), (2)(a), (3), (4) or (5), to the extent that failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
except with respect to any breach, contravention or violation (but not creation of Liens) referred to in the preceding clause (b) or (c), to the extent that such breach, contravention or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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in such capacity under employment of or contract with the Borrower, its Subsidiaries or Affiliated Practices (i) duly licensed and certified (as and where required) by each regulatory body having jurisdiction over services rendered by such Person and (ii) eligible (as and where required) to participate in Governmental Programs, in each case, except to the extent that such failure would not reasonably be expected to have a Material Adverse Effect, either individually or in the aggregate.
SECTION 5.04 Binding Effect. This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party hereto or thereto, as applicable. Each Loan Document constitutes a legal, valid and binding obligation of each Loan Party that is party thereto, enforceable against each such Loan Party in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws, by general principles of equity and principles of good faith and fair dealing.
SECTION 5.05 Financial Statements; No Material Adverse Effect.
SECTION 5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, overtly threatened in writing, at law, in equity, in arbitration or before any Governmental Authority, by or against Holdings, the Borrower or any of the Subsidiaries or any Affiliated Practice that would reasonably be expected to have a Material Adverse Effect.
SECTION 5.07 Labor Matters. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (1) there are no strikes or other labor disputes against the Borrower or the Restricted Subsidiaries pending or, to the knowledge of the Borrower, threatened in writing and (2) hours worked by and payment made based on hours worked to employees of each of the Borrower or the Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Laws dealing with wage and hour matters.
SECTION 5.08 Ownership of Property; Liens. Each Loan Party and each of its respective Restricted Subsidiaries has good and valid record title in fee simple to, or valid leasehold interests in, or easements or other limited property interests in, all real property necessary in the ordinary conduct of its business, free and clear of all Liens except for Liens permitted by Section 7.01 and except where the failure to have such title or other interest would not reasonably be expected to have, individually or in the
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aggregate, a Material Adverse Effect. As of the Effective Date, no Material Real Property is owned by any Loan Party or any of their respective Subsidiaries.
SECTION 5.09 Environmental Matters. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (1) each Loan Party and each of its Restricted Subsidiaries and their respective operations and properties is in compliance with all applicable Environmental Laws; (2) none of the Loan Parties or any of their respective Restricted Subsidiaries is subject to any actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened in writing relating to any Environmental Liability; and (3) none of the Loan Parties or any of their respective Restricted Subsidiaries has treated, stored, transported or Released Hazardous Materials at or from any currently or, to the knowledge of the Borrower, formerly owned, leased or operated real estate or facility, which could reasonably be expected to give rise to any Environmental Liability.
SECTION 5.10 Taxes. Except as would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Loan Party and each of its Restricted Subsidiaries has timely filed all tax returns and reports required to be filed, and have timely paid all Taxes (including satisfying its withholding tax obligations) levied or imposed on their properties, income or assets (whether or not shown in a tax return), except those which are being contested in good faith by appropriate actions diligently taken and for which adequate reserves have been provided in accordance with GAAP. There is no proposed Tax assessment, deficiency or other claim against any Loan Party or any of its Restricted Subsidiaries except (1) those being actively contested by a Loan Party or such Restricted Subsidiary in good faith and by appropriate actions diligently taken and for which adequate reserves have been provided in accordance with GAAP or (2) those which would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
SECTION 5.11 ERISA Compliance.
SECTION 5.12 Subsidiaries.
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and (if applicable) non-assessable, and all Equity Interests that constitute Collateral owned by Holdings in the Borrower, and by the Borrower or any Subsidiary Guarantor in any of their respective Subsidiaries are owned free and clear of all Liens of any person except (a) those Liens created under the Collateral Documents, (b) any non-consensual Lien that is permitted under Section 7.01 and (c) solely as of the Effective Date, Liens arising in connection with the Existing Credit Agreement .
SECTION 5.13 Margin Regulations; Investment Company Act.
SECTION 5.14 Disclosure. As of the Effective Date, none of the written information and written data heretofore or contemporaneously furnished in writing by or on behalf of the Borrower or any Subsidiary Guarantor to any Agent or any Lender on or prior to the Effective Date, in connection with the Transactions, when taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make such written information and written data taken as a whole, in the light of the circumstances under which it was delivered, not materially misleading (after giving effect to all modifications and supplements to such written information and written data, in each case, furnished after the date on which such written information or such written data was originally delivered and prior to the Effective Date); it being understood that for purposes of this Section 5.14, such written information and written data shall not include any projections, pro forma financial information, financial estimates, forecasts and forward-looking information or information of a general economic or general industry nature.
SECTION 5.15 Intellectual Property; Licenses, Etc. The Borrower and the Restricted Subsidiaries have good and marketable title to, or a license or right to use, all patents, trademarks, service marks, trade names, copyrights, know-how, trade secrets and other intellectual property rights (collectively, “IP Rights”) that to the knowledge of the Borrower are reasonably necessary for the operation of their respective businesses as currently conducted, except where the failure to have any such rights, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, the operation of the respective businesses of the Borrower or any Restricted Subsidiary as currently conducted does not infringe upon, dilute, misappropriate or violate any IP Rights held by any Person except for such infringements, dilutions, misappropriations or violations, individually or in the aggregate, that would not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any IP Rights is pending or, to the
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knowledge of the Borrower, threatened in writing against any Loan Party or Restricted Subsidiary, that, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
SECTION 5.16 Solvency. On the Closing Date after giving effect to the Transactions, the Borrower and the Subsidiaries, on a consolidated basis, are Solvent.
SECTION 5.17 USA PATRIOT Act; Anti-Terrorism Laws; Anti-Money Laundering Laws. To the extent applicable, each of the Borrower, the Restricted Subsidiaries and the Affiliated Practices are in compliance, in all material respects, with (1) the USA PATRIOT Act, (2) Anti-Money Laundering Laws, and (3) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto. Neither Holdings, the Borrower nor any Restricted Subsidiary nor, to the knowledge of the Borrower, any director, officer or employee of Holdings, the Borrower or any of the Restricted Subsidiaries, is currently the subject of any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) (such sanctions, “Sanctions”). No proceeds of the Loans will be used by Holdings or any Restricted Subsidiary directly or, to the knowledge of the Borrower, indirectly, in violation of the FCPA, any Anti-Money Laundering Laws or the USA PATRIOT ACT, or for the purpose of financing activities of or with any Person, or in any country, that, at the time of such financing, is the subject of any Sanctions, except to the extent licensed or otherwise approved by OFAC.
SECTION 5.18 Collateral Documents. Except as otherwise contemplated hereby or under any other Loan Documents and subject to limitations set forth in the Collateral and Guarantee Requirement, the provisions of the Collateral Documents, together with such filings and other actions required to be taken hereby or by the applicable Collateral Documents (including the delivery to Collateral Agent of any Pledged Collateral required to be delivered pursuant hereto or the applicable Collateral Documents), are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid, perfected and enforceable first priority Lien (subject to Liens permitted by Section 7.01 and to any applicable Intercreditor Agreement) on all right, title and interest of the respective Loan Parties in the Collateral described therein.
Notwithstanding anything herein (including this Section 5.18) or in any other Loan Document to the contrary, no Loan Party makes any representation or warranty as to (1) the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest in any Equity Interests of any Foreign Subsidiary, or as to the rights and remedies of the Agents or any Lender with respect thereto, under foreign Law, (2) the pledge or creation of any security interest, or the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest to the extent such pledge, security interest, perfection or priority is not required pursuant to the Collateral and Guarantee Requirement, (3) on and prior to the Effective Date and until required pursuant to Section 4.02, 6.11 or 6.12, the pledge or creation of any security interest, or the effects of perfection or non-perfection, the priority or enforceability of any pledge or security interest to the extent not required on the Effective Date pursuant to Section 4.01, (4) any Excluded Assets or (5) any loss of perfection that results from the failure of the Administrative Agent or the Collateral Agent to maintain possession of Collateral actually delivered to it and pledged under the Collateral Documents or to file Uniform Commercial Code amendments relating to a Loan Party’s change of name or jurisdiction of formation (solely to the extent that (x) the Borrower provides the Collateral Agent written notice thereof in accordance with the Loan Documents and (y) the Collateral Agent and the Borrower have agreed that the Collateral Agent will be responsible for filing such amendments) and Uniform Commercial Code continuation statements.
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SECTION 5.19 HIPAA. None of the Borrower, any Restricted Subsidiary or any Affiliated Practice has engaged in any activities that are prohibited under HIPAA, or any comparable state Law, except for such activities that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.20 Regulatory Matters.
§ 1320a-7; (ii) been convicted (as that term is defined in 42 C.F.R. § 1001.2) of any offense described in 42 U.S.C. § 1320a-7b or in 18 U.S.C. §§ 669, 1035, 1347 or 1518 or (iii) been named in a complaint filed or any other action taken pursuant to the federal False Claims Act, 31 U.S.C. § 3729 et seq., in each case , except where such would not reasonably be expected to have a Material Adverse Effect.
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Article VI Affirmative Covenants
So long as the Termination Conditions have not been satisfied, the Borrower shall (and, with respect to Sections 6.05(1), 6.08 and 6.11 only, Holdings shall), and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each of the Restricted Subsidiaries to:
SECTION 6.01 Financial Statements. Deliver to the Administrative Agent for prompt further distribution by the Administrative Agent to Revolver Agent and each Lender (subject to the limitations on distribution of any such information to Public Lenders as described in Section 6.02) each of the following:
(i) the maturity or impending maturity of any Indebtedness, (ii) any anticipated inability to satisfy the Financial Covenant or any other financial covenant, (iii) an actual Default of the Financial Covenant or any default with respect to any other financial covenant or (iv) the activities, operations, financial results, assets or liabilities of Unrestricted Subsidiaries) (such report and opinion, a “Conforming Accounting Report”);
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assurance can be given that any particular projections will be realized, that actual results may differ and that such differences may be material); and
Notwithstanding the foregoing, the obligations referred to in Sections 6.01(1) and 6.01(2) may be satisfied with respect to financial information of the Borrower and its Subsidiaries by furnishing (a) the applicable financial statements of any Parent Company or (b) the Borrower’s or such Parent Company’s Form 10-K or 10-Q, as applicable, filed with the SEC (and the public filing of such report with the SEC shall constitute delivery under this Section 6.01); provided that with respect to each of the preceding clauses (a) and (b), (i) to the extent such information relates to a Parent Company, if and so long as such Parent Company will have Independent Assets or Operations, such information is accompanied by consolidating information (which need not be audited) that explains in reasonable detail the differences between the information relating to such Parent Company and its Independent Assets or Operations, on the one hand, and the information relating to the Borrower and the consolidated Restricted Subsidiaries on a stand-alone basis, on the other hand and (ii) to the extent such information is in lieu of information required to be provided under Section 6.01(1) (it being understood that such information may be audited at the option of the Borrower), such materials are accompanied by a Conforming Accounting Report; provided, further, solely if and to the extent that the applicable deadlines required by the SEC for delivery of the Borrower’s or the applicable Parent Company’s Form 10-Q and/or 10-K (as applicable) for any period are later than the applicable deadlines for delivery set forth in Section 6.01(1) and/or 6.01(2) for such period, such deadline set forth in Sections 6.01(1) and 6.01(2) shall automatically be deemed to be replaced with such later deadlines as required by the SEC (without any further action or consent of any party to this Agreement).
Any financial statements required to be delivered pursuant to Sections 6.01(1) or 6.01(2) shall not be required to contain all purchase accounting adjustments relating to the Transactions or any other transaction(s) permitted hereunder to the extent it is not practicable to include any such adjustments in such financial statements.
SECTION 6.02 Certificates; Other Information. Deliver to the Administrative Agent for prompt further distribution by the Administrative Agent to each Lender (subject to the limitations on distribution of any such information to Public Lenders as described in this Section 6.02):
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Documents required to be delivered pursuant to Section 6.01 or Section 6.02(2) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (a) on which the Borrower posts such documents, or provides a link thereto, on the Borrower’s (or any Parent Company’s) website on the Internet at the website address listed on Schedule 10.02 hereto (or as such address may be updated from time to time in accordance with Section 10.02); or (b) on which such documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that (i) upon written request by the Administrative Agent, the Borrower will deliver paper copies of such documents to the Administrative Agent for further distribution by the Administrative Agent to each Lender (subject to the limitations on distribution of any such information to Public Lenders as described in this Section 6.02) until a written request to cease delivering paper copies is given by the Administrative Agent and (ii) the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents or link and, upon the Administrative Agent’s request, provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent will make available to the Lenders and the Issuing Banks materials or information provided by or on behalf of the Borrower hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials on IntraLinks, SyndTrak, ClearPar or another similar electronic system (the “Platform”) and (b) certain of the Lenders may have personnel who do not wish to receive any information with respect to Holdings, their Subsidiaries or their respective securities that is not Public-Side Information, and who may be engaged in investment and other market-related activities with respect to such Person’s securities (each, a “Public Lender”).
The Borrower hereby agrees that (a) at the Administrative Agent’s request, all Borrower Materials that are to be made available to Public Lenders will be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” will appear prominently on the first page thereof; (b) by marking Borrower Materials “PUBLIC,” the Borrower will be deemed to have
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authorized the Administrative Agent, the Lenders and the Issuing Banks to treat such Borrower Materials as containing only Public-Side Information (provided, however, that to the extent such Borrower Materials constitute Information, they will be treated as set forth in Section 10.09); (c) all Borrower Materials marked “PUBLIC” and, except to the extent the Borrower notifies the Administrative Agent to the contrary, any Borrower Materials provided pursuant to Sections 6.01(1), 6.01(2) or 6.02(1) are permitted to be made available through a portion of the Platform designated as “Public Side Information”; and (d) the Administrative Agent and the Arranger shall be entitled to treat Borrower Materials that are not specifically identified as “PUBLIC” as being suitable only for posting on a portion of the Platform not designated as “Public Side Information.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark the Borrower Materials “PUBLIC.”
Anything to the contrary notwithstanding, nothing in this Agreement will require Holdings, the Borrower or any Subsidiary to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter, or provide information (a) that constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure is prohibited by Law or binding agreement or (c) that is subject to attorney-client or similar privilege or constitutes attorney work product; provided that in the event that the Borrower does not provide information that otherwise would be required to be provided hereunder in reliance on the exclusions in this paragraph relating to violation of any obligation of confidentiality, the Borrower shall use commercially reasonable efforts to provide notice to the Administrative Agent promptly upon obtaining knowledge that such information is being withheld (but solely if providing such notice would not violate such obligation of confidentiality).
SECTION 6.03 Notices. Promptly after a Responsible Officer of the Borrower obtains actual knowledge thereof, notify the Administrative Agent for prompt further distribution by the Administrative Agent to each Lender (subject to the limitations on distribution of any such information to Public Lenders as described in Section 6.02) of:
Each notice pursuant to this Section 6.03 shall be accompanied by a written statement of a Responsible Officer of the Borrower (x) that such notice is being delivered pursuant to Section 6.03(1) or (2) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.
SECTION 6.04 Payment of Taxes. Timely pay, discharge or otherwise satisfy, as the same shall become due and payable, all of its obligations and liabilities in respect of Taxes imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent (1) any such Tax is being contested in good faith and by appropriate actions for which appropriate reserves have been established in accordance with GAAP or (2) the failure to pay or discharge the same would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
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SECTION 6.05 Preservation of Existence, Etc.
except in the case of clause (1) or (2) to the extent (other than with respect to the preservation of the existence of the Borrower) that failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or pursuant to any merger, consolidation, liquidation, dissolution or disposition permitted by Article VII.
SECTION 6.06 Maintenance of Properties. Except if the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, maintain, preserve and protect all of its material properties and equipment used in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted and any repairs and replacements that are the obligation of the owner or landlord of any property leased by the Borrower or any of the Restricted Subsidiaries excepted.
