UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): June 7, 2019

 

Neiman Marcus Group LTD LLC

(Exact Name of Registrant as Specified in Charter)

 

Delaware

 

333-133184-12

 

20-3509435

(State or Other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

One Marcus Square
1618 Main Street
Dallas, Texas 75201

(Address of Principal Executive Offices and Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (214) 743-7600

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

N/A

 

N/A

 

N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 


 

Item 1.01. Entry Into a Material Definitive Agreement.

 

On June 7, 2019 (the “Settlement Date”), Neiman Marcus Group LTD LLC, a Delaware limited liability company (the “Company”) completed a comprehensive set of previously announced transactions (collectively, the “Recapitalization Transactions”) to among other things, extend the maturities of the Company’s existing debt obligations by three years. On June 10, 2019, the Company issued a press release announcing the completion of the Recapitalization Transactions which is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The material terms of the Recapitalization Transactions are summarized herein.

 

Amendment to Senior Secured Term Loan Facility

 

On the Settlement Date, the Company amended the credit agreement governing its existing senior secured term loan facility (as amended, the “Amended Term Loan Facility”) pursuant to that certain Extension Amendment and Amendment No. 2 to Credit Agreement (the “Extension Amendment”), by and among, inter alios, the Company, Mariposa Intermediate Holdings LLC, a Delaware limited liability company and the direct parent of the Company (“Holdings”), The Neiman Marcus Group LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of the Company (“TNMG LLC”) and The NMG Subsidiary LLC, a newly formed Delaware limited liability company and direct, wholly-owned subsidiary of TNMG LLC (the “NMG Subsidiary”), as co-borrowers, the lenders from time to time party thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (in such Capacities, the “Term Loan Agent”), to convert the existing term loans outstanding thereunder (the “Existing Term Loans”) into extended term loans with an extended maturity date of October 25, 2023 (the “Extended Term Loans”). In connection with the Extension Amendment and Amended Term Loan Facility, approximately $2,775.4 million aggregate principal amount of Existing Term Loans were converted into Extended Term Loans by consenting term lenders, representing approximately 99.5% of the total outstanding principal amount of Existing Term Loans. After giving effect to the partial paydown described below, approximately $2,248.5 million of Extended Term Loans and approximately $12.7 million of Existing Term Loans remain outstanding under the Amended Term Loan Facility. Upon consummation of the amendment, an upfront fee of (i) 125 bps (calculated on a post-paydown basis) was paid to the initial consenting term lenders who executed the previously announced Transaction Support Agreement by March 25, 2019 and (ii) 25 bps (calculated on a post-paydown basis) was paid to consenting term lenders who executed the Transaction Support Agreement or a joinder thereto by April 6, 2019. In connection with the Extension Amendment, the Company paid such fees to the consenting term lenders of approximately $21.1 million.

 

The Extended Term Loans accrue interest at the option of each consenting term lender of either (a) LIBOR plus 6.00% per annum (subject to a 1.50% per annum floor) or ABR plus 5.00% per annum (subject to a 2.50% per annum floor), in each case payable in cash, or (b) LIBOR plus 5.50% per annum (subject to a 1.50% per annum floor) or ABR plus 4.50% per annum (subject to a 2.50% per annum floor), in each case payable in cash, plus 1.00% per annum paid-in-kind, subject to the terms of the Amended Term Loan Facility. The Amended Term Loan Facility also provides for increased amortization payments for Extended Term Loans at 1.50% per annum payable in equal quarterly installments of 0.375% per annum, less certain mandatory and voluntary prepayments, with the remaining balance due at maturity.

 

In addition, (i) TNMG LLC and the NMG Subsidiary were added as co-borrowers under the Amended Term Loan Facility (ii) the Extended Term Loans are guaranteed by Holdings and all of the co-borrowers’ current and future domestic subsidiaries and future foreign subsidiaries, (iii) the Extended Term Loans are secured by an enhanced collateral package (as described below), (iv) Holdings, the Company and its subsidiaries are subject to substantially the same covenants as they were under the existing senior secured term loan facility but with additional restrictions, and (v) the Extended Term Loans are non-callable during the first year following the Settlement Date subject to a customary make-whole premium (using a discount rate set at the treasury rate plus 0.5% per annum). On or after the first anniversary of the Settlement Date, the Company may prepay the Extended Term Loans, in whole or in part, at any time, subject to an annual prepayment premium equal to (a) 2.0% of the principal amount prepaid if made before the second anniversary of the Settlement Date and (b) 1.0% of the principal amount prepaid if made after the second anniversary of the Settlement Date but before the third anniversary of the Settlement Date. Thereafter, no prepayment premium is applicable. The key terms of the Existing Term Loans held by lenders that do not participate in the conversion of such Existing Term Loans into Extended Term Loans pursuant to the Term Loan Facility Amendment remain unchanged.

 

As more fully described in the Amended and Restated Term Loan Guarantee and Collateral Agreement, by and among Holdings, the Company, the grantors and guarantors party thereto and the Agent, the obligations with respect to the Extended Term Loans under the Amended Term Loan Facility and the guarantees of those obligations (other than the guarantees provided by Extended Term Loan PropCo (as defined below) and Notes PropCo) are secured by the following additional collateral: (i) a first priority security interest in certain future foreign assets, intercompany debt and certain additional equity interests of new subsidiary guarantors, subject to clause (iv) below, (ii) a first-priority security interest in, and mortgages on, substantially all of the Company’s, the co-borrowers’ and any subsidiary guarantors’ owned real estate interests and the real estate leasehold

 

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interests and other real property interests related to full-line Neiman Marcus or Bergdorf Goodman stores or warehouses or distribution centers other than the Notes Priority Real Estate Collateral (as defined below) (the “New Term Priority Real Estate Collateral”), (iii) a first-priority security interest in the equity interests of NMG Term Loan PropCo LLC, a new special purpose entity that is a subsidiary of the Company (“Extended Term Loan PropCo”) formed solely to hold certain real estate leases constituting New Term Priority Real Estate Collateral that cannot be mortgaged directly to secure the Amended Term Loan Facility (the collateral described in the foregoing subclauses (i) through (iii), collectively, the “New Term Priority Assets”), and (iv) a third-priority security interest in the Notes Priority Real Estate Collateral and the equity interests in Notes PropCo (as defined below), subject to the “call right” described below.

 

Immediately following certain amendments contemplated by the Extension Amendment and the Amended Term Loan Facility and the conversion of Existing Term Loans into Extended Term Loans, $526.9 million aggregate principal amount of the Extended Term Loans were prepaid, on a pro rata basis, in cash at par, subject to adjustment pursuant to the terms of the Amended Term Loan Facility, with the net cash proceeds from the issuance of the New Second Lien Notes (as defined below), cash on hand, and other sources of liquidity.

 

The foregoing summary is not intended to be a complete description and is qualified in its entirety by reference to the full text of the Extension Amendment and the Amended and Restated Term Loan Guarantee and Collateral Agreement, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.

 

Amended Asset-Based Revolving Credit Facility.

 

On June 7, 2019, the Company entered into an amendment to the credit agreement governing the Company’s asset-based revolving credit facility, by and among the Company, Holdings and the NMG Subsidiary, as co-borrowers together with other co-borrowers party thereto, the guarantors party thereto, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent (the “ABL Agent”), and the other parties party thereto from time to time (as amended, the “Amended Asset-Based Revolving Credit Facility”), which expanded the collateral package securing the Company’s and the other guarantors’ obligations thereunder to include (i) a fourth-priority security interest on the New Term Priority Assets granted in favor of the Extended Term Loans under the Amended Term Loan Facility, (ii) a fifth-priority unsecured guarantee by Extended Term Loan PropCo and, subject to the “call right” (described below), a fourth priority unsecured guarantee by Notes PropCo and (iii) subject to the “call right”, a fourth priority security interest on the Notes Priority Real Estate Collateral and the equity interests in Notes PropCo. The amendment to the Asset-Based Revolving Credit Facility also includes more restrictive negative covenants substantially consistent with the Amended Term Loan Facility and eliminates or tightens the Company’s and its subsidiaries’ ability to incur debt under certain covenants governing the incurrence of additional indebtedness.

 

The foregoing summary is not intended to be a complete description and is qualified in its entirety by reference to the full text of the Fourth Amendment to the Revolving Credit Agreement and the Amended and Restated ABL Guarantee and Collateral Agreement, which are attached hereto as Exhibits 10.3 and 10.4, respectively, and are incorporated herein by reference.

 

Issuance and Offering of New Second Lien Notes.

 

Concurrently with the consummation of the Extension Amendment and the settlement of the Exchange Offers (as defined below), the Company completed a private offering of New Second Lien Notes in an aggregate principal amount of $550.0 million. The New Second Lien Notes bear interest payable in cash at 8.000% per annum and interest payable in kind at 6.000% per annum and will mature on April 25, 2024. Contemporaneously with the execution of the Transaction Support Agreement, certain consenting holders of the Company’s Existing Notes (as defined below) and the Company’s Sponsors agreed to purchase up to $550.0 million of New Second Lien Notes as set forth in the backstop commitment letter. In consideration for execution of the backstop commitment letter, the Company made backstop commitment payments to such consenting noteholders equal to $27.5 million or 5.000% of the aggregate principal amount of commitments in respect of the New Second Lien Notes.

 

In connection with the issuance and offering of New Second Lien Notes, the Company entered into an Indenture (the “Second Lien Notes Indenture”), by and among the Company, Mariposa Borrower, Inc., a Delaware corporation and direct, wholly-owned subsidiary of the Company (“Mariposa Borrower”), TNMG LLC and the NMG Subsidiary, as co-issuers (collectively, the “Issuers”), the Guarantors (as defined below) and Ankura Trust Company, LLC, as trustee and collateral agent. The Second Lien Notes Indenture contains covenants that are substantially consistent with the covenants contained in the Existing Indentures (as defined below) but with additional restrictions.

 

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The New Second Lien Notes are secured by collateral that includes (i) a second-priority security interest in the priority collateral under the senior secured term loan facility, (ii) a second-priority security interest in the New Term Priority Assets, (iii) a second-priority interest in certain previously unencumbered real estate interests related to certain full-line Neiman Marcus stores (the “Notes Priority Real Estate Collateral”) and the equity interests of a newly formed special purpose entity and subsidiary of the Company (“Notes PropCo”) formed to hold certain Notes Priority Real Estate Collateral that cannot be mortgaged directly to the collateral agent (subject to a cap on recovery equal to $200.0 million less any amounts recovered against those assets by holders of the New Third Lien Notes issued in connection with the Exchange Offers described herein), (iv) a third-priority security interest in the collateral that secures the Company’s Asset-Based Revolving Credit Facility, and (v) except in certain circumstances, a first-priority security interest in the assets of MYT Holding Co., an indirect wholly-owned subsidiary of Neiman Marcus Group, Inc. that indirectly holds NMG Germany GmbH, which holds and through its subsidiaries operates the MyTheresa business, in each case subject to permitted liens and other exceptions and limitations.

 

The New Second Lien Notes are fully and unconditionally guaranteed on a senior secured basis by each of the Company’s current and future domestic subsidiaries (other than the Co-Issuers, Notes PropCo and Extended Term Loan PropCo) and, subject to certain exceptions, each of the Company’s future foreign subsidiaries (collectively, the “Guarantors”), subject to the terms of the Collateral Agreement, dated as of June 7, 2019, by and among the Issuers, the Guarantors, and Ankura Trust Company, LLC, as the trustee and collateral agent (the “Second Lien Notes Collateral Agreement”). In addition, MYT Holding Co. will, together with each of its subsidiaries other than NMG Germany GmbH and its subsidiaries (the “MYT Guarantor Entities”), provide a limited guarantee on a senior secured basis up to $200.0 million (the “MYT Limited Guarantee”) pursuant to the Guarantee and Collateral Agreement, by and among MYT Parent Co., the grantors party thereto and Ankura Trust Company, LLC, as trustee and collateral Agent (the MYT Guarantee and Collateral Agreement”).

 

The Issuers may redeem some or all of the New Second Lien Notes at any time prior to June 7, 2021 at a redemption price equal to 100% of their principal amount plus a make-whole premium, together with accrued and unpaid interest, if any, to, but excluding, the redemption date. The Issuers may redeem some or all of the New Second Lien Notes at any time on or after June 7, 2021 upon payment of a premium that declines ratably over time. If the Issuers experience certain change of control transactions, the Issuers must offer to purchase the New Second Lien Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date of purchase.

 

The New Second Lien Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws.

 

The foregoing summary is not intended to be a complete description of, and is qualified in its entirety by reference to the full text of, the New Second Lien Notes Indenture, the New Second Lien Notes Collateral Agreement and the MYT Guarantee and Collateral Agreement, which are attached hereto as Exhibits 10.5, 10.6 and 99.2, respectively, and are incorporated herein by reference.

 

Exchange Offers and Consent Solicitations.

 

On June 7, 2019, simultaneously with the consummation of the Extension Amendment and the issuance of New Second Lien Notes, the Company announced the completion of the private exchange offers and related consent solicitations (the “Exchange Offers”) pursuant to which $879,320,000 principal amount of the Company’s existing unsecured 8.000% Senior Cash Pay Notes due 2021 (the “Cash Pay Notes”) and $599,163,048 principal amount of its existing unsecured 8.750%/9.500% Senior PIK Toggle Notes due 2021 (the “PIK Toggle Notes” and, together with the Existing Cash Pay Notes, the “Existing Notes”) were validly tendered and exchanged for aggregate consideration consisting of $730,534,000 principal amount of 8.000% of New Third Lien Notes due 2024 (the “New 8.000% Third Lien Notes”), $497,849,150 principal amount of 8.750% of New Third Lien Notes due 2024 (the “New 8.750% Third Lien Notes” and, together with the New 8.000% Third Lien Notes, the “New Third Lien Notes”) and 250,000,000 shares of Series A Preferred Stock of MYT Holding Co., par value $0.001 per share (the “Series A Preferred Stock”), with an initial liquidation preference of $1.00 per share. Holders of Existing Notes who executed the Transaction Support Agreement or a joinder thereto by April 6, 2019 received an upfront fee of 100 bps. In connection with the exchange, the Company paid consent fees to the Consenting Noteholders of approximately $14.2 million.

 

The New Third Lien Notes and MYT Series A Preferred Stock have not been and will not be registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, nor shall there be any sale of the Company’s securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

 

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Issuance of Third Lien Notes

 

The indentures governing the New Third Lien Notes (the “Third Lien Notes Indentures”), dated the Settlement Date, by and among the Issuers, the guarantors thereto, and Wilmington Trust, National Association, as trustee and collateral agent, contain covenants substantially similar to the covenants governing the New Second Lien Notes.  The New 8.000% Third Lien Notes bear interest at an annual rate of 8.000% payable in cash and the New 8.750% Third Lien Notes bear interest at an annual rate of 8.750% payable in cash. Interest on the New Third Lien Notes will be paid on April 15 and October 15 of each year, with the first interest payment to be paid on October 15, 2019.  The New Third Lien Notes will mature on October 25, 2024.

 

The New Third Lien Notes are secured by collateral (the “Third Lien Notes Collateral”) that includes (i) a first-priority security interest in $200.0 million of the Notes Priority Real Estate Collateral and the equity interests of Notes PropCo, (ii) a third-priority security interest in the New Term Loan Priority Collateral, (iii) a first-priority pledge of 50% of the common equity interests of MYT Holding Co. and (iv) a fourth-priority security interest in the collateral that secures the Company’s Asset-Based Revolving Credit Facility on a first lien basis, in each case subject to permitted liens and other exceptions and limitations. The first-priority security interest in the Notes Priority Real Estate Collateral is subject to a “call right” in favor of the lenders under the Extended Term Loan Agreement to finance the redemption of the New Third Lien Notes, at par, in cash in a principal amount equal to $200.0 million, upon the occurrence and during the continuance of an event of default under the Amended Term Loan Facility, which $200.0 million principal amount shall be treated as additional Extended Term Loans with substantially the same rights and priorities. Accordingly, the liens on the Notes Priority Real Estate Collateral securing the New Third Lien Notes (as well as the New Second Lien Notes), will be subordinated to the liens in favor of the holders of such Extended Term Loans. In addition, the New Third Lien Notes are guaranteed, subject to certain exceptions, by each of the Company’s current and future domestic subsidiaries and future foreign subsidiaries on a senior basis other than the MYT Guarantor Entities.

 

In connection with the issuance of the New Third Lien Notes, on the Settlement Date, the Issuers entered into a security agreement (the “Third Lien Notes Collateral Agreement”), by and among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee and collateral agent. Pursuant to the terms of the Third Lien Notes Collateral Agreement, the Issuers and the Guarantors granted to the applicable Collateral Agent, for the benefit of the secured parties named therein, a security interest in, and lien upon, the Third Lien Notes Collateral.

 

The foregoing summary is not intended to be a complete description and is qualified in its entirety by reference to the full text of the New Third Lien Notes Indentures, which are attached hereto as Exhibits 10.7 and 10.8, and the Third Lien Notes Collateral Agreement, which is attached hereto as Exhibit 10.10, each of which is incorporated herein by reference.

 

Issuance of Series A Preferred Stock

 

In connection with the Exchange Offers, on June 4, 2019, MYT Holding Co. filed an Amended and Restated Certificate of Incorporation with the State of Delaware, effective upon its acceptance, authorizing the issuance of Series A Preferred Stock. In addition, MYT Holding Co. filed with the State of Delaware a Certificate of Designation, setting the rights, powers, and obligations of the New Series A Preferred Stock (the “Series A Certificate of Designation”).The Series A Preferred Stock accrues dividends at a rate of 10.000% per annum and will mature on the tenth anniversary of the date the shares of Series A Preferred Stock are first issued to holders thereof. Under the terms of the MYT Series A Preferred Stock, NMG Germany GmbH and its subsidiaries that conduct the operations of MyTheresa (the “MYT Operating Entities”), are subject to certain covenants covering (i) the payment of dividends, (ii) the incurrence of indebtedness and certain liens, (iii) the issuance of equity, and (iv) certain affiliate transactions and business activities, in each case subject to exceptions set forth in the certificate of designation. However, the MYT Operating Entities will not provide any direct guarantees or equity pledges in support of the New Third Lien Notes other than a pledge of the equity (but not the assets) of NMG Germany GmbH. The MYT Operating Entities remain outside of the Company’s credit structure and will continue to operate as a standalone business.

 

In connection with the issuance of the New Series A Preferred Stock, MYT Parent Co. and MYT Holding Co. entered into a letter agreement (the “MYT Parent Letter Agreement”), dated as of June 7, 2019, as an inducement to the holders of Series A Preferred Stock to enter into the Recapitalization Transactions relating to Company and its affiliates’ outstanding indebtedness and equity interests. The MYT Parent Letter Agreement defines the rights of holders of Series A Preferred Stock to participate in distributions on account of the equity of MYT Holding Co. or the proceeds from a sale of equity interests of the MYT Holdco by Neiman Marcus Group, Inc. or its subsidiaries to any independent third party.

 

The foregoing summary is not intended to be a complete description of, and is qualified in its entirety by reference to, the Amended and Restated Certificate of Incorporation, the Series A Certificate of Designation and the MYT Parent Letter Agreement, which are attached hereto as Exhibit 99.3, 99.4 and Exhibit 10.9, respectively, and are incorporated herein by reference.

 

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Amendment of the Indentures Governing the Existing Notes

 

In connection with the Exchange Offers, the Company solicited and received the requisite number of consents from holders of the Existing Notes to adopt certain proposed amendments to the indentures governing the Existing Notes (the “Existing Indentures”) to (i) remove substantially all of the restrictive covenants contained therein and effect certain other changes, (ii) add TNMG LLC and the NMG Subsidiary as co-issuers of each series of Existing Notes so that any remaining Existing Notes not tendered in the applicable Exchange Offer are the joint and several primary obligations of each of the Issuers, (iii) include certain collective action and/or no-action provisions that preclude noteholder action with respect to any rights or remedies with respect to the Transaction Support Agreement and the Recapitalization Transactions, (iv) eliminate certain provisions that prohibit certain consolidations and mergers and (v) eliminate certain events of default and related provisions. Supplemental indentures effecting the amendments relating to the Existing Notes were executed on June 7, 2019 by the Issuers, the Guarantors, Drivetrain Trust Company LLC, as trustee. Following the settlement of the Exchange Offers, approximately $137.3 million aggregate principal amount of the Existing Notes remain outstanding and will be governed by the Existing Indentures, as amended by the supplemental indentures.

 

The foregoing summary is not intended to be a complete description of, and is qualified in its entirety by reference to, the Second Supplemental Indentures, which are attached hereto as Exhibit 10.10 and 10.11, respectively, and are incorporated herein by reference.

 

Amendment of the 2028 Debentures Indenture.

 

On June 7, 2019, concurrently with the consummation of the Recapitalization Transactions, TNMG LLC and the holders of a majority of the outstanding principal amount of the 2028 Debentures (the “Majority 2028 Debenture Holders”), together with the successor trustee thereto, executed a supplemental indenture (the “Third Supplemental Indenture”) to the indenture governing the 2028 Debentures (the “2028 Debentures Indenture”) to, among other things, amend the reporting covenant in the 2028 Debentures Indenture to substantially replicate the reporting requirements previously set forth in the indentures governing the Existing Notes. In addition, as a result of the amendment to the reporting covenant, the Company expects to cease filing periodic reports with the U.S. Securities and Exchange Commission.

 

Pursuant to the terms of the Third Supplemental Indenture, the 2028 Debentures (i) were secured by “equal and ratable” liens on certain owned real estate properties, real estate ground leases and real estate operating leases of TNMG LLC and its subsidiaries and on shares of capital stock and indebtedness of certain subsidiaries, in each case pari passu with the Extended Term Loans, subject to the terms of the Third Supplemental Indenture, and (ii) received a new second-priority unsecured guarantee from Extended Term Loan PropCo. The Third Supplemental Indenture contains covenants that are substantially consistent with the covenants contained in the 2028 Debentures Indenture but with additional restrictions.

 

The foregoing summary is not intended to be a complete description and is qualified in its entirety by reference to the full text of the Third Supplemental Indenture, which is attached hereto as Exhibit 10.13 and is incorporated herein by reference.

 

No Solicitation, No Registration

 

Neither this Report on Form 8-K nor the attached agreements constitute an offer to purchase or sell any securities or the solicitation of an offer to exchange any securities of the Company, nor will there be any purchase, sale or exchange of any securities in any state or other jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification of any such securities or offer under the securities laws of any such state or other jurisdiction. None of the New Third Lien Notes and the related guarantees, the New Second Lien Notes and related Guarantees or the New Series A Preferred Stock has been registered under the Securities Act, and may not be offered or sold in the United States absent registration or any applicable exemption from registration requirements.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

To the extent required by Item 2.03 of the Form 8-K, the disclosure set forth above under Item 1.01 above is incorporated by reference into this Item 2.03.

 

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Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits:

 

Exhibit
No.

 

Description

 

 

 

10.1

 

Extension Amendment and Amendment No. 2 to Credit Agreement, dated as of June 7, 2019

 

 

 

10.2

 

Amended and Restated Term Loan Guarantee and Collateral Agreement, dated as of June 7, 2019

 

 

 

10.3

 

Fourth Amendment to the Revolving Credit Agreement, dated as of June 7, 2019

 

 

 

10.4

 

Amended and Restated ABL Guarantee and Collateral Agreement, dated as of June 7, 2019

 

 

 

10.5

 

14.0% Second Lien Notes Indenture, dated as of June 7, 2019

 

 

 

10.6

 

Second Lien Notes Collateral Agreement, dated as of June 7, 2019

 

 

 

10.7

 

8.000% Third Lien Notes Indenture, dated as of June 7, 2019

 

 

 

10.8

 

8.750% Third Lien Notes Indenture, dated as of June 7, 2019

 

 

 

10.9

 

Letter Agreement, dated as of June 7, 2019

 

 

 

10.10

 

Third Lien Notes Collateral Agreement, dated as of June 7, 2019

 

 

 

10.11

 

Second Supplemental Indenture, dated as of June 6, 2019

 

 

 

10.12

 

Second Supplemental Indenture, dated as of June 6, 2019

 

 

 

10.13

 

2028 Senior Debentures Third Supplemental Indenture, dated as of June 7, 2019

 

 

 

99.1

 

Press Release, dated as of June 10, 2019

 

 

 

99.2

 

Guarantee and Collateral Agreement, dated as of June 7, 2019

 

 

 

99.3

 

Amended and Restated Certificate of Incorporation of MYT Holding Co., dated as of June 4, 2019

 

 

 

99.4

 

Certificate of Designation of Cumulative Series A Preferred Stock of MYT Holding Co., dated as of June 6, 2019

 

 

 

99.5

 

Certificate of Designation of Cumulative Series B Preferred Stock of MYT Holding Co., dated as of June 6, 2019

 

 

 

99.6

 

Pledge Agreement, dated as of June 7, 2019

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

NEIMAN MARCUS GROUP LTD LLC

 

 

 

 

 

 

Date: June 11, 2019

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary

 

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Exhibit 10.1

 

EXECUTION VERSION

 

EXTENSION AMENDMENT AND AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of June 7, 2019 (this “Extension Amendment”), among MARIPOSA INTERMEDIATE HOLDINGS LLC, a Delaware limited liability company (“Holdings”), NEIMAN MARCUS GROUP LTD LLC, a Delaware limited liability company (“Existing Borrower”), THE NEIMAN MARCUS GROUP LLC, a Delaware limited liability company (“TNMG LLC”), THE NMG SUBSIDIARY LLC, a Delaware limited liability company (together with TNMG LLC, the “New Borrowers” and each, a “New Borrower”, and the New Borrowers and the Existing Borrower, collectively, the “Borrowers” and each, a “Borrower”), the GUARANTORS party hereto, the LENDERS party hereto (the “Consenting Lenders”) and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent and Collateral Agent (in such capacities, the “Agent”) to the TERM LOAN CREDIT AGREEMENT dated as of October 25, 2013 (as amended, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement”), among Holdings, the Existing Borrower, the Lenders from time to time party thereto, the Agent and the other parties party thereto from time to time.  Capitalized terms used but not otherwise defined in this Extension Amendment shall have the respective meanings assigned to such terms in the Existing Credit Agreement, as amended, supplemented or otherwise modified by this Extension Amendment (the “Amended Credit Agreement”)

 

WHEREAS, pursuant to the Existing Credit Agreement, the Lenders (as defined in the Existing Credit Agreement) have extended credit in the form of term loans (the “Existing Term Loans”) to the Existing Borrower pursuant to the terms and subject to the conditions set forth in the Existing Credit Agreement;

 

WHEREAS, the Existing Borrower and Holdings wish to make certain amendments as may be necessary or appropriate in connection with the establishment of two new Classes of Term Loans pursuant to the terms of Section 2.20 of the Existing Credit Agreement, as amended by the amendments contemplated in this Extension Amendment, and certain other amendments in accordance with the terms of Section 10.08 of the Existing Credit Agreement;

 

WHEREAS, Section 2.20 of the Existing Credit Agreement permits the Lenders of any Existing Term Loans, upon acceptance of an Extension Offer from the Existing Borrower, to extend the scheduled maturity date of all or a portion of such Existing Term Loans;

 

WHEREAS, the Consenting Lenders agree, pursuant to this Extension Amendment, to, among other things, (i) modify certain terms and conditions in Section 2.20 of the Existing Credit Agreement to permit the new Classes of Term Loans contemplated by this Extension Amendment, (ii) establish such new Classes of Term Loans on the Amendment Effective Date (as defined below), and (iii) amend certain other provisions of the Existing Credit Agreement; and

 

WHEREAS, subject to the terms and conditions set forth in this Extension Amendment, the Existing Borrower, Holdings and the Consenting Lenders agree that pursuant to this Extension Amendment, the Existing Term Loans of the Consenting Lenders shall be converted into 2019 Extended Term Loans consisting of either (i) Cash Pay Extended Term Loans or (ii) Cash Pay/PIK Extended Term Loans, or a combination of both, in each case, with the Maturity Date set forth under the Amended Credit Agreement.

