Document:

pnnt-ex101_176.htm

EXHIBIT 10.1

SECOND AMENDED AND RESTATED

INVESTMENT ADVISORY MANAGEMENT AGREEMENT 

BETWEEN 

PENNANTPARK INVESTMENT CORPORATION 

AND 

PENNANTPARK INVESTMENT ADVISERS, LLC 

 

Agreement made this 6th day of February 2018, by and between PENNANTPARK INVESTMENT CORPORATION, a Maryland corporation (the “Corporation”), and PENNANTPARK INVESTMENT ADVISERS, LLC, a Delaware limited liability company (the “Adviser”).

WHEREAS, the Corporation operates as a closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the “Investment Company Act”);

WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”); 

 

WHEREAS, the Corporation and the Adviser are parties to that certain amended and restated investment advisory management agreement dated February 2, 2016, by and between the Corporation and the Adviser (the “Prior Agreement”); 

 

WHEREAS, the Corporation and the Adviser desire to amend and restate the Prior Agreement to set forth the terms and conditions for the continued provision by the Adviser of investment advisory services to the Corporation; and

 

WHEREAS, the Corporation’s board of directors has determined that such amendment and restatement clarifies the intent of the Prior Agreement in a manner that is consistent with the Corporation’s public disclosures and is not detrimental to the Corporation.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

1. Duties of the Adviser.

(a) The Corporation hereby employs the Adviser to act as the investment adviser to the Corporation and to manage the investment and reinvestment of the assets of the Corporation, subject to the supervision of the Board of Directors of the Corporation, for the period and upon the terms herein set forth, (i) in accordance with the investment objective, policies and restrictions that are set forth in the Corporation’s registration statement, as the same may be amended from time to time, (ii) in accordance with the Investment Company Act and (iii) during the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Corporation’s charter and by-laws. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Corporation, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the investments made by the Corporation; (iii) close and monitor the Corporation’s investments; determine the securities and other assets that the Corporation will purchase, retain, or sell; perform due diligence on prospective portfolio companies; and (vi) provide the Corporation with such other investment advisory, research and related services as the Corporation may, from time to time, reasonably require for the investment of its funds. The Adviser shall have the power and authority on behalf of the Corporation to effectuate its investment decisions for the Corporation, including the execution and delivery of all documents relating to the Corporation’s investments and the placing of orders for other purchase or sale transactions on behalf of the Corporation. In the event that the Corporation determines to acquire debt financing, the Adviser will arrange for such financing on the Corporation’s behalf, subject to the oversight and approval of the Corporation’s Board of Directors. If it is necessary for the Adviser to make investments on behalf of the Corporation through a special purpose vehicle, the Adviser shall have authority to create or arrange for the creation of such special purpose vehicle and to make such investments through such special purpose vehicle in accordance with the Investment Company Act.

(b) The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for the compensation provided herein.

(c) Subject to the requirements of the Investment Company Act, the Adviser is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”) pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser to recommend specific securities or other investments based upon the Corporation’s investment objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging or effecting the acquisition or disposition of such investments and monitoring investments on behalf of the Corporation, subject to the oversight of the Adviser and the Corporation. The Adviser, and not the Corporation, shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Investment Company Act and other applicable federal and state law.

(d) The Adviser shall for all purposes herein provided be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Corporation in any way or otherwise be deemed an agent of the Corporation.

 

 

 

 

(e) The Adviser shall keep and preserve, in the manner and for the period that would be applicable to investment companies registered under the Investment Company Act any books and records relevant to the provision of its investment advisory services to the Corporation and shall specifically maintain all books and records with respect to the Corporation’s portfolio transactions and shall render to the Corporation’s Board of Directors such periodic and special reports as the Board may reasonably request. The Adviser agrees that all records that it maintains for the Corporation are the property of the Corporation and will surrender promptly to the Corporation any such records upon the Corporation’s request, provided that the Adviser may retain a copy of such records.

