Document:

Exhibit 10.1

 

Execution Version

AMENDMENT No. 2, dated as of October 8, 2015 (this “Amendment”), to the Credit Agreement dated as of April 6, 2012, among THE CONTAINER STORE, INC., a Texas corporation (the “Borrower”), the Guarantors party thereto, the several banks and other financial institutions or entities from time to time parties to the Credit Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative Agent”) and Collateral Agent, and the other parties thereto (as amended, restated, modified and supplemented from time to time, the “Credit Agreement”); capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement, as amended hereby.

 

WHEREAS, the Borrower desires to amend the Credit Agreement to, among other things, extend the Initial Maturity Date and to increase the Commitments under the Credit Agreement, in each case, on the terms set forth herein; and

 

WHEREAS, Section 11.01 of the Credit Agreement provides that the relevant Loan Parties and the Lenders may amend the Credit Agreement and the other Loan Documents for certain purposes;

 

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Section 1.                                Amendments.  The Credit Agreement is, effective as of the Amendment No. 2 Effective Date (as defined below), hereby amended as follows:

 

(a)                               Additional Definitions.  Section 1.01 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in full as follows:

 

“Amendment No. 2” means Amendment No. 2 to this Agreement, dated as of October 8, 2015, by and among the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and the Lenders party thereto.

 

“Amendment No. 2 Effective Date” has the meaning specified in Amendment No. 2.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the

 

 

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LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.

 

“Other Connection Taxes” means, with respect to any Agents, any Lender, each L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions (at the time of the Amendment No. 2 Effective Date, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region of Ukraine).

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, or the U.S. Department of State or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.

 

(b)                              Amended Definitions.  The following definitions contained in Section 1.01 of the Credit Agreement are hereby amended as follows:

 

 

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(i)                The following definitions are hereby amended and restated in their entirety to read in full as follows:

 

“Aggregate Commitments” means, at any time, the sum of the Commitments of all the Lenders at such time.  As of the Amendment No. 2 Effective Date, the Aggregate Commitments are $100.0 million.

 

“Applicable Margin” means, with respect to any LIBO Rate Loan from and after the Amendment No. 2 Effective Date, 1.25% and, with respect to any Base Rate Loan from and after the Amendment No. 2 Effective Date, 0.25%.

 

“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 Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person or its subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan that in each case is not acting in concert with another Person) other than the Sponsor, Affiliates of the Sponsor (other than any portfolio company thereof) and the Management Stockholders (collectively, the “Permitted Holders”) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of the greater of (x) 35% or more of the equity securities of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings 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) and (y) a percentage that is greater than the percentage of the equity securities of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings that is then beneficially owned by the Permitted Holders; or

 

(b)                                                Holdings shall cease, directly or indirectly, to own and control legally and beneficially all of the Equity Interests in the Borrower; or

 

(c)                                                 a “change of control” or any comparable term under, and as defined in, the Term Loan Documents or any other instrument, document or agreement governing Material Indebtedness shall have occurred, in any case that gives the holders thereof the right to require Holdings or any of

 

 

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its Subsidiaries to repurchase, offer to repurchase or immediately repay such Indebtedness.

 

“Excluded Taxes” means, with respect to the Agents, any Lender, each L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), franchise taxes imposed on it (in lieu of net income taxes) and branch profits taxes, in each case, (i) imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 11.13), any U.S. federal withholding tax to the extent imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01; (c) taxes attributable to a recipient’s failure to comply with Section 3.01(g), (h) or (i) and (d) any tax imposed under FATCA.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations promulgated thereunder or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.

 

“Fee Letter” means, collectively (a) the letter agreement, dated March 21, 2012, among the Borrower, J.P. Morgan Securities LLC, JPMCB, Wells Fargo Bank, National Association and Wells Fargo Capital Finance, LLC, and (b) the amended and restated letter agreement, dated October 8, 2015, between the Borrower and JPMCB (the “Agent Fee Letter”), as such letter agreements may from time to time be amended.

 

“Incremental Amount” means, at any time, the excess, if any, of (a) $50.0 million over (b) the aggregate amount of all Incremental Commitments established prior to such time pursuant to Section 2.15.

 

 

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“Initial Maturity Date” means the earlier of (a) October 8, 2020 and (b) January 6, 2019 if any portion of the Term Obligations remains outstanding on such date which has not been refinanced with (i) Permitted Refinancing Indebtedness with a final maturity date that is no earlier than ninety (90) days after the date in clause (a) of this definition of “Initial Maturity Date” or (ii) Subordinated Indebtedness.

 

“Letter of Credit Sublimit” means an amount equal to $40.0 million.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.  A permanent reduction of the Aggregate Commitments shall not require a corresponding pro rata reduction in the Letter of Credit Sublimit; provided, however, that if the Aggregate Commitments are reduced to an amount less than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at Borrower’s option, less than) the Aggregate Commitments.

 

“LIBO Rate” means, with respect to any LIBO Rate Loan for any applicable Interest Period, the London interbank offered rate administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on either of such Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as shall be selected by the Administrative Agent in its reasonable discretion; in each case the “LIBO Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided that, (x) if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement and (y) if the LIBO Screen Rate shall not be available at such time for a period equal in length to such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate at such time, subject to Section 3.03 in the event that the Administrative Agent shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error); provided  further, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Liquidity Event” means that Excess Availability is less than $10.0 million for five (5) consecutive Business Days.

 

“Monthly Financial Statement Delivery Period” means each period commencing on any day on which Excess Availability is less than $17.5

 

 

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million and ending on the first day thereafter that follows 60 consecutive days on which Excess Availability was greater than or equal to $17.5 million.

 

“Permitted Investor” means any Fee Recipient that, with respect to all payments of fees (however denominated) to be paid under this Agreement or any other Loan Document, is entitled to a complete exemption from United States Federal withholding tax at the time such Person becomes a party to this Agreement (and absent a subsequent change in law, at all times thereafter); provided that any Person claiming an exemption with respect to fees pursuant to Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable, (directly or indirectly through Internal Revenue Service Form W-8IMY) will not be a Permitted Investor unless such exemption is based on the “business profits” or “other income” articles of a tax treaty to which the United States is a party; and provided  further that a Person shall not be a Permitted Investor unless it provides the Borrower and the Administrative Agent with one or more executed original copies (as requested by the Borrower or the Administrative Agent) of Internal Revenue Service Form W-9 (or its successor form) or the applicable Internal Revenue Service Form W-8 (or its successor form)  no later than the date such Person becomes a party.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $15.0 million and (b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

(ii)            The definition of “Consolidated EBITDA” is hereby amended as follows:

 

(A)                    Each reference to “$5.0 million” in clauses (xi) and (xii) of such definition shall be replaced with a reference to “$8.0 million”; and

 

(B)                     The reference to “$10.0 million” in clause (xvi) of such definition shall be replaced with a reference to “$20.0 million”.

 

(iii)              The definition of “Eligible Inventory” is hereby amended by replacing the reference to “$1.0 million” in clause (c) of the items not included in Eligible Inventory with a reference to “$2.0 million”.

 

(c)                               Amendment to Section 2.03(a) of the Credit Agreement.  Clause (a) of Section 2.03 of the Credit Agreement is hereby amended by adding the following sentence at the end of Section 2.03:

 

Notwithstanding anything herein to the contrary, an L/C Issuer shall have no obligation hereunder to issue, and shall not issue, any

 

 

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Letter of Credit, the proceeds of which would be made available to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (ii) in any manner that would result in a violation of any Sanctions by any party to this Agreement.

