DRAFT — March , 2025 —
Prepared by Whitfield & Gage LLP 51 West 52nd Street New York, New York 10019
CREDIT AGREEMENT
dated as of
[●], 2025
among
NEXFORD INDUSTRIAL HOLDINGS INC., a Delaware corporation, as Borrower,
THE GUARANTORS PARTY HERETO,
CRESCENT HARBOR BANK, N.A., as Administrative Agent and Collateral Agent,
CRESCENT HARBOR BANK, N.A., as Lead Left Arranger and Bookrunner,
IRONWOOD CAPITAL MARKETS, LLC and NORTHVANE SECURITIES, INC., as Joint Lead Arrangers,
and
THE LENDERS FROM TIME TO TIME PARTY HERETO
TABLE OF CONTENTS
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ARTICLE I — DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"ABR" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50%, and (c) the Term SOFR rate for a one-month Interest Period as published on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) plus 1.00%; provided that if the ABR as so determined would be less than 1.00%, the ABR shall be deemed to be 1.00%.
"Adjusted EBITDA" means, for any period, Consolidated Net Income for such period plus, without duplication and to the extent deducted (and not added back) in calculating such Consolidated Net Income, the sum of (a) consolidated interest expense for such period, (b) provisions for federal, state, local, and foreign income taxes for such period, (c) total depreciation expense and amortization expense (including amortization of goodwill, other intangibles, deferred financing costs, and capitalized software development costs) for such period, (d) all non-cash charges, expenses, and losses for such period (including non-cash compensation expense), (e) fees, costs, charges, and expenses incurred in connection with any acquisition, investment, disposition, recapitalization, or issuance of Indebtedness or Equity Interests (in each case, whether or not consummated, and including any such transaction consummated prior to or on the Closing Date) ("acquisition-related costs"), (f) non-recurring restructuring charges, accruals, and reserves (including, without limitation, facility closing costs, severance payments, retention bonuses, and contract termination costs), (g) management, consulting, monitoring, and advisory fees and related expenses paid or accrued to the Sponsor or its Affiliates (or any director or officer) in respect of management services, (h) costs and expenses related to the integration of acquired businesses, including information technology integration, facility consolidation, and workforce optimization expenses ("integration costs"), (i) cost savings, operating expense reductions, and synergies projected by the Borrower in good faith to be reasonably anticipated to be realized within eighteen (18) months following the date of any acquisition, disposition, restructuring, cost savings initiative, or other operational change (net of the amount of actual benefits realized during such period from such actions), so long as such cost savings, operating expense reductions, and synergies are reasonably identifiable and factually supportable; provided that the aggregate amount of projected cost savings, operating expense reductions, and synergies added back pursuant to this clause (i) for any Test Period shall not exceed twenty-five percent (25%) of Adjusted EBITDA for such Test Period (calculated before giving effect to such add-backs under this clause (i)) , and (j) other charges, expenses, and losses that are acceptable to the Administrative Agent in its reasonable discretion, minus (x) non-cash gains for such period (excluding any non-cash gains to the extent such gains represent the reversal in such period of an accrual of, or non-cash reserve for, a potential cash item that reduced Adjusted EBITDA in any prior period).
For the avoidance of doubt, permitted add-backs for the twelve-month period ending December 31, 2024 shall total $28,000,000, consisting of (A) $12,000,000 of acquisition-related costs, (B) $8,500,000 of non-recurring restructuring charges, (C) $4,500,000 of sponsor management fees and related expenses, and (D) $3,000,000 of integration costs. Accordingly, the last twelve months Adjusted EBITDA as of December 31, 2024 shall be $385,000,000 (consisting of $357,000,000 of reported EBITDA plus $28,000,000 of permitted add-backs).
"Administrative Agent" means Crescent Harbor Bank, N.A., a national banking association, in its capacity as administrative agent under this Agreement and the other Loan Documents, and its successors and assigns in such capacity. The address of the Administrative Agent for purposes of this Agreement is 320 Federal Street, Boston, Massachusetts 02110.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limitation, the term "Affiliate" shall specifically include Granite Peak Capital Partners, LP, Granite Peak Capital Fund IV, LP, GP Fund IV Co-Invest, LP, Granite Peak Capital GP IV, LLC, and their respective Affiliates, and shall include, with respect to the Borrower and its Subsidiaries, each officer, director, managing member, general partner, and controlling equity holder thereof.
"Agent Parties" has the meaning assigned to such term in Section 11.02(c).
"Agreement" means this Credit Agreement, as amended, restated, supplemented, replaced, or otherwise modified from time to time in accordance with the terms hereof.
"Anti-Corruption Laws" means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, the UK Bribery Act 2010, and all other applicable anti-bribery and anti-corruption laws, rules, and regulations of any jurisdiction in which any Loan Party or any of its Subsidiaries is located or does business.
"Applicable Rate" means, with respect to Term Loans, a rate per annum equal to (a) for Term SOFR Loans, Term SOFR plus 4.00% (400 basis points) and (b) for ABR Loans, ABR plus 3.00% (300 basis points).
"Arranger" means each of Crescent Harbor Bank, N.A. (in its capacity as sole lead left arranger and bookrunner), Ironwood Capital Markets, LLC (in its capacity as joint lead arranger), and Northvane Securities, Inc. (in its capacity as joint lead arranger), and their respective successors and assigns in such capacities.
