Exhibit 10.1

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND OMNIBUS AMENDMENT TO LOAN DOCUMENTS

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND OMNIBUS AMENDMENT TO LOAN DOCUMENTS, dated as of May 23, 2018 (this “Third Amendment”), among MICHAELS STORES, INC., a Delaware corporation (the “Borrower”), MICHAELS FUNDING, INC., a Delaware corporation (“Holdings”), various Subsidiaries of the Borrower, DEUTSCHE BANK AG NEW YORK BRANCH, as the existing administrative agent (in such capacity, the “Resigning Administrative Agent”) and the existing collateral agent (in such capacity, the “Resigning Collateral Agent”) under the Existing Credit Agreement referred to below, the 2018 Converting Replacement Term B Loan Lenders, the 2018 New Replacement Term B Loan Lenders, certain Lenders party hereto constituting the Required Lenders, JPMorgan Chase Bank, N.A. (“JPMorgan”), as successor administrative agent (in such capacity, the “Successor Administrative Agent”) and successor collateral agent (in such capacity, the “Successor Collateral Agent”) and JPMORGAN CHASE BANK, N.A., WELLS FARGO SECURITIES, LLC, DEUTSCHE BANK SECURITIES INC. and GOLDMAN SACHS BANK USA, each as joint lead arrangers and joint bookrunners (in such capacities, collectively, the “Third Amendment Lead Arrangers”) (with capitalized terms used, but not defined, in this paragraph and the recitals below to be defined as provided in Section 1 below).

R E C I T A L S

WHEREAS, the Borrower, the Administrative Agent, the Collateral Agent, the lenders from time to time party thereto (the “Lenders”) and various other parties have previously entered into that certain Amended and Restated Credit Agreement, dated as of January 28, 2013 (as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of June 10, 2014, and the Second Amendment to Amended and Restated Credit Agreement, dated as of September 28, 2016, and as otherwise amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Agreement and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower and the Guarantors are party to one or more of the Loan Documents;

WHEREAS, pursuant to the Existing Credit Agreement and the Loan Documents, the Guarantors have, among other things, guaranteed the Obligations under the Existing Credit Agreement and provided security therefor;

WHEREAS, the Borrower has requested that the 2018 Converting Replacement Term B Loan Lenders agree to convert all or a portion of their 2016 Replacement Term B-1 Loans into 2018 Converted Replacement Term B Loans in a principal amount for each such 2018 Converting Replacement Term B Loan Lender equal to its Allocated 2018 Replacement Term B Loan Conversion Amount, and the 2018 Converting Replacement Term B Loan Lenders have agreed, subject to the terms and conditions contained herein and in the Existing Credit Agreement (as amended hereby), to effect such conversion;

WHEREAS, the Borrower has requested that the 2018 New Replacement Term B Loan Lenders make 2018 New Replacement Term B Loans in a principal amount for each such 2018 New Replacement Term B Loan Lender equal to its 2018 New Replacement Term B Loan Commitment, and the 2018 New Replacement Term B Loan Lenders have agreed, subject to the terms and conditions contained herein and in the Existing Credit Agreement (as amended hereby), to make such 2018 New Replacement Term B Loans;


 

WHEREAS, the Borrower has requested certain other amendments and modifications to the Existing Credit Agreement and the other Loan Documents as set forth herein;

WHEREAS, the Resigning Administrative Agent and the Resigning Collateral Agent intend to resign as Administrative Agent and Collateral Agent, respectively, in accordance with Article IX of the Existing Credit Agreement and Section 4 hereof;

WHEREAS, the Lenders (including each 2018 Replacement Term B Loan Lender) party or consenting in writing hereto hereby appoint, and the Borrower hereby approves the appointment of, JPMorgan as the Successor Administrative Agent and Successor Collateral Agent in accordance with Article IX of the Existing Credit Agreement and Section 4 hereof; and

WHEREAS, in accordance with Section 10.01 of the Existing Credit Agreement, the Borrower has requested, and the Administrative Agent, the Collateral Agent and the Required Lenders (determined immediately prior to the Third Amendment Effective Date referred to below, the “Existing Required Lenders”) have agreed, to amend and/or waive, as applicable, certain provisions of the Existing Credit Agreement on the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.    Defined Terms; Rules of Construction.  Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such terms in the Existing Credit Agreement or, if not defined therein, the Existing Credit Agreement as amended hereby.  The rules of construction specified in Sections 1.02 through 1.09 of the Existing Credit Agreement shall apply to this Third Amendment, including the terms defined in the preamble and recitals hereto.

SECTION 2.    Amendments to the Existing Credit Agreement.   (a) Effective as of the Third Amendment Effective Date, and subject to the terms and conditions set forth herein, the Existing Credit Agreement is hereby amended to incorporate the changes reflected in the redlined version of the Credit Agreement attached hereto as Annex A. The parties hereto acknowledge and agree that (i) (x) amendments to the Existing Credit Agreement relating to the incurrence of the 2018 New Replacement Term B Loans, the 2018 Replacement Term B Loan Conversion and the related repayment of a portion of the 2016 Replacement Term B-1 Loans not subject to the 2018 Replacement Term B Loan Conversion are effected in reliance on Section 10.01 of the Existing Credit Agreement and (y) the 2018 Converted Replacement Term B Loans and the 2018 New Replacement Term B Loans are “Replacement Term Loans” as contemplated by such Section.  All 2016 Replacement Term B-1 Loans outstanding immediately prior to the effectiveness of this Third Amendment on the Third Amendment Effective Date are intended to be replaced in their entirety by the 2018 Replacement Term B Loans (after giving effect to the 2018 Replacement Term B Loan Conversion) and are “Refinanced Term Loans” as contemplated by Section 10.01 of the Existing Credit Agreement.

(b)         Each Person executing this Third Amendment in its capacity as a 2018 New Replacement Term B Loan Lender or a 2018 Converting Replacement Term B Loan Lender shall become (or, if already a Lender prior to the Third Amendment Effective Date, remain) a “Lender” under the Credit Agreement and shall be bound by the provisions of the Credit Agreement as a Lender holding 2018 New Replacement Term B Loan Commitments (in the case of 2018 New Replacement Term B Loan Lenders) and 2018 Replacement Term B Loans (in the case of all 2018 Replacement Term B Loan Lenders).

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(c)         For the avoidance of doubt, immediately after giving effect to the transactions contemplated by this Third Amendment on the Third Amendment Effective Date, the only Class of Loans outstanding under the Credit Agreement shall be the 2018 Replacement Term B Loans.

(d)         As of the Third Amendment Effective Date, the address of the “Administrative Agent” for the purpose of Schedule 10.02 shall be as follows:

 

JPMorgan Chase Bank, N.A., as Agent

JPM Loan & Agency Services

10 S. Dearborn St

Chicago, IL 60603

Attention: Pastell Jenkins

 

With a copy to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Alexandra Kaplan

 

(e)         The Borrower and the undersigned Lenders hereby waive any notice requirement provided for under the Loan Documents in respect of any prepayment of the 2016 Replacement Term B-1 Loans.

 

SECTION 3.    Representations and Warranties.  To induce the other parties hereto to enter into this Third Amendment, each Loan Party hereby represents and warrants to each other party hereto that, as of the Third Amendment Effective Date (as defined below):

(i)          the execution, delivery and performance by such Loan Party of this Third Amendment and the performance by such Loan Party of the other Loan Documents (as modified hereby) to which it is a party are within such Loan Party’s corporate or other organizational powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any such Loan Party’s Organization Documents, (b) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.04 of the Existing Credit Agreement), or require any payment to be made under (i)(x) any indenture, mortgage, deed of trust or loan agreement evidencing Indebtedness in an aggregate principal amount in excess of the Threshold Amount or (y) any other Contractual Obligation to which such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or any Restricted Subsidiary or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Loan Party or its property is subject, or (c) violate any material Law, except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i)(y) above, to the extent that such conflict, breach, contravention or payment could not reasonably be expected to have a Material Adverse Effect;

(ii)         (a) Schedule 2 contains a list of all possessory Collateral delivered to the Resigning Administrative Agent or the Resigning Collateral Agent and security filings related to the Collateral in effect on the Third Amendment Effective Date, and such list is true, correct and complete in all material respects; (b) Schedule 3 contains a list of each Loan Document, including such amendments and supplements thereto, and such list is true, correct and complete in all material respects; and (c) Schedule 4 sets forth the exact legal name and jurisdiction of organization of the Borrower and each other Loan Party;

(iii)        no Event of Default exists, both before and after giving effect to this Third Amendment and the transactions contemplated hereby; and

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(iii)        the representations and warranties of the Borrower set forth in Article V of the Existing Credit Agreement and each Loan Party set forth in each other Loan Document shall be true and correct in all material respects, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; provided 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.    Resignation of Resigning Administrative Agent and Resigning Collateral Agent and Appointment of Successor Administrative Agent and Successor Collateral Agent.

(i)          As of the Third Amendment Effective Date (after receipt of the consents of the Existing Required Lenders and effective immediately prior to the amendments contemplated herein), (i) the Resigning Administrative Agent hereby resigns as the Administrative Agent and the Resigning Collateral Agent hereby resigns as the Collateral Agent, in each case, as provided under Section 9.09 of the Existing Credit Agreement and shall have no further obligations under the Loan Documents in any such capacity; (ii) each of the Resigning Administrative Agent and the Resigning Collateral Agent hereby (A) except as otherwise provided herein, relinquishes its rights, powers and privileges as Administrative Agent or Collateral Agent, as applicable, under the Loan Documents and (B) relinquishes its rights to receive any further agency fees for acting as Administrative Agent or Collateral Agent, as applicable, under the Loan Documents; (iii) the undersigned Lenders (constituting the Existing Required Lenders) hereby appoint JPMorgan as Administrative Agent and Collateral Agent under the Credit Agreement and the other Loan Documents (in each case, as modified hereby); (iv) the Borrower and the undersigned Lenders hereby waive any notice requirement provided for under the Loan Documents in respect of such resignations or appointment; (v) the Borrower hereby consents to the appointment of the Successor Administrative Agent and the Successor Collateral Agent and (vi) JPMorgan hereby accepts its appointment as Successor Administrative Agent and Successor Collateral Agent.  The parties hereto acknowledge and agree that neither the Successor Administrative Agent nor the Successor Collateral Agent shall bear any responsibility for any actions taken or omitted to be taken by the Resigning Administrative Agent or the Resigning Collateral Agent while it served as Administrative Agent or Collateral Agent, as applicable, under the Existing Credit Agreement and the other Loan Documents, and neither the Resigning Administrative Agent nor the Resigning Collateral Agent shall bear any responsibility for any actions taken or omitted to be taken by the Successor Administrative Agent or the Successor Collateral Agent under the Credit Agreement or any other Loan Document (in each case, as modified hereby).

(ii)         The parties hereto hereby confirm that each of the Successor Administrative Agent and the Successor Collateral Agent succeeds to the rights and obligations of the Administrative Agent and the Collateral Agent, as applicable, under the Credit Agreement and the other Loan Documents (in each case, as modified hereby) and becomes vested with all of the rights, powers, privileges and duties of the Administrative Agent and the Collateral Agent, as applicable, under the Credit Agreement and each other Loan Document (in each case, as modified hereby), and each of the Resigning Administrative Agent and the Resigning Collateral Agent is discharged from all of its duties and obligations as Administrative Agent and Collateral Agent under the Credit Agreement and the other Loan Documents, in each case, as of the Third Amendment Effective Date.

(iii)        The parties hereto hereby confirm that, from and after the Third Amendment Effective Date, the provisions of Articles IX and X of the Credit Agreement to the extent they pertain to the Resigning Administrative Agent and/or the Resigning Collateral Agent continue in effect for the benefit of the Resigning Administrative Agent, the Resigning Collateral Agent, their respective sub-agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while the Resigning Administrative Agent or Resigning Collateral Agent was acting as Administrative Agent or

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Collateral Agent, as applicable (including, without limitation, in connection with the transitioning of the roles of the Resigning Administrative Agent to the Successor Administrative Agent or the roles of the Resigning Collateral Agent to the Successor Collateral Agent, as applicable), and inure to the benefit of the Resigning Administrative Agent and the Resigning Collateral Agent.

(iv)        Notwithstanding any provision herein to the contrary, nothing in this Section 4 shall alter, modify or amend the rights of the Administrative Agent or the Collateral Agent under the Credit Agreement and the other Loan Documents (in each case, as modified hereby) (other than the resignations and appointments effected hereby), including, without limitation, any and all rights to compensation, reimbursement and indemnification and any and all liens for payments of such amounts in accordance with the terms of the Credit Agreement and the other Loan Documents (in each case, as modified hereby).  For the avoidance of doubt, and without limiting the previous sentence, the Borrower, the undersigned Lenders, the Successor Administrative Agent and the Successor Collateral Agent acknowledge that, as of the Third Amendment Effective Date, the Successor Administrative Agent and the Successor Collateral Agent shall be entitled to all rights of compensation, reimbursement and indemnification as the Administrative Agent or the Collateral Agent, as applicable, under the Credit Agreement and the other Loan Documents (in each case, as modified hereby).

(v)         This Section 4 shall not constitute (i) a waiver by the Borrower, any other Loan Party or any Lender of any obligation or liability which the Resigning Administrative Agent or the Resigning Collateral Agent may have incurred in connection with its services as Administrative Agent or Collateral Agent, as applicable, under the Credit Agreement or the other Loan Documents (in each case, as modified hereby), (ii) an assumption by the Successor Administrative Agent of any liability of the Resigning Administrative Agent arising out of a breach by the Resigning Administrative Agent prior to the discharge of its duties under the Credit Agreement or the other Loan Documents (in each case, as modified hereby) to which it was a party immediately prior to giving effect to this Seventh Amendment or (iii) an assumption by the Successor Collateral Agent of any liability of the Resigning Collateral Agent arising out of a breach by the Resigning Collateral Agent prior to the discharge of its duties under the Credit Agreement or the other Loan Documents (in each case, as modified hereby) to which it was a party immediately prior to giving effect to this Third Amendment.

(vi)        Each of the Borrower, the Resigning Administrative Agent and the Resigning Collateral Agent agrees that, on and after the Third Amendment Effective Date, it shall furnish promptly, at the Borrower’s sole expense, such other documents, instruments and agreements as may be reasonably requested in writing by the Successor Administrative Agent or the Successor Collateral Agent from time to time, and shall take, or cause to be taken, such further action as may be necessary or reasonably requested in writing by the Successor Administrative Agent or the Successor Collateral Agent, in each case in order to effect the matters contemplated by this Section 4.

(vii)       Each Lender that executes this Third Amendment in any capacity authorizes and instructs the Successor Administrative Agent and the Successor Collateral Agent to enter into any and all Loan Documents (and any and all other agreements or documents, including consent agreements to any amendment, including with respect to any Loan Document) contemplated by, or in connection with, this Third Amendment, the Credit Agreement or the other Loan Documents (in each case, as modified hereby), and to perform thereunder, as Administrative Agent or Collateral Agent, as applicable, on such Lender’s behalf.

(viii)      [Reserved].

(ix)        The Resigning Administrative Agent hereby assigns to the Successor Administrative Agent, and the Resigning Collateral Agent hereby assigns to the Successor Collateral Agent,

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in each case, for the benefit of the Secured Parties, all Liens granted to the Resigning Administrative Agent or the Resigning Collateral Agent, as applicable, under the Loan Documents, and the Successor Administrative Agent and the Successor Collateral Agent each hereby accepts all such Liens for the benefit of the Secured Parties.  Notwithstanding anything herein to the contrary, all such Liens shall in all respects be continuing and in effect and are hereby ratified and reaffirmed by the Borrower and the other Loan Parties.  Without limiting the generality of the foregoing and notwithstanding anything herein to the contrary, the parties hereto acknowledge and agree that any reference to Deutsche Bank AG New York Branch (individually or as administrative agent, collateral agent or agent) in or on any publicly filed document, to the extent such filing relates to the Liens assigned hereby and until such filing is modified to refer to JPMorgan, as the Successor Administrative Agent or Successor Collateral Agent, as applicable, shall, with respect to such Liens, be deemed to be a reference to the Successor Administrative Agent or Successor Collateral Agent, as applicable.  The Loan Parties party hereto agree that the Successor Administrative Agent and the Successor Collateral Agent are authorized to file financing statements and amendments and other documents with respect to the Collateral described in the Loan Documents and the proceeds thereof.  The Successor Administrative Agent and the Successor Collateral Agent each understands and agrees that neither the Resigning Administrative Agent nor the Resigning Collateral Agent makes any representation or warranty of any kind regarding the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto or the sufficiency of any documentation transferring any such lien or security interest to the Successor Administrative Agent or the Successor Collateral Agent. Furthermore, each of the Successor Administrative Agent and the Successor Collateral Agent acknowledges that it has, independently and without reliance upon the Resigning Administrative Agent or the Resigning Collateral Agent, conducted its own review of each of the Loan Documents and made its own decision to succeed the Resigning Administrative Agent or the Resigning Collateral Agent, as applicable, as the Administrative Agent or the Collateral Agent, as applicable, under the Loan Documents.

(x)         The Resigning Administrative Agent and Resigning Collateral Agent each hereby covenants and agrees that it will, in each case at the Loan Parties’ sole expense (in accordance with and pursuant to Article IX of the Credit Agreement), deliver to the Successor Administrative Agent a schedule, as of the Third Amendment Effective Date (immediately prior to giving effect to this Third Amendment and the transactions contemplated hereby) (a) setting forth the outstanding principal amount of, and any accrued interest and fees payable on, the Loans and Commitments as reflected on the Register as of such date and (b) a list of Lenders, the current contact information with respect to each Lender and the outstanding balances owing to each such Lender under the Existing Agreement, in each case reflected on the Register as of such date.

(xi)        Unless the context shall otherwise require, each reference to the “Administrative Agent” or “Collateral Agent”, as applicable, in the Credit Agreement and each of the other Loan Documents and all other agreements, documents or instruments previously or hereafter executed and delivered pursuant to the terms hereof or thereof shall be a reference to, (x) prior to the effectiveness of this Third Amendment, the Resigning Administrative Agent or the Resigning Collateral Agent, as applicable, and (y) upon and after the effectiveness of this Third Amendment, JPMorgan, as the Successor Administrative Agent or the Successor Collateral Agent, as applicable.

(xii)       It is acknowledged and agreed by each of the parties hereto that JPMorgan, in succeeding to the position of the Administrative Agent and Collateral Agent under the Credit Agreement and the other Loan Documents (i) has undertaken no analysis of the Loan Documents or the Collateral; (ii) has not made an independent investigation as to the completeness or accuracy of the Schedules attached hereto and the information contained herein or therein (as to the accuracy of which each of the Resigning Administrative Agent, Resigning Collateral Agent, the Successor Administrative Agent and the Successor

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Collateral Agent make no representation), and may conclusively rely thereon for all purposes under the Credit Agreement; (iii) has made no determination as to (x) the validity, enforceability, effectiveness or priority of any Liens granted or purported to be granted pursuant to the Loan Documents or (y) the accuracy or sufficiency of the documents, filings, recordings and other actions taken to create, perfect or maintain the existence, perfection or priority of the Liens granted or purported to be granted pursuant to the Loan Documents; (iv) shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper person; (v) may also rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper person, and shall not incur any liability for relying thereon and (vi) 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. JPMorgan shall be entitled to assume that, as of the Third Amendment Effective Date, all Liens purported to be granted pursuant to the Loan Documents are valid and perfected Liens having the priority intended by the Lenders and the Loan Documents. Each of the parties hereto expressly agrees and acknowledges that neither the Successor Administrative Agent nor the Successor Collateral Agent is assuming any liability in the capacity as Administrative Agent or Collateral Agent, as applicable, (i) under or related to the Loan Documents prior to the Third Amendment Effective Date and (ii) for any and all claims under or related to the Loan Documents that may have arisen or accrued prior to the Third Amendment Effective Date.  

(xiii)      From and after the Third Amendment Effective Date, the Successor Administrative Agent shall be entitled to receive the agency fees separately agreed upon by the Borrower and the Successor Administrative Agent in that certain Fee Letter, dated as of May 15, 2018, by and between the Successor Administrative Agent and the Borrower, and such fees shall constitute “Obligations” for all purposes of the Credit Agreement and the other Loan Documents.

(xiv)      Return of Payment.

(A) In the event that, after the Third Amendment Effective Date, the Resigning Administrative Agent receives any principal, interest or other amount owing to any Lender or the Successor Administrative Agent under the Credit Agreement or any other Loan Document, the Resigning Administrative Agent agrees that such payment shall be held in trust for the Successor Administrative Agent, and the Resigning Administrative Agent shall return such payment to the Successor Administrative Agent for payment to the Person entitled thereto.

(B)  In the event that, after the Third Amendment Effective Date, the Successor Administrative Agent receives any principal, interest or other amount owing to Resigning Administrative Agent under the Credit Agreement or any other Loan Document, the Successor Administrative Agent agrees that such payment shall be held in trust for the Resigning Administrative Agent, and the Successor Administrative Agent shall return such payment to the Resigning Administrative Agent.

SECTION 5.Conditions of Effectiveness of this Third Amendment.  This Third Amendment shall become effective as of the first date (the “Third Amendment Effective Date”) when each of the conditions set forth in this Section 5 shall have been satisfied (which, in the case of clauses (ii),  (v),  (vi) and (viii) below, may be substantially concurrent with the satisfaction of the condition specified in clause (i) below) (it being understood that the provisions of Section 4 hereof shall become effective immediately prior to the provisions of Section 2 hereof):

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(i)          JPMorgan shall have received duly executed counterparts hereof that, when taken together, bear the signatures of the Borrower, each of the other Loan Parties, each of the 2018 New Replacement Term B Loan Lenders, each of the 2018 Converting Replacement Term B Loan Lenders, Existing Required Lenders and the Administrative Agent.