 


 

NOW, THEREFORE, in consideration of the premises and covenants contained in this Extension Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Section 1.              Waiver.  Subject to the satisfaction or waiver of the conditions set forth in Section 5 of this Extension Amendment, Agent and Consenting Lenders hereby permanently waive any and all Defaults or Events of Default under the Existing Credit Agreement and any of the other Loan Documents existing on or prior to the Amendment Effective Date, effective as of the first date any such Default or Event of Default exists or existed.  This is a limited waiver and shall not be deemed to constitute a waiver of any breach of the Amended Credit Agreement or any of the other Loan Documents or any other requirements of any provision of the Amended Credit Agreement or any other Loan Documents, in each case from and after the Amendment Effective Date.

 

Section 2.              Amendments; Prepayment; Joinder of New Borrowers.

 

(a)           Subject to the satisfaction or waiver of the conditions set forth in Section 5(a) of this Extension Amendment, on the Amendment Effective Date, the Existing Credit Agreement is hereby amended to incorporate the changes reflected in Section 2.20(1), 2.20(3) and 2.20(5) (and in any defined term as used in any such provision and to add new defined terms to the extent used in any such provision) of the redlined version of the Amended Credit Agreement attached hereto as Annex A-1 (the “Initial Amendments”) but not, for the avoidance of doubt, any other change reflected in the redlined version of the Amended Credit Agreement attached hereto as Annex A-1.

 

(b)           Subject to the satisfaction or waiver of the conditions set forth in Sections 5(a) and 5(b) of this Extension Amendment, on the Amendment Effective Date and immediately following the Initial Amendment Effective Time (as defined below), (i) the Existing Credit Agreement is hereby amended to incorporate the changes reflected in the redlined version of the Amended Credit Agreement attached hereto as Annex A-1 other than the Initial Amendments, (ii) the Exhibits to the Existing Credit Agreement are hereby amended and restated as set forth on Annex A-2 hereto, and (iii) the Schedules to the Existing Credit Agreement are hereby amended and restated as set forth on Annex A-3 hereto (the “Additional Amendments” and together with the Initial Amendments, collectively, the “Amendments”).

 

(c)           Subject to the agreements of the Waiving Term Loan Lenders (as defined in the TSA), immediately following the effectiveness of the Initial Amendments and the 2019 Conversion (as defined below) and substantially concurrently with the effectiveness of the Additional Amendments, the Borrowers will prepay $550 million of the 2019 Extended Term Loans at par on a pro rata basis (calculated as  set forth in the TSA), without any penalty or premium (the “2019 Prepayment”).

 

(d)           Each of the New Borrowers, by its respective signature to this Extension Amendment, shall become a Borrower and a Loan Party under the Amended Credit Agreement and a Loan Party, a Guarantor and a Grantor under the Collateral Agreement with the same force and effect as if originally named therein as a Loan Party, a Guarantor and a Grantor, as applicable, and each New Borrower hereby (i) agrees to all the terms and provisions of (A) the Amended Credit Agreement applicable to it as a Borrower and Loan Party thereunder and (B) the Collateral Agreement applicable to it as a Loan Party, a Guarantor and a Grantor thereunder.  Each reference to a “Borrower” or a “Loan Party” in the Amended Credit Agreement and each reference to a “Loan Party,” a “Guarantor,” or a “Grantor” in the Collateral Agreement shall be deemed to include such New Borrowers.

 

(e)           Each of the Guarantors party hereto that were not party to the Collateral Agreement (as in effect prior to the date hereof), by its respective signature to this Extension Amendment, shall become a Guarantor and a Loan Party for all purposes under the Amended Credit Agreement and a Loan Party, a

 

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Guarantor and (if applicable, as set forth in the Collateral Agreement) a Grantor under the Collateral Agreement with the same force and effect as if originally named therein as a Loan Party, a Guarantor and a Grantor, as applicable, and each New Guarantor hereby (i) agrees to all the terms and provisions of (A) the Amended Credit Agreement applicable to it as a Guarantor and Loan Party thereunder and (B) the Collateral Agreement applicable to it as a Loan Party, a Guarantor and a Grantor, if applicable, thereunder.  Each reference to a “Guarantor” or a “Loan Party” in the Amended Credit Agreement and each reference to a “Loan Party,” a “Guarantor,” or a “Grantor”, if applicable, in the Collateral Agreement shall be deemed to include such New Guarantors.  For the avoidance of doubt, each of the Lenders party hereto hereby consents to the amendment and restatement of the Collateral Agreement (as defined in the Existing Credit Agreement) in the form attached as Annex A-3 hereto, which amendment and restatement shall become effective on the Amendment Effective Date.

 

Section 3.              [Reserved.]

 

Section 4.              Establishment of Extended Term Loans.

 

(a)           Subject to the satisfaction or waiver of the conditions set forth in Section 5(a) of this Extension Amendment on the date hereof but immediately prior to the effectiveness of the Additional Amendments, there is hereby established under the Amended Credit Agreement two Classes of Extended Term Loans which shall be titled (i) “Cash Pay Extended Term Loans” and (ii) “Cash Pay/PIK Extended Term Loans” (such Extended Term Loans collectively, the “2019 Extended Term Loans”) having the terms set forth in this Extension Amendment and the Amended Credit Agreement, and references in the Amended Credit Agreement to Term Loans and Extended Term Loans shall include, without limitation, the 2019 Extended Term Loans; provided, however, that solely for purposes of Section 2.15 of the Amended Credit Agreement or any analogous pro rata sharing provisions under the Amended Credit Agreement the 2019 Extended Term Loans shall not constitute separate Classes with respect to each other.  The 2019 Extended Term Loans shall be denominated in Dollars.

 

(b)           Each Consenting Lender that delivers an executed signature page to this Extension Amendment on or prior to the Amendment Effective Date irrevocably agrees to convert into 2019 Extended Term Loans the aggregate principal amount of its Existing Term Loans set forth in the Agent’s register as of the date hereof (such conversion, the “2019 Conversion”). On the Amendment Effective Date, each Consenting Lender hereby agrees that the aggregate principal amount of Existing Term Loans held by such Consenting Lender set forth in the Agent’s register as of the date hereof shall automatically (and without any further action on the part of any party to this Extension Amendment or the Existing Credit Agreement) be converted into and reclassified to become Cash Pay Extended Term Loans, Cash Pay/PIK Extended Term Loans, or a combination of both, in the amounts set forth on such Consenting Lender’s signature page to the 2019 Conversion Allocation Election in the form attached hereto as Annex 2 (the “2019 Conversion Allocation Election”), subject to Section 4(c) of this Extension Amendment. After giving effect to the 2019 Conversion but immediately prior to the 2019 Prepayment, the aggregate principal amount of all such 2019 Extended Term Loans held by a Consenting Lender shall equal the aggregate principal amount of Existing Term Loans held by such Consenting Lender as set forth in the Agent’s register as of the date hereof. The remainder (if any) of all Existing Term Loans made under the Existing Credit Agreement will, after giving effect to this Extension Amendment, remain outstanding as Term Loans (the “2013 Term Loans”) on the primary economic terms (maturity, interest) in effect immediately prior to the effectiveness of the Amendments.  On the Amendment Effective Date, after giving effect to this Extension Amendment, the aggregate principal amount of Cash Pay Extended Term Loans, the aggregate principal amount of Cash Pay/PIK Extended Term Loans and the aggregate principal amount of 2013 Term Loans shall be set forth on Schedule I hereto.

 

(c)           Each of the Consenting Lenders acknowledges and agrees to the following:

 

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(i)            in the event that, pursuant to the 2019 Conversion Allocation Election, Consenting Lenders elect to convert more than $250,000,000 but less than $500,000,000 in aggregate principal amount of Term Loans to one Class of 2019 Extended Term Loans (such Class, the “Undersubscribed Class”), the Consenting Lenders electing to receive the Class of 2019 Extended Term Loans that is not the Undersubscribed Class shall be deemed, on a pro rata basis, to have adjusted such elections such that there is at least $500,000,000 in aggregate principal amount of each Class of 2019 Extended Term Loans; and

 

(ii)           if the aggregate principal amount of either the Cash Pay Extended Term Loans or the Cash Pay/PIK Extended Term Loans subscribed for by the Consenting Lenders is less than $250,000,000, then such undersubscribed Class shall be eliminated in its entirety and all 2019 Extended Term Loans shall be Term Loans of the other Class of 2019 Extended Term Loans.

 

(d)           On the Amendment Effective Date, all accrued and unpaid interest owing by the Existing Borrower under the Existing Credit Agreement with respect to any Existing Term Loan (or portion thereof, if applicable) shall be paid in full in cash immediately prior to the 2019 Conversion.  Such payment shall not be subject to any LIBOR breakage cost reimbursement which would have otherwise been incurred under the terms of the Existing Credit Agreement or Amended Credit Agreement.

 

(e)           On and after the Amendment Effective Date, interest shall accrue on the 2019 Extended Term Loans and 2013 Term Loans at the interest rate provided for in the Amended Credit Agreement.  Each 2019 Extended Term Loan and 2013 Term Loan shall initially be deemed to be a Borrowing of a 2019 Extended Term Loan or 2013 Term Loan, as applicable, that is a Eurocurrency Loan with an initial Interest Period equal to the remaining duration (as of the Amendment Effective Date) of the Interest Period applicable to such Borrowing of an Existing Term Loan, but accruing interest at the applicable interest rate for 2019 Extended Term Loans or 2013 Term Loan, as applicable, described in the Amended Credit Agreement; provided, however, that it is understood and agreed that in no event shall any conversion or extension of any Existing Term Loan, or any other transaction contemplated by this Extension Amendment, constitute a repayment, conversion or other event with respect to such Loan that would result in the application or operation of the provisions of Section 2.06, 2.07, 2.08 or 2.13 of the Exiting Credit Agreement or Amended Credit Agreement.

 

(f)            The terms of the 2019 Extended Term Loans shall be as set forth in this Extension Amendment and the Amended Credit Agreement.

 

Section 5.              Conditions Precedent to the Extension Amendment.

 

(a)           The Initial Amendments will become effective on the date on which the Administrative Agent (or its counsel) shall have received (i) a counterpart of this Extension Amendment signed on behalf of, or written evidence satisfactory to the Administrative Agent (which may include facsimile or electronic transmission (including Adobe pdf file) of an executed signature page of this Extension Amendment) from, (A) the Consenting Lenders and (B) the Existing Borrower, Holdings, the Guarantors and the New Borrowers, and (ii) a 2019 Conversion Allocation Election from each  Consenting Lender.

 

(b)           The Additional Amendments will become effective, subject to the occurrence of the Initial Amendment Effective Time, on the date that each of the following conditions is satisfied (or waived by the Required Consenting Term Loan Lenders (as defined in the TSA)):

 

(i)            Administrative Agent (or its counsel) shall have received a counterpart of the Collateral Agreement signed on behalf of,  or written evidence satisfactory to the Administrative

 

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Agent (which may include facsimile or electronic transmission (including Adobe pdf file) of an executed signature page of the Collateral Agreement) from, (A) the Collateral Agent, and (B) Holdings, the Borrowers and the other Loan Parties party thereto.

 

(ii)           The Administrative Agent shall have received a customary legal opinion of each of (A) Kirkland & Ellis LLP, special counsel to the Loan Parties, (B) K&L Gates LLP, local counsel to Worth Avenue Leasing Company, NMG Florida Salon LLC and NM Nevada Trust, and (C) Stinson Leonard Street LLP, local counsel to NMGP, LLC.

 

(iii)          The Administrative Agent shall have received (A) a certificate of a Responsible Officer of Holdings, the Borrowers and the other Loan Parties (1) certifying the resolutions of the board of directors, members or other body authorizing the execution, delivery and performance by each Loan Party of this Extension Amendment (including the Amended Credit Agreement and each other Loan Document to be executed on the Amendment Effective Date), (2) containing an incumbency and specimen signature identifying by name and title of the officers of each Loan Party authorized to sign this Extension Amendment (or certifying that the signatures of such officers previously delivered to the Administrative Agent remain true and correct) and (3) containing appropriate attachments, including the organization documents of each Loan Party certified, if applicable, by the relevant authority of the jurisdiction of organization of such Loan Party (or certifying that the organization documents of such Loan Party previously delivered to the Administrative Agent remain true and correct) and (B) a good standing certificate (or other equivalent certificate to the extent such status or analogous concept applies to such jurisdiction of organization) as of a recent date for each such Loan Party from its respective jurisdiction of organization.

 

(iv)          On and as of the Amendment Effective Date, (A) the representations and warranties of Holdings and each other Loan Party contained in Article III of the Amended Credit Agreement or any other Loan Document shall be true and correct in all material respects; provided that, to the extent such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; and provided, further that, any representation or warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification in the Amended Credit Agreement) in all respects on such respective dates and (B) except for any Defaults or Events of Default waived pursuant to Section 1 of this Extension Amendment, no Default or Event of Default has occurred and is continuing.  The Administrative Agent shall have received a certificate from a Responsible Officer of the Lead Borrower certifying as to the matters set forth in this Section 5(b)(iv) and Section 5(b)(v) below.

 

(v)           All conditions precedent expressly set forth in (A) the TSA (including the Recapitalization Term Sheet attached thereto as Exhibit A), (B) the material documents governing the Second Lien Notes (including the Second Lien Notes Indenture), (C) the material documents governing the Third Lien Notes (including the Third Lien Notes Indenture) and (D) the material documents governing the MT Preferred Equity (as defined in the TSA) (including the applicable Certificate of Designation and material organizational documents) necessary to implement the Recapitalization Transactions, shall have been, or concurrently with the effectiveness of this Extension Amendment shall be, satisfied (or waived in accordance therewith) and New Second Lien Notes in the face amount of $550,00,000 shall have been issued.

 

(vi)          (A) The ABL/Term Loan/Notes Intercreditor Agreement, dated as of the date hereof, among Holdings, the Borrowers, the Administrative Agent, the Collateral Agent, the “Administrative Agent” (as defined in the ABL Credit Agreement), the Second Lien Notes

 

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Collateral Agent and the Third Lien Notes Collateral Agent shall have been duly executed and delivered by each party thereto, and shall be in full force and effect, and (B) the Junior Lien Intercreditor Agreement, dated as of the date hereof, among Holdings, the Borrowers, the Administrative Agent, the Collateral Agent, the Second Lien Notes Collateral Agent and the Third Lien Notes Collateral Agent shall have been duly executed and delivered by each party thereto, and shall be in full force and effect.

 

(vii)         (A) All fees and expenses required to be paid on the Amendment Effective Date pursuant to the TSA to the Consenting Lenders (or any of their respective Affiliates or advisors) upon the consummation of the Recapitalization Transactions and (B) all reasonable (and reasonably documented out-of-pocket expenses of the Administrative Agent pursuant to the terms of the Existing Credit Agreement, in each case, invoiced at least three (3) Business Days prior to the Amendment Effective Date, in each case shall have been, or substantially concurrently with the closing of the Recapitalization Transactions, shall be paid.

 

(viii)        All documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, as has been reasonably requested in writing by the Administrative Agent at least ten (10) calendar days prior to the Amendment Effective Date, will be provided not later than the date that is three (3) Business Days prior to the Amendment Effective Date.

 

(ix)          The Administrative Agent shall have received a completed Perfection Certificate dated the Amendment Effective Date and signed by a Responsible Officer of Holdings and the Lead Borrower.

 

For purposes of determining satisfaction of the conditions precedent set forth in this Section 5 which are subject to the receipt of documents by, or the satisfaction of, the Consenting Lenders, the applicable condition shall be deemed satisfied upon the execution of this Extension Amendment, and the release of signatures by Consenting Lenders representing the Required Lenders.  The time at which the conditions specified in Section 5(a) are satisfied or waived is referred to herein as the “Initial Amendment Effective Time” and the date on which the conditions specified in Sections 5(a) and 5(b) are satisfied or waived is referred to herein as the “Amendment Effective Date”.

 

Section 6.              Representations and Warranties.  Each Loan Party hereby represents and warrants to the Administrative Agent and to each of the Consenting Lenders that, as of the date first written above:

 

(a)           Each Loan Party has all requisite corporate or other organizational power and authority to execute, deliver and perform this Extension Amendment and to effect the transactions contemplated hereby and under the Amended Credit Agreement.

 

(b)           Each Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Extension Amendment and to effect the transactions contemplated hereby.  As of the date first written above, this Extension Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of  each Loan Party, enforceable against each such Loan Party in accordance with its terms, subject to:

 

(i)            the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other similar laws affecting creditors’ rights generally;

 

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(ii)           general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

 

(iii)          implied covenants of good faith and fair dealing; and

 

(iv)          any foreign laws, rules and regulations as they relate to pledges of Equity Interests in Foreign Subsidiaries.

 

(c)           The execution, delivery and performance by each Loan Party of this Extension Amendment and the consummation of the transactions contemplated hereby will not violate (i) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents (including any partnership, limited liability company or operating agreement or by-laws) of any Loan Party, (ii) any applicable order of any court or any rule, regulation or order of any Governmental Authority or (iii) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which any Loan Party is a party or by which any of them or any of their property is or may be bound, in each case of clause (i), (ii) or (iii), except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 7.              Effectiveness; Amendments.  This Extension Amendment shall become effective as of the occurrence of the Initial Amendment Effective Time and Amendment Effective Date, as applicable.  This Extension Amendment may not be amended nor may any provision hereof be waived except pursuant to a writing signed by Holdings, the Borrowers, and the Required Lenders (or the Administrative Agent acting at the direction of the Required Lenders).

 

Section 8.              Credit Agreement.  Except as expressly set forth herein, this Extension Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders, the Agents, the Borrowers or any other Loan Party under the Existing 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 Existing Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect.  Nothing herein shall be deemed to entitle Holdings or the Borrowers to any future consent to, or waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Amended Credit Agreement or any other Loan Document in similar or different circumstances.  Upon the Amendment Effective Date, any reference to the “Credit Agreement” shall mean the Amended Credit Agreement.  Upon the Amendment Effective Date, this Extension Amendment shall constitute a “Extension Amendment” and a “Loan Document” (in each case as defined  in the Amended Credit Agreement), each 2019 Extended Term Loan shall constitute an “Extended Term Loan” and a “Term Loan” (in each case as defined  in the Amended Credit Agreement) and each Consenting Lender shall constitute a “2019 Extending Term Lender” and a “Lender” (in each case as defined  in the Amended Credit Agreement), in each case for all purposes of the Amended Credit Agreement and the other Loan Documents.

 

The parties hereto expressly acknowledge that it is not their intention that this Extension Amendment or any of the other Loan Documents executed or delivered pursuant hereto constitute a novation of any of the obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document, but rather constitute a modification thereof or supplement thereto pursuant to the terms contained herein. The Existing Credit Agreement and the Loan Documents, in each case as amended, modified or supplemented hereby, shall be deemed to be continuing agreements among the parties thereto, and all documents, instruments, and agreements delivered, as well as all Liens created, pursuant to or in connection with the Existing Credit Agreement and the other Loan Documents shall remain

 

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in full force and effect, each in accordance with its terms (as amended, modified or supplemented by this Extension Amendment or otherwise).

 

Section 9.              APPLICABLE LAW. THIS EXTENSION AMENDMENT AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS EXTENSION AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK (EXCEPT FOR CONFLICTS OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION).

 

Section 10.            Counterparts.  This Extension Amendment may be executed in one or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute but one contract. Delivery of an executed signature page to this Extension Amendment by facsimile or electronic transmission (including Adobe pdf copy) shall be effective as delivery of an original signed counterpart of this Extension Amendment.

 

Section 11.            Headings.  The Section headings used in this Extension Amendment are for convenience of reference only, are not part of this Extension Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Extension Amendment.

 

Section 12.            Construction.  The rules of construction specified in Section 1.02 of the Amended Credit Agreement also apply to this Extension Amendment.

 

[Signature Pages Follow]

 

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

 

 

MARIPOSA INTERMEDIATE HOLDINGS LLC,

 

as Holdings

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NEIMAN MARCUS GROUP LTD LLC,

 

as Borrower

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

 

 

 

THE NEIMAN MARCUS GROUP LLC,

 

as Borrower

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

 

 

 

THE NMG SUBSIDIARY LLC,

 

as Borrower

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NEMA BEVERAGE CORPORATION,

 

a Texas corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

President

 

 

 

 

NEMA BEVERAGE HOLDING CORPORATION,

 

a Texas corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

President

 

[Signature Page to Extension Amendment]

 


 

 

NEMA BEVERAGE PARENT CORPORATION,

 

a Texas corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

President

 

 

 

 

NMG SALON HOLDINGS LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

President

 

 

 

 

NMG CALIFORNIA SALON LLC,

 

a California limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

 

 

 

NMG FLORIDA SALON LLC,

 

a Florida limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

 

 

 

NMG SALONS LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

 

 

 

NMG TEXAS SALON LLC,

 

a Texas limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Senior Vice President

 

[Signature Page to Extension Amendment]

 


 

 

BERGDORF GOODMAN INC.,

 

a New York corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

BERGDORF GRAPHICS, INC.,

 

a New York corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

BG PRODUCTIONS, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

MARIPOSA BORROWER, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NM BERMUDA, LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NM FINANCIAL SERVICES, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

[Signature Page to Extension Amendment]

 


 

 

NM NEVADA TRUST,

 

a Massachusetts Trust

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NMG GLOBAL MOBILITY, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NMG TERM LOAN PROPCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

NMGP, LLC,

 

a Virginia limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

 

 

 

WORTH AVENUE LEASING COMPANY,

 

a Florida corporation

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

[Signature Page to Extension Amendment]

 


 

 

NMG NOTES PROPCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Tracy M. Preston

 

Name:

Tracy M. Preston

 

Title:

Vice President

 

[Signature Page to Extension Amendment]

 


 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, in its individual capacity and as Administrative Agent and as Collateral Agent,

 

 

 

 

 

 

 

 

 

By:

/s/ Bryan J. Matthews

 

 

Name:

Bryan J. Matthews

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

By:

/s/ Megan Kane

 

 

Name:

Megan Kane

 

 

Title:

Authorized Signatory

 

[Signature Page to Extension Amendment]

 


 

[Lenders’ signature pages on file with the Agent.]

 

[Signature Page to Extension Amendment]

 


 

SCHEDULE I

 

Type of Term Loan

 

Aggregate Principal Amount

 

2013 Term Loans

 

$

12,697,707.32

 

 

 

 

 

2019 Extended Term Loans

 

 

 

Cash Pay Extended Term Loans

 

$

1,393,748,002.30

 

Cash Pay/PIK Extended Term Loans

 

$

1,381,691,477.88

 

Total 2019 Extended Term Loans

 

 

$

2,775,439,480.18

 

 

 

 

 

 

All Term Loans:

 

 

$

2,788,137,187.50

 

 


 

ANNEX A-1

 

Conformed copy showing amendments through Amendment No. 2 Effective Date

 

$2,950,000,000

 

TERM LOAN CREDIT AGREEMENT,

 

dated as of October 25, 2013,

 

among

 

MARIPOSA INTERMEDIATE HOLDINGS LLC,
as Holdings,

 

MARIPOSA MERGER SUB LLC,
(to be merged with and into
NEIMAN MARCUS GROUP LTD INC.)LLC,
as theLead Borrower,

 

THE NEIMAN MARCUS GROUP LLC and THE NMG SUBSIDIARY LLC,
as Borrowers,

 

THE LENDERS PARTY HERETO,

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Administrative Agent and Collateral Agent,

 

CREDIT SUISSE SECURITIES (USA) LLC,
RBC CAPITAL MARKETS,
DEUTSCHE BANK SECURITIES INC.,
GOLDMAN SACHS BANK USA and
MORGAN STANLEY SENIOR FUNDING, INC.,
as Bookrunners and Arrangers,

 

and

 

BMO CAPITAL MARKETS CORP.,
JEFFERIES FINANCE LLC,
UBS SECURITIES LLC and
MCS CORPORATE LENDING LLC,
as Co-Managers

 


 

ARTICLE I

 

Definitions

 

 

 

SECTION 1.01.

Defined Terms

21

SECTION 1.02.

Terms Generally

5960

SECTION 1.03.

Accounting Terms; GAAP

60

SECTION 1.04.

Effectuation of Transfers

6061

SECTION 1.05.

Currencies

6061

SECTION 1.06.

Required Financial Statements

6061

SECTION 1.07.

Divisions

61

 

 

 

ARTICLE II

 

The Credits

 

 

 

SECTION 2.01.

Term Loans and Borrowings

61

SECTION 2.02.

Request for Borrowing61Borrowings as of the Amendment No. 2 Effective Date

62

SECTION 2.03.

Funding of Borrowings

62

SECTION 2.04.

Interest Elections

62

SECTION 2.05.

Promise to Pay; Evidence of Debt

64

SECTION 2.06.

Repayment of Term Loans

65

SECTION 2.07.

Optional Prepayment of Term Loans

65

SECTION 2.08.

Mandatory Prepayment of Term Loans

6668

SECTION 2.09.

Fees

7071

SECTION 2.10.

Interest

7071

SECTION 2.11.

Alternate Rate of Interest

7072

SECTION 2.12.

Increased Costs

7173

SECTION 2.13.

Break Funding Payments

7274

SECTION 2.14.

Taxes

7375

SECTION 2.15.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

7678

SECTION 2.16.

Mitigation Obligations; Replacement of Lenders

7880

SECTION 2.17.

Illegality

7981

SECTION 2.18.

Incremental Facilities80Additional 2019 Extended Term Loans

81

SECTION 2.19.

Other Term Loans

83

SECTION 2.20.

Extensions of Term Loans

83

SECTION 2.21.

Repricing EventJoint and Several Liability of Borrowers

85

SECTION 2.22.

Designation of Lead Borrower

86

 

 

 

ARTICLE III

 

Representations and Warranties

 

 

 

SECTION 3.01.