 

(d)                             Amendment to Section 2.03(a)(iii)(A) of the Credit Agreement.  Subclause (a)(iii)(A) of Section 2.03 of the Credit Agreement is hereby amended by adding the following proviso immediately before the semi-colon at the end of Section 2.03(a)(iii)(A):

 

; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements 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, shall in each case be deemed not to be in effect on the Closing Date for purposes of this clause (a)(iii)(A), regardless of the date enacted, adopted, issued or implemented

 

(e)                               Amendment to Section 2.09(a) of the Credit Agreement.  Clause (a) of Section 2.09 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

(a)                                                 Commitment Fee.           The Borrower shall pay to the Administrative Agent, for the account of each Lender in accordance with its Applicable Percentage, a commitment fee (the “Commitment Fee”) equal to a percentage per annum determined from the following grid (the “Commitment Fee Rate”) using the Consolidated Leverage Ratio for the Measurement Period most recently ended, times the actual daily amount by which the then Aggregate Commitments exceed the sum of (i) the principal amount of Loans (including Swing Line Loans), then outstanding, and (ii) the then L/C Credit Extensions; provided, however, that in the event that any financial statement or Compliance Certificate delivered in connection with Section 6.01(a) or (b) is shown to be inaccurate during the term of this Agreement (regardless of whether the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Commitment Fee Rate for any period (an “Applicable Period”) than the Commitment Fee Rate applied for such Applicable Period, and only in such case, then the Borrower shall promptly, but in any event within

 

 

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fifteen (15) Business Days, (a) deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Period, (b) determine the Commitment Fee Rate for such Applicable Period based upon the corrected Compliance Certificate, and (c) promptly, but in any event within fifteen (15) Business Days, pay to the Administrative Agent the additional Commitment Fee owing as a result of such increased Commitment Fee Rate for such Applicable Period.  The preceding sentence is in addition to all other rights of the Administrative Agent and Lenders provided for under this Agreement. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the first Business Day after the end of each calendar quarter, commencing with the first such date to occur after the Amendment No. 2 Effective Date, and on the last day of the Availability Period.

 

	
Consolidated Leverage Ratio
    	
 
    	
 
    	
Commitment   Fee
   Rate
    
	
 Greater than 3.0x

 
    	
 
    	
 
    	
0.25%
    
	
 Less than or equal to 3.0x

 
    	
 
    	
 
    	
0.20%
    

 

 

(f)                                Amendment to Section 2.15(c) of the Credit Agreement.  Clause (c) of Section 2.15 of the Credit Agreement is hereby amended by renumbering sub-clause “(v)” of such clause as sub-clause “(vi)” and inserting a new sub-clause “(v)” to read in full as follows:

 

(v) the Borrower, the Administrative Agent and the Term Agent (as defined in the Intercreditor Agreement) have executed and delivered an amendment to the Intercreditor Agreement whereby the capped dollar limitation on the ABL Obligations (as defined in the Intercreditor Agreement) comprising the aggregate principal amount of outstanding loans or letter of credit reimbursement obligations owing under this Agreement is amended to increase such limitation to an amount no less than the Aggregate Commitments (after giving effect to such Incremental Commitment)

 

(g)                              Amendment to Section 3.01(g) of the Credit Agreement.  Clause (g) of Section 3.01 is hereby amended and restated in its entirety to read in full as follows:

 

(g)                                                Status of Foreign Lenders.  To the extent it is legally entitled to do so, any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the applicable Loan Party is resident for tax purposes, or any treaty to

 

 

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which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Loan Parties (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Loan Parties or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Loan Parties or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Loan Parties or the Administrative Agent as will enable the Loan Parties or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in this Section 3.01(g)(i)-(iv), Section 3.01(h) and Section 3.01(i) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  Each Lender shall, whenever a lapse in time or change in circumstances renders such documentation (including any specific documentation required below in this Section 3.01(g), Section 3.01(h) or Section 3.01(i)) obsolete, expired or inaccurate in any material respect, deliver promptly to the Borrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the Borrower or the Administrative Agent) or promptly notify the Borrower and the Administrative Agent that it is legally unable to do so.

 

Without limiting the generality of the foregoing, any Foreign Lender, to the extent it is legally entitled to do so, shall deliver to the Loan Parties and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Loan Parties or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(i)                                                    duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(ii)                                                duly completed copies of Internal Revenue Service Form W-8ECI,

 

 

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(iii)                          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit M-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable),

 

(iv)                          to the extent a Foreign Lender is not the beneficial owner, executed copies of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit M-3 or Exhibit M-4, Internal Revenue Service Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit M-2 on behalf of each such direct and indirect partner, or

 

(v)                              two properly completed and duly signed original copies of any other form prescribed by applicable U.S. federal income tax laws (including the Treasury Regulations) as a basis for claiming a complete exemption from, or a reduction in, U.S. federal withholding tax on any payments to such Lender under the Loan Documents.

 

(h)                              Amendment to Section 3.01(j) of the Credit Agreement.  Clause (j) of Section 3.01 is hereby amended and restated in its entirety to read in full as follows:

 

(j)                                  Treatment of Certain Refunds.  If the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the applicable Loan Party or with respect to which the applicable Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to the Loan Parties an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Loan Parties under this Section 3.01 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the applicable Loan Party, upon the request of the Administrative Agent or such Lender, agree

 

 

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to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender if the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (j), in no event will the Administrative Agent or any Lender be required to pay any amount to a Loan Party pursuant to this paragraph (j) the payment of which would place the Administrative Agent or the Lender in a less favorable net after-Tax position than the Administrative Agent or the Lender would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Loan Parties or any other Person.

 

(i)                                  Amendment to Section 3.04(a)(ii) of the Credit Agreement.  Sub-clause (ii) of clause (a) of Section 3.04 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

(ii)                              subject any Lender to any Taxes (other than (A) Indemnified Taxes covered in Section 3.01, (B) taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Loan made by it, or on its deposits, reserves, other liabilities or capital attributable thereto; or

 

(j)                                  New Section 5.23 of the Credit Agreement.       The Credit Agreement is hereby amended to add the following new Section 5.23 which shall read in its entirety as follows:

 

Section 5.23                Anti-Corruption Laws and Sanctions.                                               Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and employees and, to the knowledge of such Loan Party, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  None of (a) any Loan Party, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.   No

 

 

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Borrowing or Letter of Credit, use of proceeds, or transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

 

(k)                              Amendment to Section 6.03(e) of the Credit Agreement.  Clause (e) of Section 6.03 of the Credit Agreement is hereby amended by replacing the reference to “$5.0 million” in such clause with a reference to “$10.0 million”.

 

(l)                                  Amendment to Section 6.07(d) of the Credit Agreement.  Clause (d) of Section 6.07 of the Credit Agreement is hereby amended by replacing each reference to “$5.0 million” in such clause with a reference to “$10.0 million”.

 

(m)                          Amendment to Section 6.10(b) of the Credit Agreement.  Clause (b) of Section 6.10 of the Credit Agreement is hereby amended by amending and restating the proviso at the end of the third sentence in Section 6.10(b) as follows:

 

provided that, from and after the Amendment No. 2 Effective Date, as long as average monthly Excess Availability is greater than $17.5 million and no Event of Default exists, the Administrative Agent may conduct no more than one collateral field examination and one inventory appraisal in any twelve month period at the Loan Parties’ expense.

 

(n)                              Amendment to Section 6.11 of the Credit Agreement.  Section 6.11 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

6.11                    Use of Proceeds.                                   Use the proceeds of the Credit Extensions to provide ongoing working capital and for other general corporate purposes of the Borrower and its Subsidiaries, including the refinancing of existing indebtedness. The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its and their respective directors, officers and employees shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

(o)                              Amendment to Section 7.01(s) of the Credit Agreement.  Clause (s) of Section 7.01 of the Credit Agreement is hereby amended by replacing the reference to “$15.0 million” in such clause with a reference to “$20.0 million”.

 

 

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(p)                              Amendments to Section 7.02 of the Credit Agreement.  Section 7.02 of the Credit Agreement is hereby amended as follows:

 

(i)                                  Each reference to “$35.0 million” in clauses (g) and (k) of Section 7.02 shall be replaced with a reference to “$50.0 million”;

 

(ii)                              The reference to “$65.0 million” in clause (l) of Section 7.02 shall be replaced with a reference to “$75.0 million”; and

 

(iii)                          The reference to “$10.0 million” in clause (m) of Section 7.02 shall be replaced with a reference to “$20.0 million”.