(ii)         The Borrower shall have paid all fees and other amounts due and payable, (a) to JPMorgan pursuant to that certain Fee Letter, dated as of May 15, 2018, by and between the Borrower and JPMorgan; and (b) to the extent invoiced, reimbursement or payment of reasonable and documented out-of-pocket expenses in connection with this Third Amendment of JPMorgan and the Agents (including the Resigning Administrative Agent and the Resigning Collateral Agent), including the reasonable fees, charges and disbursements of counsel to JPMorgan and the Agents (including the Resigning Administrative Agent and the Resigning Collateral Agent), respectively, in each case, as required to be paid or reimbursed pursuant to that certain Engagement Letter (the “Engagement Letter”), dated as of May 15, 2018, by and among the Borrower and the Third Amendment Lead Arrangers, or the Existing Credit Agreement, respectively.

(iii)        JPMorgan shall have received a customary legal opinion of (i) Ropes & Gray LLP, New York counsel to the Loan Parties, and (ii) Walter Haverfield LLP, Ohio counsel to the Loan Parties, in each case, addressed to the Lenders, the Third Amendment Lead Arrangers and the Agents, dated the Third Amendment Effective Date and in form and substance reasonably satisfactory to JPMorgan.

(iv)        JPMorgan shall have received (x) a certificate from the Chief Financial Officer of the Borrower, certifying that, after giving effect to this Third Amendment, the Borrower and its Restricted Subsidiaries (on a consolidated basis) are Solvent, (y) a certificate of good standing (or subsistence) with respect to each Loan Party from the Secretary of State (or similar official) of the State of such Loan Party’s organization (to the extent relevant and available in the jurisdiction of organization of such Loan Party) and (z) a closing certificate executed by a Responsible Officer of the Borrower, dated the Third Amendment Effective Date, certifying as to the incumbency and specimen signature of each officer of a Loan Party executing this Third Amendment or any other document delivered in connection herewith on behalf of any Loan Party and attaching (A) a true and complete copy of the certificate of incorporation (or other applicable charter document) of the Borrower, including all amendments thereto, as in effect on the Third Amendment Effective Date, certified as of a recent date by the Secretary of State (or analogous official) of the jurisdiction of its organization, that has not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (y) above, (B) a true and complete copy of the by-laws (or other applicable operating agreements) of the Borrower as in effect on the Third Amendment Effective Date and (C) a true and complete copy of resolutions duly adopted or written consents duly executed by the Board of Directors (or equivalent governing body or any committee thereof) of each Loan Party authorizing the execution, delivery and performance of this Third Amendment and the performance of the Credit Agreement and the other Loan Documents (as amended by this Third Amendment) and certifying that such resolutions or written consents have not been modified, rescinded or amended and are in full force and effect.

(v)         An amount equal to the aggregate principal amount of the 2018 New Replacement Term B Loans shall have been applied (immediately following the 2018 Replacement Term B Loan Conversion) to make a voluntary prepayment of 2016 Replacement Term B-1 Loans not subject to the 2018 Replacement Term B Loan Conversion pursuant to, and in accordance with the requirements of, Section 2.05(a) of the Existing Credit Agreement.  The payment of accrued and unpaid interest on such 2016 Replacement Term B-1 Loans required pursuant to Section 2.05(a) of

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the Existing Credit Agreement, as well as any amounts payable pursuant to Article III of the Existing Credit Agreement (as modified hereby), shall be made pursuant to clause (vi) below.

(vi)        (A)  the Borrower shall have paid to the Administrative Agent, for the ratable account of each Lender holding 2016 Replacement Term B-1 Loans immediately prior to the Third Amendment Effective Date, all accrued but unpaid interest with respect to all 2016 Replacement Term B-1 Loans (irrespective of whether such 2016 Replacement Term B-1 Loans are subject to the 2018 Replacement Term B Loan Conversion), whether or not such accrued amounts are otherwise then due and payable pursuant to the terms of the Existing Credit Agreement and (B) the Borrower shall have paid in full any amounts payable pursuant to Article III of the Existing Credit Agreement (as modified hereby) in connection with the repayment of the 2016 Replacement Term B-1 Loans.

(vii)       The Administrative Agent shall have received from the Borrower a certificate executed by a Responsible Officer of the Borrower, certifying (A) as to the matters set forth in Section 3(iii) and (iv) and (B) compliance with the requirements of Section 10.01 of the Existing Credit Agreement relating to Replacement Term Loans.

(viii)      The Resigning Agent shall have delivered the pledged equity and pledged debt set forth on Schedule 2 hereto to the Successor Agent or its counsel.

 (x)        The Borrower shall have delivered to each 2018 Replacement Term B Loan Lender requesting the same at least three Business Days prior to the date of this Third Amendment a promissory note in the amount of such Lender’s 2018 Replacement Term B Loan (determined after giving effect to the 2018 Replacement Term B Loan Conversion).

SECTION 6.    Post-Closing Obligation

(a)         The Borrower hereby agrees to use commercially reasonable efforts to assign, amend, supplement or otherwise modify the Collateral Access Agreements in effect as of the date of the Third Amendment Effective Date, in each case in order to effect the matters contemplated by Section 4 hereof.

(b)         The Borrower hereby agrees to deliver evidence reasonably satisfactory to the Successor Administrative Agent that all insurance to be maintained pursuant to the Loan Documents has been obtained and is in effect and that the Successor Administrative Agent has been named as loss payee or as additional insured, as applicable, under each insurance policy with respect to such insurance by no later than 30 calendar days after the Third Amendment Effective Date (or such later date as the Successor Administrative Agent may agree in its sole discretion).

SECTION 7.    Effect of Amendment.  (a)  Except as expressly set forth in this Third Amendment or in the Credit Agreement, this Third Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Agents under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or of any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect.  Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents (including all 2018 New Replacement Term B Loans and the 2018 Converted Replacement Term B Loans), in each case, as amended by this Third Amendment.  Nothing herein shall be deemed to entitle the Borrower to a consent

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to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.

(b)         On and after the Third Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference to the Credit Agreement in any other Loan Document, in each case shall be deemed a reference to the Credit Agreement as modified by this Third Amendment.  This Third Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

(c)         This Third Amendment, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof.

(d)         This Third Amendment may not be amended, modified or waived except in accordance with Section 10.01 of the Credit Agreement.

SECTION 8.    Costs and Expenses.  The Borrower hereby agrees to reimburse each of JPMorgan and the Agents for their reasonable and documented out-of-pocket expenses in connection with this Third Amendment, including the reasonable fees, charges and disbursements of counsel for JPMorgan and the Agents, respectively, in each case, as required to be reimbursed pursuant to the Engagement Letter or the Existing Credit Agreement.

SECTION 9. Reaffirmation.  By executing and delivering a counterpart hereof, (i) each Loan Party hereby agrees that all Loans incurred by the Borrower (including, without limitation, the 2018 New Replacement Term B Loans and the 2018 Converted Replacement Term B Loans) shall be guaranteed pursuant to the Guaranty in accordance with the terms and provisions thereof and shall be secured pursuant to the Collateral Documents (as amended hereby) in accordance with the terms and provisions thereof; (ii) each Loan Party hereby (A) agrees that, notwithstanding the effectiveness of this Third Amendment, after giving effect to this Third Amendment, the Collateral Documents continue to be in full force and effect; (B) agrees that all of the Liens and security interests created and arising under each Collateral Document remain in full force and effect on a continuous basis, and the perfected status and priority of each such Lien and security interest continues in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged, as collateral security for its obligations, liabilities and indebtedness under the Credit Agreement and under its guarantees in the Loan Documents, in each case, to the extent provided in, and subject to the limitations and qualifications set forth in, such Loan Documents (as amended by this Third Amendment) and (C) affirms and confirms all of its obligations and liabilities under the Credit Agreement and each other Loan Document (including the 2018 New Replacement Term B Loans and the 2018 Converted Replacement Term B Loans), in each case after giving effect to this Third Amendment, including its guarantee of the Obligations and the pledge of and/or grant of a security interest in its assets as Collateral pursuant to the Collateral Documents (as amended hereby) to secure such Obligations, all as provided in the Collateral Documents (as amended hereby), and acknowledges and agrees that such obligations, liabilities, guarantee, pledge and grant continue in full force and effect in respect of, and to secure, such Obligations under the Credit Agreement and the other Loan Documents, in each case after giving effect to this Third Amendment and (iii) each Guarantor agrees that nothing in the Credit Agreement, this Third Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendment to the Credit Agreement.

SECTION 10.   GOVERNING LAW.  THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF

-10-

 


 

NEW YORK.  SECTIONS 10.16 AND 10.17 OF THE EXISTING CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS THIRD AMENDMENT AND SHALL APPLY TO THIS THIRD AMENDMENT, MUTATIS MUTANDIS, AND SHALL, FOR THE AVOIDANCE OF DOUBT, APPLY TO THE SUCCESSOR ADMINISTRATIVE AGENT AND THE SUCCESSOR COLLATERAL AGENT TO THE SAME EXTENT AS THEY APPLY TO THE RESIGNING ADMINISTRATIVE AGENT AND THE RESIGNING COLLATERAL AGENT.

SECTION 11.    Counterparts.  This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery by facsimile or other electronic transmission (including in “.pdf” or “.tif” format) of an executed counterpart of a signature page to this Third Amendment shall be effective as delivery of an original executed counterpart of this Third Amendment.

SECTION 12.    Headings.  Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Third Amendment.

SECTION 13.    Severability.  Section 10.14 of the Existing Credit Agreement is hereby incorporated by reference into this Third Amendment and shall apply to this Third Amendment, mutatis mutandis.

SECTION 14.    Indemnity. Section 10.05 of the Existing Credit Agreement is hereby incorporated by reference to this Third Amendment and shall apply to this Third Amendment and to the Successor Administrative Agent and the Successor Collateral Agent, and to the Third Amendment Lead Arrangers as Agent-Related Persons, mutatis mutandis.

[Remainder of page intentionally blank.]

 

-11-

 


 

 

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed by their duly authorized officers, all as of the date and year first above written.

 

 

MICHAELS STORES, INC., as Borrower

 

 

 

By:

/s/ Denise Paulonis

 

 

Name:

Denise Paulonis

 

 

Title:

Executive Vice President – Chief Financial Officer

 

 

 

MICHAELS FUNDING, INC.

AARON BROTHERS, INC.

ARTISTREE, INC.

DARICE, INC.

DARICE IMPORTS, INC.

MICHAELS FINANCE COMPANY, INC.

MICHAELS STORES PROCUREMENT COMPANY, INC.

MICHAELS STORES CARD SERVICES, LLC, as Guarantors

 

 

 

By:

/s/ Denise Paulonis

 

 

Name:

Denise Paulonis

 

 

Title:

Chief Financial Officer

 

 

 

LAMRITE WEST, INC., as a Guarantor

 

 

 

By:

/s/ Denise Paulonis

 

 

Name:

Denise Paulonis

 

 

Title:

Executive Vice President

 

 

 

 

 

Signature Page to Michaels Stores, Inc. Third Amendment (2018)

 


 

 

 

 

 

 

 

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH, as Resigning Administrative Agent and Resigning Collateral Agent

 

 

 

By:

/s/ Marguerite Sutton

 

 

Name:

Marguerite Sutton

 

 

Title:

Vice President

 

 

 

By:

/s/ Maria Guinchard

 

 

Name:

Maria Guinchard

 

 

Title:

Vice President

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A., as Successor Administrative Agent and Successor Collateral Agent

 

 

 

By:

/s/ Maria Riaz

 

 

Name:

Maria Riaz

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

Signature Page to Michaels Stores, Inc. Third Amendment (2018)

 


 

 

SIGNATURE PAGE TO THE THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF THE DATE FIRST WRITTEN ABOVE, WITH RESPECT TO, INTER ALIA, THE AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF January 28, 2013, as amended AND RESTATED as of june 10, 2014, AND AS FURTHER AMENDED AND RESTATED AS OF SEPTEMBER 28, 2016, AMONG MICHAELS STORES, INC., DEUTSCHE BANK AG NEW YORK BRANCH, AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT, AND VARIOUS LENDERS AND AGENTS PARTY THERETO

 

By executing this signature page:

 

If the undersigned institution holds 2018 New Replacement Term B Loan Commitments as of the Third Amendment Effective Date, the undersigned institution is executing this signature page as a 2018 New Replacement Term B Loan Lender and agrees (i) to the terms of the Third Amendment and (ii) on the terms and subject to the conditions set forth in the Third Amendment and the Credit Agreement (as amended by the Third Amendment), to make a 2018 New Replacement Term B Loan on the Third Amendment Effective Date in a principal amount set forth opposite its name on Schedule 1 hereto.

 

 

NAME OF INSTITUTION:

 

 

JPMORGAN CHASE BANK, N.A.

 

 

By:  /s/ Maria Riaz                                   

Name:  Maria Riaz

Title:    Vice President

 

 


 

SCHEDULE 1

 

2018 NEW REPLACEMENT TERM B  LOAN COMMITMENTS

 

2018 New Replacement Term B Loan Lender

2018 New Replacement Term B Loan Commitment

JPMorgan Chase Bank, N.A.

$431,883,945.35

 

 

 

 


 

 

SCHEDULE 2

Collateral

 

PLEDGED EQUITY

 

Issuer

Form of Entity

Jurisdiction of Organization

Holder of Equity Interests / Pledgor

Percent Held / Pledged

Certificate Number

Aaron Brothers Card Services, LLC

limited liability company

Virginia

Aaron Brothers, Inc.

100%/100% (100 units)

001

Aaron Brothers, Inc.

corporation

Delaware

Michaels Stores, Inc.

100%/100% (100 shares)

005

Artistree, Inc.

corporation

Delaware

Michaels Stores Procurement Company, Inc.

100%/100% (100 shares)

001

Darice Imports, Inc.

corporation

Ohio

LAMRITE WEST, INC.

100%/100% (100 shares)

101

DARICE, INC.

corporation

Ohio

Michaels Stores, Inc.

100%/100% (100 shares)

101

LAMRITE WEST, INC.

corporation

Ohio

Michaels Stores, Inc.

100%/100% (100 shares)

101

Michaels Finance Company, Inc.

 

corporation

Delaware

Michaels Stores, Inc.

100%/100% (100 shares)

001

Michaels of Canada Holdings LP No. 1

 

limited partnership

Alberta

Michaels Stores, Inc.

99.99%/65%

1

Michaels Stores Card Services, LLC

Limited liability company

Delaware

Michaels Stores, Inc.

100%/100% (100 shares)

001

Michaels Stores Procurement Company, Inc.

Corporation

Delaware

Michaels Stores, Inc.

100%/100% (100 shares)

001

Michaels Stores, Inc.

Corporation

Delaware

Michaels Funding, Inc.

100%/100% (100 shares)

272

Michaels U.S. Holdings 1, LLC

Limited liability company

Delaware

Michaels Stores, Inc.

100%/100% (100 shares)

1

 

 

PLEDGED DEBT

 

Pledgor

Debt Security

 


 

 

Michaels Stores Procurement Company, Inc.

Amended and Restated Promissory Note dated October 31, 2006 in the principal amount of $1,090,000,000 due December 31, 2018

The Payors party thereto

Intercompany Note dated October 31, 2006

 

MORTGAGES

 

None.

 

UCC-1 FILINGS

 

Loan Party

Secured Party

File Number

Jurisdiction

Aaron Brothers, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

6356611 4

Delaware

Artistree, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

6378598 7

Delaware

Michaels Finance Company, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

6357277 3

Delaware

Michaels Funding, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent

2013 3193167

Delaware

Michaels Stores Card Services, LLC

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

061013 7141-5

Virginia

Michaels Stores Procurement Company, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

6356618 9

Delaware

Michaels Stores, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent for the Secured Creditors under the Term Loan Agreement

6356607 2

Delaware

 


 

 

Loan Party

Secured Party

File Number

Jurisdiction

Darice Imports, Inc.

Deutsche Bank AG New York Branch, as Collateral Agent

OH00199438045

Ohio

DARICE, INC.

Deutsche Bank AG New York Branch, as Collateral Agent

OH00199439502

Ohio

LAMRITE WEST, INC.

Deutsche Bank AG New York Branch, as Collateral Agent

OH00199437922

Ohio

 

 

 

 

 


 

 

SCHEDULE 3

 

 

1.    Credit Agreement

2.    First Amendment to Amended and Restated Credit Agreement, dated as of June 10, 2014.

3.    Second Amendment to Amended and Restated Credit Agreement, dated as of September 28, 2016.

4.    Security Agreement, dated as of October 31, 2006, by and among Michaels Stores, Inc., certain other subsidiaries of Michaels Stores, Inc. and Deutsche Bank AG New York Branch (including all supplements and updates thereto).

5.    Supplement No. 1 to Security Agreement, dated as of August 21, 2013, among Michaels Funding, Inc. and Deutsche Bank AG New York Branch

6.    Supplement No. 2 to Security Agreement, dated as of March 25, 2016, by LAMRITE WEST, INC., DARICE, INC., ConsumerCrafts, LLC and Darice Imports, Inc. in favor of Deutsche Bank AG New York Branch

7.    Securities Pledge Amendment No. 1 to Security Agreement, dated as of February 2, 2014, by Michaels Stores, Inc. in favor of Deutsche Bank AG New York Branch

8.    Guarantee Agreement, dated as of December 31, 2006, by and among Michaels Stores, Inc., certain other subsidiaries of Michaels Stores, Inc. and Deutsche Bank AG New York Branch (including all supplements and updates thereto)

9.    Supplement No. 1 to Guarantee Agreement, dated as of March 25, 2016, by LAMRITE WEST, INC., DARICE, INC., ConsumerCrafts, LLC and Darice Imports, Inc. in favor of Deutsche Bank AG New York Branch

10.  Guarantor Consent and Reaffirmation, dated as of January 28, 2013, among Michaels Stores, Inc., the Subsidiary Guarantors party thereto and Deutsche Bank AG New York Branch

11.  Guarantor Consent and Reaffirmation, dated as of July 22, 2013, among Michaels Stores, Inc., the Subsidiary Guarantors party thereto and Deutsche Bank AG New York Branch

12.  Partial Release, dated February 2, 2014, by Deutsche Bank AG New York Branch in favor of Michaels Stores, Inc. and Michaels of Canada ULC

13.  HoldCo Guarantee Agreement, dated as of August 21, 2013, among Michaels Funding, Inc. and Deutsche Bank AG New York Branch

Intercreditor

14.  Intercreditor Agreement, dated as of October 31, 2006, by and between Bank of America, N.A., as ABL Agent, and Deutsche Bank AG New York Branch, as Term Agent (including all supplements and updates thereto)

15.  Ratification of Intercreditor Agreement, dated September 17, 2012, by Deutsche Bank AG New York Branch

16.  Acknowledgement of Intercreditor Agreement, by Michaels Funding, Inc.

17.  Ratification of Intercreditor Agreement, dated July 2, 2014, by Deutsche Bank AG New York Branch

18.  Acknowledgement of Intercreditor Agreement, dated March 25, 2016, by LAMRITE WEST, INC., DARICE, INC., ConsumerCrafts, LLC and Darice Imports, Inc.

IP Filings

19.  Grant of Security Interest in United States Trademarks, dated as of October 30, 2006, between Aaron Brothers, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

 


 

 

20.  Grant of Security Interest in United States Trademarks, dated as of January 28, 2013, between Aaron Brothers, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

21.  Grant of Security Interest in United States Trademarks, dated as of August 25, 2016, between Aaron Brothers, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

22.  Grant of Security Interest in United States Copyrights, dated as of January 28, 2013, between Aaron Brothers, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

23.  Grant of Security Interest in United States Trademarks, dated as of October 30, 2006, between Michaels Stores Procurement Company, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

24.  Grant of Security Interest in United States Trademarks, dated as of February 18, 2010, between Michaels Stores Procurement Company, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

25.  Grant of Security Interest in United States Trademarks, dated as of January 28, 2013, between Michaels Stores Procurement Company, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

26.  Grant of Security Interest in United States Trademarks, dated as of August 25, 2016, between Michaels Stores Procurement Company, Inc. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

27.  Grant of Security Interest in United States Trademarks, dated as of March 25, 2016, between LAMRITE WEST, INC. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

28.  Grant of Security Interest in United States Patents, dated as of March 25, 2016, between LAMRITE WEST, INC. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

29.  Grant of Security Interest in United States Copyrights, dated as of March 25, 2016, between LAMRITE WEST, INC. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

30.  Grant of Security Interest in United States Trademarks, dated as of March 25, 2016, between DARICE, INC. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

31.  Grant of Security Interest in United States Copyrights, dated as of March 25, 2016, between DARICE, INC. and Deutsche Bank AG New York Branch, as Collateral Agent and as Grantee

DACAs

32.  Restricted Account Agreement, dated as of October 31, 2006, by and among Michaels Stores, Inc., Michaels Stores Procurement Company, Inc., Michaels Stores Card Services, LLC, Aaron Brothers, Inc., Bank of America, N.A., as the ABL Collateral Agent, Deutsche Bank AG New York Branch, as the Term Loan Collateral Agent, and Wells Fargo Bank, National Association, as modified by that certain letter agreement dated as of September 17, 2012

33.  Deposit Account Control Agreement, dated as of March 22, 2010, by and among Michaels Finance Company, Inc., Michaels of Canada, ULC, Bank of America, as the First Lien Agent, Deutsche Bank AG New York Branch, as Second Lien Agent, and Wells Fargo Bank, National Association, as modified by that certain letter agreement dated as of September 17, 2012 and as further modified by that certain letter agreement dated as of February 2, 2014

34.  Deposit Account Control Agreement (Access Restricted Immediately – Two Secured Parties), dated as of June 4, 2013 (as amended, restated, supplemented and/or otherwise modified from time to time), among Michaels Stores, Inc., Aaron Brothers, Inc., Wells Fargo Bank, National Association, as the First Lien Agent, Deutsche Bank AG New York Branch, as the Second Lien Agent, and Wells Fargo Bank, National Association, as depositary.

 


 

 

35.  Deposit Account Control Agreement (Access Restricted after Notice – Two Secured Parties), dated as of April 29, 2013 (as amended, restated, supplemented and/or otherwise modified from time to time), among Michaels Stores, Inc., Michaels Stores Procurement Company, Inc., Michaels Finance Company, Inc., Michaels of Canada, ULC, Michaels Stores Card Services, LLC, Aaron Brothers Card Services, LLC, Aaron Brothers, Inc., Wells Fargo Bank, National Association, as the First Lien Agent, Deutsche Bank AG New York Branch, as the Second Lien Agent, and Wells Fargo Bank, National Association as depositary.