Organization; Powers

86

 

i


 

SECTION 3.02.

Authorization

86

SECTION 3.03.

Enforceability

87

SECTION 3.04.

Governmental Approvals

87

SECTION 3.05.

Title to Properties; Possession Under Leases

88

SECTION 3.06.

Subsidiaries

88

SECTION 3.07.

Litigation; Compliance with Laws

88

SECTION 3.08.

Federal Reserve Regulations

89

SECTION 3.09.

Investment Company Act

89

SECTION 3.10.

Use of Proceeds

89

SECTION 3.11.

Tax Returns

89

SECTION 3.12.

No Material Misstatements

90

SECTION 3.13.

Environmental Matters

90

SECTION 3.14.

Security Documents

91

SECTION 3.15.

Location of Real Property and Leased Premises

9291

SECTION 3.16.

Solvency

92

SECTION 3.17.

No Material Adverse Effect

92

SECTION 3.18.

Insurance

92

SECTION 3.19.

USA PATRIOT Act; FCPA; OFAC

9392

SECTION 3.20.

Intellectual Property; Licenses, Etc.

93

SECTION 3.21.

Employee Benefit Plans

9493

 

 

 

ARTICLE IV

 

Conditions of Lending

 

 

 

SECTION 4.01.

Conditions Precedent to the Original Closing Date

94

 

 

 

ARTICLE V

 

Affirmative Covenants

 

 

 

SECTION 5.01.

Existence; Businesses and Properties

9796

SECTION 5.02.

Insurance

9897

SECTION 5.03.

Taxes

9897

SECTION 5.04.

Financial Statements, Reports, etc.

98

SECTION 5.05.

Litigation and Other Notices

101102

SECTION 5.06.

Compliance with Laws

102

SECTION 5.07.

Maintaining Records; Access to Properties and Inspections

102103

SECTION 5.08.

Use of Proceeds

102103

SECTION 5.09.

Compliance with Environmental Laws

102103

SECTION 5.10.

Further Assurances; Additional Security

102103

SECTION 5.11.

Credit Ratings

105108

SECTION 5.12.

Lender Calls

105

SECTION 5.13.

Post-Closing Matters

106108

 

 

 

ARTICLE VI

 

Negative Covenants

 

 

 

SECTION 6.01.

Indebtedness

106108

SECTION 6.02.

Liens

111113

 

ii


 

SECTION 6.03.

Sale and Lease-Back Transactions

115118

SECTION 6.04.

Investments, Loans and Advances

115118

SECTION 6.05.

Mergers, Consolidations, Sales of Assets and Acquisitions

119121

SECTION 6.06.

Restricted Payments

121123

SECTION 6.07.

Transactions with Affiliates

125126

SECTION 6.08.

Business of the BorrowerBorrowers and itstheir Subsidiaries

128

SECTION 6.09.

Limitation on Payments and Modifications of Indebtedness; Modifications of Certificate of Incorporation, By Laws and Certain Other Agreements; etc 128.

129

 

 

 

ARTICLE VII

 

Holdings Covenantand PropCo Guarantors Covenants

 

 

 

SECTION 7.01.

Holdings Covenant

131132

SECTION 7.02.

PropCo Guarantors Covenant

133

 

 

 

ARTICLE VIII

 

Events of Default

 

 

 

SECTION 8.01.

Events of Default

132133

 

 

 

ARTICLE IX

 

The Agents

 

 

 

SECTION 9.01.

Appointment

135136

SECTION 9.02.

Delegation of Duties

138

SECTION 9.03.

Exculpatory Provisions

138139

SECTION 9.04.

Reliance by Administrative Agent

139140

SECTION 9.05.

Notice of Default

140

SECTION 9.06.

Non-Reliance on Agents and Other Lenders

140

SECTION 9.07.

Indemnification

141

SECTION 9.08.

Agent in Its Individual Capacity

141

SECTION 9.09.

Successor Agent

141

SECTION 9.10.

Arrangers and Co-Managers

142

 

 

 

ARTICLE X

 

Miscellaneous

 

 

 

SECTION 10.01.

Notices; Communications

142

SECTION 10.02.

Survival of Agreement

143

SECTION 10.03.

Binding Effect

144143

SECTION 10.04.

Successors and Assigns

144

SECTION 10.05.

Expenses; Indemnity

153151

SECTION 10.06.

Right of Set-off

155153

SECTION 10.07.

Applicable Law

155153

SECTION 10.08.

Waivers; Amendment

155153

 

iii


 

SECTION 10.09.

Interest Rate Limitation

158155

SECTION 10.10.

Entire Agreement

158156

SECTION 10.11.

WAIVER OF JURY TRIAL

159156

SECTION 10.12.

Severability

159156

SECTION 10.13.

Counterparts

159156

SECTION 10.14.

Headings

159156

SECTION 10.15.

Jurisdiction; Consent to Service of Process

159156

SECTION 10.16.

Confidentiality

160157

SECTION 10.17.

Platform; Borrower Materials

161158

SECTION 10.18.

Release of Liens and Guarantees

162159

SECTION 10.19.

USA PATRIOT Act Notice

163159

SECTION 10.20.

Security Documents and Intercreditor Agreements

163159

SECTION 10.21.

No Advisory or Fiduciary Responsibility

163160

SECTION 10.22.

Reaffirmation and Ratification

160

SECTION 10.23.

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

166

SECTION 10.24.

Waivers & Amendments with respect to 2019 Extended Term Loans

167

 

iv


 

Exhibits and Schedules

 

 

 

Exhibit A

Form of Assignment and Acceptance

 

Exhibit B

Form of Solvency Certificate

 

Exhibit C

Form of Borrowing RequestPropCo Operating License

 

Exhibit D

Form of Interest Election Request

 

Exhibit E

Form of Non-Debt Fund Affiliate Assignment and Acceptance

 

Exhibit F

U.S. Tax Compliance Certificate

 

Exhibit G

Form of First LienABL/Term Loan/Notes Intercreditor Agreement

 

Exhibit H

Form of Junior Lien Intercreditor Agreement

 

 

 

 

Schedule 1.01

Closing Date Conversions

 

Schedule 2.01

Commitments

 

Schedule 3.04

Governmental Approvals

 

Schedule 3.05(2)

Possession under Leases

 

Schedule 3.06(1)

Subsidiaries

 

Schedule 3.11

Taxes

 

Schedule 3.13

Environmental Matters

 

Schedule 3.15(1)

Owned Material Real Property

 

Schedule 3.15(2)

Leased Material Real Property

 

Schedule 3.18

Insurance

 

Schedule 3.20

Intellectual Property

 

Schedule 5.135.12

Post-Closing Matters

 

Schedule 6.04

Investments

 

Schedule 6.07

Transactions with Affiliates

 

Schedule 10.01

Notice Information

 

 

v


 

TERM LOAN CREDIT AGREEMENT, dated as of October 25, 2013 (as amended, amended and restated, supplemented, extended, renewed or otherwise modified from time to time, this “Agreement”), by and among MARIPOSA INTERMEDIATE HOLDINGS LLC, a Delaware limited liability company (“Holdings”), MARIPOSA MERGER SUBNEIMAN MARCUS GROUP LTD LLC, a Delaware limited liability company, as a Borrower (Merger Subthe “Lead Borrower” or “Existing Borrower”), THE NEIMAN MARCUS GROUP LLC, a Delaware limited liability company (“TNMG LLC”), THE NMG SUBSIDIARY LLC, a Delaware limited liability company (“The NMG Subsidiary” and together with TNMG LLC and the Lead Borrower, the “Borrowers” and each, a “Borrower”), the Lenders party hereto from time to time and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent (in such capacity, and as further defined in Section 1.01, the “Administrative Agent”), and as collateral agent (in such capacity, and as further defined in Section 1.01, the “Collateral Agent and together with the Administrative Agent, the “Agents).

 

RECITALS

 

(1)                                       Ares Corporate Opportunities Fund III, L.P., Ares Corporate Opportunities Fund IV, L.P. and Canada Pension Plan Investment Board have formed Holdings, and pursuant to the Agreement and Plan of Merger, dated as of September 9, 2013 (the “Merger Agreement”), by and among NM MARIPOSA HOLDINGS, INC., a Delaware corporation, Merger Sub and NEIMAN MARCUS GROUP LTD INC., a Delaware corporation formerly known as Neiman Marcus, Inc. (the “Company”), Merger Sub will merge (the “Merger”) with and into the Company, with the Company being the survivor of such Merger.  As used herein, the “Borrower” means Merger Sub prior to the consummation of the Merger and the Company thereafter. The Lead Borrower is party to that certain Credit Agreement, dated as of October 25, 2013 (as amended, supplemented or otherwise modified prior to the Amendment No. 2 Effective Date, including by that certain Refinancing Amendment, dated as of March 13, 2014, among Holdings, the Existing Borrower, the Lenders party thereto and the Administrative Agent, the “Existing Credit Agreement”), by and among Holdings, the Existing Borrower, certain Subsidiary Loan Parties, the Administrative Agent, the Collateral Agent and certain Lenders party thereto from time to time.

 

(2)                                       Pursuant to that certain Extension Amendment and Amendment No. 2 to Credit Agreement, dated as of June 7, 2019 (the “2019 Extension Amendment”), by and among Holdings, the Borrowers, the Subsidiary Loan Parties party thereto, the Administrative Agent, the Collateral Agent and the Lenders party thereto, the Administrative Agent and the Required Lenders have agreed, inter alia, to amend the Existing Credit Agreement in its entirety to read as set forth in this Agreement as of the Amendment No. 2 Effective Date (as defined below).

 

 

(3)                                       (2) In connection with the consummation of the Merger, (a) the Lenders have agreed to extend credit to the Borrower in the form of Term Loans on the Closing Date in an aggregate principal amount of $2,950.0 million, (b) certain financial institutions have agreed to extend credit to the Borrower and certain co-borrowers in the form of revolving loans, swingline loans and letters of credit under the ABL Credit Agreement (as defined herein) and (c) each of the Sponsors and certain other equity investors (including members of the Company’s management) arranged by or designated by the Sponsors (such equity investors together with the Sponsors, the “Investors”) will, directly or indirectly, contribute to Holdings or another Parent Entity (as defined herein) cash or rollover equity in exchange for common equity of Holdings or such Parent Entity (and Holdings or such

 


 

Parent Entity will contribute such cash and rollover equity to the common equity capital of Merger Sub) and the aggregate amount of such contributed cash or rollover equity will be no less than 22.5% of the sum of (i) the aggregate gross proceeds of the loans borrowed on the Closing Date under the ABL Credit Agreement (excluding letters of credit), the Term Loans borrowed hereunder on the Closing Date and the aggregate gross cash proceeds from any sale of Senior Notes on or prior to the Closing Date, (ii) the aggregate outstanding principal amount of the Existing 2028 Debentures on the Closing Date and (iii) the amount of such cash and rollover equity contributed on the Closing Date after giving effect to the Transactions (such contribution, the “Equity Contribution”).2019 Extension Amendment and as part of the Recapitalization Transactions, the 2019 Extending Term Lenders have agreed to convert $2,775,439,480.18 of their 2013 Term Loans on the Amendment No. 2 Effective Date for either (i) Cash Pay Extended Term Loans and/or (ii) Cash Pay/PIK Extended Term Loans, or a combination of both in each case subject to the terms and conditions set forth in this Agreement and the 2019 Extension Amendment.

 

AGREEMENT

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:Article I

 

ARTICLE I

 

Definitions

 

SECTION 1.01.            Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

ABL Claims” means the “ABL Claims” as defined in the Intercreditor Agreement.

 

2013 Collateral” means the “2013 Term Loan Designated Collateral” as defined in the Collateral Agreement and also includes all other property that is subject to any Lien in favor of the Collateral Agent for the benefit of the 2013 Term Loan Lenders pursuant to any Security Document, including without limitation each mortgage of a Real Property entered into prior to the Amendment No. 2 Effective Date.

 

2013 Term Loan Lenders” means Lenders holding 2013 Term Loans, in their capacity as such.

 

2013 Term Loan Obligations” means the 2013 Term Loans and the Obligations under the Loan Documents directly related thereto, including interest thereon.

 

2013 Term Loans” means (i) immediately prior to the effectiveness of the 2019 Extension Amendment, the Term Loans made to the Lead Borrower pursuant to the Existing Credit Agreement and (ii) immediately upon and after the effectiveness of the 2019 Extension Amendment and the 2019 Conversion (as defined therein), the Term Loans made to the Lead Borrower pursuant to the Existing Credit Agreement that the Lenders declined to convert into 2019 Extended Term Loans pursuant to the 2019 Extension Amendment, which remain outstanding under this Agreement as of the Amendment No. 2 Effective Date (which “2013 Term Loans” shall not include, for the avoidance of doubt, any Non-Participating Term Loan Exchange Indebtedness).

 

2


 

2019 Extended Term Loan Collateral” means all Collateral other than the 2013 Collateral, ABL Priority Collateral, Call Right Collateral and Equity Interests in 2019 Extended Term Loan PropCo .

 

2019 Extended Term Loan Installment Date” has the meaning assigned to such term in Section 2.06(3).

 

2019 Extended Term Loan Liens” means Liens on the Collateral, which Liens have Required Collateral Lien Priority for Liens securing the 2019 Extended Term Loans.

 

2019 Extended Term Loan Obligations” means the 2019 Extend Term Loans and the related Obligations under the Loan Documents related to the 2019 Extended Term Loans (for the avoidance of doubt, including any Additional 2019 Extended Term Loans, but not including any 2013 Term Loan Obligations or Non-Participating Term Loan Exchange Obligations).

 

2019 Extended Term Loan PropCo” means NMG Term Loan PropCo LLC, a Delaware limited liability company that is a Subsidiary of the Lead Borrower formed solely to hold Real Property interests consisting of 2019 Extended Term Loan PropCo Assets.

 

2019 Extended Term Loan PropCo Assets” means the 2019 Term Loan Priority Real Estate Assets, to the extent that such Real Property assets are Non-Mortgageable Leases.

 

2019 Extended Term Loans” means, collectively, the Cash Pay Extended Term Loans and the Cash Pay/PIK Extended Term Loans and, as applicable, the Cash Pay Additional 2019 Extended Term Loans and the Cash Pay/PIK Additional 2019 Extended Term Loans, which shall, for the avoidance of doubt, each constitute a separate Class of Term Loans and a separate Term Facility hereunder; provided, however, that solely for purposes of Section 2.07, Section 2.08 (subject to clause (5)(d) thereof) or Section 2.15 and any analogous pro rata sharing provisions under this Agreement and the other Loan Documents, the 2019 Extended Term Loans shall not constitute separate Classes with respect to each other but shall constitute one Class solely for purposes of such pro rata sharing provisions; provided, further that the 2019 Extended Term Loan Obligations (other than the Additional 2019 Extended Term Loans and the Obligations under the Loan Documents related to the Additional 2019 Extended Term Loans) shall be subordinated in right of payment or “waterfall” priority to Obligations in respect of the Additional 2019 Extended Term Loans in respect of any recovery on account of the Call Right Collateral and the Guarantee of the applicable Obligations by Notes PropCo, if any, as set forth in Section 5.04 of the Collateral Agreement.

 

2019 Extending Term Lenders” means the Lenders party to the 2019 Extension Amendment and identified as holding 2019 Extended Term Loans on Schedule 2.01 (other than any such Person that has ceased to be a party hereto in such capacity pursuant to an Assignment and Acceptance in accordance with Section 10.04), as well as any Person that acquires a direct interest in a 2019 Extended Term Loan pursuant to Section 10.04 or Section 2.20.

 

2019 Extension Amendment” has the meaning assigned to such term in the recitals hereto.

 

2019 Term Loan Priority Real Estate Assets” means (a) the Real Property assets set forth on (i) Schedule 3.15(1) under the heading “2019 Term Loan Priority Real Estate Assets” and (ii) Schedule 3.15(2) under the heading “2019 Term Loan Priority Real Estate Assets”.

 

3


 

2028 Debentures” means the 7.125% debentures due 2028 issued by TNMG LLC (f/k/a/ The Neiman Marcus Group, Inc.) pursuant to an indenture, dated as of May 27, 1998, by and between The Neiman Marcus Group LLC (f/k/a Neiman Marcus Group, Inc.) and Wilmington Savings Fund Society, FSB, as successor trustee, as amended, restated, supplemented and/or otherwise modified from time to time, including on or about the date hereof (the “2028 Debentures Indenture”).

 

2028 Debentures Collateral” means the “2028 Notes Collateral” as defined in the Junior Lien Intercreditor Agreement.

 

2028 Debentures Indenture” has the meaning given such term in the definition of 2028 Debentures.

 

2028 Debentures Obligations” means the 2028 Debentures and the related Indebtedness Obligations under the 2028 Debentures Indenture and the other Indebtedness Documents related to the 2028 Debentures.

 

ABL Credit Agreement” means the Revolving Credit Agreement, dated as of the Original Closing Date, among Holdings, Merger Subthe Existing Borrower, the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent and collateral agent, as such document may be amended, restated, supplemented or otherwise modified from time to time, including by that certain Fourth Amendment to time.

 

ABL Credit Agreement Refinancing Indebtedness” means “Credit Agreement Refinancing Indebtedness” as defined in the ABL Credit Agreement.”ABL Extended Revolving Commitments” means “Extended Loans” as defined in the ABL Credit Agreement, dated as of the Amendment No. 2 Effective Date, by and among the parties thereto.

 

ABL Facility” means the Revolving Facility” and any “Incremental Facility,” each as definedcredit facilities provided for in the ABL Credit Agreement or with respect to any other Indebtedness incurred pursuant to Section 6.01(2).

 

ABL Incremental Equivalent Debt” means any “Incremental Equivalent Debt” as defined in the ABL Credit Agreement.

 

ABL Incremental Facilities” means any “Incremental Facility” as defined in the ABL Credit Agreement.

 

ABL Loan Documents” means the ABL Credit Agreement and the other “Loan Documents” as defined in the ABL Credit Agreement or, as applicable, any other Indebtedness incurred pursuant to Section 6.01(2), as each such document may be amended, restated, supplemented or otherwise modified.

 

ABL Obligations” means the “Obligations” as defined in the ABL Credit Agreement.”ABL Other Loans” means “Other Loans” as defined in the ABL Credit Agreement. or,  as applicable, any similar term employed in respect of other Indebtedness incurred pursuant to Section 6.01(2).

 

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

 

4


 

ABL Priority Collateral Asset Sale” means any Asset Sale that consists of or includes the disposition of ABL Priority Collateral outside the ordinary course of business, but solely to the extent of the sale of such ABL Priority Collateral.

 

ABL Security Documents” means the “Security Documents” as defined in the ABL Credit Agreement.

 

ABL/Term Loan/Notes Intercreditor Agreement” means the ABL/Term Loan/Notes Intercreditor Agreement, dated as of the Amendment No. 2 Effective Date, by and among the Administrative Agent, the Collateral Agent, Deutsche Bank AG New York Branch, as administrative agent and collateral agent under the ABL Credit Agreement, the Second Lien Notes Collateral Agent, the Third Lien Notes Collateral Agent and any other parties party thereto from time to time, and acknowledged by Holdings and the Borrowers, as amended, restated, supplemented and/or otherwise modified from time to time.

 

ABR” means, for any day, a fluctuating rate per annum equal to the highest of:

 

(1)                                       the Federal Funds Rate plus 1/2 of 11.00%;

 

(2)                                       the prime commercial lending rate published as of such day by the Administrative Agent as the “prime rate;” and

 

(3)                                       the LIBOR Quoted Rate plus 11.00%.

 

Any change in the ABR due to a change in the Federal Funds Rate, the “prime rate” or the LIBOR Quoted Rate will be effective on the effective date of such change in the Federal Funds Rate, the “prime rate” or the LIBOR Quoted Rate, as the case may be.

 

ABR Borrowing” means a Borrowing comprised of ABR Loans.

 

ABR Loan” means any Term Loan bearing interest at a rate determined by reference to the ABR.

 

Additional 2019 Extended Term Loans” means Cash Pay Additional 2019 Extended Term Loan and Cash Pay/PIK Additional 2019 Extended Term Loans, in each case, incurred pursuant to Section 2.18.

 

Additional 2019 Extended Term Loan Lenders” has the meaning assigned to such term in Section 2.18(5).

 

Additional Lender” means the banks, financial institutions and other institutional lenders and investors (other than natural persons) that become Lenders in connection with an Incremental Term Loan or Other Term Loan; provided that no Disqualified Institution may be an Additional Lender.

 

Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to the greater of (1) the LIBO Rate in effect for such Interest Period divided by one minus the Statutory Reserves applicable to such Eurocurrency Borrowing, if any, and (2) 1.00%(i) 1.00%, with respect to any Term Loans other than the 2019 Extended Term Loans (including, for the avoidance of doubt, the 2013 Term Loans) or (ii) 1.50%, with respect to any 2019 Extended Term Loans.

 

5


 

Administrative Agent” means Credit Suisse AG, Cayman Islands Branch, in its capacity as administrative agent for itself and the Lenders hereunder, and any duly appointed successor in such capacity.

 

Administrative Agent Fees” has the meaning assigned to such term in Section 2.09(1).

 

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

Affiliate” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

Affiliated Lender” means each Sponsor and each of its Affiliates, other than (1) Holdings or any of its Subsidiaries (including the BorrowerBorrowers) and (2) any natural person.

 

Agents” means the Administrative Agent and the Collateral Agent, in their respective capacities as such.

 

Agreement” has the meaning assigned to such term in the introductory paragraph hereof.

 

Amendment No. 2 Effective Date” means the “Amendment Effective Date” as defined in the 2019 Extension Amendment.

 

Annual Financial Statements” has the meaning assigned to such term in Section 5.04(1).

 

Applicable Margin” means:

 

(1)                                       with respect to any 2013 Term Loans made on the Closing Date, (a) as of the Closing Date, (x) for ABR Loans, 3.00% and (y) for Eurocurrency Loans, 4.00%, and (b) following delivery of Required Financial Statements for the Borrower’s fiscal quarter ending February 1, 2014,, the percentage per annum determined in accordance with the pricing grid set forth below, based on the Senior Secured First Lien Net Leverage Ratio for the most recent fiscal quarter ending on the date prior to the first day of each fiscal quarter of the Lead Borrower:

 

Senior Secured First Lien
Net Leverage Ratio

 

Applicable Margin for
ABR Loans

 

Applicable Margin for
Eurocurrency Loans

 

Category 1:
Greater than 4.00 to 1.00

 

3.002.25%

 

4.003.25%

 

Category 2:
Less than or equal to 4.00 to 1.00

 

2.752.00%

 

3.753.00%

 

 

For purposes of the foregoing, each change in the Applicable Margin under this clause (1) resulting from a change in the Senior Secured First Lien Net Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent pursuant to

 

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Section 5.04(1) or 5.04(2) of the Required Financial Statements indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Senior Secured First Lien Net Leverage Ratio shall be deemed to be in Category 1, at the option of the Administrative Agent or at the request of the Required Lenders, if the Lead Borrower fails to deliver the Required Financial Statements required to be delivered by it pursuant to Section 5.04(1) or 5.04(2) or the certificate of a Financial Officer of the Lead Borrower required pursuant to Section 5.04(3) during the period from the expiration of the time for delivery thereof until such Required Financial Statements and such certificate are delivered;

 

(2)                                       with respect to any Incremental Term Loans, the “Applicable Margin” set forth in the Incremental Facility Amendment establishing the terms thereof; Cash Pay Extended Term Loan, a percentage per annum equal to (a) for Eurocurrency Loans, 6.00% per annum and (b) for ABR Loans, 5.00% per annum;

 

(3)                                       with respect to any Cash Pay/PIK Extended Term Loan, a percentage per annum equal to (a) for Eurocurrency Loans, 6.50% per annum and (b) for ABR Loans, 5.50% per annum;

 

(4)                                       with respect to any Cash Pay Additional Extended Term Loan, a percentage per annum equal to (a) for Eurocurrency Loans, 6.00% per annum and (b) for ABR Loans, 5.00% per annum;

 

(5)                                       with respect to any Cash Pay/PIK Additional Extended Term Loan, a percentage per annum equal to (a) for Eurocurrency Loans, 6.50% per annum or (b) for ABR Loans, 5.50% per annum;

 

(6)                                       (3) with respect to any Other Term Loans, the “Applicable Margin” set forth in the Refinancing Amendment establishing the terms thereof; and

 

(7)                                       (4) with respect to any Extended Term Loans other than the 2019 Extended Term Loans, the “Applicable Margin” set forth in the Extension Amendment establishing the terms thereof.

 

Applicable Premium” has the meaning assigned to such term in Section 2.07(5).

 

Approved Fund” has the meaning assigned to such term in Section 10.04(2).

 

Arranger” means each of Credit Suisse Securities (USA) LLC, Royal Bank of Canada, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc.

 

Asset Sale” means any loss, damage, destruction or condemnation of, or any sale, transfer or other disposition (including any Sale and Lease-Back Transaction) to any Person of any asset or assets of the BorrowerBorrowers or any Restricted Subsidiary.

 

Asset Sale Proceeds Account” means one or more deposit accounts or securities accounts (as such terms are defined in the Uniform Commercial Code) containing only the Net Cash Proceeds of Asset Sales or any Below Threshold Asset Sale Proceeds, any investments thereof in Cash Equivalents and the proceeds thereof, pending the application of such Net Cash Proceeds in accordance with Section 2.08(1), which accounts have been pledged to the Collateral Agent, for the benefit of the Secured Parties, on a first-priority basis pursuant to documentation in form and substance reasonably satisfactory to the Collateral Agent.

 

Assignee” has the meaning assigned to such term in Section 10.04(2).

 

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Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Assignee, and accepted by the Administrative Agent and the Lead Borrower (if required by Section 10.04), substantially in the form of Exhibit A or such other form that is approved by the Administrative Agent and reasonably satisfactory to the Lead Borrower.

 

Available Amount” means, as of any date, an amount, not less than zero, determined on a cumulative basis, equal to the sum, without duplication, of: Contribution Proceeds” means, as of any date, (A) (i) an amount equal to the cumulative amount of cash proceeds received by the Lead Borrower in connection with the sale or issuance of Equity Interests of any Parent Entity after the Amendment No. 2 Effective Date (including upon exercise of warrants or options) which have been contributed to the capital of the Lead Borrower or exchanged for Equity Interests of the Lead Borrower, in each case, other than the proceeds of Disqualified Stock, contributions of the type set forth in Section 6.06(2)(c), the proceeds of common Equity Interest sales used to voluntarily prepay any 2013 Term Loan prior to the Maturity Date applicable thereto in accordance with Section 2.07(2)(b) and Cure Amounts, less (ii) any such amounts that are used prior to such date to make Investments under Section 6.04(3) or Section 6.04(4), and payments in respect of Junior Financing under Section 6.09(2)(f) or Section 6.09(4)(b) and (B) any property (for the avoidance of doubt, not the fair market value thereof, but property in the form received by the Lead Borrower) other than cash received by the Lead Borrower in connection with the sale or issuance of Equity Interests of any Parent Entity after the Amendment No. 2 Effective Date (including upon exercise of warrants or options) which have been contributed to the capital of the Lead Borrower or exchanged for Equity Interests of the Lead Borrower.

