transition taxtit
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

		
 	 	
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 	For the quarterly period ended September 30, 2022	
 
OR

 	 	
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 	For the transition period from to	
 
Commission File Number: 001-32903
 
THE WESTERN UNION COMPANY
(Exact name of registrant as specified in its charter)

 	 	 	
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)	 	20-4531180
(I.R.S. Employer
Identification No.)	
 	7001 EAST BELLEVIEW AVENUE
Denver, Colorado 80237
(Address of principal executive offices)	 	
 
Registrant’s telephone number, including area code: (866) 405-5012
Securities registered pursuant to Section 12(b) of the Act:

 	 	 	
Title of each class	Trading symbol	Name of each exchange on which registered	
Common Stock, $0.01 Par Value	WU	The New York Stock Exchange	
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b‑2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒
As of October 27, 2022, 386,170,808 shares of the registrant’s common stock were outstanding.

 

Table of Contents
THE WESTERN UNION COMPANY
INDEX

 	 	PAGE
NUMBER	
PART I FINANCIAL INFORMATION	 	
 	 	 	
Item 1.	Financial Statements (Unaudited)	3	
 	 	 	
 	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2022 and 2021	3	
 	 	 	
 	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	4	
 	 	 	
 	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	5	
 	 	 	
 	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	6	
 	 	 	
 	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	8	
 	 	 	
 	Notes to Condensed Consolidated Financial Statements	10	
 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39	
 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55	
 	 	 	
Item 4.	Controls and Procedures	55	
 	 	 	
 	Review Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	56	
 	 	 	
PART II OTHER INFORMATION	 	
 	 	 	
Item 1.	Legal Proceedings	57	
 	 	 	
Item 1A.	Risk Factors	57	
 	 	 	
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57	
 	 	 	
Item 3.	Defaults Upon Senior Securities	57	
 	 	 	
Item 4.	Mine Safety Disclosures	57	
 	 	 	
Item 5.	Other Information	57	
 	 	 	
Item 6.	Exhibits	58	

2

Table of Contents
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Revenues	 	$	1,089.6	 	 	$	1,286.3	 	 	$	3,383.6	 	 	$	3,786.0	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	 	637.3	 	 	 	720.1	 	 	 	1,945.4	 	 	 	2,181.1	 	
Selling, general, and administrative	 	 	220.5	 	 	 	247.6	 	 	 	704.9	 	 	 	798.6	 	
Total expenses	 	 	857.8	 	 	 	967.7	 	 	 	2,650.3	 	 	 	2,979.7	 	
Operating income	 	 	231.8	 	 	 	318.6	 	 	 	733.3	 	 	 	806.3	 	
Other income/(expense):	 	 	 	 	 	 	 	 	 	 	 	 	
Gain on divestiture of business (Note 4)	 	 	—	 	 	 	—	 	 	 	151.4	 	 	 	—	 	
Interest income	 	 	4.9	 	 	 	0.4	 	 	 	7.3	 	 	 	1.1	 	
Interest expense	 	 	(25.2	)	 	 	(25.7	)	 	 	(74.8	)	 	 	(79.7	)	
Other income/(expense), net	 	 	(17.8	)	 	 	(1.8	)	 	 	(25.1	)	 	 	26.8	 	
Total other income/(expense), net	 	 	(38.1	)	 	 	(27.1	)	 	 	58.8	 	 	 	(51.8	)	
Income before income taxes	 	 	193.7	 	 	 	291.5	 	 	 	792.1	 	 	 	754.5	 	
Provision for income taxes	 	 	19.8	 	 	 	58.8	 	 	 	130.9	 	 	 	117.5	 	
Net income	 	$	173.9	 	 	$	232.7	 	 	$	661.2	 	 	$	637.0	 	
Earnings per share:	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.45	 	 	$	0.57	 	 	$	1.70	 	 	$	1.56	 	
Diluted	 	$	0.45	 	 	$	0.57	 	 	$	1.70	 	 	$	1.55	 	
Weighted-average shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	386.5	 	 	 	406.3	 	 	 	388.8	 	 	 	409.1	 	
Diluted	 	 	387.6	 	 	 	408.0	 	 	 	389.9	 	 	 	411.3	 	
 
See Notes to Condensed Consolidated Financial Statements.
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Table of Contents
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in millions)

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Net income	 	$	173.9	 	 	$	232.7	 	 	$	661.2	 	 	$	637.0	 	
Other comprehensive income, net of reclassifications and tax (Note 9):	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized losses on investment securities	 	 	(30.0	)	 	 	(7.9	)	 	 	(105.3	)	 	 	(18.7	)	
Unrealized gains on hedging activities	 	 	25.6	 	 	 	18.2	 	 	 	54.0	 	 	 	44.4	 	
Foreign currency translation adjustments	 	 	—	 	 	 	—	 	 	 	(17.8	)	 	 	—	 	
Defined benefit pension plan adjustments	 	 	—	 	 	 	2.3	 	 	 	—	 	 	 	7.1	 	
Total other comprehensive income/(loss)	 	 	(4.4	)	 	 	12.6	 	 	 	(69.1	)	 	 	32.8	 	
Comprehensive income	 	$	169.5	 	 	$	245.3	 	 	$	592.1	 	 	$	669.8	 	
 
See Notes to Condensed Consolidated Financial Statements.
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Table of Contents
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)

 	 	September 30,	 	 	December 31,	 	
 	 	2022	 	 	2021	 	
Assets	 	 	 	 	 	 	
Cash and cash equivalents	 	$	1,176.1	 	 	$	1,208.3	 	
Settlement assets	 	 	3,095.7	 	 	 	2,843.5	 	
Property and equipment, net of accumulated depreciation of $635.4 and $650.4, respectively	 	 	112.0	 	 	 	129.4	 	
Goodwill	 	 	2,034.6	 	 	 	2,034.6	 	
Other intangible assets, net of accumulated amortization of $730.4 and $731.8, respectively	 	 	466.2	 	 	 	417.1	 	
Other assets (Note 5)	 	 	1,201.8	 	 	 	737.7	 	
Assets held for sale (Note 4)	 	 	814.9	 	 	 	1,452.9	 	
Total assets	 	$	8,901.3	 	 	$	8,823.5	 	
Liabilities and stockholders' equity	 	 	 	 	 	 	
Liabilities:	 	 	 	 	 	 	
Accounts payable and accrued liabilities	 	$	435.7	 	 	$	450.2	 	
Settlement obligations	 	 	3,095.7	 	 	 	2,843.5	 	
Income taxes payable	 	 	849.8	 	 	 	870.7	 	
Deferred tax liability, net	 	 	161.6	 	 	 	203.8	 	
Borrowings	 	 	2,611.0	 	 	 	3,008.4	 	
Other liabilities (Note 4)	 	 	668.7	 	 	 	269.4	 	
Liabilities associated with assets held for sale (Note 4)	 	 	550.5	 	 	 	821.9	 	
Total liabilities	 	 	8,373.0	 	 	 	8,467.9	 	
 	 	 	 	 	 	 	
Commitments and contingencies (Note 6)	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Stockholders' equity:	 	 	 	 	 	 	
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued	 	 	—	 	 	 	—	 	
Common stock, $0.01 par value; 2,000 shares authorized; 385.9 shares and 393.8 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	 	 	3.9	 	 	 	3.9	 	
Capital surplus	 	 	983.0	 	 	 	941.0	 	
Accumulated deficit	 	 	(337.4	)	 	 	(537.2	)	
Accumulated other comprehensive loss	 	 	(121.2	)	 	 	(52.1	)	
Total stockholders' equity	 	 	528.3	 	 	 	355.6	 	
Total liabilities and stockholders' equity	 	$	8,901.3	 	 	$	8,823.5	 	
 
See Notes to Condensed Consolidated Financial Statements.
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THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)

 	 	Nine Months Ended	 	
 	 	September 30,	 	
 	 	2022	 	 	2021	 	
Cash flows from operating activities	 	 	 	 	 	 	
Net income	 	$	661.2	 	 	$	637.0	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	
Depreciation	 	 	31.8	 	 	 	38.4	 	
Amortization	 	 	105.7	 	 	 	121.9	 	
Gain on divestiture of business, excluding transaction costs (Note 4)	 	 	(155.8	)	 	 	—	 	
Gain on the sale of noncontrolling interest in a private company (Note 4)	 	 	—	 	 	 	(47.9	)	
Other non-cash items, net	 	 	54.0	 	 	 	124.2	 	
Increase/(decrease) in cash, excluding the effects of divestitures, resulting from changes in:	 	 	 	 	 	 	
Other assets	 	 	(166.4	)	 	 	(78.3	)	
Accounts payable and accrued liabilities	 	 	50.6	 	 	 	(27.9	)	
Income taxes payable	 	 	(29.6	)	 	 	(61.7	)	
Other liabilities	 	 	(29.1	)	 	 	(19.7	)	
Net cash provided by operating activities	 	 	522.4	 	 	 	686.0	 	
Cash flows from investing activities	 	 	 	 	 	 	
Payments for capitalized contract costs	 	 	(58.4	)	 	 	(94.7	)	
Payments for internal use software	 	 	(68.0	)	 	 	(59.1	)	
Purchases of property and equipment	 	 	(21.1	)	 	 	(26.4	)	
Purchases of settlement investments	 	 	(663.3	)	 	 	(336.4	)	
Proceeds from the sale of settlement investments	 	 	544.1	 	 	 	689.9	 	
Maturities of settlement investments	 	 	131.9	 	 	 	172.0	 	
Proceeds from the sale of noncontrolling interest in a private company (Note 4)	 	 	—	 	 	 	50.9	 	
Purchase of noncontrolling interest in stc Bank (Note 4)	 	 	—	 	 	 	(200.0	)	
Purchases of non-settlement investments (Note 5)	 	 	(400.0	)	 	 	—	 	
Proceeds from divestiture, net of cash divested (Note 4)	 	 	896.4	 	 	 	—	 	
Other investing activities	 	 	5.1	 	 	 	(3.6	)	
Net cash provided by investing activities	 	 	366.7	 	 	 	192.6	 	
Cash flows from financing activities	 	 	 	 	 	 	
Cash dividends and dividend equivalents paid (Note 9)	 	 	(275.5	)	 	 	(288.7	)	
Common stock repurchased (Note 9)	 	 	(193.1	)	 	 	(235.8	)	
Net proceeds from/(repayments of) commercial paper	 	 	(100.0	)	 	 	40.0	 	
Net proceeds from issuance of borrowings	 	 	—	 	 	 	891.7	 	
Principal payments on borrowings	 	 	(300.0	)	 	 	(1,150.0	)	
Make-whole premium on early extinguishment of debt	 	 	—	 	 	 	(14.3	)	
Proceeds from exercise of options	 	 	9.5	 	 	 	11.6	 	
Net change in settlement obligations	 	 	(31.0	)	 	 	(138.3	)	
Other financing activities	 	 	(0.2	)	 	 	—	 	
Net cash used in financing activities	 	 	(890.3	)	 	 	(883.8	)	
Net change in cash and cash equivalents, including settlement, and restricted cash	 	 	(1.2	)	 	 	(5.2	)	
Cash and cash equivalents, including settlement, and restricted cash at beginning of period	 	 	2,110.9	 	 	 	2,143.1	 	
Cash and cash equivalents, including settlement, and restricted cash at end of period	 	$	2,109.7	 	 	$	2,137.9	 	
See Notes to Condensed Consolidated Financial Statements.

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Table of Contents
THE WESTERN UNION COMPANY
SUPPLEMENTAL CASH FLOW INFORMATION
(Unaudited)
(in millions)

 	 	September 30,	 	
 	 	2022	 	 	2021	 	
Reconciliation of balance sheet cash and cash equivalents to cash flows:	 	 	 	 	 	 	
Cash and cash equivalents on balance sheet	 	$	1,176.1	 	 	$	1,003.4	 	
Settlement cash and cash equivalents (Note 8)	 	 	817.2	 	 	 	1,082.9	 	
Restricted cash in Other assets	 	 	52.4	 	 	 	8.6	 	
Cash and cash equivalents included in Assets held for sale (Note 4)	 	 	64.0	 	 	 	43.0	 	
Cash and cash equivalents, including settlement, and restricted cash	 	$	2,109.7	 	 	$	2,137.9	 	
 	 	Nine Months Ended	 	
 	 	September 30,	 	
 	 	2022	 	 	2021	 	
Supplemental cash flow information:	 	 	 	 	 	 	
Interest paid	 	$	64.8	 	 	$	69.7	 	
Income taxes paid	 	$	180.8	 	 	$	156.5	 	
Internal use software capitalized but not yet paid	 	$	—	 	 	$	24.1	 	
Accrued and unpaid capitalized contract costs	 	$	36.0	 	 	$	—	 	
 
See Notes to Condensed Consolidated Financial Statements.
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THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in millions)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Other	 	 	Total	 	
 	 	Common Stock	 	 	Capital	 	 	Accumulated	 	 	Comprehensive	 	 	Stockholders'	 	
 	 	Shares	 	 	Amount	 	 	Surplus	 	 	Deficit	 	 	Loss	 	 	Equity	 	
Balance, December 31, 2021	 	 	393.8	 	 	$	3.9	 	 	$	941.0	 	 	$	(537.2	)	 	$	(52.1	)	 	$	355.6	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	293.3	 	 	 	—	 	 	 	293.3	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	10.7	 	 	 	—	 	 	 	—	 	 	 	10.7	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(92.6	)	 	 	—	 	 	 	(92.6	)	
Repurchase and retirement of common shares	 	 	(8.6	)	 	 	(0.1	)	 	 	—	 	 	 	(158.9	)	 	 	—	 	 	 	(159.0	)	
Shares issued under stock-based compensation plans	 	 	1.9	 	 	 	0.1	 	 	 	8.8	 	 	 	—	 	 	 	—	 	 	 	8.9	 	
Other comprehensive loss (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(64.1	)	 	 	(64.1	)	
Balance, March 31, 2022	 	 	387.1	 	 	 	3.9	 	 	 	960.5	 	 	 	(495.4	)	 	 	(116.2	)	 	 	352.8	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	194.0	 	 	 	—	 	 	 	194.0	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	12.3	 	 	 	—	 	 	 	—	 	 	 	12.3	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(89.6	)	 	 	—	 	 	 	(89.6	)	
Repurchase and retirement of common shares	 	 	(1.1	)	 	 	—	 	 	 	—	 	 	 	(21.1	)	 	 	—	 	 	 	(21.1	)	
Shares issued under stock-based compensation plans	 	 	0.1	 	 	 	—	 	 	 	0.5	 	 	 	—	 	 	 	—	 	 	 	0.5	 	
Other comprehensive loss (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.6	)	 	 	(0.6	)	
Balance, June 30, 2022	 	 	386.1	 	 	 	3.9	 	 	 	973.3	 	 	 	(412.1	)	 	 	(116.8	)	 	 	448.3	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	173.9	 	 	 	—	 	 	 	173.9	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	9.6	 	 	 	—	 	 	 	—	 	 	 	9.6	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(91.5	)	 	 	—	 	 	 	(91.5	)	
Repurchase and retirement of common shares	 	 	(0.5	)	 	 	—	 	 	 	—	 	 	 	(7.7	)	 	 	—	 	 	 	(7.7	)	
Shares issued under stock-based compensation plans	 	 	0.3	 	 	 	—	 	 	 	0.1	 	 	 	 	 	 	—	 	 	 	0.1	 	
Other comprehensive loss (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(4.4	)	 	 	(4.4	)	
Balance, September 30, 2022	 	 	385.9	 	 	$	3.9	 	 	$	983.0	 	 	$	(337.4	)	 	$	(121.2	)	 	$	528.3	 	
 
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 	 	 	 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Other	 	 	Total	 	
 	 	Common Stock	 	 	Capital	 	 	Accumulated	 	 	Comprehensive	 	 	Stockholders'	 	
 	 	Shares	 	 	Amount	 	 	Surplus	 	 	Deficit	 	 	Loss	 	 	Equity	 	
Balance, December 31, 2020	 	 	411.2	 	 	$	4.1	 	 	$	885.1	 	 	$	(543.1	)	 	$	(159.5	)	 	$	186.6	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	181.8	 	 	 	—	 	 	 	181.8	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	10.8	 	 	 	—	 	 	 	—	 	 	 	10.8	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(97.9	)	 	 	—	 	 	 	(97.9	)	
Repurchase and retirement of common shares	 	 	(3.7	)	 	 	—	 	 	 	—	 	 	 	(89.0	)	 	 	—	 	 	 	(89.0	)	
Shares issued under stock-based compensation plans	 	 	2.3	 	 	 	—	 	 	 	8.1	 	 	 	—	 	 	 	—	 	 	 	8.1	 	
Other comprehensive income (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	18.4	 	 	 	18.4	 	
Balance, March 31, 2021	 	 	409.8	 	 	 	4.1	 	 	 	904.0	 	 	 	(548.2	)	 	 	(141.1	)	 	 	218.8	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	222.5	 	 	 	—	 	 	 	222.5	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	12.0	 	 	 	—	 	 	 	—	 	 	 	12.0	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(97.0	)	 	 	—	 	 	 	(97.0	)	
Repurchase and retirement of common shares	 	 	(3.0	)	 	 	—	 	 	 	—	 	 	 	(75.3	)	 	 	—	 	 	 	(75.3	)	
Shares issued under stock-based compensation plans	 	 	0.2	 	 	 	—	 	 	 	3.5	 	 	 	—	 	 	 	—	 	 	 	3.5	 	
Other comprehensive income (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1.8	 	 	 	1.8	 	
Balance, June 30, 2021	 	 	407.0	 	 	 	4.1	 	 	 	919.5	 	 	 	(498.0	)	 	 	(139.3	)	 	 	286.3	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	232.7	 	 	 	—	 	 	 	232.7	 	
Stock-based compensation	 	 	—	 	 	 	—	 	 	 	8.4	 	 	 	—	 	 	 	—	 	 	 	8.4	 	
Common stock dividends and dividend equivalents declared ($0.235 per share)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(95.9	)	 	 	—	 	 	 	(95.9	)	
Repurchase and retirement of common shares	 	 	(3.5	)	 	 	(0.1	)	 	 	—	 	 	 	(75.4	)	 	 	—	 	 	 	(75.5	)	
Shares issued under stock-based compensation plans	 	 	0.1	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Other comprehensive income (Note 9)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	12.6	 	 	 	12.6	 	
Balance, September 30, 2021	 	 	403.6	 	 	$	4.0	 	 	$	927.9	 	 	$	(436.6	)	 	$	(126.7	)	 	$	368.6	 	
 
See Notes to Condensed Consolidated Financial Statements.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Business and Basis of Presentation
Business
The Western Union Company ("Western Union" or the "Company") is a leader in global money movement and payment services, providing people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. The Western Union® brand is globally recognized. The Company’s services are available through a network of agent locations in more than 200 countries and territories and also through money transfer transactions conducted and funded through websites and mobile applications marketed under the Company’s brands (“Branded Digital”) and transactions initiated on websites and mobile applications hosted by the Company’s third-party white label or co-branded digital partners (together with Branded Digital, “Digital Money Transfer”). Each location in the Company’s agent network is capable of providing one or more of the Company’s services.
The Western Union business consists of the following segments:
•Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers which are sent from retail agent locations worldwide or through websites and mobile devices, including Digital Money Transfer services. The Company’s money transfer service is provided through one interconnected global network. This service is available for international cross-border transfers and, in certain countries, intra-country transfers.•Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other organizations and individuals. The majority of the Business Solutions business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments. On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See Note 4 for further information regarding this transaction.
All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services. Certain of the Company's corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. See Note 14 for further information regarding the Company’s segments.
There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2021, the Company's restricted net assets associated with these asset limitations and minimum capital requirements totaled approximately $460 million.
Various aspects of the Company’s services and businesses are subject to United States federal, state, and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10‑Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.
The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated as of September 30, 2022 and December 31, 2021 and for all periods presented.‌
In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of September 30, 2022 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021.
Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Cash Flow Classification Revision
Beginning in the fourth quarter of 2021, the Company revised its presentation to include changes in settlement cash associated with settlement obligations as a financing activity and changes in settlement cash from purchases, sales, and maturities of settlement investments as an investing activity within its Condensed Consolidated Statements of Cash Flows. Previously, the changes in settlement assets and settlement obligations were presented on a net basis within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.
Prior period amounts have been revised to conform to this presentation. These changes in presentation have been concluded to be immaterial, having no impact on the Company’s previously reported net income, financial position, or cash flows from operating activities, as changes in the Company’s settlement assets exactly offset changes in its settlement obligations. However, the revised presentation shows all changes associated with settlement cash in the Condensed Consolidated Statements of Cash Flows instead of in the Notes to the Condensed Consolidated Financial Statements.
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following table presents the effects of the changes in presentation of these cash flows, compared to the previously reported Condensed Consolidated Statements of Cash Flows (in millions):

 	 	Nine Months Ended September 30, 2021	 	
 	 	As Previously	 	 	 	 	 	 	 	
 	 	Reported(a)	 	 	Revisions	 	 	As Revised	 	
Net cash provided by/(used in):	 	 	 	 	 	 	 	 	 	
Operating activities	 	$	686.0	 	 	$	—	 	 	$	686.0	 	
Investing activities(b)	 	 	(332.9	)	 	 	525.5	 	 	 	192.6	 	
Financing activities(c)	 	 	(745.5	)	 	 	(138.3	)	 	 	(883.8	)	
Net change in cash and cash equivalents, including settlement, and restricted cash	 	$	(392.4	)	 	$	387.2	 	 	$	(5.2	)	
 
(a)As reported in the Company's Form 10-Q filed with the Securities Exchange Commission on November 2, 2021.(b)The financial statement lines included in Investing activities are Purchases of settlement investments, Proceeds from the sale of settlement investments, and Maturities of settlement investments.(c)The financial statement line included in Financing activities is Net change in settlement obligations.
2. Revenue
The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.
The Company recognized $1,035.0 million and $1,230.3 million for the three months ended September 30, 2022 and 2021, respectively, and $3,219.1 million and $3,635.7 million for the nine months ended September 30, 2022 and 2021, respectively, in revenues from contracts with customers. There were no material upfront costs incurred to obtain contracts with customers during these same periods. Under the Company’s loyalty programs, which are primarily offered in its money transfer services, the Company must fulfill loyalty program rewards earned by customers. The loyalty program redemption activity has been and continues to be insignificant to the Company’s results of operations, and the Company has immaterial contract liability balances, which primarily relate to its customer loyalty programs and other services. Contract asset balances related to customers were also immaterial as of the periods presented, as the Company typically receives payment of consideration from its customers prior to satisfying performance obligations under the customer contracts. In addition to revenue generated from contracts with customers, the Company recognizes revenue from other sources, including the sale of derivative financial instruments and investment income generated on settlement assets primarily related to money transfer and money order services.
The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Revenues from consumer money transfers are included in the Company’s Consumer-to- Consumer segment, revenues from foreign exchange and payment services are included in the Company’s Business Solutions segment, and revenues from consumer bill payment and other services are not included in the Company’s segments and are reported as Other. See Note 14 for further information on the Company’s segments. On August 4, 2021,‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See Note 4 for further information regarding this transaction.
Consumer Money Transfers
For the Company’s money transfer services, customers agree to the Company’s terms and conditions at the time of initiating a transaction. In a money transfer, the Company has one performance obligation as the customer engages the Company to perform one integrated service which typically occurs within minutes — collect the customer’s money and make funds available for payment to a designated person in the currency requested. Therefore, the Company recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of the Company’s terms and conditions and payment information has been received by the Company, (ii) the Company has agreed to process the money transfer, (iii) the Company has provided the customer a unique transaction identification number, and (iv) funds are available to be picked up by the customer's designated receiving party. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated.
Foreign Exchange and Payment Services
For the Company’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with the Company to provide payment services on the customer’s behalf. In the majority of the Company’s foreign exchange and payment services, the Company makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, the Company recognizes revenue on foreign exchange and payment services when this performance obligation has been fulfilled. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market.
Consumer Bill Payments and Other
The Company offers bill payment and other services that vary by contractual features, including the types and amounts of fixed charges and with respect to how fees are billed and collected. The identification of the contract with the customer for revenue recognition purposes is consistent with these features for each of the Company’s bill payment and other services. As with consumer money transfers, customers engage the Company to perform one integrated service — collect money from the consumer and process the transaction, thereby providing billers with real-time or near real-time information regarding consumer payments and simplifying the billers’ collection efforts.‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Management has determined that the substantial majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the three and nine months ended September 30, 2022 and 2021 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated.