"Asset Sale" means any Disposition of Property by the Borrower or any Restricted Subsidiary, including any such Disposition occurring by way of merger, consolidation, casualty, condemnation, or any similar proceeding; provided that the term "Asset Sale" shall not include (a) sales or other Dispositions of inventory, used, surplus, or obsolete equipment, or other assets in the ordinary course of business, (b) Dispositions of Cash Equivalents, (c) transfers of assets among Loan Parties, (d) Dispositions constituting Restricted Payments permitted by Section 7.06, (e) Dispositions constituting Investments permitted by Section 7.04, (f) the granting or creation of Liens permitted by Section 7.02, (g) any issuance of Equity Interests by the Borrower, (h) any surrender or waiver of contract rights or settlement, release, or surrender of a contract, tort, or other claim in the ordinary course of business .
"Assignment and Assumption" means an Assignment and Assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06), substantially in the form of Exhibit C hereto, and accepted by the Administrative Agent, in accordance with Section 11.06.
"Bail-In Action" means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
"Bail-In Legislation" means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule, or requirement for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009, as amended from time to time, and any other law, regulation, or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms, or other financial institutions or their affiliates.
"Bank Secrecy Act" means the Bank Secrecy Act of 1970 (31 U.S.C. §§ 5311–5330), as amended, together with all regulations promulgated thereunder.
"Bankruptcy Code" means Title 11 of the United States Code.
"Benchmark Replacement" has the meaning assigned to such term in Section 3.03.
"Benchmark Replacement Adjustment" has the meaning assigned to such term in Section 3.03.
"Benchmark Transition Event" has the meaning assigned to such term in Section 3.03.
"Beneficial Ownership Certification" means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
"Beneficial Ownership Regulation" means 31 C.F.R. § 1010.230.
"Borrower" means Nexford Industrial Holdings Inc., a Delaware corporation (EIN: 36-4178552; Delaware File Number: 5765432), having its principal office and place of business at 1400 Industrial Parkway, Schaumburg, Illinois 60173, and its successors and assigns. The Delaware registered agent of the Borrower is c/o Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801.
"Borrowing Request" means a request by the Borrower for a Borrowing in accordance with Section 2.02, substantially in the form of Exhibit A hereto.
"Builder Basket" means, at any date of determination, an amount equal to (a) (the "starter amount") plus (b) 50% of cumulative Consolidated Net Income of the Borrower and its Restricted Subsidiaries accrued from the first day of the first fiscal quarter commencing after the Closing Date (i.e., April 1, 2025, the beginning of Q2 2025, or, if the Closing Date occurs on or prior to March 31, 2025, April 1, 2025) through the end of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.01, calculated on a cumulative basis; provided that, for the avoidance of doubt, if such cumulative Consolidated Net Income for the applicable period is a negative number, the amount determined under this clause (b) shall reduce the amount of the Builder Basket dollar-for-dollar, plus (c) the aggregate amount of returns on Investments (including dividends, distributions, interest payments, repayments of principal, and proceeds of Dispositions) theretofore received in cash or Cash Equivalents by the Borrower or any Restricted Subsidiary in respect of Investments that were previously made utilizing the Builder Basket, plus (d) the aggregate amount of Declined Proceeds .
"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 remain closed; provided that, when used in connection with a SOFR Loan, the term "Business Day" shall also exclude any day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
"Capital Expenditures" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including the amount of Capital Lease Obligations) by the Borrower and its Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on a consolidated statement of cash flows of the Borrower. The last twelve months Capital Expenditures as of December 31, 2024 were $78,000,000.
"Capital Lease" means, as applied to any Person, any lease of any Property by such Person as lessee that would, in accordance with GAAP, be required to be classified and accounted for as a capital lease or finance lease on a balance sheet of such Person.
"Capital Lease Obligations" means, with respect to any Person, the obligations of such Person to pay rent or other amounts under any Capital Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
"Cash Equivalents" means (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof, (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Keystone Ratings Group, Inc. or Sentinel Credit Analytics, LLC, (c) investments in certificates of deposit, banker's acceptances, and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000, (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) and entered into with a financial institution satisfying the criteria described in clause (c), and (e) money market funds that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by Keystone Ratings Group, Inc. and AAA by Sentinel Credit Analytics, LLC, and (iii) have portfolio assets of not less than $5,000,000,000.
"CFC" means a "controlled foreign corporation" within the meaning of Section 957 of the Code.
"CFC Holdco" means any Domestic Subsidiary that is a Restricted Subsidiary substantially all of the assets of which (determined on a book value basis) consist of Equity Interests (or Equity Interests and Indebtedness) in one or more Foreign Subsidiaries that are CFCs. As of the Closing Date, Nexford International Holdings, Inc. is a CFC Holdco.
"Change of Control" means the occurrence of any of the following: (a) the acquisition by any Person or "group" (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than the Sponsor and its Affiliates, of beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of more than thirty-five percent (35%) of the outstanding voting Equity Interests of Holdings; (b) the Borrower ceasing to be a direct, wholly-owned Subsidiary of Holdings; or (c) a "Change of Control" (or similar event, however denominated) under the Senior Unsecured Notes Indenture that results in an obligation to make an offer to repurchase or redeem the Senior Unsecured Notes.
