IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. BORROWER: LENDER: CITIZENS, INC. By�� Na {Z '{ P, en N l<U N Title: cHIF- F FI rJfl l\l c IA i.... o FF i cE..-fZ REGIONS BANK...
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. BORROWER: LENDER: CITIZENS, INC. By�� Na {Z '{ P, en N l<U N Title: cHIF- F FI rJfl l\l c IA i.... o FF i cE..-fZ REGIONS BANK By: ____________ _ Name: Title: ClTlZENS, lNC. f!RST AMENDMENT TO CREl)[T AGREEMENT SIGNATURE PAGE ANNEX A Amended Credit Agreement [See attached] ANNEX A CREDIT AGREEMENT dated as of May 5, 2021 as amended by the First Amendment to Credit Agreement dated as of May 3, 2024 among CITIZENS, INC., as Borrower, THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN, as Guarantors, and REGIONS BANK Regions/Citizens – Conformed Credit Agreement (First Amendment) LEGAL02/44107030v144107030
or (c) any Person whose assets include (for purposes of Section 3(42) of ERISA, or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code) the assets of any such “employee benefit plan” or “plan”. “Bermuda Keep Well Agreement” means that certain Keep Well Agreement, dated as of April 15, 2021, by and between the Borrower and CICA Life, Ltd, a Bermuda exempted limited liability company. “Borrower” means as defined in the introductory paragraph hereto. “Borrowing” means a borrowing consisting of simultaneous Revolving Loans of the same Type of Revolving Loan and, in the case of Adjusted LIBO RateTerm SOFR Loans, having the same Interest Period. “Business Day” means (a) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or the State of Texas or is a day on which banking institutions located in such state are authorized or required by Applicable Law or other governmental action to close, and (b) with respect to all notices, determinations, fundings and payments in connection with the Adjusted LIBO RateTerm SOFR and Adjusted LIBO RateTerm SOFR Loans (and, in the case of determinations, the LIBO Index Rate and any Base Rate Loans based on the LIBO Index Rate), the term “Business Day” means any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the London interbank marketU.S. Government Securities Business Day. “Capital Lease” means, for any Person, any lease (or other arrangement conveying the right to use) of any Property (whether real, personal or mixed) by that Person, as lessee, that, in conformity with GAAP, is, or is required to be, accounted for as a capitalized lease or financing lease on the balance sheet of such Person (subject to the provisions of Section 1.2 hereof). “Capital Lease Obligations” means, for any Person, all obligations of such Person to pay rent and/or other amounts under any Capital Lease, and the amount of such obligations shall, for purposes of this Agreement and the other Credit Documents, be deemed to be the capitalized amount thereof, as determined in accordance with GAAP (subject to the provisions in Section 1.2 hereof). “Cash Equivalents” means, as at any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Xxxxx’x; (c) commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Xxxxx’x; (d) certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by the Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than One-Hundred Million Dollars ($100,000,000); and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than Five- 6 LEGAL02/44107030v1 HundredFive-Hundred Million Dollars ($500,000,000), and (iii) has the highest rating obtainable from either S&P or Xxxxx’x. “Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Applicable Law, (b) any change in any Applicable Law, or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and all requests, rules, guidelines and/or directives promulgated thereunder or issued in connection therewith, (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, and (iii) all requests, rules, guidelines or directives issued by a Governmental Authority in connection with a Lender’s submission or re-submission of a capital plan under 12 C.F.R. § 225.8 or a Governmental Authority’s assessment thereof, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued. “Change of Control” means an event or series of events by which: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) 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 (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than thirty-five percent (35%) of the Equity Interests of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (b) during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals: (i) who were members of that board or equivalent governing body on the first day of such period; (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. “Closing Date” means as defined in the introductory paragraph hereto. 7 LEGAL02/44107030v1 “Collateral” means the collateral identified in, and at any time covered by, the Collateral Documents. “Collateral Access Agreement” means a landlord waiver, landlord consent, landlord lien subordination, or bailee agreement, as applicable, granted to, and in form and substance reasonably acceptable to, the Lender. “Collateral Documents” means, collectively, the Security Agreement, all Collateral Access Agreements, and all other instruments, security agreements, mortgages and other documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to the Lender a Lien on any property of any Credit Party as security for the Obligations, or to perfect any such Lien under the UCC (or equivalent Applicable Law in any foreign jurisdiction). “Commitment Fee” means as defined in Section 2.8(b). “Commitments” means the Revolving Commitment. “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §–1 et seq.), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the U.S. Commodity Futures Trading Commission) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit 7.1(c). “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of: (a) Consolidated Total Debt as of such date; to (b) the sum of (i) Consolidated Total Debt as of such date plus (ii) Consolidated Net Worth as of such date. “Consolidated Net Income” means, for any period of measurement, for the Borrower and its Subsidiaries (including or excluding Regulated Subsidiaries of the Borrower, as so specified in the relevant instance of calculation) determined on a consolidated basis, the net income of the Borrower and such Subsidiaries for that period, as determined in accordance with GAAP. “Consolidated Net Worth” means, as of any date of determination, for the Borrower and its Subsidiaries (including, for the avoidance of doubt, Regulated Subsidiaries), determined on a consolidated basis, (a) Shareholders’ Equity of the Borrower and its Subsidiaries (including, for the avoidance of doubt, Regulated Subsidiaries) on that date, less (b) accumulated other comprehensive incomeas applicable, plus Accumulated Other Comprehensive Loss or less Accumulated Other Comprehensive Income. “Consolidated Tangible Assets” means, as of any date of determination, the book value of total assets of the Borrower and its Subsidiaries (other than Regulated Subsidiaries) on a consolidated basis, as determined in accordance with GAAP, excluding assets that are considered to be intangible assets under GAAP (including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises and licenses). 8 LEGAL02/44107030v1 “Consolidated Total Debt” means, as of any date, all Indebtedness of the Borrower and its Subsidiaries measured on a consolidated basis as of such date, but excluding (a) Indebtedness of the types described in clause (b) of the definition thereof, and (b) solely in respect of Indebtedness of the types described in clause (b) of the definition of Indebtedness, clause (c) of the definition thereof. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote ten percent (10%) or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent. “Conversion/Continuation Date” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice. “Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the form of Exhibit 2.6. “Credit Date” means the date of a Credit Extension. “Credit Document” means any of this Agreement, the Note, each Collateral Document, each Compliance Certificate, each Guarantor Joinder Agreement, each other document, instrument, certificate or agreement that the Borrower and the Lender designate in writing as a “Credit Document”, and, to the extent evidencing or securing the Obligations, all other documents, instruments or agreements executed and delivered by any Credit Party for the benefit of the Lender in connection herewith or therewith (but specifically excluding any Swap Agreements and Treasury Management Agreements with the Lender or an Affiliate of the Lender). “Credit Extension” means the making or continuing of a Revolving Loan, as the case may be. “Credit Parties” means the Borrower and the Guarantors. “Daily Simple SOFR” means, for any day, SOFR, with the conventions for such rate (which will include a lookback) being established by the Lender in accordance with the conventions for such rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that, if the Lender decides that any such convention is not administratively feasible for the Lender, then the Lender may establish (after consultation with the Borrower) another convention in its reasonable discretion. “Debt Transaction” means, with respect to any Credit Party or Subsidiary, any sale, issuance, placement, assumption or guaranty of Funded Debt, whether or not evidenced by a promissory note or other written evidence of Indebtedness, except for Funded Debt permitted to be incurred pursuant to Section 8.1. “Debtor Relief Laws” means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect. 9 LEGAL02/44107030v1
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default. “Default Rate” means an interest rate equal to the sum of: (a) (i) with respect to (A) any Base Rate Loans (other than Base Rate Loans referencing the LIBO Index Rate), the Base Rate, (B) any Base Rate Loans referencing the LIBO Index Rate, the LIBO Index Rate, and (C) any Adjusted LIBO RateTerm SOFR Loans, the Adjusted LIBO RateTerm SOFR, in each case of the foregoing clauses (a)(i)(A) through (a)(i)(C), plus the Applicable Margin, if any, applicable to such Revolving Loans, and (ii) with respect to any Obligations other than Base Rate Loans and LIBORSOFR Loans, the Base Rate plus (to the extent applicable) the Applicable Margin applicable to such Obligations; plus (b) two percent (2.00%) per annum. “Dollars” and the sign “$” mean the lawful money of the United States. “Domestic Subsidiary” means any Subsidiary that is incorporated, organized or formed (as the case may be) under the laws of the United States, any state, district or other political subdivision thereof, or the District of Columbia. “Earn Out Obligations” means, with respect to an Acquisition, all obligations of any Credit Party or Subsidiary to make earn out payments based on the achievement of specified financial results over time (but excluding, for the avoidance of doubt, purchase price adjustments, working capital adjustments, non- competitionnon-competition and consulting agreements, or other indemnity obligations) pursuant to the documentation relating to such Acquisition. The amount of any Earn Out Obligations at the time of determination shall be the aggregate amount, if any, of such Earn Out Obligations that are required at such time under GAAP to be recognized as liabilities on the consolidated balance sheet of the Borrower and its Subsidiaries. “EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition; or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent. “EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway. “EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution. “Environmental Claim” means any known investigation, written notice, notice of violation, written claim, action, suit, proceeding, written demand, abatement order or other written order or directive (conditional or otherwise) by any Person arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (b) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity or (c) in connection with any actual or alleged damage, injury, threat or harm to human health, safety, natural resources or the environment. “Environmental Laws” means any and all current or future federal or state (or any subdivision of either of them) statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other written requirements of Governmental Authorities relating to: (a) any Hazardous Materials 10 LEGAL02/44107030v1 Activity; (b) the generation, use, storage, transportation or disposal of Hazardous Materials; or (c) protection of human health and the environment from pollution, in any manner applicable to any Credit Party or Subsidiary, or any of their respective Properties and/or Facilities. “Environmental Liability” means any liability, contingent or otherwise (including, without limitation, any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower, any other Credit Party or any of their respective Subsidiaries, to the extent directly or indirectly resulting from, or based upon: (a) any actual or alleged violation of any Environmental Law; (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials; (c) any actual or alleged exposure to any Hazardous Materials; (d) the Release or threatened Release of any Hazardous Materials into the environment; or (e) any contract, agreement or other consensual arrangement pursuant to which any liability is assumed or imposed on the Borrower or any Subsidiary with respect to any of the foregoing. “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. “Equity Transaction” means, with respect to the Borrower or any of its Subsidiaries, the issuance or sale by the Borrower or such Subsidiary of any shares, units or other denomination of its Equity Interests. