SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of September 22, 2020, among ALLIANCE DATA SYSTEMS CORPORATION, a Delaware
corporation (the “Borrower”), the Guarantors (as defined in the Credit Agreement referred to below) party hereto, the Banks party hereto (the “Consenting Banks”), and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (the
“Administrative Agent”). Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors party thereto, the lenders party thereto from time to time (the “Banks”) and the Administrative Agent have entered into that certain
Amended and Restated Credit Agreement, dated as of June 14, 2017 (as amended, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Amendment, the “Credit
Agreement”);
WHEREAS, the Borrower has requested, and subject to the terms and conditions set forth herein, the Administrative Agent and the Consenting Banks have agreed to, certain
amendments to the Existing Credit Agreement as more specifically set forth herein;
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as
follows:
SECTION 1. Amendments to Existing Credit Agreement. Effective as of the Sixth
Amendment Effective Date (as defined below) and subject to the terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, Sections 5.11, 5.12 and 5.13 of the Existing Credit
Agreement are hereby amended and restated in their entireties as follows:
SECTION 5.11 Total
Leverage Ratio. The Borrower shall not permit its Total Leverage Ratio for any period of four consecutive fiscal quarters, as determined for such four quarter period ending on the last day of any fiscal quarter, to
exceed the applicable ratio set forth below for the applicable period ending on the date set forth below:
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Periods Ending
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Maximum Total Leverage Ratio
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September 30, 2020 and December 31, 2020
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3.50 to 1.00
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March 31, 2021 through and including December 31, 2021
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4.50 to 1.00
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March 31, 2022 and June 30, 2022
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4.00 to 1.00
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September 30, 2022 and thereafter
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3.50 to 1.00
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SECTION 5.12 Interest
Coverage Ratio. The Borrower will not permit its Interest Coverage Ratio for any period of four consecutive fiscal quarters, as determined for such four quarter period ending on the last day of any fiscal quarter, to be less than the
applicable ratio set forth below for the applicable period ending on the date set forth below:
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Periods Ending
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Minimum Interest Coverage Ratio
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September 30, 2020 and December 31, 2020
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4.50 to 1.00
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March 31, 2021 through and including December 31, 2021
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4.00 to 1.00
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March 31, 2022 and June 30, 2022
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4.25 to 1.00
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September 30, 2022 and thereafter
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4.50 to 1.00
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SECTION 5.13 Delinquency
Ratio. The Borrower shall not permit the average of the Delinquency Ratios for Comenity Bank for the most recently ended three consecutive calendar months ending on the last day of any fiscal quarter to exceed the applicable ratio set forth
below for the applicable period ending on the date set forth below:
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Periods Ending
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Maximum Delinquency Ratio
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September 30, 2020 and December 31, 2020
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4.50%
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March 31, 2021 through and including December 31, 2021
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6.50%
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March 31, 2022 and June 30, 2022
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5.50%
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September 30, 2022 and thereafter
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4.50%
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SECTION 2. Prepayment of Term Loans. In connection with this Amendment, the
Borrower has notified the Administrative Agent and the Consenting Banks that the Borrower intends to consummate an issuance of senior unsecured notes with an aggregate principal face amount of not less than $500,000,000 (the “Senior Note Issuance”)
and use all or a portion of the net cash proceeds from the Senior Note Issuance to optionally prepay Term Loans. Such prepayment shall be applied to reduce the scheduled installments of the Term Loans required pursuant to Section 2.5(b) of
the Credit Agreement (i) first, to the quarterly installments payable on the last Business Day of each of September 2020 and December 2020, and (ii) second, to the
bullet payment of the Term Loans due on the Maturity Date (without any reduction to any of the other scheduled installments of the Term Loans required pursuant to Section 2.5(b) of the Credit Agreement). The Consenting Banks hereby (i) waive
the requirements set forth in Section 2.10(a) of the Credit Agreement with respect to any prior notice or dollar multiples of any voluntary prepayment pursuant to this Section 2 and (ii) solely as to each such Consenting Bank, waive the
requirements set forth in Section 2.13 of the Credit Agreement with respect to reimbursement for any loss or expense resulting from such voluntary prepayment occurring on a day other than the last day of an Interest Period.