2. Corporation’s Responsibilities and Expenses Payable by the Corporation. All investment professionals of the Adviser and their respective staffs, when and to the extent engaged in providing investment advisory and management services hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, will be provided and paid for by the Adviser and not by the Corporation. The Corporation will bear all other costs and expenses of its operations and transactions, including (without limitation) those relating to: organization and offering; calculating the Corporation’s net asset value (including the cost and expenses of any independent valuation firm); expenses incurred by the Adviser payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for the Corporation and in monitoring the Corporation’s investments and performing due diligence (including related legal expenses) on its prospective portfolio companies; interest payable on debt, if any, incurred to finance the Corporation’s investments and expenses related to unsuccessful portfolio acquisition efforts; offerings of the Corporation’s common stock and other securities; investment advisory and management fees; administration fees payable under the Administration Agreement between the Corporation and PennantPark Investment Administration, LLC (the “Administrator”), the Corporation’s administrator; fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments, including costs associated with meeting potential financial sponsors; transfer agent and custodial fees; federal and state registration fees; all costs of registration and listing the Corporation’s shares on any securities exchange; federal, state and local taxes; independent Directors’ fees and expenses; costs of preparing and filing reports or other documents required by the Securities and Exchange Commission; costs of any reports, proxy statements or other notices to stockholders, including printing costs; costs associated with individual or group stockholders; the Corporation’s allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs; and all other expenses incurred by the Corporation or the Administrator in connection with administering the Corporation’s business, including payments under the Administration Agreement between the Corporation and the Administrator based upon the Corporation’s allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of the Corporation’s chief compliance officer and chief financial officer and their respective staffs.

 

3. Compensation of the Adviser. The Corporation agrees to pay, and the Adviser agrees to accept, as compensation for the services provided by the Adviser hereunder, a base management fee (“Base Management Fee”) and an incentive fee (“Incentive Fee”) as hereinafter set forth. The Corporation shall make any payments due hereunder to the Adviser or to the Adviser’s designee as the Adviser may otherwise direct. To the extent permitted by applicable law, the Adviser may elect, or adopt a deferred compensation plan pursuant to which it may elect, to defer all or a portion of its fees hereunder for a specified period of time.

(a) Effective as of January 1, 2018, the Base Management Fee shall be calculated at an annual rate of 1.5% of the Corporation’s “average adjusted gross assets,” which equals the Corporation’s gross assets (net of U.S. Treasury Bills, temporary draws under any credit facility, cash and cash equivalents, repurchase agreements or other balance sheet transactions undertaken at the end of a fiscal quarter for purposes of preserving investment flexibility for the next quarter and adjusted to exclude cash, cash equivalents and unfunded commitments, if any). The Base Management Fee will be payable quarterly in arrears and will be calculated based on the average adjusted gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. Base Management Fees for any partial month or quarter will be appropriately prorated.  

(b) Effective as of January 1, 2018, the Incentive Fee shall consist of two parts, as follows:

	
 
	
(i) 
	
One part will be calculated and payable quarterly in arrears based on the Corporation’s pre-Incentive Fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-Incentive Fee net investment income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus the Corporation’s operating expenses for the quarter (including the Base Management Fee, any expenses payable under the Administration Agreement, and any interest expense and distribution paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Corporation has not yet received in cash. Pre-Incentive Fee net investment income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee net investment income, expressed as a percentage of the value of the Corporation’s net assets at the end of the immediately preceding calendar quarter, will be compared to a “hurdle rate” of 1.75% per quarter (7.00% annualized). The Corporation will pay the Adviser an Incentive Fee with respect to the Corporation’s pre-Incentive Fee net investment income in each calendar quarter as follows; (1) no Incentive Fee in any calendar quarter in which the Corporation’s pre-Incentive Fee net investment income does not exceed the hurdle rate of 1.75%; (2) 100% of the Corporation’s pre-Incentive Fee net investment income with respect to that portion of such pre-Incentive Fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1212% in any calendar quarter (8.4848% annualized); and (3) 17.5% of the amount of the Corporation’s pre-Incentive Fee net investment income, if any, that exceeds 2.1212% in any calendar quarter. These calculations will be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the relevant quarter.

	
 
	
(ii) 
	
The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of this Agreement as set forth below), commencing on December 31, 2018, and will equal 17.5% of the Corporation’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar 

 

 

	
 
		
year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Capital Gains Fees. In the event that this Agreement shall terminate as of a date that is not a calendar year end, the termination date shall be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.