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the U.S. Department of Labor) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “ERISA Affiliate” means, as applied to any Person: (a) any corporation that is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Internal Revenue Code) of which such Person is a member; (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control (within the meaning of Section 414(c) of the Internal Revenue Code) of which that Person is a member; and (c) any member of an affiliated service group (within the meaning of Section 414(m) or Section 414(o) of the Internal Revenue Code) of which that Person, any corporation described in the foregoing clause (a), or any trade or business described in the foregoing clause (b), is a member. “ERISA Event” means: (a) the occurrence of any “reportable event” (within the meaning of Section 4043 of ERISA and the regulations issued thereunder) with respect to any Pension Plan (but excluding any Pension Plan in respect of which notice to the PBGC has been waived pursuant to Applicable Law); (b) any failure by any Credit Party, Subsidiary or ERISA Affiliate to (i) meet the “minimum funding standard” set forth in Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code), (ii) by the due date therefor, make any minimum required contribution or any required installment under 11 LEGAL02/44107030v1 Section 430(j) of the Internal Revenue Code with respect to any Pension Plan, or (iii) by the due date therefor, make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such Pension Plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal from any Pension Plan with two (2) or more contributing sponsors or the termination of any such Pension Plan, in either case resulting in material liability pursuant to Section 4063 or 4064 of ERISA; (e) (i) the institution by the PBGC of proceedings to terminate any Pension Plan, (ii) the occurrence of any event or condition that is reasonably likely (in the determination of the Lender) to constitute grounds under ERISA for the termination of any Pension Plan, or (iii) the appointment of a trustee to administer any Pension Plan; (f) the imposition of any liability pursuant to Section 4062(e) and/or Section 4069 of ERISA, or by reason of the application of Section 4212(c) of ERISA, in each case of the foregoing, that is reasonably likely to result in a Material Adverse Effect; (g) (i) the complete or partial withdrawal (within the meaning of Section 4203 and Section 4205 of ERISA) of any Credit Party, Subsidiary or ERISA Affiliate from any Multiemployer Plan, if such withdrawal is reasonably likely to result in a Material Adverse Effect, or (ii) the receipt by any Credit Party, Subsidiary or ERISA Affiliate of notice from any Multiemployer Plan that such Multiemployer Plan (A) is in insolvency pursuant to Section 4241 or Section 4245 of ERISA, (B) is in “critical” or “endangered” status (within the meaning of Section 305 of ERISA), or (C) intends to or will terminate, or has been terminated, under Section 4041A or Section 4042A of ERISA, in each case of the foregoing clauses (g)(ii)(A) through (g)(ii)(C), if such insolvency, status or (actual or anticipated) termination is reasonably likely (in the determination of the Lender) to result in any material liability to any Credit Party, Subsidiary or ERISA Affiliate; (h) the imposition of fines, penalties, taxes and/or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), Section 502(i), Section 502(l) or Section 4071 of ERISA, in each case, in respect of any Pension Plan, if such fines, penalties, taxes and/or related charges are reasonably likely to result in a Material Adverse Effect; (i) the assertion of any claim (other than routine claims for benefits and funding obligations in the ordinary course) against (A) any Pension Plan other than a Multiemployer Plan, (B) any Property of any Pension Plan referred to in the foregoing clause (i)(A), or (C) any other Person that sponsors or maintains any Pension Plan in connection with such Pension Plan, in each case of the foregoing clause (i)(A) through (i)(C), that is reasonably likely to result in a Material Adverse Effect; (j) (i) the receipt by any Credit Party, Subsidiary or ERISA Affiliate of a final, written determination from the IRS of the failure of any Pension Plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code to be qualified under Section 401(a) of the Internal Revenue Code, or (ii) the failure of any trust forming part of any such Pension Plan referred to in the foregoing clause (j)(i) to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (k) the imposition of a Lien on any Property of any Credit Party, Subsidiary or ERISA Affiliate pursuant to Section 430(k) of the Internal Revenue Code or pursuant to either Section 303(k) or Section 4068 of ERISA. “Event of Default” means as defined in Section 9.1. “Exchange Act” means as defined in Section 8.9. “Excluded Property” means, with respect to each Credit Party, including, without limitation, any Person that becomes a Credit Party after the Closing Date as contemplated by Section 7.14, (a) any Real Estate Asset owned in fee or leased by a Credit Party, (b) any personal Property (including, without limitation, any Intellectual Property or any Subsidiary, motor vehicles and/or airplanes) in respect of which perfection of a Lien is not (i) governed by the UCC, (ii) effectuated either by (A) the filing of a UCC financing statement, and/or (B) appropriate evidence of such Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office, or (iii) effected by the retention of stock and/or unit certificate(s) and associated stock power(s) duly executed in blank, (c) the Equity Interests of any direct or indirect Foreign Subsidiary or a Regulated Subsidiary ofor Excluded 12 LEGAL02/44107030v1 Subsidiary that are owned by the Borrower or any other Credit Party, (d) any Property which, subject to the terms of Section 8.1(e), is subject to a Lien of the type described in Section 8.2(f) pursuant to documents that prohibit the applicable Credit Party from granting any other Liens in such Property, (e) any Property solely to the extent that the grant of a security interest therein would (i) violate any Applicable Laws, (ii) require a consent that has not been obtained from any third party (whether under a contractual obligation, pursuant to an Applicable Law, or otherwise), including, without limitation, any Governmental Authority; provided that if requested by the Lender, the Credit Parties shall have made commercially reasonable efforts to obtain such consent, or (iii) constitute a breach of or a default under, or result in the termination or invalidation of, or provide any party thereto with a right to terminate or invalidate, any contractual obligation evidencing, or giving rise to, such Property; provided, that, any such contractual obligation referred to in this clause (e)(iii) (A) is not incurred in contemplation of (I) the owning entity’s becoming a Credit Party or Subsidiary, or (II) the entry of such owning entity into any of the Credit Documents, and (B) is otherwise permitted under this Agreement and the other Credit Documents, in each case of the foregoing clauses (A) and (B), other than to the extent that any such term would be rendered ineffective pursuant to the Anti-Assignment Provisions or any other Applicable Law or principles of equity, (f) any certificates, licenses and other authorizations issued by any Governmental Authority, to the extent that Applicable Laws prohibit the granting of a security interest therein, (g) any intent-to-use trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant or enforcement of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under Applicable Laws, and (h) any proceeds and products of any and all of the Property referred to in the foregoing clauses (a) through (g) solely to the extent that such proceeds and products would constitute Property of any of the types described in the foregoing clauses (a) through (g); provided, that, the security interest granted to the Lender under the Security Agreement or any other Credit Document shall attach immediately to any Property of any Obligor (as defined in the Security Agreement) at such time as such Property ceases to meet any of the criteria for “Excluded Property” described in any of the foregoing clauses (a) through (h). “Excluded Subsidiaries” means, each individually and collectively, (i) Nexo Global Services, LLC, a Puerto Rico limited liability company, and (ii) Nexo Enrollment Services, LLC, a Puerto Rico limited liability company. “Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Person of, or the grant under a Credit Document by such Person of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Person’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 4.8 hereof and any and all guarantees of such Person’s Swap Obligations by other Credit Parties) at the time the Guaranty of such Person or grant by such Person of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Master Agreement governing more than one Swap Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Agreements for which such Guaranty or security interest becomes illegal. “Facility” means any real property including all buildings, fixtures or other improvements located on such real property now, hereafter or heretofore owned, leased, operated or used by the Borrower or any of its Subsidiaries or any of their respective predecessors. “Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher one one-hundredth of one percent (1/100 of 1%)) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal 13 LEGAL02/44107030v1
Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate charged to Regions Bank on such day on such transactions as determined by the Lender. Notwithstanding anything to the contrary in the foregoing, if, at any time, the Federal Funds Effective Rate is less than three-fourths of one percent (0.75%) per annum, then such rate shall be deemed to be three-fourths of one percent (0.75%) per annum for all purposes of this Agreement and the other Credit Documents. “Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer (or other financial officer of substantially equivalent title and authority) of the Borrower that such financial statements present fairly, in all material respects, the financial condition of the Credit Parties and Subsidiaries as of the date(s) indicated therein, together with the results of operations and cash flows of the Credit Parties and Subsidiaries for the period(s) covered thereby, subject only to changes resulting from audit and normal year-end accounting adjustments. “First Amendment Effective Date” means May 3, 2024. “Fiscal Month” means any fiscal month of any Fiscal Year. “Fiscal Quarter” means any fiscal quarter of any Fiscal Year. “Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries ending on December 31 of each calendar year. “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary. “Funded Debt” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all obligations for borrowed money, whether current or long-term (including the Obligations hereunder), and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments but specifically excluding trade payables incurred in the ordinary course of business; (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and not past due for more than sixty (60) calendar days after the date on which such trade account payable was created), including, without limitation, any Earn Out Obligations recognized as a liability on the balance sheet of the Borrower and its Subsidiaries in accordance with GAAP; (c) all obligations under letters of credit (including standby and commercial), bankers’ acceptances and similar instruments (including bank guaranties); (d) the Attributable Principal Amount of Capital Leases, Synthetic Leases, Securitization Transactions and Sale and Leaseback Transactions; (e) all preferred stock and comparable equity interests providing for mandatory redemption, sinking fund or other like payments; (f) all Funded Debt of others secured by (or for which the holder of such Funded Debt has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, any Property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees in respect of Funded Debt of another Person; and (h) Funded Debt of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such, has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof. For purposes hereof, the amount of Funded Debt shall be determined (x) based on the outstanding principal amount in the case of borrowed money indebtedness under clause (a) and purchase money indebtedness and the deferred 14 LEGAL02/44107030v1 purchase obligations under clause (b), (y) based on the maximum amount available to be drawn in the case of letter of credit obligations and the other obligations under clause (c), and (z) based on the amount of Funded Debt that is the subject of the Guarantees in the case of Guarantees under clause (f). “Funding Notice” means a notice substantially in the form of Exhibit 2.1. “GAAP” means, as of any date of determination, accounting principles generally accepted in the United States and applied on a consistent basis as in effect on such date, subject to the limitations on the application thereof set forth in Section 1.2. “Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority. “Governmental Authority” means the government of the United States or any other nation, or any political subdivision of any of the foregoing, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank and any group or body charged with setting financial accounting or regulatory capital rules or standards). “Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority. “Guarantee” means, as to any Person: (a) any obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guaranteeing, any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease Property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital, or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor, so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring, in any other manner, the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof, or to protect such obligee against loss (in whole or in part) in respect thereof; or (b) any Lien on any Property of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made, or, if not stated or determinable, the maximum reasonably anticipated liability (as determined by the guaranteeing Person in good faith) in respect thereof. The term “Guarantee” as a verb has a corresponding meaning. “Guaranteed Obligations” means as defined in Section 4.1. “Guarantor Joinder Agreement” means a guarantor joinder agreement substantially in the form of Exhibit 7.11 or such other documents as the Lender shall deem appropriate for such purpose. “Guarantors” means (a) with respect to all Obligations, each Person identified as a “Guarantor” on the signature pages hereto and each other Person that joins as a Guarantor pursuant to Section 7.11, (b) with respect to Obligations under Swap Agreements and Treasury Management Agreements with the 15 LEGAL02/44107030v1 Lender or an Affiliate of the Lender and Swap Obligations of a Specified Credit Party (determined before giving effect to Sections 4.1 and 4.8) under the Guaranty, the Borrower, and (c) in each case, their successors and permitted assigns. For the avoidance of doubt, there are no Guarantors as of the Closing Date. “Guaranty” means the Guarantee made by the Guarantors pursuant to Section 4. “Hazardous Materials” means any hazardous substances defined by the Comprehensive Environmental Response Compensation and Liability Act, 42 USCA 9601, et. seq., as amended, including any hazardous waste as defined under 40 C.F.R. Parts 260-270, gasoline or petroleum (including crude oil or any fraction thereof), asbestos or polychlorinated biphenyls. “Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing. “Hedging Transaction” of any Person means: (a) any transaction (including, without limitation, an agreement with respect to any such transaction) now existing, or hereafter entered into, by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or any other similar transaction (including, without limitation, any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by, or subject to, any Master Agreement; and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any Master Agreement, including any such obligations or liabilities under any Master Agreement. “Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under Applicable Laws relating to the Lender which are currently in effect or, to the extent allowed under such Applicable Laws, which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than Applicable Laws now allow. “HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (Pub. L. §–94– 435), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the U.S. Federal Trade Commission and the U.S. Department of Justice) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all Funded Debt; (b) net obligations under any Swap Agreement (with the amount of such Indebtedness being determined based on the applicable Swap Termination Value at such time); (c) all Guarantees in respect of Indebtedness of another Person; and (d) all Indebtedness of the types referred to in clauses (a) through 16 LEGAL02/44107030v1 (c) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. “Indemnitee” means as defined in Section 10.2(b). “Index Rate” means, for any Index Rate Determination Date with respect to any Base Rate Loans determined by reference to the Index Rate: (a) the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent (0.16%)) equal to LIBOR as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Lender from time to time) for deposits in Dollars with a term equivalent to one (1) calendar month, determined as of approximately 11:00 a.m. (London, England time) on the date that is two (2) Business Days prior to such Index Rate Determination Date; or (b) in the event that the rate referred to in the foregoing clause (a) does not appear on such page or service, or if such page or service shall cease to be available, the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent (0.16%)) equal to the rate determined by the Lender to be the offered rate on such other page or service that displays an average settlement rate for deposits in Dollars with a term equivalent to one (1) calendar month, determined as of approximately 11:00 a.m. (London, England time) on the date that is two (2) Business Days prior to such Index Rate Determination Date, the rate per annum equal to the Term SOFR Index Rate for such calculation. Notwithstanding anything to the contrary in the foregoing, if, at any time, the Index Rate is less than three-fourths of one percent (0.75%) per annum, then such rate shall be deemed to be three-fourths of one percent (0.75%) per annum for all purposes of this Agreement and the other Credit Documents. “Index Rate Determination Date” means the Closing Date and the first Business Day of each calendar month ending thereafter; provided, however, that, solely for purposes of the definition of Base Rate, Index Rate Determination Date means the date of determination of the Base Rate. “Insurance Regulatory Authority” means, with respect to any Regulated Subsidiary, the insurance department or similar Governmental Authority charged with regulating insurance companies or insurance holding companies, in its jurisdiction of domicile and, to the extent that it has regulatory authority over such Regulated Subsidiary, in each other jurisdiction in which such Regulated Subsidiary conducts business or is licensed to conduct business. “Intellectual Property” means all trademarks, service marks, trade names, copyrights, patents, patent rights, franchises related to intellectual property, licenses related to intellectual property and other intellectual property rights. “Interest Payment Date” means with respect to (a) any Base Rate Loan, the last Business Day of each calendar quarter, commencing on the first such date to occur after the Closing Date and the final maturity date of such Revolving Loan; and (b) any Adjusted LIBO RateTerm SOFR Loan, the last day of each Interest Period applicable to such Revolving Loan; provided that, in the case of each Interest Period of longer than three (3) months, “Interest Payment Date” shall also include each date that is three (3) months, or an integral multiple thereof, after the commencement of such Interest Period. “Interest Period” means, in connection with an Adjusted LIBO RateTerm SOFR Loan, an interest period of one (1), three (3) or six (6) months, as selected by the Borrower in the applicable Funding Notice or Conversion/Continuation Notice, (a) initially, commencing on the Credit Date or Conversion/ Continuation Date thereof, as the case may be; and (b) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided that (i) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding 17 LEGAL02/44107030v1
Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (iii) of this definition, end on the last Business Day of a calendar month; and (iii) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Maturity Date. “Interest Rate Determination Date” means, with respect to any Interest Period, the date that is two (2) Business Days prior to the first day of such Interest Period. “Internal Revenue Code” means the Internal Revenue Code of 1986 (U.S.C. Title 26), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the U.S. Internal Revenue Service) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. “Investment Company Act” means the Investment Company Act of 1940 (15 U.S.C. §§–80a-1, 80a-64 et seq.), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the SEC) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “Involuntary Disposition” means the receipt by any Credit Party or Subsidiary of any cash insurance proceeds or condemnation awards payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of its property. “Lender” means as defined in the introductory paragraph hereto. “LIBO Index Rate” means, for any Index Rate Determination Date with respect to any Base Rate Loans determined by reference to the LIBO Index Rate, the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent (1/16 of 1%)) equal to (a) the LIBOR or a comparable or successor rate, which rate is approved by the Lender, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Lender from time to time) for deposits with a term equivalent to one (1) month in Dollars, determined as of approximately 11:00 a.m. (London, England time) two (2) Business Days prior to such Index Rate Determination Date, or (b) in the event the rate referenced in the preceding clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent (1/16 of 1%)) equal to the rate determined by the Lender to be the offered rate on such other page or other service which displays an average settlement rate for deposits with a term equivalent to one (1) month in Dollars, determined as of approximately 11:00 a.m. (London, England time) two (2) Business Days prior to such Index Rate Determination Date, or (c) in the event the rates referenced in the preceding clauses (a) and (b) are not 18 LEGAL02/44107030v1 available, the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent (1/16 of 1%)) equal to quotation rate (or the arithmetic