 

(q)                              Amendments to Section 7.03 of the Credit Agreement.  Section 7.03 of the Credit Agreement is hereby amended as follows:

 

(i)                                  The reference to “(x) $25.0 million” in subclause (c)(iv) of Section 7.03 shall be replaced with a reference to “(x) $30.0 million”;

 

(ii)                              Each reference to “$10.0 million” in subclauses (c)(iv)(1) and (c)(iv)(2) of Section 7.03 shall be replaced with a reference to “$15.0 million”;

 

(iii)                          The reference to “$25.0 million” in subclause (h)(ii) of Section 7.03 shall be replaced with a reference to “$35.0 million” and a closed parenthesis shall be added immediately prior to the semi-colon at the end of subclause (h)(ii);

 

(iv)                          The reference to “$10.0 million” in clause (l) of Section 7.03 shall be replaced with a reference to “$15.0 million”; and

 

(v)                              The reference to “$25.0 million” in clause (l) of Section 7.03 shall be replaced with a reference to “$30.0 million”.

 

(r)                                 Amendment to Section 7.05(h) of the Credit Agreement.  Clause (h) of Section 7.05 of the Credit Agreement is hereby amended by replacing the reference to “$10.0 million” in Section 7.05 with a reference to “$20.0 million” and by replacing the reference to “$5.0 million” in Section 7.05 with a reference to “$10.0 million”.

 

(s)                                Amendment to Section 7.06(d) of the Credit Agreement.  Clause (d) of Section 7.06 of the Credit Agreement is hereby amended by replacing the reference to “$2.5 million” in Section 7.06 with a reference to “$5.0 million”.

 

(t)                                 Amendment to Section 7.06(e) of the Credit Agreement.  Clause (e) of Section 7.06 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

(e)                               so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower and each of its

 

 

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Restricted Subsidiaries may make other Restricted Payments at any time if, after giving effect to such Restricted Payments on a Pro Forma Basis, (i) Excess Availability exceeds $15.0 million or (ii) (x) Excess Availability exceeds $12.5 million and (y) the Consolidated Fixed Charge Coverage Ratio as of the last day of the most recently ended Fiscal Quarter would be not less than 1.10:1.00;

 

(u)                              Amendments to Section 8.01 of the Credit Agreement. Clauses (f) and (i) of Section 8.01 of the Credit Agreement are hereby amended by replacing each reference to “$10.0 million” with a reference to “$20.0 million”.

 

(a)                               Amendment to Section 11.06(b)(iv) of the Credit Agreement.  The second sentence of clause (b)(iv) of Section 11.06 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and any Tax forms required by Section 3.01(g), Section 3.01(h) or Section 3.01(i);

 

(b)                              Amendment to Section 11.06(d) of the Credit Agreement.  The third sentence of clause (d) of Section 11.06 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 3.01, Section 3.04 and Section 3.05 (provided such Participant agrees to be subject to the limitations and requirements therein as though it were a Lender (it being understood that the documentation required under Section 3.01(g), Section 3.01(h) and Section 3.01(i) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b).

 

(c)                               Replacement of Schedule 2.01. Schedule 2.01 attached to the Credit Agreement is hereby replaced in its entirety with Schedule 2.01 attached hereto as Annex I and Schedule 2.01 attached hereto as Annex I shall be deemed to be attached as Schedule 2.01 to the Credit Agreement as of the Amendment No. 2 Effective Date.

 

(d)                             Replacement of Exhibit D.  Exhibit D attached to the Credit Agreement is hereby replaced in its entirety with Exhibit D attached hereto as Annex II and Exhibit D attached hereto as Annex II shall be deemed to be attached as Exhibit D to the Credit Agreement as of the Amendment No. 2 Effective Date.

 

(e)                               Replacement of Exhibit F.  Exhibit F attached to the Credit Agreement is hereby replaced in its entirety with Exhibit F attached hereto as Annex III and Exhibit D attached

 

 

-15-

 

 

hereto as Annex III shall be deemed to be attached as Exhibit F to the Credit Agreement as of the Amendment No. 2 Effective Date.

 

(f)                                Replacement of Exhibits M-1, M-2, M-3 and M-4.  Exhibits M-1, M-2, M-3 and M-4 attached to the Credit Agreement are hereby replaced in its entirety with Exhibits M-1, M-2, M-3 and M-4 attached hereto as Annex IV and Exhibits M-1, M-2, M-3 and M-4 attached hereto as Annex IV shall be deemed to be attached as Exhibits M-1, M-2, M-3 and M-4 to the Credit Agreement as of the Amendment No. 2 Effective Date.

 

Section 2.                                Representations and Warranties, No Default.  In order to induce the Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, each of the Loan Parties represents and warrants to each Lender that:

 

(a)                               After giving effect to this Amendment, each of the representations and warranties in the Credit Agreement and in the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date; and

 

(b)                              At the time of and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

 

Section 3.                                Effectiveness.  Section 1 of this Amendment shall become effective on the date (such date, if any, the “Amendment No. 2 Effective Date”) that the following conditions have been satisfied:

 

(i)                                           Consents.  The Administrative Agent shall have received executed signature pages hereto from each Lender;

 

(ii)                                       Lender Fees. The Borrower shall pay to the Administrative Agent, for the account of each Lender in accordance with each Lender’s Applicable Percentage, a non-refundable upfront fee as separately agreed upon in a fee letter between the Borrower and the Administrative Agent.

 

(iii)                                   Other Fees and Expenses.  The Borrower shall have paid, to the extent invoiced prior to the Amendment No. 2 Effective Date, all reasonable out-of-pocket expenses of the Administrative Agent in connection with this Amendment and the transaction contemplated hereby (including the reasonable fees and expenses of Vinson & Elkins L.L.P., counsel to the Administrative Agent);

 

(iv)                                   Agent Fee Letter.  The Administrative Agent shall have received the Agent Fee Letter, executed by the Borrower and the Administrative Agent;

 

 

-16-

 

 

(v)                                       Note. The Administrative Agent shall have received a Note executed by Borrower in favor of each Lender requesting a Note in the amount of such Lender’s Commitment as indicated on Schedule 2.01 of the Credit Agreement (as amended hereby);

 

(vi)                                   Officer’s Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer of each Loan Party dated the Amendment No. 2 Effective Date (a) either (i) attaching Organization Documents for such Loan Party or (ii) certifying that the Organization Documents previously delivered to the Administrative Agent by such Loan Party have not been amended and are in full force and effect, (b) attaching the resolutions of such Loan Party’s board of managers, members or equivalent governing body, authorizing the execution, delivery and performance of the Amendment, and certifying that such resolutions are in full force and effect, (c) attaching an incumbency certificate evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment, (d) certifying that after giving effect to this Amendment, each of the representations and warranties in the Credit Agreement and in the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date and (e) certifying that at the time of and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing;

 

(vii)                               Good Standing Certificates. The Administrative Agent has received a good standing or active status certificate of each Loan Party in its jurisdiction of incorporation or organization; and

 

(viii)                           Opinion of Counsel.  The Administrative Agent shall have received an executed legal opinion from Latham & Watkins LLP with respect to this Amendment, such legal opinion to be in form and substance reasonably satisfactory to the Administrative Agent.

 

Section 4.                                Counterparts.  This Amendment 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.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier or other electronic transmission (e.g., “.pdf”) shall be effective as delivery of a manually executed counterpart of this Amendment.

 

Section 5.                                Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF

 

 

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LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

Section 6.                                Headings.  Section and Subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

 

Section 7.                                Effect of Amendment.  Except as expressly set forth herein, (i) this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent or any other Agent, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document.  Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect.  Each Loan Party reaffirms its obligations under the Loan Documents to which it is party and the validity of the Liens granted by it pursuant to the Collateral Documents.  This Amendment shall constitute a Loan Document for purposes of the Credit Agreement and from and after the Amendment No. 2 Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Credit Agreement as amended by this Amendment.  Each of the Loan Parties hereby (i) consents to this Amendment, (ii) confirms that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Credit Agreement as amended hereby and (iii) agrees that all security interests granted by it pursuant to any Loan Document shall secure the Credit Agreement as amended by this Amendment.

 

Section 8.                                Submission To Jurisdiction; Waivers. Each of the parties hereto hereby irrevocably and unconditionally agrees that Section 11.14 of the Credit Agreement is incorporated herein mutatis mutandis.