 	 	Three Months Ended September 30, 2022	 	
 	 	 	 	 	Foreign	 	 	 	 	 	 	 	 	 	 	
 	 	Consumer	 	 	Exchange	 	 	 	 	 	 	 	 	 	 	
 	 	Money	 	 	and Payment	 	 	Consumer	 	 	Other	 	 	 	 	
 	 	Transfers	 	 	Services(b)	 	 	Bill Payments	 	 	Services	 	 	Total	 	
Regions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	383.6	 	 	$	—	 	 	$	17.2	 	 	$	15.2	 	 	$	416.0	 	
Europe and CIS	 	 	251.3	 	 	 	26.0	 	 	 	6.0	 	 	 	—	 	 	 	283.3	 	
Middle East, Africa, and South Asia	 	 	156.6	 	 	 	—	 	 	 	0.1	 	 	 	—	 	 	 	156.7	 	
Latin America and the Caribbean	 	 	97.0	 	 	 	—	 	 	 	23.4	 	 	 	2.1	 	 	 	122.5	 	
East Asia and Oceania	 	 	56.5	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	56.5	 	
Revenues from contracts with customers	 	$	945.0	 	 	$	26.0	 	 	$	46.7	 	 	$	17.3	 	 	$	1,035.0	 	
Other revenues (a)	 	 	37.4	 	 	 	16.6	 	 	 	1.2	 	 	 	(0.6	)	 	 	54.6	 	
Total revenues	 	$	982.4	 	 	$	42.6	 	 	$	47.9	 	 	$	16.7	 	 	$	1,089.6	 	

 	 	Nine Months Ended September 30, 2022	 	
 	 	 	 	 	Foreign	 	 	 	 	 	 	 	 	 	 	
 	 	Consumer	 	 	Exchange	 	 	 	 	 	 	 	 	 	 	
 	 	Money	 	 	and Payment	 	 	Consumer	 	 	Other	 	 	 	 	
 	 	Transfers	 	 	Services(b)	 	 	Bill Payments	 	 	Services	 	 	Total	 	
Regions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	1,171.3	 	 	$	17.9	 	 	$	52.7	 	 	$	43.8	 	 	$	1,285.7	 	
Europe and Russia/CIS	 	 	808.2	 	 	 	80.4	 	 	 	15.1	 	 	 	0.1	 	 	 	903.8	 	
Middle East, Africa, and South Asia	 	 	477.8	 	 	 	0.4	 	 	 	0.3	 	 	 	—	 	 	 	478.5	 	
Latin America and the Caribbean	 	 	279.2	 	 	 	0.5	 	 	 	74.8	 	 	 	6.5	 	 	 	361.0	 	
East Asia and Oceania	 	 	177.1	 	 	 	12.5	 	 	 	0.5	 	 	 	—	 	 	 	190.1	 	
Revenues from contracts with customers	 	$	2,913.6	 	 	$	111.7	 	 	$	143.4	 	 	$	50.4	 	 	$	3,219.1	 	
Other revenues (a)	 	 	94.7	 	 	 	55.7	 	 	 	3.6	 	 	 	10.5	 	 	 	164.5	 	
Total revenues	 	$	3,008.3	 	 	$	167.4	 	 	$	147.0	 	 	$	60.9	 	 	$	3,383.6	 	

 	 	Three Months Ended September 30, 2021	 	
 	 	 	 	 	Foreign	 	 	 	 	 	 	 	 	 	 	
 	 	Consumer	 	 	Exchange	 	 	 	 	 	 	 	 	 	 	
 	 	Money	 	 	and Payment	 	 	Consumer	 	 	Other	 	 	 	 	
 	 	Transfers	 	 	Services	 	 	Bill Payments	 	 	Services	 	 	Total	 	
Regions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	406.7	 	 	$	30.9	 	 	$	18.0	 	 	$	14.4	 	 	$	470.0	 	
Europe and Russia/CIS	 	 	345.0	 	 	 	39.3	 	 	 	1.4	 	 	 	0.4	 	 	 	386.1	 	
Middle East, Africa, and South Asia	 	 	165.8	 	 	 	0.5	 	 	 	0.2	 	 	 	—	 	 	 	166.5	 	
Latin America and the Caribbean	 	 	97.5	 	 	 	0.9	 	 	 	20.2	 	 	 	1.7	 	 	 	120.3	 	
East Asia and Oceania	 	 	69.2	 	 	 	17.9	 	 	 	0.3	 	 	 	—	 	 	 	87.4	 	
Revenues from contracts with customers	 	$	1,084.2	 	 	$	89.5	 	 	$	40.1	 	 	$	16.5	 	 	$	1,230.3	 	
Other revenues (a)	 	 	20.3	 	 	 	27.3	 	 	 	3.6	 	 	 	4.8	 	 	 	56.0	 	
Total revenues	 	$	1,104.5	 	 	$	116.8	 	 	$	43.7	 	 	$	21.3	 	 	$	1,286.3	 	
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 	 	Nine Months Ended September 30, 2021	 	
 	 	 	 	 	Foreign	 	 	 	 	 	 	 	 	 	 	
 	 	Consumer	 	 	Exchange	 	 	 	 	 	 	 	 	 	 	
 	 	Money	 	 	and Payment	 	 	Consumer	 	 	Other	 	 	 	 	
 	 	Transfers	 	 	Services	 	 	Bill Payments	 	 	Services	 	 	Total	 	
Regions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	1,211.0	 	 	$	75.6	 	 	$	54.6	 	 	$	43.2	 	 	$	1,384.4	 	
Europe and Russia/CIS	 	 	1,047.8	 	 	 	107.3	 	 	 	3.6	 	 	 	1.0	 	 	 	1,159.7	 	
Middle East, Africa, and South Asia	 	 	492.2	 	 	 	1.5	 	 	 	0.4	 	 	 	—	 	 	 	494.1	 	
Latin America and the Caribbean	 	 	276.7	 	 	 	2.5	 	 	 	56.8	 	 	 	5.6	 	 	 	341.6	 	
East Asia and Oceania	 	 	204.0	 	 	 	51.1	 	 	 	0.8	 	 	 	—	 	 	 	255.9	 	
Revenues from contracts with customers	 	$	3,231.7	 	 	$	238.0	 	 	$	116.2	 	 	$	49.8	 	 	$	3,635.7	 	
Other revenues (a)	 	 	50.8	 	 	 	74.6	 	 	 	10.0	 	 	 	14.9	 	 	 	150.3	 	
Total revenues	 	$	3,282.5	 	 	$	312.6	 	 	$	126.2	 	 	$	64.7	 	 	$	3,786.0	 	
 
(a)Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources.(b)On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See Note 4 for further information regarding this transaction.
 
3. Earnings Per Share
The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options and the unamortized compensation expense of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.‌
Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding options to purchase shares of Western Union stock and restricted stock units, as the assumed proceeds of the options and restricted stock per unit were above the Company’s average share price during the periods and their effect was anti-dilutive, were 8.1 million and 2.2 million for the three months ended September 30, 2022 and 2021, respectively, and 8.0 million and 1.7 million for the nine months ended September 30, 2022 and 2021, respectively.
 
The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Basic weighted-average shares outstanding	 	 	386.5	 	 	 	406.3	 	 	 	388.8	 	 	 	409.1	 	
Common stock equivalents	 	 	1.1	 	 	 	1.7	 	 	 	1.1	 	 	 	2.2	 	
Diluted weighted-average shares outstanding	 	 	387.6	 	 	 	408.0	 	 	 	389.9	 	 	 	411.3	 	

 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
4. Divestitures and Investment Activities
Assets Held for Sale and Related Divestiture
On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the “Buyer”) for cash consideration of $910.0 million. In the third quarter, the Company and the Buyer agreed to complete the divestiture in three closings instead of two, the first of which occurred on March 1, 2022 with the entirety of the cash consideration collected at that time and allocated to the closings on a relative fair value basis. The first closing excluded the operations in the European Union and the United Kingdom and resulted in a gain of $151.4 million. In connection with the first closing, the Company reclassified $17.8 million of currency translation gains previously included within Accumulated other comprehensive loss (“AOCL”) as a component of Gain on divestiture of business in the Condensed Consolidated Statements of Income. As of September 30, 2022, the Company has agreed to and paid final working capital adjustments to the Buyer and has classified the proceeds allocated to the European Union and United Kingdom operations of approximately $390 million within Other liabilities in the Condensed Consolidated Balance Sheets. The second closing, which includes the United Kingdom operations, is expected to occur in December 2022, pending required regulatory approvals. The third closing, which includes the European Union operations, is currently expected to occur in the first quarter of 2023, pending required regulatory approvals. The gains associated with the second and third closings are subject to regulatory capital adjustments and will be recognized at the time of each closing. During the period between the first and third closings, the Company will pay to the Buyer a measure of profit of the European Union and United Kingdom operations, while owned by the Company, adjusted for the occupancy charges for employees of the Buyer using Company facilities and other items, as contractually agreed, which was $15.0 million and $25.9 million for the three and nine months ended September 30, 2022, respectively, and was included in Other income/(expense), net in the Condensed Consolidated Statements of Income. The related income tax expense on this income is also passed to the Buyer.
The Company has presented the remaining assets of its Business Solutions business as held for sale, along with the associated liabilities, as the Company believes the completions of the second and third closings are probable. The Buyer has rebranded the sold operations within a new standalone company (now referred to as "Convera").‌
Business Solutions revenues included in the Condensed Consolidated Statements of Income were $42.6 million and $116.8 million and direct operating expenses, excluding corporate allocations, were $27.0 million and $77.1 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, Business Solutions revenues were $167.4 million and $312.6 million, respectively, and direct operating expenses, excluding corporate allocations, were $117.4 million and $244.5 million, respectively. For the three months ended September 30, 2022 and 2021, divestiture costs directly associated with this transaction were $0.4 million and $5.2 million, respectively. For the nine months ended September 30, 2022 and 2021, divestiture costs directly associated with this transaction were $4.4 million and $10.7 million, respectively.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following table reflects the assets held for sale and associated liabilities of the Business Solutions business in the accompanying Condensed Consolidated Balance Sheets (in millions). These balances are subject to regulatory capital and other requirements which will be finalized upon the third close.

 	 	September 30,	 	 	December 31,	 	
 	 	2022	 	 	2021	 	
Cash and cash equivalents	 	$	64.0	 	 	$	37.7	 	
Settlement assets	 	 	230.3	 	 	 	566.0	 	
Property and equipment, net of accumulated depreciation of $1.7 and $19.3	 	 	1.7	 	 	 	6.3	 	
Goodwill	 	 	229.2	 	 	 	532.0	 	
Other intangible assets, net of accumulated amortization of $77.8 and $360.2	 	 	9.7	 	 	 	50.4	 	
Other assets	 	 	280.0	 	 	 	260.5	 	
Total assets	 	$	814.9	 	 	$	1,452.9	 	
 	 	 	 	 	 	 	
Accounts payable and accrued liabilities	 	$	81.3	 	 	$	61.6	 	
Settlement obligations	 	 	230.3	 	 	 	566.0	 	
Other liabilities	 	 	238.9	 	 	 	194.3	 	
Total liabilities	 	$	550.5	 	 	$	821.9	 	
 
Investment Activities
 
The Company entered into an agreement in November 2020, which was subsequently amended, to acquire an ownership interest in stc Bank (formerly Saudi Digital Payments Company), a subsidiary of Saudi Telecom Company and one of the Company’s Consumer-to-Consumer digital white label partners. Under the terms of the amended agreement, the Company agreed to invest $200.0 million for a 15% ownership in stc Bank (“Investment”), and this transaction closed in October 2021. In conjunction with the Investment, the Company and stc Bank extended and expanded the terms of their commercial agreement. The Company assigned a value of $36.0 million to certain rights under the commercial agreement that are included in Other assets in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 and are being amortized over the life of the agreement. The Company is measuring the Investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments in stc Bank.
 
In April 2021, the Company sold a substantial majority of the noncontrolling interest it held in a private company for cash proceeds of $50.9 million. The Company recorded a gain of $47.9 million within Other income/(expense), net, during the nine months ended September 30, 2021. The Company retains an immaterial equity interest in this private company.‌
 
5. Fair Value Measurements
Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company’s consolidated financial statements within the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following tables present the Company’s assets and liabilities, which are measured at fair value on a recurring basis, by category (in millions):

 	 	Fair Value Measurement Using	 	 	Total	 	
September 30, 2022	 	Level 1	 	 	Level 2	 	 	Fair Value	 	
Assets:	 	 	 	 	 	 	 	 	 	
Settlement assets:	 	 	 	 	 	 	 	 	 	
Measured at fair value through net income:	 	 	 	 	 	 	 	 	 	
Money market funds	 	$	1.8	 	 	$	—	 	 	$	1.8	 	
Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):	 	 	 	 	 	 	 	 	 	
State and municipal debt securities	 	 	—	 	 	 	1,012.5	 	 	 	1,012.5	 	
Corporate debt securities	 	 	—	 	 	 	110.3	 	 	 	110.3	 	
State and municipal variable-rate demand notes	 	 	—	 	 	 	97.5	 	 	 	97.5	 	
United States government agency mortgage-backed securities	 	 	—	 	 	 	23.4	 	 	 	23.4	 	
Other assets:	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	—	 	 	 	328.2	 	 	 	328.2	 	
Total assets	 	$	1.8	 	 	$	1,571.9	 	 	$	1,573.7	 	
Liabilities:	 	 	 	 	 	 	 	 	 	
Other liabilities:	 	 	 	 	 	 	 	 	 	
Derivatives	 	$	—	 	 	$	242.3	 	 	$	242.3	 	
Total liabilities	 	$	—	 	 	$	242.3	 	 	$	242.3	 	

 	 	Fair Value Measurement Using	 	 	Total	 	
December 31, 2021	 	Level 1	 	 	Level 2	 	 	Fair Value	 	
Assets:	 	 	 	 	 	 	 	 	 	
Settlement assets:	 	 	 	 	 	 	 	 	 	
Measured at fair value through net income:	 	 	 	 	 	 	 	 	 	
Money market funds	 	$	7.9	 	 	$	—	 	 	$	7.9	 	
Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):	 	 	 	 	 	 	 	 	 	
State and municipal debt securities	 	 	—	 	 	 	1,219.9	 	 	 	1,219.9	 	
State and municipal variable-rate demand notes	 	 	—	 	 	 	84.8	 	 	 	84.8	 	
Corporate and other debt securities	 	 	—	 	 	 	57.8	 	 	 	57.8	 	
United States government agency mortgage-backed securities	 	 	—	 	 	 	36.4	 	 	 	36.4	 	
Other assets:	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	—	 	 	 	247.7	 	 	 	247.7	 	
Total assets	 	$	7.9	 	 	$	1,646.6	 	 	$	1,654.5	 	
Liabilities:	 	 	 	 	 	 	 	 	 	
Other liabilities:	 	 	 	 	 	 	 	 	 	
Derivatives	 	$	—	 	 	$	183.8	 	 	$	183.8	 	
Total liabilities	 	$	—	 	 	$	183.8	 	 	$	183.8	 	
 
There were no material, non-recurring fair value adjustments other than approximately $9 million of property and equipment, operating lease right-of-use asset, and other intangible asset impairments associated with the Company's suspension of its operations in Russia and Belarus and the first closing of its Business Solutions divestiture in the nine months ended September 30, 2022, as discussed further in Note 14. There were no material, non-recurring fair value adjustments in the three months ended September 30, 2022 and three and nine months ended September 30, 2021 or transfers between Level 1 and Level 2 measurements during the three and nine months ended September 30, 2022 and 2021.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Other Fair Value Measurements
The carrying amounts for many of the Company’s financial instruments, including certain cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and obligations approximate fair value due to their short maturities. The Company’s borrowings are classified as Level 2 within the valuation hierarchy, and the aggregate fair value of these borrowings was based on quotes from multiple banks. Fixed-rate notes are carried in the Company’s Condensed Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par. As of September 30, 2022, the carrying value and fair value of the Company’s borrowings were $2,611.0 million and $2,387.1 million, respectively (see Note 11). As of December 31, 2021, the carrying value and fair value of the Company’s borrowings were $3,008.4 million and $3,217.2 million, respectively.
During the nine months ended September 30, 2022, the Company entered into reverse repurchase agreements, a form of secured lending, with broker-dealer affiliates of large U.S. banks, using a portion of the proceeds from the sale of the Company's Business Solutions business. These agreements require the counterparties to pledge marketable securities with a value greater than the amount of cash transferred as collateral, which is held and valued by a third-party custodial bank. These investments generate interest income through the date of repurchase, at which point the purchase price together with the interest due will be paid back to the Company. The Company carries these investments at amortized cost, and as of September 30, 2022, the carrying value of these investments, as reported in Other assets in the Company's Condensed Consolidated Balance Sheets, was $400.0 million, which approximates fair value due to the creditworthiness of the counterparties, the value of the collateral, and the investments' short-term nature and variable interest rate.
6. Commitments and Contingencies
Letters of Credit and Bank Guarantees
The Company had approximately $330 million in outstanding letters of credit and bank guarantees as of September 30, 2022, which were primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent agreements. The Company expects to renew most of its letters of credit and bank guarantees prior to expiration.‌
Litigation and Related Contingencies
The Company is subject to certain claims and litigation that could result in losses, including damages, fines, and/or civil penalties, which could be significant, and in some cases, criminal charges. The Company regularly evaluates the status of legal matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each legal matter to assess if there is at least a reasonable possibility that a material loss or additional material losses may have been incurred. The Company also evaluates whether an estimate of possible loss or range of loss can be made. Unless otherwise specified below, the Company believes that there is at least a reasonable possibility that a loss or additional loss may have been incurred for each of the matters described below.
For those matters that the Company believes there is at least a reasonable possibility that a loss or additional loss may have been incurred and can reasonably estimate the loss or potential loss, the reasonably possible potential litigation losses in excess of the Company’s recorded liability for probable and estimable losses was approximately $30 million as of September 30, 2022. For the remaining matters, management is unable to provide a meaningful estimate of the possible loss or range of loss because, among other reasons: (i) the proceedings are in preliminary stages; (ii) specific damages have not been sought; (iii) damage claims are unsupported and/or unreasonable; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; or (vi) novel legal issues or unsettled legal theories are being asserted.
The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established liability or the range of reasonably possible loss.
Legal Matters
In October 2015, Consumidores Financieros Asociación Civil para su Defensa, an Argentinian consumer association, filed a purported class action lawsuit in Argentina’s National Commercial Court No. 19 against the Company’s subsidiary Western Union Financial Services Argentina S.R.L. (“WUFSA”). The lawsuit alleges, among other things, that WUFSA’s fees for money transfers sent from Argentina are excessive and that WUFSA does not provide consumers with adequate information about foreign exchange rates. The plaintiff is seeking, among other things, an order requiring WUFSA to reimburse consumers for the fees they paid and the foreign exchange revenue associated with money transfers sent from Argentina, plus punitive damages. The complaint does not specify a monetary value of the claim or a time period. In November 2015, the Court declared the complaint formally admissible as a class action. The notice of claim was served on WUFSA in May 2016, and in June 2016 WUFSA filed a response to the claim and moved to dismiss it on statute of limitations and standing grounds. In April 2017, the Court deferred ruling on the motion until later in the proceedings. The process for notifying potential class members has been completed, and the case is in the evidentiary stage. Due to the stage of this matter, the Company is unable to predict the outcome or the possible loss or range of loss, if any, associated with this matter. WUFSA intends to defend itself vigorously.
In addition to the principal matters described above, the Company is a party to a variety of other legal matters that arise in the normal course of the Company’s business. While the results of these other legal matters cannot be predicted with certainty, management believes that the final outcome of these matters will not have a material adverse effect either individually or in the aggregate on the Company’s financial condition, results of operations, or cash flows.
7. Related Party Transactions
The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents commissions for money transfer and other services provided on the Company’s behalf. Commission expense recognized for these agents for the three months ended September 30, 2022 and 2021 totaled $12.2 million and $14.0 million, respectively, and $36.5 million and $41.2 million for the nine months ended September 30, 2022 and 2021, respectively.‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
8. Settlement Assets and Obligations
Settlement assets represent funds received or to be received from agents and others for unsettled money transfers, money orders, and consumer payments. The Company records corresponding settlement obligations relating to amounts payable under money transfers, money orders, and consumer payment service arrangements. Settlement assets and obligations also include amounts receivable from, and payable to, customers for the value of their cross-currency payment transactions related to the Business Solutions segment.‌
Settlement assets and obligations consisted of the following (in millions):