mean of rates) offered to first class banks in the London interbank market for deposits in Dollars of amounts in same day funds comparable to the principal amount of the applicable Revolving Loan of the Lender for which the LIBO Index Rate is then being determined with maturities comparable to one (1) month as of approximately 11:00 a.m. (London, England time) two (2) Business Days prior to such Index Rate Determination Date. Notwithstanding anything contained herein to the contrary, the LIBO Index Rate shall not be less than three-fourths of one percent (0.75%). “LIBOR” means the London Interbank Offered Rate. “LIBOR Loan” means a Revolving Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate or LIBO Index Rate (including a Base Rate Loan referencing the LIBO Index Rate), as applicable. “Lien” means (a) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing, and (b) in the case of Equity Interests, any purchase option, call or similar right of a third party with respect to such Equity Interest. “Liquidity” means, as of any date of determination, (a) available and unencumbered cash held by the Borrower in deposit accounts domiciled in the United States, plus (b) the fair market value of available and unencumbered Cash Equivalents owned by the Borrower and held in securities accounts domiciled in the United States, plus (c) (i) the fair market value of available and unencumbered investment grade, fixed income securities owned by the Borrower and held in securities accounts domiciled in the United States, less (ii) for as long as the Bermuda Keep Well Agreementto the extent that any “keep well agreement” is required by the applicableany Insurance Regulatory Authority to be in effect, the greater of (x) fifty percent (50%) of the aggregate amount of all obligations thereunder and (which shall be deemed, in any event, not to be less thany) Five Million Dollars ($5,000,000)). For the avoidance of doubt, in the event the Bermuda Keep Well Agreement is no longer required by the applicable Insurance Regulatory Authority and is terminated or not renewed as a result of no longer being required by such Insurance Regulatory Authority, the amount set forth in clause (c)(ii) above shall be Zero Dollars ($0).. “Margin Stock” means as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time, and any successor regulations. “Master Agreement” means any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any executed master agreement based on such form, any International Foreign Exchange Master Agreement, or any other master agreement relating to the documentation of, or entered into in connection with, any Hedging Transactions (any such master agreement, together with any related schedules and/or annexes thereto). “Material Adverse Effect” means any effect, event, condition, action, omission, change or state of facts that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in, a material adverse effect with respect to (a) the business operations, properties, assets or financial condition of the Credit Parties and Subsidiaries taken as a whole; (b) the ability of any Credit Party, to fully and timely perform its obligations under the Credit Documents; (c) the legality, validity, binding effect or enforceability against a Credit Party of any Credit Document to which it is a party; (d) the value of the 19 LEGAL02/44107030v1 whole or any material part of the Collateral or the priority of Liens in favor of the Lender in the whole or any material part of the Collateral; or (e) the rights, remedies and benefits available to, or conferred upon, the Lender under any Credit Document. “Material Contract” means any contractual obligation to which any Credit Party or any of their Subsidiaries, or any of their respective assets, are bound (other than those evidenced by the Credit Documents) pursuant to which (a) any Credit Party or any of its Subsidiaries are obligated to make payments in any twelve (12) month period of Five Million Dollars ($5,000,000) or more, (b) any Credit Party or any of its Subsidiaries expects to receive revenue in any twelve (12) month period of Five Million Dollars ($5,000,000) or more, or (c) a default, breach or termination thereof could reasonably be expected to result in a Material Adverse Effect. “Maturity Date” means May 5, 20242027; provided, however, that, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day. “Xxxxx’x” means Xxxxx’x Investor Services, Inc. “Multiemployer Plan” means any “multiemployer plan” (as defined in Section 3(37) of ERISA) that is (or is required to be) sponsored, maintained and/or contributed to by any Credit Party or Subsidiary or any of their respective ERISA Affiliates. “NAIC” has the meaning set forth in the definition of “Qualifying Reinsurer”. “Net Cash Proceeds” means the aggregate proceeds paid in cash or Cash Equivalents received by any Credit Party or Subsidiary in connection with any Asset Sale net of (a) direct costs incurred or estimated costs for which reserves are maintained in connection therewith (including legal, accounting and investment banking fees and expenses, sales commissions and underwriting discounts), (b) estimated taxes paid or payable (including sales, use or other transactional taxes and any net marginal increase in income taxes) as a result thereof and (c) the amount required to retire any Indebtedness secured by a Permitted Lien on the related property and/or assets. For purposes hereof, “Net Cash Proceeds” includes any cash or Cash Equivalents received upon the disposition of any non-cash consideration received by any Credit Party or Subsidiary in any Asset Sale. “Non-Qualifying Reinsurer” means any reinsurer that is not a Qualifying Reinsurer. “Note” means a promissory note in the form of Exhibit 2.3. “Obligations” means all obligations, indebtedness and other liabilities of every nature of each Credit Party and any Subsidiary from time to time owed to the Lender or an Affiliate of the Lender under any Credit Document or under any Swap Agreement or Treasury Management Agreement with the Lender or an Affiliate of the Lender, together with all renewals, extensions, modifications or refinancings of any of the foregoing, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party or such Subsidiary, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party or such Subsidiary for such interest in the related bankruptcy proceeding), payments for early termination of Swap Agreements, fees, expenses, indemnification or otherwise; provided, however, that the “Obligations” of a Credit Party or a Subsidiary shall exclude any Excluded Swap Obligations with respect to such Person. “Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, 20 LEGAL02/44107030v1 (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its articles of organization, certificate of formation or comparable documents, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official. “Outstanding Amount” means with respect to Revolving Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Revolving Loans occurring on such date. “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Pub. L. §–107–56), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the U.S. Department of Justice or the U.S. Department of Homeland Security) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “PBGC” means the U.S. Pension Benefit Guaranty Corporation, as referred to and defined in ERISA, and any successor entity performing similar functions. “Pension Plan” means any “employee pension benefit plan” as defined in Section 3(2) of ERISA other than a Multiemployer Plan, and which is sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party or Subsidiary or any of their respective ERISA Affiliates. “Periodic Term SOFR Determination Day” has the meaning set forth in the definition of “Term SOFR”. “Periodic Term SOFR Index Rate Determination Day” has the meaning set forth in the definition of “Term SOFR Index Rate”. “Permitted Liens” means as defined in Section 8.2. “Permitted Refinancing” means any extension, renewal or replacement of any existing Indebtedness so long as any such renewal, refinancing and extension of such Indebtedness: (a) has market terms and conditions; (b) has an average life to maturity that is greater than that of the Indebtedness being extended, renewed or refinanced; (c) does not include an obligor that was not an obligor with respect to the Indebtedness being extended, renewed or refinanced (unless such obligor is also a Guarantor with respect to Obligations); (d) remains subordinated, if the Indebtedness being refinanced or extended was subordinated to the prior payment of the Obligations; 21 LEGAL02/44107030v1
(e) does not exceed in a principal amount the Indebtedness being renewed, extended or refinanced plus reasonable fees and expenses, premiums and penalties incurred in connection therewith; and (f) is not incurred, created or assumed, if any Default or Event of Default then exists or would arise therefrom. “Person” means any natural person or individual, corporation, limited liability company, trust, joint venture, association, company, firm, partnership (whether a general partnership, a limited partnership or otherwise), Governmental Authority, or other entity. “Prime Rate” means the per annum rate which the Lender publicly announces from time to time to be its prime lending rate, as in effect from time to time. The Lender’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. “Pro Forma Basis” means, for purposes of calculating the financial covenants set forth in Section 8.6 (including for purposes of determining the Applicable Margin), that any Asset Sale, Acquisition or Restricted Payment shall be deemed to have occurred as of the first day of the most recent four (4) consecutive Fiscal Quarter period preceding the date of such transaction for which the Borrower was required to deliver financial statements pursuant to Section 7.1(a) or (b). In connection with the foregoing, (a) (i) with respect to any Asset Sale, income statement and cash flow statement items (whether positive or negative) attributable to the property and/or assets disposed of shall be excluded to the extent relating to any period occurring prior to the date of such transaction and (ii) with respect to any Acquisition, income statement items (whether positive or negative) attributable to the Persons or property acquired shall be included to the extent relating to any period applicable to such calculations, in each case with respect to the foregoing clauses (a)(i) and (a)(ii) to the extent (A) such items are not otherwise included in such income statement items for the Credit Parties and Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.1 and (B) such items are supported by financial statements or other information satisfactory to the Lender and (b) any Indebtedness incurred or assumed by the any Credit Party or Subsidiary (including the Person or property and/or assets acquired) in connection with such transaction (i) shall be deemed to have been incurred as of the first day of the applicable period and (ii) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination. “Property” means an interest of any kind in any property or asset, whether real, personal or mixed, and whether tangible or intangible. “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit Party that, at the time the Guaranty (or grant of security interest, as applicable) becomes or would become effective with respect to such Swap Obligation, has total assets exceeding Ten Million Dollars ($10,000,000) or such other Credit Party as constitutes an “eligible contract participant” under the Commodity Exchange Act and which may cause another Person to qualify as an “eligible contract participant” with respect to such Swap Obligation at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act. “Qualifying Reinsurer” means (a) any Person (which may include Affiliates of any Credit Party) providing reinsurance services with at least an “A–” financial strength rating from A.M. Best Company (or any successor in interest thereto), or (b) any Person (which may include Affiliates of any Credit Party) providing reinsurance services that has collateralized its obligations to the Regulated Subsidiaries at a 22 LEGAL02/44107030v1 level consistent with the National Association of Insurance Commissioners’ (“NAIC”) requirements for credit on Schedule F of the statutory financial