 

(1)                                 $200.0 million; plus

 

(2)                                 the Cumulative Retained Excess Cash Flow Amount as of such date (measured annually); plus

 

(3)                                 the cumulative amount of cash proceeds and the fair market value of property (other than cash) received by the Borrower or any Parent Entity in connection with the sale or issuance of Equity Interests of the Borrower or any Parent Entity after the Closing Date and on or prior to such date (including upon exercise of warrants or options or in connection with a Permitted Acquisition or other Permitted Investment) which, with respect to proceeds or property received in connection with the sale or issuance of Equity Interests of a Parent Entity, have been contributed to the capital of the Borrower or exchanged for Equity Interest of the Borrower, other than the proceeds of Disqualified Stock, Excluded Contributions, Cure Amounts, any net cash proceeds that are used prior to such date for Restricted Payments under Section 6.06(1) or Section 6.06(2)(b), and equity used to incur Contribution Indebtedness; plus

 

(4)                                 100% of the aggregate amount of cash contributions to the capital of the Borrower and the fair market value of property other than cash contributed to the capital of the Borrower after the Closing Date, other than the proceeds of Disqualified Stock, Excluded Contributions, Cure Amounts, any net cash proceeds that are used prior to such date for Restricted Payments under Section 6.06(1) or Section 6.06(2)(b), and equity used to incur Contribution Indebtedness; plus

 

(5)                                 100% of the aggregate principal amount of any Indebtedness (including the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified

 

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Stock) of the Borrower or any Restricted Subsidiary issued after the Closing Date (other than Indebtedness (including Disqualified Stock) issued to Holdings, the Borrower or a Restricted Subsidiary), which has been converted into or exchanged for Equity Interests (other than Disqualified Stocks) of the Borrower or any Parent Entity; plus

 

(6)                                 100% of the aggregate amount of cash (and the fair market value of property other than cash) received by the Borrower or any Restricted Subsidiary after the Closing Date from (a) the sale (other than to Holdings, the Borrower or any Restricted Subsidiary) of the Equity Interests of any Unrestricted Subsidiary or (b) any dividend or other distribution (including any payment on intercompany Indebtedness) by any such Unrestricted Subsidiary; plus

 

(7)                                 in the event any Unrestricted Subsidiary becomes a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings, the Borrower or any Restricted Subsidiary, the lesser of (a) the fair market value of the Investments of the Borrower and the Restricted Subsidiaries in such Unrestricted Subsidiary at the time such Unrestricted Subsidiary becomes a Restricted Subsidiary or at the time of such merger, consolidation, amalgamation, transfer or liquidation (or of the assets transferred or conveyed, as applicable) and (b) the fair market value of the original Investments by the Borrower and the Restricted Subsidiaries in such Unrestricted Subsidiary, in each case, as determined by a Responsible Officer of the Borrower in good faith; plus

 

(8)                                 any mandatory prepayment declined by a Lender; minus

 

(9)                                 the use of such Available Amount since the Closing Date.

 

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

Available Incremental Term Loan Facility Amount” has the meaning assigned to such term in Section 2.18(3).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.

 

Below Threshold Asset Sale Proceeds” means the cash proceeds of Asset Sales involving aggregate consideration of $10.05.0 million or less.

 

Beneficial Owner” has the meaning given to that term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will not be deemed to have beneficial ownership of any securities that such “person” has the right to acquire or vote only upon the happening of any future event or contingency (including the passage of time) that has not yet occurred.  The terms “Beneficial Ownership”, “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

 

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

 

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Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

Board of Directors” means, as to any Person, the board of directors, board of managers or other governing body of such Person, or if such Person is owned or managed by a single entity, the board of directors, board of managers or other governing body of such entity, and the term “directors” means members of the Board of Directors.

 

Borrower” has the meaning assigned to such term in the recitals to this Agreementintroductory paragraph hereof.  As used herein, the term “Borrower” shall mean, as the context requires, “Borrower” or “Borrowers”.

 

Borrower Materials” has the meaning assigned to such term in Section 10.17(1).

 

Borrowing” means a group of Term Loans of a single Type made on a single date under a single Term Facility and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect.

 

Borrowing Base” means as of any date, the sum of:

 

(1)                                 90% of all accounts receivable held by the Borrower and the Restricted Subsidiaries as of such date; plus

 

(2)                                 90% of the inventory held by the Borrower and the Restricted Subsidiaries as of such date; plus

 

(3)                                 100% of all cash and Cash Equivalents held by the Borrower and the Restricted Subsidiaries as of such date;

 

in each case, determined on a consolidated basis in accordance with GAAP based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

 

Borrowing Request” means a request by the Borrower in accordance with the terms of Section 2.02this Agreement and substantially in the form of Exhibit Ca form mutually satisfactory to the Administrative Agent and the Lead Borrower.

 

Budget” has the meaning assigned to such term in Section 5.04(58).

 

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close; provided that when used in connection with a Eurocurrency Loan, the term “Business Day” also excludes any day on which banks are not open for dealings in deposits in the London interbank market.

 

Call Right” means “Call Right” as defined in the Junior Lien Intercreditor Agreement.

 

Call Right Cap Recovery” has the meaning assigned to such term in the Junior Lien Intercreditor Agreement.

 

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Call Right Collateral” means the Notes Priority Real Estate Assets that are not Notes PropCo Assets and the Equity Interests in Notes PropCo, and all the proceeds of any of the foregoing.

 

Capital Expenditures” means, for any period, the aggregate of all expenditures incurred by the BorrowerBorrowers and the Restricted Subsidiaries during such period that, in accordance with GAAP, are or should be included in “additions to property, plant or equipment” or similar items reflected in the consolidated statement of cash flows of the BorrowerBorrowers and itstheir Restricted Subsidiaries for such period; provided that Capital Expenditures will not include:

 

(1)                                       expenditures to the extent they are made with (a) Equity Interests of any Parent Entity or (b) proceeds of the issuance of Equity Interests of, or a cash capital contribution to, the BorrowerBorrowers after the ClosingAmendment No. 2 Effective Date;

 

(2)                                       expenditures with proceeds of insurance settlements, condemnation awards and other settlements in respect of lost, destroyed, damaged or condemned assets, equipment or other property to the extent such expenditures are made to replace or repair such lost, destroyed, damaged or condemned assets, equipment or other property or otherwise to acquire, maintain, develop, construct, improve, upgrade or repair assets or properties useful in the business of the BorrowerBorrowers and itstheir Subsidiaries;

 

(3)                                       interest capitalized during such period;

 

(4)                                       expenditures that are accounted for as capital expenditures of such Person and that actually are paid for by a third party (excluding the BorrowerBorrowers and any Restricted Subsidiary) and for which none of the BorrowerBorrowers or any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such third party or any other Person (whether before, during or after such period);

 

(5)                                       the book value of any asset owned by the BorrowerBorrowers 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 any expenditure necessary in order to permit such asset to be reused will be included as a Capital Expenditure during the period that such expenditure is actually made;

 

(6)                                       the purchase price of equipment purchased during such period to the extent the consideration therefor consists of any combination of (a) used or surplus equipment traded in at the time of such purchase or (b) the proceeds of a concurrent sale of used or surplus equipment, in each case, in the ordinary course of business;

 

(7)                                       Investments in respect of a Permitted Acquisition;(8)                                              the Merger; or

 

(8)                                       (9) the purchase of property, plant or equipment to the extent purchased with the proceeds of Asset Sales that are not applied to prepay Term Loans pursuant to Section 2.08.

 

Capital Lease Obligations” means, with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other similar arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP (as in effect on the Original Closing Date, notwithstanding any modification or interpretative change

 

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thereto after the Original Closing Date and excluding the effect to any treatment of leases under Accounting Standards Codification 842 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect)) and, for purposes hereof, the amount of such obligations at any time will be the capitalized amount thereof at such time determined in accordance with GAAP.

 

Capital Stock” means:

 

(1)                                       in the case of a corporation, corporate stock;

 

(2)                                       in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)                                       in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)                                       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.

 

Cash Equivalents” means:

 

(1)                                       Dollars, Canadian dollars, Japanese yen, pounds sterling, euros or the national currency of any participating member of the European Union or, in the case of any Foreign Subsidiary, any local currencies held by it from time to time in the ordinary course of business and not for speculation;

 

(2)                                       direct obligations of the United States of America or any member of the European Union or any agency thereof or obligations guaranteed by the United States of America or any member of the European Union or any agency thereof, in each case, with maturities not exceeding two years;

 

(3)                                       time deposits, eurodollar time deposits, certificates of deposit and money market deposits, in each case, with maturities not exceeding one year from the date of acquisition thereof, and overnight bank deposits, in each case, with any commercial bank having capital, surplus and undivided profits of not less than $250.0 million;

 

(4)                                       repurchase obligations for underlying securities of the types described in clauses (2) and (3) above and clause (6) below entered into with a bank meeting the qualifications described in clause (3) above;

 

(5)                                       commercial paper or variable or fixed rate notes maturing not more than one year after the date of acquisition issued by a corporation rated at least “P-1” by Moody’s or “A-1” by S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

 

(6)                                       securities with maturities of two years or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

 

(7)                                       Indebtedness issued by Persons (other than the Sponsors) with a rating of at least “A 2” by Moody’s or “A” by S&P (or reasonably equivalent ratings of another internationally recognized rating agency), in each case, with maturities not exceeding one year from the date of acquisition,

 

12


 

and 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 (or reasonably equivalent ratings of another internationally recognized rating agency);

 

(8)                                       Investments in money market funds with average maturities of 12 months or less from the date of acquisition that are rated “Aaa3” by Moody’s and “AAA” by S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

 

(9)                                       instruments equivalent to those referred to in clauses (1) through (8) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above customarily utilized in the countries where any such Restricted Subsidiary is located or in which such Investment is made; and

 

(10)                                shares of mutual funds whose investment guidelines restrict 95% of such funds’ investments to those satisfying the provisions of clauses (1) through (9) above.

 

Cash Management Bank” means any provider of Cash Management Services that, at the time such Cash Management Obligations were entered into or, if entered into prior to the ClosingAmendment No. 2 Effective Date, on the ClosingAmendment No. 2 Effective Date, was the Administrative Agent, a Lender or an Affiliate of the foregoing, whether or not such Person subsequently ceases to be the Administrative Agent, a Lender or an Affiliate of the foregoing.

 

Cash Management Obligations” means obligations owed by any Loan Party to any Cash Management Bank in respect of or in connection with Cash Management Services and designated by the Cash Management Bank and the Lead Borrower in writing to the Administrative Agent as “Cash Management Obligations” under this Agreement (but only if such obligations have not been designated as “Cash Management Obligations” under the ABL Credit Agreement).

 

Cash Management Services” means any treasury, depository, pooling, netting, overdraft, stored value card, purchase card (including so called “procurement card” or “P-card”), debit card, credit card, cash management and similar services and any automated clearing house transfer of funds.

 

Certain Funds ProvisionsCash Pay Additional 2019 Extended Term Loans” has the meaning givenassigned to such term in the Commitment LetterSection 2.18(8).

 

Cash Pay Extended Term Loans” means Term Loans incurred under the 2019 Extension Amendment, for which the applicable 2019 Extending Term Lender has elected the classification “Cash Pay Extended Term Loans” in accordance with the 2019 Extension Amendment, which Term Loans shall bear interest at the rate described in clause (2) of the definition of “Applicable Margin”.

 

Cash Pay/PIK Additional 2019 Extended Term Loans” has the meaning assigned to such term in Section 2.18(8).

 

Cash Pay/PIK Extended Term Loans” means Term Loans incurred under the 2019 Extension Amendment for which the applicable 2019 Extending Term Lender has elected the classification “Cash Pay/PIK Extended Term Loans” in accordance with the 2019 Extensions Amendment, which Term Loans shall bear interest at the rate described in clause (3) of the definition of “Applicable Margin”.

 

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Causes of Action” means any action, Claim, cause of action, controversy, demand, right, action, lien, indemnity, interest, guaranty, suit, obligation, liability, damage, judgment, account, defense, offset, power, privilege, and license of any kind or character whatsoever, whether known, unknown, contingent or non-contingent, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured, assertable directly or derivatively, whether arising before, on, or after the Amendment No. 2 Effective Date, in contract or in tort, in law (whether local, state, or federal U.S. or non-U.S. law) or in equity, or pursuant to any other theory of local, state, or federal U.S. or non-U.S. law.  For the avoidance of doubt, “Cause of Action” includes:  (a) any right of setoff, counterclaim, or recoupment and any Claim for breach of contract or for breach of duties imposed by law or in equity; (b) any Claim based on or relating to, or in any manner arising from, in whole or in part, tort, breach of contract, breach of fiduciary duty, fraudulent transfer or fraudulent conveyance or voidable transaction law, violation of local, state, or federal or non-U.S. law or breach of any duty imposed by law or in equity, including securities laws, negligence, and gross negligence; (c) any Claim pursuant to section 362 or chapter 5 of the title 11 of the United States Code or similar local, state, or federal U.S. or non-U.S. law; (d) any Claim or defense including fraud, mistake, duress, and usury, and any other defenses set forth in section 558 of title 11 of the United States Code; (e) any state or foreign law pertaining to actual or constructive fraudulent transfer, fraudulent conveyance, or similar Claim; and (f) any “lender liability” or equitable subordination claims or defenses.

 

A “Change in Control” will be deemed to occur if:

 

(1)                                 at any time,

 

(a)                                 Holdings ceases to Beneficially Own, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Borrower; provided, however, that prior to the completion of the Closing Date Conversions, a controlled Affiliate of the Sponsors may own the Class B Capital Stock of the BorrowerBorrowers;; or

 

(b)                                 a “change of control” (or comparable event) occurs under the ABL Credit Agreement or, the Secured Notes Indentures, the Senior Notes Indentures or the documentation governing any Permitted Refinancing Indebtedness in respect of any of the foregoing, in each case, if any Indebtedness is outstanding under such agreement; or

 

(2)                                 at any time prior to the consummation of a Qualified IPO, the Permitted Holders, taken together, cease to Beneficially Own, directly or indirectly, Voting Stock representing 50% or more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings (determined on a fully diluted basis but without giving effect to contingent voting rights not yet vested); or

 

(3)                                 at any time after the consummation of a Qualified IPO, any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act, but excluding any employee benefit plan of such Person and its subsidiariesSubsidiaries and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Permitted Holders, acquires Beneficial Ownership of Voting Stock of a Parent Entity representing (a) more than 35% of the aggregate ordinary voting power for the election of directors represented by the issued and outstanding Equity Interests of such Parent Entity (determined on a fully diluted basis but without giving effect to contingent voting rights that have not yet vested) and (b) more than the percentage of the aggregate ordinary voting power for the election of directors that is at the time Beneficially

 

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Owned, directly or indirectly, by the Permitted Holders, taken together (determined on a fully diluted basis but without giving effect to contingent voting rights that have not yet vested).

 

Change in Law” means:

 

(1)                                 the adoption of any law, rule or regulation after the ClosingAmendment No. 2 Effective Date;

 

(2)                                 any change in law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the ClosingAmendment No. 2 Effective Date; or

 

(3)                                 compliance by any Lender (or, for purposes of Section 2.12(2), by any lending office of such Lender or by such Lender’s holding company, if any) with any written request, guideline or directive (whether or not having the force of law) of any Governmental Authority, made or issued after the ClosingAmendment No. 2 Effective Date; provided that, notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives promulgated thereunder or issued in connection therewith and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States of America or foreign regulatory authorities, in each case pursuant to Basel III, in each case will be deemed to be a “Change in Law,” regardless of the date enacted, adopted, promulgated or issued.

 

Charges” has the meaning assigned to such term in Section 10.09.

 

Claim” means any (a) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (b) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.

 

Class” means, with respect to a Term Facility, (a) when used with respect to Lenders, the Lenders under such Term Facility, and (b) when used with respect to Term Loans or Borrowings, Term Loans or Borrowings under such Term Facility.  For the avoidance of doubt, (i) as of the Amendment No. 2 Effective Date, there shall be three separate Classes of Term Loans hereunder, consisting of one Class of 2013 Term Loans and two Classes of 2019 Extended Term Loans, (ii) the Non-Participating Term Loan Exchange Indebtedness (if any) shall be a separate Class of Term Loans from the 2013 Term Loans and any Class of 2019 Extended Term Loans, and (iii) each class of Additional 2019 Extended Term Loans shall be a separate Class from any other Class of 2019 Extended Term Loans (except as set forth in the definition of “2019 Extended Term Loan”) and the 2013 Term Loans.

 

Closing Date” means October 25, 2013.

 

Closing Date Conversions” means the transactions described on Schedule 1.01.

 

Closing Date Refinancing” means the repayment of debt contemplated by the Debt Payoff Letter (as defined in the Merger Agreement).

 

Closing Date Senior Secured First Lien Net Leverage Ratio” means 4.70 to 1.00.

 

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Closing Date Total Net Leverage Ratio” means 7.00 to 1.00.

 

Co-Managers” means each of BMO Capital Markets Corp., Jefferies Finance LLC, UBS Securities LLC and MCS Corporate Lending LLC.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Collateral” means the “Collateral” as defined in the Collateral Agreement and also includes all other property that is subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to any Security Document, including all interests in Real Property mortgaged in accordance with Section 5.12 hereof and the Real Property constituting Collateral prior to the Amendment No. 2 Effective Date.

 

Collateral Agent” means Credit Suisse AG, Cayman Islands Branch, in its capacity as Collateral Agent for itself and the other Secured Parties, and any duly appointed successor in that capacity.

 

Collateral Agreement” means the Amended and Restated Term Loan Guarantee and Collateral Agreement, dated as of the ClosingAmendment No. 2 Effective Date, among the Loan Parties and the Collateral Agent, as amended, supplemented , restated and/or otherwise modified from time to time.

 

Commitment” means, with respect to each Lender, the commitment of such Lender to make Term Loans as set forth on Schedule 2.01.  On the Closing Date, the aggregate amount of Commitments is $2,950.0 million.for any Lender, the commitment of such Lender to make Other Term Loans pursuant to Section 2.19 or the commitment of such Lender to make Extended Term Loans pursuant to Section 2.20.

 

Commitment Letter” means that certain Commitment Letter, dated as of September 9, 2013, by and among Merger Sub, Credit Suisse AG, Credit Suisse Securities (USA) LLC, Royal Bank of Canada, Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch and Deutsche Bank AG Cayman Islands Branch and including any joinders thereto.

 

CompanyConsent Fees” has the meaning assigned to such term in the recitals heretoSection 2.09(2).

 

Consolidated Debt” means, as of any date, the sum (without duplication) of all Indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of Capital Lease Obligations, Indebtedness for borrowed money, Disqualified Stock and Indebtedness in respect of the deferred purchase price of property or services of the BorrowerBorrowers and the Restricted Subsidiaries and all Guarantees of the foregoing, determined on a consolidated basis in accordance with GAAP, based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

 

Consolidated EBITDA” means, for any period, the Consolidated Net Income of the BorrowerBorrowers for such period:

 

(1)                                       increased, in each case to the extent deducted in calculating such Consolidated Net Income (and without duplication), by:

 

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(a)                                 provision for taxes based on income, profits or capital, including state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued, including any penalties and interest relating to any tax examinations, and state taxes in lieu of business fees (including business license fees) and payroll tax credits, income tax credits and similar tax credits, and including an amount equal to the amount of tax distributions actually made to the holders of Equity Interests of the BorrowerBorrowers or any Parent Entity in respect of such period (in each case, to the extent attributable to the operations of the BorrowerBorrowers and itstheir Subsidiaries), which will be included as though such amounts had been paid as income taxes directly by the BorrowerBorrowers; plus

 

(b)                                 Consolidated Interest Expense; plus

 

(c)                                  cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or Disqualified Stock of the BorrowerBorrowers or any Restricted Subsidiary; plus

 

(d)                                 all depreciation and amortization charges and expenses; plus

 

(e)                                  all

 

(i)                                     losses, charges, fees, costs and expenses relating to the Recapitalization Transactions;

 

(ii)                                  transaction fees, costs and expenses incurred in connection with the consummation of any transaction that is out of the ordinary course of business (or any transaction proposed but not consummated) permitted under this Agreement, including equity issuances, investments, acquisitions, dispositions, recapitalizations, mergers, option buyouts and the incurrence, modification or repayment of Indebtedness permitted to be incurred under this Agreement (including any Permitted Refinancing Indebtedness in respect thereof) or any amendments, waivers or other modifications under the agreements relating to such Indebtedness or similar transactions; and

 

(iii)                               without duplication of any of the foregoing, non-operating or non-recurring professional fees, costs and expenses for such period; plus

 

(f)                                   any expense or deduction attributable to minority Equity Interests of third parties in any Restricted Subsidiary that is not a Wholly Owned Subsidiary of the BorrowerBorrowers; plus

 

(g)                                  the amount of management, monitoring, consulting, transaction and advisory fees (including termination fees) and related indemnities, fees, charges and expenses paid or accrued to or on behalf of any Parent Entity or any of the Permitted Holders, in each case, to the extent permitted by Section 6.07; plus

 

(h)                                 earn-out obligations incurred in connection with any Permitted Acquisition or other Investment; plus

 

(i)                                     all charges, costs, expenses, accruals or reserves in connection with the rollover, acceleration or payout of Equity Interests held by officers or employees of the BorrowerBorrowers and all losses, charges and expenses related to payments made to

 

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holders of options or other derivative Equity Interests in the common equity of the BorrowerBorrowers or any Parent Entity in connection with, or as a result of, any distribution being made to equityholders of such Person or any of its direct or indirect parents, which payments are being made to compensate such option holders as though they were equityholders at the time of, and entitled to share in, such distribution; plus

 

(j)                                    all non-cash losses, charges and expenses, including any write-offs or write-downs; provided that if any such non-cash charge represents an accrual or reserve for potential cash items in any future four-fiscal quarter period (i) the Lead Borrower may determine not to add back such non-cash charge in the period for which Consolidated EBITDA is being calculated and (ii) to the extent the Lead Borrower does decide to add back such non-cash charge, the cash payment in respect thereof in such future four-fiscal quarter period will be subtracted from Consolidated EBITDA for such future four-fiscal quarter period; plus

 

(k)                                 all costs and expenses in connection with pre-opening and opening of stores, distribution centers and other facilities that were not already excluded in calculating such Consolidated Net Income; and

 

(2)                                       decreased, without duplication and to the extent increasing such Consolidated Net Income for such period, by non-cash gains (excluding any non-cash gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that were deducted (and not added back) in the calculation of Consolidated EBITDA for any prior period ending after the Original Closing Date).  For the avoidance of doubt, amortization of tenant and developer allowances will not be deducted pursuant to this clause (2).

 

Notwithstanding the foregoing, the Consolidated EBITDA of the Borrower for the fiscal quarters ended:

 

(i)                                     August 3, 2013 will be deemed to be $107.2 million;

 

(ii)                                  April 27, 2013 will be deemed to be $206.2 million;

 

(iii)                               January 26, 2013 will be deemed to be $178.3 million; and

 

(iv)                              October 27, 2012 will be deemed to be $179.8 million;

 

it being understood that the amounts listed in the foregoing clauses (i), (ii), (iii) and (iv) do not give effect to the adjustments provided for in the definition of Pro Forma Basis for any transactions or events other than the Transactions.

 

Consolidated First Lien Net Debt” means, as of any date, all Consolidated Debt as of such date (i) that constitutes Obligations or that is secured by a Lien on the Term/Note Priority Collateral that is pari passu with the Lien securing the Obligations or(other than with respect to ABL Priority Collateral or, prior to the Call Right Cap Recovery, the Call Right Collateral), (ii) that is secured by a Lien on the ABL Priority Collateral that is senior to or pari passu with the Lien securing the Obligations, or (iii) prior to the Call Right Cap Recovery, constitutes outstanding Third Lien Notes Obligations or Second Lien Notes Obligations up to a maximum principal amount of $200.0 million, minus all Unrestricted Cash as of such date, in each case, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis;

 

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provided that for purposes of calculating the amount of Consolidated First Lien Net Debt with respect to any Indebtedness being incurred in reliance on compliance with any financial ratio-based incurrence test, Unrestricted Cash will not include any proceeds received from such Indebtedness.  For the avoidance of doubt, Indebtedness in respect of the ABL Credit Agreement will constitute Consolidated First Lien Net Debt.

 

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

 

(1)                                 the aggregate interest expense of such Person and its Restricted Subsidiaries for such period, calculated on a consolidated basis in accordance with GAAP, to the extent such expense was deducted in computing Consolidated Net Income (including pay-in-kind interest payments, amortization of original issue discount, the interest component of Capital Lease Obligations and net payments and receipts (if any) pursuant to Hedge Agreements relating to interest rates (other than in connection with the early termination thereof) but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of hedging obligations, all amortization and write-offs of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge, commitment or other financing fees, any expenses resulting from the discounting of the Existing 2028 Debentures as a result of the purchase accounting treatment of the Original Transactions and the Recapitalization Transactions and all discounts, commissions, fees and other charges associated with any Receivables Facilityreceivables facility); plus

 

(2)                                 consolidated capitalized interest of the referent Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

 

(3)                                 any amounts paid or payable in respect of interest on Indebtedness the proceeds of which have been contributed to the referent Person and that has been Guaranteed by the referent Person; less

 

(4)                                 interest income of the referent Person and its Restricted Subsidiaries for such period;.

 

provided that when determining Consolidated Interest Expense in respect of any four-quarter period ending prior to the first anniversary of the Closing Date, Consolidated Interest Expense will be calculated by multiplying the aggregate Consolidated Interest Expense accrued since the Closing Date by 365 and then dividing such product by the number of days from and including the Closing Date to and including the last day of such period.  For purposes of this definition, interest on Capital Lease Obligations will be deemed to accrue at the interest rate reasonably determined by a Responsible Officer of the Lead Borrower to be the rate of interest implicit in such Capital Lease Obligations in accordance with GAAP.

