INDENTURE
Dated as of June 25, 2024
among
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation, as Issuer,
THE GUARANTORS PARTY HERETO,
and
FIDELITAS TRUST COMPANY, N.A., a national banking association, as Trustee, Registrar, Paying Agent, and Transfer Agent
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$500,000,000 8.250% Senior Notes due 2031
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CUSIP (144A): 923847 AA 5
TABLE OF CONTENTS
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CROSS-REFERENCE TABLE
NOTE: This Cross-Reference Table and the Table of Contents are not part of this Indenture and shall not have any bearing on the interpretation of any of its terms and provisions.
RECITALS
WHEREAS, Verimark Hospitality Group Inc., a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 2400 Brickell Bay Drive, Suite 3100, Miami, Florida 33129, Employer Identification Number 84-3291057 (the "Company" or the "Issuer"), has duly authorized the issuance of Five Hundred Million Dollars ($500,000,000) aggregate principal amount of its 8.250% Senior Notes due 2031 (the "Notes");
WHEREAS, the Notes are being offered and sold in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers and pursuant to Regulation S under the Securities Act to persons outside the United States, and have not been and will not be registered under the Securities Act;
WHEREAS, the Company has duly authorized the execution and delivery of this Indenture (as defined herein) and has taken all necessary corporate action to authorize the issuance of the Notes hereunder;
WHEREAS, each of the entities listed on the signature pages hereto as a "Guarantor" (each, a "Guarantor" and, collectively, the "Guarantors") has duly authorized the execution and delivery of this Indenture and its Subsidiary Guarantee (as defined herein) set forth in Article 10 hereof, and each Guarantor has taken all necessary limited liability company, corporate, or other organizational action, as applicable, to authorize the execution and delivery of this Indenture and the performance of its obligations hereunder and under its Guarantee;
WHEREAS, in order to provide for the due and punctual payment of the principal of, premium, if any, and interest on the Notes and the due and punctual performance of all of the obligations of the Company under the Notes and this Indenture, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued, and delivered, the Company and the Guarantors have requested that Fidelitas Trust Company, N.A., a national banking association organized and existing under the laws of the United States, with offices at 100 Wall Street, Suite 1500, New York, New York 10005 (the "Trustee"), enter into this Indenture;
WHEREAS, the Company and each Guarantor represent and warrant that all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, the valid, binding, and legal obligations of the Company, and to make this Indenture a valid agreement of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), have been done; and
WHEREAS, the Company, each Guarantor, and the Trustee agree, for the equal and ratable benefit of the Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
As used in this Indenture, the following terms shall have the following meanings:
"Additional Interest" means all additional interest then owing pursuant to the Registration Rights Agreement. For purposes of this Indenture, Additional Interest shall accrue at the rate of 0.25% per annum of the aggregate principal amount of the Notes for the first ninety (90) days during which such Additional Interest accrues and 0.50% per annum thereafter; provided that the aggregate amount of Additional Interest payable shall in no event exceed 1.00% per annum. All references in this Indenture to "interest" shall be deemed to include Additional Interest, if any, to the extent then owing.
"Additional Notes" means any Notes (other than the Initial Notes and the Exchange Notes) issued under this Indenture in accordance with Section 2.14.