4. Covenants of the Adviser. The Adviser covenants that it is registered as an investment adviser under the Advisers Act. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.

5. Excess Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Corporation to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Corporation’s portfolio, and constitutes the best net results for the Corporation.

6. Limitations on the Employment of the Adviser. The services of the Adviser to the Corporation are not exclusive, and the Adviser may engage in any other business or render similar or different services to others including, without limitation, the direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Corporation, so long as its services to the Corporation hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Corporation’s portfolio companies, subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the Corporation, subject to the Adviser’s right to enter into sub-advisory agreements. The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees and stockholders of the Corporation are or may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly interested in the Corporation as stockholders or otherwise.

7. Responsibility of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, officer or employee of the Adviser or the Administrator is or becomes a director, officer and/or employee of the Corporation and acts as such in any business of the Corporation, then such manager, partner, officer and/or employee of the Adviser or the Administrator shall be deemed to be acting in such capacity solely for the Corporation, and not as a manager, partner, officer or employee of the Adviser or the Administrator or under the control or direction of the Adviser or the Administrator, even if paid by the Adviser or the Administrator.

8. Limitation of Liability of the Adviser; Indemnification. The Adviser (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general partner and the Administrator) shall not be liable to the Corporation for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services, and the Corporation shall indemnify, defend and protect the Adviser (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general partner and the Administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the “Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation or its security holders) arising out of or otherwise based upon the performance of any of the Adviser’s duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation. Notwithstanding the preceding sentence of this Paragraph 8 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations under this Agreement (as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the Securities and Exchange Commission or its staff thereunder).

9. Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the first date above written. This Agreement shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (a) the vote of the Corporation’s Board of Directors, or by the vote of a majority of the outstanding voting securities of the Corporation and (b) the vote of a majority of the Corporation’s Directors who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, by the vote of a majority of the outstanding voting securities of the Corporation, or by the vote of the Corporation’s Directors or by the Adviser. This Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act). The provisions of Paragraph 8 of this Agreement shall remain in full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to any amounts owed under Section 3 through the date of termination or expiration and Section 8 shall continue in force and effect and apply to the Adviser and its representatives as and to the extent applicable.

 

 

10. Notices. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.

11. Amendments. This Agreement may be amended by mutual consent, but the consent of the Corporation must be obtained in conformity with the requirements of the Investment Company Act.

12. Entire Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with the laws of the State of New York and the applicable provisions of the Investment Company Act. To the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control.

[The remainder of this page intentionally left blank]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.

 

	
 
	
 
	
 

	
PENNANTPARK INVESTMENT CORPORATION

	
 
	
 

	
By:
	
 
	
/s/ Arthur Penn

	
 
	
 
	
Name: Arthur Penn

	
 
	
 
	
Title: Chief Executive Officer and Chairman of the Board of Directors

	
 

	
PENNANTPARK INVESTMENT ADVISERS, LLC

	
 
	
 

	
By:
	
 
	
/s/ Arthur Penn

	
 
	
 
	
Name: Arthur Penn

	
 
	
 
	
Title: Managing MemberExhibit

Exhibit 10.1

WAIVER AND AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS WAIVER AND AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”), dated as of December 22, 2017, is made between Varex Imaging Corporation (the “Borrower”), certain of the Borrower’s subsidiaries listed on the signature pages hereof under the heading “GUARANTORS” (each a “Guarantor”, and, collectively, the “Guarantors”), the lenders listed on the signature pages hereof under the heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”), and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to a Credit Agreement, dated as of May 1, 2017 (as amended, modified and supplemented prior to the date hereof, the “Credit Agreement”);
WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders amend certain provisions of the Credit Agreement, and provide certain waivers in connection therewith; and
WHEREAS, the Lenders party hereto are willing to do so on the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto hereby agree as follows:
SECTION 1 Definitions; Interpretation.

a.Terms Defined in Credit Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
b.Interpretation.  The rules of interpretation set forth in Section 1.2 of the Credit Agreement shall be applicable to this Amendment and are incorporated herein.