 

Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the net income (or loss) of such Person and its Restricted Subsidiaries for such period, calculated on a consolidated basis in accordance with GAAP (adjusted to reflect any charge, tax or expense incurred or accrued by Holdings or any Parent Entity during such period attributable to the operations of the BorrowerBorrowers and itstheir Subsidiaries as though such charge, tax or expense had been incurred by the BorrowerBorrowers, to the extent that the BorrowerBorrowers has made or would be entitled under the Loan Documents to make any Restricted Payment or other payment to or for the account of Holdings in respect thereof) and before any deduction for preferred stock dividends; provided that:

 

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(1)                                 all net after-tax extraordinary, nonrecurring or unusual gains, losses, income, expenses and charges, and in any event including all restructuring, severance, relocation, consolidation, integration or other similar charges and expenses, contract termination costs, excess pension charges, system establishment charges, start-up or closure or transition costs, expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, fees, expenses or charges relating to curtailments or modifications to pension and post-retirement employee benefit plans in connection with the Transactions or otherwise, expenses associated with strategic initiatives, facilities shutdown and opening costs, and any fees, expenses, charges or change in control payments related to the Transactions or otherwise (including any transition-related expenses incurred before, on or after the ClosingAmendment No. 2 Effective Date), will be excluded;

 

(2)                                 all net after-tax income, loss, expense or charge from abandoned, closed or discontinued operations and any net after-tax gain or loss on the disposal of abandoned, closed or discontinued operations will be excluded;

 

(3)                                 all net after-tax gain, loss, expense or charge attributable to business dispositions and asset dispositions other than in the ordinary course of business (as determined in good faith by a Responsible Officer of the Lead Borrower) will be excluded;

 

(4)                                 all net after-tax income, loss, expense or charge attributable to the early extinguishment or cancellation of Indebtedness, Hedge Agreements or other derivative instruments will be excluded;

 

(5)                                 all non-cash gain, loss, expense or charge attributable to the movement in the mark-to-market valuation of Hedge Agreements or other derivative instruments will be excluded;

 

(6)                                 (a) the net income for such period of any Person that is not a Restricted Subsidiary of the referent Person, or that is accounted for by the equity method of accounting, will be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period; and (b) the net income for such period will include any ordinary course dividends, distributions or other payments in cash received from any such Person during such period in excess of the amounts included in clause (a) hereof;

 

(7)                                 the cumulative effect of a change in accounting principles during such period will be excluded;

 

(8)                                 the effects of purchase accounting, fair value accounting or recapitalization accounting adjustments (including the effects of such adjustments pushed down to the referent Person and its Restricted Subsidiaries) resulting from the application of purchase accounting, fair value accounting or recapitalization accounting in relation to the Transactions or any acquisition consummated before or after the ClosingAmendment No. 2 Effective Date, and the amortization, write-down or write-off of any amounts thereof, net of taxes, will be excluded;

 

(9)                                 all non-cash impairment charges and asset write-ups, write-downs and write-offs will be excluded;

 

(10)                          all non-cash expenses realized in connection with or resulting from stock option plans, employee benefit plans or agreements or post-employment benefit plans or agreements, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other similar rights will be excluded;

 

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(11)                          any costs or expenses incurred in connection with the payment of dividend equivalent rights to option holders pursuant to any management equity plan, stock option plan or any other management or employee benefit plan or agreement or post-employment benefit plan or agreement will be excluded;

 

(12)                          accruals and reserves for liabilities or expenses that are established or adjusted as a result of the Recapitalization Transactions within 1812 months after the ClosingAmendment No. 2 Effective Date will be excluded;

 

(13)                          all amortization and write-offs of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge, commitment or other financing fees, will be excluded;

 

(14)                          any currency translation gains and losses related to changes in currency exchange rates (including remeasurements of Indebtedness and any net loss or gain resulting from Hedge Agreements for currency exchange risk), will be excluded;

 

(15)                          (a) the non-cash portion of “straight-line” rent expense will be excluded and (b) the cash portion of “straight-line” rent expense that exceeds the amount expensed in respect of such rent expense will be included;

 

(16)                          expenses and lost profits with respect to liability or casualty events or business interruption will be disregarded to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer, but only to the extent that such amount (a) has not been denied by the applicable carrier in writing and (b) is in fact reimbursed within 365 days of the date on which such liability was discovered or such casualty event or business interruption occurred (with a deduction for any amounts so added back that are not reimbursed with such 365-day period); provided that any proceeds of such reimbursement when received will be excluded from the calculation of Consolidated Net Income to the extent the expense or lost profit reimbursed was previously disregarded pursuant to this clause (16);

 

(17)                          losses, charges and expenses that are covered by indemnification or other reimbursement provisions in connection with any asset disposition will be excluded to the extent actually reimbursed, or, so long as such Person has made a determination that a reasonable basis exists for indemnification or reimbursement, but only to the extent that such amount is in fact indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 days);

 

(18)                          (a) cash costs and expenses in connection with pre-opening and opening of stores, distribution centers and other facilities in an aggregate amount not to exceed $20.0 million for any four-quarter period, and all non-cash pre-opening costs and expenses, will be excluded, and (b) all income, loss, charges and expenses associated with stores, distribution centers and other facilities closed in any period, or scheduled for closure within 12 months of the date on which Consolidated Net Income is being calculated, will be excluded; and

 

(19)                          non-cash charges for deferred tax asset valuation allowances will be excluded; and(20)    solely for the purpose of determining the amount available for Restricted Payments under Section 6.06(15), the net income (or loss) for such period of any Restricted Subsidiary (other than a Guarantor) will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or,

 

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directly or indirectly, by the operation 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 such Person 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 such Person or any of its Restricted Subsidiaries in respect of such period, to the extent not already included therein.

 

Consolidated Total Assets” means, as of any date, the total assets of the BorrowerBorrowers and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

 

Consolidated Total Net Debt” means, as of any date, the Consolidated Debt as of such date minus all Unrestricted Cash as of such date, in each case, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis; provided that for purposes of calculating the Consolidated Total Net Debt with respect to any Indebtedness being incurred in reliance on compliance with any financial ratio-based incurrence test, Unrestricted Cash will not include any proceeds received from such Indebtedness.

 

continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.

 

Contribution Indebtedness” has the meaning assigned to such term in Section 6.01(15).

 

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” will have correlative meanings.

 

Control Agreement” means any “Control Agreement” as defined in the Collateral Agreement.

 

Controlled Accounts” means “Blocked Accounts” as defined in the ABL Credit Agreement, the Asset Sale Proceeds Accounts, and any other Deposit Account (as defined in the Collateral Agreement), Security Account (as defined in the Collateral Agreement) or Commodities Account (as defined in the Collateral Agreement) subject to a Lien perfected by control to the secure the ABL Obligations or similar arrangement providing for perfection by control of such accounts in connection with the ABL Loan Documents, in each case subject to the terms of the Intercreditor Agreement.

 

Credit Agreement Refinancing Indebtedness” means secured or unsecured Indebtedness of the BorrowerBorrowers in the form of term loans or notes; provided that:

 

(1)                                       such Indebtedness is incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, convert, replace or refinance, in whole or part, Indebtedness (“Refinanced Debt”) that is either Term Loans or other Credit Agreement Refinancing Indebtedness;

 

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(2)                                       such Indebtedness is in an original aggregate principal amount not greater than the principal amount of the Refinanced Debt (plus the amount of unpaid accrued or capitalized interest and premiums thereon (including tender premiums), underwriting discounts, defeasance costs, fees, commissions and expenses);

 

(3)                                       the Weighted Average Life to Maturity of such Indebtedness is equal to or longer than the remaining Weighted Average Life to Maturity of the Refinanced Debt, and the final maturity date of such Credit Agreement Refinancing Indebtedness may not be earlier than the Latest Maturity Date;

 

(4)                                       such Indebtedness, if incurred under this Agreement, may participate on a pro rata basis or on a less than pro rata basis (but not on a greater than pro rata basis) in any voluntary or mandatory prepayments hereunder (and otherwise may not participate at all);

 

(5)                                       such Indebtedness is not secured by any assets or property of Holdings, the BorrowerBorrowers or any Restricted Subsidiary that does not constitute Collateral (subject to customary exceptions for cash collateral in favor of an agent, letter of credit issuer or similar “fronting” lender);

 

(6)                                       such Indebtedness is not guaranteed or incurred by any Subsidiary of the BorrowerBorrowers other than a Subsidiary Loan Party or by any other entity that is not a Loan Party (unless such entity becomes a Loan Party in connection with the incurrence of such Indebtedness);

 

(7)                                       if such Indebtedness is not incurred under this Agreement as new Obligations but is secured:

 

(a)                                 the security agreements relating to such Indebtedness are substantially similar to or the same as thecorresponding Security Documents (as determined in good faith by a Responsible Officer of the Lead Borrower);

 

(b)                                 if such Indebtedness is secured on a pari passu basis with the Term Loans, a Debt Representative acting on behalf of the holders of such Indebtedness has become party to or is otherwise subject to the provisions of a First Lien Intercreditor Agreement and, if applicable, the Intercreditor Agreement; [reserved];

 

(c)                                  if such Indebtedness is secured on a junior basis to the Term Loans, a Debt Representative, acting on behalf of the holders of such Indebtedness, has become party to or is otherwise subject to the provisions of athe Junior Lien Intercreditor Agreement as a second, third or other subordinate-ranking Lien priority party and, if applicable, thehas become party to any other Intercreditor Agreement;

 

(8)                                       the terms and conditions of such Indebtedness are substantially identical to, or, taken as a whole, no more favorable to the lenders or holders providing such Indebtedness than, those applicable to such Refinanced Debt (or, in the case of any Non-Participating Term Loan Exchange Indebtedness, the 2019 Extended Term Loans) as determined in good faith by a Responsible Officer of the Lead Borrower; provided that the Lead Borrower will promptly deliver to the Administrative Agent final copies of the definitive credit documentation relating to such Indebtedness (unless the Borrower is bound by a confidentiality obligation with respect thereto, in which case the Borrower will deliver a reasonably detailed description of the material terms and conditions of such Indebtedness in lieu thereof); provided that this clause (8) will not apply to:

 

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(a)                                 terms addressed in the preceding clauses (1) through (7);

 

(b)                                 (i) interest rate, fees, funding discounts and other pricing terms; (ii) redemption, prepayment or other premiums; (iii) optional prepayment terms; and (iv) redemption terms; (c) subordination terms; and

 

(c)                                  (d) covenants or other provisions applicable only to periods after the Latest Maturity Date at the time of incurrence of such Indebtedness.

 

Credit Agreement Refinancing Indebtedness will include any Registered Equivalent Notes issued in exchange therefor.

 

Cumulative Retained Excess Cash Flow Amount” means, as of any date, an amount, not less than zero in the aggregate, determined on a cumulative basis, equal to the Retained Percentage of Excess Cash Flow for all Excess Cash Flow Periods ending after the Closing Date and prior to such date.Credit Support” means, with respect to any Person and any Indebtedness or other Indebtedness Obligations, (i) such Person’s Guarantee of, or becoming a direct or indirect obligor with respect to, such Indebtedness or other Indebtedness Obligations, (ii) such Person’s pledge or other hypothecation of its assets to directly or indirectly secure or provide recourse with respect to such Indebtedness or other Indebtedness Obligations, (iii) such Person becoming directly or indirectly liable for such Indebtedness or other Indebtedness Obligations or (iv) such Person providing any other form of direct or indirect credit support for such Indebtedness or other Indebtedness Obligations (including by means of a “keepwell” or other similar commitment).

 

Cure Amount” means the amount of cash contributions to the capital of the Lead Borrower made pursuant to Section 8.02 of the ABL Credit Agreement.

 

Current Assets” means, as of any date, all assets (other than Cash Equivalents or other cash equivalents) that would, in accordance with GAAP, be classified on a consolidated balance sheet of the BorrowerBorrowers and the Restricted Subsidiaries as “current assets” (other than amounts related to current or deferred Taxes based on income or profits), determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

 

Current Liabilities” means, as of any date, all liabilities that would, in accordance with GAAP, be classified on a consolidated balance sheet of the BorrowerBorrowers and the Restricted Subsidiaries as “current liabilities,” other than:

 

(1)                                 the current portion of any Indebtedness;

 

(2)                                 accruals of Consolidated Interest Expense (excluding Consolidated Interest Expense that is due and unpaid);

 

(3)                                 accruals for current or deferred Taxes based on income or profits;

 

(4)                                 accruals, if any, of transaction costs resulting from the Original Transactions or the Recapitalization Transactions; and

 

(5)                                 accruals of any costs or expenses related to (a) severance or termination of employees prior to the ClosingAmendment No. 2 Effective Date or (b) bonuses, pension and other post-retirement benefit obligations;

 

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in each case, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

 

Debt Fund Affiliate” means:

 

(1)                                 any Affiliate, division or internal group of a Permitted Investor that has the principal purpose of investing in, acquiring or trading commercial loans, bonds or similar extensions of credit in the ordinary course; and

 

(2)                                 any investment fund or account of a Permitted Investor managed by third parties (including by way of a managed account, a fund or an index fund in which a Permitted Investor has invested) or a division or internal group within a Permitted Investor that is not organized or used primarily for the purpose of making equity investments,

 

in each case, with respect to which a Sponsor does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity.

 

Debt Representative” means, with respect to any Indebtedness that is secured on a pari passu basis with, or on a junior basis to, the Term Loans, the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.

 

Declining Lender” has the meaning assigned to such term in Section 2.08(4).

 

Default” means any event or condition which, but for the giving of notice, lapse of time or both, would constitute an Event of Default.

 

Defaulting Lender” means any Lender whose acts or failure to act, whether directly or indirectly, constitutes a Lender Default.

 

Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Borrower or any Restricted Subsidiary in connection with an Asset Sale that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Non-Cash Consideration.

 

Disinterested Director” means, with respect to any Person and transaction, a member of the Board of Directors of such Person who does not have any material direct or indirect financial interest in or with respect to such transaction.

 

Disqualified Institution” means:

 

(1)                                       (a)         any Person that is a competitor of the BorrowerBorrowers and identified by the Lead Borrower in writing to the Administrative Agent on or prior to the ClosingAmendment No. 2 Effective Date;

 

(b)                                 any Person that is a competitor of the BorrowerBorrowers and identified by the Lead Borrower in good faith in writing to the Administrative Agent from time to time after the ClosingAmendment No. 2 Effective Date; provided that such Person will not be a

 

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Disqualified Institution if the Administrative Agent reasonably determines in good faith that such Person is not a competitor of the BorrowerBorrowers and notifies the Lead Borrower of such determination promptly following the date on which the Lead Borrower identifies such Person to the Administrative Agent; and

 

(c)                                  together with any Affiliates of such competitors described in the foregoing clauses (a) and (b) that are reasonably identifiable as such (other than any such Affiliate that is a bank, financial institution or fund (other than a Person described in clause (2) below) that regularly invest in commercial loans or similar extensions of credit in the ordinary course of business and for which no personnel involved with the relevant competitor (i) make investment decisions or (ii) have access to non-public information relating to the BorrowerBorrowers or any Person that forms part of the Borrower’sBorrowers’ business (including itstheir Subsidiaries)); or

 

(2)                                       certain banks, financial institutions, other institutional lenders and investors and other entities that are identified by the Lead Borrower in writing to the Administrative Agent on or prior to the ClosingAmendment No. 2 Effective Date.

 

Notwithstanding the foregoing, each Loan Party and the Lenders acknowledge and agree that the Administrative Agent will not have any responsibility or obligation to determine whether any Lender or potential Lender is a Disqualified Institution and the Administrative Agent will have no liability with respect to any assignment made to a Disqualified Institution.

 

Disqualified Stock” means, with respect to any Person, any Equity Interests of such Person that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are redeemable or exchangeable at the option of the holder thereof), or upon the happening of any event or condition:

 

(1)                                       mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except 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 are subject to the prior repayment in full of the Term Loans and all other Obligations that are accrued and payable and the termination of the Commitments);

 

(2)                                       are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part;

 

(3)                                       provide for the scheduled payments of dividends in cash; or

 

(4)                                       either mandatorily or at the option of the holders thereof, are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Stock, in each case, prior to the date that is 91 days after the earlier of:

 

(a)                                 the Latest Maturity Date; and

 

(b)                                 the date on which the Term Loans and all other Obligations (other than Obligations in respect of Specified Hedge Agreements, Cash Management Obligations and contingent indemnification and reimbursement obligations that are not yet due and payable and for which no claim has been asserted) are repaid in full and the Commitments are terminated;

 

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provided that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further, that if such Equity Interests are issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Equity Interests will not constitute Disqualified Stock solely because they may be required to be repurchased by Holdings or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; and provided, further, that any class of Equity Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that is not Disqualified Stock will not be deemed to be Disqualified Stock.

 

Distressed Person” has the meaning assigned to such term in the definition of “Lender-Related Distress Event.”

 

Dollars” or “$” means lawful money of the United States of America.

 

Domestic Subsidiary” means any Subsidiary of the Lead Borrower that is organized under the laws of the United States or any political subdivision thereof, and “Domestic Subsidiaries” means any two or more of them.  Unless otherwise indicated in this Agreement, all references to Domestic Subsidiaries will mean Domestic Subsidiaries of the Lead Borrower.

 

Dutch Auction” means an auction of Term Loans conducted:(1)          pursuant to Section 10.04(10) to allow an Affiliated Lender to acquire Term Loans at a discount to par value and on a pro rata basis; or

 

(2)                                 pursuant to Section 10.04(14) to allow a Purchasing Borrower Party to prepay Term Loans at a discount to par value and on a pro rata basis,in each case, in accordance with the applicable Dutch Auction Procedures.

 

Dutch Auction Procedures” means, with respect to a purchase of Term Loans in a Dutch Auction, Dutch auction procedures as reasonably agreed upon by the applicable Affiliated Lender or Purchasing Borrower Party, as the case may be, and the Administrative Agent.

 

environmentEEA 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 and is subject to the supervision of an EEA Resolution Authority, 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 of an EEA Resolution Authority 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.

 

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Environment” means ambient and indoor air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, and natural resources such as flora and fauna.

 

Environmental Laws” means all applicable laws (including common law), statutes, rules, regulations, codes, ordinances, orders, legally binding agreements and final, legally binding decrees or judgments, in each case, promulgated or entered into by or with any Governmental Authority, relating in any way to the environmentEnvironment, preservation or reclamation of natural resources, the generation, management, Release or threatened Release of, or exposure to, any Hazardous Material or to occupational health and safety matters (to the extent relating to the environment or exposure to Hazardous Materials).

 

Equity Contributionhas the meaning assigned to such term in the recitals to this Agreementmeans the amount of cash and rollover equity contributed on the Original Closing Date after giving effect to the Original Transactions.

 

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).

 

ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and any final regulations promulgated and the rulings issued thereunder.

 

ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with Holdings or any of its SubsidiariesLoan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302302, 303 and 306(g) of ERISA and Section 412 and 430 of the Code, is treated as a single employer under Section 414 of the Code.

 

ERISA Event” means:

 

(1)                                       a Reportable Event, or the requirements of Section 4043(b) of ERISA apply, with respect to a Plan;

 

(2)                                       a withdrawal by Holdings or any of its SubsidiariesLoan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate from a 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 by Holdings or any of its Subsidiariesany Loan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate that is treated as a termination or withdrawal under Section 4062(e) of ERISA;

 

(3)                                       a complete or partial withdrawal by Holdings or any of its SubsidiariesLoan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate from a Multiemployer Plan, receipt of written notification by Holdings or any of its SubsidiariesLoan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate concerning the imposition of Withdrawal Liability on it or written notification that a Multiemployer Plan is, or is expected to be, insolvent, in reorganization within the meaning of Title IV of ERISA or endangered or in critical status within the meaning of Section 305 of ERISA or Section 432 of the Code;

 

(4)                                       (a) the provision by a Plan administrator or the PBGC to any Loan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate of notice of intent to terminate a Plan, or to appoint a trustee to administer a Plan, (b) the treatment of a Plan or Multiemployer Plan

 

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amendment as a termination under Sections 4041 or 4041A of ERISA or (c) the commencement of proceedings by the PBGC to terminate a Plan or Multiemployer Plan;

 

(5)                                       the incurrence by Holdings or any of its Subsidiariesany Loan Party or, to the knowledge of Holdings or the Lead Borrower, any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan, other than for the timely payment of plan contributions or PBGC premiums due but not delinquent under Section 4007 of ERISA;

 

(6)                                       the application for a minimum funding waiver under Section 302(c) of ERISA or Section 412(c) of the Code with respect to a Plan;

 

(7)                                       the imposition of a lien on the assets of any Loan Party under Section 303(k) of ERISA with respect to any Plan or Section 430(k) of the Code; and

 

(8)                                       a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA) or Section 430 of the Code).

 

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.

 

Eurocurrency Borrowing” means a Borrowing comprised of Eurocurrency Loans.

 

Eurocurrency Loan” means any Term Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

Event of Default” has the meaning assigned to such term in Section 8.01.

 

Excess Cash Flow” means, for any Excess Cash Flow Period, the Consolidated Net Income of the Lead Borrower for such period, minus, without duplication:

 

(1)                                       repayments, prepayments and other cash payments made with respect to the principal of any Indebtedness or the principal component of any Capital Lease Obligations of the Lead Borrower or any Restricted Subsidiary during such period (excluding voluntary and mandatory prepayments of Term Loans, voluntary prepayments of Indebtedness described in Section 2.08(2)(b) and prepayments of other revolving Indebtedness (except to the extent accompanied by a corresponding reduction in commitments), but including all premium, make-whole or penalty payments paid in cash (to the extent such payments were not already deducted in calculating Consolidated Net Income and are not otherwise prohibited under this Agreement)); provided that a mandatory prepayment of Indebtedness will only be deducted pursuant to this clause (1) to the extent not already deducted in the computation of Net Cash Proceeds of Asset Sales; minus

 

(2)                                       (a) cash payments made by the Lead Borrower or any Restricted Subsidiary during such period in respect of Capital Expenditures, Permitted Acquisitions, Investments and Restricted Payments (excluding Restricted Payments made pursuant to Sections 6.06(15), or (16), Investments in Cash Equivalents and other items (including Investments and Restricted Payments) that are eliminated in consolidation) and (b) cash payments that the Borrower or any Restricted Subsidiary is required to make in respect of Capital Expenditures, Permitted Acquisitions and Investments within 365 days after the end of such period pursuant to binding obligations entered into prior to or during such period; provided that amounts described

 

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in this clause (b) will not reduce Excess Cash Flow in subsequent periods and, to the extent not so paid, will increase Excess Cash Flow in the subsequent period but including earn-out obligations); minus

 

(3)                                       cash payments made by the Lead Borrower or any Restricted Subsidiary during such period in respect of (a) long-term liabilities other than Indebtedness or (b) items for which an accrual or reserve was established in a prior period; minus

 

(4)                                       (a) cash payments made by the Lead Borrower or any Restricted Subsidiary during such period in respect of Taxes (including distributions to any Parent Entity in respect of Taxes), to the extent such payments exceed the amount of tax expense deducted in calculating such Consolidated Net Income, and (b) cash payments that the Lead Borrower or any Restricted Subsidiary will be required to make in respect of Taxes (including distributions to any Parent Entity in respect of Taxes) within 180 days after the end of such period; provided that amounts described in this clause (b) will not reduce Excess Cash Flow in subsequent periods; minus

 

(5)                                       all cash payments and other cash expenditures made by the Lead Borrower or any Restricted Subsidiary during such period (a) with respect to items that were excluded in the calculation of such Consolidated Net Income pursuant to clauses (1) through (19) of the definition of Consolidated Net Income or (b) that were not expensed during such period in accordance with GAAP; minus

 

(6)                                       all non-cash credits included in calculating such Consolidated Net Income (including insured or indemnified losses referred to in clauses (16) and (17) of Consolidated Net Income to the extent not reimbursed in cash during such period); minus

 

(7)                                       an amount equal to the sum of (a) the increase in the Working Capital of the Lead Borrower during such period, if any, plus (b) the increase in long-term accounts receivable of the Lead Borrower and the Restricted Subsidiaries, if any (other than any such increases contemplated by clauses (a) and (b) of this clause (7) that are directly attributable to acquisitions of a Person or business unit by the Lead Borrower and the Restricted Subsidiaries during such period); plus

 

(8)                                       all non-cash charges, losses and expenses of the Lead Borrower or any Restricted Subsidiary that were deducted in calculating such Consolidated Net Income; plus

 

(9)                                       all cash payments received by the Lead Borrower or any Restricted Subsidiary during such period pursuant to Hedge Agreements that were not treated as revenue or net income under GAAP; plus

 

(10)                                an amount equal to the sum of (a) the decrease in Working Capital of the Lead Borrower during such period, if any, plus (b) the decrease in long-term accounts receivable of the Lead Borrower and the Restricted Subsidiaries, if any; plus

 

(11)                                all amounts referred to in clauses (1) and (2) above to the extent funded with the proceeds of the issuance or the incurrence of Indebtedness (other than proceeds of revolving loans), the sale or issuance of Equity Interests or any loss, damage, destruction or condemnation of, or any sale, transfer or other disposition to any Person of, any assets.

 

Excess Cash Flow Period” means each fiscal year of the Borrower.

 

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

 

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Excluded Assets” means “Excluded Assets” as defined in the Collateral Agreement.

 

Excluded Contributions” means, as of any date, the aggregate amount of the net cash proceeds and Cash Equivalents, together with the aggregate fair market value (determined in good faith by a Responsible Officer of the Borrower) of other assets that are used or useful in a business permitted under Section 6.08, received by the Borrower after the Closing Date from:

 

(1)                                 contributions to its common equity capital; or

 

(2)                                 the sale of Capital Stock of the Borrower;

 

in each case, designated as Excluded Contributions pursuant to a certificate of a Responsible Officer of the Borrower on the date such contribution is made or such Capital Stock is sold, less the aggregate amount of Investments made pursuant to Section 6.04(28) and Restricted Payments made pursuant to Section 6.06(13), in each case prior to such date; provided that the proceeds of Disqualified Stock, Cure Amounts and any net cash proceeds that are used prior to such date (A) to make Restricted Payments under Section 6.06(1) or Section 6.06(2)(b), (B) to make an Investment under Section 6.04(3), a Restricted Payment under Section 6.06(15) or a payment in respect of Junior Financing under Section 6.09(2)(a), in each case utilizing the Available Amount or (C) for Contribution Indebtedness, will not be treated as Excluded Contributions. “Excluded Equity Interests” means “Excluded Equity Interests” as defined in the Collateral Agreement.

 

Excluded Indebtedness” means all Indebtedness not incurred in violation of Section 6.01.