 	 	September 30, 2022	 	
Settlement assets:	 	 	 	
Cash and cash equivalents	 	$	817.2	 	
Receivables from agents, Business Solutions customers, and others	 	 	1,277.2	 	
Less: Allowance for credit losses	 	 	(11.9	)	
Receivables from agents, Business Solutions customers, and others, net	 	 	1,265.3	 	
Investment securities	 	 	1,243.7	 	
Less: Allowance for credit losses	 	 	(0.2	)	
Investment securities, net	 	 	1,243.5	 	
Total settlement assets (a)	 	$	3,326.0	 	
Settlement obligations:	 	 	 	
Money transfer, money order, and payment service payables	 	$	2,695.2	 	
Payables to agents	 	 	630.8	 	
Total settlement obligations (a)	 	$	3,326.0	 	

 	 	December 31, 2021	 	
Settlement assets:	 	 	 	
Cash and cash equivalents	 	$	835.5	 	
Receivables from agents, Business Solutions customers, and others	 	 	1,198.8	 	
Less: Allowance for credit losses	 	 	(23.7	)	
Receivables from agents, Business Solutions customers, and others, net	 	 	1,175.1	 	
Investment securities	 	 	1,398.9	 	
Total settlement assets	 	$	3,409.5	 	
Settlement obligations:	 	 	 	
Money transfer, money order, and payment service payables	 	$	2,838.9	 	
Payables to agents	 	 	570.6	 	
Total settlement obligations	 	$	3,409.5	 	
 
(a)Settlement assets and Settlement obligations include Assets held for sale and Liabilities associated with assets held for sale of $230.3 million and $566.0 million as of September 30, 2022 and December 31, 2021, respectively (see Note 4).
Allowance for Credit Losses
Receivables from agents and others primarily represent funds collected by such agents, but in transit to the Company, and were $1,243.3 million and $1,125.9 million as of September 30, 2022 and December 31, 2021, respectively. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness.
Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Business Solutions receivables totaled $22.0 million and $49.2 million as of September 30, 2022 and December 31, 2021, respectively. Receivables occur when funds have been paid out to a beneficiary but not yet received‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
from the customer. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis.‌
The Company establishes and monitors an allowance for credit losses related to receivables from agents and others, and Business Solutions customers. The Company has estimated the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions based on information known as of September 30, 2022.
The following tables summarize the activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers (in millions):

 	 	Agents and	 	 	Business Solutions	 	
 	 	Others	 	 	Customers	 	
Allowance for credit losses as of January 1, 2022	 	$	18.0	 	 	$	5.7	 	
Current period provision for expected credit losses (a)	 	 	1.9	 	 	 	0.4	 	
Write-offs charged against the allowance	 	 	(3.1	)	 	 	(0.4	)	
Recoveries of amounts previously written off	 	 	1.7	 	 	 	—	 	
Impacts of foreign currency exchange rates, divestitures, and other	 	 	(0.1	)	 	 	(4.2	)	
Allowance for credit losses as of March 31, 2022	 	 	18.4	 	 	 	1.5	 	
Current period provision for expected credit losses (a)	 	 	1.8	 	 	 	2.1	 	
Write-offs charged against the allowance	 	 	(1.3	)	 	 	(1.4	)	
Recoveries of amounts previously written off	 	 	1.0	 	 	 	—	 	
Impacts of foreign currency exchange rates and other	 	 	(3.0	)	 	 	(0.5	)	
Allowance for credit losses as of June 30, 2022	 	 	16.9	 	 	 	1.7	 	
Current period provision for expected credit losses (a)	 	 	3.4	 	 	 	0.5	 	
Write-offs charged against the allowance	 	 	(8.1	)	 	 	(2.1	)	
Recoveries of amounts previously written off	 	 	1.8	 	 	 	—	 	
Impacts of foreign currency exchange rates and other	 	 	(2.4	)	 	 	0.2	 	
Allowance for credit losses as of September 30, 2022	 	$	11.6	 	 	$	0.3	 	

 	 	Agents and	 	 	Business Solutions	 	
 	 	Others	 	 	Customers	 	
Allowance for credit losses as of January 1, 2021	 	$	49.3	 	 	$	3.9	 	
Current period provision for expected credit losses (a)	 	 	2.3	 	 	 	1.5	 	
Write-offs charged against the allowance	 	 	(3.3	)	 	 	(0.4	)	
Recoveries of amounts previously written off	 	 	1.9	 	 	 	—	 	
Impacts of foreign currency exchange rates and other	 	 	(0.5	)	 	 	(0.1	)	
Allowance for credit losses as of March 31, 2021	 	 	49.7	 	 	 	4.9	 	
Current period provision for expected credit losses (a)	 	 	3.2	 	 	 	1.9	 	
Write-offs charged against the allowance	 	 	(34.4	)	 	 	(0.4	)	
Recoveries of amounts previously written off	 	 	0.6	 	 	 	—	 	
Impacts of foreign currency exchange rates and other	 	 	(0.6	)	 	 	(0.1	)	
Allowance for credit losses as of June 30, 2021	 	 	18.5	 	 	 	6.3	 	
Current period provision for expected credit losses (a)	 	 	2.3	 	 	 	0.5	 	
Write-offs charged against the allowance	 	 	(4.0	)	 	 	(0.8	)	
Recoveries of amounts previously written off	 	 	1.4	 	 	 	—	 	
Impacts of foreign currency exchange rates and other	 	 	(0.7	)	 	 	—	 	
Allowance for credit losses as of September 30, 2021	 	$	17.5	 	 	$	6.0	 	
 
(a)Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit-related. The Company recognized losses that were not credit-related of $10.0 million, $7.7 million, and $10.2 million for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022, respectively, and $13.7 million, $14.5 million, and $13.8 million for the three months ended March 31, 2021, June 30, 2021, and September 30, 2021, respectively.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 
In addition, from time to time, the Company makes advances to its agents. The Company generally owes settlement funds payable to these agents that offset these advances. These amounts advanced to agents are included within Other assets in the accompanying Condensed Consolidated Balance Sheets. As of September 30, 2022 and December 31, 2021, amounts advanced to agents were $147.1 million and $146.9 million, respectively, and the related allowances for credit losses were immaterial.
Investment Securities
Investment securities included in Settlement assets in the Company’s Condensed Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. Variable-rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week but have varying maturities through 2061. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory requirements.
The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification.
Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security, or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity and are limited to the difference between fair value and the amortized cost basis.‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
As of September 30, 2022, the Company had the intent to sell certain state and municipal debt securities and recognized an impairment of $4.6 million, which was recorded to Revenues in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2022. The sale of these securities was completed in the first week of October. The Company does not intend to sell the remaining securities and does not expect it will be required to sell the remaining securities prior to recovering their amortized cost basis. The Company’s provision for credit losses on its available-for-sale securities during the three and nine months ended September 30, 2022 and 2021 and the related allowance for credit losses as of September 30, 2022 and December 31, 2021 were immaterial.
The components of investment securities are as follows (in millions):

 	 	 	 	 	 	 	 	Gross	 	 	Gross	 	 	Net	 	
 	 	Amortized	 	 	Fair	 	 	Unrealized	 	 	Unrealized	 	 	Unrealized	 	
September 30, 2022	 	Cost	 	 	Value	 	 	Gains	 	 	Losses (b)	 	 	Gains/(Losses)	 	
Settlement assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Money market funds	 	$	1.8	 	 	$	1.8	 	 	$	—	 	 	$	—	 	 	$	—	 	
Available-for-sale securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
State and municipal debt securities (a)	 	 	1,094.1	 	 	 	1,012.5	 	 	 	—	 	 	 	(81.6	)	 	 	(81.6	)	
Corporate debt securities	 	 	117.9	 	 	 	110.3	 	 	 	—	 	 	 	(7.6	)	 	 	(7.6	)	
State and municipal variable-rate demand
notes	 	 	97.5	 	 	 	97.5	 	 	 	—	 	 	 	—	 	 	 	—	 	
United States government agency
mortgage-backed securities	 	 	24.9	 	 	 	23.4	 	 	 	—	 	 	 	(1.5	)	 	 	(1.5	)	
Total available-for-sale securities	 	 	1,334.4	 	 	 	1,243.7	 	 	 	—	 	 	 	(90.7	)	 	 	(90.7	)	
Total investment securities	 	$	1,336.2	 	 	$	1,245.5	 	 	$	—	 	 	$	(90.7	)	 	$	(90.7	)	

 	 	 	 	 	 	 	 	Gross	 	 	Gross	 	 	Net	 	
 	 	Amortized	 	 	Fair	 	 	Unrealized	 	 	Unrealized	 	 	Unrealized	 	
December 31, 2021	 	Cost	 	 	Value	 	 	Gains	 	 	Losses	 	 	Gains/(Losses)	 	
Settlement assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Money market funds	 	$	7.9	 	 	$	7.9	 	 	$	—	 	 	$	—	 	 	$	—	 	
Available-for-sale securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
State and municipal debt securities (a)	 	 	1,182.6	 	 	 	1,219.9	 	 	 	39.8	 	 	 	(2.5	)	 	 	37.3	 	
State and municipal variable-rate demand
notes	 	 	84.8	 	 	 	84.8	 	 	 	—	 	 	 	—	 	 	 	—	 	
Corporate and other debt securities	 	 	58.1	 	 	 	57.8	 	 	 	0.2	 	 	 	(0.5	)	 	 	(0.3	)	
United States government agency mortgage-
backed securities	 	 	35.6	 	 	 	36.4	 	 	 	0.8	 	 	 	—	 	 	 	0.8	 	
Total available-for-sale securities	 	 	1,361.1	 	 	 	1,398.9	 	 	 	40.8	 	 	 	(3.0	)	 	 	37.8	 	
Total investment securities	 	$	1,369.0	 	 	$	1,406.8	 	 	$	40.8	 	 	$	(3.0	)	 	$	37.8	 	
 
(a)The substantial majority of these securities are fixed-rate instruments.(b)As of September 30, 2022, the Company held 430 investment securities that were in an unrealized loss position, 386 of which have a total fair value of $918.2 million and unrealized losses of $77.7 million and have been in a loss position for less than twelve months and 44 of which have a total fair value of $80.5 million and unrealized losses of $13.0 million and have been in a loss position for greater than twelve months. As discussed above, the Company's provision for credit losses on its investment securities for the three and nine months ended September 30, 2022 and the related allowance for credit losses as of September 30, 2022 were immaterial, as the increase in unrealized losses was driven by a rise in U.S. Treasury interest rates over the nine months ended September 30, 2022.
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of September 30, 2022 (in millions):

 	 	Fair Value	 	
Due within 1 year	 	$	123.1	 	
Due after 1 year through 5 years	 	 	539.4	 	
Due after 5 years through 10 years	 	 	394.8	 	
Due after 10 years	 	 	186.4	 	
Total	 	$	1,243.7	 	
 
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable-rate demand notes. Variable-rate demand notes, having a fair value of $10.0 million, $10.0 million, and $77.5 million are included in the "Due after 1 year through 5 years," "Due after 5 years through 10 years," and "Due after 10 years" categories, respectively, in the table above.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
9. Stockholders’ Equity
Accumulated Other Comprehensive Loss
The following table details reclassifications out of AOCL and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Condensed Consolidated Statements of Income.‌

 	 	Amounts Reclassified from AOCL to Net Income	 	
 	 	 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	Income Statement	 	September 30,	 	 	September 30,	 	
Income for the period (in millions)	 	Location	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Accumulated other comprehensive loss components:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gains/(losses) on investment securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Available-for-sale securities	 	Revenues	 	$	(8.4	)	 	$	2.5	 	 	$	(8.5	)	 	$	2.3	 	
Income tax benefit/(expense)	 	Provision for income taxes	 	 	1.6	 	 	 	(0.5	)	 	 	1.6	 	 	 	(0.5	)	
Total reclassification adjustments related to investment securities, net of tax	 	 	 	 	(6.8	)	 	 	2.0	 	 	 	(6.9	)	 	 	1.8	 	
Gains/(losses) on cash flow hedges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency contracts	 	Revenues	 	 	17.5	 	 	 	(0.6	)	 	 	32.4	 	 	 	(10.0	)	
Interest rate contracts	 	Interest expense	 	 	—	 	 	 	(0.1	)	 	 	(0.1	)	 	 	(0.5	)	
Interest rate contracts	 	Other income/(expense), net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.7	 	
Income tax benefit/(expense)	 	Provision for income taxes	 	 	(0.2	)	 	 	0.1	 	 	 	(0.2	)	 	 	0.1	 	
Total reclassification adjustments related to cash flow hedges, net of tax	 	 	 	 	17.3	 	 	 	(0.6	)	 	 	32.1	 	 	 	(9.7	)	
Foreign currency translation adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency translation	 	Gain on divestiture of business	 	 	—	 	 	 	—	 	 	 	17.8	 	 	 	—	 	
Total reclassification adjustments related to foreign currency translation adjustments, net of tax	 	 	 	 	—	 	 	 	—	 	 	 	17.8	 	 	 	—	 	
Amortization of components of defined benefit plans:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Actuarial loss	 	Other income/(expense), net	 	 	—	 	 	 	(3.0	)	 	 	—	 	 	 	(9.1	)	
Income tax benefit	 	Provision for income taxes	 	 	—	 	 	 	0.7	 	 	 	—	 	 	 	2.0	 	
Total reclassification adjustments related to defined benefit plans, net of tax	 	 	 	 	—	 	 	 	(2.3	)	 	 	—	 	 	 	(7.1	)	
Total reclassifications, net of tax	 	 	 	$	10.5	 	 	$	(0.9	)	 	$	43.0	 	 	$	(15.0	)	
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 
The following tables summarize the components of AOCL, net of tax in the accompanying Condensed Consolidated Balance Sheets (in millions):

 	 	Investment	 	 	Hedging	 	 	Foreign Currency	 	 	 	 	
 	 	Securities	 	 	Activities	 	 	Translation	 	 	Total	 	
As of December 31, 2021	 	$	30.4	 	 	$	18.7	 	 	$	(101.2	)	 	$	(52.1	)	
Unrealized gains/(losses)	 	 	(63.6	)	 	 	6.2	 	 	 	—	 	 	 	(57.4	)	
Tax benefit	 	 	11.9	 	 	 	—	 	 	 	—	 	 	 	11.9	 	
Amounts reclassified from AOCL into earnings, net of tax	 	 	0.1	 	 	 	(0.9	)	 	 	(17.8	)	 	 	(18.6	)	
As of March 31, 2022	 	 	(21.2	)	 	 	24.0	 	 	 	(119.0	)	 	 	(116.2	)	
Unrealized gains/(losses)	 	 	(28.7	)	 	 	37.3	 	 	 	—	 	 	 	8.6	 	
Tax benefit/(expense)	 	 	5.0	 	 	 	(0.3	)	 	 	—	 	 	 	4.7	 	
Amounts reclassified from AOCL into earnings, net of tax	 	 	—	 	 	 	(13.9	)	 	 	—	 	 	 	(13.9	)	
As of June 30, 2022	 	 	(44.9	)	 	 	47.1	 	 	 	(119.0	)	 	 	(116.8	)	
Unrealized gains/(losses)	 	 	(44.7	)	 	 	43.4	 	 	 	—	 	 	 	(1.3	)	
Tax benefit/(expense)	 	 	7.9	 	 	 	(0.5	)	 	 	—	 	 	 	7.4	 	
Amounts reclassified from AOCL into earnings, net of tax	 	 	6.8	 	 	 	(17.3	)	 	 	—	 	 	 	(10.5	)	
As of September 30, 2022	 	$	(74.9	)	 	$	72.7	 	 	$	(119.0	)	 	$	(121.2	)	

 	 	Investment	 	 	Hedging	 	 	Foreign Currency	 	 	Defined Benefit	 	 	 	 	
 	 	Securities	 	 	Activities	 	 	Translation	 	 	Pension Plan	 	 	Total	 	
As of December 31, 2020	 	$	58.3	 	 	$	(30.5	)	 	$	(101.2	)	 	$	(86.1	)	 	$	(159.5	)	
Unrealized gains/(losses)	 	 	(16.0	)	 	 	24.2	 	 	 	—	 	 	 	—	 	 	 	8.2	 	
Tax benefit/(expense)	 	 	2.9	 	 	 	(0.9	)	 	 	—	 	 	 	—	 	 	 	2.0	 	
Amounts reclassified from AOCL into earnings, net of tax	 	 	0.1	 	 	 	5.6	 	 	 	—	 	 	 	2.5	 	 	 	8.2	 	
As of March 31, 2021	 	 	45.3	 	 	 	(1.6	)	 	 	(101.2	)	 	 	(83.6	)	 	 	(141.1	)	
Unrealized gains/(losses)	 	 	2.3	 	 	 	(6.2	)	 	 	—	 	 	 	—	 	 	 	(3.9	)	
Tax expense	 	 	(0.2	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.2	)	
Amounts reclassified from AOCL into earnings, net of tax	 	 	0.1	 	 	 	3.5	 	 	 	—	 	 	 	2.3	 	 	 	5.9	 	
As of June 30, 2021	 	 	47.5	 	 	 	(4.3	)	 	 	(101.2	)	 	 	(81.3	)	 	 	(139.3	)	
Unrealized gains/(losses)	 	 	(7.3	)	 	 	17.7	 	 	 	—	 	 	 	—	 	 	 	10.4	 	
Tax benefit/(expense)	 	 	1.4	 	 	 	(0.1	)	 	 	—	 	 	 	—	 	 	 	1.3	 	
Amounts reclassified from AOCL into earnings, net of tax	 	 	(2.0	)	 	 	0.6	 	 	 	—	 	 	 	2.3	 	 	 	0.9	 	
As of September 30, 2021	 	$	39.6	 	 	$	13.9	 	 	$	(101.2	)	 	$	(79.0	)	 	$	(126.7	)	
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 
On July 22, 2021, the Company’s Board of Directors approved a plan to terminate and settle the Company’s frozen defined benefit pension plan. In the fourth quarter of 2021, the Company settled its defined benefit pension plan. Refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 12, Employee Benefit Plans, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for details on the termination and settlement of the Company's frozen defined benefit pension plan.‌
Cash Dividends Paid
The Company's Board of Directors declared quarterly cash dividends of $0.235 per common share in each of the first three quarters of 2022 and 2021, representing $273.2 million and $287.6 million in total dividends, respectively. $90.7 million was paid on September 30, 2022, $90.8 million was paid on June 30, 2022, $91.7 million was paid on March 31, 2022, $95.1 million was paid on September 30, 2021, $95.9 million was paid on June 30, 2021, and $96.6 million was paid on March 31, 2021.‌
Share Repurchases
During the nine months ended September 30, 2022 and 2021, 9.6 million and 9.6 million shares were repurchased for $176.8 million and $225.0 million, respectively, excluding commissions, at an average cost of $18.45 and $23.45, respectively, under the share repurchase authorizations approved by the Company's Board of Directors, including one which expired on December 31, 2021. On February 10, 2022, the Company's Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024. As of September 30, 2022, $823.2 million remained available under this share repurchase authorization. The amounts included in the Common stock repurchased line in the Company’s Condensed Consolidated Statements of Cash Flows represent both shares authorized by the Board of Directors for repurchase under publicly announced authorizations and shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested.
10. Derivatives
The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro, and, to a lesser degree, the Canadian dollar, the Mexican peso, and other currencies, related to forecasted revenues and settlement assets and obligations, as well as on certain foreign currency denominated cash and other asset and liability positions. The Company is also exposed to risk from derivative contracts, primarily from customer derivatives, arising from its cross-currency Business Solutions payment operations. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (ii) facilitate cross-currency Business Solutions payments by writing derivatives to customers.
The Company executes derivatives with established financial institutions; the substantial majority of these financial institutions have a credit rating of "A-" or higher from a major credit rating agency. Customer derivatives written by the Company’s Business Solutions operations primarily involve small and medium size enterprises. The primary credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis, while also monitoring the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action when doubt arises about the counterparties’ ability to perform. These actions may include requiring Business Solutions customers to post or increase collateral, and for all counterparties, the possible termination of the related contracts. The Company’s hedged foreign currency exposures are in liquid currencies; consequently, there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Foreign Currency Derivatives
The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to help mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. As of September 30, 2022, these foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation and thus time value is excluded from the assessment of effectiveness. The initial value of the excluded components is amortized into Revenues within the Company’s Condensed Consolidated Statements of Income.
The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year at inception, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability positions. None of these contracts are designated as accounting hedges.
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of September 30, 2022 and December 31, 2021 were as follows (in millions):

 	 	September 30, 2022	 	
Contracts designated as hedges:	 	 	 	
Euro	 	$	364.3	 	
Canadian dollar	 	 	124.1	 	
Australian dollar	 	 	55.4	 	
Swiss franc	 	 	43.3	 	
British pound	 	 	36.0	 	
Swedish krona	 	 	27.5	 	
Other (a)	 	 	24.5	 	
Contracts not designated as hedges:	 	 	 	
Euro	 	$	532.8	 	
Mexican peso	 	 	154.6	 	
British pound	 	 	80.7	 	
Australian dollar	 	 	67.4	 	
Indian rupee	 	 	55.9	 	
Chinese yuan	 	 	41.8	 	
Canadian dollar	 	 	32.9	 	
Japanese yen	 	 	32.1	 	
Swiss franc	 	 	28.3	 	
Brazilian real	 	 	25.1	 	
Other (a)	 	 	168.5	 	