SECTION 6.07 Maintenance of Insurance. Maintain with insurance companies that the Borrower believes (in the good faith judgment of its management) are financially sound and reputable at the time the relevant coverage is placed or renewed or with a Captive Insurance Subsidiary, insurance with respect to the Borrower’s and the Restricted Subsidiaries’ properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance which the Borrower believes (in the good faith judgment of the management of the Borrower) is reasonable and prudent in light of the size and nature of their business and customary for similar situated Persons in the same industry (as determined in good faith by the Borrower)) as are customarily carried under similar circumstances by such other Persons, and will furnish to the Lenders, upon written request from the Administrative Agent or Revolver Agent, information presented in reasonable detail as to the insurance so carried; provided that notwithstanding the foregoing, in no event will the Borrower or any Restricted Subsidiary be required to obtain or maintain insurance that is more restrictive than its normal course of practice. Subject to Section 6.12(2), each such policy of insurance will, to the extent available from the relevant insurance carrier, as appropriate, (1) in the case of each general liability policy of a Loan Party, name the Collateral Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear or (2) in the case of each casualty insurance policy of a Loan Party, contain an additional loss payable clause or endorsement that names the Collateral Agent, on behalf of the Secured Parties, as the additional loss payee thereunder and the Loan Parties shall use commercially reasonable efforts to cause such policy to provide for prior written notice to the Collateral Agent of any cancellation of such policy (or ten days’ prior notice in the case of non-payment) (it being understood that such commercially reasonable efforts shall not require the Borrower or its Restricted Subsidiaries to agree to obtain a different policy or agree to terms with respect to such policy that are less favorable to the Borrower or its Restricted Subsidiaries).
SECTION 6.08 Compliance with Laws. Comply and, to the extent not in contravention of any Services Agreement, use commercially reasonable efforts to cause the Affiliated Practice to comply, with the requirements of all Laws (including the USA PATRIOT Act, OFAC, Anti-Money Laundering Laws, the FCPA and Sanctions) and comply with all orders, writs, injunctions and decrees of any Governmental Authority applicable to it or to its business or property, except, in each case (other than the USA PATRIOT Act, OFAC, Anti-Money Laundering Laws, the FCPA and Sanctions), if the failure
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to comply therewith would not reasonably be expected individually or in the aggregate to have a Material Adverse Effect.
SECTION 6.09 Books and Records. Maintain proper books of record and account, in which entries that are full, true and correct in all material respects shall be made of all material financial transactions and matters involving the assets and business of the Borrower or such Restricted Subsidiary, as the case may be (it being understood and agreed that certain Foreign Subsidiaries may maintain individual books and records in conformity with generally accepted accounting principles in their respective countries of organization and that such maintenance shall not constitute a breach of the representations, warranties or covenants hereunder).
SECTION 6.10 Inspection Rights. Permit representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom and to discuss its affairs, finances and accounts with its directors, officers and independent public accountants (subject to such accountants’ customary policies and procedures), all at the reasonable expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided that only the Administrative Agent on behalf of the Lenders may exercise rights under this Section 6.10 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year absent the existence of an Event of Default and only one (1) such time shall be at the Borrower’s expense; provided further that when an Event of Default exists, the Administrative Agent (or any of its representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice. The Administrative Agent shall give the Borrower the opportunity to participate in any discussions with the Borrower’s independent public accountants. Any information obtained by the Administrative Agent pursuant to this Section 6.10 may be shared with the Collateral Agent or any Lender upon the request of such Person. For the avoidance of doubt, this Section 6.10 is subject to the last paragraph of Section 6.02.
SECTION 6.11 Covenant to Guarantee Obligations and Give Security. At the Borrower’s expense, subject to the provisions of the Collateral and Guarantee Requirement and any applicable limitation in any Collateral Document, take all action necessary or reasonably requested by the Administrative Agent or the Collateral Agent to ensure that the Collateral and Guarantee Requirement continues to be satisfied, including (in each case, as applicable, subject to the Excluded Subsidiary Joinder Exception):
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SECTION 6.12 Further Assurances and Post-Closing Covenant.
SECTION 6.13 Use of Proceeds. The proceeds of (1) the Closing Date Term Loans, together with the proceeds of any Revolving Loans drawn on the Closing Date (to the extent permitted under this Agreement) and cash on hand, will be used (a) to repay Indebtedness incurred under the Existing Credit Agreement, together with any premium and accrued and unpaid interest thereon and any fees and expenses with respect thereto and the Administrative Agent is irrevocably authorized and directed to disburse the proceeds of the Closing Date Term Loans to effect the Closing Date Refinancing,
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upfront fees in connection with the Closing Date Loans), (y) to replace, backstop or cash collateralize letters of credit, letters of guarantee and bankers’ acceptances or to issue other letters of credit, letters of guarantee or bankers’ acceptances for general corporate purposes on the Closing Date and (z) to otherwise fund working capital and general corporate purposes, and (b) after the Closing Date, for working capital and general corporate purposes and for any other purpose not prohibited by the Loan Documents and (3) any Delayed Draw Term Loans will be used (a) to finance Permitted Acquisitions and other permitted Investments (including working capital adjustments, earn-out payments and purchase price adjustments, including in relation to the Transactions), to build-out new facilities and to pay related fees and expenses, and/or (b) to repay Revolving Loans and/or replenish cash on hand, in each case, previously utilized for the uses described in clause (3)(a) within the last one hundred and twenty (120) days.
SECTION 6.14 Regulatory Matters. Each Loan Party shall use commercially reasonable efforts to, and shall use commercially reasonable efforts to cause each of its Subsidiaries and the Affiliated Practices to, (i) comply in all material respects with all applicable Health Care Laws relating to the operation of its business, (ii) keep and maintain all records required to be maintained by any Governmental Authority or under any Health Care Law, and (iii) maintain a corporate and health care regulatory compliance program that addresses the requirements of Health Care Laws, in each case, except where such would not reasonably be expected to have a Material Adverse Effect.
SECTION 6.15 Transactions with Affiliates.
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Directors to the Lenders, when taken as a whole, as compared to the applicable agreement as in effect on the Effective Date);
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agreement that are, in each case, approved by the Borrower in good faith; and any employment agreements, severance arrangements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, members of management, consultants or independent contractors (or their respective Controlled Investment Affiliates or Immediate Family Members or any permitted transferees thereof) that are, in each case, approved by the Borrower in good faith;
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long as such transactions, when taken as a whole, do not result in a material adverse effect on the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, when taken as a whole, in each case, as determined in good faith by the Board of Directors or certified by senior management of the Borrower in an Officer’s Certificate;
(aa) transactions undertaken in the ordinary course of business or consistent with industry practice pursuant to membership in a purchasing consortium; and
(bb) the entry by the Borrower or any Restricted Subsidiary into a Services Agreement with any Person in connection with such Person becoming an Affiliated Practice.
Article VII Negative Covenants
So long as the Termination Conditions are not satisfied:
SECTION 7.01 Liens. The Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, directly or indirectly, create, incur or assume any Lien (except any Permitted Lien(s)) that secures obligations under any Indebtedness or any related guarantee of Indebtedness on any asset or property of the Borrower or any Restricted Subsidiary, or any income or profits therefrom.
The expansion of Liens by virtue of accretion or amortization of original issue discount, the payment of dividends in the form of Indebtedness, and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence of Liens for purposes of this Section 7.01.
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SECTION 7.02 Indebtedness.
provided that the Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case, if (any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to following clauses (a),
in each case, determined on a pro forma basis; provided further that (in each case of the following clauses (i) through (vii), other than in the case of Indebtedness that is assumed in connection with an acquisition or other Investment (or any other purchase of assets) but not created in contemplation thereof):
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outstanding on the date of incurrence of such Permitted Ratio Debt (it being understood that this clause
(y) shall not apply with respect to the Permitted Ratio Debt in the form of revolving credit facilities);
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added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Term Loans and the Delayed Draw Term Loan Facility or (ii) the lenders under Permitted Ratio Debt in the form of revolving credit facilities, no consent shall be required from the Administrative Agent, the Specified Representative or any Lender to the extent that such term or provision is also added, or the features of such term or provision are provided, for the benefit of the Lenders of the Closing Date Revolving Facility, unless the addition of such term or provision (or the provision of the features thereof) for the benefit of the Lenders of the Closing Date Revolving Facility would require the consent of any Class of Lenders other than the Revolving Lenders under Section 10.01, in which case the consent of the Administrative Agent, the Specified Representative and such Class of Lenders shall be required); and
provided that Permitted Ratio Debt may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long term indebtedness (so long as such credit facility includes customary “rollover provisions” that satisfy the requirements of clause (i) and (iv) above following such rollover), in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, clause (i) and (iv) above shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions.
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any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Borrower or a Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (h);
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the most recently ended Test Period (calculated on a pro forma basis) plus, without duplication, (II) in the event of any extension, replacement, refinancing, renewal or defeasance of any such Indebtedness, Disqualified Stock or Preferred Stock, an amount equal to (A) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased plus (B) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees, underwriting, arrangement and similar fees) incurred in connection with the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such Indebtedness, Disqualified Stock or Preferred Stock;
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of such Indebtedness or other obligations incurred by the Borrower or such Restricted Subsidiary is permitted by this Agreement or (ii) any co-issuance by the Borrower or any Restricted Subsidiary of any Indebtedness or other obligations of the Borrower or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations by the Borrower or such Restricted Subsidiary is permitted by this Agreement;
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mandatory amortization prior to, 91 days after the then-Latest Maturity Date of the Closing Date Term Facility in effect immediately prior to the incurrence of such Indebtedness;
The accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies, in each case, will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 7.02. Any Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, to refinance Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, pursuant to Section 7.02(1) or clauses (c), (d), (l), (m), (n), (w), (dd)(ii), (ee), (ff), (gg) and (hh) of Section 7.02(2) will be permitted to include additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay (I) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased and (II) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness, Preferred Stock or Disqualified Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness, Preferred Stock or Disqualified Stock (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced, extended, replaced, refunded, renewed or defeased to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness).
For purposes of determining compliance with any Dollar denominated restriction on the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock, the Dollar equivalent principal amount of Indebtedness or liquidation preference of Disqualified Stock or amount of Preferred Stock denominated in a foreign currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness, Disqualified Stock or Preferred Stock was incurred or issued (or, in the case of revolving credit debt, the date such Indebtedness was first committed or first incurred (whichever yields the lower Dollar equivalent)); provided that if such Indebtedness, Disqualified Stock or Preferred Stock is issued to Refinance other Indebtedness, Disqualified Stock or Preferred Stock denominated in a foreign currency, and such refinancing would cause the applicable Dollar denominated
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restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar denominated restriction will be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness, Disqualified Stock or Preferred Stock does not exceed
The principal amount of any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to refinance other Indebtedness, Disqualified Stock or Preferred Stock, if incurred or issued in a different currency from the Indebtedness, Disqualified Stock or Preferred Stock, as applicable, being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness or Disqualified Stock or Preferred Stock is denominated that is in effect on the date of such refinancing. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date will be the principal amount thereof that would be shown on a balance sheet of the Borrower or Holdings, as applicable, dated such date prepared in accordance with GAAP.
SECTION 7.03 Fundamental Changes. The Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, consolidate, amalgamate or merge with or into or wind up into another Person, or liquidate or dissolve or dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (other than as part of the Transactions), except that:
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and
(2)
provided that in the case of clause (d), the Person who receives the assets of such dissolving or liquidated Restricted Subsidiary that is a Guarantor shall be a Loan Party or such disposition shall otherwise be permitted under Section 7.05 or the definition of “Permitted Investments”;
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applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act;
provided further that if the foregoing are satisfied, the Successor Borrower will succeed to, and be substituted for, the Borrower under this Agreement and in the case of the disposition of all or substantially all assets, the original Borrower will be released;
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provided further that if the foregoing are satisfied, the Successor Holdings will succeed to, and be substituted for, Holdings under this Agreement and in the case of the disposition of all or substantially all assets, the original Holdings will be released;
SECTION 7.04 Asset Sales. The Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, consummate any Asset Sale unless:
Section 1.07(11)); provided that each of the following will be deemed to be cash or Cash Equivalents for purposes of this clause (2):
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Subsidiary’s balance sheet or in the footnotes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet, as determined in good faith by the Borrower) of the Borrower or any Restricted Subsidiary, other than liabilities that are by their terms subordinated in right of payment to the Obligations, that are (i) assumed by the transferee of any such assets (or a third party in connection with such transfer) or (ii) otherwise cancelled or terminated in connection with the transaction with such transferee (other than intercompany debt owed to the Borrower or a Restricted Subsidiary);
To the extent any Collateral is disposed of as expressly permitted by this Section 7.04 to any Person other than a Loan Party, such Collateral shall automatically be sold free and clear of the Liens created by the Loan Documents, and, if requested by the Administrative Agent, upon the certification by the Borrower that such disposition is permitted by this Agreement, the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.
SECTION 7.05 Restricted Payments.
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(all such payments and other actions set forth in clauses (A) through (D) above being collectively referred to as “Restricted Payments”), unless, at the time of and immediately after giving effect to such Restricted Payment:
(a)
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Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 7.02(2)(l)(i)) from the issue or sale of:
provided that this clause (ii) will not include the proceeds from (1) any exercise of the cure right set forth in Section 8.04, (2) Refunding Capital Stock (as defined below) applied in accordance with Section 7.05(2)(b) below, (3) Equity Interests or convertible debt securities of the Borrower sold to a Restricted Subsidiary, (4) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (5) Excluded Contributions; plus
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cash distributions and cash interest received in respect of Restricted Investments) and repurchases and redemptions of such Restricted Investments from the Borrower or its Restricted Subsidiaries (other than by the Borrower or a Restricted Subsidiary) and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Borrower or its Restricted Subsidiaries, in each case (x) after the Effective Date (excluding any Excluded Contributions made pursuant to clause (2) of the definition thereof) and (y) solely to the extent such Investments were originally made using amounts available under this clause (b) or any other Fixed Basket;
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Stock or debt securities that have been converted into Disqualified Stock or (5) Excluded Contributions;
minus
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Subsidiary that is not a Guarantor in each case (I) made within 120 days of such sale or issuance and (II) is Refinancing Indebtedness incurred or issued, as applicable, in compliance with Section 7.02,
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provided that the Borrower may elect to apply all or any portion of the aggregate increase contemplated by clauses (i), (ii) and (iii) above in any calendar year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from any future, present or former employees, directors, officers, members of management, consultants, Related Professionals or independent contractors (or their respective Controlled Investment Affiliates or Immediate Family Members or any permitted transferees thereof) of the Borrower, any Parent Company, any Restricted Subsidiary or any Affiliated Practice in connection with a repurchase of Equity Interests of the Borrower or any Parent Company will not be deemed to constitute a Restricted Payment for purposes of this Section 7.05 or any other provision of this Agreement;
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For purposes of clauses (g) and (n) above, Taxes will include all interest and penalties with respect thereto and all additions thereto.
The amount of all Restricted Payments (other than cash) will be the fair market value on the date the Restricted Payment is made, or at the Borrower’s election, the date a commitment is made to make such Restricted Payment, of the assets or securities proposed to be transferred or issued by the Borrower or any Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
For the avoidance of doubt, this Section 7.05 will not restrict the making of any AHYDO Payment with respect to, and required by the terms of, any Indebtedness of the Borrower or any Restricted Subsidiary permitted to be incurred under this Agreement.
SECTION 7.06 Change in Nature of Business. The Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Restricted Subsidiaries on the Effective Date or any business(es) or any other activities that are reasonably similar, ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the business conducted or proposed to be conducted by the Borrower and its Restricted Subsidiaries on the Effective Date.
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SECTION 7.07 Burdensome Agreements.
provided that any dividend or liquidation priority between or among classes or series of Capital Stock, and the subordination of any obligation (including the application of any remedy bars thereto) to any other obligation will not be deemed to constitute such an encumbrance or restriction.
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consolidation or amalgamation in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Borrower or any Restricted Subsidiary or an Unrestricted Subsidiary that is designated as a Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired or designated and its Subsidiaries, or the property or assets of the Person so acquired or designated and its Subsidiaries or the property or assets so acquired or designated;
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material respect, taken as a whole, with respect to the Borrower or any Restricted Subsidiary than (A) the restrictions contained in the Loan Documents as of the Effective Date or (B) those encumbrances and other restrictions that are in effect on the Effective Date with respect to the Borrower or that Restricted Subsidiary pursuant to agreements in effect on the Effective Date, (ii) are not materially more disadvantageous, taken as a whole, to the Lenders than is customary in comparable financings for similarly situated issuers or (iii) will not materially impair the Borrower’s ability to make payments on the Obligations when due, in each case in the good faith judgment of the Borrower;
SECTION 7.08 Accounting Changes. The Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, make any change in fiscal year; provided, however, that the Borrower may, upon written notice to the Administrative Agent, change its fiscal year, and, notwithstanding anything in Section 10.01 to the contrary, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal year.