"Closing Certificate" means a certificate substantially in the form of Exhibit F hereto.
"Closing Date" means the date on which all of the conditions precedent set forth in Section 4.01 have been satisfied or waived in accordance with this Agreement. The target Closing Date is March 28, 2025.
"CME" means the CME Group Benchmark Administration Limited (or any successor administrator of SOFR).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property and assets of whatever kind and nature, whether real, personal, or mixed, tangible or intangible, now owned or hereafter acquired, in which a Lien has been or is purported to be granted to the Collateral Agent for the benefit of the Secured Parties pursuant to any of the Collateral Documents.
"Collateral Agent" means Crescent Harbor Bank, N.A., a national banking association, in its capacity as collateral agent for the Secured Parties under this Agreement and the other Loan Documents, and its successors and assigns in such capacity.
"Collateral Documents" means, collectively, the Security Agreement, the Guarantee Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreements, the CFC Holdco Limited Pledge Agreement, the intellectual Property Security Agreement, the Deposit Account Control Agreements, the Securities Account Control Agreements, the Mortgages, and all other agreements, instruments, and documents (including any amendments, supplements, restatements, or other modifications to any of the foregoing from time to time) that create or purport to create a Lien on any Collateral in favor of the Collateral Agent for the benefit of the Secured Parties.
"Commitment Letter" means that certain Commitment Letter dated as of February 14, 2025, among the Borrower and Crescent Harbor Bank, N.A., as amended, supplemented, or otherwise modified prior to the Closing Date.
"Compliance Certificate" means a certificate substantially in the form of Exhibit B hereto.
"Consolidated First Lien Net Debt" means, as of any date of determination, (a) the aggregate outstanding principal amount of Consolidated Total Debt of the Borrower and its Restricted Subsidiaries that is secured by a Lien on all or substantially all of the Collateral on a first priority basis (or pari passu basis with the Liens securing the Term Loans) as of such date, minus (b) the lesser of (i) unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries as of such date and (ii) $100,000,000.
"Consolidated Net Income" means, for any period, the net income (or loss) of the Borrower and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded from such net income (or loss) (a) the net income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or a Restricted Subsidiary by such Person during such period, (b) the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not permitted by operation of the terms of its organizational documents, any applicable law, or any agreement, instrument, or governmental requirement applicable to such Restricted Subsidiary (other than restrictions under the Loan Documents), (c) the cumulative effect of a change in accounting principles, (d) gains or losses attributable to any Asset Sale, (e) extraordinary gains and losses, (f) any non-cash impairment charges or asset write-downs .
"Consolidated Total Debt" means, as of any date of determination, the aggregate outstanding principal amount of Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated basis as of such date, determined in accordance with GAAP (excluding, for the avoidance of doubt, (i) undrawn letters of credit, (ii) hedging obligations, and (iii) intercompany Indebtedness).
"Credit Agreement" means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
"Declined Proceeds" has the meaning assigned to such term in Section 2.05(c).
"Default" means any event or condition that, with the giving of any notice, the passage of time, or both, would constitute an Event of Default.
"Default Rate" means, with respect to any Obligation, the Applicable Rate applicable to such Obligation plus 2.00% (200 basis points) per annum .
"Deposit Account Control Agreement" means each deposit account control agreement among a Loan Party, the Collateral Agent, and the applicable depositary bank, in form and substance reasonably satisfactory to the Collateral Agent.
"Disposition" or "Dispose" means the sale, transfer, license, lease, or other disposition (including any sale and leaseback transaction and any issuance of Equity Interests by any Subsidiary) of any property or asset by any Person, including any sale, assignment, transfer, or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
"Disqualified Lender" means any Person that has been identified by the Borrower as a "Disqualified Lender" in writing to the Administrative Agent on or prior to the Closing Date (as such list may be supplemented from time to time by the Borrower, subject to the prior written consent of the Administrative Agent (not to be unreasonably withheld, conditioned, or delayed)), together with any Affiliates of such Persons that are reasonably identifiable as such on the basis of the similarity of their names. For the avoidance of doubt, no supplement to the Disqualified Lender list shall retroactively disqualify any Person that has previously become a Lender hereunder.
"Domestic Subsidiary" means any Subsidiary of the Borrower that is organized or incorporated under the laws of the United States, any state thereof, or the District of Columbia.
"Environmental Laws" means all applicable federal, state, local, and foreign statutes, laws, rules, regulations, codes, ordinances, orders, decrees, directives, permits, licenses, and authorizations relating to the protection of human health or safety, the environment, or natural resources, including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Clean Water Act (33 U.S.C. §§ 1251 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), and analogous state and local laws.
"Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust, or other ownership or equity interests in a Person, and any warrants, options, or other rights entitling the holder thereof to purchase or acquire any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Event" means (a) any "reportable event" as defined in Section 4043(c) of ERISA, (b) any failure by any Plan to satisfy the minimum funding standards applicable to such Plan, (c) the filing of any request for a waiver of the minimum funding standard, (d) the incurrence of any liability under Title IV of ERISA (other than for PBGC premiums), (e) the institution of proceedings by the PBGC to terminate any Plan, (f) the appointment of a trustee to administer any Plan, (g) the withdrawal of any Loan Party or any ERISA Affiliate from a Multiemployer Plan, or (h) the occurrence of any other event or condition with respect to a Plan or Multiemployer Plan that could reasonably be expected to result in liability of the Borrower or any Restricted Subsidiary in excess of $25,000,000.