"Adjusted EBITDA" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period, plus, without duplication:
(a) the provision for income tax expense of such Person and its Restricted Subsidiaries for such period, to the extent that such provision was deducted (and not added back) in computing Consolidated Net Income;
(b) Consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent that such amount was deducted (and not added back) in computing Consolidated Net Income (including amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all Capitalized Lease Obligations, and net payments, if any, pursuant to Hedging Obligations with respect to interest rates, but excluding amortization of deferred financing fees);
(c) depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash items that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period, to the extent that such depreciation and amortization were deducted (and not added back) in computing Consolidated Net Income;
(d) any non-cash charges (including any write-offs or write-downs, non-cash impairment charges, stock-based compensation expense, and non-cash losses on sales of assets outside the ordinary course of business) of such Person and its Restricted Subsidiaries for such period, to the extent that such non-cash charges were deducted (and not added back) in computing Consolidated Net Income; provided that if any non-cash charge represents an accrual of or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Adjusted EBITDA for such future period to the extent paid;
(e) any expenses, charges, or losses related to any Equity Offering, Investment, acquisition, disposition, recapitalization, or the incurrence or repayment of Indebtedness permitted to be incurred by this Indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses, or charges related to the offering of the Notes and (ii) any amendment or other modification of this Indenture, to the extent that such expenses were deducted (and not added back) in computing Consolidated Net Income;
(f) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or with the Net Cash Proceeds of an issuance of Equity Interests of the Company (other than Disqualified Stock), to the extent such costs or expenses were deducted (and not added back) in computing Consolidated Net Income;
(g) business optimization expenses and restructuring charges, severance costs, integration costs, transition costs, and other costs or expenses (including one-time consulting fees and retention bonuses) relating to cost savings initiatives, business optimization programs, and other similar programs in connection with acquisitions, dispositions, and operational improvements; provided that such costs and expenses added back pursuant to this clause (g) shall not exceed $15,000,000 in any four consecutive fiscal quarter period;
(h) any fees and expenses related to the management of the Company's hospitality properties, including pre-opening expenses for new hotels, resorts, or other hospitality venues, franchise application fees, property improvement plan capital expenditures required by franchisors or brand partners, and costs associated with property rebranding initiatives; and
minus, without duplication:
(i) non-cash items increasing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, other than (A) the accrual of revenue in the ordinary course of business consistent with past practice and (B) items that represent the reversal in such period of any non-cash charge that was previously added back to Consolidated Net Income pursuant to clause (d) above,
all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP. Adjusted EBITDA shall be calculated on a trailing four-quarter basis for the most recently ended four full fiscal quarters for which internal financial statements are available; provided that for purposes of the Fixed Charge Coverage Ratio, Adjusted EBITDA shall be determined on a pro forma basis giving effect to any acquisition, disposition, restructuring, or operational change that has occurred during or subsequent to such four-quarter period as if such acquisition, disposition, restructuring, or operational change had occurred on the first day of such four-quarter period.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement, or otherwise.
"Agent Members" means members of, or participants in, the Depositary, Thackeray Partners LLC, or Ashgrove Enterprises.
"Applicable Premium" means, with respect to any Note on any Redemption Date prior to July 1, 2027, the greater of:
(a) 1.0% of the principal amount of such Note; and
(b) the excess, if any, of (i) the present value at such Redemption Date of (A) the Redemption Price of such Note on July 1, 2027 (such Redemption Price being set forth in the table appearing in Section 3.07(b)), plus (B) all required interest payments due on such Note through July 1, 2027 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points, over (ii) the then outstanding principal amount of such Note.
"Asset Sale" means:
(a) the sale, lease, conveyance, or other disposition of any assets or rights by the Company or any of its Restricted Subsidiaries; provided that the sale, lease, conveyance, or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries, taken as a whole, will be governed by the provisions of Article 5 and/or Section 4.14 and not by the provisions of the Asset Sale covenant set forth in Section 4.11; and
(b) the issuance or sale of Equity Interests in any of the Company's Restricted Subsidiaries (other than directors' qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary).