statements of the Regulated Subsidiaries. “Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by the Borrower or any of its Subsidiaries in any real property. “Regulated Subsidiary” means (a) any direct or indirect Subsidiary of the Borrower: (i) that is a risk retention entity subject to regulation by a Governmental Authority and/or required by Applicable Laws to utilize statutory accounting principles and submit them to a Governmental Authority, and (ii) with respect to which the Lender has received prior written notification that such Domestic Subsidiary constitutes a Regulated Subsidiary or (b) any Subsidiary of a Regulated Subsidiary. “Related Parties” means, with respect to any Person, such Person’s Affiliates, together with the respective partners, directors, officers, employees, agents, trustees, administrators, managers, partners, advisors, legal counsel, consultants, and other representatives of such Person and such Person’s Affiliates. “Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater. “Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto. “Restricted Payment” means: (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interests or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof), or any option, warrant, or other right to acquire any such dividend or other distribution or payment; (b) any payment of management fees, transaction-based fees, or similar fees to any Person holding Equity Interests in any Credit Party or Subsidiary, or any Affiliate thereof to the extent that any such payments do not reduce Consolidated Net Income; and (c) any setting apart of funds or property and/or assets in respect of any of the foregoing. “Revolving Commitment” means the commitment of the Lender to make Revolving Loans hereunder. The amount of the Revolving Commitment as of the Closing Date is Twenty Million Dollars ($20,000,000). “Revolving Commitment Period” means the period from, and including, the Closing Date to, but excluding, the earlier of (a) the Maturity Date and (b) the date on which the Revolving Commitment shall have been terminated as provided herein. “Revolving Loan” means as defined in Section 2.1(a). “S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw Hill Corporation. 23 LEGAL02/44107030v1 “Sale and Leaseback Transaction” means, with respect to the Borrower or any Subsidiary, any arrangement, directly or indirectly, with any Person (other than a Credit Party) whereby the Borrower or such Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred. “Sanctions” means as defined in Section 6.14(d). “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. “Securities Exchange Act” means the Securities Exchange Act of 1934 (15 U.S.C. §–78a et seq.), as amended and in effect from time to time, and any successor statute(s), together with any rules and regulations promulgated thereunder or in connection therewith, any rulings or orders issued by any applicable Governmental Authorities (including, without limitation, the SEC) thereunder or in connection therewith, or the application or official interpretation of any of the foregoing. “Securities” means any stock, shares, partnership interests, limited liability company interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement (e.g., stock appreciation rights), options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. “Securitization Transaction” means any financing or factoring or similar transaction (or series of such transactions) entered by the Borrower or any of its Subsidiaries pursuant to which the Borrower or such Subsidiary may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment (the “Securitization Receivables”) to a special purpose subsidiary or affiliate (a “Securitization Subsidiary”) or any other Person. “Security Agreement” means that certain pledge and security agreement dated as of the Closing Date executed by the Credit Parties in favor of the Lender. “Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries (including, for the avoidance of doubt, Regulated Subsidiaries) as of such date, determined in accordance with GAAP. “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding U.S. Government Securities Business Day; provided, that, if the published rate is subsequently corrected and provided by the SOFR Administrator or on the SOFR Administrator’s Website within the longer of one hour of the time when such rate is first published and the republication cut-off time for SOFR, if any, as specified by the SOFR Administrator in the SOFR benchmark methodology then the secured overnight financing rate for such Business Day will be subject to those corrections. Notwithstanding anything contained herein to the contrary, if, at any time, SOFR is less than three-fourths of one percent (0.75%), then SOFR shall be deemed to be three-fourths of one percent (0.75%) for purposes of this Agreement and the other Credit Documents. 24 LEGAL02/44107030v1 “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at xxxx://xxx.xxxxxxxxxx.xxx, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time. “SOFR Loan” means a Revolving Loan that bears interest at a rate based on Adjusted Term SOFR or the Index Rate (including a Base Rate Loan referencing the Index Rate), as applicable. “Solvent” or “Solvency” means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (e) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. “Specified Acceleration Event of Default” means an Event of Default pursuant to Section 9.1(f) or Section 9.1(g). “Specified Credit Party” means, each Credit Party that is, at the time on which the Guaranty (or grant of the relevant security interest) becomes effective with respect to a Swap Obligation, a corporation, partnership, proprietorship, organization, trust or other entity that would not be an “eligible contract participant” under the Commodity Exchange Act at such time but for the effect of Section 4.8. “Specified Disposition” means as defined in Section 8.7. “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than fifty percent (50%) of the total voting power of Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person, or the accounts of which would be consolidated with those of such Person in its consolidated financial statements in accordance with GAAP, if such statements were prepared as of such date, or one or more of the other Subsidiaries of that Person or a combination thereof; provided that, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding. Unless otherwise provided, “Subsidiary” shall refer to a Subsidiary of the Borrower. “Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or 25 LEGAL02/44107030v1
forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, currency swap transactions, cross-currency rate swap transactions, currency options, cap transactions, floor transactions, collar transactions, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options or warrants to enter into any of the foregoing), whether or not any such transaction is governed by, or otherwise subject to, any master agreement or any netting agreement, and (b) any and all transactions or arrangements of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any Master Agreement, including any such obligations or liabilities under any Master Agreement. “Swap Obligation” means with respect to any Credit Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act. “Swap Termination Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include the Lender or any Affiliate of the Lender). “Synthetic Lease” means a lease transaction under which the parties intend that: (a) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended; and (b) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property. “Term SOFR” means, for any calculation with respect to a SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator, subject to Section 3.1. “Term SOFR Adjustment” means, for any Interest Period, a percentage equal to one tenth of one percent (0.10%) per annum. “Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Lender in its reasonable discretion). “Term SOFR Index Rate” shall mean the Term SOFR Reference Rate for a one-month tenor on the day (such day, the “Periodic Term SOFR Index Rate Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first Business Day of each month, adjusted monthly on the first Business Day of each month, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. on any Periodic Term SOFR Index Rate Determination Day the Term SOFR Reference Rate for a one-month tenor has not been published by the Term SOFR Administrator 26 LEGAL02/44107030v1 and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, the Term SOFR Index Rate will be the Term SOFR Reference Rate for such one-month tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such one-month tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Index Rate Determination Day. “Term SOFR Reference Rate” means the forward-looking term rate based on SOFR. “Total Revolving Outstandings” means the aggregate Outstanding Amount of all Revolving Loans. “Treasury Management Agreement” means any agreement governing the provision of treasury or cash management services, including deposit accounts, funds transfer, automated clearinghouse, commercial credit cards, purchasing cards, cardless e-payable services, debit cards, stored value cards, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services. “Type” means as defined in Section 2.1(a). “U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. “UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in the State of New York (or any other applicable jurisdiction, as the context may require). “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms. “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment. “United States” or “U.S.” means the United States of America. “Upfront Fee” means as defined in Section 2.8(a). Section 1.2 Accounting Terms. (a) Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to such terms in conformity with GAAP. Financial statements and other information required to be delivered by the Borrower to the Lender pursuant to this 27 LEGAL02/44107030v1 Agreement shall be prepared in accordance with GAAP. If at any time any change in GAAP would affect the computation of any financial covenant or requirement set forth in any Credit Document, and either the Borrower or the Lender shall object in writing to determining compliance based on such change, then the Borrower and the Lender shall negotiate in good faith to amend such financial covenant or requirement to preserve the original intent thereof in light of such change to GAAP; provided that until so amended such computations shall continue to be made on a basis consistent with the most recent financial statements delivered pursuant to this Agreement as to which no such objection has been made. (b) Calculations. Notwithstanding anything to the contrary above, the parties hereto acknowledge and agree that all calculations of the financial covenants set forth herein, including for purposes of determining the Applicable Margin, shall be made on a Pro Forma Basis. (c) FASB ASC 825 and FASB ASC 470-20. Notwithstanding anything to the contrary in the above, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of each Credit Party and Subsidiary shall be deemed to be carried at one hundred percent (100%) of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. Section 1.3 Rules of Interpretation. (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “, without limitation,”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. In the computation of periods of time from a specified date to a later specified date, the word “from” shall mean “from, and including,”, and the word “to” shall mean “to, but excluding,”. Unless the context otherwise requires: (i) 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 it was originally executed, or as it may from time to time be amended, restated, amended and restated, supplemented, increased, extended, refinanced, renewed, replaced, and/or otherwise modified in writing, as applicable (subject to any restrictions on such amendments, restatements, amendments and restatements, supplements, increases, extensions, refinancings, renewals, replacements, and/or other written modifications as set forth herein or in any other Credit Document); (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns; (iii) the words “hereof”, “herein”, “hereto” and “hereunder”, and words of similar import, when used in any Credit Document, shall be construed to refer to such Credit Document in its entirety, and not to any particular provision hereof or thereof; (iv) all references in a Credit Document to Sections, Exhibits, Annexes, Appendices and Schedules shall be construed to refer to Sections of, and Exhibits, Annexes, Appendices and Schedules to, the Credit Document in which such references appear; (v) all references contained in a Section to clauses or definitions occurring “above” or “below” shall refer to the applicable clause of, or definition set forth in, such Section, and all general references contained in a Section or clause thereof to “the above” or “the below” shall refer, collectively, to all provisions of such Section or clause, as the case may be, occurring prior to or after, as applicable, the occurrence of such general reference; (vi) all references herein to sums denominated in Dollars or dollars, or with the symbol “$”, refer to the lawful currency of the United States, unless such reference specifically identifies another currency; (vii) any definition of, or reference to, any law shall include all statutory and regulatory rules, regulations, orders and provisions consolidating, amending, replacing or interpreting any such law, and any reference to, or definition of, any such law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified and/or supplemented from time to time; and (viii) the words 28 LEGAL02/44107030v1 “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. (b) Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of, or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture, or any other like term shall also constitute such a Person). (c) Unless otherwise indicated, all references herein to a specific time of day shall be construed to refer to Eastern Standard Time or Eastern Daylight Savings Time, as the case may be. Section 1.4 Rates. The Lender does not warrant, nor accept responsibility, nor shall the Lender have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR or the Index Rate, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement) or any related spread or other adjustment, including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, the Index Rate or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Conforming Changes. The Lender and its affiliates or other related entities may engage in transactions that affect the calculation of the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, the Index Rate, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Lender may select information sources or services in its reasonable discretion to ascertain the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, the Index Rate or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, the Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service. Section 1.5 Conforming Changes Relating to Term SOFR. In connection with the use or administration of Term SOFR, the Lender (after consultation with the Borrower) will have the right to make Benchmark Conforming Changes from time to time and, notwithstanding anything to the contrary contained herein or in any other Credit Document, any amendments implementing such Benchmark Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Credit Document. The Lender will promptly notify the Borrower of the effectiveness of any Benchmark Conforming Changes in connection with the use or administration of Term SOFR. Section 2. REVOLVING LOANS Section 2.1 Revolving Loans. 29 LEGAL02/44107030v1
Section 2.10 Application of Prepayments. Within each Revolving Loan, prepayments will be applied first to Base Rate Loans and Index Rate Loans to the fullest extent thereof, then to Adjusted LIBO RateTerm SOFR Loans in direct order of Interest Period maturities. In addition: (a) Voluntary Prepayments.Voluntary prepayments will be applied as specified by the Borrower. (b) Mandatory Prepayments. Mandatory prepayments will be applied to the Revolving Loans without a permanent reduction of the Revolving Commitments. Section 2.11 General Provisions Regarding Payments. (a) All payments by the Borrower hereunder shall be paid in Dollars in immediately available funds, without setoff or counterclaim or any deduction or withholding whatsoever, including for any and all present and future taxes. If the Borrower makes a payment under this Agreement to which withholding tax applies or if any taxes (other than taxes on net income imposed by any Governmental Authority and measured by the taxable income the Lender would have received if all payments under or in respect of this Agreement were exempt from taxes levied by such Governmental Authority) are at any time imposed on any payments under or in respect of this Agreement including, but not limited to, payments made pursuant to this paragraph, the Borrower shall pay all such taxes to the relevant authority in accordance with Applicable Law such that the Lender receives the sum it would have received had no such deduction or withholding been made (or, if the Borrower cannot legally comply with the foregoing, the Borrower shall pay to Lender such additional amounts as will result in the Lender receiving the sum it would have received had no such deduction or withholding been made). Further, the Borrower shall also pay to the Lender, promptly upon demand, all additional amounts that the Lender specifies as necessary to preserve the after-tax yield the Lender would have received if such taxes had not been imposed. The Borrower shall promptly provide the Lender with an original receipt or certified copy issued by the relevant authority evidencing the payment of any such amount required to be deducted or withheld. (b) The Lender may (but shall not be required to), and the Borrower hereby authorizes the Lender to, debit a deposit account of the Borrower held with the Lender or any of its Affiliates and designated for such purpose by the Borrower in order to cause timely payment to be made to the Lender of all principal, interest and fees due hereunder or under any other Credit Document (subject to sufficient funds being available in its accounts for that purpose). (c) Subject to the provisos set forth in the definition of “Interest Period,” whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest or fees hereunder, but such payment shall be deemed to have been made on the date therefor for all other purposes hereunder. (d) The Lender may, but shall not be obligated to, deem any payment by or on behalf of the Borrower hereunder that is not made in same day funds prior to 3:00 p.m. to be a non-conforming payment. Any such payment shall not be deemed to have been received by the Lender until the later of (i) the time such funds become available funds and (ii) the applicable next Business Day. The Lender shall give prompt telephonic notice to the Borrower (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default in accordance with the terms of Section 9.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such 34 LEGAL02/44107030v1 payment to the next succeeding applicable Business Day) at the Default Rate from, and including, the date such amount was due and payable to, and including, the date such amount is paid in full. Section 3. YIELD PROTECTION Section 3.1 Making or Maintaining LIBOR LoansInterest Rates. (a) Inability to Determine Applicable Interest Rate. In Notwithstanding anything to the contrary in this Agreement or any Credit Document (and any Swap Agreement shall be deemed not to be a “Credit Document” for purposes of this Section 3.1), in the event that the Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto) that (i) by reason of circumstances affecting the London or other applicable interbank market, on any Interest Rate Determination Date with respect to any Adjusted Term SOFR Loans, that (i) adequate and fair means do not exist for ascertaining theSOFR, Term SOFR, Adjusted LIBO RateTerm SOFR or the LIBO Index Rate, as applicable, or (ii) theSOFR, Term SOFR, Adjusted LIBO RateTerm SOFR or the LIBO Index Rate, as applicable, for any proposed LIBOR LoanAdjusted Term SOFR Loans does not adequately and fairly reflect the cost to the Lender of funding or maintaining such LIBORAdjusted Term SOFR Loan, the Lender shall give notice (by facsimile or by telephone confirmed in writing) to the Borrower of such determination, whereupon (x) no Revolving Loans may be made as, or converted to, LIBORAdjusted Term SOFR Loans until such time as the Lender notifies the Borrower that the circumstances giving rise to such notice no longer exist, and (y) any Funding Notice or Conversion/Continuation Notice given by the Borrower with respect to the Revolving Loans in respect of which such determination was made shall be deemed to be rescinded by the Borrower and (z) all such Revolving Loans described in clause (y) hereof shall be automatically made or continued as, or converted to, as applicable, Base Rate Loans on the last day of the then current Interest Period applicable thereto without reference to the LIBO Index Rate component of the Base Rate., unless the Borrower prepays such Revolving Loans in accordance with this Agreement. If the circumstances described in this Section 3.1(a) occur but only with respect to limited, but not all, tenors of the then applicable term rate Benchmark (including Term SOFR), then (A) the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such illegal or impracticable tenor and (B) if a tenor that was removed pursuant to clause (A) of this sentence is subsequently displayed on a screen or information service for a Benchmark, then the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor. (b) Illegality or Impracticability of the Benchmark. (i) (b) Illegality or Impracticability of LIBOR Loans. InSubject to Section 3.1(b)(ii), in the event that on any date the Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after notice to and consultation with the Borrower) that the making, maintaining or continuation of its LIBOR Loans (i) has become unlawful as a result of compliance by the Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the Closing Date which materially and adversely affect the London interbank market or the position of the Lender in that market, then, and in any such eventa Benchmark Illegality/Impracticability Event has occurred, the Lender shall on that day give notice (by facsimile or by telephone confirmed in writing) to the Borrower of such determination. Thereafter (1) the obligation of the Lender to make Revolving Loans as, or to convert Revolving Loans to, LIBORAdjusted Term SOFR Loans shall be suspended until such 35 LEGAL02/44107030v1 notice shall be withdrawn by the Lender, (2) to the extent such determination by the Lender relates to a LIBORan Adjusted Term SOFR Loan then being requested by the Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Lender shall make such Revolving Loan as (or continue such Revolving Loan as or convert such Revolving Loan to, as the case may be) a Base Rate Loan (without reference to the LIBO Index Rate (or other then-current Benchmark) component of the Base Rate), (3) the Lender’s obligation to maintain its outstanding LIBORAdjusted Term SOFR Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by Applicable Law, and (4) the Affected Loans shall automatically convert into Base Rate Loans without reference to the LIBO Index Rate (or other then-current Benchmark) component of the Base Rate on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Lender as described above relates to an Adjusted Term SOFR Loan then being requested by the Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Borrower shall have the option, subject to the provisions of Section 3.1(a), to rescind such Funding Notice or Conversion/Continuation Notice by giving notice (by facsimile or by telephone confirmed in writing) to the Lender of such rescission on the date on which the Lender gives notice of its determination as described above. Except as provided in the immediately preceding sentence, nothing in this Section 3.1(b)(i) shall affect the obligation of the Lender other than a Lender to make or maintain Revolving Loans as, or to convert Revolving Loans to, Adjusted Term SOFR Loans in accordance with the terms hereof. If a Benchmark Illegality/Impracticability Event occurs but only with respect to limited, but not