SECTION 3. GAAP Methodology. Effective January 1, 2020, the Borrower adopted
the current expected credit losses methodology (CECL) pursuant to FASB ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (the “CECL GAAP Change”). The Borrower hereby notifies
the Administrative Agent that, effective from and after the Sixth Amendment Effective Date, for purposes of Section 1.2(b) of the Credit Agreement, the Borrower does not wish to amend any covenant in Article 5 of the Credit Agreement
or any definition directly or indirectly used therein or in Appendix I of the Credit Agreement to eliminate the effect of the CECL GAAP Change on the operation of such covenants, and that the Borrower’s compliance with such covenants and
determinations made pursuant to any such definition or Appendix I of the Credit Agreement shall be determined on the basis of generally accepted accounting principles including the CECL GAAP Change. Notwithstanding the foregoing, the
Borrower, the Consenting Banks and the Administrative Agent agree that (i) for all fiscal quarters ended prior to January 1, 2020, all financial results and calculations used in determining compliance with the covenants in Article 5 of the
Credit Agreement or any definition directly or indirectly used therein or in Appendix I of the Credit Agreement shall be determined on the basis of
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generally accepted accounting principles not including the CECL GAAP Change, and (ii) for all fiscal quarters ended after January 1, 2020, all financial results and calculations used in determining
compliance with the covenants in Article 5 of the Credit Agreement or any definition directly or indirectly used therein or in Appendix I of the Credit Agreement shall be determined on the basis of generally accepted accounting
principles including the CECL GAAP Change. As a result, the four full fiscal quarter period ending September 30, 2020, will include one fiscal quarter (the fiscal quarter ended December 31, 2019) of financial reporting determined on the basis of
generally accepted accounting principles not including the CECL GAAP Change and three fiscal quarters (the fiscal quarters ended March 31, June 30 and September 30, 2020) of financial reporting determined on the basis of generally accepted accounting
principles including the CECL GAAP Change.
SECTION 4. Sixth Amendment Effective Date Conditions. This Amendment shall
become effective on the date when the following conditions shall have been satisfied or waived (such date, the “Sixth Amendment Effective Date”):
(a) The Administrative Agent’s receipt of this Amendment, duly executed by an
authorized officer of each signing Credit Party, the Required Banks and the Administrative Agent.
(b) The fact that immediately prior to and after giving effect to this Amendment, no
Default has occurred and is continuing.
(c) The fact that the representations and warranties of the Credit Parties contained in
the Credit Agreement are true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) immediately prior to and after giving effect to this Amendment (other than representations and warranties that
relate to a specific date, which shall be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such specific date).
(d) The Borrower shall have consummated (or shall consummate concurrently with the
Sixth Amendment Effective Date) the Senior Note Issuance and shall have prepaid (or shall prepay concurrently with the Sixth Amendment Effective Date) a portion of the outstanding principal amount of the Term Loans, which shall be applied as
specified pursuant to Section 2 above, in an amount equal to (i) if the aggregate principal face amount of the Senior Notes Issuance is $500,000,000, then 100% of the aggregate net cash proceeds from the Senior Note Issuance, (ii) if the
aggregate principal face amount of the Senior Notes Issuance is greater than $500,000,000 but less than or equal to $600,000,000, then (A) 100% of the aggregate net cash proceeds that would have been received by the Borrower from a $500,000,000
aggregate principal face amount Senior Note Issuance and (B) for the avoidance of doubt, 0% of the aggregate net cash proceeds attributable to that portion of the aggregate principal face amount of the Senior Note Issuance in excess of $500,000,000,
and (iii) if the aggregate principal face amount of the Senior Notes Issuance is greater than $600,000,000, then an amount equal to the sum of (A) 100% of the aggregate net cash proceeds that would have been received by the Borrower from a
$500,000,000 aggregate principal face amount Senior Note Issuance and (B) 85% of the aggregate net cash proceeds attributable to that portion of the aggregate principal face amount of the Senior Note Issuance in excess of $600,000,000. For purposes
of this paragraph, “net cash proceeds” shall be the net cash proceeds from the Senior Note Issuance after all fees, costs and expenses related to the Senior Note Issuance and this Amendment.
(e) Payment by the Borrower to the Administrative Agent for the account of each
Consenting Bank of upfront fees previously agreed to between the Borrower and Xxxxx Fargo Securities, LLC.
(f) Payment of all fees to Xxxxx Fargo Securities, LLC required to be paid in
connection with this Amendment.