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SECTION 7.09 Holdings. Holdings shall not engage in any material operating or business activities; provided that the following and any activities incidental thereto shall be permitted in any event:
SECTION 7.10 Financial Covenant. The Borrower shall not permit the First Lien Net Leverage Ratio as of the last day of such Test Period (commencing with the Test Period ending on or about December 31, 2022), to be greater than 8.50 to 1.00 (such compliance to be determined on the basis
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of the financial information most recently delivered to the Administrative Agent pursuant to Section 6.01(1) and Section 6.01(2) for such Test Period) (the “Financial Covenant”).
SECTION 7.11 Amendments to Organizational Documents and Services Agreements. No Loan Party shall amend or waive any provision of (i) any Services Agreement, except to the extent any such amendment or waiver is required by a Change in Law as reasonably determined by the Borrower in good faith or (ii) its Organizational Documents, in each case, to the extent such amendment or waiver is material and adverse to the interest of the Lenders (in their capacity as such), taken as a whole.
Article VIII
Events of Default and Remedies
SECTION 8.01 Events of Default. Each of the events referred to in clauses (1) through (11) of this Section 8.01 shall constitute an “Event of Default”:
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Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem all of such Indebtedness to be made, prior to its stated maturity; provided that (i) any such failure under clauses (a) or (b) above (x) shall only constitute an Event of Default hereunder if such failure is unremedied and is not waived by the holders of such Indebtedness prior to any termination of the Commitments or acceleration of the Loans pursuant to Section 8.02 and (y) for the avoidance of doubt, shall not result in a Default or Event of Default hereunder while any notice period or grace period, if applicable to such failure remains in effect and (ii) this clause (5) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; or
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Documents, taken as a whole (other than (i) as expressly permitted by a Loan Document (including as a result of a transaction permitted under Section 7.03 or 7.04) or (ii) as a result of the satisfaction of the Termination Conditions), or purports in writing to revoke or rescind the Loan Documents, taken as a whole, prior to the satisfaction of the Termination Conditions; or
SECTION 8.02 Remedies upon Event of Default. Subject to Section 8.04, if any Event of Default occurs and is continuing:
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the then outstanding Letters of Credit (in an amount equal to 103% of the then Outstanding Amount thereof);
provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower, any Restricted Subsidiary of the Borrower that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”), the Commitments of each Lender and any obligation of the Issuing Banks to issue Letters of Credit and any obligation of the Swing Line Lender to make Swing Line Loans, will automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid will automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the Letters of Credit as aforesaid will automatically become effective, in each case without further act of the Administrative Agent or any Lender.
SECTION 8.03 Application of Funds. Notwithstanding any contrary provision set forth herein or in any other Loan Document, (i) during the continuance of a Trigger Event of Default, Administrative Agent may, and shall upon the direction of Required Revolving Lenders, apply any and all payments received by Administrative Agent in respect of any Obligation, and all proceeds received by Administrative Agent as a result of the exercise of its remedies under the Collateral Documents after the occurrence and during the continuation of a Trigger Event of Default, in accordance with clauses first through ninth below; and (ii) all payments made by Loan Parties to Administrative Agent after any or all of the Obligations under the Loan Documents have been accelerated (so long as such acceleration has not been rescinded) or have otherwise matured, including proceeds of Collateral, shall be applied as follows:
first, to payment of costs, expenses and indemnities, including Attorney Costs, of the Agents payable or reimbursable by the Loan Parties under the Loan Documents;
second, to payment of Attorney Costs of the Revolving Lenders in respect of the Revolving Commitments payable or reimbursable by the Borrower under this Agreement;
third, to payment of all accrued unpaid interest on the Revolving Loans and Swing Line Loans and fees owed to Revolver Agent, Swing Line Lender, Revolving Lenders and Issuing Banks (whether or not accruing after the filing of any case under the Bankruptcy Code with respect to any Obligations and whether or not a claim for such post-filing or post-petition interest, fees, and charges is allowed or allowable in any such proceeding);
fourth, on a ratable basis, to (A) the payment of principal of all Revolving Loans and Swing Line Loans then outstanding, L/C Obligations then due and payable, Obligations under Secured Hedge Agreements then due and payable and Obligations under Secured Cash Management Agreements then due and payable and (B) cash collateralization of (1) unmatured L/C Obligations in the amount required under Section 2.03(7) and (2) any indemnification obligations owing to the Revolving Lenders, Obligations under Secured Hedge Agreements owing to the Lenders that are Revolving Lenders or their Affiliates, and Obligations under Secured Cash Management Agreements owing to the Lenders that are Revolving Lenders or their Affiliates, in an amount for purposes of this clause (B)(2) determined by Revolver Agent as reasonably necessary to secure such Obligations; provided, that the aggregate amount of payments and cash collateralization of Obligations under Secured Hedge Agreements with respect to interest rate hedges under clauses (A) and (B)(2) above shall not exceed the termination value or then current liability in respect of Secured Hedge Agreements with respect to no more than 50% of the notional value of the floating rate Indebtedness of the Loan Parties; provided, further, that the aggregate amount of payments
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and cash collateralization of the Obligations under Secured Cash Management Agreements under clauses (A) and (B)(2) above shall not exceed $5,000,000;
fifth, to the payment of all other Obligations owing to the Revolving Lenders under the Revolving Facility then due and payable;
sixth, to payment of Attorney Costs of the Term Lenders payable or reimbursable by the Loan Parties under this Agreement;
seventh, to payment of all accrued unpaid interest on the Term Loans and fees owed to Administrative Agent and the Term Lenders;
eighth, on a ratable basis, to (i) the payment of principal of the Term Loans then due and payable, (ii) the payment of Obligations under Secured Hedge Agreements then due and payable and Obligations under Secured Cash Management Agreements then due and payable, in each case, to the extent not paid pursuant to clause fourth above, (iii) the payment of all other Obligations then due and payable and (iv) cash collateralization of indemnification obligations owing to the Term Lenders, Obligations under Secured Hedge Agreements and Obligations under Secured Cash Management Agreements, in each case under this clause (iv), to the extent not cash collateralized pursuant to clause fourth above, in an amount determined by the Applicable Agent as reasonably necessary to secure such Obligations; and
ninth, any remainder shall be for the account of and paid to whoever may be lawfully entitled thereto.
In carrying out the foregoing, (i) amounts received shall be applied to each category in the numerical order provided until exhausted prior to the application to the immediately succeeding category, (ii) each of the Lenders or other Persons entitled to payment shall receive an amount equal to its pro rata share of amounts available to be applied pursuant to clauses third, fourth, fifth, seventh, eighth and ninth above and (iii) no payments by a Guarantor and no proceeds of Collateral of a Guarantor shall be applied to Obligations, the guaranty of which by such Guarantor would constitute an Excluded Swap Obligation. While any Trigger Event of Default is continuing, any payments or prepayments received by Revolver Agent shall be promptly paid over to Administrative Agent for application under this Section 8.03.
Subject to Section 2.03(3), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth of Section 8.03 will be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount will be applied to the other Obligations, if any, in the order set forth above and, if no Obligations remain outstanding, will be paid to the Borrower.
Notwithstanding the foregoing, amounts received from any Loan Party shall not be applied to any Excluded Swap Obligation of such Loan Party.
SECTION 8.04 Right to Cure.
Section 8.02, but subject to Sections 8.04(2) and (3), for the purpose of determining whether an Event of Default under the Financial Covenant has occurred, the Borrower may on one or more occasions designate any portion of the Net Proceeds from any Permitted Equity Issuance or of any contribution to
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the common equity capital of the Borrower (or from any other contribution to capital or sale or issuance of any other Equity Interests on terms reasonably satisfactory to the Administrative Agent) (the “Cure Amount”) as an increase to Consolidated EBITDA of the Borrower for the applicable fiscal quarter; provided that
The Cure Amount used to calculate Consolidated EBITDA for one fiscal quarter will be used and included when calculating Consolidated EBITDA for each Test Period that includes such fiscal quarter. The parties hereby acknowledge that (I) this Section 8.04(1) may not be relied on for purposes of calculating any financial ratios other than as applicable to the Financial Covenant (and may not be included for purposes of determining pricing, mandatory prepayments and the availability or amount permitted pursuant to any covenant under Article VII) and may not result in any adjustment to any amounts (including the amount of Indebtedness) or increase in cash with respect to the fiscal quarter with respect to which such Cure Amount was received other than the amount of the Consolidated EBITDA referred to in the immediately preceding sentence and (II) there shall be no pro forma reduction in Indebtedness (by netting or otherwise) with the proceeds of any Cure Amount for purposes of determining compliance with the Financial Covenant for the fiscal quarter for which such Cure Amount is deemed applied. Notwithstanding anything to the contrary contained in Section 8.01 and Section 8.02, (x) upon designation and actual receipt of the Cure Amount by the Borrower in an amount necessary to cure any Event of Default under the Financial Covenant, the Financial Covenant will be deemed satisfied and complied with as of the end of the relevant fiscal quarter with the same effect as though there had been no failure to comply with the Financial Covenant and any Event of Default under the Financial Covenant (and any other Default as a result thereof) will be deemed not to have occurred for purposes of the Loan Documents, (y) from and after the date that the Borrower delivers a written notice to the Administrative Agent that it intends to exercise its cure right under this Section 8.04 (a “Notice of Intent to Cure”) neither the Administrative Agent nor any Lender may exercise any rights or remedies under Section 8.02 (or under any other Loan Document) on the basis of any actual or purported Event of Default under the Financial Covenant (and any other Default as a result thereof) until and unless the Cure Expiration Date has occurred without the Cure Amount having been designated and (z) no Lender or Issuing Bank shall be required to (but in its sole discretion may) make any Revolving Loan, Delayed Draw Term Loan or issue or amend any Letter of Credit from and after such time as the Administrative Agent has received the Notice of Intent to Cure unless and until the Cure Amount is actually received by the Borrower.
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Article IX The Agents
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were the “collateral agent” under the Loan Documents. Without limiting the generality of the foregoing, the Lenders hereby expressly authorize the Administrative Agent to execute any and all documents (including releases) with respect to the Collateral and the rights of the Secured Parties with respect thereto (including any Intercreditor Agreement), as contemplated by and in accordance with the provisions of this Agreement and the Collateral Documents and acknowledge and agree that any such action by any Agent shall bind the Lenders. The Revolver Agent shall have the sole and exclusive right and authority (to the exclusion of the Administrative Agent, the Lenders and Issuing Banks), and is hereby authorized to (A) act as the disbursing and collecting agent for the Revolving Lenders and the Issuing Banks with respect to all payments made in respect of the Revolving Loans and Obligations arising with respect to Letters of Credit and fees related thereto, all as more specifically provided in Article II and (B) to perform such other duties and exercise such other powers as are specifically provided to the Revolver Agent in this Agreement.
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further (i) represents and warrants, as of the date such Person became a Lender party hereto, to, and (ii) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Applicable Agent, the Arranger, the Issuing Bank and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that none of the Applicable Agent, the Arranger, the Issuing Bank or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Applicable Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
SECTION 9.02 Rights as a Lender. Any Revolving Lender or Lender that is also serving as an Agent (including as Administrative Agent) hereunder shall have the same rights and powers in its capacity as a Revolving Lender or Lender, respectively, as any other Revolving Lender or Lender, respectively, and may exercise the same as though it were not an Agent and the term “Revolving Lender” or “Lender”, respectively, shall, unless otherwise expressly indicated or unless the context otherwise requires, include each Revolving Lender or Lender, respectively (if any), serving as an Agent hereunder in its individual capacity. Any such Person serving as an Agent 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 the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to any Lender. The Lenders acknowledge that, pursuant to such activities, any Agent or its Affiliates may receive information regarding any Loan Party or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that no Agent shall be under any obligation to provide such information to them.
SECTION 9.03 Exculpatory Provisions. The Administrative Agent and the Collateral Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement and in the other Loan Documents. Without limiting the generality of the foregoing, each Agent (including the Administrative Agent):
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No Agent nor any of its Related Persons shall be liable for any action taken or not taken by it (a) with the consent or at the request of the Required Lenders, Required Facility Lenders, Required Term Lenders or Required Revolver Lenders (as applicable) (or such other number or percentage of the Lenders as shall be necessary, or as the Applicable Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (b) in the absence of its own gross negligence or willful misconduct as determined by the final and non-appealable judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender, or an Issuing Bank.
No Agent-Related Person shall be responsible for or have any duty to ascertain or inquire into (a) any recital, statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (b) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (c) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (d) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (e) the value or the sufficiency of any Collateral or (f) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The duties of the Applicable Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Loan Document, expressed or implied, is intended to or shall be so construed as to impose upon the Applicable Agent any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein.
Notwithstanding any other provision of this Agreement or any provision of any other Loan Document, the Arranger is named as such for recognition purposes only, and in its capacity as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Loan Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Arranger shall be entitled to all indemnification and reimbursement rights in favor of the Arranger as, and to the extent, provided for under Section 10.05. Without limitation of the foregoing, the Arranger shall not, solely by reason of this Agreement or any other Loan Documents, have any fiduciary relationship in respect of any Lender or any other Person.
SECTION 9.04 Lack of Reliance on the Agent. Independently and without reliance upon the Administrative Agent or Revolver Agent, the Arranger and their respective Affiliates, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (a) its own independent investigation of the financial condition and affairs of Holdings, the Borrower and the Restricted Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (b) its own appraisal of the creditworthiness of Holdings, the Borrower and the Restricted Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent, Revolver Agent and the Arranger and any of their respective Affiliates shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether
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coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent, the Revolver Agent, the Arranger and any of their respective Affiliates shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Loan Document or the financial condition of Holdings, the Borrower or any of the Restricted Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Loan Document, or the financial condition of Holdings, the Borrower or any of the Restricted Subsidiaries or the existence or possible existence of any Default or Event of Default.
The Agents may in good faith ask for such information or support it may deem reasonably necessary to confirm that one or more lenders in fact constitute either the Required Lenders, Required Facility Lenders, Required Term Loans or Required Revolving Lenders under any Facility before taking or declining to take any action under a Loan Document and none of the Agents shall be deemed to be liable to any Lender for so taking or so declining to take such action until it shall have received such information so reasonably requested.
SECTION 9.05 Certain Rights of the Agent. If the Applicable Agent requests instructions from the Required Lenders, Required Facility Lenders, Required Term Lenders or Required Revolver Lenders (as applicable) with respect to any act or action (including failure to act) in connection with this Agreement or any other Loan Document, the Applicable Agent shall be entitled to refrain from such act or taking such action unless and until the Applicable Agent shall have received instructions from the Required Lenders, Required Facility Lenders, Required Term Lenders or Required Revolver Lenders (as applicable); and the Applicable Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Applicable Agent as a result of the Applicable Agent acting or refraining from acting hereunder or under any other Loan Document in accordance with the instructions of the Required Lenders, Required Facility Lenders, Required Term Lenders or Required Revolver Lenders (as applicable).
SECTION 9.06 Reliance by the Agent. The Applicable Agent shall be entitled to rely upon, and shall be fully protected in relying upon, any note, writing, resolution, notice, statement, certificate, telex, teletype or facsimile message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Applicable Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Loan Document and its duties hereunder and thereunder, upon advice of counsel selected by the Applicable Agent. In determining compliance with any condition hereunder to the making of a Loan or the issuance, extension or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or Issuing Bank, the Applicable Agent may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Applicable Agent shall have received notice to the contrary from such Lender or Issuing Bank prior to the making of such Loan or issuances of such Letter of Credit. The Applicable Agent may consult with legal counsel (who may be counsel for the Borrower), 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.
SECTION 9.07 Delegation of Duties. The Applicable Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Documents by or through any one or more sub-agents appointed by the Applicable Agent. The Applicable Agent and any such sub- agent may perform any and all of its duties and exercise its rights and powers by or through their respective Agent-Related Persons. The exculpatory provisions of this Article shall apply to any such sub agent and to the Agent-Related Persons of the Applicable Agent and any such sub agent, and shall apply
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to their respective activities as Applicable Agent. Notwithstanding anything to the contrary in this Section 9.07 or Section 9.14, the Applicable Agent shall not delegate to any Supplemental Administrative Agent or Supplemental Revolver Agent (as applicable) responsibility for receiving any payments under any Loan Document for the account of any Lender, which payments shall be received directly by the Applicable Agent without prior written consent of the Borrower (not to unreasonably withheld or delayed).