all, tenors of the then applicable term rate Benchmark (including Term SOFR), then (x) the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such illegal or impracticable tenor and (y) if a tenor that was removed pursuant to clause (x) of this sentence is not, or is no longer, subject to a Benchmark Illegality/Impracticability Event, then the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor. (ii) Notwithstanding anything to the contrary in this Agreement or any other Credit Document, if the Lender determines (which determination shall be conclusive absent manifest error) that a Benchmark Illegality/Impracticability Event has occurred, then, on a date and time determined by the Lender (any such date, the “Benchmark Replacement Date”), which date shall be at the end of an Interest Period or on the relevant Interest Payment Date, as applicable, for interest calculated, the then current Benchmark will be replaced hereunder and under any other Credit Document with the Benchmark Replacement. Notwithstanding anything to the contrary in this Agreement or any other Credit Document, (x) if the Lender determines that the non-Term SOFR alternatives set forth in the definition of Benchmark Replacement is available on or prior to the Benchmark Replacement Date or (y) a Benchmark Illegality/Impracticability Event has occurred with respect to the non-Term SOFR Benchmark Replacement then in effect, then in each case, the Lender and the Borrower may amend this Agreement solely for the purpose of replacing Term SOFR or any then current Benchmark Replacement in accordance with this Section 3.1 at the end of any Interest Period, relevant Interest Payment Date or payment period for interest calculated, as applicable, with another alternate benchmark rate giving due consideration to any evolving or then existing convention for similar Dollar denominated bilateral credit facilities for such alternative benchmarks and, in each case, including Benchmark Replacement Adjustment giving due consideration to any evolving or then existing convention for similar Dollar denominated bilateral credit facilities for such benchmarks, which adjustment or method for calculating such Benchmark Replacement Adjustment shall be published on an information service as selected by 36 LEGAL02/44107030v1 the Lender from time to time in its reasonable discretion and may be periodically updated. For the avoidance of doubt, any such proposed rate and Benchmark Replacement Adjustment shall constitute a Benchmark Replacement. Any such amendment shall become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date the Lender and the Borrower shall executed such amendment. The Lender will notify (in one or more notices) the Borrower of the implementation of any Benchmark Replacement. Any Benchmark Replacement shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Lender, such Benchmark Replacement shall be applied in a manner as otherwise reasonably determined by the Lender. Notwithstanding anything else to the contrary in this Agreement or any other Credit Document, if at any time any Benchmark Replacement as so determined would otherwise be less than zero percent (0%), the Benchmark Replacement will be deemed to be zero percent (0%) for the purposes of this Agreement and the other Credit Documents. In connection with the implementation of a Benchmark Replacement, the Lender will have the right (following consultation with the Borrower) to make Benchmark Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Credit Document, any amendments implementing such Benchmark Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided, that, with respect to any such amendment effected, the Lender shall post each such amendment implementing such Benchmark Conforming Changes to the Borrower reasonably promptly after such amendment becomes effective. Any determination, decision or election that may be made by the Lender pursuant to this Section 3.1(b)(ii), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Credit Document, except, in each case, as expressly required pursuant to this Section 3.1(b)(ii). (c) Compensation for Breakage or Non-Commencement of Interest Periods. The Borrower shall compensate the Lender, promptly upon written request by the Lender (which request shall set forth the basis for requesting such amounts), for all reasonable out-of-pocket losses, expenses and liabilities (including any interest paid or calculated to be due and payable by the Lender to lenders of funds borrowed by it to make or carry its Adjusted LIBO RateTerm SOFR Loans and any loss, expense or liability sustained by the Lender in connection with the liquidation or re-employment of such funds but excluding loss of anticipated profits) which the Lender sustains: (i) if for any reason (other than a default by the Lender) a borrowing of any Adjusted LIBO RateTerm SOFR Loans does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Adjusted LIBO RateTerm SOFR Loans does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment of, or any conversion of, anany of its Adjusted LIBO RateTerm SOFR Loans occurs on any day other than the last day of an Interest Period applicable to that Revolving Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or (iii) if any 37 LEGAL02/44107030v1
(b) The Lender acknowledges that: (i) the Information may include material non-public information concerning the Borrower or any Subsidiary, as the case may be; (ii) it has developed compliance procedures regarding the use of material non-public information; and (iii) it will handle such material non-public information in accordance with Applicable Law, including United States federal and state securities laws. [Signatures on Following Page(s)Signature Pages Intentionally Omitted] 70 LEGAL02/44107030v1 ANNEX B Amended Schedules [See attached] SCHEDULE 6.2 EQUITY INTERESTS AND OWNERSHIP Credit Party Name of Subsidiary Jurisdiction of Organization Percentage of Outstanding Shares Owned Regulated Subsidiary (Yes/No) Citizens, Inc. CICA LIFE Insurance Company of America Colorado 100% Yes Citizens, Inc. CICA Life Ltd. Bermuda 100% No Citizens, Inc. CICA Life A.I. Puerto Rico 100% (indirect) Yes Citizens, Inc. Nexo Global Services, LLC Puerto Rico 100% No Citizens, Inc. Nexo Enrollment Services, LLC Puerto Rico 100% (indirect) No Citizens, Inc. Computing Technology, Inc. Colorado 100% (indirect) No Citizens, Inc. Security Plan Life Insurance Company Louisiana 100% (indirect) Yes Citizens, Inc. Security Plan Fire Insurance Company Louisiana 100% (indirect) Yes Citizens, Inc. Magnolia Guaranty Life Insurance Company Mississippi 100% (indirect) Yes There are no existing option, warrant, call, right, commitment, buy-sell, voting trust or other shareholder agreement or other agreement to which any Subsidiary is a party requiring the issuance by any Subsidiary of any Equity Interests. SCHEDULE 6.13 NAME, JURISDICTION AND TAX IDENTIFICATION NUMBERS Legal Name of Credit Party Jurisdiction of Organization Chief Executive Office Address Federal Taxpayer Identification Number Organizational Number Citizens, Inc. Colorado 00000 Xxxxxxx Xxxx Xxxxx 0000 Xxxxxx, Xxxxx 00000 00-0000000 19871335428
SCHEDULE 7.9(C) DEPOSIT AND DISBURSEMENT ACCOUNTS Financial Institution Name Account is Held Account Number Type Regions Bank CICA Life A I 0093666934 Operating Regions Bank CICA Life A I 0093672748 Operating Regions Bank Magnolia Guaranty Life Insurance Company 0200591335 Operating Delta Bank Security Plan Life Insurance Company 6027189 Operating Rayne State Security Plan Life Insurance Company 1303437 Operating Regions Bank Security Plan Life Insurance Company 0310682732 Operating Regions Bank Security Plan Life Insurance Company 0220540760 Operating Regions Bank Security Plan Life Insurance Company 0310682767 Operating Regions Bank Security Plan Life Insurance Company 0310682775 Operating Regions Bank Security Plan Life Insurance Company 0310682791 Operating Regions Bank Security Plan Life Insurance Company 0310682805 Operating Regions Bank Security Plan Life Insurance Company 0310682813 Operating Regions Bank Security Plan Life Insurance Company 0310682783 Operating Regions Bank Security Plan Life Insurance Company 0310682724 Operating Regions Bank Security Plan Life Insurance Company 0220540779 Operating Regions Bank Security Plan Life Insurance Company 4510183288 Operating Regions Bank Security Plan Life Insurance Company 0310682759 Operating Regions Bank Security Plan Life Insurance Company 0310682740 Operating Regions Bank Security Plan Life Insurance Company 0161121258 Operating Regions Bank Security Plan Life Insurance Company 0179856349 Operating Regions Bank Security Plan Life Insurance Company 8457029403 Operating Whitney Bank Security Plan Life Insurance Company 60372722 Operating Financial Institution Name Account is Held Account Number Type Whitney Bank (formerly MidSouth) Security Industrial Insurance Co 18008968 Operating Whitney Bank Security Plan Life Insurance Company 60200344 Operating Whitney Bank Security Plan Life Insurance Company 64041828 Operating Regions Bank Citizens National Life Insurance Company 8440041211 Operating Regions Bank CICA Life Insurance Company of America 8457014139 Operating Regions Bank CICA Life Insurance Company of America 0084042249 Operating Regions Bank Security Plan Fire Insurance Company 8457029411 Operating Regions Bank CICA Life LTD 0124333743 Operating Regions Bank CICA Life LTD 0124335150 Operating Regions Bank Computing Technology Inc. 8457023634 Operating Regions Bank Citizens, Inc. 8457014163 Operating Regions Bank Citizens, Inc. 8457029454 Operating Regions Bank Nexo Global Services 0332837003 Operating Regions Bank Nexo Enrollment Services 0347115017 Operating Oriental Bank Nexo Enrollment Services 7871348831 Operating First Bank Puerto Rico CICA Life A I 0109239328 Operating Century Trust CICA Life Insurance Company of America 4632 State Deposit Regions Bank CICA Life Insurance Company of America 7050014681 State Deposit Regions Bank CICA Life Insurance Company of America 1046000306 State Deposit Regions Bank CICA Life Insurance Company of America 2050002092 State Deposit Principal Custody CICA Life Insurance Company of America 1140977208 State Deposit Regions Bank CICA Life Insurance Company of America 1001010807 State Deposit Illinois National Bank CICA Life Insurance Company of America 6000141430 4 State Deposit U S Bank CICA Life Insurance Company of America 5000948-000 State Deposit U S Bank CICA Life Insurance Company of America 584735500 State Deposit U S Bank CICA Life Insurance Company of America 78278900 State Deposit Principal Custody Citizens National Life Insurance Company 25889057 State Deposit Financial Institution Name Account is Held Account Number Type Whitney Bank Security Plan Life Insurance Company 1040001068 State Deposit Whitney Bank Security Plan Fire Insurance Company 1040001040 State Deposit Regions Bank Magnolia Guaranty Life Insurance Company 1050004340 State Deposit U S Bank Citizens Inc 5000336- XXX Investment Mgmt U S Bank CICA Life Insurance Company of America 5000337- XXX Investment Mgmt U S Bank Computing Technology Inc. 5000339- XXX Investment Mgmt U S Bank Security Plan Life Insurance Company 5000340- XXX Investment Mgmt U S Bank CICA Life Ltd 5000338- XXX Investment Mgmt U S Bank Citizens National Life Insurance Company 5000341- XXX Investment Mgmt U S Bank Security Plan Fire Insurance Company 5000342- XXX Investment Mgmt U S Bank Magnolia Guaranty Life Insurance Company 5000343- XXX Investment Mgmt U S Bank CICA Life AI 5001355- XXX Investment Mgmt SCHEDULE 8.1 EXISTING INDEBTEDNESS (1) Capital Maintenance Agreement between Citizens, Inc. and CICA Life Insurance Company of America effective as of March 27, 2024, which requires Citizens, Inc. to infuse capital as needed to ensure that the Risk Based Capital Ratio of CICA Life Insurance Company of America does not fall below 350% as of any quarter end. (2) Keep Well Agreement between Citizens, Inc. and CICA Life A.I. effective August 31, 2023, which requires, Citizens, Inc. contribute up to $10 million USD, as necessary, to ensure that CICA Life A.I. maintains at least 112 percent of its required ratio of premiums to capital and surplus in accordance with applicable Puerto Rico laws and regulations, or 200% the minimum capital and surplus required from CICA Life A.I under such laws and regulations, whichever is higher.