Notwithstanding the foregoing, none of the following items will be deemed to be an Asset Sale:
(i) any single transaction or series of related transactions that involves assets having a fair market value of less than $5,000,000;
(ii) a transfer of assets between or among the Company and its Restricted Subsidiaries;
(iii) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to a Restricted Subsidiary;
(iv) the sale, lease, or other disposition of inventory, equipment, accounts receivable, or other assets in the ordinary course of business;
(v) the sale or other disposition of cash or Cash Equivalents;
(vi) the disposition of obsolete, worn-out, or surplus equipment or property in the ordinary course of business;
(vii) a Restricted Payment that does not violate Section 4.08 or a Permitted Investment;
(viii) the licensing or sublicensing of intellectual property or other general intangibles in the ordinary course of business;
(ix) the creation of a Lien that is not prohibited by Section 4.10;
(x) surrender or waiver of contract rights or settlement, release, recovery on, or surrender of contract, tort, or other claims in the ordinary course of business;
(xi) the granting of Liens not prohibited by this Indenture;
(xii) sales of accounts receivable and related assets of the type specified in the definition of "Qualified Receivables Transaction" in connection with a Qualified Receivables Transaction; and
(xiii) dispositions in connection with Permitted Liens.
"Bankruptcy Law" means Title 11 of the United States Code or any similar federal or state law for the relief of debtors.
"Board of Directors" means:
(a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(b) with respect to a partnership, the board of directors of the general partner of the partnership;
(c) with respect to a limited liability company, the managing member, members, or managers or any controlling committee of managing members, members, or managers thereof; and
(d) with respect to any other Person, the board or committee of such Person serving a similar function.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York are authorized or obligated by law, regulation, or executive order to close.
"Capital Stock" means:
(a) in the case of a corporation, corporate stock;
(b) in the case of an association or business entity, any and all shares, interests, participations, rights, or other equivalents (however designated) of corporate stock;
(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
"Capitalized Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP. The amount of Indebtedness represented by a Capitalized Lease Obligation shall be the capitalized amount of such obligations determined in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
"Cash Equivalents" means:
(a) United States dollars;
(b) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(c) time deposits and certificates of deposit of any commercial bank or trust company organized or licensed to conduct a banking business under the laws of the United States of America, any state thereof, the District of Columbia, or any foreign country recognized by the United States of America having capital and surplus in excess of $500,000,000, in each case with maturities of not more than one year from the date of acquisition;
(d) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (b) above entered into with any financial institution meeting the qualifications specified in clause (c) above;
(e) commercial paper having one of the two highest ratings obtainable from Crestline Ratings Group or Broadmark Rating Services Inc. and maturing within one year after the date of acquisition; and
(f) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (e) of this definition.
"Change of Control" means the occurrence of any of the following:
(a) the direct or indirect sale, lease, transfer, conveyance, or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries, taken as a whole, to any Person or group of related Persons (as such term is defined in Section 13(d)(3) of the Exchange Act), other than a Permitted Holder;
(b) the consummation of any transaction (including any merger or consolidation), the result of which is that any Person or group of related Persons (as such term is defined in Section 13(d)(3) of the Exchange Act), other than a Permitted Holder, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or group shall be deemed to have beneficial ownership of all securities that such Person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time) of more than 50% of the total voting power of the Voting Stock of the Company;
(c) the adoption by the Company of a plan relating to the liquidation or dissolution of the Company; or
(d) the first day on which, during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office.
"Change of Control Triggering Event" means the occurrence of both a Change of Control and a Rating Decline.
"Ashgrove Enterprises" means Westmark & Co., and its successors.
"Closing Date" means June 25, 2024.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Verimark Hospitality Group Inc., a Delaware corporation, and its successors and assigns obligated under this Indenture.
"Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP and before any reduction in respect of Disqualified Stock dividends or preferred stock dividends; provided that:
(a) all extraordinary, non-recurring, or unusual gains, losses, charges, and expenses (including relating to any premium or penalty paid in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity) shall be excluded;
(b) the net income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary thereof;
(c) the net income (but not loss) of any Restricted Subsidiary that is not a Guarantor shall 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 wholly permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, members, or partners, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived;
(d) solely for the purpose of determining the amount available for Restricted Payments under clause (c) of the first paragraph of Section 4.08, the net income of any Restricted Subsidiary that is not a Guarantor shall be excluded if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except to the extent such dividends or distributions are actually paid during such period;
(e) the cumulative effect of a change in accounting principles shall be excluded;
(f) any non-cash compensation charge or expense arising from any grant of stock, stock options, or other equity-based awards shall be excluded; and
(g) any unrealized gains or losses in respect of Hedging Obligations or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions shall be excluded.