36.  Deposit Account Control Agreement, dated as of March 29, 2016, by and among Michaels Stores, Inc., Aaron Brothers, Inc., Wells Fargo Bank, National Association, as the First Lien Agent, Deutsche Bank AG New York Branch, as the Second Lien Agent, and Wells Fargo Bank, National Association.

37.  Deposit Account Control Agreement (Access Restricted after Notice – Two Secured Parties), dated as of June 22, 2016 (as amended, restated, supplemented and/or otherwise modified from time to time), among LAMRITE WEST, INC., Wells Fargo Bank, National Association, as the First Lien Agent, Deutsche Bank AG New York Branch, as the Second Lien Agent, and Wells Fargo Bank, National Association as depositary.

38.  Deposit Account Control Agreement (Access Restricted after Notice – Two Secured Parties), dated as of June 22, 2016 (as amended, restated, supplemented and/or otherwise modified from time to time), among LAMRITE WEST, INC., Wells Fargo Bank, National Association, as the First Lien Agent, Deutsche Bank AG New York Branch, as the Second Lien Agent and Wells Fargo Bank, National Association as depositary.

Credit Card Notifications

39.  Credit card notifications executed and delivered by the Loan Parties from time to time

Landlord and Warehouse Waivers

40.  Landlord’s Waiver, dated as of October 20, 2006, executed and delivered by TELACU 1270, Inc., as Landlord, in favor of the ABL Agent and the Term Loan Agent, and acknowledged and agreed by Aaron Brothers, Inc., with respect to real property located at Building No. 1, TELACU Industrial Park, 1270 Goodrich Boulevard, Commerce, California, as modified by that certain letter agreement dated as of September 17, 2012.

41.  Landlord’s Waiver, executed and delivered by Three Harbor Realty LLC, as Landlord, in favor of the ABL Agent and the Term Loan Agent, and acknowledged and agreed by Michaels Stores Procurement Company, Inc., with respect to real property located at Haslet, Texas, as modified by that certain letter agreement dated as of September 17, 2012.

42.  Landlord’s Waiver, dated as of October 3, 2006, executed and delivered by Centralia North, LLC (as successor to Tarragon-Centralia North I, L.L.C.), as Landlord, in favor of the ABL Agent and the Term Loan Agent, with respect to real property located at Centralia North Corporate Park, Centralia, Washington, as modified by that certain letter agreement dated as of March 28, 2013

43.  Landlord’s Waiver, dated as of September 26, 2006, executed and delivered by 60 Green Mountain, LLC (as successor to Robert K. Mercile, an adult individual d/b/a “Mericle Properties”), as Landlord, in favor of the ABL Agent and the Term Loan Agent, with respect to real property located at 60 Green Mountain Road, Humboldt Industrial Park West, Hazle Township, Pennsylvania and East Union Township, Pennsylvania, as modified by that certain letter agreement dated as of March 27, 2013.

44.  Landlord’s Waiver, dated as of October 31, 2006, executed and delivered by Mike Jacksonville FL, LLC, as Landlord, in favor of the ABL Agent and the Term Loan Agent, and acknowledged and agreed by Michaels Stores Procurement Company, Inc., with respect to real property located at 9200 West Beaver Street, Jacksonville, Florida, as modified by that certain letter agreement dated as of September 17, 2012

 


 

 

45.  Landlord’s Waiver Agreement, dated as of October 31, 2006, by and among Lexington Lancaster II L.L.C., as Landlord, the ABL Agent, the Term Loan Agent, Michaels Stores Procurement Company, Inc. and Capmark Finance Inc., Master Servicer for LaSalle Nat’l Bank, Trustee for Goldman Sachs Mortgage Securities Corp II Commercial Mortgage Pass-Through Certificates, as Landlord’s Mortgagee, with respect to real property located at 3501 W. Avenue H, Lancaster, California

46.  Landlord’s Waiver Agreement, dated as of October 31, 2006, by and among 2400 Haven LLC (as successor to Lexington Lion New Lenox L.P.), as Landlord, the ABL Agent, the Term Loan Agent, Michaels Stores Procurement Company, Inc., and LaSalle Bank National Association, as Trustee for the Registered Holdings of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2004-C2, as Landlord’s Mortgagee, with respect to real property located at 2400 West Haven Avenue, New Lenox, Illinois, as modified by that certain letter agreement dated as of March 28, 2013

47.  Landlord’s Waiver, dated as of October 31, 2006, by and among Royal Tech Center 1, LP, Royal Tech Center 2, LP, Royal Tech Center 3, LP, Royal Tech Center 4, LP, Royal Tech Center 5, LP, Royal Tech Center 6, LP, Royal Tech Center 7, LP, Royal Tech Center 8, LP, Royal Tech Center 9, LP, Royal Tech Center 10, LP, Royal Tech Center 11, LP, Royal Tech Center 12, LP, Royal Tech Center 13, LP, Royal Tech Center 14, LP, Royal Tech Center 15, LP, Royal Tech Center 16, LP, Royal Tech Center 17, LP, Royal Tech Center 18, LP, Royal Tech Center 19, LP, Royal Tech Center 20, LP, Royal Tech Center, and Investors, LP, by and through its agent, TIC Properties Management, LLC, as Landlord, the ABL Agent, the Term Loan Agent, and Michaels Stores, Inc. with respect to real property located at 8000 Bent Branch Drive and 2910 West Bent Drive, Irving, Texas

48.  Landlord’s Waiver, dated as of August 31, 2006, executed and delivered by Complete Properties, Inc. (as successor to Pope Companies, Inc.), as Landlord, in favor of the ABL Agent and the Term Loan Agent, with respect to real property located at 1350 Bridgeport Drive, Suite 16-27, Kernersville, North Carolina, as modified by that certain letter agreement dated as of March 27, 2013

49.  Landlord’s Waiver, dated as of October 20, 2006, executed and delivered by Richard S. Groner and Sallie H. Groner, as Landlord, in favor of the ABL Agent and the Term Loan Agent, with respect to real property located at Industrial Parke Drive and Carotec Road, Kernersville, North Carolina, as modified by that certain letter agreement dated as of September 17, 2012

50.  Landlord’s Waiver, dated as of October 20, 2006, executed and delivered by Richard S. Groner and Sallie H. Groner, as Landlord, in favor of the ABL Agent and the Term Loan Agent, with respect to real property located at 1060 Industrial Parke Drive, Kernersville, North Carolina, as modified by that certain letter agreement dated as of September 17, 2012

51.  Collateral Agreement, dated as of March 10, 2010, by and among Michaels Stores, Inc., the ABL Agent, the Term Loan Agent and UPS Supply Chain Solutions, Inc.

52.  Landlord’s Waiver, dated as of May 12, 2016, by and among Catanzarite Investment Company LLC, the ABL Agent, the Term Loan Agent and LAMRITE WEST, INC., with respect to the real property located at 21160 Drake Road, Strongsville, Ohio 44149.

53.  Landlord’s Waiver, dated as of May 12, 2016, by and among AIC Income Fund 12850 Darice, L.L.C., the ABL Agent, the Term Loan Agent and LAMRITE WEST, INC., with respect to the real property located at 12850 Darice Parkway, Strongsville, Ohio 44149.

54.  Landlord’s Waiver, dated as of May 12, 2016, by and among AIC Income Fund 13000 Darice, L.L.C., the ABL Agent, the Term Loan Agent and LAMRITE WEST, INC., with respect to the real property located at 13000 Darice Parkway, Strongsville, Ohio 44149.

55.  Warehouse Waiver, dated as of April 8, 2016, by and among Amware Distribution Warehouses, M&M, LLC, the ABL Agent, the Term Loan Agent and LAMRITE WEST, INC. with respect to the warehouse located at 745 Industrial Parkway, Elyria, Ohio 44035.

 

 


 

 

SCHEDULE 4

 

Loan Party

Jurisdiction

AARON BROTHERS, INC.

Delaware

ARTISTREE, INC.

Delaware

DARICE IMPORTS, INC.

Ohio

DARICE, INC.

Ohio

LAMRITE WEST, INC.

Ohio

MICHAELS FINANCE COMPANY, INC.

Delaware

MICHAELS FUNDING, INC.

Delaware

MICHAELS STORES CARD SERVICES, LLC

Virginia

MICHAELS STORES PROCUREMENT

COMPANY, INC.

Delaware

MICHAELS STORES, INC.

Delaware

 

 

 

 

 

 

 

 

 


 

 

ANNEX A

FORM OF AMENDED CREDIT AGREEMENT

 

[See attached]

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of January 28, 2013

As amended by the First Amendment to Amended and Restated Credit Agreement

Dated as of June 10, 2014

As amended by the Second Amendment to Amended and Restated Credit Agreement

Dated as of September 28, 2016 (effective as of the Subsequent Second Amendment Effective Date)

As amended by the Third Amendment to Amended and Restated Credit Agreement

Dated as of May 23, 2018

among

MICHAELS STORES, INC.,

as Borrower,

DEUTSCHEJPMORGAN CHASE BANK AG NEW YORK BRANCH, N.A.,

as Administrative Agent,

THE OTHER LENDERS PARTY HERETO,

and

BARCLAYS BANK PLC,

CREDIT SUISSE SECURITIES (USA) LLC,

GOLDMAN SACHS BANK USA,

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

MORGAN STANLEY SENIOR FUNDING, INC., and

WELLS FARGO SECURITIES, LLC,

as Co-Documentation Agents

 

DEUTSCHE BANK SECURITIES INC.,
BARCLAYS BANK PLC,

 

 

 

 

Americas 91896236 (2K)

 

 

 


 

 

CREDIT SUISSE SECURITIES (USA) LLC,

GOLDMAN SACHS BANK USA,

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

MORGAN STANLEY SENIOR FUNDING, INC., and

WELLS FARGO SECURITIES, LLC,

as Co-Lead Arrangers and as Joint Bookrunners

 

 

 

 

ARTICLE I Definitions and Accounting Terms

2

SECTION 1.01. Defined Terms

2

SECTION 1.02. Other Interpretive Provisions

65 66

SECTION 1.03. Accounting Terms

66 67

SECTION 1.04. Rounding

66 67

SECTION 1.05. References to Agreements, Laws, Etc.

66 68

SECTION 1.06. Times of Day

66 68

SECTION 1.07. Timing of Payment or Performance

66 68

SECTION 1.08. Currency Equivalents Generally

67 68

SECTION 1.09. Change of Currency

67 68

SECTION 1.10. Pro Forma and Other Calculations

67 69

ARTICLE II The Commitments and Credit Extensions

69 71

SECTION 2.01. The Loans

69 71

SECTION 2.02. Borrowings, Conversions and Continuations of Loans

70 72

SECTION 2.03. [RESERVED].

72 74

SECTION 2.04. [RESERVED].

72 74

SECTION 2.05. Prepayments

72 74

SECTION 2.06. Termination of Commitments

83 85

SECTION 2.07. Amortization of Loans.

83 85

SECTION 2.08. Interest

83 85

SECTION 2.09. Fees

85 87

SECTION 2.10. Computation of Interest and Fees

86 88

SECTION 2.11. Evidence of Indebtedness

86 88

SECTION 2.12. Payments Generally

87 89

SECTION 2.13. Sharing of Payments

89 91

SECTION 2.14. Provisions Applicable to Canadian Loan Parties

89 91

SECTION 2.15. Refinancing Amendments

90 92

SECTION 2.16. Extended Term Loans.

91 93

SECTION 2.17. Incremental Borrowings.

93 95

 

 

ARTICLE III Taxes, Increased Costs Protection and Illegality

97 99

SECTION 3.01. Taxes

97 99

SECTION 3.02. Illegality

99 101

SECTION 3.03. Inability to Determine Rates

99 101

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans

100 101

SECTION 3.05. Funding Losses

101 103

SECTION 3.06. Matters Applicable to All Requests for Compensation

101 103

SECTION 3.07. Replacement of Lenders under Certain Circumstances

102 104

SECTION 3.08. Survival

103 105

ARTICLE IV Conditions Precedent to Credit Extensions

103 105

SECTION 4.01. Conditions to Making of Term B Loans

104 105

SECTION 4.02. Conditions to All Credit Extensions

105 107

ARTICLE V Representations and Warranties

106 107

SECTION 5.01. Existence, Qualification and Power; Compliance with Laws

106 107

SECTION 5.02. Authorization; No Contravention

106 107

SECTION 5.03. Governmental Authorization; Other Consents

106 108

SECTION 5.04. Binding Effect

106 108

SECTION 5.05. Financial Statements; No Material Adverse Effect

107 108

SECTION 5.06. Litigation

107 109

SECTION 5.07. No Default

107 109

SECTION 5.08. Ownership of Property; Liens

107 109

SECTION 5.09. Environmental Compliance

107 109

SECTION 5.10. Taxes

108 110

SECTION 5.11. ERISA Compliance

109 110

SECTION 5.12. Subsidiaries; Equity Interests

109 111

SECTION 5.13. Margin Regulations; Investment Company Act

109 111

SECTION 5.14. Disclosure

110 111

SECTION 5.15. Intellectual Property; Licenses, Etc

110 111

SECTION 5.16. Solvency

110 112

SECTION 5.17. Subordination of Junior Financing

110 112

 

 

SECTION 5.18. Labor Matters

110 112

SECTION 5.19. Anti-Terrorism Laws; OFAC

110 112

ARTICLE VI Affirmative Covenants

111 112

SECTION 6.01. Financial Statements

111 112

SECTION 6.02. Certificates; Other Information

112 114

SECTION 6.03. Notices

114 115

SECTION 6.04. Payment of Obligations

114 116

SECTION 6.05. Preservation of Existence, Etc

114 116

SECTION 6.06. Maintenance of Properties

115 116

SECTION 6.07. Maintenance of Insurance

115 116

SECTION 6.08. Compliance with Laws

115 117

SECTION 6.09. Books and Records

116 117

SECTION 6.10. Inspection Rights

116 117

SECTION 6.11. Covenant to Guarantee Obligations and Give Security

116 118

SECTION 6.12. Compliance with Environmental Laws

118 120

SECTION 6.13. Further Assurances and Post-Closing Conditions

119 120

SECTION 6.14. [Reserved]

119 121

SECTION 6.15. Pension Plans

121

SECTION 6.16. Maintenance of Rating

120 121

SECTION 6.17. Redemption of 2016 Senior Subordinated Notes

120 121

ARTICLE VII Negative Covenants

120 121

SECTION 7.01. Asset Sales

120 121

SECTION 7.02. Limitation on Restricted Payments

121 122

SECTION 7.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

129

SECTION 7.04. Liens

134 135

SECTION 7.05. [RESERVED].

134 135

SECTION 7.06. Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

134 135

SECTION 7.07. Transactions with Affiliates

137

 

 

SECTION 7.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

138

SECTION 7.09. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

139 140

SECTION 7.10. Change in Nature of Business

141

SECTION 7.11. [RESERVED]

141

SECTION 7.12. Use of Proceeds

141

SECTION 7.13. Accounting Changes

141

SECTION 7.14. Amendments of Indebtedness, Etc.

142

ARTICLE VIII Events Of Default and Remedies

141 142

SECTION 8.01. Events of Default

141 142

SECTION 8.02. Remedies Upon Event of Default

144

SECTION 8.03. Exclusion of Immaterial Subsidiaries

144 145

SECTION 8.04. Application of Funds

144 145

ARTICLE IX Administrative Agent and Other Agents

146

SECTION 9.01. Appointment and Authorization of Agents

145 146

SECTION 9.02. Delegation of Duties

146

SECTION 9.03. Liability of Agents

147

SECTION 9.04. Reliance by Agents

146 147

SECTION 9.05. Notice of Default

147

SECTION 9.06. Credit Decision; Disclosure of Information by Agents

148

SECTION 9.07. Indemnification of Agents

147 148

SECTION 9.08. Agents in their Individual Capacities

148

SECTION 9.09. Successor Agents

149

SECTION 9.10. Administrative Agent May File Proofs of Claim

149

SECTION 9.11. Collateral and Guaranty Matters

149 150

SECTION 9.12. Other Agents; Arrangers and Managers

150 151

SECTION 9.13. Appointment of Supplemental Administrative Agents

150 151

SECTION 9.14. Solidary Interests/Quebec Liens (Hypothecs)

152

SECTION 9.15. Certain ERISA Matters.

153

ARTICLE X Miscellaneous

152 154

 

 

SECTION 10.01. Amendments, Etc

152 154

SECTION 10.02. Notices and Other Communications; Facsimile Copies

155 157

SECTION 10.03. No Waiver; Cumulative Remedies

156 158

SECTION 10.04. Attorney Costs and Expenses

156 158

SECTION 10.05. Indemnification by the Borrower

157 159

SECTION 10.06. Payments Set Aside

158 160

SECTION 10.07. Successors and Assigns

158 160

SECTION 10.08. Confidentiality

162 164

SECTION 10.09. Setoff

163 165

SECTION 10.10. Interest Rate Limitation

163 165

SECTION 10.11. Counterparts

163 165

SECTION 10.12. Integration

163 166

SECTION 10.13. Survival of Representations and Warranties

164 166

SECTION 10.14. Severability

164 166

SECTION 10.15. Tax Forms

164 166

SECTION 10.16. GOVERNING LAW

166 168

SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY

166 168

SECTION 10.18. Binding Effect

166 169

SECTION 10.19. Lender Action

167 169

SECTION 10.20. USA PATRIOT Act; Canadian Anti-Money Laundering Legislation

167 169

SECTION 10.21. Judgment Currency

167 170

SECTION 10.22. Other Liens on Collateral; Terms of Intercreditor Agreement; Etc.

168 170

SECTION 10.23. Effect of the Amendment and Restatement of the Existing Credit Agreement; Amendments to Security Agreement on the Subsequent Second Amendment Effective Date

169 171

SECTION 10.24. No Advisory or Fiduciary Responsibility.

170 172

SECTION 10.25. Acknowledgement and Consent to Bail-In of EEA Financial Institutions

170 172

SECTION 10.26. Keepwell

171 173

 

 

 

 

 

 

 

 

 

 

2

 

 


 

 

 

SCHEDULES

1.01B            Collateral Documents

1.01D           Mortgaged Properties

1.01E            Excluded Subsidiary

1.01F            Foreign Subsidiary

2.01              Commitments

5.05              Financial Statement Exceptions

5.10              Taxes

5.11              ERISA and other Pension Plan Compliance

5.12              Subsidiaries and Other Equity Investments

6.07              Insurance

7.03              Existing Indebtedness

7.04              Existing Liens

10.02            Administrative Agent’s Office, Certain Addresses for Notices

 

EXHIBITS

Form of

 

A            Committed Loan Notice

B           [Reserved]

C             Note

D            Compliance Certificate

E             Assignment and Assumption

F-1         Domestic Guaranty

F-2         Canadian Guarantee

G-1        Security Agreement

G-2        Canadian Security Agreement

H            Intercreditor Agreement

I              Opinion Matters ― Counsel to Loan Parties

J              Intercompany Note

K             Specified Discount Prepayment Notice

L             Specified Discount Prepayment Response

M           Discount Range Prepayment Notice

N            Discount Range Prepayment Offer

O            Solicited Discounted Prepayment Notice

P             Solicited Discounted Prepayment Offer

Q            Acceptance and Prepayment Notice

R             Guarantor Consent and Reaffirmation

S             Canadian Guarantor Consent and Reaffirmation

 

 

 

 

 

 

 

Americas 91896236 (2K)

 

 

 


 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of June 10, 2014, and the Second Amendment to Amended and Restated Credit Agreement, dated as of September 28, 2016, and effective as of the Subsequent Second Amendment Effective Date, and the Third Amendment to Amended and Restated Credit Agreement, dated as of May 23, 2018, this “Agreement”) is entered into as of January 28, 2013, among MICHAELS STORES, INC., a Delaware corporation (the “Borrower”), DEUTSCHEJPMORGAN CHASE BANK AG, NEW YORK BRANCH.A., as Administrative Agent, each Lender from time to time party hereto, and BARCLAYS BANK PLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN SACHS BANK USA, J.P. MORGAN SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MORGAN STANLEY SENIOR FUNDING, INC., and WELLS FARGO SECURITIES, LLC, as Co-Documentation Agents.

PRELIMINARY STATEMENTS

Pursuant to the Recapitalization Agreement (as this and other capitalized terms used in these preliminary statements are defined in Section 1.01 below), Bain Paste Mergerco, Inc. and Blackstone Paste Mergerco, Inc. (collectively, the “MergerCos”) were merged with the Borrower, with the Borrower as the surviving corporation (the “Recapitalization”).

Simultaneously with the consummation of the Recapitalization, the Borrower entered into that certain Credit Agreement, dated as of October 31, 2006 (as amended and in effect immediately prior to the Restatement Effective Date, the “Existing Credit Agreement”), by, among others, the Borrower, the “Lenders” as defined therein, and DEUTSCHE BANK AG NEW YORK BRANCH, as “Administrative Agent” as defined therein, pursuant to which the Borrower incurred an Original Loan (as defined in the Existing Credit Agreement) on the Closing Date in an aggregate principal amount of $2,400,000,000.

The proceeds of the Original Loan made on the Closing Date, together with the proceeds of (i) the issuance of certain unsecured notes, (ii) the funding of $400,000,000 under the ABL Credit Agreement on the Closing Date and (iii) the Equity Contribution, were used to finance the Debt Prepayment and pay the Merger Consideration and the Closing Date Transaction Expenses.  Immediately prior to the Restatement Effective Date, outstanding term loans in the aggregate principal amount of approximately $1,495,000,000 (the “Outstanding Term Loans”) were outstanding under the Existing Credit Agreement.

The Borrower desires to refinance the Outstanding Term Loans in full with Refinancing Term Loans pursuant to a Refinancing Amendment under Section 2.15 of the Existing Credit Agreement, and, in connection therewith, to amend and restate the Existing Credit Agreement in its entirety to, among other things, (i) provide for such Refinancing Term Loans, which will take the form of a new tranche of senior secured term loans under this Agreement, and (ii) increase the aggregate principal amount of such tranche borrowed and outstanding under this Agreement to $1,640,000,000 on the Restatement Effective Date.