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SECTION 5. Acknowledgement and Confirmation. Each of the Credit Parties party
hereto hereby agrees that with respect to each Credit Document to which it is a party, after giving effect to this Amendment and the transactions contemplated hereunder, all of its obligations, liabilities and indebtedness under such Credit Document,
including guarantee obligations, shall, except as set forth herein or in the Credit Agreement, remain in full force and effect on a continuous basis.
SECTION 6. Limited Effect. Except as provided herein, the Existing Credit
Agreement and the other Credit Documents shall remain unmodified and in full force and effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Existing
Credit Agreement or any other Credit Document other than as set forth herein, (b) to prejudice any right or rights that the Administrative Agent or the Banks may now have or may have in the future under or in connection with the Existing Credit
Agreement or the other Credit Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or modified from time to time, other than as set forth herein, or (c) to be a commitment or any
other undertaking or expression of any willingness to engage in any further discussion with the Borrower, any of its Subsidiaries or any other Person with respect to any other waiver, amendment, modification or any other change to the Existing Credit
Agreement or the other Credit Documents or any rights or remedies arising in favor of the Banks or the Administrative Agent, or any of them, under or with respect to any such documents.
SECTION 7. Costs and Expenses. The Borrower hereby reconfirms its obligations
pursuant to Section 10.3(a) of the Credit Agreement to pay and reimburse the Administrative Agent in accordance with the terms thereof.
SECTION 8. Representations and Warranties. To induce the Administrative Agent
and the Consenting Banks to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and the Consenting Banks that: (a) the representations and warranties contained in the Credit Agreement are true and correct in
all material respects (where not already qualified by materiality, otherwise in all respects) on and as of the date hereof immediately after giving effect to this Amendment with the same effect as though made on the date hereof (it being understood
and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) only as of such
specified date); (b) immediately after giving effect to this Amendment, no Default or Event of Default exists; (c) this Amendment has been duly authorized by all necessary corporate proceedings and duly executed and delivered by the Borrower and each
other Credit Party, and the Credit Agreement, as amended by this Amendment, is the legal, valid and binding obligation of the Borrower and each other Credit Party, enforceable against the Borrower and each other Credit Party in accordance with its
terms; and (d) no consent, approval, authorization, order, registration or qualification with any Governmental Authority is required for, the absence of which would materially adversely affect, the legal and valid execution and delivery or
performance by the Borrower or any other Credit Party of this Amendment or the performance by the Borrower or any other Credit Party of the Credit Agreement, as amended by this Amendment. Each Guarantor hereby ratifies and reaffirms: (i) the
validity, legality and enforceability of its obligations under Article 9 of the Credit Agreement; (ii) that its reaffirmation of such obligations is a material inducement to the Administrative Agent and the Consenting Banks to enter into this
Amendment; and (iii) that its obligations under Article 9 of the Credit Agreement shall remain in full force and effect in accordance with its terms until all the Guaranteed Obligations have been paid in full.
SECTION 9. Reference to and Effect on the Credit Agreement and the Credit
Documents.
(a) On and after the Sixth Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement,” “herein,” “hereto”, “hereof” and “hereunder” or words of like import referring to the
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Credit Agreement, and each reference in the Notes and each of the other Credit Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, after giving effect to this Amendment.
(b) Except as specifically provided above, the Credit Documents shall remain in full
force and effect and are hereby ratified and confirmed in all respects. Except as provided herein, the execution, delivery, and effectiveness of this Amendment shall not operate as a waiver of any right, power, or remedy of the Administrative Agent
or any Bank under the Credit Agreement or any other Credit Document, nor constitute a waiver or modification of any provision of the Credit Agreement or any other Credit Document. This Amendment is a Credit Document and is subject to the terms and
conditions of the Credit Agreement.
SECTION 10. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart to this Amendment by facsimile transmission or by electronic mail in pdf
format shall be as effective as delivery of a manually executed counterpart hereto.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written.