SECTION 9.08 Indemnification. Whether or not the transactions contemplated hereby are consummated, to the extent any of the Administrative Agent, Revolver Agent or any other of their Agent-Related Persons (solely to the extent any such Agent-Related Person was performing services on behalf of the Administrative Agent or Revolver Agent) or Issuing Bank is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify any of the Administrative Agent, Revolver Agent or any other of their Agent-Related Person (solely to the extent any such Agent-Related Person was performing services on behalf of the Administrative Agent or Revolver Agent) or Issuing Bank in proportion to their respective Pro Rata Shares for and against any and all liabilities, obligations, responsibilities, fines, sanctions, losses, damages, penalties, claims, actions, suits, judgments, costs, fees, Taxes, commissions, charges, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by any of the Administrative Agent, Revolver Agent or any other of their Agent-Related Persons (solely to the extent any such Agent-Related Person was performing services on behalf of the Administrative Agent or Revolver Agent) or Issuing Bank for any action taken or omitted to be taken in performing its duties hereunder, under any other Loan Document, under any Letter of Credit or in any way relating to or arising out of this Agreement, any other Loan Document or the Letters of Credit; provided that no Lender shall be liable for any portion of such liabilities, obligations, responsibilities, fines, sanctions, losses, damages, penalties, claims, actions, judgments, suits, costs, fees, Taxes, commissions, charges, expenses or disbursements resulting from any of the Applicable Agent’s, any other of its Agent-Related Person’s or Issuing Bank’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
Without limitation of the foregoing, each Lender shall reimburse the Applicable Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Applicable Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Applicable Agent is not reimbursed for such expenses by or on behalf of the Borrower, provided that such reimbursement by the Lenders shall not affect the Borrower’s continuing reimbursement obligations with respect thereto, provided further that the failure of any Lender to indemnify or reimburse the Applicable Agent shall not relieve any other Lender of its obligation in respect thereof. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.08 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. The undertaking in this Section 9.08 shall survive termination of the Aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent.
SECTION 9.09 The Agent in Its Individual Capacity. With respect to its obligation to make Loans under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a “Lender” or “Revolving Lender”, respectively, and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lender”, “Revolving Lender”, “Required Lenders”, “Required Facility Lenders”, “Required Term Lenders”, “Required Revolving Lenders” or any similar terms shall, unless the context clearly indicates otherwise, include the Administrative Agent in its individual capacity. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial
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advisory services) to any Loan Party or any Affiliate of any Loan Party (or any Person engaged in a similar business with any Loan Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Loan Party or any Affiliate of any Loan Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. The Lenders acknowledge that, pursuant to such activities, any Agent or its Affiliates may receive information regarding any Loan Party or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that no Agent shall be under any obligation to provide such information to them.
SECTION 9.10 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender, Swing Line Lender or an Issuing Bank hereunder, as the case may be. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “lead arranger” or “bookrunner” shall have any obligation, liability, responsibility or duty under this Agreement other than (a) as expressly provided herein or (b) those applicable to all Lenders, but only to the extent acting in such capacity as a Lender.
SECTION 9.11 Resignation by the Agents. The Administrative Agent may resign from the performance of all its respective functions and duties hereunder or under the other Loan Documents at any time by giving 30 Business Days prior written notice to the Revolver Agent, the Lenders and the Borrower. If the Administrative Agent becomes subject to a Lender-Related Distress Event, then the Administrative Agent may be removed as the Administrative Agent at the reasonable request of the Required Lenders. If the Administrative Agent becomes subject to an Agent-Related Distress Event, then the Borrower may remove the Administrative Agent from such role upon 15 days’ prior written notice to the Lenders. Such resignation or removal shall take effect upon the appointment of a successor Administrative Agent, as provided below. The Revolver Agent may resign from the performance of all its respective functions and duties hereunder or under the other Loan Documents at any time by giving 30 Business Days prior written notice to the Administrative Agent, the Lenders and the Borrower. If the Revolver Agent becomes subject to a Lender-Related Distress Event, then the Revolver Agent may be removed as the Administrative Agent at the reasonable request of the Required Lenders. If the Revolver Agent becomes subject to an Agent-Related Distress Event, then the Borrower may remove the Revolver Agent from such role upon 15 days’ prior written notice to the Lenders. Such resignation or removal shall take effect upon the appointment of a successor Revolver Agent, as provided below.
Notwithstanding anything to the contrary in this Agreement, no successor Agent shall be appointed unless such successor Administrative Agent represents and warrants that it is (a) a “U.S. person” and a “financial institution” and that it will comply with its “obligation to withhold,” each within the meaning of U.S. Treasury Regulations Section 1.1441-1 or (b) a Withholding U.S. Branch.
Upon any such notice of resignation by, or notice of removal of, an Agent, the Required Lenders or the Required Revolving Lenders, as applicable, shall appoint a successor Agent hereunder or thereunder who shall be a commercial bank or trust company or other Person that customarily acts in an agency or trustee role in syndicated credit facilities, in each case, reasonably acceptable to the Borrower, which acceptance shall not be unreasonably withheld or delayed (provided that the Borrower’s approval shall not be required if an Event of Default under Section 8.01(1) or, solely with respect to the Borrower, Section 8.01(6) has occurred and is continuing).
If a successor Applicable Agent shall not have been so appointed within such 30 Business Day period, the Applicable Agent with the consent of the Borrower (which consent shall not be
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unreasonably withheld or delayed, provided that the Borrower’s consent shall not be required if an Event of Default under Section 8.01(1) or, solely with respect to the Borrower, Section 8.01(6) has occurred and is continuing), shall then appoint a successor Applicable Agent, who shall serve as Applicable Agent hereunder or thereunder until such time, if any, as the Required Lenders or the Required Revolving Lenders, as applicable, appoint a successor Applicable Agent, as provided above.
If no successor Applicable Agent has been appointed pursuant to the foregoing by the 35th Business Day after the date such notice of resignation was given by the Applicable Agent or such notice of removal was given by the Required Lenders, the Revolving Required Lenders or the Borrower, as applicable, the Applicable Agent’s resignation shall nonetheless become effective and the Required Lenders or the Revolving Required Lenders, as applicable, shall thereafter perform all the duties of the Applicable Agent hereunder or under any other Loan Document until such time, if any, as the Required Lenders or the Required Revolving Lenders, as applicable, appoint a successor Applicable Agent, as provided above. The retiring Applicable Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Banks under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and except for any indemnity payments or other amounts then owed to the retiring or removed Applicable Agent, all payments, communications and determinations provided to be made by, to or through the Applicable Agent shall instead be made by or to each Lender or Issuing Bank directly, until such time as the Required Lenders or the Required Revolving Lenders, as applicable, appoint a successor Applicable Agent as provided for above in this Section 9.11.
Upon the acceptance of a successor’s appointment as Administrative Agent hereunder and, in the case of a successor’s appointment as Administrative Agent for purposes of the immediately succeeding clauses (a) and (b), upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to (a) continue the perfection of the Liens granted or purported to be granted by the Collateral Documents or (b) otherwise ensure that the Collateral and Guarantee Requirement is satisfied, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section 9.11).
The fees payable by the Borrower to a successor Administrative Agent or Revolver Agent, as applicable, shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Applicable Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article IX and Sections 10.04 and 10.05 shall continue in effect for the benefit of such retiring Applicable Agent, its sub-agents and their respective Agent-Related Persons in respect of any actions taken or omitted to be taken by any of them while the retiring Applicable Agent was acting as Applicable Agent.
Upon a resignation or removal of the Administrative Agent or Revolver Agent, as applicable, pursuant to this Section 9.11, the Applicable Agent (a) shall continue to be subject to Section 10.09 and (b) shall remain indemnified to the extent provided in this Agreement and the other Loan Documents and the provisions of this Article IX (and the analogous provisions of the other Loan Documents) shall continue in effect for the benefit of the Applicable Agent for all of its actions and inactions while serving as the Applicable Agent.
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SECTION 9.12 Collateral Matters. Each Lender (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) irrevocably authorizes and directs the Administrative Agent and the Collateral Agent to take the actions to be taken by them as set forth in Sections 7.04 and 10.24.
Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders, the Required Facility Lenders, the Required Term Lenders, or the Required Revolving Lenders, as applicable, in accordance with the provisions of this Agreement or the Collateral Documents, and the exercise by the Required Lenders, the Required Facility Lenders, the Required Term Lenders, or the Required Revolving Lenders, as applicable, of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time, to take any action with respect to any Collateral or Collateral Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Collateral Documents.
Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release or subordinate particular types or items of Collateral pursuant to this Section 9.12. In each case as specified in this Section 9.12, Section 7.04 and Section 10.24, the applicable Agent will (and each Lender irrevocably authorizes the applicable Agent to), at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release or subordination of such item of Collateral from the assignment and security interest granted under the Collateral Documents, or to evidence the release of such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents, this Section 9.12, Section 7.04 and Section 10.24.
The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Loan Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 9.12, Section 7.04, Section 10.24 or in any of the Collateral Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
SECTION 9.13 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
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compensation, expenses, disbursements and advances of the Lenders, any Issuing Bank and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, any Issuing Bank and the Administrative Agent under Sections 2.09 and 10.04) allowed in such judicial proceeding; and
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and relevant Issuing Banks, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agents and their respective agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.
The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar Laws in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with any such bid (a) the Administrative Agent shall be authorized to form one or more acquisition vehicles to make a bid, (b) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in clauses (a) through (i) of the first proviso to Section 10.01(1) of this Agreement), (c) the Administrative Agent shall be authorized to assign the relevant Obligations to any such acquisition vehicle pro rata by the Lenders, as a result of which each of the Lenders shall be deemed to have received a pro rata portion of any Equity Interests and/or debt instruments issued by such an acquisition vehicle on account of the assignment of the Obligations to be credit bid, all without the need for any Secured Party or acquisition vehicle to take any further action and (d) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the
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amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.
SECTION 9.14 Appointment of Supplemental Administrative Agents.
SECTION 9.15 Intercreditor Agreements. The Administrative Agent and Collateral Agent are hereby authorized to enter into any Intercreditor Agreement to the extent contemplated by the terms hereof, and the parties hereto acknowledge that such Intercreditor Agreement is (and shall be) binding upon them. Each Secured Party (a) hereby agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreements, (b) hereby authorizes, instructs and directs the Administrative
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Agent and Collateral Agent to enter into the Intercreditor Agreements and to subject the Liens on the Collateral securing the Obligations to the provisions thereof and (c) without any further consent of the Lenders, hereby authorizes, instructs and directs the Administrative Agent and the Collateral Agent to negotiate, execute and deliver on behalf of the Secured Parties any intercreditor agreement or any amendment (or amendment and restatement) to the Collateral Documents or any Intercreditor Agreement contemplated hereunder (including any such amendment (or amendment and restatement) of any intercreditor agreement to provide for the incurrence of any Indebtedness permitted hereunder that will be secured on a junior lien or pari passu basis to the Obligations).
In addition, each Secured Party hereby authorizes and directs the Administrative Agent and the Collateral Agent to enter into (a) any amendments to any Intercreditor Agreements, and (b) any other intercreditor arrangements, in the case of the clauses (a) and (b) to the extent required to give effect to the establishment of intercreditor rights and privileges as contemplated and required or permitted by this Agreement (including any such amendment (or amendment and restatement) of any intercreditor agreement to provide for the incurrence of any Indebtedness permitted hereunder that will be secured on a junior lien or pari passu basis to the Obligations). Each Secured Party acknowledges and agrees that any of the Administrative Agent and Collateral Agent (or one or more of their respective Affiliates) may (but are not obligated to) act as the “Debt Representative” or like term for the holders of Credit Agreement Refinancing Indebtedness under the security agreements with respect thereto or any Intercreditor Agreement then in effect. Each Lender waives any conflict of interest, now contemplated or arising hereafter, in connection therewith and agrees not to assert against any Agent or any of its affiliates any claims, causes of action, damages or liabilities of whatever kind or nature relating thereto.
SECTION 9.16 Secured Cash Management Agreements and Secured Hedge Agreements. Except as otherwise expressly set forth herein or in any Guaranty or any Collateral Document, no Cash Management Bank or Hedge Bank that obtains the benefits of Section 8.03, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.
SECTION 9.17 Withholding Tax. To the extent required by any applicable Laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. Without limiting or expanding the provisions of Section 3.01, each Lender shall indemnify and hold harmless the Administrative Agent against, and shall make payable in respect thereof within ten (10) days after demand therefor, all Taxes and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent by the IRS or any other Governmental Authority as a result of the failure of the Administrative Agent to properly withhold tax from amounts paid to or for the account of such Lender for any reason (including because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding tax ineffective), whether or not such Taxes are correctly or legally imposed or asserted. Each Lender shall severally indemnify the Administrative Agent within 10 days after demand therefor, for (a) any Non-Excluded Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative
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Agent for such Non-Excluded Taxes and without limiting the obligation of the Loan Parties to do so), (b) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.07(5) relating to the maintenance of a Participant Register and (c) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due the Administrative Agent under this Section 9.17. The agreements in this Section 9.17 shall survive the resignation or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations. For purposes of this Section 9.17, the term “Lender” includes any Issuing Bank and any Swing Line Lender.
SECTION 9.18 Return of Payments.
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to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this Section 9.15(c)(i) shall be conclusive, absent manifest error.
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received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
This Section 9.18 shall not apply to the disbursement of any proceeds of a Loan to or at the express direction of the Borrower, unless otherwise expressly agreed in writing by the Borrower. In addition, (i) no payment of Obligations made in accordance with this Agreement with funds received by the Administrative Agent from the Borrower or any other Loan Party for the purpose of satisfying such Obligations shall constitute an Erroneous Payment, unless otherwise expressly agreed in writing by the Borrower and (ii) without limiting clause (iv) above and notwithstanding anything to the contrary herein or in any other Loan Document, the Borrower and the Loan Parties shall have no obligations, liabilities or responsibilities for any losses, claims, damages, liabilities, expenses, actions, consequences or remediation (including the repayment or recovery of any amounts) arising out of, resulting from or in connection with any Erroneous Payment or any such actions or inactions of any Payment Recipient in respect of any Erroneous Payment.
Article X Miscellaneous
SECTION 10.01 Amendments, Etc.