					
 	 	December 31, 2021	 	
Contracts designated as hedges:	 	 	 	
Euro	 	$	399.9	 	
Canadian dollar	 	 	134.0	 	
Australian dollar	 	 	58.4	 	
Swiss franc	 	 	45.9	 	
British pound	 	 	43.8	 	
Swedish krona	 	 	30.7	 	
Japanese yen	 	 	30.4	 	
Other (a)	 	 	0.9	 	
Contracts not designated as hedges:	 	 	 	
Euro	 	$	755.7	 	
British pound	 	 	148.1	 	
Canadian dollar	 	 	144.2	 	
Australian dollar	 	 	98.1	 	
Mexican peso	 	 	96.3	 	
Philippine peso	 	 	76.2	 	
Indian rupee	 	 	63.4	 	
Japanese yen	 	 	46.0	 	
Russian ruble	 	 	44.4	 	
Chinese yuan	 	 	31.6	 	
New Zealand dollar	 	 	26.6	 	
Swiss franc	 	 	25.1	 	
Swedish krona	 	 	25.1	 	
Other (a)	 	 	132.7	 	

 

 

(a)Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 
Business Solutions Operations
The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See Note 4 for further information regarding this transaction. The Company aggregates its Business Solutions foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with Convera through the end of the third closing of the Business Solutions divestiture. The derivatives written are part of the broader portfolio of foreign currency positions arising from the Company’s cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions included in Revenues in the Company’s Condensed Consolidated Statements of Income were $39.3 million and $99.5 million for the three months ended September 30, 2022 and 2021, respectively, and $151.5 million and $271.4 million for the nine months ended September 30, 2022 and 2021, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the majority of these derivative contracts have a duration at inception of less than one year.
The aggregate equivalent United States dollar notional amount of derivative customer contracts held by the Company in its Business Solutions operations was approximately $5.0 billion and $8.0 billion as of September 30, 2022 and December 31, 2021, respectively. The significant majority of customer contracts are written in the following currencies: the United States dollar, euro, and the British pound.‌
Interest Rate Hedging
Periodically, the Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term, variable-rate payments in order to manage its overall exposure to interest rate fluctuations. The Company designates these derivatives as fair value hedges. The change in the fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within Borrowings in the Condensed Consolidated Balance Sheets. Interest expense in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.
The Company terminated two of its treasury locks in the first quarter of 2021, which were associated with the issuance of $600.0 million of aggregate principal amount of 1.350% unsecured notes due March 15, 2026 (“2026 Notes”). The Company received a total of $3.3 million upon termination, of which $2.6 million was deferred as a component of AOCL and will be amortized to Interest expense in the Condensed Consolidated Statements of Income over the term of the 2026 Notes. As a portion of the forecasted interest payments on the 2026 Notes will occur outside the time period originally specified at designation of the treasury locks as cash flow hedges, $0.7 million was recognized in Other income/(expense), net in the Condensed Consolidated Statements of Income, upon termination.‌
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Balance Sheet
The following table summarizes the fair value of derivatives reported in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (in millions):

 	 	Derivative Assets	 	 	Derivative Liabilities	 	
 	 	 	 	Fair Value	 	 	 	 	Fair Value	 	
 	 	Balance Sheet	 	September 30,	 	 	December 31,	 	 	Balance Sheet	 	September 30,	 	 	December 31,	 	
 	 	Location	 	2022	 	 	2021	 	 	Location	 	2022	 	 	2021	 	
Derivatives designated as hedges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency cash flow hedges	 	Other assets	 	$	83.2	 	 	$	30.6	 	 	Other liabilities	 	$	0.2	 	 	$	2.6	 	
Total derivatives designated as hedges	 	 	 	$	83.2	 	 	$	30.6	 	 	 	 	$	0.2	 	 	$	2.6	 	
Derivatives not designated as hedges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Solutions operations - foreign currency (a)	 	Assets held for sale	 	$	232.9	 	 	$	213.1	 	 	Liabilities associated with assets held for sale	 	$	235.0	 	 	$	174.1	 	
Foreign currency	 	Other assets	 	 	12.1	 	 	 	4.0	 	 	Other liabilities	 	 	7.1	 	 	 	7.1	 	
Total derivatives not designated as hedges	 	 	 	$	245.0	 	 	$	217.1	 	 	 	 	$	242.1	 	 	$	181.2	 	
Total derivatives	 	 	 	$	328.2	 	 	$	247.7	 	 	 	 	$	242.3	 	 	$	183.8	 	
 
(a)In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions entered into with Convera do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with Convera to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business.
The fair values of derivative assets and liabilities associated with contracts that include netting language that the Company believes to be enforceable have been netted in the following tables to present the Company’s net exposure with these counterparties. The Company’s rights under these agreements generally allow for transactions to be settled on a net basis, including upon early termination, which could occur upon the counterparty’s default, a change in control, or other conditions.
In addition, certain of the Company’s other agreements include netting provisions, the enforceability of which may vary from jurisdiction to jurisdiction, depending on the circumstances. Due to the uncertainty related to the enforceability of these provisions, the derivative balances associated with these agreements are included within "Derivatives that are not or may not be subject to master netting arrangement or similar agreement" in the following tables. In certain circumstances, the Company may require its Business Solutions customers to maintain collateral balances which may mitigate the risk associated with potential customer defaults.
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following tables summarize the gross and net fair value of derivative assets and liabilities as of September 30, 2022 and December 31, 2021 (in millions):
Offsetting of Derivative Assets

 	 	 	 	 	Gross	 	 	Net Amounts	 	 	Derivatives	 	 	 	 	
 	 	Gross	 	 	Amounts Offset in	 	 	Presented in	 	 	Not Offset in	 	 	 	 	
 	 	Amounts of	 	 	the Condensed	 	 	the Condensed	 	 	the Condensed	 	 	 	 	
 	 	Recognized	 	 	Consolidated	 	 	Consolidated	 	 	Consolidated	 	 	Net	 	
September 30, 2022	 	Assets	 	 	Balance Sheets	 	 	Balance Sheets	 	 	Balance Sheets	 	 	Amounts	 	
Derivatives subject to a master netting arrangement or similar agreement	 	$	176.5	 	 	$	—	 	 	$	176.5	 	 	$	(89.2	)	 	$	87.3	 	
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	 	 	151.7	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	328.2	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
December 31, 2021	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives subject to a master netting arrangement or similar agreement	 	$	163.9	 	 	$	—	 	 	$	163.9	 	 	$	(92.4	)	 	$	71.5	 	
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	 	 	83.8	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	247.7	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
Offsetting of Derivative Liabilities

 	 	 	 	 	Gross	 	 	Net Amounts	 	 	Derivatives	 	 	 	 	
 	 	Gross	 	 	Amounts Offset in	 	 	Presented in	 	 	Not Offset in	 	 	 	 	
 	 	Amounts of	 	 	the Condensed	 	 	the Condensed	 	 	the Condensed	 	 	 	 	
 	 	Recognized	 	 	Consolidated	 	 	Consolidated	 	 	Consolidated	 	 	Net	 	
September 30, 2022	 	Liabilities	 	 	Balance Sheets	 	 	Balance Sheets	 	 	Balance Sheets	 	 	Amounts	 	
Derivatives subject to a master netting arrangement or similar agreement	 	$	159.5	 	 	$	—	 	 	$	159.5	 	 	$	(89.2	)	 	$	70.3	 	
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	 	 	82.8	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	242.3	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
December 31, 2021	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives subject to a master netting arrangement or similar agreement	 	$	109.6	 	 	$	—	 	 	$	109.6	 	 	$	(92.4	)	 	$	17.2	 	
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	 	 	74.2	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	183.8	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Income Statement
Cash Flow Hedges
The effective portion of the change in fair value of derivatives that qualify as cash flow hedges is recorded in AOCL in the Company’s Condensed Consolidated Balance Sheets. Generally, amounts are recognized in income when the related forecasted transaction affects earnings.‌
The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the three and nine months ended September 30, 2022 and 2021 (in millions):

 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Foreign currency derivatives (a)	 	$	43.4	 	 	$	17.7	 	 	$	86.9	 	 	$	32.4	 	
Interest rate derivatives	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3.3	 	
 
(a)Gains/(losses) of $0.2 million and $(0.2) million for the three months ended September 30, 2022 and 2021, respectively, and $(4.7) million and $(1.2) million for the nine months ended September 30, 2022 and 2021, respectively, represent amounts excluded from the assessment of effectiveness and recognized in other comprehensive income, for which an amortization approach is applied.
The following table presents the location and amounts of pre-tax net gains/(losses) from cash flow hedging relationships recognized in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2022 and 2021 (in millions):

 	 	Three Months Ended September 30,	
 	 	2022	 	 	2021	
 	 	Revenues	 	 	Interest Expense	 	 	Revenues	 	 	Interest Expense	 	 	
Total amounts presented in the Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded	 	$	1,089.6	 	 	$	(25.2	)	 	$	1,286.3	 	 	$	(25.7	)	 	
Gain/(loss) on cash flow hedges:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency derivatives:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gains/(losses) reclassified from AOCL into earnings	 	 	17.5	 	 	 	—	 	 	 	(0.6	)	 	 	—	 	 	
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach	 	 	1.5	 	 	 	—	 	 	 	1.4	 	 	 	—	 	 	
Interest rate derivatives:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Losses reclassified from AOCL into earnings	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.1	)	 	

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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 	 	Nine Months Ended September 30,	 	
 	 	2022	 	 	2021	 	
 	 	Revenues	 	 	Interest Expense	 	 	Revenues	 	 	Interest Expense	 	 	Other income/(expense), net	 	
Total amounts presented in the Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded	 	$	3,383.6	 	 	$	(74.8	)	 	$	3,786.0	 	 	$	(79.7	)	 	$	26.8	 	
Gain/(loss) on cash flow hedges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency derivatives:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gains/(losses) reclassified from AOCL into earnings	 	 	32.4	 	 	 	—	 	 	 	(10.0	)	 	 	—	 	 	 	—	 	
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach	 	 	4.0	 	 	 	—	 	 	 	4.9	 	 	 	—	 	 	 	—	 	
Interest rate derivatives:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gains/(losses) reclassified from AOCL into earnings	 	 	—	 	 	 	(0.1	)	 	 	—	 	 	 	(0.5	)	 	 	0.7	 	
 
Undesignated Hedges
 
The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Condensed Consolidated Statements of Income on derivatives for the three and nine months ended September 30, 2022 and 2021 (in millions):

 	 	 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	 	 	September 30,	 	 	September 30,	 	
Derivatives (a)	 	Location	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Foreign currency derivatives (b)	 	Selling, general, and administrative	 	$	42.6	 	 	$	23.4	 	 	$	97.6	 	 	$	41.3	 	
 
(a)The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.(b)The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange losses on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above and included in Selling, general, and administrative in the Condensed Consolidated Statements of Income, were $40.6 million and $25.7 million for the three months ended September 30, 2022 and 2021, respectively, and $90.4 million and $50.7 million for the nine months ended September 30, 2022 and 2021, respectively.
All cash flows associated with derivatives are included in Cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.
Based on September 30, 2022 foreign exchange rates, an accumulated other comprehensive pre-tax gain of $59.8 million related to the foreign currency forward contracts is expected to be reclassified into Revenues within the next 12 months.
 
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
11. Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):

 	 	September 30, 2022	 	 	December 31, 2021	 	
Commercial paper (a)	 	$	175.0	 	 	$	275.0	 	
Notes:	 	 	 	 	 	 	
4.250% notes due 2023 (b)	 	 	300.0	 	 	 	300.0	 	
2.850% notes due 2025 (b)	 	 	500.0	 	 	 	500.0	 	
1.350% notes due 2026 (b)	 	 	600.0	 	 	 	600.0	 	
2.750% notes due 2031 (b)	 	 	300.0	 	 	 	300.0	 	
6.200% notes due 2036 (b)	 	 	500.0	 	 	 	500.0	 	
6.200% notes due 2040 (b)	 	 	250.0	 	 	 	250.0	 	
Term loan facility borrowing (c)	 	 	—	 	 	 	300.0	 	
Total borrowings at par value	 	 	2,625.0	 	 	 	3,025.0	 	
Debt issuance costs and unamortized discount, net	 	 	(14.0	)	 	 	(16.6	)	
Total borrowings at carrying value (d)	 	$	2,611.0	 	 	$	3,008.4	 	
 
(a)Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s revolving credit facility. The commercial paper notes may have maturities of up to 397 days from date of issuance. The Company’s commercial paper borrowings as of September 30, 2022 had a weighted-average annual interest rate of approximately 3.4% and a weighted-average term of approximately 3 days.(b)The difference between the stated interest rate and the effective interest rate is not significant.(c)See Term Loan Facility section below for further discussion.(d)As of September 30, 2022, the Company’s weighted-average effective rate on total borrowings was approximately 3.8%.
 
Term Loan Facility
On December 18, 2018, the Company entered into an amended and restated term loan facility providing for up to $950.0 million in borrowings and extending the final maturity of the facility to January 2024 (the "Term Loan Facility"). Proceeds from the 2026 Notes and $300.0 million of aggregate principal amount of 2.750% unsecured notes due March 15, 2031 ("2031 Notes"), and cash, including cash generated from operations, were used to repay $650.0 million of the Term Loan Facility in the first quarter of 2021 and $500.0 million of the aggregate principal amount of 3.600% unsecured notes due in March 2022 in the second quarter of 2021. On January 4, 2022, the Company repaid all remaining borrowings owed under the Term Loan Facility for total consideration of $300.0 million, using proceeds from commercial paper and cash, including cash generated from operations. The Company is no longer able to borrow money under this facility.
The following summarizes the Company’s maturities of its notes at par value as of September 30, 2022 (in millions):

Due within 1 year	 	$	300.0	 	
Due after 1 year through 2 years	 	 	—	 	
Due after 2 years through 3 years	 	 	500.0	 	
Due after 3 years through 4 years	 	 	600.0	 	
Due after 4 years through 5 years	 	 	—	 	
Due after 5 years	 	 	1,050.0	 	
Total	 	$	2,450.0	 	
 
The Company’s obligations with respect to its outstanding borrowings, as described above, rank equally.
12. Income Taxes
The Company’s effective tax rates on pre-tax income were 10.2% and 20.2% for the three months ended September 30, 2022 and 2021, respectively, and 16.5% and 15.6% for the nine months ended September 30, 2022 and‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
2021, respectively. The decrease in the Company's effective tax rate for the three months ended September 30, 2022 compared to the corresponding period in the prior year was primarily due to discrete tax expenses in the prior period and discrete tax benefits in the current period related to the completion of the examination of the Company's consolidated federal income tax returns for 2017 and 2018 (the "IRS Examination"), discussed below, partially offset by the sale of the Company's Business Solutions business and the Company's decision to suspend its operations in Russia and Belarus. The increase in the Company's effective tax rate for the nine months ended September 30, 2022 compared to the corresponding period in the prior year was primarily due to the sale of the Company's Business Solutions business and the Company's decision to suspend its operations in Russia and Belarus, partially offset by discrete tax expenses in the prior period and discrete tax benefits in the current period related to the completion of the IRS Examination. The impact of the sale of the Company's Business Solutions business is included in the Company's estimated annual effective rate, the ongoing effects of which are expected to continue throughout the year.
 
Unrecognized tax benefits are reflected in Income taxes payable in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of September 30, 2022 and December 31, 2021 was $356.1 million and $376.3 million, respectively, including interest and penalties. As previously disclosed in Part II, Item 8, Financial Statements and Supplementary Data, Note 11, Income Taxes, in the Company's Annual Report on Form 10-K, the Company continues to believe that it is reasonably possible that its total unrecognized tax benefits could decrease by December 31, 2022, in connection with various matters which may be resolved.
 
The Company’s tax filings are subject to examination by U.S. federal, state, and various non-United States jurisdictions. The conclusion of the IRS Examination resulted in both agreed and unagreed adjustments. The agreed adjustments have been reflected in the Company's financial statements for the three months ended September 30, 2022. The Company is contesting the unagreed adjustments at the IRS Appeals level and believes its reserves for these unagreed adjustments are adequate. The statute of limitations for the U.S. federal returns for 2017 and 2018 has been extended to March 31, 2024.
 
13. Stock-Based Compensation Plans
For the three months ended September 30, 2022 and 2021, the Company recognized stock-based compensation expense of $9.6 million and $8.4 million, respectively, resulting primarily from stock options, restricted stock units, and performance-based restricted stock units in the Condensed Consolidated Statements of Income. For the nine months ended September 30, 2022 and 2021, the Company recognized stock-based compensation expense of $32.6 million and $31.2 million, respectively.‌
During the nine months ended September 30, 2022, the Company granted 0.6 million options at a weighted-average exercise price of $18.62 and 3.6 million performance-based restricted stock units and restricted stock units at a weighted-average grant date fair value of $19.94. As of September 30, 2022, the Company had 6.4 million outstanding options at a weighted-average exercise price of $18.68, of which 3.6 million options were exercisable at a weighted-average exercise price of $19.16. The Company had 6.9 million outstanding performance-based restricted stock units (based on target performance) and restricted stock units at a weighted-average grant date fair value of $21.43 as of September 30, 2022.‌
14. Segments
As further described in Note 1, the Company classifies its business into two segments: Consumer-to-Consumer and Business Solutions. Operating segments are defined as components of an enterprise that engage in business activities, about which separate financial information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker ("CODM") in allocating resources and assessing performance.
The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The segment includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. The Company includes Digital Money Transfer transactions in its regions, including transactions from the Company’s arrangements with financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. By means of common processes and‌
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THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
systems, these regions, including Digital Money Transfer transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment.
The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other organizations and individuals. On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See Note 4 for further information regarding this transaction.
All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services.
Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily based on a percentage of the segments’ revenue compared to total revenue. Effective January 1, 2022, the Company stopped allocating corporate costs to its Business Solutions segment, given its agreement to sell this business, as discussed further in Note 4.
The following table presents the Company’s segment results for the three and nine months ended September 30, 2022 and 2021 (in millions):

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	
Consumer-to-Consumer	 	$	982.4	 	 	$	1,104.5	 	 	$	3,008.3	 	 	$	3,282.5	 	
Business Solutions (a)	 	 	42.6	 	 	 	116.8	 	 	 	167.4	 	 	 	312.6	 	
Other	 	 	64.6	 	 	 	65.0	 	 	 	207.9	 	 	 	190.9	 	
Total consolidated revenues	 	$	1,089.6	 	 	$	1,286.3	 	 	$	3,383.6	 	 	$	3,786.0	 	
Operating income:	 	 	 	 	 	 	 	 	 	 	 	 	
Consumer-to-Consumer	 	$	193.7	 	 	$	268.2	 	 	$	626.5	 	 	$	708.1	 	
Business Solutions (a)	 	 	15.9	 	 	 	38.4	 	 	 	51.7	 	 	 	61.9	 	
Other	 	 	21.6	 	 	 	12.0	 	 	 	73.4	 	 	 	36.3	 	
Total segment operating income	 	 	231.2	 	 	 	318.6	 	 	 	751.6	 	 	 	806.3	 	
Russia/Belarus exit costs (b)	 	 	0.6	 	 	 	—	 	 	 	(10.6	)	 	 	—	 	
Business Solutions exit costs (b)	 	 	—	 	 	 	—	 	 	 	(7.7	)	 	 	—	 	
Total consolidated operating income	 	$	231.8	 	 	$	318.6	 	 	$	733.3	 	 	$	806.3	 	