"Event of Default" has the meaning assigned to such term in Section 8.01.
"Excess Cash Flow" means, for any fiscal year, an amount (if positive) equal to Adjusted EBITDA for such fiscal year minus the sum of (a) cash interest expense actually paid in cash during such fiscal year (excluding amounts paid in kind or capitalized), (b) scheduled principal payments of Indebtedness actually made during such fiscal year (excluding any voluntary prepayments, mandatory prepayments, or refinancings), (c) Capital Expenditures made in cash during such fiscal year (net of any amounts financed with Indebtedness other than revolving loans), (d) cash taxes actually paid during such fiscal year, (e) increases in Working Capital for such fiscal year (or plus decreases in Working Capital for such fiscal year), (f) the aggregate amount of Restricted Payments and Investments actually made during such fiscal year that were permitted under the Builder Basket or other baskets under Section 7.04 or Section 7.06 (to the extent funded from internally generated cash flow and not otherwise deducted in the calculation of Adjusted EBITDA), and (g) certain other permitted deductions, including cash restructuring charges and integration expenses actually paid in cash during such fiscal year (to the extent not added back in the calculation of Adjusted EBITDA) and the aggregate amount of any premium or penalty paid in cash in connection with any voluntary or mandatory prepayment during such fiscal year.
"Excess Cash Flow Percentage" means, for any fiscal year, (a) 50%, if the First Lien Net Leverage Ratio as of the last day of such fiscal year (calculated on a Pro Forma Basis) exceeds 4.25:1.00; (b) 25%, if the First Lien Net Leverage Ratio as of the last day of such fiscal year is greater than 3.50:1.00 but less than or equal to 4.25:1.00; and (c) 0%, if the First Lien Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 3.50:1.00.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" means (a) motor vehicles and other assets subject to certificates of title with a book value below per vehicle or asset, (b) letter of credit rights (as defined in the UCC) with a face amount of less than , (c) commercial tort claims (as defined in the UCC) with a value of less than , (d) any other assets as to which the Administrative Agent and the Borrower reasonably determine that the cost of obtaining a security interest therein (including the costs of perfection) would be excessive in relation to the value of the security afforded thereby .
"Existing Credit Agreement" means that certain Credit Agreement dated as of June 14, 2019, among Nexford Industrial Holdings Inc., as Borrower, the Guarantors party thereto, Atlas Meridian Bank, N.A., as Administrative Agent and Collateral Agent, and the Lenders party thereto, as amended by (i) the First Amendment to Credit Agreement dated as of March 20, 2020, (ii) the Second Amendment to Credit Agreement dated as of November 8, 2021, (iii) the Third Amendment to Credit Agreement dated as of April 15, 2023, and (iv) the Fourth Amendment to Credit Agreement dated as of September 12, 2024.
"Existing Revolving Credit Facility" means the $190,000,000 revolving credit facility established under the Existing Credit Agreement, which facility is currently undrawn and shall be terminated on the Closing Date in connection with the Transaction.
"Existing Term Loan" means the $875,000,000 first lien term loan facility established under the Existing Credit Agreement. The estimated payoff amount as of the anticipated Closing Date is approximately $879,375,000, consisting of $875,000,000 in outstanding principal and approximately $4,375,000 of accrued and unpaid interest.
"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, treaty, or convention entered into in connection with the implementation of such Sections of the Code.
"Federal Funds Effective Rate" means, for any day, the rate calculated by the Federal Reserve Bank of New York based on such day's federal funds transactions.
"Fee Letter" means that certain Fee Letter dated as of February 18, 2025, among the Borrower and Crescent Harbor Bank, N.A.
"Financial Covenant" has the meaning assigned to such term in Section 7.11.
"First Lien Net Leverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated First Lien Net Debt as of such date to (b) Adjusted EBITDA for the most recently ended Test Period. On a pro forma basis as of the Closing Date, giving effect to the Transaction and the borrowing of the Term Loans hereunder, the First Lien Net Leverage Ratio is estimated to be ($1,400,000,000 – $100,000,000) ÷ $385,000,000 = 3.38x.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is not a Domestic Subsidiary. As of the Closing Date, the Foreign Subsidiaries include Nexford Canada Holdings ULC, a British Columbia unlimited liability company, and Nexford Canada Manufacturing, Inc., an Ontario corporation.
"Free-and-Clear Basket" means, at any time, the greater of (x) and (y) 100% of LTM Adjusted EBITDA at the time of incurrence (based on the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01).
"Funds Flow Memorandum" means the funds flow memorandum executed by the Borrower and approved by the Administrative Agent setting forth the application of the proceeds of the Term Loans on the Closing Date.
"GAAP" means generally accepted accounting principles in the United States, as in effect from time to time, applied on a consistent basis, subject to Section 1.03.
"Governing Law" means the laws of the State of New York.
"Guarantee Agreement" means that certain Guarantee Agreement dated as of the Closing Date, among the Guarantors party thereto and the Collateral Agent for the benefit of the Secured Parties.
"Guarantors" means, collectively, (a) the Holdings Guarantor (Granite Peak NIH Holdings, LLC, a Delaware limited liability company, EIN: 85-3291047, Delaware File Number: 7234891) and (b) each Subsidiary Guarantor, and "Guarantor" means each of them individually.