The proceeds of the Loans on the Restatement Effective Date will be used to (i) refinance in full the Outstanding Term Loans, (ii) finance the redemption of a portion of the 2016 Senior Subordinated Notes in the aggregate principal amount of approximately $137,000,000 and (iii) fund certain related fees and expenses associated with the Transaction.

The Lenders and each Additional Lender providing the Refinancing Term Loans have indicated their willingness to lend and to consent to the other amendments herein, in each case on the terms and subject to the conditions set forth herein.

 

 

 

 

 

1

 

 


 

 

 

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, the following terms shall have the meanings set forth below:

2016 Converted Replacement Term B-1 Loans” shall mean the Loans resulting from the 2016 Replacement Term B-1 Loan Conversion.

2016 Converted Replacement Term B-2 Loans” shall mean the Loans resulting from the 2016 Replacement Term B-2 Loan Conversion.

2016 Converting Replacement Term B-1 Loan Lender” shall mean, as of the Initial Second Amendment Effective Date, each Lender with a Term B Loan that has executed and delivered a counterpart of the Second Amendment, together with a 2016 Replacement Term B-1 Loan Conversion Election, to the Administrative Agent in accordance with the terms thereof.

2016 Converting Replacement Term B-2 Loan Lender” shall mean, as of the Initial Second Amendment Effective Date, each Lender with an Incremental 2014 Term Loan that has executed and delivered a counterpart of the Second Amendment, together with a 2016 Replacement Term B-2 Loan Conversion Election, to the Administrative Agent in accordance with the terms thereof.

2016 New Replacement Term B-1 Loan Commitment” shall mean, with respect to each 2016 New Replacement Term B-1 Loan Lender, the commitment of such 2016 New Replacement Term B-1 Loan Lender to make 2016 New Replacement Term B-1 Loans pursuant to Section 2.01(c)(B) as set forth on Schedule 1 to the Second Amendment, as the same may be reduced from time to time pursuant to Section 2.06.

2016 New Replacement Term B-1 Loan Lender” shall mean a Term Lender with a 2016 New Replacement Term B-1 Loan Commitment.

2016 New Replacement Term B-1 Loans” shall mean term loans made by the 2016 New Replacement Term B-1 Loan Lenders to the Borrower pursuant to Section 2.01(c)(B).

2016 New Replacement Term B-2 Loan Commitment” shall mean, with respect to each 2016 New Replacement Term B-2 Loan Lender, the commitment of such 2016 New Replacement Term B-2 Loan Lender to make 2016 New Replacement Term B-2 Loans pursuant to Section 2.01(c)(D) as set forth on Schedule 1 to the Second Amendment, as the same may be reduced from time to time pursuant to Section 2.06.

 “2016 New Replacement Term B-2 Loan Lender” shall mean a Term Lender with a 2016 New Replacement Term B-2 Loan Commitment.

2016 New Replacement Term B-2 Loans” shall mean term loans made by the 2016 New Replacement Term B-2 Loan Lenders to the Borrower pursuant to Section 2.01(c)(D).

 

 

 

 

 

2

 

 


 

 

 

2016 Non-Converting Replacement Term B-1 Loan Lender” shall mean each Lender holding Term B Loans party hereto immediately prior to the occurrence of the Initial Second Amendment Effective Date and which is not a 2016 Converting Replacement Term B-1 Loan Lender.

2016 Non-Converting Replacement Term B-2 Loan Lender” shall mean each Lender holding Incremental 2014 Term Loans party hereto immediately prior to the occurrence of the Initial Second Amendment Effective Date and which is not a 2016 Converting Replacement Term B-2 Loan Lender.

2016 Replacement Term B-1 Loan Conversion” shall mean the conversion of Term B Loans to 2016 Converted Replacement Term B-1 Loans as described in Section 2.01(c)(A).

2016 Replacement Term B-1 Loan Conversion Election” shall mean, as to any 2016 Converting Replacement Term B-1 Loan Lender, its request to have all of its Term B Loans converted into 2016 Converted Replacement Term B-1 Loans as set forth in the “Lender Election Form” accompanying the signature page of such 2016 Converting Replacement Term B-1 Loan Lender to the Second Amendment.

2016 Replacement Term B-1 Loan Lender” shall mean (a) as of the Initial Second Amendment Effective Date (prior to giving effect to the 2016 Replacement Term Loan Conversion), each 2016 New Replacement Term B-1 Loan Lender and each 2016 Converting Replacement Term B-1 Loan Lender and (b) on and after the Initial Second Amendment Effective Date (after giving effect to the 2016 Replacement Term Loan Conversion), each Lender with an outstanding 2016 Replacement Term B-1 Loan.

2016 Replacement Term B-1 Loans” shall mean, collectively, (a) at all times, (i) the 2016 Converted Replacement Term B-1 Loans and (ii) the 2016 New Replacement Term B-1 Loans and (b) upon the occurrence of the 2016 Replacement Term Loan Conversion, the 2016 Replacement Term B-2 Loans (all of which were converted into 2016 Replacement Term B-1 Loans of a single Class pursuant to the 2016 Replacement Term Loan Conversion on the Initial Second Amendment Effective Date).

 “2016 Replacement Term B-2 Loan Conversion” shall mean the conversion of Incremental 2014 Term Loans to 2016 Converted Replacement Term B-2 Loans as described in Section 2.01(c)(C).

2016 Replacement Term B-2 Loan Conversion Election” shall mean, as to any 2016 Converting Replacement Term B-2 Loan Lender, its request to have all of its Incremental 2014 Term Loans converted into 2016 Converted Replacement Term B-2 Loans as set forth in the “Lender Election Form” accompanying the signature page of such 2016 Converting Replacement Term B-2 Loan Lender to the Second Amendment.

2016 Replacement Term B-2 Loan Lender” shall mean each 2016 New Replacement Term B-2 Loan Lender and each 2016 Converting Replacement Term B-2 Loan Lender.

2016 Replacement Term B-2 Loans” shall mean, collectively, (a) the 2016 Converted Replacement Term B-2 Loans and (b) the 2016 New Replacement Term B-2 Loans.

2016 Replacement Term Loan Conversion” has the meaning specified in the Second Amendment.

2016 Senior Subordinated Notes” means $400,000,000 in aggregate principal amount of the Borrower’s 11-3/8% senior subordinated notes due 2016 (as reduced by any prepayment, redemption or retirement thereof).

 

 

 

 

 

3

 

 


 

 

 

2016 Senior Subordinated Notes Indenture” means the Indenture for the 2016 Senior Subordinated Notes, dated as of October 31, 2006, as amended, supplemented or modified from time to time.

2018 Converted Replacement Term B Loans” shall mean the Loans resulting from the 2018 Replacement Term B Loan Conversion.

2018 Converting Replacement Term B Loan Lender” shall mean, as of the Third  Amendment Effective Date, each Lender with a 2016 Replacement Term B-1 Loan immediately prior to the Third Amendment Effective Date that has executed and delivered a counterpart of the Third Amendment, together with a 2018 Replacement Term B Loan Conversion Election, to the Administrative Agent in accordance with the terms thereof.

2018 New Replacement Term B Loan Commitment” shall mean, with respect to each 2018 New Replacement Term B Loan Lender, the commitment of such 2018 New Replacement Term B Loan Lender to make 2018 New Replacement Term B Loans pursuant to Section 2.01(d)(B) as set forth on Schedule 1 to the Third Amendment, as the same may be reduced from time to time pursuant to Section 2.06.

2018 New Replacement Term B Loan Lender” shall mean a Term Lender with a 2018 New Replacement Term B Loan Commitment.

2018 New Replacement Term B Loans” shall mean term loans made by the 2018 New Replacement Term B Loan Lenders to the Borrower pursuant to Section 2.01(d)(B).

2018 Non-Converting Replacement Term B-1 Loan Lender” shall mean each Lender holding 2016 Replacement Term B-1 Loans party hereto immediately prior to the occurrence of the Third Amendment Effective Date and which is not a 2018 Converting Replacement Term B Loan Lender.

2018 Replacement Term B Loan Conversion” shall mean the conversion of 2016 Replacement Term B-1 Loans to 2018 Converted Replacement Term B Loans as described in Section 2.01(d)(A).

2018 Replacement Term B Loan Conversion Election” shall mean, as to any 2018 Converting Replacement Term B Loan Lender, its request to have all of its 2016 Replacement Term B-1 Loans converted into 2018 Converted Replacement Term B Loans as set forth in the signature page of such 2018 Converting Replacement Term B Loan Lender to the Third Amendment.

2018 Replacement Term B Loan Lender” shall mean, on and after the Third Amendment Effective Date (after giving effect to the 2018 Replacement Term B Loan Conversion), each Lender with an outstanding 2018 Replacement Term B Loan.

2018 Replacement Term B Loans” shall mean, collectively, at all times, (i) the 2018 Converted Replacement Term B Loans and (ii) the 2018 New Replacement Term B Loans.

2020 Senior Subordinated Notes” means, collectively, (i) the $260,000,000 aggregate principal amount of the Borrower’s 5-7/8% senior subordinated notes due 2020 issued on December 19, 2013 and (ii) the $250,000,000 aggregate principal amount of the Borrower’s 5-7/8% senior subordinated notes due 2020 issued on June 16, 2014 (as each may be reduced by any prepayment, redemption or retirement thereof).

 

 

 

 

 

4

 

 


 

 

 

2020 Senior Subordinated Notes Indenture” means the Indenture for the 2020 Senior Subordinated Notes, dated as of December 19, 2013, as amended, supplemented or modified from time to time.

 “ABL Collateral Agent” shall mean the “Collateral Agent” as defined in the ABL Credit Agreement, or Person performing comparable functions under the ABL Credit Agreement.

ABL Collateral Documents” shall mean the “Security Documents” as defined in the ABL Credit Agreement, or comparable term as used in the ABL Credit Agreement.

ABL Credit Agreement” shall mean the Third Amended and Restated Credit Agreement, dated as of May 27, 2016, among the Borrower, as the lead borrower, the other borrowers named therein, the facility guarantors identified therein, Wells Fargo Bank, National Association, as administrative agent and as collateral agent, and the lenders identified therein, as the same may be amended, restated, modified, supplemented, extended, renewed, refunded, replaced or refinanced from time to time in one or more agreements or indentures (in each case with the same or new lenders, institutional investors or agents), including any agreement or indenture extending the maturity thereof or otherwise restructuring all or any portion of the Indebtedness thereunder or increasing the amount loaned or issued thereunder or altering the maturity thereof (so long as, in the case of any replacement or refinancing, all commitments under the agreements or indentures so replaced or refinanced shall have been terminated, all unpaid amounts thereunder (other than indemnities) shall have been paid in full and all parties to any replacement or refinancing agreements or indentures, or a trustee or agent on their behalf, shall have become party to the Intercreditor Agreement as of the applicable date of replacement or refinancing, as the case may be).

 “ABL Lenders” shall mean the “Lenders” as defined in the ABL Credit Agreement.

ABL Loan Documents” shall mean the ABL Credit Agreement and the related guaranties, pledge agreements, security agreements, mortgages, notes and other agreements and instruments entered into in connection with the ABL Credit Agreement.

ABL Loans” shall mean the “Revolving Loans” as defined in the ABL Credit Agreement, or other loans borrowed under the ABL Credit Agreement.

ABL Priority Collateral” means, collectively, all “ABL Priority Collateral” as defined in the Intercreditor Agreement.

Acceptable Discount” has the meaning specified in Section 2.05(a)(iii)(D)(2).

 

Acceptable Prepayment Amount” has the meaning specified in Section 2.05(a)(iii)(D)(3).

 

Acceptance and Prepayment Notice” means a notice of the Borrower’s acceptance of the Acceptable Discount in substantially the form of Exhibit Q attached hereto.

 

Acceptance Date” has the meaning specified in Section 2.05(a)(iii)(D)(2).

ACH” means automated clearing house transfers.

Acquired Indebtedness” means, with respect to any specified Person, (a) Indebtedness of any other Person existing at the time such other Person is merged or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in

 

 

 

 

 

5

 

 


 

 

 

contemplation of, such other Person merging or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Acquisition” means, with respect to a specified Person, (a) an Investment in or a purchase of a 50% or greater interest in the Capital Stock of any other Person, (b) a purchase or acquisition of all or substantially all of the assets of any other Person, (c) a purchase or acquisition of a real estate portfolio or Stores from any other Person or assets constituting a business unit, line of business or division of any other Person, or (d) any merger, amalgamation or consolidation of such Person with any other Person or other transaction or series of transactions resulting in the acquisition of all or substantially all of the assets, or a 50% or greater interest in the Capital Stock of, any Person, in each case in any transaction or group of transactions which are part of a common plan.

Act” has the meaning set forth in Section 10.20.

Additional Assets” means (a) any asset used or useful in a Similar Business, including any such asset acquired through any capital expenditure, (b) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Borrower or another Restricted Subsidiary or is merged or amalgamated with or into the Borrower or another Restricted Subsidiary and that is primarily engaged in a Similar Business, (c) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary that is primarily engaged in a Similar Business, (d) all or substantially all of the assets of a Similar Business or (e) any other asset that replaces an asset that is the subject of an Asset Sale.

Additional First Lien Indebtedness” has the meaning specified in the definition of Additional First Lien Intercreditor Agreement.

Additional First Lien Intercreditor Agreement” means an intercreditor agreement among the Administrative Agent, the Collateral Agent and one or more Senior Representatives for applicable holders of Permitted First Priority Refinancing Debt or any other Indebtedness permitted by Section 7.03 that is secured by Permitted Liens on the Collateral that are pari passu (but without regard to control of remedies) with the Liens on the Collateral securing the Obligations (“Additional First Lien Indebtedness”) providing that, inter alia, the Liens on the Collateral as between the Collateral Agent (for the benefit of the Secured Parties) and one or more Senior Representatives (for the benefit of any such Senior Representatives and the applicable holders of Permitted First Priority Refinancing Debt or Additional First Lien Indebtedness, as the case may be) shall be pari passu (but without regard to control of remedies), as such intercreditor agreement may be amended, modified, restated and/or supplemented from time to time in accordance with the terms hereof and thereof.  The Additional First Lien Intercreditor Agreement shall be in a form customary for transactions of the type contemplated thereby and otherwise reasonably satisfactory to the Administrative Agent and the Borrower and, to the extent agreed to by the Collateral Agent, one or more Senior Representatives for the applicable holders of Permitted First Priority Refinancing Debt or Additional First Lien Indebtedness, as the case may be, and the ABL Collateral Agent, may be in the form of an amendment and restatement of the Intercreditor Agreement.

Additional Incremental Lender” has the meaning specified in Section 2.17(c).

Additional Junior Lien Indebtedness” has the meaning specified in the definition of Additional Junior Lien Intercreditor Agreement.

Additional Junior Lien Intercreditor Agreement” means an intercreditor agreement among the Administrative Agent, the Collateral Agent and one or more Senior Representatives for

 

 

 

 

 

6

 

 


 

 

 

applicable holders of Permitted Junior Priority Refinancing Debt or any other Indebtedness permitted by Section 7.03 that is secured by Permitted Liens on the Collateral that are junior to the Liens on the Collateral securing the Obligations (“Additional Junior Lien Indebtedness”) providing that, inter alia, the Liens on the Collateral in favor of one or more Senior Representatives (for the benefit of any such Senior Representatives and the applicable holders of Permitted Junior Priority Refinancing Debt or Additional Junior Lien Indebtedness, as the case may be) shall be junior to the Liens on the Collateral in favor of the Collateral Agent (for the benefit of the Secured Parties), as such intercreditor agreement may be amended, modified, restated and/or supplemented from time to time in accordance with the terms hereof and thereof.  The Additional Junior Lien Intercreditor Agreement shall be in a form customary for transactions of the type contemplated thereby and otherwise reasonably satisfactory to the Administrative Agent and the Borrower and, to the extent agreed to by the Collateral Agent, one or more Senior Representatives for the applicable holders of Permitted Junior Priority Refinancing Debt or Additional Junior Lien Indebtedness, as the case may be, and the ABL Collateral Agent, may be in the form of an amendment and restatement of the Intercreditor Agreement.

Additional Lender” means, at any time, any bank or other financial institution or institutional lender (other than any such bank, financial institution or institutional lender that is a Lender at such time) that agrees to provide any portion of Credit Agreement Refinancing Indebtedness pursuant to a Refinancing Amendment in accordance with Section 2.15, provided that each Additional Lender shall be subject to the approval of the Administrative Agent to the extent that each such Additional Lender is not then an existing Lender, an Affiliate of a then existing Lender or an Approved Fund (such approval not to be unreasonably withheld or delayed), and the Borrower.

Administrative Agent” means DeutscheJPMorgan Chase Bank, N.AG New York Branch., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.  Unless the context otherwise requires, the term “Administrative Agent” as used herein and in the other Loan Documents shall include the Collateral Agent.

Administrative Agent’s Office” means the Administrative Agent’s address and 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.

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 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, shall mean 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 set forth in Section 7.07(a).

Agent-Related Persons” means the Agents and the Arrangers, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

Agents” means, collectively, the Administrative Agent, the Collateral Agent, the Co-Documentation Agents and the Supplemental Administrative Agents (if any).

 

 

 

 

 

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Aggregate Commitments” means the Commitments of all the Lenders.

Agreement” means this Credit Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

Agreement Currency” has the meaning provided in Section 10.21.

Allocated 2018 Replacement Term B Loan Conversion Amount” shall mean, with respect to each Lender holding 2016 Replacement Term B-1 Loans that is a 2018 Converting Replacement Term B Loan Lender, the amount determined by the Third Amendment Lead Arrangers and the Borrower as the final amount of such Lender’s 2018 Converted Replacement Term B Loans on the Third Amendment Effective Date and notified to each such Lender by the Third Amendment Lead Arrangers on or before the Third Amendment Effective Date.  The “Allocated 2018 Replacement Term B Loan Conversion Amount” of any Lender shall not exceed (but may be less than) the aggregate principal amount of 2016 Replacement Term B-1 Loans held by such Lender immediately prior to the effectiveness of the Third Amendment on the Third Amendment Effective Date.  All such determinations made by the Third Amendment Lead Arrangers and the Borrower shall, absent manifest error, be final, conclusive and binding on the Borrower and the Lenders and the Third Amendment Lead Arrangers shall have no liability to any Person with respect to such determination absent gross negligence or willful misconduct by the Third Amendment Lead Arrangers (as determined in a final non-appealable judgment of a court of competent jurisdiction).

Allocated Replacement Term B-1 Loan Conversion Amount” shall mean, with respect to each Lender holding Term B Loans that is a 2016 Converting Replacement Term B-1 Loan Lender, the amount determined by the Administrative Agent and the Borrower as the final amount of such Lender’s 2016 Converted Replacement Term B-1 Loans on the Initial Second Amendment Effective Date and notified to each such Lender by the Administrative Agent promptly following the Initial Second Amendment Effective Date.  The “Allocated Replacement Term B-1 Loan Conversion Amount” of any Lender shall not exceed (but may be less than) the aggregate principal amount of Term B Loans held by such Lender immediately prior to the effectiveness of the Second Amendment on the Initial Second Amendment Effective Date.  All such determinations made by the Administrative Agent and the Borrower shall, absent manifest error, be final, conclusive and binding on the Borrower and the Lenders and the Administrative Agent shall have no liability to any Person with respect to such determination absent gross negligence or willful misconduct by the Administrative Agent (as determined in a final non-appealable judgment of a court of competent jurisdiction).

Allocated Replacement Term B-2 Loan Conversion Amount” shall mean, with respect to each Lender holding Incremental 2014 Term Loans that is a 2016 Converting Replacement Term B-2 Loan Lender, the amount determined by the Administrative Agent and the Borrower as the final amount of such Lender’s 2016 Converted Replacement Term B-2 Loans on the Initial Second Amendment Effective Date and notified to each such Lender by the Administrative Agent promptly following the Initial Second Amendment Effective Date.  The “Allocated Replacement Term B-2 Loan Conversion Amount” of any Lender shall not exceed (but may be less than) the aggregate principal amount of Incremental 2014 Term Loans held by such Lender immediately prior to the effectiveness of the Second Amendment on the Initial Second Amendment Effective Date.  All such determinations made by the Administrative Agent and the Borrower shall, absent manifest error, be final, conclusive and binding on the Borrower and the Lenders and the Administrative Agent shall have no liability to any Person with respect to such determination absent gross negligence or willful misconduct by the Administrative Agent (as determined in a final non-appealable judgment of a court of competent jurisdiction).

Applicable Discount” has the meaning specified in Section 2.05(a)(iii)(C)(2).

 

 

 

 

 

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Applicable Rate” means a percentage per annum equal to (a) with respect to Term B Loans, (i) for Eurocurrency Rate Loans, 2.75%, and (ii) for Base Rate Loans, 1.75%,; (b) with respect to Incremental 2014 Term Loans, (i) for Eurocurrency Rate Loans, 3.00%, and (ii) for Base Rate Loans, 2.00%, and; (c) with respect to 2016 Replacement Term B-1 Loans (after giving effect to the 2016 Replacement Term Loan Conversion), (i) until delivery of financial statements for the first full fiscal quarter of the Borrower ending after the Initial Second Amendment Effective Date, (A) for Eurocurrency Rate Loans, 2.75%, and (Bii) for Base Rate Loans, 1.75%, and (ii) thereafter, the following percentages per annum based upon the Consolidated Secured Debt Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):; and (d) with respect to 2018 Replacement Term B Loans (after giving effect to the 2018 Replacement Term B Loan Conversion), (i) for Eurocurrency Rate Loans, 2.50%, and (ii) for Base Rate Loans, 1.50%.

Pricing Level

Consolidated Secured Debt Ratio

Eurocurrency Rate for 2016 Replacement Term B-1 Loans

Base Rate for 2016 Replacement Term B-1 Loans

 

 

 

 

1

Greater than or equal to 1.50:1.00

2.75%

1.75%

2

Less than 1.50:1.00

2.50%

1.50%


                             Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Secured Debt Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided that, at the option of the Administrative Agent or the Required Lenders, the highest Pricing Level (i.e. Pricing Level 1) shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply) and (y) as of the first Business Day after an Event of Default under Section 8.01(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply).