 

Excluded Subsidiary” means any:

 

(1)                                 Immaterial Subsidiary;

 

(2)                                 Subsidiary that is not a Wholly Owned Subsidiary of Holdings or the Borrower;

 

(1)                                       (3) (i) Unrestricted Subsidiary;

 

(4)                                 Foreign Subsidiary;

 

(5)                                 Domestic Subsidiary of a Foreign Subsidiary;

 

(6)                                 Subsidiary substantially all the assets of which are Equity Interests or indebtedness in one or more Foreign Subsidiaries;

 

(7)                                 Subsidiary if acting as a Guarantor, or its Guarantee, would (a) be prohibited by law or regulation or (b) require a governmental or third-party consent, approval, license or authorization; and (8) , (ii) captive insurance Subsidiary, and (iii) not-for-profit Subsidiary or Subsidiary which is a special purpose entity for securitization transaction (including any Receivables Subsidiary) or like special purposes;

 

(2)                                       in each case, unless the Borrower determines in its sole discretion, upon notice to the Administrative Agent, that any of the foregoing Persons (other than a Subsidiary that is not a Wholly Owned Subsidiary of Holdings or the Borrower), only to the extent such Subsidiary was created, formed or acquired in connection with a Permitted Acquisition;

 

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(3)                                       Foreign Subsidiary that is existing as of the Amendment No. 2 Effective Date; provided that such Foreign Subsidiary shall not be deemed an Excluded Subsidiary hereunder to the extent that one or more Loan Parties makes Investments in such Foreign Subsidiary after the Amendment No. 2 Effective Date exceeding $2.5 million in the aggregate; and

 

(4)                                       Foreign Subsidiary or FSHCO acquired or created after the Amendment No. 2 Effective Date and with respect to which (i) an officer of the Lead Borrower (reasonably and in good faith) and the Administrative Agent have determined that making such Subsidiary a Subsidiary Loan Party is not practicable (including as a result of local law in the jurisdiction in which such Subsidiary is organized or other applicable law, rule or regulation), or (ii) a Responsible Officer of the Lead Borrower (reasonably and in good faith) and the Collateral Agent determine that the burden or cost (including as a result of any adverse changes in applicable tax laws) of providing a Guarantee of the Obligations from such Subsidiary outweigh the benefit of the Guarantee afforded thereby (it being understood for purposes of each of the foregoing that any such Guarantee provided by a Subsidiary Loan Party may not be given, or may be released, due to material adverse U.S. federal income tax consequences, in each case, only if such consequences arise as a result of a change in law occurring after the Amendment No. 2 Effective Date, including, for the avoidance of doubt, a change to the Proposed Regulations under section 956 of the Internal Revenue Code of 1986, as amended, published on November 5, 2018);

 

in each case, unless the Lead Borrower determines in its sole discretion, upon written notice to the Collateral Agent, that any of the foregoing Persons should not be an Excluded Subsidiary until the date on which the Lead Borrower has informed the AdministrativeCollateral Agent that it elects to have such Person be an Excluded Subsidiary; provided that (i) the Guarantee provided by a Subsidiary Loan Party and the security interest provided by such Person is full and unconditional and fully enforceable in the jurisdiction of organization of such Person. and (ii) to the extent that a Subsidiary of Holdings provides Credit Support for the Second Lien Notes and/or Third Lien Notes or any Refinancing thereof, such Subsidiary shall not be deemed an Excluded Subsidiary for the purposes of this Agreement.  For the avoidance of doubt, Immaterial Subsidiaries shall not automatically constitute Excluded Subsidiaries hereunder, but Immaterial Subsidiaries shall not, subject to Section 5.10, constitute Subsidiary Guarantors as of the Amendment No. 2 Effective Date.

 

Excluded Taxes” means, with respect to any Recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder:

 

(1)                                       income taxes imposed on or measured by its net income (however denominated) or franchise taxes imposed in lieu of net income taxes, in each case, (a) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes;

 

(2)                                       any branch profits tax or any similar tax that is imposed by any jurisdiction described in clause (1) above;

 

(3)                                       any withholding tax (including any backup withholding tax) that is in effect and would apply to amounts payable hereunder to or for the account of a Recipient under the law applicable at the time such Recipient becomes a party to this Agreement (or in the case of a Lender, under the law applicable at the time such Lender changes its lending office), except to the extent that the Recipient’s assignor (if any), at the time of assignment (or such Lender immediately before it

 

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changed its lending office), was entitled to receive additional amounts from the Loan Party with respect to any withholding tax pursuant to Section 2.14(1) or Section 2.14(3);

 

(4)                                       Taxes that are attributable to such Lender’s or Administrative Agent’s failure to comply with Section 2.14(5) or Section 2.14(6); and

 

(5)                                       any U.S. federal withholding Taxes imposed under FATCA.

 

Executive Order” has the meaning assigned to such term in Section 3.19(3)(a).

 

Existing 2028 Debentures” means the 7.125% debentures due 2028 issued by The Neiman Marcus Group, Inc. pursuant to an indenture dated as of May 27, 1998. Credit Agreement” has the meaning assigned to such term in the recitals hereto.

 

Extended Term Loan Installment Date” has the meaning assigned to such term in Section 2.06(2)3).  The 2019 Extended Term Loan Installment Date shall be deemed to be an Extended Term Loan Installment Date for all purposes of this Agreement.

 

Extended Term Loans” has the meaning assigned to such term in Section 2.20(1).  The 2019 Extended Term Loans and the Additional 2019 Extended Term Loans shall be deemed to be Extended Term Loans for all purposes of this Agreement.

 

Extending Term Lender” has the meaning assigned to such term in Section 2.20(1).  The 2019 Extending Term Lenders shall be deemed to be Extending Term Lenders for all purposes of this Agreement.

 

Extension” has the meaning assigned to such term in Section 2.20(1).

 

Extension Amendment” has the meaning assigned to such term in Section 2.20(2).  The 2019 Extension Amendment shall be deemed to be an Extension Amendment for all purposes of this Agreement.

 

Extension Offer” has the meaning assigned to such term in Section 2.20(1).

 

FATCA” means Sections 1471 through 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 or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

 

FCPA” has the meaning assigned to such term in Section 3.19(2).

 

Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that:

 

(1)                                       if such day is not a Business Day, the Federal Funds Rate for such day will be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day; and

 

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(2)                                       if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day will be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1.0%) charged to the Administrative Agent on such day on such transactions as determined in good faith by the Administrative Agent.

 

Fee Letter means the Fee Letter, dated September 9, 2013, by and among Merger Sub, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Royal Bank of Canada, Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch and Deutsche Bank AG Cayman Islands Branch, as amended and in effect from time to time and including any joinders thereto.

 

Fees” means the (1) Administrative Agent Fees and all other fees set forth in the Fee Letter payable to a Lender, the Administrative Agent, any Arranger or any Co-Manager, in each case, with respect to Term Loans and (2) the Consent Fees.

 

Financial Covenant Default” has the meaning assigned to such term in Section 8.01(6).

 

Financial Officer” means, with respect to any Person, the chief financial officer, principal accounting officer, director of financial services, treasurer, assistant treasurer or controller of such Person.

 

First Lien Intercreditor Agreement” means a “pari passu” intercreditor agreement substantially in the form attached hereto as Exhibit G (as the same may be modified in a manner satisfactory to the Administrative Agent).  Upon the request of the Borrower, the Administrative Agent and Collateral Agent will execute and deliver a First Lien Intercreditor Agreement with the Loan Parties and one or more Debt Representatives for Indebtedness permitted hereunder that is permitted to be secured on a pari passu basis with the Term Loans.

 

Fixed Charge Coverage Ratio” means, as of any date, the ratio of:

 

(1)                                 (a) Consolidated EBITDA of the Borrower for the most recent period of four consecutive fiscal quarters for which Required Financial Statements have been delivered, calculated on a Pro Forma Basis, minus (b) non-financed Maintenance Capital Expenditures of the Borrower for such period that were paid in cash during such four-quarter period (it being understood that Capital Expenditures funded with proceeds of revolving loans will not be deemed to be “financed” for the purpose of this clause (b)) minus (c) Taxes based on income of the Borrower and the Restricted Subsidiaries that were paid or payable in cash during such period (including tax distributions paid in cash during such period) to

 

(2)                                 Fixed Charges of the Borrower for such four-quarter period, calculated on a Pro Forma Basis.

 

Fixed Charges” means, for any period, the sum without duplication, of the following for such period:

 

(1)                                 the Consolidated Interest Expense of the Borrower that was paid or payable in cash during such period; plus

 

(2)                                 all scheduled principal amortization payments that were paid or payable in cash during such period with respect to Indebtedness for borrowed money of the Borrower and the

 

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Restricted Subsidiaries, including payments in respect of Capital Lease Obligations, but excluding payments with respect to intercompany Indebtedness; plus

 

(3)                                 all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock of the Borrower or preferred stock of any Restricted Subsidiary made during such period.

 

Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America.  For purposes of this definition, the United States of America, each state thereof and the District of Columbia will be deemed to constitute a single jurisdiction.

 

Foreign Subsidiary” means any Subsidiary that not a Domestic Subsidiary.

 

FSHCO” means any Domestic Subsidiary substantially all the assets of which are Equity Interests or Indebtedness of one or more Foreign Subsidiaries that are treated as controlled foreign corporations within the meaning of Section 957 of the Code.

 

GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession (but excluding the policies, rules and regulations of the SEC applicable only to public companies).

 

Notwithstanding anything to the contrary above or in the definition of Capital Lease Obligations or Capital Expenditures, in the event of a change under GAAP (or the application thereof) requiring any leases to be capitalized that are not required to be capitalized as of the Original Closing Date, only those leases that would result or would have resulted in Capital Lease Obligations or Capital Expenditures on the Original Closing Date (assuming for purposes hereof that they were in existence on the Original Closing Date) will be considered capital leases and all calculations under this Agreement will be made in accordance therewith.

 

Governmental Authority” means any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory or legislative body.

 

Guarantee” of or by any Person (the “guarantor”) means:

 

(1)                                       any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect:

 

(a)                                 to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take or pay or otherwise) or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligations;

 

(b)                                 to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof;

 

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(c)                                  to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation;

 

(d)                                 entered into for the purpose of assuring in any other manner the holders of such Indebtedness or other obligation of the payment thereof or to protect such holders against loss in respect thereof (in whole or in part); or

 

(e)                                  as an account party in respect of any letter of credit, bank guarantee or other letter of credit guaranty issued to support such Indebtedness or other obligation; or

 

(2)                                       any Lien on any assets of the guarantor securing any Indebtedness (or any existing right, contingent or otherwise, of the holder of Indebtedness to be secured by such a Lien) of any other Person, whether or not such Indebtedness or other obligation is assumed by the guarantor;

 

provided, that the term “Guarantee” will not include endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations in effect on the ClosingAmendment No. 2 Effective Date or entered into in connection with any acquisition or disposition of assets permitted by this Agreement (other than such obligations with respect to Indebtedness).

 

The amount of any Guarantee will be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

The term “Guaranteed” as used herein will have a corresponding meaning.

 

Guarantor” means (1) Holdings; (2) each Subsidiary Loan Party that is not a Borrower; and (3) each Parent Entity or Restricted Subsidiary (other than any Restricted Subsidiary that is not a Wholly Owned Subsidiary) that the Lead Borrower may elect in its sole discretion, from time to time, upon written notice to the Administrative Agent, to cause to Guarantee the Obligations until such date that the Lead Borrower has informed the Administrative Agent that it elects not to have such Person Guarantee the Obligations; provided that, in the case of this clause (3), the Guarantee and the security interest provided by such Person is full and unconditional and fully enforceable in the jurisdiction of organization of such Person.

 

Hazardous Materials” means all pollutants, contaminants, wastes, chemicals, materials, substances and constituents, including explosive or radioactive substances or petroleum or petroleum byproducts or distillates, friable asbestos or friable asbestos-containing materials, polychlorinated biphenyls or radon gas, in each case, that are regulated or would reasonably be expected to give rise to liability under any Environmental Law due to their dangerous or deleterious properties.

 

Hedge Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, in each case, not entered into for speculative purposes; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Holdings or any of its Subsidiaries will be a Hedge Agreement.

 

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Holdings” has the meaning assigned to such term in the introductory paragraph hereof.

 

Hudson Yard Indebtedness” means the deferred financing obligation reflected on the balance sheet of TNMG LLC related to its ownership for accounting purposes of a portion of TNMG LLC’s retail property at Hudson Yards.

 

Immaterial Subsidiary” means, as of any date, any Subsidiary that (i) did not, as of the last day of the most recent fiscal quarter for which Required Financial Statements have been deliveredended prior to the Amendment No. 2 Effective Date, have assets with a value in excess of 2.5% of the Consolidated Total Assets or revenues representing in excess of 2.5% of total revenues of the Lead Borrower and the Restricted Subsidiaries for the period of four consecutive fiscal quarters for which Required Financial Statements have been deliveredmost recently ended prior to the Amendment No. 2 Effective Date, calculated on a consolidated basis in accordance with GAAP; and (ii) taken together with all Immaterial Subsidiaries as of the last day of the most recent fiscal quarter of the Borrower for which Required Financial Statements have been deliveredLead Borrower ended prior to the Amendment No. 2 Effective Date, did not have assets with a value in excess of 5.0% of Consolidated Total Assets or revenues representing in excess of 5.0% of total revenues of the Lead Borrower and the Restricted Subsidiaries on a consolidated basis for such four-quarter period.  All Immaterial Subsidiaries existing as of the Amendment No. 2 Effective Date shall, within 90 days of the Amendment No. 2 Effective Date (or such later date as mutually agreed by the Lead Borrower and the Administrative Agent) either (i) be dissolved, liquidated or merged out of existence or (ii) become a Guarantor hereunder in accordance with Section 5.10.

 

Incremental Equivalent Term Debt” means secured or unsecured Indebtedness of the Borrower in the form of term loans or notes; provided that:

 

(1)                                 the aggregate outstanding principal amount of such Indebtedness on any date that such Indebtedness is incurred pursuant to Section 6.01(1) shall be subject to the limitations set forth in Section 2.18(3);

 

(2)                                 the final maturity date of such Incremental Equivalent Term Debt may not be earlier than the Latest Maturity Date of the Term Loans;

 

(3)                                 the Weighted Average Life to Maturity of such Incremental Equivalent Term Debt may be no shorter than the longest remaining Weighted Average Life to Maturity of the Term Loans;

 

(4)                                 if such Indebtedness is secured on a pari passu basis with the Term Loans, such Indebtedness (a) consist of notes and (b) a Debt Representative acting on behalf of the holders of such Indebtedness has become party to or is otherwise subject to the provisions of a First Lien Intercreditor Agreement; and

 

(5)                                 if such Indebtedness is secured on a junior basis to the Term Loans, a Debt Representative acting on behalf of the holders of such Indebtedness has become party to or is otherwise subject to the provisions of a Junior Lien Intercreditor Agreement.

 

Incremental Equivalent Term Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Incremental Facilityhas the meaning assigned to such term in Section

 

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2.18(1)means the facility and commitments utilized in making Additional 2019 Extended Term Loans hereunder.

 

Incremental Facility Amendment” has the meaning assigned to such term in Section 2.18(5).

 

Incremental Lenders” has the meaning assigned to such term in Section 2.18(5).

 

Incremental Term Loan Installment Date” has the meaning assigned to such term in Section 2.06(2).

 

Incremental Term Loans” has the meaning assigned to such term in Section 2.18(1).

 

Incremental Yield” has the meaning assigned to such term in Section 2.18(8).

 

Indebtedness” means, with respect to any Person, without duplication:

 

(1)                                       all obligations of such Person for borrowed money;

 

(2)                                       all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;

 

(3)                                       all obligations of such Person under conditional sale or title retention agreements relating to property or assets purchased by such Person;

 

(4)                                       all obligations of such Person issued or assumed as the deferred purchase price of property or services, to the extent the same would be required to be shown as a long-term liability on a balance sheet prepared in accordance with GAAP;

 

(5)                                       all Capital Lease Obligations of such Person;

 

(6)                                       all net payments that such Person would have to make in the event of an early termination, on the date Indebtedness of such Person is being determined, in respect of outstanding Hedge Agreements;

 

(7)                                       the principal component of all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and bank guarantees;

 

(8)                                       the principal component of all obligations of such Person in respect of bankers’ acceptances;

 

(9)                                       all Guarantees by such Person of Indebtedness described in clauses (1) through (8) above; and

 

(10)                                the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference of such Disqualified Stock);

 

provided that Indebtedness will not include:

 

(a)                                 trade payables, accrued expenses and intercompany liabilities arising in the ordinary course of business;

 

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(b)                                 prepaid or deferred revenue arising in the ordinary course of business;

 

(c)                                  purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase prices of an asset to satisfy unperformed obligations of the seller of such asset; or

 

(d)                                 earn-out obligations until such obligations become a liability on the balance sheet of such Person in accordance with GAAP.

 

The Indebtedness of any Person will include the Indebtedness of any partnership in which such Person is a general partner, other than to the extent that the instrument or agreement evidencing such Indebtedness expressly limits the liability of such Person in respect thereof.

 

Indebtedness Documents” means, with respect to any Indebtedness, all agreements and instruments governing such Indebtedness, all evidences of such Indebtedness or Credit Support thereof, all security documents for such Indebtedness (and documents and filings related thereto) and any intercreditor or similar agreements related thereto.

 

Indebtedness Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness.

 

Indemnified Taxes” means (1) all Taxes other than Excluded Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document; and (2) to the extent not otherwise described in clause (1), Other Taxes.

 

Indemnitee” has the meaning assigned to such term in Section 10.05(2).

 

Intellectual Property Rights” has the meaning assigned to such term in Section 3.20(1).

 

Intercreditor Agreement” means the Intercreditor Agreement, dated as of the Closing Date, by and among the Administrative Agent, the Collateral Agent and Deutsche Bank AG New York Branch, as administrative agent and collateral agent under the ABL Credit Agreement, and acknowledged by Holdings and the Borrower, as amended, restated, supplemented or otherwise modified from time to timeany of the ABL/Term Loan/Notes Intercreditor Agreement or the Junior Lien Intercreditor Agreement or any other intercreditor or similar agreements related to the Obligations.

 

Interest Coverage Ratio” means, as of any date, the ratio of (1) the Consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which Required Financial Statements have been delivered, calculated on a Pro Forma Basis, to (2) the sum of (a) the Consolidated Interest Expense of the Lead Borrower for such period, calculated on a Pro Forma Basis, and (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock of the Lead Borrower or preferred stock of any of the Restricted Subsidiaries, in each case, made during such period.

 

Interest Election Request” means a request by the Lead Borrower to convert or continue a Borrowing in accordance with Section 2.04.

 

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Interest Payment Date” means (1) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Term Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Borrowing; and (2) with respect to any ABR Loan, the last Business Day of each fiscal quarter of the Lead Borrower commencing with the last Business Day of the fiscal quarter of the Borrower ending in January 2014..

 

Interest Period” means, as to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as applicable, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is one, two, three or six months thereafter (or, if agreed by all Lenders, 12 months or a shorter period), as the Lead Borrower may elect, or the date any Eurocurrency Borrowing is converted to an ABR Borrowing in accordance with Section 2.04 or repaid or prepaid in accordance with Section 2.06, 2.07 or 2.08; provided that:

 

(1)                                       if any Interest Period would end on a day other than a Business Day, such Interest Period will be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period will end on the next preceding Business Day;

 

(2)                                       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) will end on the last Business Day of the calendar month at the end of such Interest Period;

 

(3)                                       no Interest Period will extend beyond the applicable Maturity Date.  Interest will accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period; and

 

(4)                                       with respect to the 2019 Extended Term Loans and the 2013 Term Loans, the initial Interest Period, commencing on the ClosingAmendment No. 2 Effective Date, will end on December 6, 2013.July 5, 2019.

 

Investment” has the meaning assigned to such term in Section 6.04.

 

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 reasonably equivalent ratings of another internationally recognized rating agency).

 

Investment Grade Securities” means:

 

(1)                                       (1)         securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

 

(2)                                       (2)         securities that have an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the BorrowerBorrowers and its Restrictedtheir Subsidiaries;

 

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(3)                                       (3)         corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition; and

 

(4)                                       (4)         investments in any fund that invests at least 95.0% of its assets in investments of the type described in clauses (1) and (2) above which fund may also hold immaterial amounts of cash pending investment and/or distribution.

 

Investors” has the meaning assigned to such term in the recitals hereto.

 

Junior Financing” means (i) any Indebtedness permitted to be incurred hereunder that is contractually subordinated in right of payment to the Obligations, unsecured or secured by Liens that are contractually subordinated to the Liens securing the Obligations or any Permitted(excluding (a) the ABL Obligations and (b) Obligations under this Agreement), (ii) the 2028 Debentures, (iii) the Senior Notes, (iv) the Secured Notes, or (v) any Refinancing Indebtedness in respect of any of the foregoing.

 

Junior Lien Intercreditor Agreement” means a “junior lien” intercreditor agreement substantially in the form attached hereto as Exhibit H (as the same may be modified in a manner satisfactory to the Administrative Agent), or, if requested by the providers of Indebtedness to be secured on a junior basis to the Term Loans, another lien subordination arrangement satisfactory to the Administrative Agent.  Upon the request of the Borrower, the Administrative Agent and Collateral Agent will execute and deliver a Junior Lien Intercreditor Agreement with the Loan Parties and one or more Debt Representatives for Indebtedness permitted hereunder that is permitted to be secured on a junior basis to the Term Loans.Indebtedness” means Indebtedness that is secured only by Junior Liens on the Collateral.

 

Junior Liens” means Liens on the Collateral, which Liens on any item of Collateral rank junior to the Liens securing the Obligations on such item of Collateral, provided that, with respect to the Call Right Collateral, such Liens may rank senior to the Lien securing the Obligations in accordance with the Junior Lien Intercreditor Agreement.

 

Junior Lien Intercreditor Agreement” means that certain Junior Lien Intercreditor Agreement, dated as of the Amendment No. 2 Effective Date, by and among the Administrative Agent, the Collateral Agent, the Second Lien Notes Collateral Agent, the Third Lien Notes Collateral Agent and any other parties party thereto from time to time, and acknowledged by Holdings and the Borrowers, as amended, restated, supplemented or otherwise modified from time to time.

 

Latest Maturity Date” means, as of any date of determination, the latest Maturity Date of the Term Facilities in effect on such date.

 

Lender” means each financial institution listed on Schedule 2.01 (other than any such Person that has ceased to be a party hereto pursuant to an Assignment and Acceptance in accordance with Section 10.04), as well as any Person that becomes a Lender hereunder pursuant to Section 10.04 and any Additional Lender.

 

Lender Default” means:

 

(1)                                 the refusal (which has not been retracted) or failure of any Lender to make available its portion of any Borrowing;

 

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(2)                                 any Lender has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations under the Term Facility or under other similar agreements in which it commits to extend credit; or

 

(3)                                 the admission by any Lender that it is insolvent or such Lender becoming subject to a Lender-Related Distress Event.

 

Lender-Related Distress Event” means, with respect to any Lender or any Person that directly or indirectly controls a Lender (each, a “Distressed Person”), as the case may be, a voluntary or involuntary case with respect to such Distressed Person under any debt relief law, or a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, or such Distressed Person or any Person that directly or indirectly controls such Distressed Person is subject to a forced liquidation, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Person or its assets to be, insolvent or bankrupt; provided that a Lender-Related Distress Event will not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interests in any Lender or any Person that directly or indirectly controls such Lender by a Governmental Authority or an instrumentality thereof.

 

lending office” means, as to any Lender, the applicable branch, office or Affiliate of such Lender designated by such Lender to make Term Loans.

 

Letter of Credit” has the meaning assigned to such term in the ABL Credit Agreement.

 

LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, the rate per annum equal to the arithmetic mean of the offered rates for deposits in Dollars with a term equivalent to such Interest Period by reference to the British Bankers’ Association Interest Settlement Rates (or by reference to any successor or substitute entity or other quotation service providing comparable quotations to such British Bankers’ Association Interest Settlement Rates) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association (or any successor or substitute agency) as an authorized vendor for the purpose of displaying such rates); provided that if such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period will be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurocurrency Loan being made, continued or converted by the Administrative Agent and with a term equivalent to such Interest Period would be offered by the Administrative Agent to major banks in the London interbank Eurocurrency market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

 

LIBOR Quoted Rate” means, for any day (or if such day is not a Business Day, the immediately preceding Business Day), a fluctuating rate per annum equal to the greater of (1) the Adjusted LIBO Rate for an interest period of one month as determined as of 11:00 a.m. (London, England time) on such day by reference to the British Bankers’ Association Interest Settlement Rates (or by reference to any successor or substitute entity or other quotation service providing comparable quotations to such British Bankers’ Association Interest Settlement Rates) for deposits in dollars (as set forth by any service selected

 

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by the Administrative Agent that has been nominated by the British Bankers’ Association (or any successor or substitute agency) as an authorized vendor for the purpose of displaying such rates); and (2) 1.00%(a) 1.00%, with respect to any Term Loans other than the 2019 Extended Term Loans (including the 2013 Term Loans) or (b) 1.50%, with respect to any 2019 Extended Term Loans.

 

Lien” means, with respect to any asset (1) any mortgage, deed of trust, lien, hypothecation, pledge, charge, security interest or similar encumbrance in or on such asset; or (2) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset; provided that in no event will an operating lease or an agreement to sell be deemed to constitute a Lien.

 

Limited MYT Guarantee” means the joint and several, irrevocable, full and unconditional Guarantee by each MYT Guarantor on a senior basis of the performance of and punctual payment when due of all obligations of the issuers of the Second Lien Notes under the Second Lien Notes Indenture and the Second Lien Notes to the holders of such Second Lien Notes and the Second Lien Notes Trustee in accordance therewith (the maximum amount recoverable therefrom in the aggregate not to exceed $200.0 million).

 

Limited MYT Guarantee Collateral” means all or substantially all assets of the MYT Guarantors securing the Limited MYT Guarantee of each MYT Guarantor.

 

Loan Documents” means this Agreement, the Security Documents, the ABL/Term Loan/Notes Intercreditor Agreement, any First Lien Intercreditor Agreement, anythe Junior Lien Intercreditor Agreement, any Notethe PropCo Subordination Agreements, any Note, any Extension Amendment (including the 2019 Extension Amendment), any other amendment or other agreement or document evidencing or governing the Obligations hereunder, and, solely for the purposes of Sections 3.01, 3.02, and 8.01(3) hereof, the Fee Letter.

 

Loan Parties” means Holdings, the BorrowerBorrowers and the Subsidiary Loan Parties.

 

Maintenance Capital Expenditures” means, for any period, the portion of the aggregate amount of all Capital Expenditures of the Borrower for such period attributable to maintenance of property, plant or equipment of the Borrower and the Restricted Subsidiaries, as determined in good faith by a Responsible Officer of the Borrower.Make-Whole Premium” means, with respect to any Premium Event, an amount equal to the sum of the present values, as determined by the Administrative Agent in accordance with accepted financial practice, at the date (the “Prepayment Date”) of the applicable prepayment, acceleration, satisfaction, release, payment, restructuring, reorganization, replacement, reinstatement, defeasance, refinancing, amendment, or compromise of 2019 Extended Term Loans, of (i) all remaining scheduled payments of interest payable on the principal amount prepaid, accelerated, satisfied, released, paid, restructured, reorganized, reinstated, replaced, defeased, refinanced, amended or compromised, as applicable, from the Prepayment Date up to but not including the first anniversary of the Amendment No. 2 Effective Date, calculated using an interest rate equal to the interest rate applicable to such 2019 Extended Term Loans on the Prepayment Date and (ii) the prepayment premium that would be due with respect to a prepayment of 2019 Extended Term Loans on the first anniversary of the Amendment No. 2 Effective Date pursuant to Section 2.07(4)(y), in the case of each of clauses (i) and (ii), discounted to the Prepayment Date at a rate equal to the Treasury Rate plus 0.50%.