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4.03, (C) amend, waive or otherwise modify non-compliance with any provision of Sections 2.01(2), 4.03(6), 10.25 or 10.26 or (D) change or amend the definition of Trigger Event of Default, or (ii) all Revolving Lenders (or the Revolver Agent with the prior written approval of all Revolving Lenders), (A) amend or waive this Section 10.01(1)(g) or the definitions of the terms used in this Section 10.01(1)(g) insofar as the definitions affect the substance of this Section 10.01(1)(g), or (B) change the definition of the term Required Revolving Lenders or the percentage of the Lenders which shall be required for Required Revolving Lenders or any specific right of Required Revolving Lenders to grant or withhold consent to take or omit any action hereunder. For the purposes of determining whether proceeds of Collateral or payments must be applied pursuant to Section 8.03, no amendment or waiver of any Trigger Event of Default shall be taken into account unless such amendment or waiver shall have been signed by the Required Revolving Lenders (or by the Revolver Agent with the consent of the Required Revolving Lenders);
provided that:
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(i) no amendment, waiver or consent shall, unless in writing and signed by each Issuing Bank in addition to the Lenders required above, affect the rights or duties of such Issuing Bank under this Agreement or any Issuing Bank Document relating to any Letter of Credit issued or to be issued by it; provided, however, that this Agreement may be amended to adjust the mechanics related to the issuance of Letters of Credit, including mechanical changes relating to the existence of multiple Issuing Banks, with only the written consent of the Administrative Agent, the applicable Issuing Bank and the Borrower so long as the obligations of the Revolving Lenders, if any, who have not executed such amendment, and if applicable the other Issuing Banks, if any, who have not executed such amendment, are not adversely affected thereby;
provided further that notwithstanding the foregoing:
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is expressly contemplated by any Intercreditor Agreement in connection with joinders and supplements; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document without the prior written consent of the Administrative Agent or the Collateral Agent, as applicable;
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amendments to this Agreement or any other Loan Document as may be necessary in the reasonable opinion of the Borrower and the Administrative Agent to effect any provision specifying that any waiver, amendment or modification may be made with the consent or approval of the Administrative Agent
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other Restricted Subsidiary or any instrument issued or guaranteed by the Borrower or any other Restricted Subsidiary shall not be deemed to create a short position with respect to such Specified Indebtedness, so long as (x) such index is not created, designed, administered or requested by such Lender or its Affiliates and (y) the Borrower and the other Restricted Subsidiaries and any instrument issued or guaranteed by the Borrower or the other Restricted Subsidiaries, collectively, shall represent less than 5% of the components of such index, (iv) derivative transactions that are documented using either the 2014 ISDA Credit Derivatives Definitions or the 2003 ISDA Credit Derivatives Definitions (collectively, the “ISDA CDS Definitions”) shall be deemed to create a short position with respect to the relevant Specified Indebtedness if such Lender or its Affiliates is a protection buyer or the equivalent thereof for such derivative transaction and (x) the relevant Specified Indebtedness is a “Reference Obligation” under the terms of such derivative transaction (whether specified by name in the related documentation, included as a “Standard Reference Obligation” on the most recent list published by Markit, if “Standard Reference Obligation” is specified as applicable in the relevant documentation or in any other manner), (y) the relevant Specified Indebtedness would be a “Deliverable Obligation” under the terms of such derivative transaction or (z) the Borrower or any other Restricted Subsidiary is designated as a “Reference Entity” under the terms of such derivative transaction and (v) credit derivative transactions or other derivatives transactions not documented using the ISDA CDS Definitions shall be deemed to create a short position with respect to any Specified Indebtedness if such transactions offer the Lender or its Affiliates protection against a decline in the value of such Specified Indebtedness, or in the credit quality of the Borrower or any other Restricted Subsidiary, in each case, other than as part of an index so long as (x) such index is not created, designed, administered or requested by such Lender or its Affiliates and (y) the Borrower and the other Restricted Subsidiaries, and any instrument issued or guaranteed by the Borrower or the other Restricted Subsidiaries, collectively, shall represent less than 5% of the components of such index. In connection with any amendment, modification or waiver of this Agreement or the other Loan Documents, each Lender (other than any Lender that is a Regulated Bank) will be deemed to have represented to the Borrower and the Administrative Agent that it does not constitute a Net Short Lender, in each case, unless such Lender shall have notified the Borrower and the Administrative Agent prior to the requested response date with respect to such amendment, modification or waiver that it constitutes a Net Short Lender (it being understood and agreed that the Borrower and the Administrative Agent shall be entitled to rely on each such representation and deemed representation). In no event shall the Administrative Agent be obligated to ascertain, monitor or inquire as to whether any Lender is a Net Short Lender;
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the accrued interest and fees in respect thereof and (ii) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders; provided that the consent of the Lenders or the Required Lenders, as the case may be, shall not be required to make any such changes necessary to be made in connection with any borrowing of Incremental Loans, any borrowing of Other Loans, any Extension or any borrowing of Replacement Loans and otherwise to effect the provisions of Section 2.14, 2.15 or 2.16 or the immediately succeeding paragraph of this Section 10.01, respectively or to effect amendments to this Agreement or any other Loan Document as may be necessary in the reasonable opinion of the Borrower and the Administrative Agent to effect any provision specifying that any waiver, amendment or modification may be made with the consent or approval of the Administrative Agent; provided, that, if any such additional credit facilities are secured on a pari passu basis with the Term Facility, then such additional credit facilities shall be subject to an Equal Priority Intercreditor Agreement; and
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Notwithstanding anything to the contrary in this Section 10.01, (x) each Replacement Amendment may, without the consent of any other Loan Party, Agent or Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 10.01(2) (for the avoidance of doubt, this Section 10.01(2) shall supersede any other provisions in this Section 10.01 to the contrary), including to effect technical and corresponding amendments to this Agreement and the other Loan Documents and (y) at the option of the Borrower in consultation with the Administrative Agent, incorporate terms that would be favorable to existing Lenders of the applicable Class or Classes for the benefit of such existing Lenders of the applicable Class or Classes, in each case under this clause (y), so long as the Administrative Agent reasonably agrees that such modification is favorable to the applicable Lenders.
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party to any Loan Document. Notification of such amendment shall be made by the Administrative Agent to the Lenders promptly upon such amendment becoming effective.
SECTION 10.02 Notices and Other Communications; Facsimile Copies.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient shall be deemed to have been given at the opening of business on the next succeeding Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (2) below shall be effective as provided in such subsection (2).
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FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Agent-Related Persons or the Arranger (collectively, the “Agent Parties”) have any liability to Holdings, the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to Holdings, the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
SECTION 10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law.
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Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Issuing Bank or Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as Issuing Bank or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.10 (subject to the terms of Section 2.13) or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided further that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
SECTION 10.04 Costs and Expenses. The Borrower agrees (a) if the Effective Date occurs and to the extent not paid or reimbursed on or prior to the Effective Date, to pay or reimburse the Administrative Agent and the Arranger for all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent and such Arranger incurred in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs of a single U.S. counsel (including, without limitation, those of any common diligence team at such identified counsel for such Arranger) and, if necessary, a single local counsel in each relevant material jurisdiction and (b) upon presentation of a summary statement, together with any supporting documentation reasonably requested by the Borrower, to pay or reimburse the Administrative Agent, each Issuing Bank, each Swing Line Lender and the other Lenders, taken as a whole, promptly following a written demand therefor for all reasonable and documented out-of-pocket costs and expenses incurred in connection with the enforcement of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and including all Attorney Costs of one counsel to the Administrative Agent and the Lenders taken as a whole (and, if necessary, one local counsel in any relevant material jurisdiction and solely in the case of a conflict of interest, one additional counsel in each relevant material jurisdiction to each group of affected Lenders similarly situated taken as a whole)). The agreements in this
Section 10.04 shall survive the termination of the Aggregate Commitments and repayment of all other Obligations. All amounts due under this Section 10.04 shall be paid within thirty (30) calendar days following receipt by the Borrower of an invoice relating thereto setting forth such expenses in reasonable detail. If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it hereunder or under any Loan Document, such amount may be paid on behalf of such Loan Party by the Administrative Agent in its sole discretion.
SECTION 10.05 Indemnification by the Borrower. The Borrower shall indemnify and hold harmless the Agents, each Issuing Bank, each Swing Line Lender, and each other Lender, the Arranger and their respective Related Persons (collectively, the “Indemnitees”) from and against any and all losses, claims, damages, liabilities or expenses (including Attorney Costs and Environmental Liabilities) to which any such Indemnitee may become subject arising out of, resulting from or in
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connection with (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to all Indemnitees taken as a whole and, if reasonably necessary, a single local counsel for all Indemnitees taken as a whole in each relevant material jurisdiction, and solely in the case of a conflict of interest, one additional counsel in each relevant material jurisdiction to each group of affected Indemnitees similarly situated taken as a whole) any actual or threatened claim, litigation, investigation or proceeding relating to the Transactions or to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents, the Loans, the Letters of Credit or the use, or proposed use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, litigation, investigation or proceeding), and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or expenses resulted from (a) the gross negligence, bad faith or willful misconduct of such Indemnitee or any of its Related Indemnified Persons as determined by a final, non-appealable judgment of a court of competent jurisdiction, (b) a material breach of any obligations under any Loan Document by such Indemnitee or any of its Related Indemnified Persons as determined by a final, non-appealable judgment of a court of competent jurisdiction or (c) any dispute solely among Indemnitees other than any claims against an Indemnitee in its capacity or in fulfilling its role as an administrative agent or arranger or any similar role under any Loan Document and other than any claims arising out of any act or omission of Holdings or any of its Affiliates (as determined by a final, non- appealable judgment of a court of competent jurisdiction). To the extent that the undertakings to indemnify and hold harmless set forth in this Section 10.05 may be unenforceable in whole or in part because they are violative of any applicable Law or public policy, the Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any of them. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement (except to the extent such damages are found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such Indemnitee), nor shall any Indemnitee or any Loan Party have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Effective Date) (other than, in the case of any Loan Party, in respect of any such damages incurred or paid by an Indemnitee to a third party for which such Indemnitee is otherwise entitled to indemnification pursuant to this Section 10.05). In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 10.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, stockholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents is consummated. All amounts due under this Section 10.05 shall be paid within thirty (30) calendar days after written demand therefor. The agreements in this Section 10.05 shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations. This Section 10.05 shall not apply to Taxes, except any Taxes that represent losses, claims or damages arising from any non-tax claim. Notwithstanding the foregoing, each Indemnitee shall be obligated to refund and return promptly any and all amounts paid by any Loan Party or any of its Affiliates under this Section 10.05 to such Indemnitee for any such fees, expenses or damages to the extent such Indemnitee is not entitled to payment of such amounts in accordance with the terms hereof as determined by a final judgment of a court of competent jurisdiction.
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SECTION 10.06 Marshaling; Payments Set Aside. None of the Administrative Agent or any Lender shall be under any obligation to marshal any assets in favor of the Loan Parties or any other party or against or in payment of any or all of the Obligations. To the extent that any payment by or on behalf of the Borrower is made to any Agent or any Lender, or any Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by any Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Overnight Rate from time to time in effect.
SECTION 10.07 Successors and Assigns.
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Section 10.07(12), the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms.
In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or sub participations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent,
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the applicable Pro Rata Share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Pro Rata Share. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (3) of this Section 10.07 (and, in the case of an Affiliated Lender or a Person that, after giving effect to such assignment, would become an Affiliated Lender, to the requirements of clause (8) of this Section 10.07), from and after the effective date specified in each Assignment and Assumption, other than in connection with an assignment pursuant to Section 10.07(12), (x) the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement and (y) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances occurring prior to the effective date of such assignment), but shall in any event continue to be subject to Section 10.09. Upon request, and the surrender by the assigning Lender of its Note, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.07(4).
EACH LENDER HEREBY ACKNOWLEDGES THAT HOLDINGS AND THE BORROWER OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, ANY AFFILIATED LENDER (INCLUDING ANY INVESTOR) AND ANY DEBT FUND AFFILIATE MAY FROM TIME TO TIME PURCHASE OR TAKE ASSIGNMENT OF TERM LOANS HEREUNDER IN ACCORDANCE WITH THE PROVISIONS SET FORTH IN THIS AGREEMENT, INCLUDING PURSUANT TO SECTION
2.05 AND THIS SECTION 10.07 (INCLUDING THROUGH OPEN MARKET PURCHASES).
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Treasury regulations). Notwithstanding the foregoing, in no event shall the Administrative Agent be obligated to ascertain, monitor or inquire as to whether any Lender is an Affiliated Lender, nor shall the Administrative Agent be obligated to monitor the aggregate amount of the Term Loans or Incremental Term Loans held by Affiliated Lenders.
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doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
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in possession of undisclosed information that may be material to such Lender’s decision to participate in such repurchase or assignment (unless such requirement is waived by the Borrower);
Notwithstanding anything to the contrary contained herein, any Affiliated Lender that has purchased Term Loans pursuant to this subsection (8) may, in its sole discretion, contribute, directly or indirectly, the principal amount of such Term Loans or any portion thereof, plus all accrued and unpaid interest thereon, to the Borrower for the purpose of cancelling and extinguishing such Term Loans. Upon the date of such contribution, assignment or transfer, (x) the aggregate outstanding principal amount of Term Loans shall reflect such cancellation and extinguishing of the Term Loans then held by the Borrower and (y) the Borrower shall promptly provide notice to the Administrative Agent of such contribution of such Term Loans, and the Administrative Agent, upon receipt of such notice, shall reflect the cancellation of the applicable Term Loans in the Register.
Each Affiliated Lender agrees to notify the Administrative Agent and the Borrower promptly (and in any event within ten (10) Business Days) if it acquires any Person who is also a Lender, and each Lender agrees to notify the Administrative Agent and the Borrower promptly (and in any event within ten (10) Business Days) if it becomes an Affiliated Lender. The Administrative Agent may conclusively rely upon any notice delivered pursuant to the immediately preceding sentence or pursuant to clause (v) of this subsection (8) and shall not have any liability for any losses suffered by any Person as a result of any purported assignment to or from an Affiliated Lender.
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on any matter related to any Loan Document or (c) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, no Affiliated Lender shall have any right to consent (or not consent), otherwise act or direct or require the Administrative Agent or any Lender to take (or refrain from taking) any such action and, except with respect to any amendment, modification, waiver, consent or other action (x) in Section 10.01 requiring the consent of all Lenders, all Lenders directly and adversely affected or specifically such Lender, (y) that alters an Affiliated Lender’s pro rata share of any payments given to all Lenders or (z) affects the Affiliated Lender (in its capacity as a Lender) in a manner that is disproportionate to the effect on any Lender in the same Class, the Loans held by an Affiliated Lender shall be disregarded in both the numerator and denominator in the calculation of any Lender vote (and shall be deemed to have been voted in the same percentage as all other applicable Lenders voted if necessary to give legal effect to this paragraph) (but, in any event, in connection with any amendment, modification, waiver, consent or other action, shall be entitled to any consent fee, calculated as if all of such Affiliated Lender’s Loans had voted in favor of any matter for which a consent fee or similar payment is offered).
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(i)(I) if the assignee is Holdings or a Subsidiary of the Borrower, upon such assignment, transfer or contribution, the applicable assignee shall automatically be deemed to have contributed or transferred the principal amount of such Term Loans, plus all accrued and unpaid interest thereon, to the Borrower; or (II) if the assignee is the Borrower (including through contribution or transfers set forth in clause (I)), (A) the principal amount of such Term Loans, along with all accrued and unpaid interest thereon, so contributed, assigned or transferred to the Borrower shall be deemed automatically cancelled and extinguished on the date of such contribution, assignment or transfer, (B) the aggregate outstanding principal amount of Term Loans of the remaining Lenders shall reflect such cancellation and extinguishing of the Term Loans then held by the Borrower and (C) the Borrower shall promptly provide notice to the Administrative Agent of such contribution, assignment or transfer of such Term Loans, and the Administrative Agent, upon receipt of such notice, shall reflect the cancellation of the applicable Term Loans in the Register;
(ii) each Lender (other than an Affiliated Lender) that assigns any Loans to Holdings, the Borrower or any Subsidiary pursuant to clause (b) above shall deliver to the Administrative Agent and the Borrower a customary Big Boy Letter; and
(iv) purchases of Term Loans pursuant to this subsection (12) may not be funded with the proceeds of Revolving Loans.
SECTION 10.08 Resignation of Issuing Bank and Swing Line Lender.
Notwithstanding anything to the contrary contained herein, any Issuing Bank or Swing Line Lender may, upon thirty (30) Business Days’ notice to the Borrower and the Lenders, resign as an Issuing Bank or Swing Line Lender, respectively, so long as on or prior to the expiration of such 30-Business Day period
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with respect to such resignation, the relevant Issuing Bank or Swing Line Lender shall have identified a successor Issuing Bank or Swing Line Lender reasonably acceptable to the Borrower willing to accept its appointment as successor Issuing Bank or Swing Line Lender, as applicable. In the event of any such resignation of an Issuing Bank or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders willing to accept such appointment a successor Issuing Bank or Swing Line Lender hereunder; provided that no failure by the Borrower to appoint any such successor shall affect the resignation of the relevant Issuing Bank or Swing Line Lender, as the case may be, except as expressly provided above. If an Issuing Bank resigns as an Issuing Bank, it shall retain all the rights and obligations of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Bank and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(3)). If the Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it outstanding as of the effective date of such resignation (including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(3)).