(a)On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to the Buyer. The sale will be completed in three closings, the first of which occurred on March 1, 2022. The second is expected to occur in December 2022, with the third expected in the first quarter of 2023. The operations of the Business Solutions business to be sold in the second and third closings continue to be included in Revenues and Operating income after the first closing. During the period between the first and third closings, the Company will pay to the Buyer a measure of profit of the European Union and United Kingdom operations, while owned by the Company, adjusted for the occupancy charges for employees of the Buyer using Company facilities and other items, as contractually agreed, and this expense is recognized in Other income/(expense), net in the Condensed Consolidated Statements of Income. The related income tax expense on this income is also passed to the Buyer.(b)Represents the exit costs incurred in connection with the Company's suspension of its operations in Russia and Belarus and the divestiture of the Business Solutions business, primarily related to severance and non-cash impairments of property and equipment, an operating lease right-of-use asset, and other intangible assets. While certain of the expenses are identifiable to the Company's segments, the expenses are not included in the measurement of segment operating income provided to the CODM for purposes of performance assessment and resource allocation. These expenses are therefore excluded from the Company's segment operating income results.
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THE WESTERN UNION COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2.
The following discussion should be read in conjunction with the condensed consolidated financial statements and the notes to those statements included elsewhere in this report on Form 10-Q. This report on Form 10‑Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as "expects," "intends," "targets," "anticipates," "believes," "estimates," "guides," "provides guidance," "provides outlook," “projects,” “designed to,” and other similar expressions or future or conditional verbs such as "may," "will," "should," "would," "could," and "might" are intended to identify such forward-looking statements. Readers of the Form 10‑Q of The Western Union Company (the "Company," "Western Union," "we," "our," or "us") should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in the Risk Factors section and throughout the Annual Report on Form 10‑K for the year ended December 31, 2021. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.
Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events related to our business and industry, such as: changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic downturns and trade disruptions, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns or other events, such as public health emergencies, epidemics, or pandemics, such as COVID-19, civil unrest, war, terrorism, natural disasters, or non-performance by our banks, lenders, insurers, or other financial services providers; failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price or customer experience, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including digital, mobile and internet-based services, card associations, and card-based payment providers, and with digital currencies and related exchanges and protocols, and other innovations in technology and business models; geopolitical tensions, political conditions, and related actions, including trade restrictions and government sanctions, which may adversely affect our business and economic conditions as a whole, including interruptions of United States or other government relations with countries in which we have or are implementing significant business relationships with agents, clients, or other partners; deterioration in customer confidence in our business, or in money transfer and payment service providers generally; failure to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place; our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in response to changing industry and consumer needs or trends; mergers, acquisitions, and the integration of acquired businesses and technologies into our Company, divestitures, and the failure to realize anticipated financial benefits from these transactions, and events requiring us to write down our goodwill; decisions to change our business mix; changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers and payment transactions; changes in tax laws, or their interpretation, any subsequent regulation, and potential related state income tax impacts, and unfavorable resolution of tax contingencies; any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems or those of our vendors or other third parties; cessation of or defects in various services provided to us by third-party vendors; our ability to realize the anticipated benefits from restructuring-related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and to minimize any disruptions in our workforce that may result from those initiatives; failure to manage credit and fraud risks presented by our agents, clients, and consumers; adverse rating actions by credit rating agencies; our ability to protect our trademarks, patents, copyrights, and other intellectual property rights, and to defend ourselves against potential intellectual property infringement claims; our ability to attract and retain qualified key employees and to manage our workforce successfully; material changes in the market value or liquidity of securities that we hold; restrictions imposed by our debt obligations; (ii) events related to our regulatory and litigation environment, such as: liabilities or loss of business resulting from a failure by us, our agents, or‌
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their subagents to comply with laws and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent money laundering, terrorist financing, fraud, and other illicit activity; increased costs or loss of business due to regulatory initiatives and changes in laws, regulations, and industry practices and standards, including changes in interpretations, in the United States and abroad, affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services, including related to anti-money laundering regulations, anti-fraud measures, our licensing arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring requirements, consumer protection requirements, remittances, and immigration; liabilities, increased costs or loss of business and unanticipated developments resulting from governmental investigations and consent agreements with or enforcement actions by regulators; liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory enforcement actions, including costs, expenses, settlements, and judgments; failure to comply with regulations and evolving industry standards regarding consumer privacy, data use, the transfer of personal data between jurisdictions, and information security, including with respect to the General Data Protection Regulation in the European Union and the California Consumer Privacy Act; failure to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other governmental authorities in the United States and abroad related to consumer protection and derivative transactions; effects of unclaimed property laws or their interpretation or the enforcement thereof; failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working capital to meet the changing requirements of our regulators worldwide; changes in accounting standards, rules and interpretations, or industry standards affecting our business; and (iii) other events, such as: catastrophic events; and management’s ability to identify and manage these and other risks.
Overview
We are a leading provider of money movement and payment services, operating in two business segments:
•Consumer-to-Consumer - Our Consumer-to-Consumer operating segment facilitates money transfers, which are sent from our retail agent locations worldwide or through websites and mobile devices, including our money transfer transactions conducted and funded through websites and mobile applications marketed under our brands (“Branded Digital”) and transactions initiated on websites and mobile applications hosted by our third-party white label or co-branded digital partners (together with Branded Digital, “Digital Money Transfer”). Our money transfer service is provided through one interconnected global network. This service is available for international cross-border transfers and, in certain countries, intra-country transfers.•Business Solutions - Our Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment’s business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, we write foreign currency forward and option contracts for customers to facilitate future payments. On August 4, 2021, we entered into an agreement to sell our Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC. During the third quarter of 2022, all parties agreed for the sale to be completed in three closings instead of two. The first closing occurred on March 1, 2022, the second is expected to occur in December 2022, and the third is expected in the first quarter of 2023. See below for additional information regarding this transaction.
All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes our bill payment services which facilitate payments from consumers to businesses and other organizations and our money order services. Certain of our corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. Additional information on our segments is provided in the Segment Discussion below.
 
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Results of Operations
The following discussion of our consolidated results of operations and segment results refers to the three and nine months ended September 30, 2022 compared to the same periods in 2021. The results of operations should be read in conjunction with the discussion of our segment results of operations, which provide more detailed discussions concerning certain components of the Condensed Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated. The below information has been prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.‌
Our revenues and operating income for the three and nine months ended September 30, 2022 were impacted by fluctuations in the United States dollar compared to foreign currencies. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in decreases to revenues of $60.8 million and $136.1 million for the three and nine months ended September 30, 2022, respectively, relative to the corresponding periods in the prior year. Fluctuations in the United States dollar compared to foreign currencies negatively impacted operating income by $0.6 million for the three months ended September 30, 2022 and positively impacted operating income by $7.5 million for the nine months ended September 30, 2022, relative to the corresponding periods in the prior year.
On August 4, 2021, we entered into an agreement to sell our Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the “Buyer”) for cash consideration of $910.0 million. During the third quarter of 2022, we agreed with the Buyer to complete the divestiture in three closings instead of two, the first of which occurred on March 1, 2022 with the entirety of the cash consideration collected and allocated to the closings on a relative fair value basis. The first closing excluded the operations in the European Union and the United Kingdom and resulted in a gain of $151.4 million. The second closing, which includes the United Kingdom operations, is expected to occur in December 2022, pending required regulatory approvals. The third closing, which includes the European Union operations, is expected to occur in the first quarter of 2023, pending required regulatory approvals. The gains associated with the second and third closings are subject to regulatory capital adjustments and will be recognized at the time of each closing. The Buyer has rebranded the sold operations within a new standalone company (now referred to as "Convera"). Refer to Part I, Item 1, Financial Statements, Note 4, Divestitures and Investment Activities for further discussion.
Business Solutions revenues included in our Condensed Consolidated Statements of Income were $42.6 million and $116.8 million and direct operating expenses, excluding corporate allocations, were $27.0 million and $77.1 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, Business Solutions revenues were $167.4 million and $312.6 million, respectively, and direct operating expenses, excluding corporate allocations, were $117.4 million and $244.5 million, respectively. For the three months ended September 30, 2022 and 2021, divestiture costs directly associated with this transaction were $0.4 million and $5.2 million, respectively. For the nine months ended September 30, 2022 and 2021, divestiture costs directly associated with this transaction were $4.4 million and $10.7 million, respectively.‌
In March 2022, we suspended our operations in Russia and Belarus, which are included in our Consumer-to-Consumer segment, due to the Russia/Ukraine conflict (the "Conflict"). Revenues associated with the Russia and Belarus operations, including transactions sent from, into, and within these countries for the three months ended September 30, 2021 were approximately $40 million, and for the nine months ended September 30, 2022 and 2021 and the year ended December 31, 2021, were approximately $28 million, $106 million, and $145 million, respectively. The Conflict has had and is expected to continue to have broader implications to our overall business, including reduced transaction activity in Ukraine. We expect that our results of operations will continue to be negatively impacted by this Conflict for the remainder of 2022 and likely thereafter.
 
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The following table sets forth our consolidated results of operations for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
(in millions, except per share amounts)	 	2022	 	2021	 	% Change	 	2022	 	2021	 	% Change	
Revenues	 	$1,089.6	 	$1,286.3	 	(15)%	 	$3,383.6	 	$3,786.0	 	(11)%	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	  637.3‌	 	  720.1‌	 	(12)%	 	  1,945.4‌	 	  2,181.1‌	 	(11)%	
Selling, general, and administrative	 	  220.5‌	 	  247.6‌	 	(11)%	 	  704.9‌	 	  798.6‌	 	(12)%	
Total expenses	 	  857.8‌	 	  967.7‌	 	(11)%	 	  2,650.3‌	 	  2,979.7‌	 	(11)%	
Operating income	 	  231.8‌	 	  318.6‌	 	(27)%	 	  733.3‌	 	  806.3‌	 	(9)%	
Other income/(expense):	 	 	 	 	 	 	 	 	 	 	 	 	
Gain on divestiture of business	 	  —‌	 	  —‌	 	(a)	 	151.4	 	  —‌	 	(a)	
Interest income	 	  4.9‌	 	  0.4‌	 	(a)	 	  7.3‌	 	  1.1‌	 	(a)	
Interest expense	 	  (25.2)	 	  (25.7)	 	(2)%	 	  (74.8)	 	  (79.7)	 	(6)%	
Other income/(expense), net	 	  (17.8)	 	  (1.8)	 	(a)	 	  (25.1)	 	  26.8‌	 	(a)	
Total other income/(expense), net	 	  (38.1)	 	  (27.1)	 	41%	 	  58.8‌	 	  (51.8)	 	(a)	
Income before income taxes	 	  193.7‌	 	  291.5‌	 	(34)%	 	  792.1‌	 	  754.5‌	 	5%	
Provision for income taxes	 	  19.8‌	 	  58.8‌	 	(66)%	 	  130.9‌	 	  117.5‌	 	11%	
Net income	 	$173.9	 	$232.7	 	(25)%	 	$661.2	 	$637.0	 	4%	
Earnings per share:	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$0.45	 	$0.57	 	(21)%	 	$1.70	 	$1.56	 	9%	
Diluted	 	$0.45	 	$0.57	 	(21)%	 	$1.70	 	$1.55	 	10%	
Weighted-average shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	  386.5‌	 	  406.3‌	 	 	 	  388.8‌	 	  409.1‌	 	 	
Diluted	 	  387.6‌	 	  408.0‌	 	 	 	  389.9‌	 	  411.3‌	 	 	
 
(a)Calculation not meaningful.
 
Revenues Overview
 
Revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate we set to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. We also offer several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors.
 
Due to the significance of the effect that foreign exchange fluctuations against the United States dollar can have on our reported revenues, constant currency results have been provided in the table below for consolidated revenues. Constant currency results assume foreign revenues are translated from foreign currencies to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. We have also disclosed the impact of our Business Solutions divestiture on our revenues in the table below. Constant currency measures and measures that exclude the impact of divestitures are non-GAAP financial measures and are provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates and divestitures of our businesses, which is consistent with how management evaluates our revenue results and trends. We believe that these measures provide management and investors with information about revenue results and trends that eliminates currency volatility and divestitures, thereby providing greater clarity regarding, and increasing the comparability of, our underlying results and trends. These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.‌
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The following table sets forth our consolidated revenue results for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
(dollars in millions)	 	2022	 	2021	 	% Change	 	2022	 	2021	 	% Change	
Revenues, as reported (GAAP)	 	$1,089.6	 	$1,286.3	 	(15)%	 	$3,383.6	 	$3,786.0	 	(11)%	
Foreign currency impact (a)	 	 	 	 	 	4%	 	 	 	 	 	4%	
Divestitures impact (b)	 	 	 	 	 	5%	 	 	 	 	 	3%	
Revenue change, constant currency adjusted, excluding Business Solutions (Non-GAAP)	 	 	 	 	 	(6)%	 	 	 	 	 	(4)%	
 
(a)Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in decreases to revenues of $60.8 million and $136.1 million for the three and nine months ended September 30, 2022, respectively, when compared to foreign currency rates in the corresponding periods in the prior year.(b)In March 2022, we completed the first closing of the sale of our Business Solutions business, as discussed above. Business Solutions revenues included in our results were $42.6 million and $116.8 million for the three months ended September 30, 2022 and 2021, respectively, and $167.4 million and $312.6 million for the nine months ended September 30, 2022 and 2021, respectively.
 
For the three and nine months ended September 30, 2022, revenues decreased 15% and 11%, respectively, when compared to the corresponding periods in the prior year due to a transaction decline in our Consumer-to-Consumer segment, including as a result of the suspension of our operations in Russia and Belarus, as well as the first closing of the divestiture of our Business Solutions business, as described above. Fluctuations in the exchange rates between the United States dollar and foreign currencies negatively impacted revenue by 4% for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year.‌
 
Operating Expenses Overview
 
Operational efficiency program
 
On October 20, 2022, we announced an operational efficiency program which aims to redeploy approximately $150 million in expenses in our current cost base over the next 5 years, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people costs. We believe these changes will allow us to invest in strategic initiatives. The timing and pace of this redeployment may vary, and we believe that we will continue to refine aspects of the program during the remainder of 2022 and into 2023.
 
Enhanced Regulatory Compliance
 
The financial services industry, including money services businesses, continues to be subject to increasingly strict legal and regulatory requirements, and we continue to focus on and regularly review our compliance programs. In connection with these reviews, and in light of growing and rapidly evolving regulatory complexity and heightened attention of, and increased dialogue with, governmental and regulatory authorities related to our compliance activities, we have made, and continue to make, enhancements to our processes and systems designed to detect and prevent money laundering, terrorist financing, and fraud and other illicit activity, and enhancements designed to improve consumer protection. Some of these changes have had, and we believe will continue to have, an adverse effect on our business, financial condition, and results of operations.
 
Cost of Services
 
Cost of services primarily consists of agent commissions, which represented approximately 60% of total cost of services for both the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2022, Cost of services decreased compared to the corresponding periods in the prior year due to a decrease in Consumer-to-Consumer money transfer agent commissions, which generally vary with revenues and a decrease associated with the Business Solutions divestiture, as discussed above. In addition, for the nine months ended September 30, 2022 compared to the corresponding prior period, Cost of services decreased due to timing of investments in information technology and reductions in chargebacks and other losses.‌
 
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Selling, General, and Administrative
 
Selling, general, and administrative expenses decreased for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year due to a decrease associated with the Business Solutions divestiture, as discussed above, and fluctuations between the United States dollar and foreign currencies. For the three months ended September 30, 2022 compared to the corresponding period in the prior year, the decrease was partially offset by increased marketing costs. For the nine months ended September 30, 2022 compared to the corresponding period in the prior year, the decrease was also due to decreases in employee-related expenses, partially offset by exit costs associated with the suspension of our Russian and Belarus operations and the Business Solutions divestiture, as discussed below.‌
 
Total Other Income/(Expense), Net
 
Total other income/(expense), net during the three months ended September 30, 2022 when compared to the corresponding period in the prior year was impacted by the expense associated with payment obligations to the Buyer of the Business Solutions business for a measure of the profits, as contractually agreed, from the European Union and United Kingdom operations subsequent to the first closing, which will continue until the third closing. Total other income/(expense), net for the nine months ended September 30, 2022, when compared to the corresponding period in the prior year benefited from the gain on the first closing of the Business Solutions divestiture, debt extinguishment costs incurred in the prior period, and a reduction in net periodic pension costs due to the termination of our U.S. defined benefit pension plan in the fourth quarter of 2021. This was partially offset by a prior year gain of $47.9 million recorded from the sale of a substantial majority of shares we held as a noncontrolling investor in a private company and the measure of profits paid to the Buyer of Business Solutions.
 
Income Taxes‌
 
Our effective tax rates on pre-tax income were 10.2% and 20.2% for the three months ended September 30, 2022 and 2021, respectively, and 16.5% and 15.6% for the nine months ended September 30, 2022 and 2021, respectively. The decrease in our effective tax rate for the three months ended September 30, 2022 compared to the corresponding period in the prior year was primarily due to discrete tax expenses in the prior period and discrete tax benefits in the current period related to the completion of the examination of our consolidated federal income tax returns for 2017 and 2018 (the "IRS Examination"), partially offset by the sale of our Business Solutions business and our decision to suspend operations in Russia and Belarus. The increase in our effective tax rate for the nine months ended September 30, 2022 compared to the corresponding period in the prior year was primarily due to the sale of our Business Solutions business and our decision to suspend operations in Russia and Belarus, partially offset by discrete tax expenses in the prior period and discrete tax benefits in the current period related to the completion of the IRS Examination. The impact of the sale of our Business Solutions business is included in our estimated annual effective rate, the ongoing effects of which are expected to continue throughout the year.‌
 
As of September 30, 2022, the total amount of tax contingency reserves was $302.4 million, including accrued interest and penalties, net of related items. As previously disclosed in Part II, Item 8, Financial Statements and Supplementary Data, Note 11, Income Taxes, in our Annual Report on Form 10-K, we continue to believe that it is reasonably possible that our total unrecognized tax benefits could decrease by December 31, 2022, in connection with various matters which may be resolved.
 
Earnings Per Share
 
During the three months ended September 30, 2022 and 2021, both basic and diluted earnings per share were $0.45 and $0.57, respectively. During the nine months ended September 30, 2022 and 2021, basic earnings per share were $1.70 and $1.56, respectively, and diluted earnings per share were $1.70 and $1.55, respectively. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested. For the three months ended September 30, 2022 and 2021 there were 8.1 million and 2.2 million, respectively, and for the nine months ended September 30, 2022 and 2021, there were 8.0 million and 1.7 million, respectively, of shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding options to purchase shares of Western Union stock and restricted stock units, as the assumed‌
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proceeds of the options and restricted stock per unit were above our average share price during the periods and their effect was anti-dilutive.
 
Earnings per share for both the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year were impacted by the previously described factors impacting net income and a lower number of shares outstanding. The lower number of shares outstanding was due to stock repurchases exceeding stock issuances under our stock compensation programs.
 
Segment Discussion
 
We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our segments addresses a different combination of consumer groups, distribution networks, and services offered. Our segments are Consumer-to-Consumer and Business Solutions. On August 4, 2021, we entered into an agreement to sell our Business Solutions business and completed the first closing on March 1, 2022. During the third quarter of 2022, we agreed with the Buyer to complete the divestiture in three closings instead of two. The operations of the Business Solutions business to be sold in the second and third closings continue to be included in Revenues and Operating income after the first closing. However, between the first and third closings, we will pay the Buyer a measure of the profits from these operations, adjusted for other charges, and this expense is recognized in Other income/(expense), net in the Condensed Consolidated Statements of Income.‌
 
During the nine months ended September 30, 2022, we incurred $10.6 million and $7.7 million of exit costs associated with the suspension of our Russia and Belarus operations and the Business Solutions divestiture, respectively. These exit costs are primarily related to severance and non-cash impairments of property and equipment, an operating lease right-of-use asset, and other intangible assets. While certain of the expenses are identifiable to our segments, the expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker for purposes of performance assessment and resource allocation. These expenses are therefore excluded from our segment operating income results.
 
The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Consumer-to-Consumer	 	 	90	%	 	 	86	%	 	 	89	%	 	 	87	%	
Business Solutions	 	 	4	%	 	 	9	%	 	 	5	%	 	 	8	%	
Other	 	 	6	%	 	 	5	%	 	 	6	%	 	 	5	%	
 	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%	
 
Consumer-to-Consumer Segment
The following table sets forth our Consumer-to-Consumer segment results of operations for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
(dollars and transactions in millions)	 	2022	 	2021	 	% Change	 	2022	 	2021	 	% Change	
Revenues	 	$982.4	 	$1,104.5	 	(11)%	 	$3,008.3	 	$3,282.5	 	(8)%	
Operating income	 	$193.7	 	$268.2	 	(28)%	 	$626.5	 	$708.1	 	(12)%	
Operating income margin	 	20%	 	24%	 	 	 	21%	 	22%	 	 	
Key indicator:	 	 	 	 	 	 	 	 	 	 	 	 	
Consumer-to-Consumer transactions	 	  66.9‌	 	  76.6‌	 	(12)%	 	  204.8‌	 	  227.6‌	 	(10)%	
 
Our Consumer-to-Consumer money transfer service facilitates money transfers sent from our retail agent locations worldwide and our Digital Money Transfer services. The segment includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. We include Digital Money Transfer transactions in our regions, including transactions from our arrangements with financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under‌
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their brands. By means of common processes and systems, these regions, including Digital Money Transfer transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment.
Transaction volume is the primary generator of revenue in our Consumer-to-Consumer segment. A Consumer-to-Consumer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows, including Digital Money Transfer transactions, is determined based upon the region where the money transfer is initiated. Included in each region’s transaction and revenue percentages in the tables below are Digital Money Transfer transactions for the three and nine months ended September 30, 2022 and 2021. Where reported separately in the discussion below, Digital Money Transfer, and its subset Branded Digital, consist of 100% of the transactions conducted and funded through those respective channels.
The table below sets forth revenue and transaction changes by geographic region compared to the same period in the prior year. Additionally, due to the significance of our Consumer-to-Consumer segment to our overall results, we have also provided constant currency results for our Consumer-to-Consumer segment revenues. Consumer-to-Consumer segment constant currency revenue growth/(decline) is a non-GAAP financial measure, as further discussed in Revenues Overview above.

 	 	Three Months Ended September 30, 2022	 	Nine Months Ended September 30, 2022	
 	 	Revenue Decline as
Reported
(GAAP)	 	Foreign
Exchange
Translation
Impact	 	Constant
Currency
Revenue Growth / (Decline)(a)
(Non-GAAP)	 	Transaction Growth / (Decline)	 	Revenue Growth / (Decline) as
Reported
(GAAP)	 	Foreign
Exchange
Translation
Impact	 	Constant
Currency
Revenue Growth / (Decline)(a)
(Non-GAAP)	 	Transaction Growth / (Decline)	
Consumer-to-Consumer regional growth/(decline):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America (United States & Canada) ("NA")	 	(5)%	 	0%	 	(5)%	 	(5)%	 	(3)%	 	0%	 	(3)%	 	(6)%	
Europe and Russia/CIS ("EU & CIS")	 	(23)%	 	(7)%	 	(16)%	 	(32)%	 	(20)%	 	(6)%	 	(14)%	 	(23)%	
Middle East, Africa, and South Asia ("MEASA")	 	(5)%	 	(2)%	 	(3)%	 	(1)%	 	(2)%	 	(1)%	 	(1)%	 	0%	
Latin America and the Caribbean ("LACA")	 	0%	 	(4)%	 	4%	 	3%	 	1%	 	(4)%	 	5%	 	3%	
East Asia and Oceania ("APAC")	 	(16)%	 	(5)%	 	(11)%	 	(11)%	 	(11)%	 	(4)%	 	(7)%	 	(12)%	
Total Consumer-to-Consumer segment:	 	(11)%	 	(3)%	 	(8)%	 	(12)%	 	(8)%	 	(2)%	 	(6)%	 	(10)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Digital Money Transfer(b)	 	(12)%	 	(3)%	 	(9)%	 	(20)%	 	(4)%	 	(2)%	 	(2)%	 	(13)%	
Branded Digital(b)	 	(8)%	 	(3)%	 	(5)%	 	(1)%	 	(2)%	 	(3)%	 	1%	 	(1)%	

(a)Constant currency revenue growth assumes that revenues denominated in foreign currencies are translated to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the corresponding prior period.(b)Digital Money Transfer revenues have been included in the regions above. As noted above, Branded Digital is a subset of Digital Money Transfer and is included in the regions and Digital Money Transfer revenues.
The table below sets forth regional revenues as a percentage of our Consumer-to-Consumer revenue for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	
Consumer-to-Consumer revenue as a percentage of segment revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
NA	 	 	40	%	 	 	37	%	 	 	39	%	 	 	37	%	
EU & CIS	 	 	28	%	 	 	32	%	 	 	29	%	 	 	33	%	
MEASA	 	 	16	%	 	 	15	%	 	 	16	%	 	 	15	%	
LACA	 	 	10	%	 	 	9	%	 	 	10	%	 	 	9	%	
APAC	 	 	6	%	 	 	7	%	 	 	6	%	 	 	6	%	
 
Digital Money Transfer, which is included in the regional percentages above, represented approximately 24% of our Consumer-to-Consumer revenues for the three months ended September 30, 2022 and 2021 and 25% and 24% for the nine months ended September 30, 2022 and 2021, respectively.
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Our consumers transferred $24.1 billion and $27.7 billion in Consumer-to-Consumer principal for the three months ended September 30, 2022 and 2021, of which $23.0 billion and $26.5 billion related to cross-border principal for the same corresponding periods described above, respectively. Our consumers transferred $73.4 billion and $81.3 billion in Consumer-to-Consumer principal for the nine months ended September 30, 2022 and 2021, of which $70.2 billion and $77.6 billion related to cross-border principal for the same corresponding periods described above, respectively. The decrease in principal and cross-border principal transferred during the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year was primarily attributable to a decline in Consumer-to-Consumer transactions, including as a result of the suspension of our operations in Russia and Belarus, as discussed above, as well as fluctuations in exchange rates between the United States dollar and foreign currencies. Consumer-to-Consumer principal is the amount of consumer funds transferred to the designated recipient. Cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated. Consumer-to-Consumer principal and cross-border principal are metrics used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances.
 