SECTION 2 Amendments to the Credit Agreement. Effective as of the Amendment Effective Date (as defined below), the Credit Agreement is amended as follows:

a.Section 8.1(a) of the Credit Agreement is hereby amended by deleting the text “and consolidating” each time such text appears therein.

b.Section 8.1(b) of the Credit Agreement is hereby amended by (i) replacing the text “December 31, 2016” therein with the text “June 30, 2017”, and (ii) deleting the text “and consolidating” each time such text appears therein.

c.Section 9.2 of the Credit Agreement is hereby amended by (i) deleting the text “and” in Section 9.2(r) thereof; (ii) replacing the text “.” with the text “; and” in Section 9.2(s) thereof; and (iii) inserting immediately after Section 9.2(s) thereof the following new Section 9.5(t) thereof:
“(t)    grants of customary back-up security interests over accounts receivable disposed pursuant to Section 9.5(k).”
d.Section 9.5 of the Credit Agreement is hereby amended by (i) deleting the text “and” in Section 9.5(i) thereof; (ii) replacing (x) the text “clause  (k)” with the text “clause (j)”, and (y) the text “.” with the 

text “; and” in Section 9.5(j) thereof; and (iii) inserting immediately after Section 9.5(j) thereof the following new Section 9.5(k) thereof: 

“(k)    Asset Dispositions in connection with accounts receivable financing transactions; provided that (i) at the time of such Asset Disposition, no Default or Event of Default shall exist or would result from such Asset Disposition, (ii) the consideration received shall be in cash, (iii) the purchaser of such accounts receivable is not an Affiliate of any Credit Party and (iv) the aggregate purchase price of accounts receivable sold in reliance on this clause (k) shall not exceed $25,000,000 in any fiscal quarter.”
e.     Section 11.10 of the Credit Agreement is hereby amended by adding the following new text immediately prior to the second paragraph thereof: 

“Upon any sale or other disposition by any Credit Party (other than to any other Credit Party) of any Collateral in connection with any sale or other disposition permitted under the Loan Documents, or upon the effectiveness of any written consent to the release of the security interest created under any Security Document in any Collateral pursuant to Section 12.2, the security interests in such Collateral created by the Security Documents shall be automatically released.”
SECTION 3 Waiver.

a.Waiver.  Effective as of the Amendment Effective Date, the Lenders party hereto hereby waive the following:

i.on a permanent basis, the Borrower’s obligation to make mandatory principal prepayments of the Loans pursuant to Section 4.4(b)(ii) of the Credit Agreement in amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from an Asset Disposition permitted by Section 9.5(k) of the Credit Agreement as amended hereby;

ii.failure to deliver consolidating financial statements pursuant to Sections 8.1(a) and 8.1(b) of the Credit Agreement (prior to giving effect to this Amendment) prior to the date hereof; 

iii.failure to deliver quarterly financial statements for the fiscal quarters ended December 31, 2016 and March 31, 2017 pursuant to Section 8.1(b) of the Credit Agreement (prior to giving effect to this Amendment) prior to the date hereof; 

iv.failure to, prior to the date hereof, (x) notify, pursuant to Section 8.14(a) of the Credit Agreement, the Administrative Agent promptly after Varex Imaging West, LLC (“Varex West LLC”) became a Material Subsidiary and (y) deliver the documents required to be delivered pursuant to Section 8.14(a) of the Credit Agreement; and

v.failure to deliver prior written notice to the Administrative Agent of the change in name of PerkinElmer Medical Holdings, Inc. to Varex Imaging West Holdings, Inc. (“Varex West Inc.”, and together with Varex West LLC, the “Varex West Entities”) on July 31, 2017 pursuant to Section 5(f) of the Security Agreement.

b.Limitations. The waiver set forth above shall be limited precisely as written and relates solely to the provisions of Sections 4.4(b)(ii), 8.1(a), 8.1(b) and 8.14(a) of the Credit Agreement (prior to giving 

effect to this Amendment), and Section 5(f) of the Security Agreement in the manner and to the extent described above and nothing in this Amendment shall be deemed to:

i.constitute a waiver of compliance by any Credit Party with respect to any other term, provision or condition of the Credit Agreement, the Security Agreement or any other Loan Document, or any other instrument or agreement referred to therein; or

ii.prejudice any right or remedy that any Secured Party may now have or may have in the future under or in connection with the Credit Agreement, the Security Agreement or any other Loan Document, or any other instrument or agreement referred to therein.