"Holdings" means Granite Peak NIH Holdings, LLC, a Delaware limited liability company (EIN: 85-3291047, Delaware File Number: 7234891), which is the direct parent and 100% owner of all of the outstanding Equity Interests of the Borrower. The registered address of Holdings is c/o Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801.
"Holdings Pledge Agreement" means that certain Pledge Agreement dated as of the Closing Date, made by Holdings in favor of the Collateral Agent, with respect to 100% of the Equity Interests in the Borrower.
"Incremental Equivalent Debt" has the meaning assigned to such term in Section 2.14(e).
"Incremental Facility" has the meaning assigned to such term in Section 2.14(a).
"Incremental Facility Amendment" means an amendment to this Agreement substantially in the form of Exhibit J hereto.
"Independent Auditor" means Ashworth & Kendrick LLP, or any other nationally recognized independent registered public accounting firm selected by the Borrower and reasonably acceptable to the Administrative Agent.
"intellectual Property" means all patents, trademarks, service marks, trade names, copyrights, trade secrets, technology, know-how, processes, and other intellectual property rights of every kind and nature.
"intellectual Property Security Agreement" means each intellectual property security agreement entered into by any Loan Party and the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent.
"Intercreditor Agreement" means that certain First Lien/Unsecured Intercreditor Agreement dated as of the Closing Date, among Crescent Harbor Bank, N.A. (in its capacity as First Lien Collateral Agent), Pinnacle Trust Company (in its capacity as Unsecured Notes Trustee), the Borrower, and the other parties thereto from time to time, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Interest Period" means, with respect to any SOFR Loan, the period commencing on the date such SOFR Loan is disbursed or converted to or continued as a SOFR Loan and ending on the numerically corresponding day in the calendar month that is one (1) or three (3) months thereafter (in each case, as selected by the Borrower in its Borrowing Request or Interest Election Request); provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall 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 shall end on the next preceding Business Day, and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.
"Investment" means, with respect to any Person, (a) any direct or indirect purchase or other acquisition of any Equity Interest or debt security of any other Person, (b) any loan, advance, or capital contribution to any other Person, (c) any Guarantee of any Indebtedness of any other Person, and (d) any other item that is or would be classified as an "investment" on a balance sheet prepared in accordance with GAAP.
"Lenders" means each lender from time to time party to this Agreement, including, as of the Closing Date, Crescent Harbor Bank, N.A., Ironwood Capital Markets, LLC, Northvane Securities, Inc., Ridgeline Asset Management, LP, Halcyon Credit Partners, LLC, Verdant Institutional Investors, LP, Cascadia Loan Fund III, LP, and Bluewater Fixed Income Fund, LP, and in each case together with their respective successors, assignees, and participants as permitted hereunder.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority, or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right-of-way, or other encumbrance on title to real property, and any Capital Lease having substantially the same economic effect as any of the foregoing).
"Loan Documents" means, collectively, this Agreement, the Guarantee Agreement, the Security Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreements, the CFC Holdco Limited Pledge Agreement, the intellectual Property Security Agreement, the Deposit Account Control Agreements, the Securities Account Control Agreements, the Mortgages, the Intercreditor Agreement, the Fee Letter, and each other agreement, certificate, instrument, or document designated as a "Loan Document" by the Administrative Agent and the Borrower.
"Loan Parties" means, collectively, the Borrower and each Guarantor, and "Loan Party" means each of them individually.
"LTM" or "last twelve months" means the period of the four most recently completed consecutive fiscal quarters (or, if shorter, the period since the Closing Date).
"Margin Stock" means "margin stock" as defined in Regulations T, U, and X of the Board of Governors of the Federal Reserve System.
"Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents, or (c) the rights and remedies of the Administrative Agent and the Lenders under the Loan Documents, taken as a whole .
"Maturity Date" means March 28, 2032 (the seventh anniversary of the Closing Date).
"Mortgaged Properties" means each of the real properties listed on Schedule 5.08, consisting of: (i) 1400 Industrial Parkway, Schaumburg, Illinois 60173 (appraised value: $85,000,000), (ii) 2750 Commerce Drive, Rockford, Illinois 61101 (appraised value: $42,000,000), (iii) 600 Manufacturers Row, Greenville, South Carolina 29607 (appraised value: $38,000,000), and (iv) 9100 Westpark Industrial Boulevard, Houston, Texas 77063 (appraised value: $28,000,000). The total aggregate appraised value of the Mortgaged Properties is $193,000,000.
"Mortgages" means each mortgage, deed of trust, or similar instrument executed and delivered by the applicable Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties, covering the Mortgaged Properties, in form appropriate for recording in the applicable jurisdiction.
"Most Favored Nation Provision" or "MFN Provision" has the meaning assigned to such term in Section 2.14(d).
"Multiemployer Plan" means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions.