Revenues
Consumer-to-Consumer money transfer revenue and transactions decreased 11% and 12%, respectively, for the three months ended September 30, 2022 compared to the corresponding period in the prior year, and decreased 8% and 10%, respectively, for the nine months ended September 30, 2022, compared to the corresponding period in the prior year, including due to the suspension of our operations in Russia and Belarus. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, negatively impacted revenue by 3% and 2% for the three and nine months ended September 30, 2022, respectively, compared to the corresponding periods in the prior year.‌
In our Consumer-to-Consumer regions, the decrease in NA revenue for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year was primarily due to decreases in transactions sent from the United States. The EU & CIS region experienced transaction volume and revenue declines in Russia and Belarus, France, Germany, and the United Kingdom and was also impacted by promotional pricing. Our revenues associated with Digital Money Transfer, including white label partnerships, were negatively impacted by our suspension of operations in Russia and Belarus in the three and nine months ended September 30, 2022 and will be negatively impacted for the year ending December 31, 2022 and likely thereafter. These white label transactions had lower revenues per transaction, causing a greater decrease to EU & CIS transactions, as compared to revenues.
We have historically implemented price reductions or price increases throughout many of our global corridors. We will likely continue to implement price changes from time to time in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently. Price increases may adversely affect transaction volumes, as consumers may not use our services if we fail to price them appropriately. We believe that revenues could be adversely impacted in connection with promotional pricing we recently implemented for Branded Digital transactions, including those sent from the United States.‌
Operating Income
Consumer-to-Consumer operating income decreased 28% and 12% for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year, primarily due to the decreases in revenues, as discussed above, partially offset by decreases in agent commissions, which generally vary with revenues. For the three months ended September 30, 2022 compared to the corresponding period in the prior year, the decrease was also a result of increased marketing costs. In addition, for the nine months ended September 30, 2022 compared to the corresponding prior period, the decrease in operating income was partially offset by reductions in employee-related expenses, the timing of investments in information technology, and decreased chargebacks and other losses.‌
 
Business Solutions
The following table sets forth our Business Solutions segment results of operations for the three and nine months ended September 30, 2022 and 2021:
 
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 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
(dollars in millions)	 	2022	 	2021	 	% Change	 	2022	 	2021	 	% Change	
Revenues	 	$42.6	 	$116.8	 	(63)%	 	$167.4	 	$312.6	 	(46)%	
Operating income	 	$15.9	 	$38.4	 	(59)%	 	$51.7	 	$61.9	 	(17)%	
Operating income margin	 	37%	 	33%	 	 	 	31%	 	20%	 	 	
 
Revenues
 
Business Solutions revenue decreased 63% and 46% for the three and nine months ended September 30, 2022, respectively, compared to the corresponding periods in the prior year primarily due to the first closing of the sale of our Business Solutions business, which occurred on March 1, 2022, as described further above. Fluctuations in the exchange rates between the United States dollar and foreign currencies negatively impacted revenue by 6% and 4% for the three and nine months ended September 30, 2022, respectively, compared to the corresponding periods in the prior year.‌
 
Operating Income
 
For the three and nine months ended September 30, 2022, operating income when compared to the corresponding periods in the prior year was impacted by the first closing of the sale of our Business Solutions business, partially offset by a reduction in depreciation and amortization expenses, including as a result of classifying our Business Solutions business as held for sale in August 2021. In addition, for the nine months ended September 30, 2022 compared to the corresponding period in the prior year, operating income was impacted by decreases in employee-related expenses, including incentive compensation.
 
Effective January 1, 2022, we stopped allocating corporate costs to our Business Solutions segment, given our agreement to sell this business.
Other
 
Other primarily consists of our cash-based bill payments businesses in Argentina and the United States, in addition to our money order services.
 
The following table sets forth Other results for the three and nine months ended September 30, 2022 and 2021:

 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
(dollars in millions)	 	2022	 	2021	 	% Change	 	2022	 	2021	 	% Change	
Revenues	 	$64.6	 	$65.0	 	0%	 	$207.9	 	$190.9	 	9%	
Operating income	 	$21.6	 	$12.0	 	82%	 	$73.4	 	$36.3	 	(a)	
Operating income margin	 	33%	 	18%	 	 	 	35%	 	19%	 	 	
 
(a)Calculation not meaningful.

Revenues
 
For the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year, Other revenues remained consistent and increased, respectively, primarily due to transaction growth in our cash-based bill payments services offered at retail locations in Argentina, as well as growth in our business-to-consumer payments, partially offset by the strengthening of the United States dollar against the Argentine peso and investment losses.

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Operating Income
 
Other operating income increased for the three and nine months ended September 30, 2022 compared to the corresponding periods in the prior year due to the reimbursement of expenses associated with transition services provided after the first closing of the sale of our Business Solutions business and decreased costs associated with strategic initiatives, including for the review of mergers, acquisitions, and divestitures. Additionally, for the nine months ended September 30, 2022 compared to the corresponding period in the prior year, Other operating income increased due to increased revenues, as discussed above.‌
Capital Resources and Liquidity
Our primary source of liquidity has been cash generated from our operating activities, primarily from net income and fluctuations in working capital. Our working capital is affected by the timing of payments for employee and agent incentives, interest payments on our outstanding borrowings and timing of income tax payments, among other items. Many of our annual employee incentive compensation and agent incentive payments are made in the first quarter following the year they were incurred. The majority of our interest payments are due in the second and fourth quarters. The annual payments resulting from the United States tax reform legislation enacted in 2017 (the “Tax Act”) include amounts related to the United States taxation of certain previously undistributed earnings of foreign subsidiaries. These payments are typically due in the second quarter of each year through 2025.
Our future cash flows could be impacted by a variety of factors, some of which are out of our control. These factors include, but are not limited to, changes in economic conditions, especially those impacting migrant populations, changes in income tax laws or the status of income tax audits, including the resolution of outstanding tax matters, and the settlement or resolution of legal contingencies.‌
Substantially all of our cash flows from operating activities have been generated from subsidiaries. Most of these cash flows are generated from our regulated subsidiaries. Our regulated subsidiaries may transfer all excess cash to the parent company for general corporate use, except for assets subject to legal or regulatory restrictions, including: (i) requirements to maintain cash and other qualifying investment balances, free of any liens or other encumbrances, related to the payment of certain of our money transfer and other payment obligations, (ii) other legal or regulatory restrictions, including statutory or formalized minimum net worth requirements, and (iii) restrictions on transferring assets outside of the countries where these assets are located. In connection with our decision to suspend operations in Russia and Belarus, as well as the ongoing nature of the conflict and recent related restrictions imposed on our Russian subsidiary, we have classified approximately $17 million of our cash balance held in Russia as restricted and are continuing to pursue the distribution of this amount to the parent.‌
We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, and our $1.5 billion revolving credit facility ("Revolving Credit Facility"), which expires in January 2025 and supports our commercial paper program. Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility. As of September 30, 2022, we had no outstanding borrowings on our Revolving Credit Facility and $175.0 million of outstanding borrowings on the commercial paper program.
To help ensure availability of our worldwide cash where needed, we utilize a variety of planning and financial strategies, including decisions related to the amounts, timing, and manner by which cash is made available from our international subsidiaries. These decisions can influence our overall tax rate and impact our total liquidity. We regularly evaluate our United States cash requirements, taking tax consequences and other factors into consideration and also the potential uses of cash internationally to determine the appropriate level of dividend repatriations of our foreign source income.
Cash and Investment Securities
As of September 30, 2022 and December 31, 2021, we had Cash and cash equivalents of $1,240.1 million and $1,246.0 million, which includes $64.0 million and $37.7 million related to Business Solutions, respectively. As described in Part I, Item 1, Financial Statements, Note 4, Divestitures and Investment Activities, we collected the entirety of the cash‌
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consideration related to the sale of our Business Solutions business, subject to regulatory approval and other closing conditions. We invested a portion of these proceeds temporarily in reverse repurchase agreements, as discussed in Part 1, Item 1, Financial Statements, Note 5, Fair Value Measurements. We believe that the longer-term use of the Business Solutions proceeds will be consistent with our objective to maintain strong liquidity and a capital structure consistent with investment-grade credit ratings, as further described below.
In many cases, we receive funds from money transfers and certain other payment services before we settle the payment of those transactions. These funds, referred to as Settlement assets on our Condensed Consolidated Balance Sheets, are not used to support our operations. However, we earn income from investing these funds. We maintain a portion of these settlement assets in highly liquid investments, classified as Cash and cash equivalents within Settlement assets, to fund settlement obligations.‌
Investment securities, classified within Settlement assets on the Condensed Consolidated Balance Sheets, were $1,243.5 million and $1,398.9 million as of September 30, 2022 and December 31, 2021, respectively, and consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of "A-" or better from a major credit rating agency.
Investment securities are exposed to market risk due to changes in interest rates and credit risk. We regularly monitor credit risk and attempt to mitigate our exposure by investing in highly-rated securities and diversifying our investment portfolio. Our investment securities are also actively managed with respect to concentration. As of September 30, 2022, all investments with a single issuer and each individual security represented less than 10% of our investment securities portfolio.
Cash Flows from Operating Activities
Cash provided by operating activities decreased to $522.4 million during the nine months ended September 30, 2022, from $686.0 million in the corresponding period in the prior year. Excluding the gain on the sale of the Business Solutions business, as the pre-tax proceeds from this divestiture are reflected in Cash provided by investing activities, net income would have decreased during the nine months ended September 30, 2022, which resulted in the decrease to cash provided by operating activities. Cash provided by operating activities is also impacted by fluctuations in our working capital balances, among other factors.
Financing Resources
On December 18, 2018, we entered into an amended and restated term loan facility providing for up to $950.0 million in borrowings and extending the final maturity of the facility to January 2024 (the "Term Loan Facility"). In the first quarter of 2021, we repaid $650.0 million of the Term Loan Facility. On January 4, 2022, we repaid all remaining borrowings owed under the Term Loan Facility for total consideration of $300.0 million, using proceeds from our commercial paper and cash, including cash generated from operations. We are no longer able to borrow money under this facility.
On March 9, 2021, we issued $600.0 million and $300.0 million of aggregate principal amount of 1.350% and 2.750% unsecured notes due March 15, 2026 (“2026 Notes”) and March 15, 2031 (“2031 Notes”), respectively. Interest with respect to these notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. If a change of control triggering event occurs, holders of the 2026 Notes and 2031 Notes may require us to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. We may redeem the 2026 Notes and the 2031 Notes, in whole or in part, at any time prior to February 15, 2026 and December 15, 2030, respectively, at the greater of par or a price based on the applicable treasury rate plus 15 and 25 basis points, respectively. We may redeem the 2026 Notes and the 2031 Notes at any time after February 15, 2026 and December 15, 2030, respectively, at a price equal to par, plus accrued interest.‌
Proceeds from the 2026 Notes and 2031 Notes and cash, including cash generated from operations, were used to repay $650.0 million of the term loan facility in the first quarter of 2021 and $500.0 million of the aggregate principal amount of 3.600% unsecured notes due in March 2022 in the second quarter of 2021.
 
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As of September 30, 2022, we have outstanding borrowings at par value of $2,625.0 million. The substantial majority of these outstanding borrowings consist of unsecured fixed-rate notes with maturities ranging from 2023 to 2040.
Our Revolving Credit Facility provides for unsecured financing facilities in an aggregate amount of $1.5 billion, including a $250.0 million letter of credit sub-facility. Interest due under the Revolving Credit Facility is fixed for the term of each borrowing and is payable according to the terms of that borrowing. Generally, interest is calculated using a selected LIBOR rate plus an interest rate margin of 110 basis points. A facility fee is also payable quarterly at an annual rate of 15 basis points on the total facility, regardless of usage. Both the interest rate margin and facility fee percentage are based on certain of our credit ratings. While we have not drawn on our Revolving Credit Facility since its inception, during the fourth quarter of 2022, we amended our Revolving Credit Facility to allow us to draw loans payable based upon the Secured Overnight Financing Rate, the Euro Interbank Offered Rate, or the Sterling Overnight Index Average.
The purpose of our Revolving Credit Facility, which is diversified through a group of 19 participating institutions, is to provide general liquidity and to support our commercial paper program, which we believe enhances our short-term credit rating. The largest commitment from any single financial institution within the total committed balance of $1.5 billion is approximately 11%. As of September 30, 2022, we had no outstanding borrowings under our Revolving Credit Facility. If the amount available to borrow under the Revolving Credit Facility decreased, or if the Revolving Credit Facility were eliminated, the cost and availability of borrowing under the commercial paper program may be impacted.
Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility. Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. We had $175.0 million of commercial paper borrowings outstanding as of September 30, 2022. Our commercial paper borrowings as of September 30, 2022 had a weighted-average annual interest rate of approximately 3.4% and a weighted-average term of approximately 3 days. During the nine months ended September 30, 2022, the average commercial paper balance outstanding was $200.6 million, and the maximum balance outstanding was $725.0 million. Proceeds from our commercial paper borrowings were used for general corporate purposes and working capital needs.
Cash Priorities
Liquidity
Our objective is to maintain strong liquidity and a capital structure consistent with investment-grade credit ratings. We have existing cash balances, cash flows from operating activities, access to the commercial paper markets, and our Revolving Credit Facility available to support the needs of our business.
Our ability to grow the business, make investments in our business, make acquisitions, return capital to shareholders, including through dividends and share repurchases, and service our debt and tax obligations will depend on our ability to continue to generate excess operating cash through our operating subsidiaries and to continue to receive dividends from those operating subsidiaries, our ability to obtain adequate financing and our ability to identify acquisitions that align with our long-term strategy. For additional information, please refer to Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in our Annual Report on Form 10‑K for the year ended December 31, 2021.
Capital Expenditures
The total aggregate amount paid for contract costs, purchases of property and equipment, and purchased and developed software was $147.5 million and $180.2 million for the nine months ended September 30, 2022 and 2021, respectively. Amounts paid for new and renewed agent contracts vary depending on the terms of existing contracts as well as the timing of new and renewed contract signings. Other capital expenditures during these periods included investments in our information technology infrastructure.
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Share Repurchases and Dividends
During the nine months ended September 30, 2022 and 2021, 9.6 million and 9.6 million shares were repurchased for $176.8 million and $225.0 million, respectively, excluding commissions, at an average cost of $18.45 and $23.45, respectively, under the share repurchase authorizations approved by our Board of Directors, including one which expired on December 31, 2021. On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024. As of September 30, 2022, $823.2 million remained available under this share repurchase program.‌
Our Board of Directors declared a quarterly cash dividend of $0.235 per common share in each of the first three quarters of 2022, representing $273.2 million in total dividends.‌
Material Cash Requirements‌
Debt Service Requirements
Our 2022 and future debt service requirements will include payments on all outstanding indebtedness, including any borrowings under our commercial paper program. Our next scheduled principal payment on our outstanding notes is in 2023.
2017 United States Federal Tax Liability
The Tax Act imposed a tax on certain of our previously undistributed foreign earnings. This tax charge, combined with our other 2017 United States taxable income and tax attributes, resulted in a 2017 United States federal tax liability of approximately $800 million, of which approximately $478 million remained as of September 30, 2022. We have elected to pay this liability in periodic installments through 2025. Under the terms of the law, we are required to pay the remaining installment payments as summarized in the Capital Resources and Liquidity discussion located in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10‑K for the year ended December 31, 2021. These payments have affected and will continue to adversely affect our cash flows and liquidity and may adversely affect future share repurchases.‌
Operating Leases
We lease real properties for use as administrative and sales offices, in addition to transportation, office, and other equipment. Refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 13, Leases, in our Annual Report on Form 10-K for the year ended December 31, 2021 for details on our leasing arrangements, including future maturities of our operating lease liabilities.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Other Commercial Commitments
We had approximately $330 million in outstanding letters of credit and bank guarantees as of September 30, 2022 primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent agreements. We expect to renew many of our letters of credit and bank guarantees prior to expiration.
As of September 30, 2022, our total amount of unrecognized income tax benefits was $356.1 million, including associated interest and penalties. The timing of any related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities are affected by factors which are variable and outside our control.
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts and disclosures in the financial statements and accompanying notes. Actual results could differ from those estimates. Our Critical Accounting Policies and Estimates disclosed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10‑K for the year ended December 31, 2021, for which there were no material changes, included:
•Income taxes, including income tax contingencies•Derivative financial instruments•Goodwill•Other intangible assets•Legal contingencies
Risk Management
We are exposed to market risks arising from changes in market rates and prices, including changes in foreign currency exchange rates and interest rates and credit risk related to our agents and customers. A risk management program is in place to manage these risks.
Foreign Currency Exchange Rates
We provide our services primarily through a network of agent locations in more than 200 countries and territories. We manage foreign exchange risk through the structure of the business and an active risk management process. We currently settle with the significant majority of our agents in United States dollars, Mexican pesos, or euros, requiring those agents to obtain local currency to pay recipients, and we generally do not rely on international currency markets to obtain and pay illiquid currencies. However, in certain circumstances, we settle in other currencies. The foreign currency exposure that does exist is limited by the fact that the majority of transactions are paid by the next day after they are initiated, and agent settlements occur within a few days in most instances. To mitigate this risk further, we enter into short duration foreign currency forward contracts, generally with maturities ranging from a few days to one month, to offset foreign exchange rate fluctuations between transaction initiation and settlement. We also have exposure to certain foreign currency denominated cash and other asset and liability positions and may utilize foreign currency forward contracts, typically with maturities of less than one year at inception, to offset foreign exchange rate fluctuations on these positions. In certain consumer money transfer, bill payment, and Business Solutions transactions involving different send and receive currencies, we generate revenue based on the difference between the exchange rate set by us to the consumer or business and the rate available in the wholesale foreign exchange market, helping to provide protection against currency fluctuations. We attempt to promptly buy and sell foreign currencies as necessary to cover our net payables and receivables which are denominated in foreign currencies.
We use longer-term foreign currency forward contracts to help mitigate risks associated with changes in foreign currency exchange rates on revenues denominated primarily in the euro, and, to a lesser degree, the Canadian dollar, the Mexican peso, and other currencies. We use contracts with maturities of up to 36 months at inception to mitigate some of the impact that changes in foreign currency exchange rates could have on forecasted revenues, with a targeted weighted-average maturity of approximately one year. We believe the use of longer-term foreign currency forward contracts provides predictability of future cash flows from our international operations.
We have additional foreign exchange risk and associated foreign exchange risk management requirements due to the nature of our Business Solutions business. Our Business Solutions business writes derivatives as part of the broader portfolio of foreign currency positions arising from our cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options in certain countries. The majority of these derivative contracts have a duration at inception of less than one year. Business Solutions aggregates its foreign exchange exposures arising‌
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from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with Convera through the end of the third closing of the Business Solutions divestiture.‌
As of September 30, 2022, a hypothetical uniform 10% strengthening or weakening in the value of the United States dollar relative to all other currencies in which our net income is generated would have resulted in a decrease/increase to pre-tax annual income of approximately $15 million, based on our forecast of unhedged exposure to foreign currency at that date. There are inherent limitations in this sensitivity analysis, primarily due to the following assumptions: (i) foreign exchange rate movements are linear and instantaneous, (ii) fixed exchange rates between certain currency pairs are retained, (iii) the unhedged exposure is static, and (iv) we would not hedge any additional exposure. As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income.
Interest Rates
We invest in several types of interest-bearing assets, with a total value as of September 30, 2022 of approximately $3.0 billion. Approximately $2.0 billion of these assets bear interest at floating rates. Our interest-bearing assets primarily include cash in banks, money market instruments, state and municipal variable-rate securities, and reverse repurchase agreements and are included in our Condensed Consolidated Balance Sheets within Cash and cash equivalents, Settlement assets, and Other assets. To the extent these assets are held in connection with money transfers and other related payment services awaiting redemption, they are classified as Settlement assets. Earnings on these investments will increase and decrease with changes in the underlying short-term interest rates.
The remainder of our interest-bearing assets primarily consists of highly-rated state and municipal debt securities, which are fixed-rate term notes. These investments may include investments made from cash received from our money order services, money transfer business, and other related payment services awaiting redemption and are classified within Settlement assets in the Condensed Consolidated Balance Sheets. As interest rates rise, the fair value of these fixed-rate interest-bearing securities will decrease; conversely, a decrease to interest rates would result in an increase to the fair value of the securities. We have classified these investments as available-for-sale within Settlement assets in the Condensed Consolidated Balance Sheets, and accordingly, recorded these instruments at their fair value with the net unrealized gains and losses, net of the applicable deferred income tax effect, being added to or deducted from our Total stockholders’ equity in our Condensed Consolidated Balance Sheets.
Borrowings under our commercial paper program mature in such a short period that the financing is effectively floating rate. As of September 30, 2022, there were $175.0 million in outstanding borrowings under our commercial paper program.
We review our overall exposure to floating and fixed rates by evaluating our net asset or liability position and the duration of each individual position. We manage this mix of fixed versus floating exposure in an attempt to minimize risk, reduce costs, and improve returns. Our exposure to interest rates can be modified by changing the mix of our interest-bearing assets as well as adjusting the mix of fixed versus floating rate debt. The latter is accomplished primarily through the use of interest rate swaps and the decision regarding terms of any new debt issuances (i.e., fixed versus floating). From time to time, we use interest rate swaps designated as hedges to vary the percentage of fixed to floating rate debt, subject to market conditions. As of September 30, 2022, our weighted-average effective rate on total borrowings was approximately 3.8%.
At September 30, 2022, a hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to pre-tax income for the next twelve months of approximately $2 million based on borrowings that are sensitive to interest rate fluctuations, net of the impact of hedges. The same 100 basis point increase/decrease in interest rates, if applied to our cash and investment balances on September 30, 2022 that bear interest at floating rates, would result in an offsetting increase/decrease to pre-tax income for the next twelve months of approximately $20 million. There are inherent limitations in the sensitivity analysis presented, primarily due to the assumptions that interest rate changes would be instantaneous and consistent across all geographies in which our interest-bearing assets are held and our liabilities are payable. As a result, the analysis is unable to reflect the potential effects of more complex market changes, including changes in credit risk regarding our investments, which may positively or negatively affect income. In addition, the mix of fixed versus floating rate debt and investments and the level of assets and liabilities will change over time, including the impact from commercial paper borrowings that may be outstanding in future periods.
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Credit Risk
To manage our exposures to credit risk with respect to investment securities, money market fund investments, derivatives, and other credit risk exposures resulting from our relationships with banks and financial institutions, we regularly review investment concentrations, trading levels, credit spreads, and credit ratings, and we attempt to diversify our investments among global financial institutions.
We are also exposed to credit risk related to receivable balances from agents in the money transfer, walk-in bill payment, and money order settlement process. We perform a credit review before each agent signing and conduct periodic analyses of agents and certain other parties we transact with directly. In addition, we are exposed to losses directly from consumer transactions, particularly through our digital channels, where transactions are originated through means other than cash and are therefore subject to "chargebacks," insufficient funds or other collection impediments, such as fraud, which are anticipated to increase as digital channels become a greater proportion of our money transfer business.
We are exposed to credit risk in our Business Solutions business relating to: (i) derivatives written by us, primarily to our customers, and (ii) the extension of trade credit when transactions are paid to recipients prior to our receiving cleared funds from the sending customers. For the derivatives, the duration of these contracts at inception is generally less than one year. The credit risk associated with our derivative contracts increases when foreign currency exchange rates move against our customers, possibly impacting their ability to honor their obligations to deliver currency to us or to maintain appropriate collateral with us. For those receivables where we have extended trade credit, collection ordinarily occurs within a few days. To mitigate the risk associated with potential customer defaults, we perform credit reviews of the customer on an ongoing basis, and, for our derivatives, we may require certain customers to post or increase collateral.
Our losses have been less than 2% of our consolidated revenues in all periods presented.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information under Risk Management in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report is incorporated herein by reference.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our controls and procedures related to our reporting and disclosure obligations (as defined by Rules 13a-15(e) and 15d-15(e) within the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2022, which is the end of the period covered by this Quarterly Report on Form 10‑Q. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of September 30, 2022, the disclosure controls and procedures were effective to ensure that information required to be disclosed by us, including our consolidated subsidiaries, in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported, as applicable, within the time periods specified in the rules and forms of the Securities and Exchange Commission, and are designed to ensure that information required to be disclosed by us in the reports that we file or submit is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10‑Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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Review Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of The Western Union Company
Results of Review of Interim Financial Statements
We have reviewed the condensed consolidated balance sheet of The Western Union Company (the Company) as of September 30, 2022, the related condensed consolidated statements of income, comprehensive income, and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, the related consolidated statements of income, comprehensive income, cash flows, and stockholders’ equity for the year then ended, and the related notes and schedule (not presented herein); and in our report dated February 24, 2022, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 	 	
 	/s/ Ernst & Young LLP	
Denver, Colorado	 	
November 1, 2022	 	