SECTION 4 Conditions of Effectiveness.  This Amendment shall become effective upon the satisfaction of each of the following conditions precedent (the “Amendment Effective Date”):

a.Executed Counterparts. The Borrower, the Guarantors, the Administrative Agent and the Required Lenders shall have indicated their consent to this Amendment by the execution and delivery of the signature pages hereto to the Administrative Agent.

b.Representations and Warranties.  After giving effect to this Amendment:
i.the representations and warranties contained in Section 5 hereof shall be true and correct; and

ii.no Default or Event of Default shall have occurred and be continuing.

c.Costs and Expenses. The Administrative Agent shall have received all reasonable and documented out-of-pocket expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel) that are due and payable in connection with this Amendment.

d.Material Subsidiary Required Documents. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

i.Security Documents pledging one hundred percent (100%) of the total outstanding Equity Interests of Varex West LLC and a consent thereto executed by Varex West LLC (including, without limitation, if applicable, original certificated Equity Interests evidencing the Equity Interests of Varex West LLC, together with an appropriate undated stock or other transfer power for each certificate duly executed in blank by the registered owner thereof); 

ii.a duly executed supplement to the Security Agreement executed by Varex West LLC;

iii.a duly executed supplement to the Guaranty Agreement executed by Varex West LLC;

iv.a certificate of a Responsible Officer of Varex West LLC certifying as to the incumbency and genuineness of the signature of each officer of Varex West LLC executing the Loan Documents listed in clauses (i), (ii) and (iii) of this Section 4(d) (collectively, the “Varex West Documents”) and this Amendment and certifying that attached thereto is a true, correct and complete copy of (A) the certificate of formation of Varex West LLC and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of formation (or equivalent), (B) the governing document of Varex West LLC as in effect on the Amendment Effective Date, (C) resolutions duly adopted by the board of directors (or other governing body) of Varex West LLC authorizing and approving the 

transactions contemplated by the Varex West Documents and this Amendment and the execution, delivery and performance of the Varex West Documents and this Amendment (D) each certificate required to be delivered pursuant to Section 4(d)(v);

v.a certificate as of a recent date of the good standing of Varex West LLC under the laws of its jurisdiction of formation;

vi.each document required by the Security Documents to be filed, registered or recorded in order to perfect the security interests of the Administrative Agent, on behalf of the Secured Parties, in the Collateral pledged by Varex West LLC and the Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens thereon (subject to Permitted Liens);

vii.the results of a Lien search (including a search as to judgments, pending litigation, bankruptcy and tax matters), made against Varex West LLC under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in all assets of Varex West LLC, indicating among other things that the assets of Varex West LLC are free and clear of any Lien (except for Permitted Liens); and

viii.updated Schedules 7.1 and 7.2 to the Credit Agreement reflecting the name changes to the Varex West Entities, which schedules shall replace Schedules 7.1 and 7.2 of the Credit Agreement effective as of the Amendment Effective Date.

SECTION 5 Representations and Warranties.  To induce the Administrative Agent and the Lenders to enter into this Amendment, each Credit Party hereby represents and warrants to the Administrative Agent and the Lenders that the following statements are true and correct:

a.Each Credit Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution and delivery of this Amendment and the performance of this Amendment and the Credit Agreement as amended hereby.  This Amendment has been duly executed and delivered by the duly authorized officers of each Credit Party, and this Amendment and the Credit Agreement as amended hereby each constitutes the legal, valid and binding obligation of each Credit Party party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

b.The representations and warranties contained in the Loan Documents are true and correct in all material respects on and as of the date hereof, except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty is true and correct in all respects (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty remains true and correct in all material respects as of such earlier date, except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty is true and correct in all respects as of such earlier date).

c.The execution and delivery of this Amendment, and the performance of this Amendment and the Credit Agreement as amended hereby, by each Credit Party does not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval or violate any Applicable Law 

relating to any Credit Party or any Subsidiary thereof, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Credit Party or any Subsidiary thereof, (iii) conflict with, result in a breach of or constitute a default under any Material Contract to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens or (v) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution and delivery of this Amendment, and the performance, validity or enforceability of this Amendment and the Credit Agreement as amended hereby.

d.No Default or Event of Default has occurred and is continuing (after giving effect to this Amendment).