SECTION 10.09 Confidentiality. Each of the Agents, the Arranger, the Lenders and each Issuing Bank agrees to maintain the confidentiality of the Information in accordance with its customary procedures (as set forth below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, legal counsel, independent auditors, agents, trustees, managers, controlling Persons, advisors and representatives who need to know such information (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential, with such Affiliate being responsible for such Person’s compliance with this Section 10.09; provided, however, that such Agent, such Arranger, such Lender or such Issuing Bank, as applicable, shall be principally liable to the extent this Section 10.09 is violated by one or more of its Affiliates or any of its or their respective partners, directors, officers, employees, legal counsel, independent auditors, agents, trustees, managers, controlling Persons, advisors or representatives), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners); provided, however, that each Agent, the Arranger, each Lender and each Issuing Bank agrees to notify the Borrower promptly thereof (except in connection with any request as part of a regulatory examination) to the extent it is legally permitted to do so, (c) to the extent required by applicable laws or regulations or by any subpoena or otherwise (including by order) as required by applicable Law or regulation or as requested by a governmental authority; provided that such Agent, such Arranger, such Lender or such Issuing Bank, as applicable, agrees that it will notify the Borrower as soon as practicable in the event of any such disclosure by such Person (except in connection with any request as part of a regulatory examination) unless such notification is prohibited by law, rule or regulation, (d) to any Lenders or participants or prospective Lenders or Participants or derivative counterparties or prospective derivative counterparties (in each case, other than Disqualified Institution); provided that such disclosure shall be made subject to the acknowledgment and acceptance by such prospective Lender, Participant or Eligible Assignee that such Information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to the Borrower, the Agents and the Arranger), (e) for purposes of establishing a “due diligence” defense, (f) on a confidential basis to service providers to the Agents and the Lenders in connection with the administration, settlement and management of this Agreement and the credit facilities provided hereunder, (g) with the consent of the Borrower, (h) to rating agencies and to market data collectors for customary purposes in the lending industry in connection with the Facilities, (i) to enforce their respective rights hereunder or under any other Loan Document or (j) to the extent such Information (I) becomes publicly available other than as a result of a breach by any Person of this Section 10.09 or any other confidentiality provision in favor of any Loan Party, (II) becomes available to any Agent, the Arranger, any Lender, any Issuing Bank or any of their respective Affiliates on a non-confidential basis
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from a source other than Holdings, the Borrower or any Subsidiary thereof, and which source is not known by such Agent, such Lender, such Issuing Bank or the applicable Affiliate to be subject to a confidentiality restriction in respect thereof in favor of Holdings, the Borrower or any Affiliate thereof or (III) is independently developed by the Agents, the Lenders, the Issuing Banks, the Arranger or their respective Affiliates, in each case, so long as not based on information obtained in a manner that would otherwise violate this Section 10.09.
For purposes of this Section 10.09, “Information” means all information received from any Loan Party or any Subsidiary thereof and their respective officers, directors, employees, agents and advisors of such Persons relating to any Loan Party or any Subsidiary or Affiliate thereof or their respective businesses, other than any such information that is available to any Agent, any Lender or any Issuing Bank on a non-confidential basis prior to disclosure by any Loan Party or any Subsidiary thereof; it being understood that no information received from Holdings, the Borrower or any Subsidiary or Affiliate thereof after the date hereof shall be deemed non-confidential on account of such information not being clearly identified at the time of delivery as being confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 10.09 shall be considered to have complied with its obligation to do so in accordance with its customary procedures if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Each Agent, the Arranger, each Lender and each Issuing Bank acknowledges that (a) the Information may include trade secrets, protected confidential information, or material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of such information and (c) it will handle such information in accordance with applicable Law, including United States Federal and state securities Laws and to preserve its trade secret or confidential character.
The respective obligations of the Agents, the Arranger, the Lenders and any Issuing Bank under this Section 10.09 shall survive, to the extent applicable to such Person, (x) the payment in full of the Obligations and the termination of this Agreement, (y) any assignment of its rights and obligations under this Agreement and (z) the resignation or removal of any Agent, Swing Line Lender or Issuing Bank.
SECTION 10.10 Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each Issuing Bank is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or such Issuing Bank to or for the credit or the account of any Loan Party against any and all of the obligations of such Loan Party then due and payable under this Agreement or any other Loan Document to such Lender or such Issuing Bank, irrespective of whether or not such Lender or such Issuing Bank shall have made any demand under this Agreement or any other Loan Document; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (a) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks and the Lenders and (b) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender and each Issuing Bank under this Section 10.10 are in addition to other rights and remedies (including other rights of setoff) that such Lender or such Issuing Bank may have. Each Lender and each Issuing Bank agrees to notify the Borrower and the
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Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
SECTION 10.11 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 10.12 Counterparts; Integration; Effectiveness. This Agreement and each of the other Loan Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract 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. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging (including in
.pdf format) means shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.13 Electronic Execution of Assignments and Certain Other Documents. The words “delivery,” “execution,” “execute,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Committed Loan Notices, Swing Line Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, 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 other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 10.14 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.
SECTION 10.15 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability
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of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.16 GOVERNING LAW.
SECTION 10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
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SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.17.
SECTION 10.18 Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent and the Administrative Agent shall have been notified by each Lender that each such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, each Agent, each Lender, each other party hereto and their respective successors and assigns.
SECTION 10.19 Lender Action. Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party under any of the Loan Documents or the Secured Hedge Agreements (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent. The provision of this Section 10.19 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.
SECTION 10.20 Use of Name, Logo, Etc. Each Loan Party consents to the publication in the ordinary course by the Administrative Agent or the Arranger of customary advertising material relating to the financing transactions contemplated by this Agreement using such Loan Party’s name, product photographs, logo or trademark; provided that any such material shall be provided to the Borrower for its review a reasonable period of time in advance of publication. Such consent shall remain effective until revoked by such Loan Party in writing to the Administrative Agent and the Arranger.
SECTION 10.21 USA PATRIOT Act. Each Lender that is subject to the USA PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the USA PATRIOT Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.
SECTION 10.22 Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 10.23 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Borrower and Holdings acknowledges and agrees that (a) (i) the arranging and other services regarding this Agreement provided by the Agents, the Arranger and the Lenders are arm’s-length commercial transactions between the Borrower, Holdings and their respective Affiliates, on the one hand, and the Administrative Agent, the Arranger and the Lenders, on the other hand, (ii) each of the Borrower and Holdings has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate and (iii) each of
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the Borrower and Holdings is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) each Agent, the Arranger and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower, Holdings or any of their respective Affiliates, or any other Person and (ii) none of the Agents, the Arranger nor any Lender has any obligation to the Borrower, Holdings or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents and (c) the Agents, the Arranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, Holdings and their respective Affiliates, and none of the Agents, the Arranger, nor any Lender has any obligation to disclose any of such interests to the Borrower, Holdings or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrower and Holdings hereby waives and releases any claims that it may have against the Agents, the Arranger, or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
SECTION 10.24 Release of Collateral and Guarantee Obligations; Subordination
of Liens.
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provisions of this paragraph, all without the further consent or joinder of any Lender or Issuing Bank. Any representation, warranty or covenant contained in any Loan Document relating to any such released Collateral or Guarantor shall no longer be deemed to be repeated. Notwithstanding anything herein to the contrary, no Guarantor shall be released from its Guarantee of the Obligations pursuant to clause (1) of the definition of Excluded Subsidiary other than to the extent such Guarantor becomes non-wholly-owned solely as a result of a bona fide joint venture arrangement with a third party that is not an Affiliate of Holdings or the Sponsor pursuant to an Investment permitted under Section 7.05, valued in an amount equal to the fair market value of such Guarantor at the time of such transaction.
SECTION 10.25 Separate Obligations. Each Term Creditor acknowledges and agrees that because of their differing rights in proceeds of the Collateral, the Obligations arising under or in respect of the Term Loans are fundamentally different from the Obligations arising under or in respect of the Revolving Loans and must be separately classified in any plan of reorganization proposed or confirmed in any bankruptcy or insolvency proceeding involving any Borrower or Guarantor as a debtor. No Term Creditor shall seek in any such bankruptcy or insolvency proceeding to be treated as part of the same class of creditors as the Revolving Creditors or shall oppose any pleading or motion by the Revolving Creditors for the Revolving Creditors and the Term Creditors to be treated as separate classes of creditors. Notwithstanding the foregoing, and regardless of whether the Obligations arising under or in respect of the Term Loans and the Obligations arising under or in respect of the Revolving Loans are separately classified in any such plan of reorganization, the Term Creditors hereby acknowledge and agree that to the extent that the aggregate value of the Collateral exceeds the amount of the Obligations arising under or in respect of the Revolving Loans, the Revolving Creditors shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of interest, and fees, costs and charges incurred subsequent to the commencement of the applicable bankruptcy or insolvency proceeding (regardless of whether such interest, and fees, costs and charges incurred subsequent to the commencement of the applicable bankruptcy or insolvency proceeding is allowed as part of the claims of the Revolving Creditors under
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section 506(b) of the Bankruptcy Code or otherwise) before any distribution (whether pursuant to a plan of reorganization or otherwise) is made in respect of any of the claims held by the Term Creditors. The Term Creditors hereby acknowledge and agree to hold in trust for the benefit of the Revolving Creditors and to turn over to the Revolving Creditors all distributions received or receivable by them in any bankruptcy or insolvency proceeding (whether pursuant to a plan of reorganization or otherwise) to the extent necessary to effectuate the intent of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of the Term Creditors.
SECTION 10.26 Purchase Option.
10.26 shall be made by execution and delivery by the Administrative Agent, the Revolver Agent, Revolving Lenders, and exercising Term Lenders of an Assignment and Assumption. Upon the date of such purchase and sale, the exercising Term Lenders shall (a) pay to the Revolver Agent for the benefit of the Revolving Lenders as the purchase price therefor the sum of (i) the full amount of all the Revolving Loan Obligations, Obligations under the Secured Cash Management Agreements and Obligations under
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the Secured Hedge Agreements owing to any Lender that is a Revolving Lender or one of its Affiliates then outstanding and unpaid (including principal, interest, fees, indemnities and expenses, including reasonable attorneys’ fees and legal expenses), (b) furnish Cash Collateral to the Revolver Agent with respect to (i) the outstanding L/C Obligations in such amounts as are required under Section 2.03(7) (to the same extent as if an Event of Default were continuing) and (ii) any unreimbursed contingent obligations with respect to indemnification obligations, Obligations under the Secured Cash Management Agreements and Obligations under the Secured Hedge Agreements in such amount as the Revolver Agent shall determine is reasonably necessary to secure such Obligations and (c) agree to reimburse the Revolving Lenders for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding L/C Obligations as described above and any checks or other payments provisionally credited to the Revolving Loan Obligations, and/or as to which the Revolving Lenders have not yet received final payment. Such purchase price and cash collateral shall be remitted by wire transfer of immediately available funds to the Revolver Agent in accordance with the terms of this Agreement or as mutually agreed, solely for the account of the Revolving Lenders. Interest and fees shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by the Term Lenders are received by the Revolver Agent prior to 1:00 p.m., New York City time and interest and fees may, at the Revolver Agent’s discretion, be calculated to and including such Business Day if the amounts so paid by the Term Lenders are received by the Revolver Agent later than 1:00 p.m., New York City time.
SECTION 10.27 Acknowledgement and Consent to Bail-In of Affected Financial
Institutions
. Solely to the extent any Lender or Issuing Bank that is an Affected Financial Institution is a party to this Agreement, notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among the parties hereto, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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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 Loan Document; or
SECTION 10.28 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties hereto hereby 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 “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan 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 United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. 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) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. 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 United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan 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 U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
291
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
LIFESTANCE HEALTH HOLDINGS, INC.,
as the Borrower
By: /s/ Michael Lester
Name: Michael Lester
Title: Chief Executive Officer
LYNNWOOD INTERMEDIATE HOLDINGS, INC.,
as Holdings
By: /s/ Michael Lester
Name: Michael Lester
Title: Chief Executive Officer
[Signature Page to Credit Agreement]
CAPITAL ONE, NATIONAL ASSOCIATION, as
Administrative Agent, Revolver Agent, Collateral Agent, Issuing Bank, Swing Line Lender and Revolving Lender
By: /s/ Brian Dunn
Name: Brian Dunn
Title: Duly Authorized Signatory
[Signature Page to Credit Agreement]
UNITRANCHE LOAN TRANSACTION
II, LLC, as a Lender
By: Capital One, National Association, as Manager
By: /s/ Earl F. Smith III
Name: Earl F. Smith III
Title: Duly Authorized Signatory
By: HPS Investment Partners, LLC, as Manager
By: /s/ Aman Malik
Name: Aman Malik
Title: Managing Director
[Signature Page to Credit Agreement]
SCHEDULES |
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1.01(1) |
Closing Date Subsidiary Guarantors |
1.01(2) |
Cash Management Banks |
1.01(4) |
Hedge Banks |
1.01(5) |
Mortgaged Properties |
1.01(6) |
Affiliated Practices |
2.01 |
Commitments |
4.01(1)(c) |
Certain Collateral Documents |
4.01(1)(f) |
Local Counsel |
5.12 |
Subsidiaries and Other Equity Investments |
6.12(2) |
Post-Closing Matters |
7.01 |
Existing Liens |
7.02 |
Existing Indebtedness |
7.05 |
Existing Investments |
10.02 |
Administrative Agent's Office, Certain Addresses for Notices |
1.01(1) – Closing Date Subsidiary Guarantors
Schedule 1.01(2) – Cash Management Banks
Schedule 1.01(3) – Existing Letters of Credit
Schedule 1.01(4) – Hedge Banks
Schedule 1.01(5) – Mortgaged Properties
Schedule 1.01(6) – Affiliated Practices
Schedule 2.01 – Commitments
Schedule 4.01(1)(c) – Certain Collateral Documents
Schedule 4.01(1)(f) – Local Counsel
Schedule 5.12 – Subsidiaries and Other Equity Investments
Schedule 6.12(2) – Post-Closing Matters
Schedule 7.01 – Existing Liens
Schedule 7.02 – Existing Indebtedness
Schedule 7.05 – Existing Investments
Schedule 10.02 – Administrative Agent’s Office, Certain Addresses for Notices
EXHIBIT A-1
[FORM OF]
COMMITTED LOAN NOTICE
EXHIBIT A-2
[FORM OF]
SWING LINE LOAN NOTICE
EXHIBIT B-1
[FORM OF]
TERM NOTE
EXHIBIT B-2
[FORM OF] REVOLVING NOTE
EXHIBIT B-3
[FORM OF] SWING LINE NOTE
EXHIBIT B-4
[FORM OF] DELAYED DRAW TERM NOTE
EXHIBIT C
[FORM OF] COMPLIANCE CERTIFICATE
EXHIBIT D-1
[FORM OF] ASSIGNMENT AND ASSUMPTION
EXHIBIT D-2
[FORM OF]
AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION
EXHIBIT E
FORM OF GUARANTY
EXHIBIT F
FORM OF PLEDGE AND SECURITY AGREEMENT
EXHIBIT G-1
[FORM OF]
FORM OF EQUAL PRIORITY INTERCREDITOR AGREEMENT
EXHIBIT G-2
[FORM OF]
FORM OF FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT
EXHIBIT H-1
[FORM OF]
UNITED STATES TAX COMPLIANCE CERTIFICATE
EXHIBIT H-2
[FORM OF]
UNITED STATES TAX COMPLIANCE CERTIFICATE
EXHIBIT H-3
[FORM OF]
UNITED STATES TAX COMPLIANCE CERTIFICATE
EXHIBIT H-4
[FORM OF]
UNITED STATES TAX COMPLIANCE CERTIFICATE
EXHIBIT I
FORM OF SOLVENCY CERTIFICATE
EXHIBIT J
[FORM OF]
DISCOUNT RANGE PREPAYMENT NOTICE
EXHIBIT K
[FORM OF]
DISCOUNT RANGE PREPAYMENT OFFER
EXHIBIT L
[FORM OF ]
SOLICITED DISCOUNTED PREPAYMENT NOTICE
EXHIBIT M
[FORM OF]
ACCEPTANCE AND PREPAYMENT NOTICE
EXHIBIT N
[FORM OF]
SPECIFIED DISCOUNT PREPAYMENT NOTICE
EXHIBIT O
[FORM OF]
SOLICITED DISCOUNTED PREPAYMENT OFFER
EXHIBIT P
[FORM OF]
SPECIFIED DISCOUNT PREPAYMENT RESPONSE
EXHIBIT Q
[FORM OF]
INTERCOMPANY NOTE
EXHIBIT R-1
[FORM OF]
LETTER OF CREDIT REPORT
EXHIBIT R-2
[FORM OF]
SWING LINE REPORT
Exhibit 10.2
SEPARATION AND GENERAL RELEASE AGREEMENT
This Separation and Release of Claims Agreement (this “Agreement”) is entered into by LifeStance Health Group, Inc. (“LifeStance”), and Gwendolyn Booth (“Employee”).
RECITALS
AGREEMENT
LifeStance Health Group, Inc. |
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By: |
/s/ Ryan Pardo |
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/s/ Gwendolyn Booth |
Its: |
Chief Legal Officer |
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Gwendolyn Booth |
Date: |
May 22, 2022 |
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Exhibit A
Consulting Agreement
Exhibit B
RSU Amendment
Exhibit C
Stock Transfer Amendment
Exhibit 10.3
LifeStance Health Group, Inc.
INDEPENDENT CONTRACTOR AGREEMENT
This INDEPENDENT Contractor Agreement (this “Agreement”), made and entered into as of July 1, 2022 (the “Effective Date”), between LifeStance Health Group, Inc. (“Company”) and Gwendolyn Booth (“Contractor”) contains the terms and conditions on which Contractor will provide certain Services (as hereinafter defined) to Company. In consideration of the promises and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:
1. Services. The specific engagement scope, services, and fees are set forth in Exhibit A attached hereto and hereby made a part of this Agreement (“Services”). Time is of the essence in this Agreement. Contractor agrees to devote as much business time as is necessary to properly perform any services hereunder.