 

Section 9.                                FATCA Treatment.  For purposes of determining withholding Taxes imposed under FATCA, from and after the Amendment No. 2 Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Credit Agreement and any outstanding Loans as not qualifying as “grandfathered obligations” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

 

	
 
    	
THE CONTAINER   STORE, INC., as Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jodi Taylor
    
	
 
    	
Name: 
    	
Jodi Taylor
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE CONTAINER STORE   GROUP, INC.,
    
	
 
    	
TCS GIFT CARD SERVICES,   LLC,
    
	
 
    	
THE CONTAINER STORE   SERVICES, LLC,
    
	
 
    	
each as a Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jodi Taylor
    
	
 
    	
Name:   
    	
Jodi   Taylor
    
	
 
    	
Title:
    	
Chief   Financial Officer
    

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 2 - THE CONTAINER STORE, INC.]

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A.,
    
	
 
    	
as   Administrative Agent, Collateral Agent, and
    
	
 
    	
as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jon Eckhouse
    
	
 
    	
Name:   
    	
Jon   Eckhouse
    
	
 
    	
Title:
    	
Authorized   Officer
    

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 2 - THE CONTAINER STORE, INC.]

 

 

	
 
    	
WELLS FARGO BANK,   NATIONAL
    
	
 
    	
ASSOCIATION, as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lauren Murphy
    
	
 
    	
Name: 
    	
Lauren Murphy
    
	
 
    	
Title:
    	
Vice President
    
				

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 2 - THE CONTAINER STORE, INC.]

 

 

ANNEX I

 

Schedule 2.01

 

Commitments and Applicable Percentages

 

 

	
Lender
    	
Commitment
    	
Applicable   Percentage

 

 
    
	
JPMorgan Chase   Bank, N.A.
    	
$50,000,000.00
    	
50.00%
    
	
Wells Fargo   Bank, National Association
    	
$50,000,000.00
    	
50.00%
    
	
 
    	
 
    	
 
    
	
 
    	
$100,000,000.00
    	
100.00%
    

 

 

ANNEX II

 

Exhibit D

 

Form of Compliance Certificate

 

COMPLIANCE CERTIFICATE

 

Date of Certificate:                     

 

To:                           JPMorgan Chase Bank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among THE CONTAINER STORE, INC., a Texas corporation (the “Borrower”), the Guarantors party thereto (individually, a “Guarantor” and, collectively, the “Guarantors”), the Lenders from time to time party thereto (individually, a “Lender” and, collectively, the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent.  Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.

 

The undersigned, in his or her capacity as a duly authorized and acting Responsible Officer of Holdings, hereby certifies on behalf of Holdings and each of the other Loan Parties as of the date hereof the following:

 

1.                                    No Defaults or Events of Default.

 

[Since                      (the date of the last similar certification), no Default or Event of Default has occurred.]

 

[A Default or Event of Default has occurred since                      (the date of the last similar certification).  The Loan Parties have taken or propose to take those actions with respect to such Default or Event of Default as described on Appendix I.]

 

2.                                    Financial Calculations.  Attached hereto as Appendix II are reasonably detailed calculations with respect to (i) the Consolidated Fixed Charge Coverage Ratio (determined for purposes of Section 7.15 of the Credit Agreement) on a trailing four quarter basis, as of the Fiscal Quarter ending                     1 and (ii) the Consolidated Leverage Ratio.

 

3.                                    Financial Statements.

 

1                                           To be delivered together with the financial statements of Holdings and its Subsidiaries pursuant to Section 6.01(a), Section 6.01(b) or Section 6.01(c) of the Credit Agreement but tested pursuant to Section 7.15 of the Credit Agreement only during a Covenant Compliance Event.

 

D-1

 

[Use following paragraph (a) for fiscal year-end financial statements]

 

(a)                               Attached hereto as Appendix III are the audited financial statements of Holdings and its Subsidiaries required by Section 6.01(a) of the Credit Agreement for the Fiscal Year ending                               , and the related Consolidated statements of income or operations, shareholders’ equity (if available) and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail, audited and accompanied by a report and opinion of Ernst & Young, LLP or another Registered Public Accounting Firm of nationally recognized standing reasonably satisfactory to the Administrative Agent, which report and opinion has been prepared in accordance with the requirements of Section 6.01(a) of the Credit Agreement.  Also attached hereto as Appendix III are the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries and variable interest entities (if any) from such financial statements.

 

[Use following paragraph (b) for fiscal quarter-end financial statements]

 

(b)                              Attached hereto as Appendix III are the unaudited financial statements of Holdings and its Subsidiaries required by Section 6.01(b) of the Credit Agreement for the Fiscal Quarter ending                     , and the related Consolidated statements of income or operations and cash flows for such Fiscal Quarter and for the portion of Holdings’ Fiscal Year then ended, all in reasonable detail, setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year and to the figures as set forth in the projections delivered pursuant to Section 6.01(d).  Also attached hereto as Appendix III are the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries and variable interest entities (if any) from such financial statements.

 

(c)                               The financial statements furnished to the Administrative Agent for the [Fiscal Year/Fiscal Quarter] ending _______________ were prepared in accordance with GAAP and present fairly in all material respects the financial condition, results of operations, shareholders’ equity (if available) and cash flows of Holdings and its Subsidiaries on a Consolidated basis, as of the end of the period(s) covered, subject only to, with respect to the quarterly financial statements, normal year-end adjustments, including, but not limited to, purchase accounting adjustments, and the absence of footnotes.

 

4.                                    Locations of Collateral.  Attached hereto as Appendix IV is a description of any change in the location of any office in which a Loan Party maintains books or records relating to Collateral owned by it or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility).

 

D-2

 

5.                                    Management Discussion.  Attached hereto as Appendix V is a narrative prepared by management of Holdings, in accordance with Section 6.01(e) of the Credit Agreement, with respect to the financial statements delivered herewith.

 

6.                                    List of Subsidiaries.  Attached hereto as Appendix VI is a list of each Subsidiary that identifies each Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary as of the date of this Compliance Certificate.

 

 

 

 

IN WITNESS WHEREOF, a duly authorized and acting Responsible Officer of Holdings, on behalf of Holdings and each of the other Loan Parties, has duly executed this Compliance Certificate as of                               , 20    .

 

	
 
    	
THE CONTAINER STORE   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

D-3

 

APPENDIX I

 

The following describes the nature of the Default or Event of Default in reasonable detail and the steps, if any, being taken or contemplated by the Loan Parties to be taken on account thereof.

 

 

APPENDIX II

 

Consolidated Fixed Charge Coverage Ratio

 

1.                                    Consolidated EBITDA for such Measurement Period:

 

(a)                               Consolidated Net Income of Holdings and its Restricted Subsidiaries for the most recently completed Measurement Period:

 

Plus the following, to the extent deducted in calculating Consolidated Net Income for such Measurement Period:

 

(b)                              Consolidated Interest Charges:

 

(c)                               provision for Federal, state, local and foreign income taxes:

 

(d)                             depreciation and amortization expense:

 

(e)                               non-cash stock compensation paid to officers, directors, employees or consultants:

 

(f)                                all non-cash losses from Dispositions other than Dispositions of inventory in the ordinary course of business:

 

(g)                              Transaction Expenses:

 

(h)                              expenses incurred in connection with the prepayment, amendment, or refinancing of Indebtedness:

 

(i)                                  non-cash expenses related to LIFO/LCM reserves and non-cash rent:

 

(j)                                  any non-cash purchase accounting adjustments made in connection with any acquisition permitted by the Credit Agreement:

 

(k)                              expenses incurred in connection with closed stores, store closings and store relocations in an amount not to exceed $8.0 million in the aggregate in such Measurement Period:

 

(l)                                  Management Fees:

 

(m)                          all transactional costs, expenses and charges payable to non-Affiliated third parties and made at the time of, and in connection with, any acquisition (whether or not consummated) in an amount not to exceed $8.0 million in the aggregate during such Measurement Period:

 

(n)                              any expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness (including with respect to Indebtedness, a refinancing thereof, whether or not successful), in each case permitted to be incurred or made under

 

 

the Credit Agreement and any amendment or modification to the terms of any such transactions, including such fees, expenses or charges related to the Transaction:

 

(o)                              non-cash losses (minus any non-cash gains) with respect to Swap Contracts:

 

(p)                              extraordinary, unusual or non-recurring expenses, charges or losses during such period (as determined by the Borrower in good faith, it being understood that Item 10(e) of Regulation S-K under the Securities Act shall not constitute a limitation on any such determination):

 

(q)                              pre-opening and grand opening expenses in an amount not to exceed $20.0 million in such Measurement Period:

 

Minus, the following:

 

(r)                                 to the extent included in calculating Consolidated Net Income for such Measurement Period, all non-recurring, non-cash items increasing Consolidated Net Income, excluding any non-cash items that result in an accrual of a reserve for cash items in any future period, (in each case of or by Holdings and its Restricted Subsidiaries for such Measurement Period):

 

(s)                                non-cash gains from Dispositions other than Dispositions of inventory in the ordinary course of business:

 

(t)                                 Consolidated EBITDA [The sum of Lines 1(a) through 1(q) minus the sum of Lines 1(r) and 1(s)]:

 

2.                                    Plus for the purposes of Section 7.15 only, Specified Equity Contributions made during such Measurement Period:

 

3.                                    Minus:

 

Capital Expenditures made during such Measurement Period:

 

4.                                    CASH FLOW AVAILABLE FOR FIXED CHARGES

 

[The sum of Line 1(t) plus Line 2 minus Line 3]:

 

5.                                    Debt Service Charges for such Measurement Period:

 

(a)                               Consolidated Interest Charges paid in cash or required to be paid in cash:

 

Plus

 

(b)                              principal payments made or required to be made on account of Indebtedness (excluding the (i) Obligations, (ii) any Synthetic Lease Obligations and (iii) any principal payments required to be made with respect to the Term Facility solely as

 

 

a result of any “excess cash flow” mandatory prepayment requirement under the Term Facility, but including, without limitation, any Capital Lease Obligations):

 

(c)                               Debt Service Charges [The sum of Lines 5(a) and 5(b)]:

 

Plus:

 

6.                                    Aggregate amount of all scheduled mandatory cash payments on Disqualified Equity Interests made of or by Holdings and its Restricted Subsidiaries:

 

7.                                    FIXED CHARGES [The sum of Line 5 and Line 6]:

 

8.                                    CONSOLIDATED FIXED CHARGE COVERAGE RATIO [Line 4 divided by Line 7]:

 

 

Consolidated Leverage Ratio2

 

1.                                    Total Debt:

 

(a)                               The aggregate principal amount of Indebtedness (other than contingent Indebtedness of the type described in clause (b) of the definition of “Indebtedness” and obligations under Swap Contracts permitted by Section 7.02(a) (except to the extent any such Swap Contract has terminated)) of Holdings and its Restricted Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a Consolidated basis in accordance with GAAP:

 

Minus:

 

(b)                              The aggregate amount of unrestricted cash and Cash Equivalents of Holdings and its Restricted Subsidiaries on such date in excess of $5.0 million:

 

2.                                    Consolidated EBITDA [Line 1(t) above in the calculation of Consolidated Fixed Charge Coverage Ratio]:

 

3.                                    CONSOLIDATED LEVERAGE RATIO [Line 1 immediately above divided by Line 2 immediately above]:

 

2  Calculation to be used to determine if any changes in the Commitment Fee Rate are necessary.

 

 

ANNEX III

 

Exhibit F

 

Form of Assignment and Assumption

 

Reference is made to the Credit Agreement dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, The Container Store, Inc., a Texas corporation ( “Borrower”), the Guarantors party thereto (individually, a “Guarantor” and, collectively, the “Guarantors”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties, JPMorgan Chase Bank, N.A., as collateral agent (in such capacity, the “Collateral Agent”) for its own benefit and the benefit of the other Credit Parties, and the lenders from time to time party thereto (individually, a “Lender” and, collectively, the “Lenders”).  Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

                              (the “Assignor”) and                                (the “Assignee”) agree as follows:

 

l.                The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations as a Lender under the Credit Agreement as of the date hereof (including, without limitation, such interest in each of the Assignor’s outstanding Commitments, if any, and the Loans (and related Obligations) owing to it) specified in Section 1 of Schedule I hereto.  After giving effect to such sale and assignment, the Assignor’s and the Assignee’s Commitments and the amount of the Loans owing to the Assignor and the Assignee and the amount of Letters of Credit participated in by the Assignor and the Assignee will be as set forth in Section 2 of Schedule I hereto.

 

2.            The Assignor:   (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any Liens and that it is legally authorized to enter into this Assignment and Assumption; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, warranties or representations made in, or in connection with, the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; and (d) confirms, in the case of an Assignee who is not a Lender, an Affiliate of a Lender, or an Approved Fund, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the Assignor subject to this Assignment and Assumption, is not less than $1.0 million (and in integral multiples of $1.0

 

 

million in excess thereof), and after giving effect thereto, the Assignor shall hold a Commitment of at least $1.0 million, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

 

3.            The Assignee:   (a) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 6.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption; (b) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (c) appoints and authorizes the Agents to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agents by the terms thereof, together with such powers as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Credit Agreement, are required to be performed by it as a Lender; (e) specifies as its lending office (and address for notices) the office set forth beneath its name on the signature pages hereof; (f) if it is a Fee Recipient, confirms that it is a Permitted Investor, and attached hereto is the documentation it is required to deliver pursuant to the terms of the Credit Agreement, duly completed and executed by such Permitted Investor, (g) agrees that, if the Assignee is a Foreign Lender entitled to an exemption from, or reduction of, withholding tax under the law of the jurisdiction in which the applicable Loan Party is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under the Credit Agreement or under any other Loan Document, it shall deliver to the Loan Parties and the Administrative Agent (in such number of copies as shall be requested by the recipient) whichever of the following is applicable:  (i) duly completed copies of Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E (as applicable), claiming eligibility for benefits of an income tax treaty to which the United States is a party, (ii) duly completed copies of Internal Revenue Service Form W-8ECI, (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a U.S. Tax Certificate in the form of Exhibit M-1, Exhibit M-2, Exhibit M-3 or Exhibit M-4 to the Credit Agreement (the “U.S. Tax Certificates”) and (B) duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable), (iv) to the extent a Foreign Lender is not the beneficial owner (for example, where the Foreign Lender is a partnership or participating Lender granting a typical participation), Internal Revenue Service Form W-8IMY, accompanied by an Internal Revenue Service Form W-8ECI, W-8BEN or W-8BEN-E (as applicable), U.S. Tax Compliance Certificate, Internal Revenue Service Form W-9 or Form W-8IMY from each beneficial owner, as applicable, or (v) any other form prescribed by applicable Law as a basis for claiming exemption from, or a reduction in, United States federal withholding tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made; and (h) represents and warrants that it is an Eligible Assignee.

 

 

4.            Following the execution of this Assignment and Assumption by the Assignor and the Assignee, it will be delivered, together with a processing and recordation fee in the amount of $3,500 (unless such fee has been waived by the Administrative Agent in its sole discretion), to the Administrative Agent for acceptance and recording by the Administrative Agent.  The effective date of this Assignment and Assumption shall be the date of acceptance thereof by the Administrative Agent, unless otherwise specified on Schedule I hereto (the “Effective Date”).

 

5.            Upon such acceptance and recording by the Administrative Agent and, to the extent required by Section 11.06(b)(iii) of the Credit Agreement, consent by the Administrative Agent, the Borrower, the L/C Issuer, and/or the Swing Line Lender, as applicable (such consent not to be unreasonably withheld or delayed), from and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned by this Assignment and Assumption, shall have the rights and obligations of a Lender under the Credit Agreement, and (b) the Assignor shall, to the extent of the interest assigned by this Assignment and Assumption, be released from its obligations under the Credit Agreement.

 

6.            Upon such acceptance and recording by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee.  The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.

 

7.            This Assignment and Assumption shall be governed by, and be construed in accordance with, the laws of the State of New York.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

 

	
 
    	
[ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Lending Office (and   address for notices):
    
	
 
    	
[Address]
    

 

 

Acknowledged and, to the extent required by Section 11.06(b)(i)(B) or Section 11.06(b)(iii) of the Credit Agreement, consented to, this                      day of                     .