"Custodian" means the Trustee, as custodian with respect to the Global Notes, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the giving of notice or both would become, an Event of Default.
"Depositary" or "DTC" means The Depository Trust Company, its nominees and successors, including Cede & Co.
"Disqualified Stock" means, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event or condition (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder of the Capital Stock, in whole or in part, (c) is convertible into or exchangeable for any Indebtedness or Disqualified Stock, or (d) is required to be redeemed, in each case, in whole or in part, on or prior to the date that is ninety-one (91) days after the Stated Maturity of the Notes; provided that any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the issuer thereof to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the issuer thereof may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described under Section 4.08.
"Equity Interests" means Capital Stock and all warrants, options, or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
"Equity Offering" means a public offering or private placement of common stock or preferred stock (other than Disqualified Stock) of the Company.
"Thackeray Partners LLC" means Stonefield Industries, as operator of the Thackeray Partners LLC System, and its successors.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Exchange Notes" means the notes issued in exchange for the Notes pursuant to the Registration Rights Agreement.
"Existing Credit Facility" means the Amended and Restated Credit Agreement dated as of March 15, 2021, among the Company, as borrower, the several lenders from time to time party thereto (including Greystone National Bank, N.A., Harborview Lending Group, Cascade Federal Bank, and Meriden Commercial Finance LLC), and Greystone National Bank, N.A., as administrative agent, Loan No. GNB-SYN-2021-04417, as amended, restated, supplemented, waived, or otherwise modified from time to time (terminated as of the Closing Date).
"Existing Indebtedness" means all Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Notes and the Guarantees) in existence on the Issue Date, until such amounts are repaid in full.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person for any period, the ratio of Adjusted EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries Incurs, assumes, guarantees, repays, repurchases, redeems, defeases, or otherwise discharges any Indebtedness (other than ordinary working capital borrowings or revolving credit borrowings) or issues, repurchases, or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance, or other discharge of Indebtedness, or such issuance, repurchase, or redemption of Disqualified Stock or preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. The Fixed Charge Coverage Ratio incurrence test applicable under this Indenture is not less than 2.00 to 1.00.
"Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of:
(a) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all Capitalized Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts, and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus
(b) all scheduled principal payments or installments of principal of Indebtedness of such Person and its Restricted Subsidiaries for such period (other than any such payments due at Stated Maturity).
"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, as in effect on the Issue Date.
"Global Note" means a Note in the form of a global note registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A-1 (in the case of a 144A Global Note) or Exhibit A-2 (in the case of a Regulation S Global Note) hereto.
"Guarantee" means the guarantee by each Guarantor of the Company's Obligations under this Indenture and the Notes, as set forth in Article 10 hereof.
"Guarantor" means each of:
(a) Verimark Resort Holdings LLC, a limited liability company organized under the laws of the State of Delaware;
(b) VHG Properties Inc., a corporation organized under the laws of the State of Delaware;
(c) Bayshore Hotel Management LLC, a limited liability company organized under the laws of the State of Florida;
(d) Verimark Capital Holdings LLC, a limited liability company organized under the laws of the State of Delaware; and
(e) Pinnacle Lodging Enterprises Inc., a corporation organized under the laws of the State of Delaware,
and each other Subsidiary of the Company that becomes a Guarantor pursuant to Section 4.17 hereof, in each case until released from its Guarantee pursuant to Section 10.06 hereof.
"Hedging Obligations" means, with respect to any specified Person, the obligations of such Person under:
(a) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements, and interest rate collar agreements;
(b) foreign exchange contracts and currency swap agreements; and
(c) other agreements or arrangements designed to manage, hedge, or protect such Person against fluctuations in interest rates, currency exchange rates, or commodity prices.