2. Ownership. All original written material and deliverables produced by Contractor as part of the Services or during the course of her performance hereunder shall be the property of Company with all rights to use, reproduce, display, distribute, modify and make derivative works in any form and may be utilized outside of this Agreement by Contractor only with Company’s prior written approval. All work product produced, unless otherwise noted by Contractor in writing, is original and Contractor irrevocably assigns, grants and sells all right, title and interest to such work product, along with all rights to copyright, register for trademark, use, publish and republish in all forms of media, to Company and its assigns.
3. Term and Termination. This Agreement will commence on the Effective Date and unless terminated as otherwise provided herein, shall continue until the End Date set forth in Exhibit A. Notwithstanding the foregoing, Contractor may terminate this Agreement at any time, for any or no reason, without penalty, upon written notice to Company. In addition, Company may, in addition to its other rights, terminate this Agreement upon notice if Contractor violates any of her obligations under this Agreement or any other agreement between Contractor and the Company or any of its affiliates; provided, however, that any such termination shall require the consent of both of the Chief Executive Officer of the Company and the Compensation Committee of the Company. In the event of termination, Company is obligated to pay only for actual Services rendered by Contractor prior to the effective date of termination.
4. Fees. Contractor shall be paid for the Services as set forth in Exhibit A. Contractor shall invoice Company as set forth on Exhibit A.
5. Independent Contractor Relationship. Contractor and Company expressly agree that, in providing services to Company under this Agreement, Contractor will be an independent contractor and will not be an employee or agent of Company or any of its affiliates. Contractor agrees that Contractor will have no right to make any commitments on behalf of Company or any of its affiliates without the express written consent of an authorized officer of Company. Contractor further agrees that Contractor will provide services hereunder independently and will not receive training or direction from Company or any of its affiliates, other than as to the goals to be achieved through the provision of such services. Contractor is free to accept engagements from others during the term of this Agreement, as long as those engagements do not interfere with Contractor providing services under this Agreement or otherwise violate any of Contractor’s obligations hereunder or under any other agreement between Contractor and Company or any of its affiliates. Contractor warrants that it has and will comply with all federal, state and local laws regarding business permits, insurance, tax registrations, certificates and licenses that may be required to carry out the services. Contractor is not eligible for, and shall not actively participate in, any employee pension, health, or other benefit plan of Company. Contractor will not earn paid time off or other similar benefits.
6. Performance of Obligations. Contractor shall at all times perform her obligations hereunder in such a manner as to not cause Company to be in material violation of any applicable laws or regulations.
7. Confidential Information. Except as otherwise provided in this Agreement or with the prior written consent of Company, Confidential Information shall remain strictly confidential and secret and shall not be disclosed to third parties, or utilized, directly or indirectly, by Consultant for her own business purposes or for any other purpose. “Confidential Information” includes all Company information provided to Consultant or to which Consultant may have access to (including information gathered in connection with the Services), including without limitation, business and financial information of any kind, patient information of any kind, vendor lists, pricing information, business
strategies and methods, business projections/forecasts and documents, marketing studies, profits, costs, pricing, advertising copy, business plans and records, trade secrets, technical and non technical data, business statistics and computer code, whether written or oral, tangible or intangible, whether or not such Confidential Information is designated as being confidential as well as any deliverables and any other material prepared under this Agreement by Consultant; provided, however, that the term "Confidential Information" shall not include information that (i) is generally known by or available to the public or which becomes known or available by means other than the breach hereof; (ii) is legally known to Consultant prior to the time Consultant receives such information from Company; or (iii) is legally disclosed to Consultant by an independent third party without restriction on disclosure. Notwithstanding the foregoing, Consultant is permitted to deliver a copy of any such information to any person pursuant to an order issued by a court of competent jurisdiction or administrative agency or otherwise as required by applicable law, provided that Company has been given reasonable notice thereof and the opportunity to prevent the disclosure of such information. Consultant acknowledges and agrees that breach of this Section may cause irreparable harm to Company for which recovery of money damages may be inadequate, and Company may be entitled to seek timely injunctive relief to protect its rights under this Section, in addition to any and all other remedies available at law or in equity.
8. Indemnity. Contractor agrees to protect, defend, hold harmless and indemnify Company, its directors, officers, employees, affiliates and their respective representatives from and against any and all claims, demands, actions, liabilities, damages, losses, fines, penalties, costs and expenses including reasonable attorneys' fees (collectively the "Claims"), of any kind whatsoever including, without limitation of the foregoing, those relating to actual or alleged death of or injury to persons and damage to property, actually or allegedly, directly or indirectly, arising or resulting from or connected with: (a) a breach of this Agreement by Contractor; (b) the Services and/or the omission or commission of any act, lawful or unlawful, by Contractor or her agents or employees (including without limitation while proceeding to or from the site of any Services) whether or not such act is within the scope of the agency or employment of such agents or employees; (c) insurance or tax requirements imposed on Company based upon Contractor's services rendered; (d) any Claim that any Services, work product or deliverable provided by Contractor infringes upon any patent, trademark, trade secret, copyright or similar proprietary right.
9. Insurance. Contractor will procure and maintain during the period of this Agreement and so long as any indemnity survives, such insurance as is reasonably and customary for similarly situated independent contractors.
10. Assignment. In the event of any sale or transfer of the assets or stock of Company, Company shall have the right to assign this Agreement and/or its rights hereunder to an acquirer and no consent to assign this Agreement shall be necessary for such assignment to be effective. The sale to any acquirer shall not be conditioned upon the acquirer’s acceptance of or continuation of this Agreement. Contractor may not assign this Agreement, nor subcontract any of her obligations hereunder, without the prior written consent of Company.
11. Miscellaneous
(a) Entire Agreement. This Agreement and the attached Exhibit shall constitute the entire agreement between the parties and supersede all previous communications and representations whether oral or written, between the parties or any officer or representative of the parties.
(b) Amendments. No amendments or other variation to this Agreement shall be effective unless in writing and signed by an authorized person on behalf of each party.
(c) Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of Washington, except as to its conflicts of laws provisions. The parties hereby consent to the exercise of exclusive jurisdiction by the state or federal courts located in King County, Washington for any claim hereunder.
(d) Severability. If any provision of this Agreement is determined to be unenforceable or invalid, the remaining provisions of this Agreement shall remain in full force and effect.
(e) Notices. Any notices required under this Agreement shall be in writing. Notices shall be delivered in person or sent by overnight courier or by U.S. Mail addressed to the addresses as set forth below. Notice shall be
2
effective upon delivery if delivered in person or sent by overnight courier or two days after being mailed, postage prepaid, by certified mail, return receipt requested.
If to Company:
LifeStance Health Group, Inc.
10655 NE 4th St
Suite 901
Bellevue, WA 98004
If to Contractor:
__________________
__________________
__________________
Attn: _____________
(f) No Waiver. The waiver by either party of any breach of this Agreement, or any warranty herein contained, shall not be construed as a waiver of any subsequent breach. Such party's failure to exercise any rights hereunder shall not operate as a waiver of such right.
(g) Survival. Sections 2, 5, 7, 8, 10 and 11 of this Agreement shall survive the termination or expiration of this Agreement for any reason.
AGREED AS OF THE DATE FIRST SET FORTH ABOVE:
LifeStance Health Group, Inc. |
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By: |
/s/ Ryan Pardo |
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By: |
/s/ Gwendolyn Booth |
Name: |
Ryan Pardo |
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Name: |
Gwendolyn Booth |
Title: |
Chief Legal Officer |
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Date: |
May 21, 2022 |
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Date: |
May 20, 2022 |
3
EXHIBIT A
Start Date: July 1, 2022
End Date: June 30, 2023
Services:
The Consultant shall serve as the Executive Director of the LifeStance Foundation, the Company’s affiliated charitable organization focused on improving access to mental health care in the United States.
In addition, at the Company’s request, the Consultant will provide strategic consulting with respect to the enhancement of Company’s operating model, employee satisfaction and enhanced efficiency, as well as other assistance as may be requested by Company from time to time.
Fees: $13,750 per month payable in accordance with the Company’s ordinary accounts payable practices.
Exhibit 10.4
LIFESTANCE HEALTH GROUP, INC.
2021 Equity Incentive Plan
AMENDMENT TO
Restricted Stock Unit Award Agreement
THIS AMENDMENT (this “Amendment”) amends the Restricted Stock Unit Award Agreement by and between LifeStance Health Group, Inc. (the “Company”), and Gwendolyn Booth (the “Participant”), dated June 9, 2021 (the “Agreement”), and is made as of June 30, 2022. Any capitalized term not defined herein shall have the meaning provided in the Agreement.
RECITALS
WHEREAS, pursuant to the Agreement, the Participant was granted 550,988 restricted stock units on the terms provided therein and in the Plan; and
Whereas, the parties now desire to amend the Agreement to modify the vesting schedule of such restricted stock units.
NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Participant hereby agree as follows:
“Subject to the Participant’s continued Employment through each applicable vesting date, (i) thirty-three and one-third percent (33⅓%) of the Restricted Stock Units shall vest on the first anniversary of the Date of Grant; and (ii) the remaining sixty-six and two-thirds percent (66 2/3%) of the Restricted Stock Units shall vest on the second anniversary thereof, such that the Restricted Stock Units will be one hundred percent (100%) vested on the second (2nd) anniversary of the Date of Grant.”
Except as expressly set forth in this Amendment, the Agreement will continue in full force and effect in accordance with its terms. This Amendment sets forth the entire understanding of the parties, and, as of the date of this Amendment, supersedes all prior agreements and all other arrangements and communications, whether oral or written, with respect to the subject matter hereof. This Amendment may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment is a Delaware contract and shall be governed by and enforced in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provisions (whether Delaware or any other jurisdiction) that would cause the application of the laws of any other jurisdiction other than Delaware.
[Signature Page to Amendment Follows]
2
IN WITNESS WHEREOF, the Company and the Participant have executed and delivered this Amendment as of June 30, 2022.
THE COMPANY: |
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LifeStance Health Group, Inc. |
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Signature: |
/s/ Ryan Pardo |
Name: |
Ryan Pardo |
Title: |
Chief Legal Officer |
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THE PARTICIPANT: |
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Signature: |
/s/ Gwendolyn Booth |
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Gwendolyn Booth |
3
Exhibit 10.5
AMENDMENT TO
Stock Transfer Restriction Agreement
THIS AMENDMENT TO THE Stock Transfer Restriction Agreement (this “Amendment”) is made as of June 30, 2022, by and among LifeStance Health Group Inc., a Delaware limited liability company (the “Company”), TPG VIII Lynwood Holdings Aggregation, L.P. (“TPG”), and Gwendolyn Booth ( “Booth” and collectively with the Company and TPG, the “Parties”). Any capitalized term not defined herein shall have the meaning given it in the Stock Transfer Restriction Agreement between the Parties and certain other Sponsor Investors, Management Investors and Employee and Other Investors, dated June 9, 2021 (the “Agreement”).
RECITALS
Whereas, the Parties wish to modify certain terms of the Agreement solely with respect to Booth;
NOW, THEREFORE, the Parties in consideration of the value to the Parties of this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:
AGREEMENT
“Management Investors. Until the two (2)-year anniversary of the closing of Initial Public Offering, no Management Investor shall Transfer a number of Shares exceeding the greater of: (i) that number of Shares the Transfer of which would result in the Relative Ownership Percentage of such Management Investor immediately following such Transfer being less than the Relative Ownership Percentage of the TPG Investor immediately following such Transfer; and (ii) ten percent (10%) of the Vested Equity of such Management Investor at the time of Transfer, in any three-month period (for the avoidance of doubt, excluding any Excluded Transfers).”
3. Facsimile and Counterpart Signature Pages. This Amendment may be executed by facsimile and in one or more counterparts, each of which counterparts will be deemed to be an original and all of which, which taken together, will be deemed to constitute one in the same agreement.
[Signature Page to Amendment Follows]
IN WITNESS WHEREOF, the Company and Grantee have executed and delivered this Amendment as of the first date written above.
THE COMPANY: |
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LifeStance Health Group, Inc. |
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Signature: |
/s/ Ryan Pardo |
Name: |
Ryan Pardo |
Title: |
Chief Legal Officer |
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TPG: |
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TPG VIII Lynwood Holdings Aggregation, L.P. |
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Signature: |
/s/ Deirdre Cummings |
Name: |
Deirdre Cummings |
Title: |
Vice President |
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THE PARTICIPANT: |
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Signature: |
/s/ Gwendolyn Booth |
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Gwendolyn Booth |
2
Exhibit 10.6
LIFESTANCE HEALTH GROUP, INC.
SEVERANCE AND CHANGE IN CONTROL POLICY
This Severance and Change in Control Policy (this “Policy”) of LifeStance Health Group, Inc. (the “Company”), effective as of August 5, 2022 (the “Effective Date”), sets forth the payments and benefits the Company intends to provide to certain employees of the Company and its subsidiaries who have been selected for participation in this Policy by the Company, which shall include, but not be limited to, the individuals specified on Appendix B hereto (each, an “Eligible Employee” and, collectively, the “Eligible Employees”) and who experience a Qualifying Termination, subject to the terms and conditions of this Policy. The severance payments and benefits payable under this Policy shall apply to Qualifying Terminations on and after the Effective Date. This Policy does not alter the “at will” nature of an Eligible Employee’s employment. Capitalized terms that are not defined within this Policy have the meanings ascribed to them in Appendix A.
QUALIFYING Termination OUTSIDE OF THE CHANGE IN CONTROL PERIOD.
In the event an Eligible Employee experiences a Qualifying Termination that is not during the Change in Control Period, the Eligible Employee will be eligible to receive, depending upon his or her title as set forth in the table below, (i) payments equal to the number of months set forth below (the “Severance Period”) of the Eligible Employee’s then-current annual base salary, paid in cash in the form of payroll continuation payments payable beginning on the first payroll date following the Release Effective Date (as defined below) through the end of the Severance Period; (ii) if the Eligible Employee timely elects to continue coverage under the Company’s health and dental insurance plans under COBRA, an amount each month, as taxable compensation, for the full premium cost of the Eligible Employee’s continued participation in such plans (including coverage for his or her dependents) until the earlier of (x) the last day of the Severance Period, (y) the date upon which COBRA coverage otherwise terminates (including, without limitation, when the Eligible Employee becomes eligible to participate in any group health plan offered by another employer), or (z) the date on which the Eligible Employee ceases to be eligible for COBRA continuation coverage for any reason; (iii) if the Eligible Employee elects to continue his participation in any Company insurance plans in which he was participating on the date of the Eligible Employee’s Qualifying Termination, other than the health and dental insurance plans, an amount each month, as taxable compensation, equal to the full premium cost of the Eligible Employee’s participation in such plans until the earlier of (y) the last day of the Severance Period or (z) the date on which the Eligible Employee ceases to be entitled to continue such participation under applicable law and plan terms, provided, that if the Eligible Employee is not eligible to continue such participation, the Company shall pay the Eligible Employee an amount equal to the amount it would have paid for such continued premium costs as taxable compensation; and (iv) for the Chief Executive Officer of the Company (the “CEO”) only, a pro-rata portion of the CEO’s annual cash bonus for the year of such Qualifying Termination based on actual performance, with such pro-ration based on the number of days the CEO was employed
during such year, paid in a lump sum not later than two and one-half (2 ½) months following the end of the year in which the Qualifying Termination occurred.
Title |
Severance Period (in months) |
CEO |
12 |
C-Level Officer and other individuals on Appendix B |
12 |
Other |
As individually determined |
Any severance benefits payable under this Policy are subject to the Eligible Employee executing and not revoking the Release and his or her ongoing compliance with any Restrictive Covenants (as defined below), as further described below.
QUALIFYING TERMINATION WITHIN THE CHANGE IN CONTROL PERIOD.