 

 

	
 
    	
ADMINISTRATIVE AGENT:
    
	
 
    	
JPMORGAN CHASE BANK,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Acknowledged and, to the extent required by Section 11.06(b)(i)(B) or Section 11.06(b)(iii) of the Credit Agreement, consented to, this                      day of                     .

 

 

	
 
    	
BORROWER:
    
	
 
    	
THE CONTAINER   STORE, INC.3
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

3  Include as required by the Credit Agreement.

 

 

Acknowledged and, to the extent required by Section 11.06(b)(i)(B) or Section 11.06(b)(iii) of the Credit Agreement, consented to, this                      day of                     .

 

 

	
 
    	
SWING LINE LENDER:
    
	
 
    	
JPMORGAN CHASE BANK,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Acknowledged and, to the extent required by Section 11.06(b)(i)(B) or Section 11.06(b)(iii) of the Credit Agreement, consented to, this                      day of                     .

 

	
 
    	
L/C ISSUER
    
	
 
    	
JPMORGAN CHASE BANK,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule I

 

to

 

Assignment and Assumption

 

	
Section 1.
    	
Percentage/Amount of   Commitments/Loans/Letters of Credit Assigned by Assignor to Assignee.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Applicable Percentage   assigned by Assignor:
    	
 
    	
                             %
    
	
 
    	
 
    	
 
    
	
Commitment assigned by   Assignor:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Outstanding   Principal Amount of Loans assigned by Assignor:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Participations assigned   by Assignor in L/C Obligations:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Section 2.
    	
Percentage/Amount of   Commitments/Loans/Letters of Credit Held by Assignor and Assignee after   giving effect to Assignment and Assumption.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Assignor’s Applicable   Percentage:
    	
 
    	
                             %
    
	
 
    	
 
    	
 
    
	
Assignee’s Applicable   Percentage:
    	
 
    	
                             %
    
	
 
    	
 
    	
 
    
	
Assignor’s Commitment:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Assignee’s Commitment:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Outstanding   Principal Amount of Loans Owing to Assignor:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Outstanding   Principal Amount of Loans Owing to Assignee:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Participations   by Assignor in L/C Obligations:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Aggregate Participations   by Assignee in L/C Obligations:
    	
 
    	
$                               
    
	
 
    	
 
    	
 
    
	
Section 3.
    	
Effective Date:
    	
 
    	
 
    

 

 

ANNEX IV

 

Exhibit M-1

 

[Form of] U.S. Tax Certificate

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Credit Agreement, dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, THE CONTAINER STORE, INC., a Texas corporation (“Borrower”), the Guarantors party thereto (each individually, a “Guarantor” and, collectively, the “Guarantors”), each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), and JPMORGAN CHASE BANK, N.A. as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties.

 

Pursuant to the provisions of Section 3.01(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-United States person status on Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable).  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date: _________, 20[  ]
    	
 
    

 

 

Exhibit M-2

 

[Form of] U.S. Tax Certificate

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Credit Agreement, dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, THE CONTAINER STORE, INC., a Texas corporation (“Borrower”), the Guarantors party thereto (each individually, a “Guarantor” and, collectively, the “Guarantors”), each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), and JPMORGAN CHASE BANK, N.A. as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties.

 

Pursuant to the provisions of Section 3.01(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect applicable partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its direct or indirect applicable partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect applicable partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871-(h)(3)(B) of the Code, and (v) none of its direct or indirect applicable partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with Internal Revenue Service Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) or (ii) an Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date: _________, 20[  ]
    	
 
    

 

 

Exhibit M-3

 

[Form of] U.S. Tax Certificate

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Credit Agreement, dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, THE CONTAINER STORE, INC., a Texas corporation (“Borrower”), the Guarantors party thereto (each individually, a “Guarantor” and, collectively, the “Guarantors”), each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), and JPMORGAN CHASE BANK, N.A. as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties.

 

Pursuant to the provisions of Section 3.01(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-United States person status on Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable).  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date: _________, 20[  ]
    	
 
    

 

 

Exhibit M-4

 

[Form of] U.S. Tax Certificate

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Credit Agreement, dated as of April 6, 2012 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, THE CONTAINER STORE, INC., a Texas corporation (“Borrower”), the Guarantors party thereto (each individually, a “Guarantor” and, collectively, the “Guarantors”), each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), and JPMORGAN CHASE BANK, N.A. as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties.

 

Pursuant to the provisions of Section 3.01(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect applicable partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect applicable partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect applicable partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (v) none of its direct or indirect applicable partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with Internal Revenue Service Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) or (ii) an Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date: _________, 20[  ]Exhibit 4.1

 

INLAND REAL ESTATE INCOME TRUST, INC.

AMENDED AND RESTATED DISTRIBUTION REINVESTMENT
PLAN

 

Inland Real Estate
Income Trust, Inc. (the “Company”), as a service to its stockholders, hereby offers participation in its amended and
restated distribution reinvestment plan (the “Plan”). The Plan is designed to provide participants with a simple, convenient
and economical way to purchase shares of the Company’s common stock. Stockholders who choose not to participate in the Plan
will receive cash distributions, as declared and paid by the Company.

To aid in your understanding
of the question-and-answer statements set forth below, you may find the following basic definitions useful:

“Shares
registered in your name” means shares of the Company’s common stock for which you are the owner of record. If you
own shares of the Company’s common stock but are not the owner of record for those shares, it is likely that the shares you
own are registered in the name of another (e.g., in the name of a bank or trustee holding shares of common stock on your behalf)
and are held for you by the registered owner in an account in your name.

“Shares
enrolled in the Plan” means shares registered in your name that you have chosen to enroll in the Plan. Distributions
on all shares enrolled in the Plan are automatically reinvested in additional shares of the Company’s common stock. You do
not have to enroll all of your shares of common stock in the Plan.

The following question-and-answer
statements define the Plan, effective as of November 2, 2015.

Purpose

1. What is the purpose of the Plan?

The purpose of the
Plan is to provide eligible stockholders (see Question 5) with a simple and convenient way to invest cash distributions in additional
shares of the Company’s common stock. The Plan is intended to be used by you as a vehicle for long-term investment in the
Company’s common stock.

Maximum Ownership
of Shares. To maintain the Company’s qualification as a REIT, no more than 50% of its outstanding shares of common stock
may be owned directly or indirectly by five or fewer individuals at any time during July through December of each year. To ensure
that the Company meets this test, its charter provides that no person may own more than 9.8% in value of its issued and outstanding
stock or more than 9.8% in value or in number of shares, whichever is more restrictive, of its issued and outstanding common stock.
Therefore, to the extent that any purchase of shares of common stock under the Plan would cause you to own in excess of 9.8% in
value of the Company’s issued and outstanding stock or 9.8% in value or in number of shares, whichever is more restrictive,
of the Company’s issued and outstanding common stock, you may not reinvest your distributions to purchase additional shares
of common stock.

Investment Options

2. What investment options are
available to participants in the Plan?

The Plan provides
two options for purchasing additional shares of common stock:

Full Distribution
Reinvestment Option. You may have cash distributions on all of your shares of common stock automatically reinvested; or

    1 

     

    

 

Partial Distribution
Reinvestment Option. You may reinvest distributions on a percentage of the shares of common stock you own and continue to receive
cash distributions on the other shares registered in your name. You can take advantage of this option by enrolling in the Plan
only that percentage of your shares for which you wish to reinvest distributions.

Benefits and Disadvantages

3. What are the benefits and disadvantages
of the Plan?

Benefits.
Before deciding whether to participate, you should consider the following benefits of the Plan:

		•	You may purchase additional shares of the Company’s common stock by automatically reinvesting
cash distributions on all, or less than all, of the shares registered in your name. You will continue to receive cash distributions
for those shares of common stock that you choose not to enroll in the Plan.

		•	No commissions, brokerage fees or service charges will be paid by you in connection with purchases
under the Plan.

		•	Your funds will be fully invested because the Plan permits fractions of shares of common stock
to be purchased for you and registered in your name. Distributions on such fractions, as well as on whole shares, will be reinvested
in additional shares of common stock and registered in your name.

		•	Regular statements from the Administrator (as defined below) reflecting all current activity
in your account, including purchases, sales and latest balance, will simplify your recordkeeping.