 

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Management Agreement” means (1) each of the Management Services Agreements, as in effect on the Closing Date (the “Closing Date Management Agreements”), as amended, supplemented or otherwise modified in a manner not materially adverse to the Lenders, and (2) any other similar or related agreement with one or more of the Sponsors on terms not materially adverse to the Lenders relative to the terms of the Closing Date Management Agreements; it being agreed that (a) the inclusion of or increases (either by amendments to the Closing Date Management Agreements, the execution of a similar or related agreements or otherwise) by a material amount in the aggregate amount payable to the Sponsors as a monitoring, management or similar fee above $10.0 million per annum (with pro rated amounts payable for any partial year periods and any amounts not paid in any year accruing and payable upon request of the Sponsors in future periods) will be deemed to be materially adverse to the Lenders and (b) (i) adding Affiliates of the Sponsors as parties to any such agreements or (ii) providing for the payment (or accrual) of an annual monitoring, management or similar fee to the Sponsors in an aggregate amount equal to or less than $10.0 million per annum for any period commencing on or after the Closing Date (with pro rated amounts payable for any partial year periods and any amounts not paid in any period beginning on the Closing Date accruing and being payable upon request of the Sponsors in future periods), either by amendments to the Closing Date Management Agreements, the execution of a similar or related agreements or otherwise, in each case, will not be materially adverse to the Lenders. each of (i) that certain Management Services Agreements, dated as of October 25, 2013, by and among ACOF Operating Manager III, LLC, a Delaware limited liability company, TNMG LLC and NMG, (ii) that certain Management Services Agreement, dated as of October 25, 2013, by and among ACOF Operating Manager IV, LLC, a Delaware limited liability company, TNMG LLC and NMG, and (iii) that certain Management Services Agreement, dated as of October 25, 2013, by and among CPPIB Equity Investments Inc., a corporation incorporated under the Canada Business Corporations Act, TNMG LLC and NMG, in each case, as in effect on the Amendment No. 2 Effective Date, as amended, amended and restated, supplemented or otherwise modified in a manner consistent with this Agreement, including Section 6.07 hereof.

 

Management Group” means the group consisting of the directors, executive officers and other management personnel of the BorrowerNM Group and the Restricted Subsidiaries on the Closing Dateits Subsidiaries on the Amendment No. 2 Effective Date or who became directors, officers or management personnel of NM Group or any direct or indirect parent of NM Group, as applicable, and its Subsidiaries following the Amendment No. 2 Effective Date (other than in connection with a transaction that would otherwise be a Change in Control if such persons were not included in the definition of “Permitted Holders”), or (in each case) family members thereof, or trusts, partnerships or limited liability companies for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date Beneficially Own or have the right to acquire, directly or indirectly, Equity Interests of the Lead Borrower or any Permitted Parent.

 

Margin Stock” has the meaning assigned to such term in Regulation U.

 

Material Adverse Effect” means a material adverse effect on:

 

(1)                                       the business, financial condition or results of operations, in each case, of the Lead Borrower and the Restricted Subsidiaries (taken as a whole);

 

(2)                                       the ability of the BorrowerBorrowers and the Guarantors (taken as a whole) to perform their payment obligations under the Loan Documents; or

 

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(3)                                       the rights and remedies of the Administrative Agent and the Lenders (taken as a whole) under the Loan Documents.

 

Material Indebtedness” means Indebtedness (other than the Term Loans) of theany Borrower or any Subsidiary Loan Party in an aggregate outstanding principal amount exceeding $50.0 million.

 

Material Subsidiary” means any Subsidiary other than an Immaterial Subsidiary.

 

Maturity Date” means, as the context may require:

 

(1)                                       with respect to the 2013 Term Loans existing on the Closing Date, October 25, 2020;

 

(2)                                       with respect to any Incremental Term Loans, the final maturity date specified therefor in the applicable Incremental Facility Amendment; 2019 Extended Term Loans, (i) unless clause (ii) applies, October 25, 2023 and (ii) July 16, 2021, if and only if, all of the Senior Notes (and any Refinancing in respect thereof), other than Senior Notes (and any Refinancing in respect thereof) in an aggregate principal amount not to exceed $150.0 million, have not been, on or prior to July 16, 2021, (a) fully repaid or otherwise redeemed, discharged or defeased or (b) extended so that the maturity date with respect thereto is no earlier than April 24, 2024;

 

(3)                                       with respect to any Other Term Loans, the final maturity date specified therefor in the applicable Refinancing Amendment; and

 

(4)                                       with respect to any other Extended Term Loans, the final maturity date specified therefor in the applicable Extension Amendment.

 

Maximum Rate” has the meaning assigned to such term in Section 10.09.

 

Merger” has the meaning assigned to such term in the recitals hereto. Sub” means Mariposa Merger Sub LLC, a Delaware limited liability company, which merged with and into Lead Borrower with Lead Borrower surviving such merger.

 

Merger Agreement” has the meaning assigned to such term in the recitals hereto.

 

Merger Sub” has the meaning assigned to such term in the introductory paragraph hereof.

 

MNPI” means any material Nonpublic Informationnonpublic information regarding Holdings and the Subsidiaries that has not been disclosed to the Lenders generally (other than Lenders who elect not to receive such information).  For purposes of this definition “material Nonpublic Information” means Nonpublic Informationnonpublic information” means nonpublic information that would reasonably be expected to be material to a decision by any Lender to assign or acquire any Term Loans or to enter into any of the transactions contemplated thereby.

 

Moody’s” means Moody’s Investors Service, Inc or any successor to the rating agency business thereof.

 

Mortgage Policies” has the meaning assigned to such term in Section 5.10(2).

 

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Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which Holdings, the Borrower or any Restricted Subsidiaryany Loan Party or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

MYT Entities” means, (a) collectively, (i) Mariposa Luxembourg I S.à r.l. (Luxembourg), (ii) Mariposa Luxembourg II S.à r.l. (Luxembourg), (iii) NMG Germany GmbH (Germany), (iv) mytheresa.com GmbH (Germany), (v) mytheresa.com Service GmbH (Germany), (vi) Theresa Warenvertrieb GmbH (Germany), (vii) New MYT Dutch HoldCo (Netherlands) and (viii) the Subsidiaries of any of the foregoing described in subclauses (i) through (vii) of this clause (a), and (b) as used in the definitions of “MyTheresa Designation” and “MyTheresa Distribution” and in Section 10.05(2) and Section 10.22, the entities described in subclauses (i) through (vi) of the foregoing clause (a).

 

MYT Guarantor” means, collectively, and together with their respective successors, (a) the entities listed in clause (a)(i), (a)(ii) and (a)(vii) of the definition of “MYT Entities” and (b) MYT Parent and MYT Intermediate Holdco, providing the Limited MYT Guarantee of the Second Lien Notes Indenture.

 

MYT Holdco” means MYT Holding Co., a Delaware corporation and a direct Wholly Owned Subsidiary of MYT Parent, together with its successors.

 

MYT Holdco Common Equity” means the common Equity Interests of the MYT Holdco.

 

MYT Holdco Preferred Series A Certificate” means the certificate of designation governing the MYT Holdco Series A Preferred Stock.

 

MYT Holdco Preferred Series B Certificate” means the certificate of designation governing the MYT Holdco Series B Preferred Stock.

 

MYT Holdco Preferred Stock” means, collectively, the Cumulative Series A Preferred Stock of MYT Holdco under the certificate of designation governing the MYT Holdco Preferred Series A Stock and the Cumulative Series B Preferred Stock of MYT Holdco under the certificate of designation governing the MYT Holdco Preferred Series B Stock.

 

MYT Holdco Series A Preferred Stock” means the Cumulative Series A Preferred Stock of the MYT Holdco under the MYT Holdco Preferred Series A Certificate.

 

MYT Holdco Series B Preferred Stock” means the Cumulative Series B Preferred Stock of the MYT Holdco under the MYT Holdco Preferred Series B Certificate.

 

MYT Holdco Preferred Stock Documents” means. collectively, the documents governing the MYT Holdco Preferred Stock (including the applicable certificates of designation and organizational documents).

 

MYT Intermediate Holdco” means MYT Intermediate Holding Co., a newly formed Delaware corporation and a direct Wholly Owned Subsidiary of MYT Holdco, together with its successors.

 

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MYT Parent” means MYT Parent Co., a newly formed Delaware corporation, together with its successors.

 

MYT Waterfall” means, collectively, distributions of cash or any other assets received in connection with a MYT Secondary Sale (as defined in the Second Lien Notes Indenture) by MYT Holdco or any of the equityholders thereof (which proceeds shall be funded by the purchasers directly to MYT Holdco for deposit or distribution) made in accordance with the following priorities:

 

(1)                                 first, up to $200.0 million irrevocably deposited into the MYT Account (as defined in the Second Lien Notes Indenture); provided, that, upon the earlier to occur of (i) the satisfaction and discharge in full of the Second Lien Notes Obligations and (ii) provision of MYT Alternate Security (as defined in the Second Lien Notes Indenture), any amounts in the MYT Account shall be released and distributed in accordance with clauses (2), (3) and (4) below;

 

(2)                                 second, to holders of MYT Holdco Series A Preferred Stock on a pro rata basis, up to an amount in respect of each share of MYT Holdco Series A Preferred Stock equal to (i) $1.00, adjusted as appropriate in the event of any stock dividend, stock split, stock distribution, recapitalization, combination or similar event with respect to shares of MYT Holdco Series A Preferred Stock, plus (ii) all accumulated and unpaid dividends (whether or not declared, and including all such dividends that have compounded) thereon through but not including, the date of payment (such amount in the aggregate, the “Liquidation Preference”);

 

(3)                                 third, to the holders of MYT Holdco Series B Preferred Stock, up to an amount equal to the Liquidation Preference received by the holders of MYT Holdco Series A Preferred Stock in the foregoing clause (2) (excluding any additional dividends of 2% per annum payable in accordance with the MYT Holdco Preferred Series A Certificate upon certain events of default therein); and

 

(4)                                 fourth, (x) to the holders of the MYT Holdco Common Equity, 50% of any remaining distributions on a pro rata basis and (y) the other 50% of any remaining distributions, to the Lead Borrower as common equity and used by the Lead Borrower to redeem the Third Lien Notes at par.

 

MyTheresa Assets” means the assets described in clauses (1), (2), and (3) of the definition of MyTheresa Distribution.

 

MyTheresa Designation” means, collectively, all designations by any Loan Party or any of their Related Parties prior to the execution date of the TSA of any of the MYT Entities as “unrestricted” Subsidiaries under the Senior Notes Indentures, the Existing Credit Agreement, or the ABL Credit Agreement, and all acts or omissions taken by any Loan Party or any of its Related Parties in structuring, implementing, or effectuating the foregoing designations.

 

MyTheresa Distribution” means, collectively, all distributions or dividends by any Loan Party or any of their Related Parties (including but not limited to NMG International) prior to the execution date of the TSA to or for the benefit of any other Related Parties of (1) any Equity Interests in the MYT Entities, (2) any Indebtedness owed by the MYT Entities to any Related Party (including but not limited to NMG International), and (3) any and all other Claims or Equity Interests of any Related Party (including but not limited to NMG International) in the MYT Entities, and all

 

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acts or omissions taken by any Loan Party or any of its Related Parties in structuring, implementing, or effectuating the distributions or dividends described in clauses (1) through (3) of this definition.

 

Net Cash Proceeds” means the aggregate cash proceeds (using the fair market value of any Cash Equivalents) received by the Lead Borrower or any Restricted Subsidiary in respect of any Asset Sale (including  any cash received in respect of or upon the sale or other disposition of any Designated Non-Cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, and including any proceeds received as a result of unwinding any related Hedge Agreements in connection with such transaction but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct cash costs relating to such Asset Sale and the sale or disposition of such Designated Non-Cash Consideration (including legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses incurred as a result thereof, taxes paid or payable within one year of such Asset Sale as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required to be paid as a result of such transaction that is secured by a Permitted Lien that is prior or senior to the Lien securing the Obligations, and any costs associated with unwinding any related Hedge Agreements in connection with such transaction and any deduction of appropriate amounts to be provided by the Borrower or any of the 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 the 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 that such reserved amounts will be deemed to be Net Cash Proceeds to the extent and at the time of any reversal thereof (to the extent not applied to the satisfaction of any applicable liabilities in cash in a corresponding amount).  For purposes of Section 2.08(1), no cash proceeds realized in connection with an Asset Sale will be deemed to be Net Cash Proceeds unless such Asset Sale involves aggregate consideration in excess of $10.05.0 million.

 

New MYT Dutch HoldCo” means a newly formed Dutch B.V., Wholly Owned Subsidiary of MYT Intermediate Holding and direct parent of NMG Germany GmbH as a result of a merger by absorption of Mariposa Luxembourg II S.à r.l. into Mariposa Luxembourg I S.à r.l. and a subsequent merger by absorption of Mariposa Luxembourg I S.à r.l. into such newly formed Dutch B.V.

 

New York Courts” has the meaning assigned to such term in Section 10.15.

 

NM Group” means, collectively, NMG and its Subsidiaries.

 

NMG” means Neiman Marcus Group, Inc., a Delaware corporation and the direct Parent Entity of Holdings.

 

NMG International” means NMG International LLC, a Delaware limited liability company.

 

No MNPI Representation” means, with respect to any Person, a customary representation that such Person is not in possession of any MNPI.

 

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Non-Consenting Lender” has the meaning assigned to such term in Section 2.16(3).

 

Non-Debt Fund Affiliate” means any Affiliated Lender other than a Debt Fund Affiliate.

 

Non-Debt Fund Affiliate Assignment and Acceptance” has the meaning assigned to such term in Section 10.04(10)(b).

 

Non-Ratio Based Incremental Facility Cap” has the meaning assigned to such term in Section 2.18(3).Mortgageable Leases” means all leasehold Real Property interests subject to provisions restricting the mortgaging, assignment or other creation of a security interest in or of any such lease, agreement or other instrument governing such leasehold interest or in respect of which a mortgage, assignment or creation of a security interest therein or thereof could reasonably be expected (as determined in good faith by a Responsible Officer of the Lead Borrower and the Collateral Agent) to be in conflict with, result in a breach of, constitute (alone or with notice or lapse of time or both) a default under, or give rise to a right of or result in any cancellation, revocation or acceleration of any right or obligation (including any payment) or to a loss of a material benefit under, any such lease, agreement or other instrument governing such leasehold interest; provided that no leasehold Real Property shall be a Non-Mortgageable Lease if it is not treated as a Non-Mortgageable Lease under any of the Indebtedness Documents governing any Indebtedness of the Borrowers or any Restricted Subsidiary.

 

Non-Participating Term Loan Exchange Indebtedness” means, any Indebtedness incurred by the Borrowers or any Guarantors under this Agreement in exchange for or converted from, or the net proceeds of which are used to, Refinance or repay the 2013 Term Loan Obligations (or any refinancings thereof constituting Permitted Refinancing Indebtedness); provided that:

 

(1)                                       the principal amount (or accreted value, if applicable) of such Non-Participating Term Loan Exchange Indebtedness does not exceed 100% of the outstanding aggregate principal amount (or accreted value, if applicable) of the 2013 Term Loans so Refinanced or repaid (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses);

 

(2)                                       such Non-Participating Term Loan Exchange Indebtedness otherwise qualifies as Permitted Refinancing Indebtedness with respect to the 2013 Term Loans (except that such Indebtedness and Guarantees thereof may be unsecured, secured with 2019 Extended Term Loan Liens (including secured with any existing 2019 Extended Term Loan Liens) or secured with Liens junior to the 2019 Extended Term Loan Liens on any or all of the Collateral and Guaranteed by any Person that Guarantees the 2019 Extended Term Loans, including any PropCo Guarantor);

 

(3)                                       such Non-Participating Term Loan Exchange Indebtedness shall not amortize;

 

(4)                                       such Non-Participating Term Loan Exchange Indebtedness shall not be subject to any “most favored nation” pricing provisions;

 

(5)                                       such Non-Participating Term Loan Exchange Indebtedness shall mature no earlier than the latest Maturity Date then applicable to the 2019 Extended Term Loans hereunder;

 

(6)                                       such Non-Participating Term Loan Exchange Indebtedness has a cash interest rate not exceeding that of the 2019 Extended Term Loans incurred on the Amendment No. 2 Effective Date; and

 

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(7)                                       such Non-Participating Term Loan Exchange Indebtedness is subordinated in right of payment or “waterfall” priority to the 2019 Extended Term Loan Obligations.

 

Notwithstanding any other provision of this Agreement (including the specific provisions of Sections 2.19 and 2.20), Non-Participating Term Loan Exchange Indebtedness may be incurred as Other Term Loans pursuant to Section 2.19 (to the extent incurred to refinance existing 2013 Term Loans) or Extended Term Loans pursuant to Section 2.20 (to the extent holders of 2013 Term Loans elect to extend such 2013 Term Loans in the form of Non-Participating Term Loan Exchange Indebtedness).

 

Non-Participating Term Loan Exchange Obligations” means the Indebtedness and the related Obligations under the Loan Documents related to the Non-Participating Term Loan Exchange Indebtedness.

 

Non-Wholly Owned Target” means any Person or assets acquired pursuant to a Permitted Acquisition that becomes, upon the consummation of such acquisition, a non-Wholly Owned Subsidiary, a joint venture entity or any other entity, special purpose vehicle, or asset in which a Loan Party owns a minority interest under any similar arrangement.

 

Note” has the meaning assigned to such term in Section 2.05(5).

 

Notes Priority Real Estate Assets” means the Real Property assets set forth on (i) Schedule 3.15(1) under the heading “Notes Priority Real Estate Assets” and (ii) Schedule 3.15(2) under the heading “Notes Priority Real Estate Assets”.

 

Notes PropCo” means NMG Notes PropCo LLC, a Delaware limited liability company that is a Subsidiary of the Lead Borrower formed solely to hold the Real Property interests consisting of Notes PropCo Assets; provided, however, that in the event no Notes Priority Real Estate Assets are contributed to the Notes PropCo as of the post-closing deadline (subject to any applicable extensions) to put in place mortgages over the Notes Priority Real Estate Assets set forth on Schedule 5.12, Notes PropCo shall be permitted to be liquidated or dissolved pursuant to Section 6.05(1)(g) after the Amendment No. 2 Effective Date.

 

Notes PropCo Assets” means the Notes Priority Real Estate Assets, to the extent that such Real Property assets are Non-Mortgageable Leases.

 

Obligations” means:

 

(1)                                       all amounts owing to any Agent or any Lender pursuant to the terms of this Agreement or any other Loan Document (including any Applicable Premium and any contingent indemnification and reimbursement obligations, or other payments required under Section 10.05), including all interest and expenses accrued or accruing (or that would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement by or against any Loan Party of any proceeding under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law naming such Loan Party as the debtor in such proceeding, in accordance with and at the rate specified in this Agreement, whether or not the claim for such interest or expense is allowed or allowable as a claim in such proceeding;

 

(2)                                       any Specified Hedge Obligations; and

 

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(3)                                       any Cash Management Obligations;

 

provided that:

 

(a)                                 the Obligations of the Loan Parties under any Specified Hedge Agreement and Cash Management Obligations will be secured and Guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and Guaranteed; and

 

(b)                                 any release of Collateral or Guarantors (as defined in the Collateral Agreement) effected in the manner permitted by this Agreement or any Security Document will not require the consent of any Cash Management Bank or Qualified Counterparty pursuant to any Loan Document.

 

OFAC” has the meaning assigned to such term in Section 3.19(3)(e).

 

Offering Circular” means the Offering Circular related to the offering of Second Lien Notes, dated as of May 20, 2019.

 

Original Closing Date” means October 25, 2013.

 

Original Commitment” means, with respect to each Lender, the commitment of such Lender to make Term Loans under the Existing Credit Agreement.

 

Original Merger” means the “Merger” as defined in the Existing Credit Agreement.

 

Original Merger Agreement” means the “Merger Agreement” as defined in the Existing Credit Agreement.

 

Original Term Loan Installment Date” has the meaning assigned to such term in Section 2.06(1).

 

Original Transactions” means the “Transactions” as defined in the Existing Credit Agreement.

 

Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Term Loan or Loan Document).

 

Other First Lien Indebtedness” has the meaning assigned to such term in Section 2.08(1)(c).

 

Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.16).

 

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Other Term Loan Installment Date” has the meaning assigned to such term in Section 2.06(23).

 

Other Term Loans” has the meaning assigned to such term in Section 2.19(1).

 

Parent Entity” means any direct or indirect parent of the Lead Borrower.

 

Participant” has the meaning assigned to such term in Section 10.04(4)(a).

 

Participant Register” has the meaning assigned to such term in Section 10.04(4)(a).

 

Payment Office” means the office of the Administrative Agent located at Eleven Madison Avenue, New York, New York 10010 or such other office as the Administrative Agent may designate to the Lead Borrower and the Lenders from time to time.

 

PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA, or any successor thereto.

 

Perfection Certificate” means the Perfection Certificate with respect to the Loan Parties in a form substantially similar to that delivered on the ClosingAmendment No. 2 Effective Date.

 

Permitted Acquisition” means any acquisition of all or substantially all the assets of, or a majority of the Equity Interests in, or merger, consolidation or amalgamation with, a Person or division or line of business of a Person (or any subsequent investment made in a Person, division or line of business previously acquired in a Permitted Acquisition) if (1) no Event of Default is continuing immediately prior to making such Investment or would result therefrom; and (2) immediately after giving effect thereto, with respect to acquisitions of entities that do not become Subsidiary Loan Parties, the aggregate fair market value of all Investments made in such entities since the Closing Date (with all such Investments being valued at their original fair market value and without taking into account subsequent increases or decreases in value), when taken together with the aggregate amount of payments made with respect to Investments pursuant to Section 6.04(6), will not exceed the greater of (a) $100 million and (b) 1.15% of Consolidated Total Assets as of the date any such acquisition is made.the purchase or other acquisition, by merger, consolidation, amalgamation or otherwise, of the Equity Interests in, or the assets of (including all or substantially all the assets constituting a business unit, division, product line or line of business of), any Person, including minority investments and joint ventures (or any subsequent investment made in a Person, business unit, division, product line or line of business previously acquired in a Permitted Acquisition) (any such transaction, an “Acquisition”), provided:

 

Permitted Amendment” means any Incremental Facility Amendment, Refinancing Amendment or Extension Amendment

 

(1)                                       no Event of Default is continuing immediately prior to making such Investment or would result therefrom;

 

(2)                                       immediately after giving effect thereto, the aggregate consideration (which shall not include any related transaction costs of the Loan Parties or their Subsidiaries for their own account  but shall include Indebtedness of the target assumed or retained in connection with any applicable transaction) (collectively, the “Aggregate Consideration”) paid (x) in connection with any such individual Acquisition, whether consummated through a single transaction or

 

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series of related transactions but excluding from such amount any amounts paid utilizing the Available Contribution Proceeds, shall not exceed, $150.0 million (the “Individual Cap”), plus after such Permitted Acquisition is made, additional incremental amounts not to exceed $25.0 million in the aggregate (the “Incremental Cap”) in such Permitted Acquisition, and (y) for all Permitted Acquisitions since the Amendment No. 2 Effective Date (without taking into account subsequent increases or decreases in value of the target or assets acquired but including any incremental amounts funded pursuant to the preceding clause (x) after any initial Permitted Acquisition), but excluding from such aggregate amount any amounts paid utilizing the Available Contribution Proceeds shall not exceed, together with Indebtedness assumed in connection with such acquisition pursuant to Section 6.01(12), $300.0 million less the Aggregate Consideration paid by TNMG LLC prior to the Amendment No. 2 Effective Date in respect of that certain Investment made by TNMG LLC pursuant to that certain Unit Purchase Agreement, dated as of April 17, 2019, by and among FashionPhile Group, LLC, TNMG LLC and the other parties party thereto (the “Aggregate Cap”);

 

(3)                                       following the consummation thereof,

 

(a)                                 any acquired Person, solely to the extent such Person becomes a Wholly Owned Subsidiary of Holdings or any of its Subsidiaries, shall become a Guarantor hereunder, to the extent required by and subject to the limitations of Section 5.10; and

 

(b)                                 any acquired assets (including any Equity Interests in a Non-Wholly Owned Target) shall constitute Collateral, subject to the limitations set forth in the Loan Documents;

 

provided, that, (i) no Non-Wholly Owned Target shall be required to become a Guarantor hereunder or pledge any of its assets as Collateral hereunder, (ii) any Non-Wholly Owned Target so acquired pursuant to this definition shall be permitted to fund its ratable share of investments in other bona fide operating businesses, in each case, subject to the Individual Cap, the Incremental Cap and the Aggregate Cap, and (iii) for purposes of clarity, a third party owner (that is not Holdings or any of its Subsidiaries) of a Non-Wholly Owned Target shall not be required to pledge its Equity Interests in such entity as Collateral;

 

(4)                                       immediately after giving effect to any such Acquisition, on a Pro Forma Basis as of the date any such Acquisition is made, “Excess Availability” as defined in and under the ABL Credit Agreement shall not be less than $300 million;

 

(5)                                       such Acquisition is not in respect of any Indebtedness of, or Equity Interests in, Holdings or its Subsidiaries nor in any Person that holds any such Indebtedness or Equity Interests; and

 

(6)                                       any joint venture investment shall (x) not be consummated with Affiliates of Holdings, the Borrowers, or their Subsidiaries (except that such Affiliates (including any Sponsor but excluding Holdings, the Borrowers, and their Subsidiaries) may co-invest in any such joint venture with an unaffiliated third party Person on terms substantially similar to the terms of the applicable Loan Party’s or Subsidiary’s Investment without such Affiliates’ Investments being subject to the caps set forth above), and (y) consist of bona fide operating businesses reasonably related to the Borrowers’ business.

 

Permitted Debt” has the meaning assigned thereto in Section 6.01.

 

Permitted Holders” means each of:

 

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(1)                                       the Sponsors;

 

(2)                                       any member of the Management Group (or any controlled Affiliate thereof of which members of the Management Group hold at least 50% of the Voting Stock and 50% of the economic value);

 

(3)                                       any other holder of a direct or indirect equity interestEquity Interest in Holdings that either (a) holds such interestEquity Interest as of the Closing Date and is disclosed to the Arrangers prior to the Closing Date or (b) becomes a holder of such interest prior to the three-month anniversary of the Closing Date and is a limited partner of a Sponsor on the Closing Date; provided that the limited partners that become holders of equity interests pursuant to this clause (b) do not own in the aggregate more than 25% of the Voting Stock of Holdings as of such three-month anniversaryAmendment No. 2 Effective Date;

 

(4)                                       any group (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of which the Persons described in the foregoing clauses (1), (2) or (3) are members; provided that, (a) without giving effect to the existence of such group or any other group, the Persons described in the foregoing clauses (1), (2) and (3), collectively, Beneficially Own Voting Stock representing 50% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings or any Permitted Parent (determined on a fully diluted basis but without giving effect to contingent voting rights not yet vested) then held by such group and (b) if the Beneficial Ownership described in subclause (a) is shared with any Person other than the Persons described in clauses (1), (2) and (3) above, the Persons described in clauses (1), (2) and (3) above hold at least 50% of the economic value of the equity securities of Holdings  (or Permitted Parent, as the case may be) then held by such group; and

 

(5)                                       any Permitted Parent.