"Net Cash Proceeds" means, (a) with respect to any Disposition (including any Asset Sale, casualty, or condemnation event), the cash and Cash Equivalents received in connection therewith (including any cash received upon the sale or other Disposition of any non-cash consideration received in any such Disposition), net of (i) all reasonable and customary out-of-pocket fees, commissions, costs, and other expenses incurred in connection therewith, (ii) the amount of all taxes (including income taxes, transfer taxes, and similar taxes) paid or reasonably estimated to be payable in connection therewith, and (iii) the amount of any Indebtedness secured by a Lien on such property or asset ranking senior to the Lien of the Collateral Documents that is required to be repaid, and (b) with respect to the incurrence or issuance of any Indebtedness, the cash proceeds received therefrom, net of all underwriting discounts, commissions, fees, and other costs and expenses incurred in connection therewith.
"Obligations" means all advances, debts, liabilities, and obligations of every kind and nature owing by the Borrower or any other Loan Party to any Secured Party arising under, out of, in connection with, or related to any Loan Document, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses, or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
"OID" means original issue discount. The Term Loans are being issued at an original issue discount of 50 basis points (i.e., at an issue price of 99.50% of par), resulting in aggregate OID of $7,000,000 on the $1,400,000,000 aggregate principal amount of Term Loans.
"OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury.
"Organizational Documents" means, with respect to any Person, the articles of incorporation, certificate of incorporation, certificate of formation, articles of organization, or comparable organizational document of such Person, and the bylaws, limited liability company agreement, limited partnership agreement, or other comparable governing document of such Person, in each case as amended, restated, supplemented, or otherwise modified from time to time.
"Permitted Acquisition" means any acquisition by the Borrower or any Restricted Subsidiary of all or substantially all of the assets of, or all of the Equity Interests in, any Person, or of any business, division, or product line of any Person, so long as (a) no Default or Event of Default has occurred and is continuing or would result therefrom, (b) the Borrower is in pro forma compliance with the Financial Covenant (if applicable), (c) the acquired entity or business is in a line of business reasonably related or complementary to the business of the Borrower and its Subsidiaries on the Closing Date, and (d) to the extent required by Section 6.10, the acquired entity becomes a Guarantor within the time period specified therein.
"Permitted Indebtedness" has the meaning assigned to such term in Section 7.01.
"Permitted Investments" has the meaning assigned to such term in Section 7.04.
"Permitted Liens" has the meaning assigned to such term in Section 7.02.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental authority, or any other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA and in respect of which the Borrower 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.
"Prime Rate" means the rate of interest per annum publicly announced from time to time by Crescent Harbor Bank, N.A. as its "prime rate" in effect at its principal office in Boston, Massachusetts.
"Pro Forma Basis" means, with respect to compliance with any test, covenant, or ratio hereunder, that the Transaction, any Specified Transaction, and any other event in respect of which compliance is being determined on a Pro Forma Basis shall be deemed to have occurred as of the first day of the applicable Test Period, and pro forma adjustments shall be calculated in accordance with Regulation S-X under the Securities Act of 1933, as amended. The "Pro Forma Basis" shall include, without limitation, the elimination of historical financial results of any Person, business, or assets disposed of, and the inclusion of historical financial results of any Person, business, or assets acquired, in each case during the applicable Test Period, as if such Disposition or acquisition had occurred on the first day of such Test Period.
"Property" means any right, title, or interest in or to property or assets of any kind whatsoever, whether real, personal, or mixed, and whether tangible or intangible.
"Refinancing Indebtedness" means, with respect to any Indebtedness, any Indebtedness that renews, refinances, extends, replaces, or refunds such Indebtedness; provided that (a) the principal amount (or accreted value, as applicable) of such refinancing Indebtedness does not exceed the principal amount (or accreted value) of the Indebtedness being renewed, refinanced, extended, replaced, or refunded (plus accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses incurred, in connection therewith), (b) such refinancing Indebtedness has a final maturity no earlier than the final maturity of the Indebtedness being renewed, refinanced, extended, replaced, or refunded, (c) such refinancing Indebtedness has a weighted average life to maturity no shorter than the remaining weighted average life to maturity of the Indebtedness being renewed, refinanced, extended, replaced, or refunded, and (d) if such Indebtedness is subordinated to the Obligations, such refinancing Indebtedness is subordinated to the Obligations on terms not less favorable to the Lenders than the subordination terms applicable to the Indebtedness being renewed, refinanced, extended, replaced, or refunded.
"Register" has the meaning assigned to such term in Section 11.06(c).
"Repricing Transaction" means (a) any prepayment of Term Loans with the proceeds of any new or replacement tranche of term loans bearing interest at an effective yield less than the effective yield applicable to such Term Loans prior to such prepayment, or (b) any amendment to this Agreement that reduces the effective yield on the Term Loans, in each case, other than in connection with a Change of Control or a transformative acquisition.
"Required Lenders" means, at any time, Lenders holding more than 50% of the aggregate outstanding principal amount of all Term Loans at such time.
"Resolution Authority" means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
"Restricted Payment" means any dividend, distribution, or other payment (whether in cash, securities, or other property) with respect to any Equity Interests of the Borrower or Holdings, or any payment (whether in cash, securities, or other property) on account of the purchase, redemption, retirement, acquisition, cancellation, or termination of any Equity Interests of the Borrower or Holdings or any option, warrant, or other right to acquire any such Equity Interest, or any voluntary prepayment, repurchase, redemption, defeasance, or other satisfaction prior to scheduled maturity of any Subordinated Indebtedness.