In the event an Eligible Employee experiences a Qualifying Termination within the Change in Control Period, the Eligible Employee will be eligible to receive, depending upon his or her title as set forth in the table below, (i) a payment equal to the number of months set forth below (the “CIC Severance Period”) of the Eligible Employee’s then-current annual base salary, paid in cash as a single lump sum payment on the first payroll date following the later of the Release Effective Date and the consummation of the Change in Control (subject to the provisions of “Timing of Payments and Section 409A; Withholding” below), (ii) payment, on the first payroll date following the later of the Release Effective Date and the consummation of the Change in Control, of a percentage of his or her target annual cash bonus (set forth below) for the year in which the Qualifying Termination occurs, (iii) if the Eligible Employee timely elects to continue coverage under the Company’s health and dental insurance plans under COBRA, an amount each month, as taxable compensation, for the full premium cost of the Eligible Employee’s continued participation in such plans (including coverage for his or her dependents) until the earlier of (x) the last day of the CIC Severance Period, (y) the date upon which COBRA coverage otherwise terminates (including, without limitation, when the Eligible Employee becomes eligible to participate in any group health plan offered by another employer), or (z) the date on which the Eligible Employee ceases to be eligible for COBRA continuation coverage for any reason; (iv) if the Eligible Employee elects to continue his participation in any Company insurance plans in which he was participating on the date of the Eligible Employee’s Qualifying Termination, other than the health and dental insurance plans, an amount each month, as taxable compensation, equal to the full premium cost of the Eligible Employee’s participation in such plans until the earlier of (y) the last day of the CIC Severance Period or (z) the date on which the Eligible Employee ceases to be entitled to continue such participation under applicable law and plan terms, provided, that if the Eligible Employee is not eligible to continue such participation, the Company shall pay the Eligible Employee an amount equal to the amount it would have paid for such continued premium costs as taxable compensation, (v) except to the extent that an award agreement or applicable employment agreement entered into before the Effective Date provides for more favorable vesting terms or the terms of an award agreement or employment agreement entered after the Effective Date provides otherwise, (x) full acceleration of the vesting of all of the Eligible Employee’s unvested and outstanding time-based equity awards and performance-based equity awards originally granted on or after June 9, 2021 (it being understood that such performance-based awards shall be deemed earned at the Change in Control assuming target performance and shall
2
thereafter be converted into time-based equity awards) and (y) vesting of the Eligible Employee’s unvested and outstanding performance-based equity awards originally granted prior to June 9, 2021 based on actual performance through the Change in Control (whether based on VWAP or MoM return).
Title |
CIC Severance Period |
Percentage of Target Annual Bonus |
CEO |
24 |
100% |
C-Level Officer and other individuals on Appendix B |
12 |
100% |
Other |
As individually determined |
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Any Change in Control severance benefits payable under this Policy are subject to the Eligible Employee executing and not revoking the Release and his or her ongoing compliance with any Restrictive Covenants (as defined below), as further described below.
DEATH OR DISABILITY.
No Eligible Employee shall have any right to receive any form of compensation, remuneration or benefit hereunder as a result of a termination of employment due to the Eligible Employee’s death or Disability. Nothing hereunder, however, shall supersede any entitlement to receive compensation or benefits under any employment or other agreement with the Company or any life insurance, disability or other benefit plan or arrangement in accordance with the terms of such agreement, plan or arrangement.
RELEASE OF CLAIMS.
Payment of the severance benefits described above will be subject to the Eligible Employee executing a Release, which must become irrevocable at the time specified in the Release (the “Release Effective Date”), but in no event later than sixty (60) days following the date of the Eligible Employee’s termination of employment. Any cash severance benefits described in this Policy that would otherwise be payable or become effective prior to the Release Effective Date will be paid in arrears on the first regularly scheduled payroll date of the Company that follows such Release Effective Date by at least five (5) business days. Any accelerated vesting of equity awards provided for in this Policy will not become effective until the Release becomes irrevocable on the Release Effective Date, but the unvested equity awards will remain outstanding and eligible to vest upon the Release Effective Date following the Qualifying Termination.
COMPLIANCE WITH RESTRICTIVE COVENANTS.
The Eligible Employee’s right to receive and retain the severance benefits provided for in this Policy is conditioned on his or her compliance with any agreement between the Eligible Employee and the Company or any of its affiliates that includes non-competition, non-solicitation and/or confidentiality restrictions (the “Restrictive Covenants”). The severance benefits payable under this Policy shall be subject to forfeiture, clawback and/or recoupment by the Company automatically upon the Eligible Employee’s breach of any Restrictive Covenants.
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TIMING OF PAYMENTS AND SECTION 409A; WITHHOLDING.
The Company will have the right to withhold from any amount payable hereunder any applicable federal, state and local taxes.
This Policy is intended to comply with Section 409A of the Code (“Section 409A”) or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Policy, payments provided under this Policy may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption thereunder. Any payments under this Policy that may be exempt under Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be treated as exempt under Section 409A to the maximum extent possible. For purposes of Section 409A, references to termination of employment will be interpreted consistent with the definition of “separation from service” in Section 409A (after giving effect to the presumptions contained therein), to the extent required under Section 409A, and each installment in a series of payments will be treated as a separate “payment.”
Notwithstanding any other provision of this Policy, if any payment or benefit is conditioned on the Eligible Employee’s execution of a Release, the first payment shall include all amounts that would otherwise have been paid to the Eligible Employee during the period beginning on the date of the Qualifying Termination and ending on the payment date if no delay had been imposed. If the period within which the Eligible Employee must execute a Release would begin in one calendar year and expire in the following calendar year, then any payments contingent upon the execution of a Release shall be made in such following calendar year (regardless of the year of execution of the Release) if the payment in such following calendar year is required to avoid penalty under Section 409A.
Notwithstanding anything to the contrary in this Policy, if at the time of an Eligible Employee’s termination of employment, the Eligible Employee is a “specified employee,” as defined below, any and all amounts payable under this Policy on account of such separation from service that would (but for this provision) be payable within six (6) months following the date of termination will instead be paid on the next business day following the expiration of such six (6)-month period or, if earlier, upon the Eligible Employee’s death; except (i) to the extent of amounts that do not constitute a deferral of compensation within the meaning of Treasury Regulation Section 1.409A-l(b) (including without limitation by reason of the safe harbor set forth in Section 1.409A-1 (b)(9)(iii), as determined by the Company in its reasonable good faith discretion); (ii) benefits that qualify as excepted welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5); or (iii) other amounts or benefits that are not subject to the requirements of Section 409A.
Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Policy comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by an Eligible Employee on account of non-compliance with Section 409A.
SECTION 280G OF THE CODE.
Notwithstanding anything in this Policy to the contrary, if at any time it is determined that payment of the severance benefits described herein, either alone or together with any other payments
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and benefits payable to an Eligible Employee (the “280G Payments”), would constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this paragraph, be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then such 280G Payments will be reduced by the Company by first reducing or eliminating payments that are payable in cash and then by reducing or eliminating payments, rights, and benefits that are not payable in cash, in each case, in reverse order beginning with payments, rights, or benefits that are to be paid farthest in time from the Qualifying Termination or the Change in Control, as applicable, so that the Eligible Employee will not be subject to the Excise Tax; provided that such reduction or elimination will not apply if the Eligible Employee would receive a greater after-tax amount by receiving all such 280G Payments without reduction or elimination pursuant to the foregoing provisions of this sentence. In the event that an Eligible Employee receives payments or benefits that should not have been paid under this paragraph, the Eligible Employee must repay or reimburse the Company promptly upon receiving notice that an overpayment has been made. Nothing in this paragraph will cause the Company to be responsible for, or to have any liability or obligation with respect to, the Excise Tax, including, but not limited to providing any gross-up or payment for taxes.
DISCRETION TO INTERPRET THIS POLICY.
The Board or the Compensation Committee has the sole discretion to interpret this Policy and make all determinations under this Policy, including, without limitation, as to (i) an employee’s eligibility to participate in this Policy, (ii) the circumstances under which the severance benefits may be paid, (iii) the amount of severance benefits that may be paid, and (iv) whether any payments or benefits are 280G Payments. All interpretations and determinations by the Board or the Compensation Committee concerning the terms and provisions of this Policy and its administration will be final and binding.
NO DUPLICATION OF BENEFITS.
This Policy governs severance payable to any Eligible Employee; provided, however, that if an Eligible Employee is party to or subject to an agreement with the Company or any of its affiliates, such as an offer letter or employment agreement, that provides for severance, then such agreement will govern the severance payments payable to such Eligible Employee, unless he or she consents in writing to waive the severance payments in such agreement and to be subject to this Policy, in all cases, subject to compliance with Section 409A, in which case, the timing of payments under this Policy may be adjusted in the discretion of the Company to the extent necessary to comply with Section 409A. In no event will an Eligible Employee be entitled to a duplication of amounts or benefits under this Policy and under (i) any general severance policy or severance plan that the Company or any of its affiliates maintain or (ii) any agreement or arrangement between the Eligible Employee and the Company that provides for severance benefits (collectively under (i) and (ii), the “Company Plans”). Any severance benefits payable to an Eligible Employee under this Policy will be in lieu of and not in addition to any benefits that the Company may provide under any other Company Plans to which the Eligible Employee would otherwise be entitled (unless the Company Plan expressly provides for severance benefits to be in addition to those provided under this Policy and provided that any termination provisions included in equity award agreements entered into between the Eligible Employee and the Company prior to the Effective Date shall continue to apply in addition to the applicable provisions of this Policy). The Company will reduce any severance benefits payable to an Eligible Employee under this Policy by any severance benefits to which the
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Eligible Employee is entitled by operation of a law or government regulations.
ACKNOWLEDGEMENTS.
The benefits provided under this Policy are entirely discretionary to the Company and the Company reserves the right in its sole and absolute discretion to amend or modify, or to suspend or terminate this Policy at any time and from time to time; provided, however, that the Company may not, without an Eligible Employee’s consent, alter the terms of this Policy so as to affect materially and adversely the Eligible Employee’s rights under this Policy.
This Policy is unfunded, and payments and benefits hereunder are payable from the general assets of the Company.
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APPENDIX A
For purposes of this Policy, the following terms will have the following meanings:
“Board” means the Board of Directors of the Company.
“Cause” means, in the case of any Eligible Employee who is party to an employment, change of control or severance-benefit agreement that contains a definition of “Cause,” the definition set forth in such agreement applies with respect to such Eligible Employee for purposes of this Policy for so long as such agreement is in effect. In every other case, “Cause” means, as determined by the Board or the Compensation Committee, (i) a substantial failure of the Eligible Employee to perform the Eligible Employee’s duties and responsibilities to the Company or any of its affiliates or substantial negligence in the performance of such duties and responsibilities; (ii) the commission by the Eligible Employee of a felony or a crime involving moral turpitude; (iii) the commission by the Eligible Employee of theft, fraud, embezzlement, material breach of trust or any material act of dishonesty involving the Company or any of its affiliates; (iv) a significant violation by the Eligible Employee of the code of conduct of the Company or any of its affiliates of any material policy of the Company or any of its affiliates, or of any statutory or common law duty of loyalty to the Company or any of its affiliates; (v) material breach of any of the terms of any agreement between the Company or any of its affiliates and the Eligible Employee; or (vi) other conduct by the Eligible Employee that could be expected to be harmful to the business, interests or reputation of the Company.
“Change in Control” (i) any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided, that a Change in Control shall not be deemed to occur as a result of a change of ownership resulting from the death of a stockholder, a registered public offering of the Company’s common stock, or as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); or (ii) the consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote), (B) a sale or other disposition of all or substantially all of the assets of the Company or (C) a liquidation or dissolution of the Company. Notwithstanding the foregoing, in any case where the occurrence of a Change in Control could affect the vesting of or payment of an amount or award subject to the requirements of Section 409A, to the extent required to comply with Section 409A, the term “Change in Control” shall mean an occurrence that both (i) satisfies the requirements set forth above in this definition and (ii) is a “change in control event” as that term is defined in the regulations under Section 409A.
“Change in Control Period” means the period beginning six (6) months prior to the consummation of
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the first occurrence of a Change in Control after the Effective Date and ending twelve (12) months thereafter.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” means the Internal Revenue Code of 1986, as amended.
“Compensation Committee” means the Compensation Committee of the Board.
“Disability” means, in the case of any Eligible Employee who is party to an employment agreement that contains a definition of “Disability,” the definition set forth in such agreement applies with respect to such Eligible Employee for purposes of this Policy for so long as such agreement is in effect. In every other case, “Disability” means a disability as determined under the Company’s long-term disability policy, as from time to time in effect.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Good Reason” means, in the case of any Eligible Employee who is party to an employment, change of control or severance-benefit agreement that contains a definition of “Good Reason,” the definition set forth in such agreement applies with respect to such Eligible Employee for purposes of this Policy for so long as such agreement is in effect. In every other case, “Good Reason” means that one or more of the following events occur without the Eligible Employee’s consent: (i) a significant diminution in the nature or scope of the Eligible Employee’s responsibilities, duties or authority (including, without limitation, a diminution due to the Board or the Company, as applicable, having hired another senior executive officer to whom the Eligible Employee is requested by the Board or the Company, as applicable, to report, and any change in the Eligible Employee’s reporting relationship such that he or she no longer reports directly to the Board or the CEO, as applicable); provided, however, that the Company’s failure to continue the Eligible Employee’s appointment or election as a director or officer of any of its affiliates, any diminution of the business of the Company and/or any of its affiliates and/or any sale or transfer of equity, property or other assets of the Company or any of its affiliates shall not constitute “Good Reason”; (ii) a reduction in the Eligible Employee’s base salary or annual bonus opportunity, other than an across-the-board reduction that affects other similarly situated Eligible Employees of the Company on a proportionate basis (which such reduction will be disregarded when determining the amount of payments due following a termination of employment for Good Reason); (iii) a requirement by the Company that the Eligible Employee relocate his or her principal place of business to a location that is more than thirty-five (35) miles from his or her then-current location (disregarding any temporary remote work); or (iv) any significant breach by the Company of any of the terms of any material agreement between the Company and the Eligible Employee which has a material adverse effect on the Eligible Employee; provided, however, that, an event will not give rise to a termination for Good Reason, unless the Eligible Employee has notified the Company within thirty (30) days of the initial occurrence of such event, setting forth, in reasonable detail, the nature of such event, the Company has failed to correct the event within a period of thirty (30) days after the Company’s receipt of such notice (the “Cure Period”), and the Eligible Employee actually terminates employment with the Company on the first day following the expiration of the Cure Period.
“Qualifying Termination” means the termination of the Eligible Employee’s employment by the Company without Cause (which, for the avoidance of doubt, will not include a termination of
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employment due to an Eligible Employee’s disability or death) or the termination of the Eligible Employee’s employment by the employee for Good Reason, provided that a termination of the employment of an Eligible Employee in connection with a sale of all or substantially all of the Company’s assets will not be considered a Qualifying Termination if the Eligible Employee is offered comparable employment by the Company or its successors, defined as a position having a comparable role in the purchaser of such assets (or any of its affiliates) with similar or greater span of responsibility and with comparable compensation and benefits opportunities, regardless of whether the Eligible Employee accepts such offer of employment.
“Release” means a general release in favor of the Company, its affiliates and their respective directors, officers, employees, and other service providers in a form that the Company provides to the Eligible Employee in connection with the Qualifying Termination.
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APPENDIX B
Named Participants
Name |
Title |
Michael Lester |
Chief Executive Officer |
Danish Qureshi |
Chief Operating Officer |
Kevin Mullins |
Chief Development Officer |
Michael Bruff |
Chief Financial Officer |
Ryan Pardo |
Chief Legal Officer |
Warren Gouk |
Chief Administrative Officer |
Anisha Patel-Dunn |
Chief Medical Officer |
Felicia Gorcyca |
Chief People Officer |
Pablo Pantaleoni |
Chief Digital Officer |
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Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Lester, certify that:
Date: August 10, 2022 |
|
By: |
/s/ Michael K. Lester |
|
|
|
Michael K. Lester |
|
|
|
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Bruff, certify that:
Date: August 10, 2022 |
|
By: |
/s/ J. Michael Bruff |
|
|
|
J. Michael Bruff |
|
|
|
Chief Financial Officer and Treasurer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LifeStance Health Group, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael K. Lester, President and Chief Executive Officer of LifeStance Health Group, Inc., hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
Date: August 10, 2022 |
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By: |
/s/ Michael K. Lester |
|
|
|
Michael K. Lester |
|
|
|
President and Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LifeStance Health Group, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Michael Bruff, Chief Financial Officer and Treasurer of LifeStance Health Group, Inc., hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
Date: August 10, 2022 |
|
By: |
/s/ J. Michael Bruff |
|
|
|
J. Michael Bruff |
|
|
|
Chief Financial Officer and Treasurer |