Notwithstanding the foregoing, (x) the Applicable Rate in respect of Incremental Term Loans of any Class, Extended Term Loans of any Extension Series or Refinancing Term Loans of any Refinancing Series shall be the applicable percentages per annum provided pursuant to the relevant Incremental Amendment, Extension Amendment or Refinancing Amendment, as the case may be, and (y) the Applicable Rate in respect of certain Loans shall be increased as, and to the extent, necessary to comply with the provisions of Section 2.17.

Appropriate Lender” means, at any time, with respect to Loans of any Class, the Lenders of such Class.

Approved Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

Arrangers” means (a) with respect to the Term B Loans, Deutsche Bank Securities Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., and Wells Fargo Securities, LLC, each in its capacity as a Joint Bookrunner and a Co-Lead Arranger under

 

 

 

 

 

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this Agreement,; (b) with respect to the Incremental 2014 Term Loans, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc., Wells Fargo Securities, LLC, Guggenheim Securities Holdings, LLC and Macquarie Capital (USA) Inc., each in its capacity as a Joint Bookrunner and a Co-Lead Arranger under the First Amendment and(c) with respect to the 2016 Replacement Term B-1 Loans, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Goldman Sachs Bank USA and SunTrust Robinson Humphrey, Inc., each in its capacity as a Joint Bookrunner and a Co-Lead Arranger under the Second Amendment.; and (d) with respect to the 2018 Replacement Term B Loans, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA, each in its capacity as a Joint Lead Arranger and Joint Bookrunner under the Third Amendment.

Asset Sale” means (a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Borrower or any of its Restricted Subsidiaries (each referred to in this definition as a “disposition”) or (b) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions (other than directors’ qualifying shares and shares issued to foreign nationals as required under applicable law); in each case, other than:

(i)          any disposition of Cash Equivalents or Investment Grade Securities or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale in the ordinary course of business (it being understood that the sale of inventory or goods (or other assets) in bulk in connection with the closing of any number of Stores in the ordinary course of business shall be considered a sale in the ordinary course of business);

(ii)         the disposition of all or substantially all of the assets of the Borrower in a manner permitted pursuant to Section 7.06 or any disposition that constitutes a Change of Control;

(iii)       the making of any Restricted Payment that is permitted to be made, and is made, under Section 7.02 or the making of any Permitted Investment;

(iv)        any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $25,000,000;

(v)         any disposition of property or assets or issuance of securities by a Restricted Subsidiary of the Borrower to the Borrower or by the Borrower or a Restricted Subsidiary of the Borrower to another Restricted Subsidiary of the Borrower;

(vi)        to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(vii)       the lease, assignment, sublease, license or sublicense of any real or personal property in the ordinary course of business;

(viii)     any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(ix)        foreclosures on or expropriations of assets;

 

 

 

 

 

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(x)         (A) sales of accounts receivable, or participations therein, in connection with any Receivables Facility, or (B) the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business and not as part of a financing transaction;

(xi)        the granting of a Lien that is a Permitted Lien;

(xii)       the issuance by a Restricted Subsidiary of Preferred Stock or Disqualified Stock that is permitted by Section 7.03; and

(xiii)     any financing transaction with respect to property built or acquired by the Borrower or any Restricted Subsidiary after the Closing Date, including asset securitizations permitted by this Agreement and any Sale and Lease-Back Transaction.

Asset Sale/Casualty Event Offer” has the meaning set forth in Section 2.05(c)(iii).

Assignees” has the meaning specified in Section 10.07(b).

Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit E attached to the Existing Credit Agreement.

Attorney Costs” means and includes all reasonable and documented fees, expenses and disbursements of any law firm or other external legal counsel.

Auction Agent” means (a) the Administrative Agent or (b) any other financial institution or advisor employed 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(a)(iii); 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.

Audited Financial Statements” means the audited consolidated balance sheets of the Borrower and its Subsidiaries as of each of January 28, 2012, January 29, 2011 and January 30, 2010, and the related audited consolidated statements of income, stockholders’ equity and cash flows for the Borrower and its Subsidiaries for the fiscal years ended January 28, 2012, January 29, 2011 and January 30, 2010, respectively, as any of the foregoing may have been restated.

Available Incremental Amount” has the meaning specified in Section 2.17(d)(iv).

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 EEA Financial Institution.

Bail-In Legislation” means, 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.

Bank Products” means any supply chain finance services including, without limitation, trade payable services and supplier accounts receivable and drafts/bills of exchange purchases; credit or debit cards; purchase cards or merchant account lines of credit.

 

 

 

 

 

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Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by DBNYthe Administrative Agent as its “prime rate” and (c) the Eurocurrency Rate for a Eurocurrency Rate Loan denominated in Dollars with an Interest Period of one month commencing on such day (or, if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  The “prime rate” is a rate set by DBNYthe Administrative Agent based upon various factors including DBNYthe Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by DBNYthe Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.  In no event shall the Base Rate be less than 0.00%.

 

Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

Board of Directors” means (a) with respect to a corporation, the board of directors of the corporation, (b) with respect to a partnership, the board of directors of the general partner of the partnership and (c) with respect to any other Person, the board or committee of such Person serving a similar function.

Borrower” has the meaning provided in the introductory paragraph of this Agreement; provided that when used in the context of determining the fair market value of an asset or liability under this Agreement, “Borrower” shall, unless otherwise expressly stated, be deemed to mean the Board of Directors of the Borrower when the fair market value of such asset or liability is equal to or in excess of $200,000,000 (unless otherwise expressly stated), in which case the determination of the Board of Directors shall be deemed conclusive for purposes of this Agreement.

Borrower Guaranty” means the Borrower Guaranty made by the Borrower in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-1 attached to the Existing Credit Agreement.

Borrower Offer of Specified Discount Prepayment” means the offer by any Company Party to make a voluntary prepayment of Loans at a Specified Discount to par pursuant to Section 2.05(a)(iii)(B).

Borrower Solicitation of Discount Range Prepayment Offers” means the solicitation by any Company 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(a)(iii)(C).

Borrower Solicitation of Discounted Prepayment Offers” means the solicitation by any Company 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(a)(iii)(D).

Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and Class and, in the case of Eurocurrency Rate Loans, having the same Interest Period, made by each of the Lenders having Commitments of the respective Class pursuant to Section 2.01 or under any Incremental Amendment, Extension Amendment or Refinancing Amendment; provided that, immediately following the incurrence of the 2016 New Replacement Term B-1 Loans, the 2016 Converted Replacement Term B-1 Loans, the 2016 New Replacement Term B-2 Loans and the 2016 Converted Replacement Term B-2 Loans and the consummation of the 2016 Replacement Term B-1 Loan Conversion, the 2016 Replacement Term B-2 Loan Conversion and the 2016 Replacement Term Loan Conversion, in each case, on the Initial Second Amendment Effective Date, the term “Borrowing” shall include the consolidated “borrowing” of 2016 New Replacement Term B-1 Loans, the 2016 Converted Replacement Term B-1 Loans, the 2016 New

 

 

 

 

 

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Replacement Term B-2 Loans and the 2016 Converted Replacement Term B-2 Loans as described in Section 2.08(e).; provided further that, immediately following the incurrence of the 2018 New Replacement Term B Loans, the 2018 Converted Replacement Term B Loans and the consummation of the 2018 Replacement Term B Loan Conversion, in each case, on the Third Amendment Effective Date, the term “Borrowing” shall include the consolidated “borrowing” of 2018 New Replacement Term B Loans and the 2018 Converted Replacement Term B Loans as described in Section 2.08(e).

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any interest rate settings as to a Eurocurrency Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurocurrency Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.

Canadian Guarantee” means, collectively, (a) the Canadian Guarantee made by the Canadian Subsidiary Guarantors in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-2 attached to the Existing Credit Agreement and (b) each other guaranty and Guaranty Supplement delivered by a Canadian Subsidiary Guarantor pursuant to Section 6.11.

Canadian Security Agreement” means, collectively, (a) the Security Agreement executed by the Canadian Subsidiary Guarantors, substantially in the form of Exhibit G-2 attached to the Existing Credit Agreement, and (b) any Deed of Immovable and Moveable Hypothec, together with, in each case, each other security agreement supplement executed and delivered by a Canadian Subsidiary Guarantor pursuant to Section 6.11.

Canadian Subsidiary” means any Subsidiary that is organized under the laws of Canada or any province thereof.

Canadian Subsidiary Guarantors” means, collectively, (i) Michaels of Canada ULC and (ii) each other Canadian Subsidiary of the Borrower that, in the sole discretion of the Borrower, shall have entered into the Canadian Guarantee and complied with the requirements of clause (b) of the definition of “Collateral and Guarantee Requirement”.

Capital Expenditures” means, for any period, the aggregate of (a) all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of the Borrower and the Restricted Subsidiaries and (b) the value of all assets under (or subject to) Capitalized Lease Obligations incurred by the Borrower and the Restricted Subsidiaries during such period; provided that the term “Capital Expenditures” shall not include (i) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, (ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (iii) the purchase of plant, property or equipment or software to the extent financed with the proceeds of Asset Sales that are not required to be applied to prepay Loans pursuant to Section 2.05(c), (iv) expenditures that are accounted for as capital expenditures by the Borrower or any Restricted Subsidiary and that actually are paid for by a Person other than the Borrower or any Restricted Subsidiary, to the extent neither the Borrower nor any Restricted Subsidiary has provided or is

 

 

 

 

 

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required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period), (v) the book value of any asset owned by the Borrower or any Restricted Subsidiary prior to or during such period to the extent that such book value is included as a capital expenditure during such period as a result of such Person reusing or beginning to reuse such asset during such period without a corresponding expenditure actually having been made in such period, provided that (A) any expenditure necessary in order to permit such asset to be reused shall be included as a Capital Expenditure during the period in which such expenditure actually is made and (B) such book value shall have been included in Capital Expenditures when such asset was originally acquired, (vi) expenditures that constitute Acquisitions permitted hereunder, (vii) any expenditure which but for this clause (vii) would otherwise constitute a “Capital Expenditure”, to the extent financed with the proceeds of the sale or issuance of any Equity Interests of the Borrower or (viii) that portion of interest on Indebtedness incurred for Capital Expenditures which is paid in cash and capitalized in accordance with GAAP during such period.

Capital Stock” means (a) in the case of a corporation, shares in the capital of such corporation; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock; (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

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; provided,  that all obligations of any Person that are or would be characterized as operating lease obligations in accordance with GAAP immediately prior to the Subsequent Second Amendment Effective Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations (and not as Capitalized Lease Obligations) for purposes of this Agreement regardless of any change in GAAP following the Subsequent Second Amendment Effective Date that would otherwise require such obligations to be recharacterized as Capitalized Lease Obligations.

 “Cash Collateral Account” means a blocked account at DBNYJPMorgan Chase Bank, N.A. (or another commercial bank selected in compliance with Section 9.09) in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner reasonably satisfactory to the Administrative Agent.

Cash Equivalents” means:

(a)         United States dollars and Canadian dollars;

(b)         (i)  euro or any national currency of any participating member state of the EMU; or

(ii)         in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(c)         securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition;

 

 

 

 

 

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(d)         certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $250,000,000 in the case of U.S. banks and, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, $100,000,000 (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks, and in each case in a currency permitted under clauses (a) or (b) above;

(e)         repurchase obligations for underlying securities of the types described in clauses (c) and (d) entered into with any financial institution meeting the qualifications specified in clause (d) above and in each case in a currency permitted under clauses (a) or (b) above;

(f)          commercial paper rated at least P-2 by Moody’s or at least A-2 by S&P and in each case maturing within 24 months after the date of creation thereof and in each case in a currency permitted under clauses (a) or (b) above;

(g)         marketable short term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof and in each case in a currency permitted under clauses (a) or (b) above;

(h)         readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of 24 months or less from the date of acquisition;

(i)          Indebtedness or Preferred Stock issued by Persons with a rating of A or higher from S&P or A2 or higher from Moody’s with maturities of 24 months or less from the date of acquisition and in each case in a currency permitted under clauses (a) or (b) above;

(j)          Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s and in each case in a currency permitted under clauses (a) or (b) above;

(k)         investment funds investing substantially all of their assets in securities of the type described in clauses (a) through (j) above; and

(l)          credit card receivables and debit card receivables so long as same are payable by a financial institution and are considered “cash equivalents” in accordance with GAAP and are so reflected on the Borrower’s balance sheet.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (a) and (b) above, provided that such amounts are converted into any currency listed in clauses (a) and (b) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

Cash Management Services” means any cash management services or foreign exchange facilities, including, without limitation: (a) ACH transactions; (b) controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer services; (c) credit or debit cards; (d) credit

 

 

 

 

 

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card processing services; and (e) purchase cards.

 “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.

CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as subsequently amended.

CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

CFC” means a “controlled foreign corporation” within the meaning of Section 957(a) of the Code.

Change in Law” means the occurrence, after the Restatement Effective Date, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty (excluding the taking effect after the Restatement Effective Date of a law, rule, regulation or treaty adopted prior to the Restatement Effective Date), (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) 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 (i) the Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173), all Laws relating thereto, all interpretations and applications thereof and any compliance by a Lender with any request or directive relating thereto and (ii) 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, in each case, for the purposes of this Agreement, be deemed to be adopted and taking effect subsequent to the Restatement Effective Date.

Change of Control” means the occurrence of any of the following after the Restatement Effective Date:

(a)         the sale, lease or transfer, in one or a series of related transactions (other than by way of merger or consolidation), of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders; or

(b)         the Borrower becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by (i) any Person (other than one or more Permitted Holders) or (ii) Persons (other than one or more Permitted Holders) that together are (1) a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), or (2) acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) as a group in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Borrower or any of its direct or indirect parent companies holding directly or indirectly 100% of the total voting power of the Voting Stock of the Borrower; or

(c)         any “Change of Control” (or any comparable term) in any document pertaining to

 

 

 

 

 

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(i) the ABL Credit Agreement, (ii) the Senior Notes, the 2020 Senior Subordinated Notes, Incremental Equivalent Debt, Credit Agreement Refinancing Indebtedness (except to the extent incurred pursuant to a Refinancing Amendment), other Indebtedness (other than any Loan) or any Refinancing Indebtedness in respect of the foregoing, in each case with an aggregate outstanding principal amount in excess of the Threshold Amount or (iii) any Disqualified Stock with an aggregate liquidation preference in excess of the Threshold Amount.

Civil Code” means the Civil Code of Quebec and all regulations thereunder, as amended from time to time, and any successor statutes.

Class” (a) 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,; (b) when used with respect to Commitments, refers to whether such Commitments are Term B Commitments, 2016 New Replacement Term B-1 Loan Commitments, 2016 New Replacement Term B-2 Loan Commitments, 2018 New Replacement Term B Loan Commitments, Incremental Term Commitments of a given Incremental Series, Extended Term Commitments of a given Extension Series, Refinancing Term Commitments of a given Refinancing Series, in each case not designated part of another existing Class; and (c) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Term B Loans, 2016 New Replacement Term B-1 Loans, 2016 Converted Replacement Term B-1 Loans, 2016 Replacement Term B-1 Loans, 2016 New Replacement Term B-2 Loans, 2016 Converted Replacement Term B-2 Loans, 2016 Replacement Term B-2 Loans, 2018 New Replacement Term B Loans, 2018 Converted Replacement Term B Loans, 2018 Replacement Term B Loans, Incremental Term Loans, Extended Term Loans made pursuant to a given Extension Series, or Refinancing Term Loans made pursuant to a given Refinancing Series, in each case not designated part of another existing Class; provided that, (i) with respect to a Borrowing of 2016 New Replacement Term B-1 Loans incurred on the Initial Second Amendment Effective Date, the 2016 New Replacement Term B-1 Loans shall constitute a separate “Class” at the time of the incurrence thereof,; (ii) immediately after the incurrence of 2016 New Replacement Term B-1 Loans and the consummation of the 2016 Replacement Term B-1 Loan Conversion on the Initial Second Amendment Effective Date (and immediately prior to the consummation of the 2016 Replacement Term Loan Conversion), all 2016 New Replacement Term B-1 Loans and all 2016 Converted Replacement Term B-1 Loans shall constitute a single “Class” of 2016 Replacement Term B-1 Loans for all purposes of this Agreement and the other Loan Documents,; (iii) with respect to a Borrowing of 2016 New Replacement Term B-2 Loans incurred on the Initial Second Amendment Effective Date, the 2016 New Replacement Term B-2 Loans shall constitute a separate “Class” at the time of the incurrence thereof,; (iv) immediately after the incurrence of 2016 New Replacement Term B-2 Loans and the consummation of the 2016 Replacement Term B-2 Loan Conversion on the Initial Second Amendment Effective Date (and immediately prior to the consummation of the 2016 Replacement Term Loan Conversion), all 2016 New Replacement Term B-2 Loans and all 2016 Converted Replacement Term B-2 Loans shall constitute a single “Class” of 2016 Replacement Term B-2 Loans for all purposes of this Agreement and the other Loan Documents and; (v) immediately after the transactions described in preceding clauses (ii) and (iv), all 2016 Replacement Term B-2 Loans shall convert into, and become, 2016 Replacement Term B-1 Loans pursuant to the 2016 Replacement Term Loan Conversion and shall, together with all 2016 New Replacement Term B-1 Loans and all 2016 Converted Replacement Term B-1 Loans, constitute a single “Class” of 2016 Replacement Term B-1 Loans for all purposes of this Agreement and the other Loan Documents; (vi) with respect to a Borrowing of 2018 New Replacement Term B Loans incurred on the Third Amendment Effective Date, the 2018 New Replacement Term B Loans shall constitute a separate “Class” at the time of the incurrence thereof; and (vii) immediately after the incurrence of 2018 New Replacement Term B Loans and the consummation of the 2018 Replacement Term B Loan Conversion on the Third Amendment Effective Date, all 2018 New Replacement Term B Loans and all 2018 Converted Replacement Term B Loans shall constitute a single “Class” of 2018 Replacement Term B Loans for all purposes of this Agreement and the other Loan Documents.  Commitments (and, in each case, the Loans made pursuant to

 

 

 

 

 

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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 the same terms and conditions shall be construed to be in the same Class.

Closing Date” means October 31, 2006.

Closing Date Transaction” means the “Transaction” as defined in the Existing Credit Agreement.

Closing Date Transaction Expenses” means the “Transaction Expenses” as defined in the Existing Credit Agreement.

Code” means the U.S. Internal Revenue Code of 1986, as amended, and rules and regulations related thereto.

Co-Documentation Agent” means Barclays Bank PLC, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., and Wells Fargo Securities, LLC, each as a Co-Documentation Agent under this Agreement.

Collateral” means all the “Collateral” as defined in any Collateral Document and shall include the Mortgaged Properties.

Collateral Access Agreement” means an agreement reasonably satisfactory in form and substance to the Collateral Agent executed by (a) a bailee or other Person in possession of Collateral, and (b) each landlord of real property leased by any Loan Party, pursuant to which such Person (i) acknowledges the Collateral Agent’s Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the Collateral held by such Person or located on such real property, (iii) agrees to furnish the Collateral Agent with access to the Collateral in such Person’s possession or on the real property for the purposes of conducting a liquidation and (iv) makes such other agreements with the Collateral Agent as the Collateral Agent may reasonably require.

Collateral Agent” means the Administrative Agent, in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.

Collateral and Guarantee Requirement” means, at any time, the requirement that:

(a)         the Administrative Agent shall have received (v) each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01(a)(iii) of the Existing Credit Agreement, pursuant to Section 4.01 of this Agreement or pursuant to Section 6.11 at such time as is designated therein, (w) the Intercreditor Agreement, (x) the Additional First Lien Intercreditor Agreement (if then in effect), (y) the Additional Junior Lien Intercreditor Agreement (if then in effect), and (z) any other intercreditor agreement entered into pursuant to the terms of this Agreement (if then in effect), in each case duly executed by each Loan Party thereto;

(b)         all Obligations shall have been unconditionally guaranteed by the Borrower (in the case of Obligations under clause (y) of the first sentence of the definition thereof), each Restricted Subsidiary that is a Domestic Subsidiary and not an Excluded Subsidiary and, after the formation thereof, Holdco;

(c)         all guarantees issued or to be issued in respect of the 2020 Senior Subordinated

 

 

 

 

 

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Notes shall be subordinated to the Guaranties to the same extent that the 2020 Senior Subordinated Notes are subordinated to the Obligations;

(d)         the Obligations and the Guaranties shall have been secured by a first priority security interest (subject to the terms of the Intercreditor Agreement, the Additional First Lien Intercreditor Agreement (if then in effect), the Additional Junior Lien Intercreditor Agreement (if then in effect) and any other intercreditor agreement entered into pursuant to the terms of this Agreement (if then in effect)) in all Equity Interests (other than Equity Interests of Unrestricted Subsidiaries and any Equity Interest of any Restricted Subsidiary pledged to secure Indebtedness permitted under Section 7.03(b)(xix)) of each Wholly Owned Subsidiary directly owned by any Guarantor; provided that pledges of voting Equity Interests of each Foreign Subsidiary (including each Foreign Subsidiary held by a Canadian Subsidiary Guarantor) and each Domestic Subsidiary that is described in clause (e)(ii) of the definition of Excluded Subsidiary shall be limited to 65% of the total combined voting power of all Equity Interests of such Foreign Subsidiary at any time; provided further that in the case of Canadian Subsidiary Guarantor that owns Equity Interests in a Foreign Subsidiary, the pledge of voting Equity Interests of such Canadian Subsidiary Guarantor shall be limited to 65% of the total combined voting power of all Equity Interests of such Canadian Subsidiary Guarantor (or, if such Canadian Subsidiary Guarantor is an unlimited liability company, such  lesser percentage as is acceptable to the Collateral Agent);

(e)         except to the extent otherwise permitted hereunder or under any Collateral Document, the Obligations and the Guaranties shall have been secured by a security interest in, and mortgages on, substantially all tangible and intangible assets of the Borrower and each other Guarantor (including accounts, inventory, equipment, investment property, contract rights, intellectual property, other general intangibles, owned real property and proceeds of the foregoing), in each case, with the priority required by the Collateral Documents, the Intercreditor Agreement, the Additional First Lien Intercreditor Agreement (if then in effect), the Additional Junior Lien Intercreditor Agreement (if then in effect) and any other intercreditor agreement entered into pursuant to the terms of this Agreement (if then in effect); provided that security interests in real property shall be limited to the Mortgaged Properties;

(f)          none of the Collateral shall be subject to any Liens other than Liens permitted by Section 7.04; and

(g)         the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each owned property required to be delivered pursuant to Section 6.11 (the “Mortgaged Properties”) duly executed and delivered by the record owner of such property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first priority Lien on the property described therein (subject to the applicable provisions of the Intercreditor Agreement, the Additional First Lien Intercreditor Agreement (if then in effect), the Additional Junior Lien Intercreditor Agreement (if then in effect) and any other intercreditor agreement entered into pursuant to the terms of this Agreement (if then in effect)), free of any other Liens except as expressly permitted by Section 7.04, together with such endorsements, coinsurance and reinsurance as the Administrative Agent may reasonably request, (iii) such existing surveys, existing abstracts, existing appraisals and other documents as the Administrative Agent may reasonably request with respect to any such Mortgaged Property and (iv) to the extent required by applicable law, flood certificates covering each Mortgaged Property in form and substance reasonably acceptable to the Collateral Agent, certified to the Collateral Agent in its capacity as such and certifying whether or not such Mortgaged Property is located in a flood hazard zone by reference to the applicable FEMA map.