"Restricted Subsidiary" means, at any time, any Subsidiary of the Borrower that is not an Unrestricted Subsidiary. Unless otherwise specified, all references to Restricted Subsidiaries mean Restricted Subsidiaries of the Borrower.
"Sanctioned Country" means, at any time, any country or territory that is itself the subject or target of any comprehensive Sanctions program (including, as of the Closing Date, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine).
"Sanctioned Person" means, at any time, any Person (a) listed on any Sanctions-related list of designated or blocked persons maintained by OFAC (including the Specially Designated Nationals and blocked Persons List, the Sectoral Sanctions Identifications List, and the Non-SDN Menu-Based Sanctions List), the U.S. Department of State, the United Nations Security Council, the European Union, or His Majesty's Treasury, (b) that is organized or resident in a Sanctioned Country, or (c) that is owned fifty percent (50%) or more, or otherwise controlled, by one or more Persons described in clauses (a) or (b) of this definition.
"Sanctions" means all economic or financial sanctions or trade embargoes imposed, administered, or enforced from time to time by (a) the Office of Foreign Assets Control of the U.S. Department of the Treasury, (b) the U.S. Department of State, (c) the United Nations Security Council, (d) the European Union and/or its member states, (e) His Majesty's Treasury of the United Kingdom, or (f) any other relevant sanctioning authority with jurisdiction over any Loan Party or its Subsidiaries.
"Secured Parties" means, collectively, the Administrative Agent, the Collateral Agent, and each Lender.
"Securities Account Control Agreement" means each securities account control agreement among a Loan Party, the Collateral Agent, and the applicable securities intermediary, in form and substance reasonably satisfactory to the Collateral Agent.
"Security Agreement" means that certain Security Agreement dated as of the Closing Date, among the Borrower, the Subsidiary Guarantors, and the Collateral Agent for the benefit of the Secured Parties.
"Senior Unsecured Notes" means the $250,000,000 aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 issued by the Borrower under the Senior Unsecured Notes Indenture.
"Senior Unsecured Notes Indenture" means that certain Indenture dated as of November 8, 2021, among Nexford Industrial Holdings Inc., as Issuer, the Guarantors party thereto, and Pinnacle Trust Company, as Trustee, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms of this Agreement.
"SOFR" means the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (or a successor administrator), with credit spread adjustments of 0.10% (10 basis points) for one-month SOFR and 0.15% (15 basis points) for three-month SOFR.
"SOFR Floor" means a rate of 0.75% per annum.
"Soft Call Premium" means a prepayment premium of 1.00% (i.e., 101% of par) of the aggregate principal amount of Term Loans prepaid, applicable to any Repricing Transaction occurring within six (6) months after the Closing Date.
"Solvency Certificate" means a certificate substantially in the form of Exhibit G hereto.
"Solvent" means, when used with respect to any Person, that as of the date of determination, (a) the fair value of the assets of such Person (on a going concern basis) exceeds its total liabilities (including contingent liabilities), (b) such Person is able to pay its debts and obligations as they become due in the ordinary course, and (c) such Person does not have unreasonably small capital with which to conduct its business.
"Specified Transaction" means any acquisition, Disposition, Investment, Restricted Payment, incurrence of Indebtedness, or any other event that by the terms of this Agreement requires pro forma compliance with a financial ratio or test or requires a financial ratio or test to be calculated on a Pro Forma Basis.
"Sponsor" means Granite Peak Capital Partners, LP, a Delaware limited partnership, together with its Affiliates (including, without limitation, Granite Peak Capital Fund IV, LP and GP Fund IV Co-Invest, LP). The headquarters of the Sponsor are located at 600 Steamboat Road, Suite 300, Greenwich, Connecticut 06830. The Co-Founders and Managing Partners of the Sponsor are Derek Calloway and Vanessa Liu.
"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which more than 50% of the total voting power of the Equity Interests is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, or a combination thereof.
"Subsidiary Guarantors" means each of the following Domestic Subsidiaries of the Borrower, together with each other Domestic Subsidiary that is or becomes a party to the Guarantee Agreement or a Subsidiary Pledge Agreement in accordance with Section 6.10: Nexford Precision Components, Inc. (Delaware corporation); Nexford Engineered Systems, LLC (Delaware limited liability company); Nexford Coatings & Surface Technologies, Inc. (Delaware corporation); Nexford Manufacturing Services, LLC (Illinois limited liability company); Nexford Properties, LLC (Delaware limited liability company); Nexford International Holdings, Inc. (Delaware corporation; CFC Holdco); Clearfield Tool & Die, Inc. (Pennsylvania corporation); Summit Industrial Fabrication Co. (South Carolina corporation); Ridgepoint Specialty Coatings, LLC (Texas limited liability company); and Lakeshore Precision Engineering, Inc. (Michigan corporation). As of the Closing Date, there are eleven (11) Subsidiary Guarantors (including Nexford International Holdings, Inc., which is a limited guarantor/pledgor only). "Subsidiary Guarantor" means each of them individually.
"Subsidiary Pledge Agreement" means each pledge agreement executed by a Subsidiary Guarantor in favor of the Collateral Agent, with respect to 100% of the Equity Interests in its respective direct Subsidiaries (subject, in the case of CFC Holdcos, to the limitations described in the definition of "CFC Holdco Limited Pledge Agreement").