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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this Item 1 is incorporated herein by reference to the discussion in Part I, Item 1, Financial Statements, Note 6, Commitments and Contingencies.
 
Item 1A. Risk Factors
There have been no material changes to the risk factors described in our Annual Report on Form 10‑K for the year ended December 31, 2021.‌
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth stock repurchases for each of the three months of the quarter ended September 30, 2022:

 	 	 	 	 	 	 	 	 	 	 	Approximate Dollar	 	
 	 	 	 	 	 	 	 	Total Number of Shares	 	 	Value of Shares that	 	
 	 	 	 	 	 	 	 	Purchased as Part of	 	 	May Yet Be Purchased	 	
 	 	Total Number of	 	 	Average Price	 	 	Publicly Announced	 	 	Under the Plans or	 	
Period	 	Shares Purchased (a)	 	 	Paid per Share	 	 	Plans or Programs (b)	 	 	Programs (in millions)	 	
July 1 - 31	 	 	357,544	 	 	$	16.69	 	 	 	350,788	 	 	$	823.2	 	
August 1 - 31	 	 	88,425	 	 	$	16.95	 	 	 	—	 	 	$	823.2	 	
September 1 - 30	 	 	14,213	 	 	$	14.37	 	 	 	—	 	 	$	823.2	 	
Total	 	 	460,182	 	 	 	 	 	 	350,788	 	 	 	 	
 
(a)These amounts represent both shares authorized by our Board of Directors for repurchase under a publicly announced authorization, as described below, as well as shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested.(b)On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024, of which $823.2 million remained available as of September 30, 2022. In certain instances, management has historically established and may continue to establish prearranged written plans pursuant to Rule 10b5‑1. A Rule 10b5‑1 plan permits us to repurchase shares at times when we may otherwise be unable to do so, provided the plan is adopted when we are not aware of material non-public information.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
57

Table of Contents
Item 6. Exhibits
See Exhibit Index for documents filed or furnished herewith and incorporated herein by reference.
EXHIBIT INDEX

Exhibit
Number	 	Description	
 	 	 	
10.1	 	Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of October 31, 2022, between The Western Union Company and Citibank, N.A. as administrative agent for the Banks	
 	 	 	
15	 	Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information	
 	 	 	
31.1	 	Certification of Chief Executive Officer of The Western Union Company Pursuant to Rule 13a‑14(a) under the Securities Exchange Act of 1934	
 	 	 	
31.2	 	Certification of Chief Financial Officer of The Western Union Company Pursuant to Rule 13a‑14(a) under the Securities Exchange Act of 1934	
 	 	 	
32	 	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code	
 	 	 	
101.INS	 	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)	
 	 	 	
101.SCH	 	Inline XBRL Taxonomy Extension Schema Document	
 	 	 	
101.CAL	 	Inline XBRL Taxonomy Extension Calculation Linkbase Document	
 	 	 	
101.DEF	 	Inline XBRL Taxonomy Extension Definition Linkbase Document	
 	 	 	
101.LAB	 	Inline XBRL Taxonomy Extension Label Linkbase Document	
 	 	 	
101.PRE	 	Inline XBRL Taxonomy Extension Presentation Linkbase Document	
 	 	 	
104	 	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	

 

58

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 	 	The Western Union Company (Registrant)	
 	 	 	
Date: November 1, 2022	 	By:	/s/ Devin B. McGranahan	
 	 	 	Devin B. McGranahan	
 	 	 	President and Chief Executive Officer
(Principal Executive Officer)	
 	 	 	 	
Date: November 1, 2022	 	By:	/s/ Matthew Cagwin	
 	 	 	Matthew Cagwin	
 	 	 	Interim Chief Financial Officer (Principal Financial Officer)	
 	 	 	 	
Date: November 1, 2022	 	By:	/s/ Mark Hinsey	
 	 	 	Mark Hinsey	
 	 	 	Chief Accounting Officer and Controller
(Principal Accounting Officer)	
 
59

EXECUTION COPY
Exhibit 10.1
AMENDMENT NO. 2 TO THE
CREDIT AGREEMENT
Dated as of October 31, 2022
AMENDMENT NO. 2 TO THE CREDIT AGREEMENT (this “Amendment”) between THE WESTERN UNION COMPANY, a Delaware corporation (the “Company”), and CITIBANK, N.A., as administrative agent (the “Administrative Agent”) for the Banks (as defined below).
PRELIMINARY STATEMENTS:
(1) The Company, the banks, financial institutions and other institutional lenders party thereto (collectively, the “Banks”) and the Administrative Agent are parties to that certain Amended and Restated Credit Agreement, dated as of December 18, 2018 (as amended by Letter Amendment No. 1 dated as of May 11, 2020, the “Credit Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.
(2) In accordance with Section 2.11(b) of the Credit Agreement, the Company and the Administrative Agent have agreed to amend the Credit Agreement to incorporate successor rates to the LIBOR Rate.
(3) The parties hereto have agreed to make certain amendments to the Credit Agreement as set forth in, and in accordance with the terms and conditions of, this Amendment (the Credit Agreement as so amended, the “Amended Credit Agreement”).
SECTION 1.Amendments to Credit Agreement. As of the Amendment Effective Date (as defined below), subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Administrative Agent and the Company hereby agree to amend the Credit Agreement to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Amended Credit Agreement attached as Annex A hereto.
SECTION 2.Conditions of Effectiveness. This Amendment shall become effective on and as of the date (the “Amendment Effective Date”) on which each of the following conditions precedent shall have been satisfied or waived:
(a) The Administrative Agent shall have received counterparts of this Amendment executed by the Company and the Administrative Agent.
(b) The Administrative Agent shall not have received, within five Business Days of the date a copy of this Amendment is provided to the Banks, a written notice from the Majority Banks stating that such Majority Banks object to this Amendment.
1

SECTION 3.Reference to and Effect on the Loan Documents. (a) On and after the Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in any other Loan Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Amended Credit Agreement.
(b) The Credit Agreement and the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, the Administrative Agent or the Company under the Credit Agreement or any other Loan Document, nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.
SECTION 4.Costs and Expenses. The Company agrees to pay on demand all costs and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent, in accordance with the terms of Section 9.5 of the Credit Agreement.
SECTION 5.Execution in Counterparts. This Amendment may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or other electronic format shall be effective as delivery of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment and/or any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures (as defined below), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be. “Electronic Signatures” means any electronic symbol or process attached to, or associated with, any contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.
SECTION 6.Governing Law. This Amendment shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
[REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
 
2

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

THE WESTERN UNION COMPANY
By: /s/ Devin Parker
Name: Devin Parker
Title: Assistant Treasurer
 
CITIBANK, N.A., as Administrative Agent
By: /s/ Richard D Rivera
Name: Richard D Rivera
Title: Vice President

3

 
 
Annex A
Amended Credit Agreement
(See attached).
4

ANNEX A to AMENDMENT NO. 2 dated as of October 31, 2022
 
EXECUTION COPY
Conformed for Letter Am No. 1 dated as of May 11, 2020
 
Published Deal CUSIP: ___________
Published Revolving Facility CUSIP: ___________
____________________________________________________________

 
AMENDED AND RESTATED
CREDIT AGREEMENT
 
among
 
THE WESTERN UNION COMPANY,
as the Company,
 
THE BANKS NAMED HEREIN,
 
CITIBANK, N.A.,
as Administrative Agent
 
BANK OF AMERICA, N.A. and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Syndication Agents
 
and
 
BARCLAYS BANK PLC,
JPMORGAN CHASE BANK, N.A. and
U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agents
 
$1,500,000,000 Revolving Credit Facility
 
Dated as of December 18, 2018
 
CITIBANK, N.A.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, and
WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers and Joint Book Runners

______________________________________________________________________________

 

 
TABLE OF CONTENTS
Page
SECTION 1
DEFINITIONS
1.1 Defined Terms 2
1.2 Other Definitional Provisions 22
1.3 Accounting Terms 23
1.4 Exchange Rates; Currency Equivalents 23
1.5 Computation of Dollar Amounts 24
1.6 Times of Day 24
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments 24
2.2 Notes 24
2.3 Procedure for Borrowing 25
2.4 Fees 26
2.5 Termination or Reduction of Commitments 26
2.6 Prepayments 27
2.7 Conversion and Continuation Options 27
2.8 Minimum Amounts of Tranches 28
2.9 Interest Rates and Payment Dates 29
2.10 Computation of Interest and Fees 29
2.11 Inability to Determine Interest Rate 30
2.12 Pro Rata Treatment and Payments 32
2.13 Illegality 34
- i -

2.14 Requirements of Law 35
2.15 Taxes 37
2.16 Indemnity 41
2.17 Action of Affected Banks 41
2.18 [Reserved] 42
2.19 [Reserved] 42
2.20 Increase of Commitments 42
2.21 Payment in Full at Maturity 43
2.22 Letter of Credit Subfacility 43
2.23 Indemnification of Issuing Lenders; Nature of Issuing Lenders’ Duties. 47
2.24 Defaulting Banks 49
2.25 Extension of Termination Date 51
2.26 Cash Collateral 54
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 Financial Condition 55
3.2 No Change 55
3.3 Corporate Existence; Compliance with Law 55
3.4 Corporate Power; Authorization; Enforceable Obligations 56
3.5 No Legal Bar 56
3.6 No Material Litigation 56
3.7 Federal Regulations 57
3.8 Investment Company Act 57
3.9 Purpose of Loans 57
3.10 Disclosure 57
- ii -

3.11 Ranking 57
3.12 AML Laws; Anti-Corruption Laws; Sanctions 57
3.13 EEA Financial Institution 58
SECTION 4
CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness 58
4.2 Conditions to Each Loan 59
SECTION 5
AFFIRMATIVE COVENANTS
5.1 Financial Statements 60
5.2 Certificates; Other Information 61
5.3 Conduct of Business and Maintenance of Existence 62
5.4 Inspection of Property; Books, Records and Discussions 62
5.5 Notices 62
5.6 Taxes 63
SECTION 6
NEGATIVE COVENANTS
6.1 Limitation on Significant Subsidiary Indebtedness 64
6.2 Limitation on Liens 64
6.3 Limitation on Sales and Leasebacks 66
6.4 Limitations on Fundamental Changes 66
6.5 Limitations on Restrictions on Dividends 67
6.6 Financial Covenant 67
6.7 Use of Proceeds 67
- iii -

SECTION 7
EVENTS OF DEFAULT
SECTION 8
THE ADMINISTRATIVE AGENT
8.1 Appointment 70
8.2 Delegation of Duties 70
8.3 Exculpatory Provisions 70
8.4 Reliance by Administrative Agent 72
8.5 Rights as a Bank 72
8.6 Non-Reliance on Administrative Agent and Other Banks 72
8.7 Indemnification by Banks 73
8.8 Resignation of Administrative Agent 73
8.9 No Other Duties, etc. 74
8.10 Administrative Agent May File Proofs of Claim 74
8.11 Lender ERISA Matters 75
SECTION 9
MISCELLANEOUS
9.1 Amendments and Waivers 76
9.2 Notices 77
9.3 No Waiver; Cumulative Remedies 79
9.4 Survival of Representations and Warranties 79
9.5 Payment of Expenses 79
9.6 Successors and Assigns; Participations; Purchasing Banks 80
9.7 Adjustments; Set-off 84
9.8 Table of Contents and Section Headings 86
- iv -

9.9 Confidentiality 86
9.10 Patriot Act Notice; Beneficial Ownership Regulation 86
9.11 Counterparts 87
9.12 Severability 87
9.13 Integration 87
9.14 GOVERNING LAW 87
9.15 Submission To Jurisdiction; Waivers 87
9.16 Acknowledgements 88
9.17 WAIVERS OF JURY TRIAL 88
9.18 Effectiveness 88
9.19 Judgment Currency 89
9.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 89
9.21 Electronic Execution of Assignments and Certain Other Documents 90
9.22 Amendment and Restatement 90

- v -

Schedules
 
Schedule 1.1 Banks and Commitments
Schedule 3.6 Material Litigation
Exhibits
 
Exhibit A Form of Note
Exhibit B Form of Borrowing Certificate
Exhibit C [Reserved]
Exhibit D Form of Commitment Transfer Supplement
Exhibit E Form of Compliance Certificate
Exhibit F Form of Commitment Increase Supplement
Exhibit G Forms of U.S. Tax Compliance Certificates

 

 
 
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 18, 2018, among THE WESTERN UNION COMPANY, a Delaware corporation (the “Company”), the several banks and other financial institutions from time to time parties to this Agreement (the “Banks”), CITIBANK, N.A., BANK OF AMERICA, N.A. and WELLS FARGO BANK, NATIONAL ASSOCIATION, in their respective capacities as Issuing Lenders (in such capacity, each together with its successors in such capacity, an “Issuing Lender”), BANK OF AMERICA, N.A. and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Syndication Agents (in such capacity, the “Syndication Agents”), BARCLAYS BANK PLC, JPMORGAN CHASE BANK, N.A. and U.S. BANK NATIONAL ASSOCIATION, as Documentation Agents (in such capacity, the “Documentation Agents”), and CITIBANK, N.A., as administrative agent for the Banks hereunder (in such capacity, the “Administrative Agent”).
BACKGROUND STATEMENT
The Company, the lenders parties thereto and Citibank, as administrative agent, were parties to that certain $1,650,000,000 Credit Agreement dated as of September 29, 2015 (as amended, restated, supplemented, extended or otherwise modified from time to time prior to the date hereof, the “Existing Revolving Credit Agreement”). Subject to the satisfaction of the conditions set forth in Section 4.1, the Company, the parties hereto and Citibank, as Administrative Agent, desire to amend and restate the Existing Revolving Credit Agreement as herein set forth and in connection with such amendment and restatement, to substitute as lenders the Banks listed on Schedule 1.1 hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and of the mutual covenants and agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Adjusted Base Rate”: at any time with respect to any Base Rate Loan, a rate per annum equal to the Base Rate as in effect at such time plus the Applicable Margin for Base Rate Loans as in effect at such time.
“Adjusted Term SOFR”: for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Adjusted EURIBO Rate”: with respect to any Term Benchmark Loan denominated in Euro for any Interest Period, a rate per annum equal to the EURIBOR Rate as in effect for such Interest Period plus the Applicable Margin for Term Benchmark Loans as in effect at such time.