 

 

 

 

 

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The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, particular assets if and for so long as, in the reasonable judgment of the Collateral Agent (confirmed in writing by notice to the Borrower), the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom.  The Collateral Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with the Borrower, that perfection 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.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Collateral Documents as in effect on the Restatement Effective Date and, to the extent appropriate in the applicable jurisdiction, as agreed between the Collateral Agent and the Borrower.

Collateral Documents” means, collectively, the Security Agreement, the Mortgages, the Canadian Security Agreement, each of the mortgages, collateral assignments, Security Agreement Supplements, Guarantor Consent and Reaffirmation, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent and the Lenders pursuant to Section 6.11 or Section 6.13 and each of the other agreements, instruments or documents that creates or purports to create or affirm a Lien or Guaranty in favor of the Collateral Agent for the benefit of the Secured Parties.

Commercial Letter of Credit Facility” means, with respect to the Borrower or any of its Restricted Subsidiaries, a facility or other arrangement with any ABL Lender or any Affiliate of any such ABL Lender (or any Person that was an ABL Lender or an Affiliate of any such ABL Lender at the time the applicable agreement providing for such facility or other arrangement was entered into) providing for the issuance of commercial letters of credit, including any instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals or restatements thereof and any facility or arrangement with any ABL Lender or any Affiliate of any such ABL Lender (or any Person that was an ABL Lender or an Affiliate of any such ABL Lender at the time the applicable agreement providing for such facility or other arrangement was entered into) that replaces all or any part of such facility or arrangement, including any such facility or arrangement that increases the aggregate face value of commercial letters of credit to be issued thereunder, whether by the same or any other issuing bank which is an ABL Lender or an Affiliate of any such ABL Lender (or any Person that was an ABL Lender or an Affiliate of any such ABL Lender at the time the applicable agreement providing for such facility or other arrangement was entered into).

 “Commitment” means a Term B Commitment, a 2016 New Replacement Term B-1 Loan Commitment, a 2016 New Replacement Term B-2 Loan Commitment, a 2018 New Replacement Term B Loan Commitment, an Incremental Term Commitment of a given Incremental Series, an Extended Term Commitment of a given Extension Series, or a Refinancing Term Commitment of a given Refinancing Series, as the context may require.

Committed Loan Notice” means a notice of (a) a Borrowing with respect to a given Class of Loans, (b) a conversion of Loans of a given Class from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A attached hereto.

 

 

 

 

 

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Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 “Company Parties” means the collective reference to any Holdco (after the formation thereof), the Borrower and their Subsidiaries, and “Company Party” means any one of them.

Compensation Period” has the meaning specified in Section 2.12(c)(ii).

Compliance Certificate” means a certificate substantially in the form of Exhibit D attached hereto.

Consolidated Depreciation and Amortization Expense” means with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

(a)         consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (i) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (iii) non-cash interest payments (but excluding any non cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (iv) the interest component of Capitalized Lease Obligations, and (v) net payments, if any, made (less net payments, if any, received) pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (A) penalties and interest related to taxes, (B) any additional interest with respect to any Indebtedness due to the failure to comply with any registration rights agreement relating to such Indebtedness, (C) amortization of deferred financing fees, debt issuance costs, discounted liabilities, commissions, fees and expenses, (D) any expensing of bridge, commitment and other financing fees, (E) any prepayment premium or penalty, and (F) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility); plus

(b)         consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(c)         interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. 

Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,

(a)         any after-tax effect of extraordinary, non–recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses, Closing Date Transaction Expenses to the extent

 

 

 

 

 

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incurred on or prior to December 31, 2007, Transaction Expenses, severance costs, relocation costs, costs related to the Perfect Store Initiative, Hybrid Distribution Network Costs, pre-opening, opening, consolidation and closing costs for any facilities (including Stores), signing, retention or completion bonuses or recruiting costs, transition costs, costs incurred in connection with acquisitions after the Closing Date, restructuring costs, Specified Legal Expenses, integration and systems establishment costs, and curtailments or modifications to pension and post–retirement employee benefit plans shall be excluded,

(b)         the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period,

(c)         any net after-tax gains or losses on disposal of disposed, abandoned or discontinued operations shall be excluded,

(d)         any after–tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Borrower, shall be excluded,

(e)         the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period by such Person,

(f)          solely for the purpose of determining the amount available for Restricted Payments under clause (iii)(A) of Section 7.02(a) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of the Borrower will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Borrower or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(g)         effects of adjustments (including the effects of such adjustments pushed down to the Borrower and its Restricted Subsidiaries) in the merchandise inventory, property and equipment, intangible assets, goodwill, deferred revenue and debt line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Closing Date Transaction or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(h)         any after–tax effect of income (loss) from the early extinguishment or conversion of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

(i)          any impairment charge or asset write-off or write-down, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded,

 

 

 

 

 

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(j)          any non-cash compensation charge or expense including any such charge or expense arising from the grant of stock appreciation or similar rights, stock options, restricted stock or other equity-incentive programs shall be excluded,

(k)         any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests (including in any initial public offering of the Borrower or Holdco), refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded,

(l)          accruals and reserves that are established within twelve months after the Closing Date that are so required to be established as a result of the Transaction in accordance with GAAP shall be excluded,

(m)        any unrealized net gain or loss (after any offset) resulting in such period from currency transaction or translation gains or losses including those related to currency remeasurements of Indebtedness (including any net loss or gain resulting from (i) Swap Contracts for currency exchange risk and (ii) resulting from intercompany indebtedness) and any other foreign currency transaction or translation gains and losses, to the extent such gains or losses are non-cash items, shall be excluded,

(n)         any unrealized net gains and losses (after any offset) resulting from Swap Contracts or embedded derivatives that require similar accounting treatment and the application of Accounting Standards Codification Topic No. 815, Derivatives and Hedging shall be excluded.

In addition, to the extent not already included in the Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include the amount of proceeds received from business interruption insurance and reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any Permitted Investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder.

Notwithstanding the foregoing, for the purpose of Section 7.02 only (other than Section 7.02(a)(iii)(D)), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Borrower and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Borrower and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Borrower or any of its Restricted Subsidiaries, 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 pursuant to Section 7.02(a)(iii)(D).

Consolidated Secured Debt Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted Subsidiaries that is secured by Liens as at the last day of the Relevant Reference Period to (b) the Borrower’s EBITDA for the Relevant Reference Period. Notwithstanding anything to the contrary herein, for purposes of the calculation of the Consolidated Secured Debt Ratio used in determining the availability of Incremental Facilities or Incremental Equivalent Debt, (i) any Incremental Facilities or Incremental Equivalent Debt that are or is unsecured and any refinancing thereof shall nevertheless be deemed to be secured on a pari passu basis with the 20162018 Replacement Term B- 1  Loans and (ii) any cash proceeds of any Incremental Facility

 

 

 

 

 

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or Incremental Equivalent Debt then being incurred will not be netted for purposes of determining compliance with the Consolidated Secured Debt Ratio.

Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to the remainder of (i) the sum of, without duplication, (a) the aggregate amount of all outstanding Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes, bonds, debentures, letters of credit, bankers’ acceptances and similar instruments (and excluding, for the avoidance of doubt, (x) any undrawn letters of credit and bankers’ acceptances and reimbursement obligations in respect of commercial and trade letters of credit and (y) all obligations relating to Receivables Facilities), (b) the aggregate amount of all outstanding Disqualified Stock of the Borrower and all Preferred Stock of its Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP, and (c) any Contingent Obligations of the Borrower and its Restricted Subsidiaries in respect of the obligations described in clauses (a) and (b) above, less (ii) the aggregate amount of Unrestricted cash and Cash Equivalents included on the consolidated balance sheet of the Borrower and any Restricted Subsidiaries as of such date.  For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall 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 or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Borrower.

Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted Subsidiaries as at the last day of the Relevant Reference Period to (b) the Borrower’s EBITDA for the Relevant Reference Period.

Consolidated Working Capital” means, at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and the Restricted Subsidiaries at such date over (b) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and the Restricted Subsidiaries on such date, including deferred revenue but excluding in each case, without duplication, (i) the current portion of any Funded Debt, (ii) all Indebtedness consisting of Loans, ABL Loans and Capitalized Lease Obligations, to the extent otherwise included therein, (iii) the current portion of interest and (iv) the current portion of current and deferred income taxes.

Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation, or (ii)      to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Contract Consideration” has the meaning set forth in the definition of “Excess Cash

 

 

 

 

 

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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.

Control” has the meaning specified in the definition of “Affiliate.”

Corrective Extension Amendment” has the meaning provided in Section 2.16.

Credit Agreement Refinancing Indebtedness” means any (a) Permitted First Priority Refinancing Debt, (b) Permitted Junior Priority Refinancing Debt, (c) Permitted Unsecured Refinancing Debt or (d) other Indebtedness incurred pursuant to a Refinancing Amendment, in each case, issued, incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace, repurchase, retire or refinance, in whole or part, then existing Loans of a given Class (including any successive Credit Agreement Refinancing Indebtedness) (“Refinanced Debt”); provided that (i) such exchanging, extending, renewing, replacing, repurchasing, retiring or refinancing Indebtedness is in an original aggregate principal amount (or accreted value, if applicable) not greater than the aggregate principal amount (or accreted value, if applicable) of the Refinanced Debt except by an amount equal to unpaid accrued interest and premium (including tender premiums) and penalties thereon plus other reasonable amounts paid, and fees, expenses and original issue discount reasonably incurred, in connection with such exchanging, extending, renewing, replacing, repurchasing, retiring or refinancing Indebtedness, (ii) such Indebtedness has a later maturity and a Weighted Average Life to Maturity equal to or greater than that of the Refinanced Debt (other than due to prior scheduled amortization or prepayments of the Refinanced Debt), and (iii) unless such Credit Agreement Refinancing Indebtedness is incurred solely by means of extending or renewing then existing Indebtedness described in clause (a), (b) or (c) above without resulting in any Net Proceeds, such Refinanced Debt shall be repaid, repurchased, retired, defeased or satisfied and discharged with 100% of the Net Proceeds from any Credit Agreement Refinancing Indebtedness, and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained.

DBNY” means Deutsche Bank AG New York Branch and any successor thereto by merger, consolidation or otherwise.

DBSI” means Deutsche Bank Securities Inc. and any successor thereto by merger, consolidation or otherwise.

 “Debt Prepayment” means the prepayment by the Borrower on the Closing Date of any and all Indebtedness outstanding under the Prior Credit Agreement.

Debtor Relief Laws” means the Bankruptcy Code of the United States, the Companies’ Creditors Arrangement Act of Canada, the Bankruptcy and Insolvency Act of Canada, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

 

 

 

 

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Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum; provided that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in each case, to the fullest extent permitted by applicable Laws.

Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured, (b) has otherwise failed to pay over to the Administrative Agent 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 or subsequently cured, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

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, executed by the principal financial officer of the Borrower, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption, repurchase of or collection or payment on, such Designated Non-cash Consideration.

Designated Preferred Stock” means Preferred Stock of the Borrower or any parent company thereof (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 executed by the principal financial officer of the Borrower or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 7.02(a)(iii).

Discount Prepayment Accepting Lender” has the meaning specified in Section 2.05(a)(iii)(B)(2).

Discount Range” has the meaning specified in Section 2.05(a)(iii)(C)(1).

Discount Range Prepayment Amount” has the meaning specified in Section 2.05(a)(iii)(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(a)(iii)(C) substantially in the form of Exhibit M attached hereto.

Discount Range Prepayment Offer” means the irrevocable written offer by a Lender, substantially in the form of Exhibit N attached hereto, 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 specified in Section 2.05(a)(iii)(C)(1).

Discount Range Proration” has the meaning specified in Section 2.05(a)(iii)(C)(3).

Discounted Prepayment Determination Date” has the meaning specified in Section 2.05(a)(iii)(D)(3).

 

 

 

 

 

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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(a)(iii)(B)(1), Section 2.05(a)(iii)(C)(1) or Section 2.05(a)(iii)(D)(1), respectively, unless a shorter period is agreed to between the Borrower and the Auction Agent.

Discounted Term Loan Prepayment” has the meaning specified in Section 2.05(a)(iii)(A).

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 putable or exchangeable, or upon the happening of any event, (a) matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable), in whole or in part, or (b) provides for the scheduled payments of dividends in cash, in each case prior to the date 91 days after the earlier of the Latest Maturity Date at the time such Disqualified Stock is first issued or the date Loans are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Capital Stock shall 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.

Disposition” has the meaning set forth in the definition of “Excess Cash Flow”.

Disqualified Institutions” means any banks, financial institutions or other Persons separately identified by the Borrower to the Arrangers in writing prior to the Restatement Effective Date.

Dollar” and “$” mean lawful money of the United States.

Domestic Subsidiary” means (i) any Subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia and (ii) unless otherwise expressly provided herein, each Canadian Subsidiary that, in the sole discretion of the Borrower, elects to become (and, upon such election, becomes) a Canadian Subsidiary Guarantor.

Domestic Subsidiary Guarantors” means, collectively, each Domestic Subsidiary of the Borrower that is not a Canadian Subsidiary and that shall have entered into the Subsidiary Guaranty and complied with the requirements of clause (b) of the definition of “Collateral and Guarantee Requirement”.

EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period.

(a)         increased (without duplication) by:

(i)          provision for taxes based on income or profits or capital, including, without limitation, state, franchise and similar taxes (such as the Pennsylvania capital tax

 

 

 

 

 

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and Texas margin tax) and foreign withholding taxes of such Person paid or accrued during such period deducted (and not added back) in computing Consolidated Net Income; plus

(ii)         Fixed Charges of such Person for such period plus bank fees and costs of surety bonds in connection with financing activities, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (A), (B), (C), (D), (E) and (F) in the definition thereof, to the extent the same were deducted (and not added back) in calculating such Consolidated Net Income; plus

(iii)       Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income; plus

(iv)        any expenses or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by this Agreement (including any refinancing or amendment thereof) (in each case, whether or not successful), including (A) such fees, expenses or charges related to this Agreement and the ABL Credit Agreement and (B) any amendment or other modification of the Senior Notes, the 2020 Senior Subordinated Notes, this Agreement, the other Loan Documents, the ABL Credit Agreement and the other ABL Loan Documents, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

(v)         the amount of any restructuring charge or reserve deducted (and not added back) in such period in computing Consolidated Net Income; plus

(vi)        any other non cash charges, including (v) any write-offs or write-downs, (w) equity-based awards compensation expense, (x) losses on sales, disposals or abandonment of, or any impairment charge or asset write off related to, intangible assets, long-lived assets and investments in debt and equity securities, (y) all losses from investments recorded using the equity method, and (z) other non-cash charges, non-cash expenses or non-cash losses, in each case reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, (1) the Borrower may determine not to add back such non-cash charge in the current period and (2) to the extent the Borrower does decide to add back such non-cash charge, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(vii)       the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly Owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

(viii)     the amount of management, monitoring, consulting, advisory and other fees (including termination fees) and related indemnities and expenses paid or accrued in such period to the Investors to the extent otherwise permitted under Section 7.07 and to the extent deducted (and not added back) in such period in computing Consolidated Net Income; plus

(ix)        the amount of “run rate” net cost savings, synergies and operating expense

 

 

 

 

 

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reductions projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or with respect to which substantial steps have been taken or are expected in good faith to be taken no later than eighteen (18) months after the end of the period (calculated on a pro forma basis as though such cost savings, operating expense reductions and/or synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and/or synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable (it is understood and agreed that “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken) and (y) the aggregate amount of cost savings added pursuant to this clause (ix) shall not exceed 10.0% of EBITDA determined on a pro forma basis for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to Section 1.10); plus

(x)         the amount of loss on sale of receivables and related assets to the Receivables Subsidiary in connection with a Receivables Facility; plus

(xi)        any costs or expense incurred by the Borrower or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Borrower or net cash proceeds of an issuance of Equity Interests of the Borrower (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in Section 7.02(a)(iii); plus

(xii)       any net loss from disposed or discontinued operations; plus

(xiii)     cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing EBITDA or Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of EBITDA pursuant to clause (b) below for any previous period and not added back; and

(b)         decreased (without duplication), in each case to the extent included in arriving at such Consolidated Net Income, by: 

(i)          non–cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period and any non-cash gains with respect to cash actually received in a prior period so long as such cash did not increase EBITDA in such prior period, plus

(ii)         any net income from disposed or discontinued operations; and

(c)         increased or decreased by (without duplication), as applicable, any adjustments resulting from the application of FASB Interpretation No. 45 (Guarantees).

For purposes of calculating EBITDA for any period, the impact of changes in estimates for inventory cost capitalization and the initial adoption of an accounting policy for gift card breakage made in the fourth quarter of fiscal year 2005 shall be excluded.

 

 

 

 

 

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EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) 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 Refinancing” has the meaning specified in Section 10.23.

Effective Yield” means, as to any Loans of any Class, the effective yield on such Loans as determined by the Administrative Agent, taking into account the applicable interest rate margins, any interest rate floors or similar devices and all fees, including upfront or similar fees or original issue discount (amortized over the shorter of (x) the life of such Loans and (y) the four years following the date of incurrence thereof) payable generally to Lenders making such Loans, but excluding any arrangement, structuring, commitment or other similar fees payable in connection therewith that are not generally shared with the relevant Lenders and customary consent fees paid generally to consenting Lenders.  For purposes of calculating the Effective Yield of the 2016 Replacement Term B-1 Loans pursuant to Section 2.17(e)(ii), the original issue discount of the 2016 Replacement Term B-1 Loans shall be deemed to be 0.075%.    For purposes of calculating the Effective Yield of the 2018 Replacement Term B Loans pursuant to Section 2.17(e)(iii), the original issue discount of the 2018 Replacement Term B Loans shall be deemed to be 0.00%.

Eligible Assignee” means any Assignee permitted by and consented to in accordance with Section 10.07(b); provided that in any event, “Eligible Assignee” shall not include any natural person.

EMU” means the economic and monetary union as contemplated in the Treaty on European Union.

Environmental Laws” means any and all Federal, state, provincial, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution, the protection of the environment, natural resources, or, to the extent relating to exposure to Hazardous Materials, human health or to the release of any materials into the environment, including those related to Hazardous Materials, air emissions and discharges to waste or public systems.

Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

 

 

 

 

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Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Equity Contributions” means the contribution on the Closing Date of cash in an aggregate amount of not less than $1,630,000,000 to the MergerCos as common equity and/or preferred equity.

Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

Equity Offering” means any public or private sale of common stock or Preferred Stock of the Borrower or any of its direct or indirect parent companies (excluding Disqualified Stock), other than (a) public offerings with respect to the Borrower’s or any direct or indirect parent company’s common stock registered on Form S-8; (b) issuances to any Subsidiary of the Borrower; and (c) any such public or private sale that constitutes an Excluded Contribution.

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 is under common control with any Loan Party within the meaning of Section 414 of the Code or Section 4001 of ERISA.

ERISA Event” means, in the case of a Plan or Multiemployer Plan subject to ERISA, (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate 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; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or written notification that a Multiemployer Plan is in reorganization; (d) the filing of a written notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings in writing by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) 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; (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate or (g) the failure of any Pension Plan to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA.

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” means the single currency of participating member states of the EMU.

Eurocurrency” when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Eurocurrency Rate.

Eurocurrency Rate” means, for any Interest Period with respect to any Eurocurrency Rate Loan, the rate per annum determined by the Administrative Agent, at approximately 11:00 a.m.

 

 

 

 

 

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(London time) on the date which is two Business Days prior to the beginning of such Interest Period by reference to the ICE Benchmark Administration Interest Settlement Rates for deposits in Dollars (as set forth by any service selected by the Administrative Agent which has been nominated by the ICE Benchmark Administration as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provision of this definition, the “Eurocurrency Rate” shall be the interest rate per annum, determined by the Administrative Agent to be a rate at which the Administrative Agent could borrow funds in the London interbank market in London, England at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of such Interest Period, were it to do so by asking for and then accepting offers in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loans for which the Eurocurrency Rate is then being determined and with maturities comparable to such Interest Period; provided,  further, that, (i) solely with respect to the 2016 Replacement Term B-1 Loans and the 2018 Replacement Term B Loans, the Eurocurrency Rate shall be deemed to not be less than 1.00% per annum and (ii) in no event shall the Eurocurrency Rate be less than 0.00%.

Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the Eurocurrency Rate.