ALLIANCE DATA SYSTEMS CORPORATION, as Borrower
By:/s/ J. Xxxxxxx Xxxxxxx
Name: J. Xxxxxxx Xxxxxxx
Title: Senior Vice President and Treasurer
ADS ALLIANCE DATA SYSTEMS, INC., as Guarantor
By:/s/ J. Xxxxxxx Xxxxxxx
Name: J. Xxxxxxx Xxxxxxx
Title: Senior Vice President and Treasurer
ALLIANCE DATA FOREIGN HOLDINGS, INC., as Guarantor
By:/s/ Xxxxxxx X. Fair
Name: Xxxxxxx X. Fair
Title: Vice President, Tax
ADS FOREIGN HOLDINGS, INC., as Guarantor
By:/s/ Xxxxxxx X. Fair
Name: Xxxxxxx X. Fair
Title: Vice President, Tax
COMENITY LLC, as Guarantor
By:/s/ Xxxxxxx X. Fair
Name: Xxxxxxx X. Fair
Title: Vice President, Tax
COMENITY SERVICING LLC, as Guarantor
By:/s/ Xxxxxxx X. Fair
Name: Xxxxxxx X. Fair
Title: Vice President, Tax
ALLIANCE DATA INTERNATIONAL LLC, as Guarantor
By: ALLIANCE DATA FOREIGN HOLDINGS, INC., its sole member
By:/s/ Xxxxxxx X. Fair
Name: Xxxxxxx X. Fair
Title: Vice President, Tax
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and a Bank
By:/s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
BANK OF AMERICA, N.A. , as a Bank
By:/s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Director
MUFG BANK, LTD., as a Bank
By:/s/ Xxx Xxxxxxxxxxxx
Name: Xxx Xxxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, N.A., as a Bank
By:/s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx Xxxxxxx
Title: Executive Director
MIZUHO BANK, LTD., as a Bank
By:/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Executive Director
TRUIST BANK, AS SUCCESSOR BY MERGER TO SUNTRUST BANK, as a Bank
By:/s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Director
FIFTH THIRD BANK, NATIONAL ASSOCIATION, as a Bank
By:/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Director
THE BANK OF NOVA SCOTIA, as a Bank
By:/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Director
BNP PARIBAS, as a Bank
By:/s/ Xxxxxxxxxx X. Xxxxx
Name: Xxxxxxxxxx X. Xxxxx
Title: Vice President
By:/s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Director
ROYAL BANK OF CANADA, as a Bank
By:/s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
SUMITOMO MITSUI BANKING CORPORATION, as a Bank
By:/s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
CITIZENS BANK, NATIONAL ASSOCIATION, as a Bank
By:/s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as a Bank
By:/s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Authorizd Signatory
BANCO BILBAO VIZCAYA ARGENTERIA, S.A. NEW YORK BRANCH, as a Bank
By:/s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Executive Director
By:/s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION, as a Bank
By:/s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: SVP
REGIONS BANK, as a Bank
By:/s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Director
U.S. BANK NATIONAL ASSOCATION, as a Bank
By:/s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Senior Vice President
XXXXXXX XXXXX BANK, N.A., as a Bank
By:/s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH, as a Bank
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Director
By:/s/ Xxxx X Xxx
Name: Xxxx X Xxx
Title: Director
SYNOVUS BANK, as a Bank
By:/s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Officer
THE NORTHERN TRUST COMPANY, as a Bank
By:/s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
XXXXXX XXXXXXX SENIOR FUNDING, INC., as a Bank
By:/s/ Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Authorized Signatory
ASSOCIATED BANK, N.A., as a Bank
By:/s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: SVP
THE HUNTINGTON NATIONAL BANK, as a Bank
By:/s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: Vice President
CITIBANK, N.A., as a Bank
By:/s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
CADENCE BANK, N.A., as a Bank
By:/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President
TAIWAN COOPERATIVE BANK LTD., ACTING THROUGH ITS NEW YORK BRANCH, as a Bank
By:/s/ Li Xxx Xxxx
Name: Li Xxx Xxxx
Title: Deputy General Manager
BANCO DE SABADELL, S.A. – MIAMI BRANCH, as a Bank
By:/s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Head of Structured Finance Americas
TAIWAN BUSINESS BANK NEW YORK, as a Bank
By:/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Loan Manager
FIRST HAWAIIAN BANK, as a Bank
By:/s/ Xxxxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Vice President
XXXXX XXX COMMERCIAL BANK, LTD., LOS ANGELES BRANCH, as a Bank
By:/s/ Wan-Xxxx Xxxxx
Name: Wan-Xxxx Xxxxx
Title: V.P. & General Manager
VIRTUS SEIX FLOATING RATE HIGH INCOME FUND, as a Lender
By: SEIX INVESTMENT ADVISORS LLC, as Subadvisor
By:/s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
FIRST NATIONAL BANK OF OMAHA, as a Bank
By:/s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Director
MIDFIRST BANK, as a Bank
By:/s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: Managing Director