"Holder" means the Person in whose name a Note is registered on the register maintained by the Registrar.
"Incur" means issue, create, assume, guarantee, incur, or otherwise become liable for; provided that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition, or otherwise) shall be deemed to have been Incurred by such Person at the time it becomes a Subsidiary; and the terms "Incurred," "Incurrence," and "Incurring" have meanings correlative to the foregoing.
"Indebtedness" means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures, or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(c) in respect of banker's acceptances;
(d) representing Capitalized Lease Obligations;
(e) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed, except any such balance that constitutes an accrued expense or trade payable; or
(f) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date will be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation.
"Indenture" means this Indenture, as amended or supplemented from time to time.
"Initial Notes" means the Notes issued on the Issue Date.
"Initial Purchasers" means Kensington Barrow & Co., Ridgeline Capital Markets LLC, and Stonebridge Marvelo Securities Inc.
"Interest Payment Date" means January 1 and July 1 of each year, commencing January 1, 2025.
"Investment" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other obligations), advances, or capital contributions (excluding commission, payroll, travel, and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests, or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment Grade" means a rating equal to or higher than Baa3 (or the equivalent) by Crestline Ratings Group and BBB– (or the equivalent) by Broadmark Rating Services Inc. (or, if either such entity ceases to rate the Notes for reasons outside the control of the Company, the equivalent investment grade credit rating from any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency).
"Issue Date" means June 25, 2024.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, or encumbrance of any kind in respect of such asset, whether or not filed, recorded, or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in, and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Material Adverse Effect" means any event, circumstance, development, change, or effect that, individually or in the aggregate, (a) is or would reasonably be expected to be material and adverse to the business, assets, financial condition, or results of operations of the Company and its Restricted Subsidiaries, taken as a whole, or (b) would reasonably be expected to materially impair the ability of the Company or any Guarantor to perform its obligations under this Indenture, the Notes, or any Guarantee.
"Maturity Date" means July 1, 2031.
"Net Cash Proceeds" means, with respect to any Asset Sale, the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of such Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:
(a) the direct costs relating to such Asset Sale, including legal, accounting, and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale;
(b) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements;
(c) amounts required to be applied to the repayment of Indebtedness (other than revolving credit Indebtedness) secured by a Lien on the asset or assets that were the subject of such Asset Sale; and
(d) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP.
"Net Proceeds" has the same meaning as Net Cash Proceeds.
"Notes" means the Initial Notes and any Additional Notes and any Exchange Notes treated as a single class of securities, unless the context otherwise requires. Unless the context otherwise requires, references to "Notes" include the related Guarantees.
"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, if any, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker's acceptances), damages, and other liabilities, and guarantees of payment of such principal, interest, premium, if any, penalties, fees, indemnifications, reimbursements, damages, and other liabilities payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, any Senior Vice President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary, or the General Counsel of the Company.
"Officers' Certificate" means a certificate signed by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer, or the principal accounting officer of the Company, that meets the requirements of Section 12.03.
"Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of, or counsel to, the Company or any Guarantor.
"Original Issue discount" means the excess of the aggregate principal amount of the Initial Notes over the issue price thereof, being $7,500,000 (reflecting an issue price of 98.500% of par).
"Paying Agent" means Fidelitas Trust Company, N.A., in its capacity as paying agent for the Notes under this Indenture, or any successor paying agent appointed pursuant to Section 2.03.
"Permitted Holder" means (a) any officer or director of the Company or its Subsidiaries as of the Issue Date, and (b) any trust, partnership, limited liability company, or other entity established for estate planning, personal planning, or similar purposes by or for the benefit of any Person described in clause (a).
"Permitted Indebtedness" has the meaning specified in Section 4.09.