SECTION 6 Acknowledgement, Agreement and Consent.

a.Each Credit Party confirms and agrees that, notwithstanding the effectiveness of this Amendment, the obligations of such Credit Party under the Loan Documents to which such Credit Party is a party shall not be impaired and the Loan Documents to which such Credit Party is a party is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.

b.Each Guarantor hereby acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

c.Each Guarantor hereby acknowledges and agrees that the Secured Obligations guaranteed under the Guaranty Agreement will include all Secured Obligations, as amended by this Amendment.

d.Each Credit Party hereby acknowledges and agrees that (i) to the extent any Loan Document purports to grant, assign or pledge to the Administrative Agent or any other Person a security interest or Lien on any Collateral as security for the Secured Obligations, such grant, assignment or pledge is hereby ratified and confirmed in all respects and (ii) the Secured Obligations secured under the Security Documents will include all Secured Obligations, as amended by this Amendment.

SECTION 7 Miscellaneous.

a.Credit Agreement Otherwise Not Affected, Etc.  Except as expressly amended pursuant hereto, each Loan Document shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.  The Administrative Agent’s and the Lenders’ execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future. Nothing contained herein shall be deemed a waiver or consent in respect of (or otherwise affect any Secured Party’s ability to enforce) any Default not explicitly waived by Section 3. On and after the Amendment Effective Date, each reference in any Loan Document to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment.

b.No Reliance.  Each Credit Party hereby acknowledges and confirms to each Secured Party that the Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

c.Governing Law. This Amendment and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment and the transactions contemplated hereby shall be governed by, and construed in accordance with, the law of the State of New York.

d.Complete Agreement; Amendments.  This Amendment, together with the other Loan Documents, contains the entire and exclusive agreement of the parties hereto and thereto with reference to the matters discussed herein and therein.  This Amendment supersedes all prior commitments, drafts, communications, discussions and understandings, oral or written, with respect thereto.  This Amendment may not be modified, amended or otherwise altered except in accordance with the terms of Section 12.2 of the Credit Agreement.

e.Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  

f.Loan Documents. This Amendment shall constitute a Loan Document.
[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.
THE BORROWER

VAREX IMAGING CORPORATION

                        	
		
	By:
	/s/ Matthew Lowell

	Name:
	Matthew Lowell

	Title:
	Vice President, Finance, Treasury, and Business Development

THE GUARANTORS

VAREX IMAGING WEST HOLDINGS, INC. (formerly known as PerkinElmer Medical Holdings, Inc.)

                        	
		
	By:
	/s/ Matthew Lowell

	Name:
	Matthew Lowell

	Title:
	Vice President, Finance, Treasury, and Business Development

VAREX IMAGING WEST, LLC 

	
		
	By:
	/s/ Matthew Lowell

	Name:
	Matthew Lowell

	Title:
	Vice President, Finance, Treasury, and Business Development

THE ADMINISTRATIVE AGENT

BANK OF AMERICA, N.A.

	
		
	By:
	/s/ Brenda Schriner

	Name:
	Brenda Schriner

	Title:
	Vice President

THE LENDERS

BANK OF AMERICA, N.A., as Swingline Lender, Issuing Lender and Lender
	
		
	By:
	/s/ Sebastian Lurie

	Name:
	Sebastian Lurie

	Title:
	Senior Vice President

    

DNB CAPITAL LLC, as Issuing Lender and Lender

	
		
	By:
	/s/ Kristie Li

	Name:
	Kristie Li

	Title:
	Senior Vice President

JPMORGAN CHASE BANK, N.A., as Issuing Lender and Lender

	
		
	By:
	/s/ Ling Li

	Name:
	Ling Li

	Title:
	Executive Director

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Issuing Lender and Lender

	
		
	By:
	/s/ Darin Mullis

	Name:
	Darin Mullis

	Title:
	Director

Sumitomo Mitsui Banking Corporation, as Lender

	
		
	By:
	/s/ James D. Weinstein

	Name:
	James D. Weinstein

	Title:
	Managing Director

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