SCHEDULE 8.2 EXISTING LIENS None. SCHEDULE 8.5 EXISTING INVESTMENTS None. SCHEDULE 10.1 NOTICE INFORMATION To any Credit Party: Citizens, Inc. 00000 Xxxxxxx Xxxx, Xxxxx 0000 Xxxxxx, Xxxxx 00000 Attn: Xxxxxxx X. Xxxxxxx, Chief Financial Officer Phone: 000-000-0000 Email: Xxxx.Xxxxxxx@xxxxxxxxxxx.xxx With copies (which shall not constitute notice) to: xxxxx@xxxxxxxxxxx.xxx To the Lender: Regions Bank, as Lender 0000 Xxxx Xxxxxxxxx Xxxxxx XX, Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 Attn: Xxxxxx Xxxxxx Phone: 000-000-0000 Email: Xxxxxx.xxxxxx@xxxxxxx.xxx With copies (which shall not constitute notice) to: Regions Bank 0000 Xxxxxxx Xxxxxx Xxxxxx, 0xx Xxxxx Xxxxxx, XX 00000 Attn: Xxxxxx Xxxxx 000-000-0000 xxxxxx.xxxxx@xxxxxxx.xxx Xxxxxx & Bird LLP 0000 Xxxx Xxxxxxxxx Xxxxxx Xxxxxxx, XX 00000 Attn: Xxxx X. Xxxxxx, Esq. Phone: 000-000-0000 Email: Xxxx.Xxxxxx@xxxxxx.xxx ANNEX C Amended Exhibits [See attached]
EXHIBIT 7.1(C) FORM OF COMPLIANCE CERTIFICATE [Date] For the Fiscal [Quarter][Year] of the Borrower ending _______________, 20_____ Regions Bank, as Lender 0000 Xxxx Xxxxxxxxx Xxxxxx XX, Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 Attn: Xxxxxx Xxxxxx 000-000-0000 Xxxxxx.xxxxxx@xxxxxxx.xxx With Copies to Regions Bank 2050 Parkway Office Circle, 3rd Floor Xxxxxx, AL 35244 Attn: Xxxxxx Xxxxx 000-000-0000 xxxxxx.xxxxx@xxxxxxx.xxx Ladies and Gentlemen: Reference is made to the Credit Agreement dated as of May 5, 2021 (as amended, restated, amended and restated, supplemented, increased, extended, refinanced, renewed, replaced, and/or otherwise modified in writing from time to time, the “Credit Agreement”), among Citizens, Inc., a Colorado corporation (the “Borrower”), the guarantors from time to time party thereto and Regions Bank, as Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. I, ____________________, being the duly elected and qualified, and acting in my capacity as [insert title of Authorized Officer] of the Borrower, hereby certify to the Lender as follows: [ Use following paragraph 1 for Fiscal Year-end financial statements] 1. Attached hereto as Schedule 1 are the annual audited consolidated and consolidating financial statements required to be delivered pursuant to Section 7.1(b) of the Credit Agreement for the Fiscal Year of the Borrower indicated above, together with the audit report and opinion of an independent certified public accountant required to be delivered pursuant to such Section of the Credit Agreement. Such financial statements present fairly, in all material respects, the financial condition of the Credit Parties and Subsidiaries as of the date(s) indicated, together with the results of operations and cash flows of the Credit Parties and Subsidiaries for the period(s) covered thereby, subject only to changes resulting from audit and normal year-end accounting adjustments. [Use following paragraph 1 for Fiscal Quarter-end financial statements] 1. Attached hereto as Schedule 1 are the quarterly unaudited consolidated and consolidating financial statements required to be delivered pursuant to Section 7.1(a) of the Credit Agreement for the Fiscal Quarter of the Borrower indicated above. Such financial statements present fairly, in all material respects, the financial condition of the Credit Parties and Subsidiaries as of the date(s) indicated therein, together with the results of operations and cash flows of the Credit Parties and Subsidiaries for the period(s) covered thereby, subject only to changes resulting from audit and normal year-end accounting adjustments. 2. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under [his/her] supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower and its Subsidiaries during the accounting period covered by such financial statements. 3. A review of the activities of the Borrower and its Subsidiaries during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower and each of the other Credit Parties performed and observed all its obligations under the Credit Documents, and [select one:] [to the best knowledge of the undersigned, during such fiscal period each of the Credit Parties performed and observed each covenant and condition of the Credit Documents applicable to it, and no Default has occurred and is continuing.] [--or—] [to the best knowledge of the undersigned, the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:] 4. The representations and warranties of the Credit Parties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects (or all respects if qualified by materiality) on and as of date hereof to the same extent as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (or all respects if qualified by materiality) on and as of such earlier date. 5. The financial covenant analyses and information set forth on Schedule A attached hereto are true and accurate on and as of the date of this Certificate. 6. Attached hereto as Exhibit B is a summary of all material changes in GAAP, if any, and in the consistent application thereof, the effect on the financial covenants resulting therefrom, and a reconciliation between calculation of the financial covenants (and determination of the applicable pricing level under the definition of “Applicable Margin”) before and after giving effect to such changes. Delivery of an executed counterpart of a signature page of this Compliance Certificate by fax transmission or other electronic mail transmission (e.g., “.pdf” or “.tif”) shall be effective as delivery of a manually-executed counterpart of this Compliance Certificate. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] CITIZENS, INC., a Colorado corporation By: Name: Title: Exhibit A to Compliance Certificate Financial Statement Date: [__________, __________] Capitalized terms used but not defined herein have the meanings set forth in the Credit Agreement. In the event of conflict between the provisions and formulas set forth herein and the provisions and formulas set forth in the Credit Agreement, the provisions and formulas of the Credit Agreement shall prevail. 1. Liquidity (a) Available and unencumbered cash held by the Borrower in deposit accounts domiciled in the United States: $__________ (b) the fair market value of available and unencumbered Cash Equivalents owned by the Borrower and held in securities accounts domiciled in the United States: $__________ (c) the fair market value of available and unencumbered investment grade, fixed income securities owned by the Borrower and held in securities accounts domiciled in the United States: $__________ (d) To the extent that any “keep well agreement” is required by any Insurance Regulatory Authority to be in effect, the greater of (x) fifty percent (50%) of the aggregate amount of all obligations thereunder and (y) Five Million Dollars ($5,000,000): $__________ (e) Liquidity (1.(a) + (b) + (c) - (d)): $__________ (f) 1.5 times (x) the aggregate principal outstanding amount of all Revolving Loans, plus (y) the total amount of net obligations under any Swap Agreement (with such amount being determined based on the applicable Swap Termination Value at such time): $__________ Compliance with Section 8.6(a) of the Credit Agreement (the value of 1.(e) is not less than the value of 1.(f)): Y ☐ N ☐
2. Consolidated Leverage Ratio (a) Consolidated Total Debt as of such date: $__________ (i) All Indebtedness of the Borrower and its Subsidiaries measured on a consolidated basis as of such date: $__________ (ii) Net obligations under any Swap Agreement (with the amount of such Indebtedness being determined based on the applicable Swap Termination Value at such time): $__________ (iii) Solely in respect of clause (ii) above, all Guarantees in respect of clause (ii) above: $__________ (iv) Consolidated Total Debt (2.(a)(i) - (ii) - (iii)): $__________ (b) Consolidated Net Worth as of such date: $__________ (i) Shareholders’ Equity of the Borrower and its Subsidiaries (including, for the avoidance of doubt, Regulated Subsidiaries) on that date: $__________ (ii) as applicable, plus Accumulated Other Comprehensive Loss or less Accumulated Other Comprehensive Income: $__________ (iii) Consolidated Net Worth (2.(b)(i) - (ii)): $__________ (c) Consolidated Total Debt + Consolidated Net Worth (2.(a)(iv) + (b)(iii)): $__________ (d) Consolidated Leverage Ratio ((2.(a)(iv)) / (2.(c)): __________% Maximum Consolidated Leverage Ratio under Section 8.6(b) of the Credit Agreement: 15% Compliance with Section 8.6(b) of the Credit Agreement: Y ☐ N ☐ 3. Consolidated Net Worth (a) Consolidated Net Worth (2.(b)(iii) above): $__________ (b) Consolidated Net Worth of the Borrower and its Subsidiaries (including Regulated Subsidiaries) as of the Closing Date: $__________ (c) Consolidated Net Income of the Borrower and its Subsidiaries (including Regulated Subsidiaries) earned with respect to each full Fiscal Quarter ending after the Closing Date: $__________ (d) increase to shareholder’s equity of the Borrower or any Subsidiary resulting from any Equity Transaction of the Borrower and its Subsidiaries (including Regulated Subsidiaries) occurring on or after the Closing Date: $__________ (e) Sum of (75% x 3.(b)) + (50% x 3.(c)) + (100% x 3.(d)): $__________ Compliance with Section 8.6(c) of the Credit Agreement (the value of 3.(a) is not less than the value of 3.(e)): Y ☐ N ☐ 4. Statutory Capitalization / Risk Based Capital Ratio (a) Authorized Control Level Risk-Based Capital Ratio (as used or defined by the applicable Insurance Regulatory Authority) of CICA Life Insurance Company of America: __________% (b) CICA Life A.I. shall maintain a minimum capital and surplus of no less than the greater of: (i) Eighteen Million Dollars ($18,000,000): $__________ (ii) An amount equal to one-hundred ten percent (110%) of the minimum statutory surplus (i.e., the denominator of the Premium ratio (as used or defined by the applicable Insurance Regulatory Authority) required for CICA Life A.I. to be in compliance with the Premium ratio required by the applicable Insurance Regulatory Authority in effect at any time (which, for the avoidance of doubt, is a Premium ratio of no greater than 7.00:1.00 as of the First Amendment Effective Date): $__________ Compliance with Section 8.6(d) of the Credit Agreement:6 Y ☐ N ☐ 6 350% of company action level (or similar term as used under Applicable Laws or by any applicable Insurance Regulatory Authority) for CICA Life Insurance Company of America. Exhibit B to Compliance Certificate