"Permitted Investment" means:
(a) any Investment in the Company or in a Restricted Subsidiary;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary in a Person, if as a result of such Investment such other Person becomes a Restricted Subsidiary or such other Person is merged, consolidated, or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary;
(d) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.11;
(e) any Investment in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in settlement of delinquent obligations of such trade creditors or customers;
(f) Hedging Obligations incurred in the ordinary course of business;
(g) Investments existing on the Issue Date;
(h) additional Investments having an aggregate fair market value not to exceed $25,000,000 at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); and
(i) advances, loans, or extensions of credit to officers, directors, and employees of the Company and its Restricted Subsidiaries in the ordinary course of business in an aggregate amount not to exceed $5,000,000 at any one time outstanding.
"Permitted Liens" has the meaning specified in Section 4.10.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government, or any agency or political subdivision thereof, or any other entity.
"Purchase Agreement" means the Purchase Agreement dated as of June 18, 2024, among the Company, the Guarantors, and Kensington Barrow & Co., as representative of the Initial Purchasers, relating to the offer and sale of the Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.
"Qualified Receivables Transaction" means any transaction or series of transactions that may be entered into by the Company or any of its Restricted Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries may sell, convey, or otherwise transfer to a Receivables Entity, or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Restricted Subsidiaries, and any assets related thereto.
"Rating Agency" means (a) Crestline Ratings Group and (b) Broadmark Rating Services Inc., in each case, and their respective successors, or, if any such entity ceases to rate the Notes or ceases to make a rating of the Notes publicly available for reasons outside of the control of the Company, a nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency.
"Rating Decline" means the occurrence of the following on, or within ninety (90) days after, the date of the first public notice of (a) the occurrence of a Change of Control or (b) the intention of the Company or any other Person to effect a Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by either Rating Agency): a decrease in the rating of the Notes by both Rating Agencies below the ratings in effect immediately prior to the first public notice of the occurrence or intention described in clause (a) or (b) above.
"Receivables Entity" means a bankruptcy-remote special purpose entity formed solely for purposes of facilitating a Qualified Receivables Transaction.
"Record Date" means December 15 (for the January 1 Interest Payment Date) and June 15 (for the July 1 Interest Payment Date), whether or not such day is a Business Day.
"Redemption Date" means the date fixed for redemption under Section 3.07 or Section 3.08, as applicable.
"Redemption Price" means the price at which the Notes are to be redeemed pursuant to Section 3.07 or Section 3.08, as applicable.
"Registrar" means Fidelitas Trust Company, N.A., in its capacity as registrar for the Notes under this Indenture, or any successor registrar appointed pursuant to Section 2.03.
"Registration Rights Agreement" means the Registration Rights Agreement dated as of June 25, 2024, among the Company, the Guarantors, and the Initial Purchasers, as amended, supplemented, or otherwise modified from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Replacement Assets" means (a) non-current assets that will be used or useful in the business of the Company and its Restricted Subsidiaries as conducted on the Issue Date or in businesses reasonably related thereto, (b) the Equity Interests of a Person engaged in such a business that becomes a Restricted Subsidiary as a result of the acquisition of such Equity Interests by the Company or a Restricted Subsidiary, or (c) a combination of (a) and (b).
"Restricted Investment" means an Investment other than a Permitted Investment.
"Restricted Payment" means, with respect to any Person:
(a) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock in their capacity as such (other than (i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company, and (ii) dividends or distributions payable to the Company or a Restricted Subsidiary);
(b) the purchase, redemption, or other acquisition or retirement for value of any Capital Stock of the Company held by any Person (other than by a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than by the Company or a Restricted Subsidiary), including in connection with any merger or consolidation, and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock);
(c) the purchase, repurchase, redemption, defeasance, or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment, or scheduled sinking fund payment, of any Indebtedness of the Company that is contractually subordinated to the Notes or of any Indebtedness of any Guarantor that is contractually subordinated to the Guarantee of such Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries); or
(d) any Restricted Investment.
"Restricted Subsidiary" means, with respect to any specified Person, any Subsidiary of such Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.