Disadvantages.
Before deciding whether to participate, you should consider the following disadvantages of the Plan:

		•	You will be treated for U.S. federal income tax purposes as receiving a distribution equal to
the fair market value of the shares of common stock purchased for you as a result of the reinvestment of cash distributions. This
distribution will be taxable to the extent of the Company’s current and accumulated earnings and profits (and to the extent
the distribution exceeds both the Company’s current and accumulated earnings and profits and the tax basis in your shares
of common stock). Accordingly, you may have a tax liability without a corresponding distribution of cash with which to pay the
liability when it comes due.

		•	You may not know the actual number of shares of common stock purchased for you as a result of
the reinvestment of cash distributions until after the applicable Distribution Payment Date, as defined in Question 16.

		•	You may incur income taxes, as described in Question 20.

		•	We may amend, suspend, modify or terminate the Plan at any time, without the prior consent of
participants in the Plan.

    2 

     

    

 

Administration

4. Who administers the Plan for
participants?

DST Systems, Inc.
(the “Administrator”) administers the Plan, keeps records, sends statements of account to each participant, and performs
other duties related to the Plan. Shares purchased under the Plan will be registered in your name.

The Company, in
conjunction with the Administrator, may adopt rules and regulations to facilitate the administration of the Plan. The Company reserves
the right to interpret the provisions of the Plan, and any rules and regulations adopted in accordance therewith, in its sole discretion.
The determination of any matter with respect to the Plan made by the Company in good faith shall be final and conclusive and binding
on the Administrator and all participants in the Plan. The Administrator currently acts as distribution disbursing and transfer
agent and registrar for the Company’s common stock and may have other business relationships with the Company from time to
time.

For answers to questions
regarding the Plan and to request Plan forms, please contact the Company at (800) 826-8228.

Eligibility and Enrollment

5. Who is eligible to participate?

If you are a stockholder
in the Company and have shares registered in your name, you are eligible to participate in the Plan. If your shares of common stock
are registered in a name other than your own (e.g., in the name of a bank or trustee holding shares of common stock on your behalf)
and you want to participate in the Plan, you should consult directly with the entity holding your shares to determine if they can
enroll in the Plan. You will not be eligible to participate in the Plan, however, if you reside in a jurisdiction in which it is
unlawful, or where it is unduly burdensome, for the Company or the Administrator to let you participate.

The Company reserves
the right to reject the enrollment of any participant who has abused the Plan through excessive sales, terminations and enrollments,
or otherwise (see Questions 1 and 26).

6. When may an eligible person
join the Plan?

If you are eligible
to participate as described in Question 5 and have been furnished a copy of the Company’s prospectus, you may join the Plan
at any time. Your enrollment will become effective as described below in Question 12.

7. What happens if a participant’s
financial condition changes after enrollment?

You must notify
the Administrator in the event that, at any time during your participation in the Plan, there is any material change in your financial
condition, as compared to information previously provided to your broker or financial advisors, or inaccuracy of any representation
under the subscription agreement for your initial purchase of securities, including specifically with respect to the concentration
limits applicable to residents of certain states. A “material change” also includes any anticipated or actual material
decrease in your net worth or annual gross income, or any other material change in circumstances that may be likely to cause you
to fail to meet the minimum income and net worth standards or the concentration limits set forth in the Company’s prospectus
for your initial purchase of shares or cause your broker or financial advisor to determine that an investment in shares of the
Company’s common stock is no longer suitable and appropriate for you.

    3 

     

    

 

8. How does an eligible person
join the Plan?

You may join the
Plan by completing the appropriate section of the subscription agreement or submitting a distribution election form. In the event
you wish to enroll shares of common stock that are registered in more than one name (i.e., joint tenants, trustees, etc.), all
registered stockholders must sign the subscription agreement.

You should send
any original subscription agreement to the address indicated on your subscription agreement. You should send any distribution election
forms to the address set forth on the form.

9. Is partial participation possible
under the Plan?

Yes. You may elect
to enroll in the Plan all, or less than all, of the shares registered in your name.

10. For what reinvestment options
does the Election Form provide?

By joining the Plan,
you authorize the Administrator to invest in accordance with the Plan all cash distributions paid on your shares then or subsequently
enrolled in the Plan. The Plan also provides for the partial enrollment in the Plan of your shares of common stock. If you do not
wish all of the shares of common stock held in your name to be enrolled in the Plan, you may designate the percentage of shares
of common stock you do wish enrolled.

11. How may a participant change
options under the Plan?

As a participant, you may change your
reinvestment options at any time by requesting a distribution election form and returning it to the Administrator at the address
set forth on the form. Any change in reinvestment option must be received by the Administrator not later than five days prior to
the next Distribution Payment Date in order to make a change with respect to that distribution payment (see also Questions 12,
14 and 16).

12. When does enrollment in the
Plan become effective?

Your signed subscription
agreement or distribution election form will be processed as quickly as practicable after its receipt by the Administrator. Reinvestment
of cash distributions on your shares enrolled in the Plan will take place as follows:

		•	If your signed subscription agreement or distribution election form is received by the Administrator
prior to the Distribution Payment Date, reinvestment of distributions on your enrolled shares of common stock will begin with that
Distribution Payment Date.

		•	If your signed subscription agreement or distribution election form is received by the Administrator
on or after the Distribution Payment Date, that distribution payment will be made in cash and reinvestment of distributions on
your enrolled shares of common stock will begin with the next following Distribution Payment Date.

For a discussion of record dates and Distribution Payment
Dates, see Questions 14 and 16.

Costs

13. Are there any costs to participants
in the Plan?

All costs to administer
the Plan are paid by the Company, except that you may incur income taxes as a result of your participation in the Plan (see Question
20).

    4 

     

    

 

Purchases

14. When are the record dates and
Distribution Payment Dates for the Company’s distributions?

You should not assume
that the Company will pay distributions or pay them in any particular amount or on any particular date. The Company’s board
of directors will establish Distribution Payment Dates and corresponding record dates.

The Company currently
has no plans to declare any special or extraordinary distributions. However, should any such special distribution be declared,
the amount due on shares enrolled in the Plan, unless otherwise advised by the Company, will be paid to your account under the
Plan and invested in accordance with the Plan, subject to your right to withdraw at any time.

15. What is the source of shares
purchased under the Plan?

The sole source
of shares purchased under the Plan is newly issued shares of common stock purchased directly from the Company.

16. When will shares be purchased
under the Plan?

Cash distributions
reinvested under the Plan will be applied to the purchase of shares of common stock on the dates that cash distributions are paid
on the Company’s common stock (each, a “Distribution Payment Date”). Shares generally will be purchased for you
and registered in your name on the Distribution Payment Date.

17. What will be the price of the
shares purchased under the Plan?

The price per share
for shares of common stock purchased for you under the Plan on any Distribution Payment Date will be equal to $9.50 per share,
which is 95% of the last price at which shares were offered by the Company in its “best efforts” public offering of
its shares, until such time as the Company reports an estimated value of its shares. On and after the date on which the Company
reports an estimated value of its shares, the price per share under the Plan will be equal to the estimated value of a share, as
determined by the Company’s board of directors and reported by the Company from time to time. Assuming that the Plan has
not been terminated or suspended in connection with a listing, if a listing occurs, the price per share for shares of common stock
purchased for you under the Plan will be equal to 100% of the average daily open and close sales price per share, as reported by
the national securities exchange or inter-dealer quotation system, whichever is applicable, on any Distribution Payment Date.

18. How many shares will be purchased
for participants?

The number of shares
of common stock purchased for you depends on the aggregate amount of your cash distributions and the purchase price per share,
determined in accordance with Question 17. A number of shares of common stock, including fractions computed to three decimal places,
equal to the aggregate amount of your cash distributions on any particular Distribution Payment Date, less taxes on distributions
(if applicable, see Question 20 and Question 21), divided by the applicable purchase price per share, will be purchased for you
and registered in your name. The Administrator and the Company will not accept orders to purchase a specific number of shares or
to purchase on days other than the applicable Distribution Payment Date. The Company will not purchase shares of common stock for
you under the Plan to the extent that the purchase would cause you to own in excess of 9.8% in value of the Company’s issued
and outstanding shares of stock or 9.8% in value or in number of shares, whichever is more restrictive, of its issued and outstanding
shares of common stock, unless those limitations are waived by the Company’s board of directors.