"CFC Holdco Limited Pledge Agreement" means that certain Pledge Agreement dated as of the Closing Date, made by Nexford International Holdings, Inc. in favor of the Collateral Agent, with respect to 65% of the voting Equity Interests and 100% of the non-voting Equity Interests in Nexford Canada Holdings ULC.
"Term Commitment" means, with respect to each Lender, the commitment of such Lender to make a Term Loan to the Borrower on the Closing Date in the principal amount set forth opposite such Lender's name on Schedule 2.01 hereto.
"Term Loan" means a term loan made by a Lender to the Borrower pursuant to Section 2.01.
"Term SOFR" means, for the applicable Interest Period, the forward-looking term rate based on SOFR as published by the CME Group Benchmark Administration Limited (or any successor administrator acceptable to the Administrative Agent), for the applicable tenor; provided that if Term SOFR as so determined would be less than the SOFR Floor, Term SOFR shall be deemed to be the SOFR Floor for purposes of this Agreement.
"Test Period" means the most recently completed four (4) consecutive fiscal quarters of the Borrower for which financial statements have been (or are required to have been) delivered pursuant to Section 6.01.
"Total Net Leverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated Total Debt of the Borrower and its Restricted Subsidiaries as of such date, minus the lesser of (i) unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries as of such date and (ii) , to (b) Adjusted EBITDA for the most recently ended Test Period. On a pro forma basis as of the Closing Date, giving effect to the Transaction, the Total Net Leverage Ratio is estimated to be ($1,400,000,000 + $250,000,000 – ) ÷ $385,000,000 = .
"Transaction" means, collectively, (a) the entry into this Agreement and the other Loan Documents, (b) the borrowing of the Term Loans in the aggregate principal amount of $1,400,000,000, (c) the repayment in full of the Existing Term Loan and the termination of the Existing Revolving Credit Facility, (d) the payment by the Borrower of a dividend to Holdings in the approximate amount of $335,000,000 (the "Dividend"), (e) the payment of all fees, costs, and expenses incurred in connection with the foregoing (approximately $38,625,000), and (f) the deposit of cash to the balance sheet of the Borrower (approximately $147,000,000 of excess proceeds after payment of the items described in clauses (c) through (e) above).
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York or, when the laws of any other jurisdiction govern the perfection or priority of any Lien, the Uniform Commercial Code of such other jurisdiction.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower designated by the Borrower as an "Unrestricted Subsidiary" in accordance with the terms of this Agreement; provided that no Subsidiary may be designated as an Unrestricted Subsidiary if it is a Guarantor or if any of its assets constitute Collateral.
"USA PATRIOT Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, as amended from time to time, and the rules and regulations promulgated thereunder.
"Working Capital" means, at any date of determination, the excess of consolidated current assets (excluding cash and Cash Equivalents) of the Borrower and its Restricted Subsidiaries over consolidated current liabilities (excluding the current portion of long-term Indebtedness, Capital Lease Obligations, and accrued interest) of the Borrower and its Restricted Subsidiaries, in each case as determined in accordance with GAAP.
Section 1.02 — Other Interpretive Provisions
For purposes of this Agreement, unless otherwise specified: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined; (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms; (c) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (d) the word "will" shall be construed to have the same meaning and effect as the word "shall"; (e) any definition of or reference to any agreement, instrument, or other document herein shall be construed as referring to such agreement, instrument, or other document as from time to time amended, restated, supplemented, or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, or modifications set forth herein or in any other Loan Document); (f) any reference herein to any Person shall be construed to include such Person's successors and assigns; (g) the words "herein," "hereof," and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof; (h) all references herein to Articles, Sections, Exhibits, and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless otherwise indicated; (i) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified, or supplemented from time to time; and (j) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights.
Section 1.03 — Accounting Terms
Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered hereunder shall be prepared in accordance with GAAP as in effect at the time of such preparation (unless the Borrower and the Administrative Agent agree to another standard); provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith (the "frozen GAAP" election). Adjusted EBITDA and all related definitions used in the computation thereof shall be calculated on a Pro Forma Basis giving effect to Specified Transactions occurring during the applicable Test Period as if such Specified Transactions had occurred on the first day of such Test Period.
Section 1.04 — Rounding
Any financial ratios required to be maintained or satisfied by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein, and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number) to the number of decimal places by which such ratio is expressed herein. All financial ratios under this Agreement shall be calculated to two (2) decimal places.
Section 1.05 — Times of Day
Unless otherwise specified, all references herein to times of day shall be references to New York City time (Eastern Time).
Section 1.06 — Letter of Credit Amounts
Reserved. No letter of credit facility is being established under this Agreement.
Section 1.07 — Pro Forma Calculations
Whenever any test, financial ratio, or condition is required to be calculated hereunder on a Pro Forma Basis, the pro forma calculations shall be determined in good faith by a Responsible Officer of the Borrower in accordance with Regulation S-X under the Securities Act of 1933, as amended. Without limiting the generality of the foregoing, in connection with any acquisition (whether or not a Permitted Acquisition), the pro forma calculation shall include the historical consolidated financial results of the acquired Person, business, or assets for the applicable Test Period as if such acquisition had occurred on the first day of such Test Period. In connection with any Disposition, the pro forma calculation shall exclude the historical consolidated financial results attributable to the Disposed property or assets for the applicable Test Period as if such Disposition had occ