 

Permitted Holdings Debt” means unsecured Indebtedness of Holdings that:

 

(1)                                       is not subject to any Guarantee by the BorrowerBorrowers or any Restricted Subsidiary;

 

(2)                                       does not mature prior to the date that is ninety-one (91) days after the Latest Maturity Date;

 

(3)                                       no Event of Default has occurred and is continuing immediately after the issuance or incurrence thereof or would result therefrom;

 

(4)                                       has no scheduled amortization or payments of principal (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirements of clause (6) hereof) prior to the Latest Maturity Date;

 

(5)                                       does not require any payments in cash of interest or other amounts in respect of the principal thereof prior to the earlier to occur of the date that is ninety-one (91) days after the Latest Maturity Date; and

 

(6)                                       has mandatory prepayment, repurchase or redemption, covenant, default and remedy provisions customary for senior discount notes of an issuer that is the parent of a borrower under senior secured credit facilities, and in any event, with respect to covenant, default and remedy provisions, no more restrictive than those set forth in the Senior Notes Indentures taken as a whole (other than

 

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provisions customary for senior discount notes of a holding company), in each case as determined in good faith by a Responsible Officer of the Lead Borrower;

 

provided that clauses (4) and (5) will not restrict payments that are necessary to prevent such Indebtedness from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; provided, further that the Lead Borrower will deliver to the Administrative Agent final copies of the definitive credit documentation relating to such Indebtedness (unless the Lead Borrower is bound by a confidentiality obligation with respect thereto, in which case the Lead Borrower will deliver a reasonably detailed description of the material terms and conditions of such Indebtedness in lieu thereof).

 

Permitted InvestmentInvestments” has the meaning assigned to such term in Section 6.04.

 

Permitted Investor” means:

 

(1)                                       each of the Sponsors;

 

(2)                                       each of their respective Affiliates (other than any member of the NM Group or any other portfolio company of the Sponsors) and investment managers;

 

(3)                                       any fund or account managed by any of the Persons described in clause (1) or (2) of this definition;

 

(4)                                       any employee benefit plan of Holdings or any of its Subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan; and

 

(5)                                       investment vehicles of members of management of Holdings or the BorrowerBorrowers that invest in, acquire or trade commercial loans but excluding natural persons.

 

Permitted Liens” has the meaning assigned to such term in Section 6.02.

 

Permitted Parent” means any Parent Entity for so long as it is controlled only by one or more Persons that are Permitted Holders pursuant to clause (1), (2), (3) or (4) of the definition thereof; provided that such Parent Entity was not formed in connection with, or in contemplation of, a transaction that would otherwise constitute a Change in Control.

 

Permitted PropCo Guaranteed Obligations” means, collectively, (i) the 2019 Extended Term Loan Obligations, (ii) the Second Lien Notes Obligations, (iii) the Third Lien Notes Obligations, (iv) the ABL Obligations, (v) the Non-Participating Term Loan Exchange Obligations and (vi) the 2028 Debentures Obligations.

 

Permitted Refinancing Indebtedness” means any Indebtedness issued in exchange for or converted from, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund (collectively, “Refinance” or a “Refinancing”) the Indebtedness being Refinanced (or previous refinancings thereof constituting Permitted Refinancing Indebtedness); provided that:

 

(1)                                       the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so Refinanced (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses);

 

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(2)                                       the final maturity of such Permitted Refinancing Indebtedness is later than the maturity of the Indebtedness so refinanced and the Weighted Average Life to Maturity of such Permitted Refinancing Indebtedness is greater than or equal to the shorter of (a) the Weighted Average Life to Maturity of the Indebtedness being Refinanced and (b) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being Refinanced that were due on or after the date that is one year following the Latest Maturity Date were instead due on the date that is one year following the Latest Maturity Date; provided that no Permitted Refinancing Indebtedness incurred in reliance on this subclause (b) will have any scheduled principal payments due prior to the Latest Maturity Date in excess of, or prior to, the scheduled principal payments due prior to such Latest Maturity Date for the Indebtedness being Refinanced;

 

(3)                                       if the Indebtedness being Refinanced is subordinated in right of payment or, as to any assets, lien priority to the Obligations under this Agreement, such Permitted Refinancing Indebtedness is subordinated, as to such assets, in right of payment or lien priority to suchthe Obligations on terms at least as favorable to the applicable Lenders as those contained in the documentation governing the Indebtedness being Refinanced;

 

(4)                                       no Permitted Refinancing Indebtedness maywill have different obligors, or greater (including higher ranking priority) Guarantees or security, than the Indebtedness being Refinanced; provided that, with respect to a Refinancing of the ABL Obligations, the Liens, if any, securing such Permitted Refinancing Indebtedness will be on terms not materially less favorable to the Lenders than those contained in the documentation governing the ABL Credit Agreement, as determined in good faith by a Responsible Officer of the Lead Borrower;(5)                                  in the case of a Refinancing of  Indebtedness that is secured on a pari passu basis with the Term Loans with Indebtedness that is secured on a pari passu basis with the Term Loans, a Debt Representative acting on behalf of the holders of such Indebtedness has become party to or is otherwise subject to the provisions of a First Lien Intercreditor Agreement and, if applicable, the Intercreditor Agreement;  (and, for the avoidance of doubt, any Liens securing such Permitted Refinancing Indebtedness may not extend to additional assets or be higher in priority than the Liens securing the Indebtedness being Refinanced);

 

(5)                                       [reserved];

 

(6)                                       in the case of a Refinancing of Indebtedness that is secured on a pari passu basis with, or on a junior basis to, the Term Loans with Indebtedness that is secured on a junior basis, to the Term Loans,by any Collateral and subject to specified Required Collateral Lien Priority, the applicable Liens securing such Permitted Refinancing Indebtedness do not have a higher priority than the Required Collateral Lien Priority applicable to the Liens securing the Obligations and a Debt Representative acting on behalf of the holders of such Indebtedness has become party to or is otherwise subject to the provisions of athe Junior Lien Intercreditor Agreement and, if applicable, the ABL/Term Loan/Notes Intercreditor Agreement; and

 

(7)                                       in the case of a Refinancing of the ABL Obligations, the Liens, if any, securing such Permitted Refinancing Indebtedness are subject to the ABL/Term Loan/Notes Intercreditor Agreement or another intercreditor agreement that is substantially consistent with, and no less favorable to the Lenders in any material respect than, the ABL/Term Loan/Notes Intercreditor Agreement as certified by a Responsible Officer of the Lead Borrower; and

 

(8)                                       in the case of a Refinancing of the Second Lien Notes Obligations and/or the Third Lien Notes Obligations, the cash interest rate on any such Permitted Refinancing Indebtedness

 

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shall not exceed the cash interest rate applicable to such Second Lien Notes Obligations and/or Third Lien Notes Obligations being Refinanced.

 

Permitted Refinancing Indebtedness may not be incurred to Refinance Indebtedness that is secured on a junior basis to the Term Loans with Indebtedness that is secured on a pari passu basis with the Term Loans.  For the avoidance of doubt, any Permitted Refinancing Indebtedness incurred to refinance any Obligations, Incremental Equivalent Term Debt or Credit Agreement Refinancing Indebtedness will be required to satisfy the requirements of the definition of “Incremental Equivalent Term Debt” or “Credit Agreement Refinancing Indebtedness”, as applicable.

 

Indebtedness constituting Permitted Refinancing Indebtedness will not cease to constitute Permitted Refinancing Indebtedness as a result of the subsequent extension of the Latest Maturity Date after the date of original incurrence thereof.

 

Notwithstanding the foregoing: (a) Indebtedness incurred to refinance the Remaining Senior Notes must be Remaining Senior Notes Exchange Indebtedness; (b) Indebtedness incurred to refinance the 2013 Term Loans must be unsecured Indebtedness, Junior Lien Indebtedness or Non-Participating Term Loan Exchange Indebtedness; (c) Indebtedness incurred to refinance the Second Lien Notes, Third Lien Notes and/or the Guarantees in respect thereof must be unsecured Indebtedness or Junior Lien Indebtedness; (d) Indebtedness incurred to refinance any Indebtedness Guaranteed by Notes PropCo may not have the benefit of a Guarantee by Notes PropCo that has a higher priority in right of payment than the Guarantee by Notes PropCo of the Indebtedness being refinanced; and (e) Indebtedness incurred to refinance any Indebtedness Guaranteed by 2019 Extended Term Loan PropCo may not have the benefit of a Guarantee by 2019 Extended Term Loan PropCo that has a higher priority in right of payment than the Guarantee by 2019 Extended Term Loan PropCo of the Indebtedness being refinanced.

 

Person” means any natural person, corporation, business trust, joint venture, association, company, partnership, limited liability company, government, individual or family trust, Governmental Authority or other entity of whatever nature.

 

PIK Interest” has the meaning assigned to such term in Section 2.10(7).

 

Plan” means any “employee pension benefit plan” as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) that is (1) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA; and (2) either (a) sponsored or maintained (at the time of determination or at any time within the five years prior thereto) by Holdings or any of its Subsidiariesany Loan Party or any ERISA Affiliate or (b) in respect of which Holdings or any of its Subsidiariesany Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

Platform” has the meaning assigned to such term in Section 10.17(1).

 

Pledged Collateral” means “Pledged Collateral” as defined in the Collateral Agreement.

 

Premium Event” has the meaning assigned to such term in Section 2.07(4).

 

Pro Forma Basis” or “Pro Forma” means, with respect to the calculation of the Senior Secured First Lien Net Leverage Ratio, the Total Net Leverage Ratio, the Interest Coverage Ratio, the Fixed Charge Coverage Ratio or any other calculation under any applicable provision of the Loan Documents, as of any date, that pro forma effect will be given to the Recapitalization Transactions, any

 

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Permitted Acquisition or Investment, any issuance, incurrence, assumption or permanent repayment of Indebtedness (including Indebtedness issued, incurred or assumed as a result of, or to finance, any relevant transaction and for which any such financial ratio or other calculation is being calculated) and all sales, transfers and other dispositions or discontinuance of any Subsidiary, line of business, division or store, or any conversion of a Restricted Subsidiary to an Unrestricted Subsidiary or of an Unrestricted Subsidiary to a Restricted Subsidiary, in each case that have occurred during the four consecutive fiscal quarter period of the Lead Borrower being used to calculate such financial ratio (the “Reference Period”), or subsequent to the end of the Reference Period but prior to such date or prior to or simultaneously with the event for which a determination under this definition is made (including any such event occurring at a Person who became a Restricted Subsidiary after the commencement of the Reference Period), as if each such event occurred on the first day of the Reference Period, and pro forma effect will be given to factually supportable and identifiable pro forma cost savings related to operational efficiencies, strategic initiatives or purchasing improvements and other synergies, in each case, reasonably expected by the BorrowerBorrowers and the Restricted Subsidiaries to be realized based upon actions taken or reasonably expected to be taken within 1812 months of the date of such calculation (without duplication of the amount of actual benefit realized during such period from such actions), which cost savings, improvements and synergies can be reasonably computed, as certified in writing by the chief financial officer of the BorrowerLead Borrower, up to an amount, after giving effect to such application or adjustment, not in excess of 10% of Consolidated EBITDA for any Reference Period.

 

Projections” means all projections (including financial estimates, financial models, forecasts and other forward-looking information) furnished to the Lenders or the Administrative Agent by or on behalf of Holdings or any of the Subsidiaries on or prior to the ClosingAmendment No. 2 Effective Date.

 

PropCo Guarantors” means Notes PropCo and 2019 Extended Term Loan PropCo.

 

PropCo Operating License” has the meaning assigned to such term in Section 5.10(8).

 

PropCo Subordination Agreements” means each of (a) that certain subordination agreement, dated as of the Amendment No. 2 Effective Date, by and among the Administrative Agent, the  representative for the Second Lien Notes, the representative for the Third Lien Notes and any other parties party thereto from time to time, and acknowledged by 2019 Extended Term Loan PropCo, as amended, restated, supplemented or otherwise modified from time to time and (b) that certain subordination agreement, dated as of the Amendment No. 2 Effective Date, by and among the Administrative Agent, the representative for the Second Lien Notes, the representative for the Third Lien Notes and any other parties party thereto from time to time, and acknowledged by Notes PropCo, as amended, restated, supplemented or otherwise modified from time to time.

 

Public Lender” has the meaning assigned to such term in Section 10.17(2).

 

Purchase Date” means the date that the Merger is required to be consummated pursuant to the Merger Agreement.

 

Purchase Documents” means the collective reference to the Merger Agreement, all material exhibits and schedules thereto and all agreements expressly contemplated thereby.

 

Purchasing Borrower Party” means Holdings or any Subsidiary of Holdings that becomes an Assignee or Participant pursuant to Section 10.04(14).

 

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Qualified Counterparty” means any counterparty to any Specified Hedge Agreement that, at the time such Specified Hedge Agreement was entered into or on the Original Closing Date, was an Agent, an Arranger, a Lender or an Affiliate of the foregoing, whether or not such Person subsequently ceases to be an Agent, an Arranger, a Lender or an Affiliate of the foregoing.

 

Qualified Equity Interests” means any Equity Interests other than Disqualified Stock.

 

Qualified IPO” means an underwritten public offering (other than a public offering pursuant to a registration statement on Form S-4 or Form S-8) of the Equity Interests of any Parent Entity which generates cash proceeds of at least $100.0 million.

 

Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

 

(1)                                 the Board of Directors of the Borrower has determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is, in the aggregate, economically fair and reasonable to the Borrower and the Restricted Subsidiaries;

 

(2)                                 all sales of accounts receivable and related assets by the Borrower or any Restricted Subsidiary to the Receivables Subsidiary are made at fair market value (as determined in good faith by a Responsible Officer of the Borrower); and

 

(3)                                 the financing terms, covenants, termination events and other provisions thereof will be market terms (as determined in good faith by a Responsible Officer of the Borrower) and may include Standard Securitization Undertakings. The grant of a security interest in any accounts receivable of the Borrower or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure any Indebtedness will not be deemed a Qualified Receivables Financing.

 

Quarterly Financial Statements” has the meaning assigned to such term in Section 5.04(2).

 

Ratio Debt” has the meaning assigned to such term in Section 6.01.

 

Real Property” means, collectively, all right, title and interest (including any leasehold estate) in and to any and all parcels of or interests in real property owned in fee or leased by any Loan Party, together with, in each case, all easements, hereditaments and appurtenances relating thereto, and all improvements and appurtenant fixtures incidental to the ownership or lease thereof.

 

Receivables Facility” means one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated, refunded, replaced or refinanced from time to time, the Indebtedness of which is non-recourse (except for standard representations, warranties, covenants and indemnities made in connection with such facilities) to the Borrower and the Restricted Subsidiaries pursuant to which the Borrower or any Restricted Subsidiary sells its accounts receivable to either (1) a Person that is not a Restricted Subsidiary; or (2) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.Recapitalization Transaction Documents” has the meaning assigned to “Recapitalization Transaction Documents” in the TSA.

 

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Receivables Financing” means any transaction or series of transactions that may be entered into by the Borrower or any Restricted Subsidiary pursuant to which the Borrower or any Restricted Subsidiaries may sell, convey or otherwise transfer to: Recapitalization Transactions” means, collectively, the transactions to occur pursuant to the Recapitalization Transaction Documents, including:

 

(1)                                 a Receivables Subsidiary (in the case of a transfer by the Borrower or any Restricted Subsidiary that is not a Receivables Subsidiary); and

 

(2)                                 any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Borrower or any Restricted Subsidiary, and any assets related thereto including all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedge Agreements entered into by the Borrower or any such Restricted Subsidiary in connection with such accounts receivable.

 

Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

 

Receivables Subsidiary” means a Wholly Owned Subsidiary of the Borrower (or another Person formed solely for the purposes of engaging in a Qualified Receivables Financing with the Borrower and to which the Borrower or any Restricted Subsidiary transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of the Borrower and its Restricted Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Borrower (as provided below) as a Receivables Subsidiary and:

 

(1)                                       no portion of the Indebtedness or any other obligations (contingent or otherwise): the execution and delivery of the 2019 Extension Amendment and the other Loan Documents, and the creation of the Liens pursuant to the Security Documents;

 

(a)                                 is guaranteed by the Borrower or any Restricted Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings);

 

(b)                                 is recourse to or obligates the Borrower or any Restricted Subsidiary in any way other than pursuant to Standard Securitization Undertakings; or

 

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(c)                                  subjects any property or asset of the Borrower or any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

 

(2)                                       with which neither the Borrower nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which the Borrower reasonably believes to be no less favorable to the Borrower or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Borrower; and the execution and delivery of any amended or amended and restated ABL Loan Documents, and the creation of the Liens pursuant to the ABL Security Documents;

 

(3)                                       to which neither the Borrower nor any other Restricted Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. the execution and delivery of the Second Lien Notes Documents and the issuance of the Second Lien Notes under the Second Lien Notes Indenture, and the creation of the Liens pursuant to the Second Lien Notes Security Agreement;

 

(4)                                       the execution and delivery of the Third Lien Notes Documents and the issuance of the Third Lien Notes under the Third Lien Notes Indentures, and the creation of the Liens pursuant to the Third Lien Notes Security Agreement;

 

(5)                                       the execution and delivery of the MYT Holdco Preferred Stock Documents and the issuance of the MYT Holdco Preferred Stock; and

 

(6)                                       Any such designation by the Board of Directors of the Borrower will be evidenced to the Administrative Agent by filing with the Administrative Agent a certified copy of the resolution of the Board of Directors of the Borrower giving effect to such designation and a certificate of a Responsible Officer of the Borrower certifying that such designation complied with the foregoing conditions.the payment of all fees, costs and expenses in connection with the foregoing.

 

Recipient” means the Administrative Agent and any Lender, as applicable.

 

Refinance” has the meaning assigned to such term in the definition of “Permitted Refinancing Indebtedness,” and the terms “Refinanced” and “Refinancing” will have correlative meanings.

 

Refinancing Amendment” means an amendment to this Agreement (and, as necessary, each other Loan Document) executed by each of (1) the BorrowerBorrowers and Holdings; (2) the Administrative Agent; and (3) each Lender that agrees to provide any portion of the Other Term Loans in accordance with Section 2.19.

 

Register” has the meaning assigned to such term in Section 10.04(2)(d).

 

Registered Equivalent Notes” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act, substantially identical notes (having the same Guarantees and collateral provisions) issued by the Borrower in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.

 

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Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Regulation X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Reinvestment Deferred Amount” means, with respect to any Reinvestment Event, the aggregate amount of Net Cash Proceeds received by the BorrowerBorrowers or a Restricted Subsidiary in connection therewith that are not applied to prepay the Term Loans as a result of the delivery of a Reinvestment Notice.

 

Reinvestment Event” means any Asset Sale in respect of which the Lead Borrower has delivered a Reinvestment Notice.

 

Reinvestment Notice” means a written notice executed by a Responsible Officer stating that the BorrowerBorrowers or any Restricted Subsidiary intends and expects to use an amount of funds not to exceed (i) the amount of Net Cash Proceeds of an Asset Sale to restore, rebuild, repair, construct, improve, replace or otherwise acquire assets used or useful in the Borrower’s or a Restricted Subsidiary’s businessany Asset Sale of any warehouse or distribution center to (a) make an investment in, or purchase of, a warehouse or distribution center within 12 months following the date of the consummation of such Asset Sale or (b) apply such funds to any investments in, or purchases of, a warehouse or distribution center which were made at any time during the 24 months immediately preceding the date of consummation of such Asset Sale, or (ii) with respect to an Asset Sale of any store or stores, an aggregate amount of $30.0 million to fund capital expenditures incurred within 12 months following the date of the consummation of the applicable Asset Sale.

 

Reinvestment Prepayment Amount” means, with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended by the BorrowerBorrowers or a Restricted Subsidiary prior to the relevant Reinvestment Prepayment Date to restore, rebuild, repair, construct, improve, replace or otherwise acquire assets used or useful in the Borrower’s or a Restricted Subsidiary’s businessin the manner described in the definition of “Reinvestment Notice”.

 

Reinvestment Prepayment Date” means, (i) with respect to any Reinvestment Event in respect of which a Reinvestment Notice is delivered as described in clause (i) of the definition of Reinvestment Notice, the date occurring one year24 months after such Reinvestment Event or, if the Borrower or a Restricted Subsidiary has entered into a legally binding commitment within one year after such Reinvestment Event to restore, rebuild, repair, construct, improve, replace or otherwise acquire assets used or useful in the Borrower’s or a Restricted Subsidiary’s business, the date occurring two years, and (ii) with respect to any Reinvestment Event in respect of which a Reinvestment Notice is delivered as described in clause (ii) of the definition of “Reinvestment Notice”, the date occurring 12 months after such Reinvestment Event.

 

Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

Related Persons” has the meaning assigned to such term in Section 6.06(2).

 

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Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing, depositing, dispersing, emanating or migrating in, into, upon, onto or through into the environmentEnvironment.

 

Remaining Present Value” means, as of any date with respect to any lease, the present value as of such date of the scheduled future lease payments with respect to such lease, determined with a discount rate equal to a market rate of interest for such lease reasonably determined at the time such lease was entered into.Released Claim” has the meaning assigned to such term in Section 10.22(7).

 

Remaining Senior Notes” means any Senior Notes issued pursuant to the Senior Notes Indentures that the holders thereof declined to exchange into Third Lien Notes pursuant to the exchange offer contemplated by the TSA, which remain outstanding on the Amendment No. 2 Effective Date following the consummation of the Recapitalization Transactions.

 

Remaining Senior Notes Exchange Indebtedness” means Remaining Senior Notes Third Lien Exchange Indebtedness and Remaining Senior Notes Unsecured Exchange Indebtedness.

 

Remaining Senior Notes Exchange Obligations” means the Indebtedness and the related Indebtedness Obligations under the applicable Remaining Senior Notes Exchange Indebtedness and the other Indebtedness Documents related to the applicable Remaining Senior Notes Exchange Indebtedness.

 

Remaining Senior Notes Obligations” means the Indebtedness and the related Indebtedness Obligations under the Indebtedness Documents related to the Remaining Senior Notes.

 

Remaining Senior Notes Third Lien Exchange Indebtedness” means, any Indebtedness incurred by the issuers of the Senior Notes or issued in exchange for, or the net proceeds of which are used to Refinance the Senior Notes (or any refinancings thereof constituting Permitted Refinancing Indebtedness); provided that:

 

(1)                                       the aggregate principal amount (or accreted value, if applicable) of such Remaining Senior Notes Third Lien Exchange Indebtedness issued shall not exceed an amount equal to 85% of the aggregate outstanding principal amount (or accreted value, if applicable) of the Senior Notes so Refinanced (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses);

 

(2)                                       such Remaining Senior Notes Third Lien Exchange Indebtedness otherwise qualifies as Permitted Refinancing Indebtedness with respect to the Remaining Senior Notes (except that (a) such Indebtedness and Guarantees thereof may be secured with the same priority on the same Collateral that secures the Third Lien Notes and a Debt Representative acting on behalf of the holders of such Indebtedness shall become (if it is not already) party to or will otherwise be subject to the provisions of the Junior Lien Intercreditor Agreement and ABL/Term Loan/Notes Intercreditor Agreement and (b) such Indebtedness may benefit from the same Guarantees that provide Credit Support to the Third Lien Notes, including by Notes PropCo and 2019 Extended Term Loan PropCo, subject to the Required PropCo Guarantee Priority for Third Lien Notes or otherwise no worse for the Lenders);

 

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(3)                                       such Remaining Senior Notes Third Lien Exchange Indebtedness shall have a cash interest rate not exceeding the cash interest rate on the Third Lien Notes as of the Amendment No. 2 Effective Date;

 

(4)                                       such Remaining Senior Notes Third Lien Exchange Indebtedness shall not amortize;

 

(5)                                       such Remaining Senior Notes Third Lien Exchange Indebtedness shall not be subject to any “most favored nation” pricing provisions; and

 

(6)                                       such Remaining Senior Notes Third Lien Exchange Indebtedness shall mature no earlier than the latest maturity date then applicable to the Third Lien Notes under the Third Lien Notes Indentures.

 

Remaining Senior Notes Unsecured Exchange Indebtedness” means, any Indebtedness incurred by the issuers of the Senior Notes or issued in exchange for, or the net proceeds of which are used to Refinance the Senior Notes (or any refinancings thereof constituting Permitted Refinancing Indebtedness); provided that:

 

(1)                                       the aggregate principal amount (or accreted value, if applicable) of such Remaining Senior Notes Unsecured Exchange Indebtedness issued shall not exceed an amount equal to 100% of the aggregate outstanding principal amount (or accreted value, if applicable) of the Senior Notes so Refinanced (including any Guarantees thereof) (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses);

 

(2)                                       such Remaining Senior Notes Unsecured Exchange Indebtedness otherwise qualifies as Permitted Refinancing Indebtedness with respect to the Remaining Senior Notes;

 

(3)                                       such Remaining Senior Notes Unsecured Exchange Indebtedness shall have a cash interest rate not exceeding the weighted average cash interest rate of the Senior Notes outstanding as of the Amendment No. 2 Effective Date;

 

(4)                                       such Remaining Senior Notes Unsecured Exchange Indebtedness shall not amortize;

 

(5)                                       such Remaining Senior Notes Unsecured Exchange Indebtedness shall not be subject to any “most favored nation” pricing provisions; and

 

(6)                                       such Remaining Senior Notes Unsecured Exchange Indebtedness shall mature no earlier than the latest maturity date then applicable to the Third Lien Notes under the Third Lien Notes Indentures.

 

Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30 day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

 

Repricing Event” means (1) any prepayment of the Term Loans with the proceeds of, or any conversion of Term Loans into, any new or replacement tranche of debt financing bearing interest at an “effective” interest rate less than the “effective” interest rate applicable to the Term Loans and (2) any amendment to the Term Facility that, directly or indirectly, reduces

 

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the “effective” interest rate applicable to the Term Loans (in each case, taking into account original issue discount and upfront fees, which will be deemed to constitute like amounts of original issue discount, being equated to interest rate margins based on an assumed four-year life to maturity); provided that no Repricing Event will be deemed to occur in connection with a Change in Control.

 

Required 2019 Extending Term Lenders” means, at any time, Lenders having 2019 Extended Term Loans outstanding that, taken together, represent more than 50.0% of the sum of all 2019 Extended Term Loans outstanding at such time.

 

Required Collateral Lien Priority” means, with respect to any Lien on any Collateral, that such Lien on such Collateral has the priority indicated in the table below pursuant to the Intercreditor Agreements or other binding contractual obligation of the applicable secured parties, based on the category of asset subject to such Lien listed at the top of each column and the Indebtedness Obligations secured by such Lien listed at the beginning of each row:

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