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:

(a)         the sum, without duplication, of:

(i)          Consolidated Net Income for such period,

(ii)         an amount equal to the amount of all non-cash charges incurred during such period, to the extent deducted in arriving at such Consolidated Net Income, but excluding any such non-cash charges and expenses representing an accrual or reserve for potential items in any future period and excluding amortization of a prepaid cash item that was paid in a prior period,

(iii)       decreases in Consolidated Working Capital and long-term account receivables for such period (other than any such decreases arising from Acquisitions by the Borrower and the Restricted Subsidiaries completed during such period), and

(iv)        an amount equal to the aggregate net non-cash loss on the sale, lease, transfer or other disposition (each, a “Disposition”) of assets by the Borrower and its Restricted Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income; over

(b)         the sum, without duplication, of:

(i)          an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income and cash losses, charges and expenses added back to Consolidated Net Income pursuant to clauses (a) through (n) of the definition thereof,

(ii)         without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Capital Expenditures made in cash during such period, except to the extent that such Capital Expenditures were financed with the proceeds of Indebtedness of the Borrower or the Restricted Subsidiaries,

 

 

 

 

 

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(iii)       the aggregate amount of all principal payments of Indebtedness of the Borrower and the Restricted Subsidiaries (including (A) the principal component of payments in respect of Capitalized Lease Obligations, (B) the amount of any mandatory prepayment of Loans pursuant to Section 2.05(c) with the proceeds of an Asset Sale, to the extent such Asset Sale resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase and (C) the amount of all voluntary prepayments of Loans made pursuant to Section 2.05(a)(iii), in an amount equal to the discounted amount actually paid in cash in respect of the principal amount of such Loans, but excluding all other prepayments of Loans) made during such period (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), except to the extent financed with the proceeds of other Indebtedness of the Borrower or the Restricted Subsidiaries,

(iv)        an amount equal to the aggregate net non-cash gain on the Disposition of assets by the Borrower and the Restricted Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income,

(v)         increases in Consolidated Working Capital and long-term account receivables for such period (other than any such increases arising from Acquisitions by the Borrower and the Restricted Subsidiaries during such period),

(vi)        cash payments by the Borrower and the Restricted Subsidiaries during such period in respect of long-term liabilities of the Borrower and the Restricted Subsidiaries other than Indebtedness,

(vii)       the amount of Investments and Acquisitions made during such period pursuant to clauses (c), (e), (h) and (m) of the definition of Permitted Investments to the extent such Investments and Acquisitions were financed with internally generated cash flow of the Borrower and the Restricted Subsidiaries,

(viii)     the amount of Restricted Payments paid during such period pursuant to Sections 7.02(a), 7.02(b)(iv), (x), (xi), (xiii), (xv), (xix) and (xx) to the extent such Restricted Payments were financed with internally generated cash flow of the Borrower and the Restricted Subsidiaries; provided, however, that in the case of Restricted Payments made pursuant to Section 7.02(a), the deduction pursuant to this clause (viii) shall not exceed an amount equal to Consolidated Net Income for such period,

(ix)        the aggregate amount of expenditures actually made by the Borrower and the Restricted Subsidiaries in cash during such period (including expenditures for the payment of financing fees), to the extent that such expenditures were not expensed during such period,

(x)         the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Borrower and the Restricted Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness,

(xi)        without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration (to the extent to be funded by internally generated cash) required to be paid in cash by the Borrower or any of the Restricted Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or

 

 

 

 

 

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during such period relating to Acquisitions or Capital Expenditures to be consummated or made during the period of four consecutive fiscal quarters of the Borrower following the end of such period, provided that to the extent the aggregate amount of internally generated cash actually utilized to finance such Acquisitions or Capital Expenditures during such period of four consecutive fiscal quarters is less than the Contract Consideration, 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,

(xii)       the amount of cash taxes paid and, without duplication, cash distributions for payment of taxes, in such period, to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period, and

(xiii)     cash expenditures made in respect of Swap Contracts to the extent not reflected in the computation of Consolidated Net Income for such period.

Excess Cash Flow Period” shall mean each fiscal year of the Borrower, commencing with the fiscal year of the Borrower ending on January 27, 2014.

Excess Proceeds” has the meaning set forth in Section 2.05(c)(ii).

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Borrower from (a) contributions to its common equity capital, and (b) the sale (other than to a Subsidiary of the Borrower or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Borrower) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Borrower, in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by the principal financial officer of the Borrower on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in Section 7.02(a)(iii).

Excluded Subsidiary” means (a) any Subsidiary that is not a Wholly-Owned Subsidiary, (b) any Receivables Subsidiary, (c) each Subsidiary listed on Schedule 1.01E hereto, (d) any Subsidiary that is prohibited by applicable Law or Contractual Obligation existing on the  Restatement Effective Date (or, in the case of any Subsidiary acquired after the  Restatement Effective Date, any Contractual Obligation in existence at the time of the acquisition of such Subsidiary but not entered into in contemplation thereof) from guaranteeing the Obligations, (e) any Domestic Subsidiary that is (i) a Subsidiary of a Foreign Subsidiary that is a CFC or (ii) a Foreign Subsidiary Holding Company, (f) any Restricted Subsidiary acquired pursuant to an Acquisition permitted hereunder financed with Secured Indebtedness incurred pursuant to Section 7.03(b)(xix) and each Restricted Subsidiary thereof that guarantees such Indebtedness; provided that each such Restricted Subsidiary shall cease to be an Excluded Subsidiary under this clause (f) if such Secured Indebtedness is repaid or becomes unsecured or if such Restricted Subsidiary ceases to guarantee such Secured Indebtedness, as applicable, (g) any Immaterial Subsidiary and (h) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Borrower), the cost or other consequences (including any adverse tax consequences) of providing a Guaranty shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof or obligations thereunder)

 

 

 

 

 

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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) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. 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 Guaranty, obligations or security interest is or becomes illegal.

 “Executive Order” means Executive Order No. 13224 of September 23, 2001, entitled Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).

Existing Credit Agreement” has the meaning specified in the preliminary statements to this Agreement.

Existing Term Loan Tranche” has the meaning provided in Section 2.16.

 

Extended Term Commitments” means one or more commitments hereunder to convert Loans under an Existing Term Loan Tranche to Extended Term Loans of a given Extension Series pursuant to an Extension Amendment.

Extended Term Loans” has the meaning provided in Section 2.16.

Extending Term Lender” has the meaning provided in Section 2.16.

 

Extension” means any establishment of Extended Term Commitments and Extended Term Loans pursuant to Section 2.16 and the applicable Extension Amendment.

 

Extension Amendment” has the meaning provided in Section 2.16.

Extension Election” has the meaning provided in Section 2.16.

 

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 of Loans be submitted for Extension.

 

Extension Request” has the meaning provided in Section 2.16.

 

Extension Series” has the meaning provided in Section 2.16.

 

Facility” or “Facilities” means the Loans made pursuant to Section 2.01, a given Class of Incremental Term Loans, a given Extension Series of Extended Term Loans, or a given Refinancing Series of Refinancing Term Loans, as the context may require.

 

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; provided that if the fair market value is equal to or exceeds $200,000,000, such determination shall be made by the Board of Directors of the Borrower, in which case the determination of the Board of Directors shall be deemed conclusive for purposes of this Agreement.

 

 

 

 

 

 

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FATCA means sections 1471, 1472, 1473 and 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations promulgated thereunder and published guidance with respect thereto and any agreements entered into pursuant to Section 1471(b)(1) of the Code or otherwise pursuant to any of the foregoing.

 

Federal Funds Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

First Amendment” means that certain First Amendment to Amended and Restated Credit Agreement, dated as of June 10, 2014, by and among the Borrower, the Guarantors party thereto, the various Lenders party thereto and the Administrative Agent.

First Amendment Effective Date” has the meaning provided in the First Amendment.

Fixed Charge Coverage Ratio” means, with respect to any Person for any Relevant Reference Period, the ratio of EBITDA of such Person for such Relevant Reference Period to the Fixed Charges of such Person for such Relevant Reference Period. 

Fixed Charge Coverage Ratio Incurrence Test” means, at a given date of determination, that the Fixed Charge Coverage Ratio for the Relevant Reference Period would have been at least 2.00 to 1.00, determined on a pro forma basis after giving effect to the incurrence of $1.00 of additional Indebtedness or the issuance of Disqualified Stock or Preferred Stock with a liquidation preference of $1.00 (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such Relevant Reference Period.

Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of (a) Consolidated Interest Expense of such Person for such period; (b) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock during such period; and (c) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Lender” has the meaning specified in Section 10.15(a).

Foreign Subsidiary” means any direct or indirect Restricted Subsidiary of the Borrower which (a) is not a Domestic Subsidiary or (b) is set forth on Schedule 1.01F.

Foreign Subsidiary Holding Company” means any Restricted Subsidiary substantially all of whose assets consist of (a) Equity Interests or (b) Equity Interests and Indebtedness, in either case, of one or more Foreign Subsidiaries that are CFCs (or one or more Domestic Subsidiaries that are Foreign Subsidiary Holding Companies).

 “FRB” means the Board of Governors of the Federal Reserve System of the United States or any successor thereto.

 

 

 

 

 

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Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

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 which are in effect (a) for purposes of Sections 5.05(a)(i), 6.01 and 6.09 only, for the accounting period in respect of which reference to GAAP is being made, and (b) for all other purposes, on the Closing Date.

Governmental Authority” means any nation or government, any state, provincial, municipal or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Granting Lender” has the meaning specified in Section 10.07(h).

guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), 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.

Guarantor Consent and Reaffirmation”  means, collectively, (a) the Guarantor Consent and Reaffirmation executed by each Subsidiary Guarantor, substantially in the form of Exhibit R attached hereto and (b) the Canadian Guarantor Consent and Reaffirmation executed by the Canadian Subsidiary Guarantors, substantially in the form of Exhibit S attached hereto.

Guarantors” means the Borrower, each Subsidiary Guarantor and, on and after the execution and delivery of the Holdco Guaranty, Holdco.

Guaranty” means, collectively, the Borrower Guaranty, the Subsidiary Guaranty, the Canadian Guarantee and, on and after the execution and delivery thereof, the Holdco Guaranty.

Guaranty Supplement” has the meaning provided in the respective Guaranty.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

Hedge Bank” means any Person that is a Lender or an Affiliate of a Lender at the time it enters into a Secured Hedge Agreement, in its capacity as a party thereto, and such Person’s successors and assigns.

Hedging Obligations” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement,

 

 

 

 

 

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commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, commodity price or currency risks either generally or under specific contingencies.

Highfields” means Highfields Capital I LP, Highfields Capital II LP and Highfields Capital III LP and each Affiliate thereof (excluding portfolio companies of any of the foregoing).

Holdco” means a holding company to be formed as the direct parent company of the Borrower, the primary purpose of which is to own the Capital Stock of the Borrower.

Holdco Guaranty” means  the guaranty to be made (or, after execution and delivery, made) by Holdco in favor of the Administrative Agent on behalf of the Secured Parties substantially in the form of Exhibit F-1 attached to the Existing Credit Agreement (with appropriate modifications to reference Holdco) and otherwise in a form and substance reasonably satisfactory to the Administrative Agent.

Hybrid Distribution Network Costs” shall mean costs associated with the implementation of enhancements to the Borrower’s and its Restricted Subsidiaries' distribution network intended to increase the Borrower's and its Restricted Subsidiaries' basic merchandise inventories that are shipped through distribution centers.

Identified Participating Lenders” has the meaning specified in Section 2.05(a)(iii)(C)(3).

Immaterial Subsidiary” means a Subsidiary of the Borrower for which (a) the assets of such Subsidiary constitute less than or equal to 1% of Total Assets and collectively with all Immaterial Subsidiaries, less than or equal to 5% of Total Assets, and (b) the revenues of such Subsidiary account for less than or equal to 1% of Total Revenues and collectively with all Immaterial Subsidiaries, less than or equal to 5% of Total Revenues.

 “Increased Loan” has the meaning specified in Section 10.23.

incur” has the meaning specified in Section 7.03.

Incremental 2014 Term Loan” has the meaning provided in the First Amendment.

Incremental 2014 Term Commitment” has the meaning provided in the First Amendment.

Incremental Amendment” has the meaning specified in Section 2.17(f).

Incremental Equivalent Debt” has the meaning specified in Section 7.03(b)(xxii).

Incremental Facility” means any Facility consisting of a given Class of Incremental Term Loans and/or Incremental Term Loan Commitments.

Incremental Facility Closing Date” has the meaning specified in Section 2.17(d).

Incremental Loan Request” has the meaning specified in Section 2.17(a).

Incremental Series” means all Incremental Term Loans and Incremental Term Commitments that are established pursuant to the same Incremental Amendment (or any subsequent Incremental Amendment to the extent that such Incremental Amendment expressly provides that the

 

 

 

 

 

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Incremental Term Loans or Incremental Commitments provided for therein are intended to be a part of any previously established “Incremental Series”) and that provide for the same interest margins, “floor” and amortization schedule.

Incremental Term Commitments” has the meaning specified in Section 2.17(a).

Incremental Term Lenders” has the meaning specified in Section 2.17(c).

Incremental Term Loan” has the meaning specified in Section 2.17(b).

Indebtedness” means, with respect to any Person at a particular time, without duplication:

(a)         any indebtedness (including principal and premium) of such Person, whether or not contingent:

(i)          in respect of borrowed money;

(ii)         evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(iii)       representing the balance deferred and unpaid of the purchase price of any property or services (including Capitalized Lease Obligations), except (A) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (B) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and is not paid after becoming due and payable; or

(iv)        representing any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than 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;

(b)         to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (a) of a third Person (whether or not such items would appear upon the balance sheet of the such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business;

(c)         to the extent not otherwise included, the obligations of the type referred to in clause (a) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person and whether or not such obligations would appear upon the balance sheet of such Person; provided that the amount of such Indebtedness will be the lesser of the fair market value of such asset at the date of determination and the amount of Indebtedness so secured; and

(d)         all obligations of such Person in respect of Disqualified Capital Stock;

 

 

 

 

 

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provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (x) Contingent Obligations incurred in the ordinary course of business, (y) obligations under or in respect of Receivables Facilities or (z) obligations under or in respect of commercial letters of credit.

Indemnified Liabilities” has the meaning set forth in Section 10.05.

Indemnitees” has the meaning set forth in Section 10.05.

Indemnified Taxes” means all Taxes and all Other Taxes.

Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Borrower, qualified to perform the task for which it has been engaged.

Information” has the meaning specified in Section 10.08.

Initial Second Amendment Effective Date” has the meaning specified in the Second Amendment.

Intercompany Note” means the Intercompany Note, substantially in the form attached as Exhibit J attached to the Existing Credit Agreement.

Intercreditor Agreement” means the Intercreditor Agreement executed by the Collateral Agent, the ABL Collateral Agent and the Loan Parties, substantially in the form of Exhibit H attached to the Existing Credit Agreement. 

Interest Payment Date” means, (a) 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 Facility under which such Loan was made; provided that if any Interest Period for a Eurocurrency 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 (b) as to any Base Rate Loan of any Class, the last Business Day of each January, April, July and October and the applicable Maturity Date of the Facility under which such Loan was made.

Interest Period” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter, or to the extent agreed to by each Lender of such Eurocurrency Rate Loan, nine or twelve months thereafter, or to the extent agreed to by the Administrative Agent, less than one month thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:

(a)         any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b)         any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)         no Interest Period shall extend beyond the applicable Maturity Date for the Class

 

 

 

 

 

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of Loans of which such Eurocurrency Rate Loan is a part.

Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB– (or the equivalent) by S&P, or, in either case, an equivalent rating by any other Rating Agency.

Investment Grade Securities” means (a) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents), (b) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Borrower and its Subsidiaries, (c) investments in any fund that invests exclusively in investments of the type described in clauses (a) and (b) which fund may also hold immaterial amounts of cash pending investment or distribution, and (d) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

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 constituting Cash Equivalents, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Borrower in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property.  For purposes of the definition of “Unrestricted Subsidiary” and Section 7.02, (a) “Investments” shall include the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the Borrower’s “Investment” in such Subsidiary at the time of such redesignation less (ii) the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and (b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Borrower.

Investors” means Bain Capital, LLC and The Blackstone Group LP, each of their respective Affiliates and any investment funds advised or managed by any of the foregoing, but not including, however, any portfolio companies of any of the foregoing; provided, that, for purposes of the definitions of “EBITDA” and “Sponsor Management Agreement” only, the term “Investors” shall include Highfields.

IP Rights” has the meaning set forth in Section 5.15.

IRS” means the United States Internal Revenue Service.

ITA” means the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended from time to time.

Judgment Currency” has the meaning provided in Section 10.21.

Junior Financing Documentation” shall mean the 2020 Senior Subordinated Notes, the

 

 

 

 

 

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2020 Senior Subordinated Notes Indenture and the documentation governing any other Subordinated Indebtedness of the Borrower or any of its Restricted Subsidiaries.

Latest Maturity Date” means, at any date of determination, the latest Maturity Date applicable to any Loan or Commitment hereunder at such time, including the latest maturity date of any Incremental Term Loan, any Incremental Term Commitment, any Refinancing Term Loan, any Refinancing Term Commitment, any Extended Term Loan or any Extended Term Commitment, in each case as extended in accordance with this Agreement from time to time.

Laws” means, collectively, all international, foreign, Federal, state, provincial, municipal and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, 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, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

LCT Test Date” has the meaning specified in Section 1.10(g).

Lender” or “Term Lender” means each lender from time to time party hereto, including (i) each lender that has a Term B Commitment, 2016 New Replacement Term B-1 Loan Commitment, 2016 New Replacement Term B-2 Loan Commitment, 2018 New Replacement Term B Commitment, Incremental Term Commitment pursuant to a given Incremental Series, Refinancing Term Commitment pursuant to a given Refinancing Series or Extended Term Commitment pursuant to a given Extension Series; (ii) each lender that has an outstanding Loan at such time; (iii) each 2016 Replacement Term B-1 Loan Lender and each 2016 Replacement Term B-2 Loan Lender; (iv) each 2018 Replacement Term B Loan Lender, (v) each Replacement Lender and its respective successors and assigns as permitted hereunder and (vvi) each Person that shall become a party hereto pursuant to an Incremental Amendment or a Refinancing Amendment and its respective successors and assigns as permitted hereunder, each of which is referred to herein as a “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.

Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority 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 registration statement under the PPSA (or equivalent statutes) of any jurisdiction, including the Civil Code; provided that in no event shall an operating lease be deemed to constitute a Lien.

Limited Condition Transaction” shall mean (i) any permitted Acquisition or Investment whose consummation is not conditioned on the availability of, or on obtaining, third party financing and (ii) any redemption, repurchase, defeasance, satisfaction and discharge or repayment, in each case, of Indebtedness requiring irrevocable notice in advance of such redemption, repurchase, defeasance, satisfaction and discharge or repayment.

 “Loan” means the term loans made by the Lenders on the Restatement Effective Date or, the Initial Second Amendment Effective Date or the Third Amendment Effective Date to the Borrower

 

 

 

 

 

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pursuant to Section 2.01, any Extended Term Loan, any Incremental Term Loan, any Refinancing Term Loan or any Replacement Term Loan (including the 2016 Replacement Term B-1 Loans and, prior to the 2016 Replacement Term Loan Conversion, the 2016 Replacement Term B-2 Loans and the 2018 Replacement Term Loans), as the context may require.

Loan Documents” means, collectively, (a) this Agreement, (b) the First Amendment, (c) the Second Amendment, (d) the NotesThird Amendment, (e) the GuarantyNotes, (f) the Guaranty, (g) any Refinancing Amendment, Incremental Amendment or Extension Amendment, (gh) the Intercreditor Agreement, (hi) the Collateral Documents, (i) on and after the execution and delivery thereof, the Additional First Lien Intercreditor Agreement, and (j) on and after the execution and delivery thereof, the Additional First Lien Intercreditor Agreement, and (k) on and after the execution and delivery thereof, the Additional Junior Lien Intercreditor Agreement.

Loan Parties” means, collectively, the Borrower and each Guarantor.

Master Agreement” has the meaning specified in the definition of “Swap Contract.”

Material Adverse Effect” means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect on the validity or enforceability of this Agreement or any other Loan Document, taken as a whole, or (c) a material adverse effect on the rights and remedies of the Lenders under any Loan Document.

Maturity Date” means (a) with respect to the 20162018 Replacement Term B- 1  Loans, January 28, 2023, (b) with respect to any Class of Extended Term Loans, the final maturity date as specified in the applicable Extension Request accepted by the respective Lender or Lenders, (c) with respect to any Class of Refinancing Term Loans, the final maturity date as specified in the applicable Refinancing Amendment and (d) with respect to any Class of Incremental Term Loans, the final maturity date as specified in the applicable Incremental Amendment; provided that, in each case, 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 10.10.

Merger Consideration” means the total funds required to consummate the Recapitalization.

MergerCos” has the meaning set forth in the preliminary statements to this Agreement.

Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs, charges and mortgages of real property or interests therein made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties in form and substance reasonably satisfactory to the Collateral Agent (taking account of relevant local Law matters), and any other mortgages executed and delivered pursuant to Section 6.11.

Mortgage Policies” has the meaning specified in Section 6.13(b)(ii).

Mortgaged Properties” has the meaning specified in paragraph (g) of the definition of “Collateral and Guarantee Requirement”.

 

 

 

 

 

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Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

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:

(a)         with respect to any Asset Sale or Casualty Event, the aggregate cash proceeds received by the Borrower or any of its Restricted Subsidiaries in respect of such Asset Sale or Casualty Event, including any cash received upon the sale or other disposition of any Designated Non-cash Consideration received in respect of such Asset Sale or Casualty Event, net of the direct costs relating to such Asset Sale or Casualty Event and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness that is secured by the asset subject to such Asset Sale or Casualty Event and that is required to be repaid (and is timely repaid) in connection with such Asset Sale or Casualty Event (other than as required by Section 2.05(c)) and any deduction of appropriate amounts to be provided by the Borrower or any of its Restricted Subsidiaries 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 of its Restricted Subsidiaries 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, however, that, upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described above, or if such liabilities have not been satisfied in cash and such reserve is not reversed within three hundred and sixty five (365) days after such Asset Sale or Casualty Event, “Net Proceeds” shall include the amount of such reserve; and

(b)         with respect to the incurrence or issuance of any Indebtedness or Capital Stock by the Borrower or any Restricted Subsidiary, the excess, if any, of (i) the sum of the cash received in connection with such incurrence or issuance over (ii) the investment banking fees, underwriting discounts, commissions, costs and other out-of-pocket expenses and other customary expenses, incurred by the Borrower or such Restricted Subsidiary in connection with such incurrence or issuance.

Non-Consenting Lenders” has the meaning specified in Section 3.07(c).

Note” means a promissory note of the Borrower payable to any Lender or its registered assigns, in substantially the form of Exhibit C attached hereto (with such modifications thereto as may be necessary to reflect differing Classes of Loans), evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from the Loans of a given Class made by such Lender.