    5 

     

    

 

19. Will shares purchased through
the Plan earn distributions?

Yes. All shares
purchased through the Plan, including fractional shares, will be entitled to any distributions when and as declared by the Company.
Only shares of common stock held as of a record date for a given distribution are entitled to that distribution.

Taxes

20. What are the U.S. federal income
tax consequences of participation in the Plan?

The Company believes
the following to be an accurate summary of the U.S. federal income tax consequences for Plan participants as of the effective date
of this Plan. You are urged to consult with your own tax advisor to determine the particular tax consequences that may result from
your participation in the Plan and the subsequent disposition by you of shares of common stock purchased pursuant to the Plan.

(1) Cash distributions
reinvested under the Plan are, in effect, treated for U.S. federal income tax purposes as having been received in cash on the Distribution
Payment Date even though they are used to purchase additional shares of common stock. You will be treated for U.S. federal income
tax purposes as having received, on the Distribution Payment Date, a distribution equal to the sum of (a) the fair market value
of any common stock purchased under the Plan (including common stock purchased through reinvestment of dividends on shares held
in your account), and (b) any cash distributions actually received by you with respect to your shares of common stock not included
in the Plan, and such distribution (provided it is not designated as a capital gain dividend or qualified dividend income) will
constitute a taxable dividend to the extent of the Company’s current and accumulated earnings and profits (as determined
for U.S. federal income tax purposes) allocable to the distribution. Distributions in excess of the Company’s current and
accumulated earnings and profits first will constitute a tax-deferred return of capital that reduces the tax basis in your shares,
but not below zero, and then capital gain to the extent the excess distribution exceeds the tax basis in your shares.

(2) The tax basis
per share of common stock purchased under the Plan is the fair market value of the share on the Distribution Payment Date on which
the share was purchased for you and registered in your name.

(3) The holding
period for shares of common stock acquired with reinvested distributions generally will begin on the day following the Distribution
Payment Date on which the shares were purchased for you and registered in your name (see Question 16).

(4) A gain or loss
may be recognized upon your disposition of common stock purchased through the Plan. The amount of gain or loss recognized will
be the difference between the cash and fair market value of property received for the whole or fractional shares of common stock
and your tax basis in the whole or fractional shares of common stock. Generally, any gain or loss recognized on the disposition
of common stock acquired under the Plan will be treated for U.S. federal income tax purposes as a capital gain or loss.

21. How are U.S. federal income
tax withholding provisions applied to participants in the Plan?

If you fail to furnish
a valid taxpayer identification number to the Administrator and fail to certify that you are not subject to backup withholding,
then the Administrator is required by law under the backup withholding rules to withhold taxes from the amount of distributions
and the proceeds from any sale of your shares. Under certain other circumstances, you also may be subject to backup withholding.
The withheld amount will be deducted from the amount of distributions and the remaining amount of distributions reinvested. In
the case of a sale, the withheld amount will be deducted from the sale proceeds and the remaining amount will be sent to you.

    6 

     

    

 

If you are a non-U.S.
stockholder you must provide the required U.S. federal income tax certifications to establish your status as a non-U.S. stockholder
in order for backup withholding not to apply to you. You also must provide the required certifications if you wish to claim the
benefit of exemptions from U.S. federal income tax withholding or reduced withholding rates under a treaty or convention entered
into between the United States and your country of residence. If you are a non-U.S. stockholder participating in the Plan whose
dividends are subject to U.S. federal income tax withholding, the appropriate amount will be withheld and the balance will be applied
to purchase shares of common stock, which will be registered in your name.

Reports to Participants

22. What kinds of reports will
be sent to participants in the Plan?

A summary statement
of your account will be mailed to you by the Administrator on a monthly basis until the end of 2015 and, thereafter, on a quarterly
basis. These statements are your continuing record of current activity including the cost of your purchases and proceeds from your
sales in the Plan. In addition, you will be sent copies of other communications sent to holders of the Company’s common stock,
including the Company’s annual report, the notice of annual meeting, proxy statement, and the information you will need for
reporting your distribution income for U.S. federal income tax purposes. If, after receiving and reviewing this information, you
no longer wish to participate in the Plan, you may withdraw from the Plan in accordance with the terms set forth in Questions 24
and 25 below.

All notices, statements
and reports from the Administrator and Company to you will be addressed to your latest address of record with the Administrator.
Therefore, you must promptly notify the Administrator of any change of address. To be effective with respect to mailings of distribution
checks, address changes must be received by the Administrator five business days prior to the next Distribution Payment Date.

Certificates for Shares

23. Will certificates be issued
for shares purchased?

No. Shares of the
Company’s common stock purchased through the Plan will be issued in book entry form only. This means that we will not issue
actual share certificates to you or any holders of the Company’s common stock. The use of book entry only registration protects
you against loss, theft or destruction of stock certificates and reduces costs. Shares of common stock purchased through the Plan
will be registered in your name. The number of shares of common stock registered in your name will be shown on your statement of
your account.

Termination of Participation

24. When may a participant terminate
participation in the Plan?

You may request
termination of your participation in the Plan at any time. Any distributions earned subsequent to the effective date of your termination
will be paid to you by check unless you re-enroll in the Plan.

25. How does a participant terminate
participation in the Plan?

To terminate your
participation in the Plan, you must notify the Administrator that you wish to do so. An election form should be sent to the address
set forth on the election form.

26. May an individual’s participation
be terminated by the Company or the Administrator?

The Company reserves
the right to terminate the participation of any participant who, in the Company’s sole discretion, is abusing the Plan or
causing undue expense. The Company also reserves the right to suspend or terminate the Plan with respect to participants in one
or more jurisdictions.

    7 

     

    

 

Sales of Shares 

27. What happens when a participant
sells or transfers all of his or her shares?

If you sell or transfer
all the shares registered in your name, your participation in the Plan will automatically terminate. Any distributions received
after your disposition of the shares (for example, if the shares of common stock are disposed after the record date and before
the Distribution Payment Date), will be paid in cash.

28. What happens when a participant
sells or transfers some but not all of his or her shares?

If you have elected
the “Full Distribution Reinvestment” option described in Question 2, and you transfer or sell a portion of the shares
registered in your name, then the Administrator will continue to reinvest the distributions on all remaining shares registered
in your name.

If you have elected
the “Partial Distribution Reinvestment” option described in Question 2 by enrolling in the Plan only a percentage of
the shares you own, and you transfer or sell a portion of the shares registered in your name, then the Administrator will continue
to reinvest the distributions on the remaining shares registered in your name up to the number of shares originally enrolled in
the Plan. For example, if you requested the Company to enroll in the Plan 50% of the 100 shares registered in your name, and then
you transferred or sold 20 shares, the Company would continue to reinvest the distributions on 40 shares. If instead, you transferred
or sold 80 shares, the Company would continue to reinvest the distributions on 10 shares.

Other Information

29. What are the responsibilities
of the Administrator and the Company under the Plan?

Subject to the limitations
contained in the Company’s charter, the Administrator and the Company will not be liable under the Plan for any act done
in good faith or for any good faith omission to act, including, without limitation, any claim of liability arising with respect
to the prices or times at which shares are purchased for you or any change in the market value of the Company’s common stock.

You should not assume
that the Company will pay distributions or pay them in any particular amount or on any particular date.

You should recognize
that neither the Administrator nor the Company can assure you of a profit or protect you against a loss on the shares of common
stock purchased by you under the Plan.

30. May the Plan be changed or
discontinued?

Notwithstanding
any other provisions of the Plan, the Company reserves the right to amend, modify, suspend or terminate the Plan at any time, in
whole or in part, or in respect to participants in one or more jurisdictions, without the prior consent of participants in the
Plan. In the event that the Company amends, suspends or terminates the Plan, however, the Company will mail participants notice
of the change at least ten calendar days prior to the change, and the Company will disclose the change in a report filed with the
SEC on either Form 8-K, Form 10-Q or Form 10-K, as appropriate.

8

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