NPL” means the National Priorities List under CERCLA.

Obligations” means all (x) advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party and its Subsidiaries arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent,

 

 

 

 

 

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due or to become due, now existing or hereafter arising, and (y) obligations of any Loan Party and its Subsidiaries arising under any Secured Hedge Agreement, in each of clauses (x) and (y) including interest and fees that accrue after the commencement by or against any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided, however, that the Obligations shall not include any Excluded Swap Obligations.  Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of their Subsidiaries to the extent they have obligations under the Loan Documents) include (a) the obligation (including guarantee obligations) to pay principal, interest, reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities and other amounts payable by any Loan Party or its Subsidiaries under any Loan Document and (b) the obligation of any Loan Party or any of its Subsidiaries to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party or such Subsidiary.

Offered Amount” has the meaning specified in Section 2.05(a)(iii)(D)(1).

Offered Discount” has the meaning specified in Section 2.05(a)(iii)(D)(1).

Officer” means the Chairman of the Board, the Chief Executive Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Borrower.

Officer’s Certificate” means a certificate signed on behalf of the Borrower by an Officer of the Borrower, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Borrower, that meets any applicable requirements set forth in this Agreement.

Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Administrative Agent.  The counsel may be an employee of or counsel to the Borrower or the Administrative Agent.

Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; (c) with respect to any unlimited liability company, the memorandum of association; and (d) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Original Eurocurrency Borrowing” has the meaning specified in Section 2.08(e).

Other Applicable Indebtedness” has the meaning specified in Section 2.05(c)(i)(A)(I).

Other Taxes” has the meaning specified in Section 3.01(b).

Outstanding Amount” means with respect to the Loans of any Class, on any date, the outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans of such Class occurring on such date.

 

 

 

 

 

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Outstanding Term Loans” has the meaning set forth in the preliminary statements to this Agreement.

Participant” has the meaning specified in Section 10.07(e).

Participating Lender” has the meaning specified in Section 2.05(a)(iii)(C)(2).

PBA” means the Pension Benefits Act (Ontario) or similar legislation of any other Canadian federal or provincial jurisdiction, and the regulations promulgated thereunder, as amended from time to time.

PBGC” means the Pension Benefit Guaranty Corporation or any Governmental Authority of another jurisdiction exercising similar functions in respect of any Pension Plan of a Loan Party (including the Pension Benefit Guarantee Fund of Ontario).

Pension Event” means (a) the whole or partial withdrawal of a Loan Party or any Subsidiary from a Pension Plan during a Pension Plan year; or (b) the filing of a notice of interest to terminate in whole or in part a Pension Plan or the treatment of a Pension Plan amendment as a termination or partial termination; or (c) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer a Pension Plan; or (d) any other event or condition which might constitute grounds for the termination of, winding up or partial termination or winding up or the appointment of trustee to administer, any Pension Plan.

Pension Plan” means (a) 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 Section 412 of the Code or Section 302 or Title IV of ERISA, or (b) Pension Plan covered by any other Laws (including the PBA and the ITA) and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate 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 during the immediately preceding five (5) plan years.

Perfect Store Initiative” shall mean the initiative related to the Borrower's and its Restricted Subsidiaries' store standardization and remodeling program, pursuant to which retail store layouts will be modified into a configuration intended to enhance the customer in-store experience.

Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and Cash Equivalents between the Borrower or any of its Restricted Subsidiaries and another Person; provided that any Net Proceeds received must be applied in accordance with Section 2.05(c).

Permitted Debt” has the meaning specified in Section 7.03(b).

Permitted First Priority Refinancing Debt” means any secured Indebtedness incurred by the Borrower in the form of one or more series of senior secured notes or loans; provided that (i) such Indebtedness is secured by (A) the TL Priority Collateral on a pari passu first-lien basis (but without regard to the control of remedies) with the Secured Obligations and (B) the ABL Priority Collateral on a pari passu second-lien basis (but without regard to the control of remedies) with the Secured Obligations, and is not secured by any property or assets of the Borrower or any Subsidiary other than the Collateral, (ii) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness in respect of any Class of Loans (including portions of any Class of Loans), (iii) such Indebtedness (and the Liens securing the same) are permitted by the terms of the ABL Credit Agreement and the Intercreditor Agreement (in each case, to the

 

 

 

 

 

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extent the ABL Credit Agreement and the Intercreditor Agreement are then in effect), (iv) such Indebtedness does not mature or have scheduled amortization or payments of principal (other than customary offers to purchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (v) the security agreements relating to such Indebtedness are substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to the Administrative Agent), (vi) such Indebtedness is not guaranteed by any Subsidiaries other than the Subsidiary Guarantors, and (vii) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the Additional First Lien Intercreditor Agreement, provided that if such Indebtedness is the initial Permitted First Priority Refinancing Debt incurred by the Borrower, then the Borrower, the Subsidiary Guarantors, the Administrative Agent, the Collateral Agent and the Senior Representative for such Indebtedness shall have executed and delivered the Additional First Lien Intercreditor Agreement.  Permitted First Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Permitted Foreign Restructuring” means the transfer or other Disposition of the Capital Stock of certain Foreign Subsidiaries (as elected by the Borrower) by the Borrower or its Subsidiaries to a Foreign Subsidiary of the Borrower and, in the case of Michaels of Canada, ULC, the re-designation by the Borrower of Michaels of Canada, ULC as a Foreign Subsidiary (which may occur only if no Event of Default then exists or would arise therefrom).  For the avoidance of doubt, upon consummation of the Permitted Foreign Restructuring, Michaels of Canada, ULC shall be an Excluded Subsidiary hereunder and shall no longer be required to be a Loan Party hereunder and shall be released from the Canadian Guarantee and the Canadian Security Agreement shall be terminated.

Permitted Holder” means any of the Investors and members of management of the Borrower (or its direct parent) who are holders of Equity Interests of the Borrower (or any of its direct or indirect parent companies) on the Restatement Effective Date.

Permitted Investments” means:

(a)         any Investment in the Borrower or any of its Restricted Subsidiaries;

(b)         any Investment in cash and Cash Equivalents or Investment Grade Securities;

(c)         any Investment by the Borrower or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:

(i)          such Person becomes a Restricted Subsidiary; or

(ii)         such Person, in one transaction or a series of related transactions, is merged, amalgamated or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Borrower or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

(d)         any Investment in securities or other assets not constituting cash, Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to Section 7.01 or any other disposition of assets not constituting an Asset Sale;

(e)         any Investment existing on the Restatement Effective Date and any extension,

 

 

 

 

 

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modification, replacement or renewal of any such Investment, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Restatement Effective Date (or as subsequently amended or otherwise modified in a manner not disadvantageous to the Lenders in any material respect);

(f)          any Investment acquired by the Borrower or any of its Restricted Subsidiaries (i) in exchange for any other Investment or accounts receivable held by the Borrower or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (ii) as a result of a foreclosure by the Borrower or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(g)         Hedging Obligations permitted under Section 7.03(b)(x);

(h)         any Investment in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (h) that are at that time outstanding, not to exceed the greater of (x) $125,000,000 and (y) 6.50 % of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(i)          Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Borrower or any of its direct or indirect parent companies; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under Section 7.02(a)(iii);

(j)          guarantees of Indebtedness of the Borrower or any Restricted Subsidiary permitted under Section 7.03, performance guarantees and Contingent Obligations in the ordinary course of business and the creation of liens on the assets of the Borrower or any of its Restricted Subsidiaries in compliance with the covenant described in Section 7.04;

(k)         any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 7.07(b) (except transactions described in clauses (ii), (v) and (ix) thereof);

(l)          Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment;

(m)        additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (m) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for cash or marketable securities), not to exceed the greater of (x) $150,000,000 and (y) 7.90% of Total Assets (in each case, with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(n)         Investments relating to a Receivables Subsidiary that, in the good faith determination of the Borrower are necessary or advisable to effect any Receivables Facility;

(o)         advances to, or guarantees of Indebtedness of, employees not in excess of

 

 

 

 

 

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$15,000,000 outstanding at any one time, in the aggregate;

(p)         loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practices or to fund such Person’s purchase of Equity Interests of the Borrower or any direct or indirect parent company thereof; and

(q)         Investments consisting of licensing of intellectual property pursuant to joint marketing arrangements with other Persons.

Permitted Junior Priority Refinancing Debt” means any secured Indebtedness incurred by the Borrower in the form of one or more series of secured notes or loans; provided that (i) such Indebtedness is secured by Liens on the Collateral that are junior to the Liens securing the Secured Obligations and is not secured by any property or assets of the Borrower or any Subsidiary other than the Collateral, (ii) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness in respect of any Class of Loans (including portions of any Class of Loans), (iii) such Indebtedness (and the Liens securing the same) are permitted by the terms of the ABL Credit Agreement, the Intercreditor Agreement and the Additional First Lien Intercreditor Agreement (in each case, to the extent the ABL Credit Agreement, the Intercreditor Agreement and the Additional First Lien Intercreditor Agreement are then in effect), (iv) such Indebtedness does not mature or have scheduled amortization or payments of principal (other than customary offers to purchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (v) the security agreements relating to such Indebtedness are substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to the Administrative Agent), (vi) such Indebtedness is not guaranteed by any Subsidiaries other than the Subsidiary Guarantors, and (vii) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the Additional Junior Lien Intercreditor Agreement, provided that if such Indebtedness is the initial Permitted Junior Priority Refinancing Debt incurred by the Borrower, then the Borrower, the Subsidiary Guarantors, the Administrative Agent, the Collateral Agent and the Senior Representative for such Indebtedness shall have executed and delivered the Additional Junior Lien Intercreditor Agreement.  Permitted Junior Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Permitted Liens” means, with respect to any Person:

(a)         pledges, deposits or security by such Person under workmen’s compensation laws, unemployment insurance, employers’ health tax and other social security or statutory laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent or deposits, in each case incurred in the ordinary course of business;

(b)         Liens imposed by law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

 

 

 

 

 

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(c)         Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or that remain payable without penalty or which are being contested in good faith by appropriate actions diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP, or for property taxes on property that the Borrower or one of its Subsidiaries has determined to abandon if the sole recourse for such tax, assessment, charge, levy or claim is to such property;

(d)         Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers’ acceptances issued, and completion guarantees provided for, in each case pursuant to the request of and for the account of such Person in the ordinary course of its business or consistent with past practice prior to the Restatement Effective Date;

(e)         minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights–of–way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, gas and oil pipelines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially impair their use in the operation of the business of such Person;

(f)          Liens securing Indebtedness permitted to be incurred pursuant to Section 7.03(b)(iv), (xviii) or (xix); provided that Liens securing Indebtedness permitted to be incurred pursuant to Section 7.03(b)(xviii) extend only to the assets of Foreign Subsidiaries and Liens securing Indebtedness permitted to be incurred pursuant to Section 7.03(b)(xix) are solely on acquired property or the assets of the acquired entity, as the case may be;

(g)         Liens existing on the Restatement Effective Date and set forth in Schedule 7.04;

(h)         Liens existing on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided,  further,  however, that such Liens may not extend to any other property owned by the Borrower or any of its Restricted Subsidiaries;

(i)          Liens existing on property at the time the Borrower or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Borrower or any of its Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, merger, amalgamation or consolidation; provided,  further,  however, that the Liens may not extend to any other property owned by the Borrower or any of its Restricted Subsidiaries;

(j)          Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Borrower or another Restricted Subsidiary permitted to be incurred in accordance with Section 7.03;

(k)         Liens securing Hedging Obligations so long as the related Indebtedness is permitted to be incurred under this Agreement;

(l)          Liens on specific items of inventory or other goods and proceeds of any Person

 

 

 

 

 

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securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(m)        leases, subleases, licenses or sublicenses granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Borrower or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(n)         Liens arising from Uniform Commercial Code (or equivalent statutes) financing statements or PPSA registration statements or recordation filings regarding operating leases or consignments entered into by the Borrower and its Restricted Subsidiaries in the ordinary course of business;

(o)         Liens in favor of the Borrower or any Subsidiary Guarantor;

(p)         Liens on equipment of the Borrower or any of its Restricted Subsidiaries granted in the ordinary course of business to the Borrower’s clients at which such equipment is located;

(q)         Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(r)          Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (f), (g), (h) and (i); provided, however, that (i) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (ii) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (f), (g), (h) and (i) at the time the original Lien became a Permitted Lien under this Agreement, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(s)         deposits made or other security provided to secure liabilities to insurance carriers under insurance or self-insurance arrangements in the ordinary course of business;

(t)          other Liens securing obligations not exceeding $50,000,000 at any one time outstanding;

(u)         Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h), so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(v)         Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(w)        Liens (i) of a collection bank arising under Section 4–210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right

 

 

 

 

 

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of set-off) and which are within the general parameters customary in the banking industry;

(x)         Liens deemed to exist in connection with Investments in repurchase agreements or other Cash Equivalents permitted under Section 7.03; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement or other Cash Equivalent;

(y)         Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(z)         Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Borrower or any of its Restricted Subsidiaries in the ordinary course of business;

(aa)       (i) Liens securing the Obligations, (ii) Liens securing obligations in respect of Bank Products and (iii) Liens securing obligations in respect of Cash Management Services;

(bb)       Liens solely on any cash earnest money deposits made by the Borrower or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Agreement;

(cc)       the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or permit held by the Borrower or any of its Restricted Subsidiaries or by a statutory provision, to terminate any such lease, license, franchise, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

(dd)       restrictive covenants affecting the use to which real property may be put, provided, however, that the covenants are complied with;

(ee)       security given to a public utility or any municipality or Governmental Authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(ff)        zoning by-laws and other land use restrictions, including, without limitation, site plan agreements, development agreements and contract zoning agreements;

(gg)       Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Borrower or any Restricted Subsidiary in the ordinary course of business;

(hh)       [Reserved];

(ii)         rights of a seller of unpaid goods in respect of such goods at common law or under the Bankruptcy and Insolvency Act (Canada) and other applicable legislation;

 

 

 

 

 

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(jj)         the reservations, limitations, provisos and conditions, if any, expressed in any original grants from the crown under Canadian law and any statutory exceptions to title under Canadian law;

(kk)       customary transfer restrictions and purchase options in joint venture and similar agreements;

(ll)         (x) Liens created pursuant to the ABL Collateral Documents securing (i) Indebtedness incurred pursuant to Section 7.03(b)(i)(x) and (ii) obligations in respect of any Commercial Letter of Credit Facility, in each case, so long as the same is at all times subject to the Intercreditor Agreement and (y) Liens securing obligations in respect of any Receivables Facilities;

(mm)     (x) Liens incurred to secure any Indebtedness or any obligation in respect thereof permitted to be incurred pursuant to Section 7.03; provided that, with respect to Liens securing obligations permitted under this clause (mm), at the time of incurrence and after giving pro forma effect thereto, (i) to the extent secured by the Collateral, such obligations are secured on either a pari passu or junior basis with the Obligations, (ii) no Event of Default shall have occurred and be continuing and (iii) the Consolidated Secured Debt Ratio would be no greater than 3.25 to 1.00 as of the last day of the Relevant Reference Period and (y) Liens securing obligations in respect of any Refinancing Indebtedness in respect of Indebtedness described in sub-clause (x) of this clause (mm); provided, that in the case of any Additional First Lien Indebtedness, such Indebtedness shall be subject to the Additional First Lien Intercreditor Agreement and, in the case of any Additional Junior Lien Indebtedness, such Indebtedness shall be subject to the Additional Junior Lien Intercreditor Agreement; and

(nn)       Liens on the Collateral securing obligations in respect of (i) Permitted First Priority Refinancing Debt (and Permitted Refinancings thereof), (ii) Permitted Junior Priority Refinancing Debt (and Permitted Refinancings thereof), and (iii) Incremental Equivalent Debt (and Permitted Refinancings thereof).

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

Permitted Refinancing” means, with respect to any Person, any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness of such Person (including, for the avoidance of doubt, any one or more successive modifications, replacements, refinancings, refundings, renewals or extensions); provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, replaced, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium (including tender premiums) thereon plus other reasonable amounts paid (including original issue discount and upfront fees), and fees and expenses reasonably incurred, in connection with such modification, replacement, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder, (b) such modification, replacement, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has (except by virtue of prior scheduled amortization or prepayments of the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended, (c) at the time thereof, no Event of Default shall have occurred and be continuing, (d) if such Indebtedness being modified, replaced, refinanced, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, replacement, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms

 

 

 

 

 

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at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended, (e) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such modified, replaced, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees), (f) any such modification, replacement, refinancing, refunding, renewal or extension is incurred by the Person who is the obligor of the Indebtedness being modified, refinanced, refunded, renewed or extended, (g) in the case of a “Permitted Refinancing” of Permitted First Priority Refinancing Debt, such Indebtedness meets the requirements of clauses (i), (iii), (v), (vi) and (vii) of the definition of “Permitted First Priority Refinancing Debt” (or if such Indebtedness is to be secured on a junior basis to the Obligations or to be unsecured, the requirements of succeeding clause (h) or (i) below, as applicable), (h) in the case of a “Permitted Refinancing” of Permitted Junior Priority Refinancing Debt, such Indebtedness meets the requirements of clauses (i), (iii), (v), (vi) and (vii) of the definition of “Permitted First Priority Refinancing Debt” (or if such Indebtedness is to be unsecured, the requirements of succeeding clause (i) below) and (i) in the case of  a “Permitted Refinancing” of Permitted Unsecured Refinancing Debt, such Indebtedness meets the requirements of clauses (iv) and (v) of the definition of “Permitted Unsecured Refinancing Debt”.

Permitted Unsecured Refinancing Debt” means unsecured Indebtedness incurred by the Borrower in the form of one or more series of unsecured notes or loans; provided that (i) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness in respect of any Class of Loans (including portions of any Class of Loans), (iii) such Indebtedness does not mature or have scheduled amortization or payments of principal (other than customary offers to purchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (iv) such Indebtedness is not guaranteed by any Subsidiaries other than the Subsidiary Guarantors, and (v) such Indebtedness is not secured by any Lien on any property or assets of the Company or any Subsidiary.  Permitted Unsecured Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Person” means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership, joint stock company, trust, unincorporated organization, Governmental Authority or other entity.

Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA, any ERISA Affiliate.

Pledged Debt” has the meaning specified in the Security Agreement.

Pledged Equity” has the meaning specified in the Security Agreement.

PPSA” means the Personal Property Security Act of Ontario (or any successor statute) or similar legislation of any other Canadian jurisdiction, including, without limitation, the Civil Code of

 

 

 

 

 

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Quebec, the laws of which are required by such legislation to be applied in connection with the issue, perfection, enforcement, opposability, validity or effect of security interests.

Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

Prior Credit Agreement” means the “Existing Credit Agreement” as defined in the Existing Credit Agreement.

Pro Rata Share” means, with respect to each Lender, (i) at or prior to the funding on the Restatement Effective Date, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments of all Lenders at such time,; (ii) on the First Amendment Effective Date (immediately prior to the funding of the Incremental 2014 Term Loans and the termination of the Incremental 2014 Term Commitments on such date) and for purposes of Section 2.02(b) only, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Incremental 2014 Term Commitment of such Lender at such time and the denominator of which is the aggregate amount of all Incremental 2014 Term Commitments of all Lenders at such time,; (iii) on the Initial Second Amendment Effective Date (immediately prior to the funding of the 2016 New Replacement Term B-1 Loans and the termination of the 2016 New Replacement Term B-1 Loan Commitments on such date) and for purposes of Section 2.02(b) only, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the 2016 New Replacement Term B-1 Loan Commitment of such Lender at such time and the denominator of which is the aggregate amount of all 2016 New Replacement Term B-1 Loan Commitments of all Lenders at such time, (iv) on the Initial Second Amendment Effective Date (immediately prior to the funding of the 2016 New Replacement Term B-2 Loans and the termination of the 2016 New Replacement Term B-2 Loan Commitments on such date) and for purposes of Section 2.02(b) only, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the 2016 New Replacement Term B-2 Loan Commitment of such Lender at such time and the denominator of which is the aggregate amount of all 2016 New Replacement Term B-2 Loan Commitments of all Lenders at such time and; (v) on the Third Amendment Effective Date (immediately prior to the funding of the 2018 New Replacement Term B Loans and the termination of the 2018 New Replacement Term B Loan Commitments on such date) and for purposes of Section 2.02(b) only, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the 2018 New Replacement Term B Loan Commitment of such Lender at such time and the denominator of which is the aggregate amount of all 2018 New Replacement Term B Loan Commitments of all Lenders at such time; and (vi) at any other time and for all other purposes, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the principal amount of the Loans of the applicable Class of such Lender at such time and the denominator of which is the aggregate principal amount of the Loans of the applicable Class of all Lenders at such time.

Proceeds of Crime Act” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the regulations promulgated thereunder, as amended from time to time.

Projections” shall have the meaning set forth in Section 6.01(c).

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.

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 Guaranty or grant of the relevant security

 

 

 

 

 

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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.

 “Qualifying Lender” has the meaning specified in Section 2.05(a)(iii)(D)(3).

Qualified Proceeds” means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Borrower in good faith.

Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Loans publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Borrower which shall be substituted for Moody’s or S&P or both, as the case may be.

Recapitalization” has the meaning set forth in the preliminary statements to this Agreement.

Recapitalization Agreement” means the Agreement and Plan of Merger, dated as of June 30, 2006, between the MergerCos, Bain Paste Finco, LLC, Blackstone Paste Finco, LLC, and the Borrower, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of September 1, 2006.

Receivables Facility” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Borrower or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Borrower or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any accounts receivable or participation interest therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

Receivables Subsidiary” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

Refinanced Term Loans” has the meaning specified in Section 10.01.

Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower executed by each of (a) the Borrower, (b) the Administrative Agent and (c) each Additional Lender and Lender that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Section 2.15.

Refinancing Indebtedness” has the meaning set forth in Section 7.03(b)(xiii).

 

 

 

 

 

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Refinancing Series” shall mean all Refinancing Term Loans or Refinancing Term Commitments that are established pursuant to the same Refinancing Amendment (or any subsequent Refinancing Amendment to the extent such Refinancing Amendment expressly provides that the Refinancing Term Loans or Refinancing Term Commitments provided for therein are intended to be a part of any previously established Refinancing Series) and that provide for the same interest margins and am