 
“Adjusted SONIA Rate”: at any time with respect to any SONIA Loan, a rate per annum equal to SONIA as in effect at such time plus the SONIA Adjustment plus the Applicable Margin for SONIA Loans as in effect at such time.
“Adjusted LIBORTerm SOFR Rate”: with respect to any LIBORTerm Benchmark Loan denominated in Dollars for any Interest Period, a rate per annum equal to the LIBOR RateAdjusted Term SOFR as in effect for such Interest Period plus the Applicable Margin for LIBORTerm Benchmark Loans as in effect at such time.
“Administrative Questionnaire”: an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate”: as to any Person, any other Person (whether or not existing as at the date hereof) that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons per forming similar functions) of such Person or (ii) direct or cause the direction of the management and policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.
“Agreement”: this Amended and Restated Credit Agreement.
“AML Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or the Company’s Subsidiaries from time to time concerning or relating to anti-money laundering.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or the Company’s Subsidiaries from time to time concerning or relating to bribery or corruption.
“Applicable Margin”: with respect to each day for each Type of Loan and for the Letter of Credit Fee, the rate per annum based on the Ratings in effect on such day as set forth under the relevant column heading below:

Rating	LIBOR RateTerm Benchmark /SONIA/Letters of Credit	Base Rate	
Rating I	0.900%	0.000%	
Rating II	1.000%	0.000%	
Rating III	1.100%	0.100%	
Rating IV	1.300%	0.300%	
Rating V	1.500%	0.500%	
“Applicable Time”: with respect to any borrowings and payments in Foreign Currencies, the local times in the place of settlement for such Foreign Currencies as may be determined by the Administrative Agent to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.
3

“Approved Fund”: any Fund that is administered or managed by (i) a Bank, (ii) an Affiliate of a Bank or (iii) an entity or an Affiliate of an entity that administers or manages a Bank.
“Available Commitment”: as to any Bank at any time, an amount equal to the excess, if any, of (i) the amount of such Bank’s Commitment over (ii) the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of all Loans made by such Bank then outstanding plus the Bank’s Commitment Percentage of outstanding LOC Obligations at such time.
“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation”: with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code”: the Bankruptcy Code in Title 11 of the United States Code.
“Base Rate”: on any day, the highest of (i) the per annum interest rate publicly announced from time to time by Citibank in New York, New York to be its base rate (which may not necessarily be its lowest or best lending rate), as adjusted to conform to changes in such base rate as of the opening of business on such date, (ii) the Federal Funds Rate plus 0.50% per annum, as adjusted to conform to changes in the Federal Funds Rate as of the opening of business on such date and (iii) the LIBOR RateAdjusted Term SOFR for an Interest Period of one month commencing on such date plus 1.0% per annum, as adjusted to conform to changes in such LIBOR RateAdjusted Term SOFR as of the opening of business on such date.
“Base Rate Loan”: any Loan the rate of interest applicable to which is based upon the Adjusted Base Rate.
“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.
“Benefit Plan”: as defined in subsection 8.11.
“Borrowing Certificate”: a notice of borrowing and certificate of the Company substantially in the form of Exhibit B.
“Borrowing Date”: any Business Day specified in a notice furnished pursuant to subsection 2.3 as a date on which the Company requests the Banks to make Loans hereunder.
“Business Day”: a day other than a Saturday or Sunday or a day on which commercial banks in New York City, New York, are authorized or required by law to close; provided, however, that (i) when used to describe the date of any borrowing of, or any payment or interest rate determination in respect of, a LIBOR Loan, the term “Business Day” shall also exclude any day on which commercial banks are not open for dealings in Dollar deposits in the London interbank market and (ii) when used in connection with a Foreign Currency Loan, the term “Business Day” shall also exclude any day on which banks are not open for foreign exchange dealings between
4

banks in the exchange of the home country of such Foreign Currency (or, in the case of a Foreign Currency Loan denominated in Euro, on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open).
“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.
“Cash Collateralize”: to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Lenders or the Banks, as collateral for LOC Obligations or obligations of Banks to fund participations in respect of LOC Obligations (as the context may require), cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and each applicable Issuing Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Central Bank Rate”: the sum of (a) the greater of (i) the Bank of England (or any successor thereto)’s “Bank Rate” as published by the Bank of England (or any successor thereto) from time to time and (ii) zero; plus (b) the applicable Central Bank Rate Adjustment.
“Central Bank Rate Adjustment”: for any day, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of SONIA for the five most recent Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest such SONIA determination applicable during such period of five Business Days) minus (ii) the Central Bank Rate in effect on the last Business Day in such period. For purposes of this definition, the term Central Bank Rate shall be determined disregarding clause (b) of the definition of such term.
“Change in Law”: the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States of America or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control”: any acquisition by any Person or Group of Persons, either directly or indirectly, of (i) the power to elect, appoint or cause the election or appointment of at least a majority of the members of the Board of Directors of the Company (or any other Person to which all or substantially all of the properties and assets of the Company have been transferred), through beneficial ownership of the Capital Stock of the Company (or such other Person) or through
5

contract, agreement, arrangement or proxy, or (ii) all or substantially all of the consolidated properties and assets of the Company.
“Citibank”: Citibank, N.A.
“Closing Date”: the date on which this Agreement becomes effective in accordance with subsection 4.1.
“Code”: the Internal Revenue Code of 1986.
“Commitment”: as to any Bank, the obligation of such Bank (i) to make Loans to the Company hereunder and (ii) to purchase participation interests in the Letters of Credit, in an aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) at any one time outstanding not to exceed the amount set forth opposite such Bank’s name on Schedule 1.1 or in the Commitment Transfer Supplement pursuant to which it became a Bank, as such amount may be reduced pursuant to subsection 2.5 or 9.6 or increased pursuant to subsection 2.20 or 9.6.
“Commitment Percentage”: as to any Bank at any time, the percentage of the aggregate Commitments then constituted by such Bank’s Commitment.
“Commitment Period”: as to any Bank, the period from and including the Closing Date to but not including the Termination Date applicable to such Bank or such earlier date on which the Commitments shall terminate as provided herein.
“Commitment Transfer Supplement”: a commitment transfer supplement entered into by a Bank and an Eligible Assignee (with the consent of any party whose consent is required by subsection 9.6), and accepted by the Administrative Agent, in substantially the form of Exhibit D (or any other form approved by the Administrative Agent and the Company).
“Commonly Controlled Entity”: an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001(b) of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code.
“Communications”: as defined in subsection 9.2(b).
“Competitor”: any Person significantly and directly engaged in the business of payment instruments or consumer funds transfers.
“Compliance Certificate”: as defined in subsection 5.2(a).
“Confidential Materials”: as defined in subsection 9.9.
“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consenting Bank”: as defined in subsection 2.25(b).
6

“Consolidated Net Assets”: the gross book value of the assets of the Company and its Subsidiaries (which under GAAP would appear on the consolidated balance sheet of the Company and its Subsidiaries) less all reserves (including depreciation, depletion and amortization) applicable thereto and less (i) minority interests and (ii) liabilities (determined in accordance with GAAP) which, in accordance with their terms, will be settled within one year after the date of determination.
“Consolidated Net Income”: the net income of the Company and its Subsidiaries (which under GAAP would appear on the consolidated income statement of the Company and its Subsidiaries), excluding, however, (i) any equity of the Company or a Subsidiary in the unremitted earnings of any corporation which is not a Subsidiary, (ii) gains from the write-up in the book value of any asset and (iii) in the case of an acquisition of any Person which is accounted for on a purchase basis, earnings of such Person prior to its becoming a Subsidiary.
“Consolidated Total Assets”: the gross book value of the assets of the Company and its Subsidiaries (which under GAAP would appear on the consolidated balance sheet of the Company and its Subsidiaries).
“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Covenant Indebtedness”: as defined in subsection 6.6.
“Debtor Relief Laws”: means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect.
“Default”: any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.
“Defaulting Bank”: subject to subsection 2.24(b), any Bank that (i) has failed to (A) perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit, within three Business Days of the date required to be funded by it hereunder unless such Bank notifies the Administrative Agent and the Company in writing that such failure is the result of such Bank’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (B) pay to the Administrative Agent, any Issuing Lender or any other Bank any other amount required to be paid by it hereunder (including in respect of its Participation Interests) within two Business Days of the date when due; (ii) has notified the Company, the Administrative Agent or any Issuing Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Bank’s obligation to fund a Loan hereunder and states that such position is based on such Bank’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied); (iii) has failed,
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within three Business Days after written request by the Administrative Agent or the Company, to confirm in writing to the Administrative Agent and the Company that it will comply with its prospective funding obligations hereunder (provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (iii) upon receipt of such written confirmation by the Administrative Agent and the Company); or (iv) has, or has a direct or indirect parent company that has, (A) become the subject of a proceeding under any Debtor Relief Law or become the subject of a Bail-In Action or (B) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors (other than by way of an Undisclosed Administration (as defined below) that is not expected to impair or delay the funding of any obligation of such Bank hereunder) or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank. Any determination by the Administrative Agent that a Bank is a Defaulting Bank under any one or more of clauses (i) through (iv) above shall be conclusive and binding absent demonstrable error, and such Bank shall be deemed to be a Defaulting Bank (subject to subsection 2.24(b)) upon delivery of written notice of such determination to the Company, each Issuing Lender and each Bank. “Undisclosed Administration” means in relation to a Bank the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Bank is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
“Dollar Amount”: at any time, (i) with respect to Dollars or an amount denominated in Dollars, such amount and (ii) with respect to an amount of any Foreign Currency or an amount denominated in such Foreign Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) applicable to such Foreign Currency.
“Dollars” and “$”: dollars in lawful currency of the United States of America.
“EBITDA”: for any period, net income (or net loss) plus the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) any other noncash deductions, losses or charges made in determining net income for such period and (vi) extraordinary, non-recurring or unusual losses, expenses or charges (including costs and expenses of litigation included in operating income); provided that the amount added back to net income (or net loss) pursuant to this clause (vi) in respect of any such extraordinary, non-recurring or unusual losses, expenses or charges (including costs and expenses of litigation included in operating income) shall not exceed 10% of EBITDA (calculated before giving effect to this clause (vi) in the aggregate for any period of four consecutive fiscal quarters of the Company), and minus extraordinary, non-recurring or unusual gains, in each case determined in accordance with GAAP for such period. For the purpose of calculating EBITDA for any period, if during such period the
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Company or any Subsidiary shall have consummated a Specified Transaction, EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Specified Transaction occurred on the first day of such calculation period.
“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee”: any Person that meets the requirements to be an assignee under subsection 9.6(b)(iii), 9.6(b)(v) and 9.6(b)(vi) (subject to such consents, if any, as may be required under subsection 9.6(b)(iii)).
“EMU”: Economic and Monetary Union as contemplated in the Treaty on European Union.
“EMU Legislation”: legislative measures of the European Council (including European Council regulations) for the introduction of, changeover to or operation of a single or unified European currency (whether known as the Euro or otherwise), being in part the implementation of the third stage of EMU.
“Environmental Laws”: any and all Federal, foreign, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to or imposing liability or standards of conduct concerning environmental protection matters.
“ERISA”: the Employee Retirement Income Security Act of 1974.
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“EURIBOR Loan”: at any time, any Loan that bears interest at such time at the applicable Adjusted EURIBO Rate.
“EURIBOR Rate”: for any Interest Period with respect to any Term Benchmark Loan denominated in Euros, an interest rate per annum obtained by dividing (i) (x) the Euro Interbank Offered Rate (“EURIBOR”) administered by the European Money Markets Institute (or any other person who takes over the administration of that rate) for the relevant period displayed on the applicable Bloomberg screen page (or such other commercially available source providing such
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quotations as may be designated by the Administrative Agent from time to time (with the consent of the Company, not to be unreasonably withheld, conditioned or delayed)) for purposes of providing quotations of interests rates for offering of deposits in Euros at approximately 11:00 a.m., London time, two Business Days prior to the first day of such Interest Period for a period substantially equal to such Interest Period, by (ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such Interest Period; provided that, if the EURIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Euro” shall mean the single currency of Participating Member States of the European Union.
“Event of Default”: any of the events specified in Section 7; provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.
“Excluded Individuals”: with respect to any Person, the officers, directors, employees, agents and representatives of such Person involved, directly or indirectly, in the payment instruments and consumer funds transfer business of such Person.
“Excluded Taxes”: any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, imposed by the United States of America (or any political subdivision thereof) or as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Bank, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof); (ii) in the case of a Bank, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Bank with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (A) such Bank acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Company under subsection 2.17(b)) or (B) such Bank changes its lending office, except in each case to the extent that, pursuant to subsection 2.15, amounts with respect to such Taxes were payable either to such Bank’s assignor immediately before such Bank became a party hereto or to such Bank immediately before it changed its lending office; (iii) Taxes attributable to such Recipient’s failure to comply with subsection 2.15(f); (iv) any Taxes imposed under FATCA; and (v) Other Connection Taxes.
“Existing Revolving Credit Agreement”: as defined in the recitals hereto.
“Extension of Credit”: as to any Bank, the making of a Loan by such Bank or the issuance of, or participation in, a Letter of Credit by such Bank.
“Extension Date”: as defined in subsection 2.25(b).
“Facility Fee Rate”: for each day during each calculation period, a rate per annum based on the Ratings in effect on such day, as set forth below:
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Rating	Facility
Fee Rate	
Rating I	0.100%	
Rating II	0.125%	
Rating III	0.150%	
Rating IV	0.200%	
Rating V	0.250%	
“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any applicable intergovernmental agreements between a non-U.S. jurisdiction and the United States of America with respect thereto, any law, regulations, or other official guidance enacted in a non-U.S. jurisdiction relating to an intergovernmental agreement related thereto, and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Rate” means, for any day, the rate published for such day (or, if such day is not a Business Day, published for the immediately preceding Business Day) by the Federal Reserve Bank of New York for overnight Federal funds transactions with members of the Federal Reserve System, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent; provided that, if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Federal Reserve Board”: the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.
“Fee Letters”: collectively, (i) the letter agreement dated November 9, 2018, addressed to the Company from the Administrative Agent and Citigroup Global Markets Inc., (ii) the letter agreement dated November 9, 2018, addressed to the Company from Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and (iii) the letter agreement dated November 9, 2018, addressed to the Company from Wells Fargo Bank, National Association and Wells Fargo Securities, LLC.
“Financing Lease”: any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP as in effect on December 18, 2018, to be capitalized on a balance sheet of the lessee, without regard to any classification or reclassification as financing or operating leases upon the Company’s adoption of Accounting Standards Codification 842, Leases.
“Foreign Currency”: (i) Euros and (ii) British Pound Sterling.
“Foreign Currency Equivalent”: with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Foreign Currency as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) applicable to such Foreign Currency.
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“Foreign Currency Loan”: any Loan denominated in a Foreign Currency.
“Foreign Lender”: any Bank that is not a U.S. Person.
“Fronting Exposure”: at any time there is a Defaulting Bank, with respect to any Issuing Lender, such Defaulting Bank’s Commitment Percentage of the outstanding LOC Obligations with respect to Letters of Credit issued by such Issuing Lender other than LOC Obligations as to which such Defaulting Bank’s participation obligation has been reallocated to other Banks or Cash Collateralized in accordance with the terms hereof.
“Fund”: any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funded Indebtedness”: any indebtedness for money borrowed, created, issued, incurred, assumed or guaranteed which would, in accordance with GAAP, be classified as long-term debt, but in any event including all indebtedness for money borrowed, whether secured or unsecured, maturing more than one year, or extendible at the option of the obligor to a date more than one year, after the date of determination thereof (excluding any amount thereof included in current liabilities).
“GAAP”: generally accepted accounting principles in the United States of America, as set forth in the Accounting Standards Codification of the Financial Accounting Standards Board, consistently applied and maintained, as in effect from time to time (subject to the provisions of subsection 1.3).
“Government Acts”: as defined in subsection 2.23(a).
“Governmental Authority”: any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Group of Persons” means any related Persons that would constitute a “group” for purposes of Section 13(d) and Rule 13d-5 under the Securities Exchange Act of 1934 (as such Section and Rule are in effect as of the date of this Agreement).
“Guarantee Obligation”: as to any Person (the “guaranteeing person”), and without duplication, any obligation of (i) the guaranteeing person or (ii) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing the payment or in effect guaranteeing the payment of any Indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (A) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor or (C) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make
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payment of such primary obligation; provided, however, that the term Guarantee Obligation shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business or (y) any bond or guarantee given by the Company or any Subsidiary on behalf of any Subsidiary solely for the performance of contractual obligations with customers or on behalf of customers in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary payment obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Company in good faith.
“Hedging Agreement”: any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, events, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, that is entered into by the Company or any of its Subsidiaries for hedging purposes or in connection with dealer activities.
“Indebtedness”: of any Person at any date and without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than trade liabilities not more than 60 days past due incurred in the ordinary course of business and payable in accordance with customary practices or endorsements for the purpose of collection in the ordinary course of business and excluding the deferred purchase price of property or services to be repaid through earnings of the purchaser to the extent such amount is not characterized as indebtedness in accordance with GAAP), (ii) any other indebtedness of such Person that is evidenced by a note, bond, debenture or similar instrument, (iii) all obligations of such Person under Financing Leases, (iv) all payment obligations of such Person in respect of acceptances issued or created for the account of such Person and (v) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof; provided that if such Person has not assumed or otherwise become liable in respect of such indebtedness, such obligations shall be deemed to be in an amount equal to the lesser of (x) the amount of such indebtedness and (y) the book value of the property subject to such Lien at the time of determination. For the purposes of this definition, the following shall not constitute Indebtedness: (A) any obligations of the Company or any of its Subsidiaries under any Hedging Agreement and any Guarantee Obligations with respect to Hedging Agreements, and (B) the issuance of payment instruments, consumer funds transfers, or other amounts paid to or received by the Company, any of its Subsidiaries or any agent thereof in the ordinary course of business in order for the Company or such Subsidiary to make further distribution to a third party, to the extent payment in respect thereof has been received by the Company, such Subsidiary or any agent thereof.
“Indemnified Taxes”: (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Company under any Loan Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
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“Information Materials”: the Confidential Information Memorandum dated November 9, 2018 in respect of the transactions contemplated hereby sent by the Lead Arrangers to each of the Banks, including all supplements and amendments thereto.
“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.
“Interest Payment Date”: (i) as to any Base Rate Loan, the last Business Day of each March, June, September and December and, with respect to any Bank holding such a Base Rate Loan, the final Termination Date of such Bank, (ii) as to any LIBORSONIA Loan, the last Business Day of each calendar month and, with respect to any Bank holding such a SONIA Loan, the final Termination Date of such Bank, (iii) as to any Term Benchmark Loan having an Interest Period of three months or less, the last day of such Interest Period and (iiiiv) as to any LIBORTerm Benchmark Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period.
“Interest Period”: with respect to any LIBORTerm Benchmark Loan:
(i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such LIBORTerm Benchmark Loan and ending one, three, or six, or, in the case of EURIBOR Loans and subject to clause (F) of this definition, twelve months thereafter, as selected by the Company in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBORTerm Benchmark Loan and ending one, three, or six, or, in the case of EURIBOR Loans and subject to clause (F) of this definition, twelve months, thereafter, as selected by the Company by irrevocable notice to the Administrative Agent not less than (x) with respect to LIBORTerm Benchmark Loans denominated in Dollars, three Business Days prior to the last day of the then current Interest Period with respect thereto and (y) with respect to LIBORTerm Benchmark Loans denominated in Foreign CurrencyEuro, four Business Days prior to the last day of the then current Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period pertaining to a LIBORTerm Benchmark Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;
(B) the Company may not select any Interest Period that would expire after the final Termination Date;
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(C) if the Company shall fail to give notice as provided in clause(ii) above, the Company shall be deemed to have selected (i) in the case of Loans denominated in Dollars, a Base Rate Loan to replace the affected LIBORTerm Benchmark Loan and (ii) in the case of Loans denominated in Foreign CurrenciesEuro, an Interest Period of one month;
(D) any Interest Period pertaining to a LIBORTerm Benchmark Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month;
(E) no more than eight LIBORTerm Benchmark Loans may be in effect at any time (for purposes hereof, LIBORTerm Benchmark Loans with different Interest Periods shall be considered as separate LIBORTerm Benchmark Loans, even if they shall begin on the same date, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBORTerm Benchmark Loan with a single Interest Period); and
(F) in the case of any such LIBOREURIBOR Loans, the Company shall not be entitled to select an Interest Period having a duration of twelve months unless, by 2:00 p.m. on the third Business Day prior to the first day of such Interest Period, each Bank notifies the Administrative Agent that such Bank will be providing funding for such LIBOREURIBOR Loans with such Interest Period (the failure of any Bank to so respond by such time being deemed for all purposes of this Agreement as an objection by such Bank to the requested duration of such Interest Period); provided that if any or all of the Banks object to the requested duration of such Interest Period, the duration of the Interest Period for such LIBOREURIBOR Loans shall be one, two, three or six months, as specified by the Company in the applicable Borrowing Certificate as the desired alternative to an Interest Period of twelve months.
“Issuing Lender”: the persons specified in the introductory paragraph hereto, any other Bank so appointed by the Company that agrees to act as an Issuing Lender and any successor thereto.
“Issuing Lender Fees”: as defined in subsection 2.4(d).
“Lead Arrangers”: Citibank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement) and Wells Fargo Securities, LLC.
“Letter of Credit”: any letter of credit issued by an Issuing Lender pursuant to the terms hereof, as such Letter of Credit may be amended, modified, extended, renewed or replaced from time to time.
“Letter of Credit Facing Fee”: as defined in subsection 2.4(d).
“Letter of Credit Fee”: as defined in subsection 2.4(c).
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“LIBOR Loan”: at any time, any Loan that bears interest at such time at the applicable Adjusted LIBOR Rate.
“LIBOR Rate”: with respect to each LIBOR Loan constituting part of the same borrowing for any Interest Period, (A) with respect to any LIBOR Loan denominated in Dollars, an interest rate per annum obtained by dividing (i) the rate of interest appearing on the applicable Bloomberg screen page equal to the London Interbank Offered Rate, or a comparable or successor rate which rate is approved by the Administrative Agent (with the consent of the Company, not to be unreasonably withheld, conditioned or delayed), as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent (with the consent of the Company, not to be unreasonably withheld, conditioned or delayed) from time to time) for Dollar deposits at approximately 11:00 a.m., London time, two Business Days prior to the first day of such Interest Period for a period substantially equal to such Interest Period and in minimum amounts of at least $5,000,000, by (ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such Interest Period, and (B) with respect to any LIBOR Loan denominated in a Foreign Currency, an interest rate per annum obtained by dividing (i) (x) the rate of interest appearing on the applicable Bloomberg screen page equal to the London Interbank Offered Rate, or a comparable or successor rate which rate is approved by the Administrative Agent (with the consent of the Company, not to be unreasonably withheld, conditioned or delayed), as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time (with the consent of the Company, not to be unreasonably withheld, conditioned or delayed)) for deposits in such Foreign Currency at approximately 11:00 a.m., London time, two Business Days prior to the first day of such Interest Period for a period substantially equal to such Interest Period and in minimum amounts of at least $5,000,000, by (ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such Interest Period; provided that, if the LIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“LIBOR Successor Rate”: as defined in subsection 2.11(b).
“LIBOR Successor Rate Conforming Changes”: as defined in subsection 2.11(b).
“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing), it being understood that the holding of money or investments for the purpose of honoring payment instruments or consumer funds transfers, or other amounts paid to or received by the Company, any of its Subsidiaries or any agent thereof in the ordinary course of business in order for the Company or such Subsidiary to make further distribution to a third party, shall not be considered a “Lien” for the purposes of this definition.
“Loan Documents”: this Agreement, the LOC Documents and the Notes.
“Loans”: as defined in subsection 2.1(a).
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“LOC Commitment”: with respect to each Bank, the commitment of such Bank to purchase participation interests in the Letters of Credit up to such Bank’s Commitment Percentage of all LOC Obligations.
“LOC Documents”: with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or (ii) any collateral security for such obligations.
“LOC Mandatory Borrowing”: as defined in subsection 2.22(f).
“LOC Obligations”: at any time, the sum of (i) the maximum amount that is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (ii) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lenders but not theretofore reimbursed.
“Majority Banks”: at any time, the Banks holding more than 50% of the aggregate unpaid principal amount of the Loans and Participation Interests or, if no Loans and Participation Interests are then outstanding, the Banks holding more than 50% of the aggregate amount of the Commitments; provided that the Loans, Participation Interests and Commitments held or deemed held by any Defaulting Bank shall be excluded for purposes of making a determination of Majority Banks.
“Material Adverse Effect”: a material adverse effect on the ability of the Company to perform its obligations under this Agreement or the other Loan Documents.
“Moody’s”: Moody’s Investors Service, Inc.
“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Non-Consenting Bank”: any Bank that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Banks in accordance with the terms of subsection 9.1 and (ii) has been approved by the Majority Banks.
“Non-Defaulting Bank”: at any time, each Bank that is not a Defaulting Bank at such time.
“Non-Extending Bank”: as defined in subsection 2.25(b).
“Note”: as defined in subsection 2.2.
“Notice”: as defined in subsection 9.2(c).
“Obligations”: all of the obligations, indebtedness and liabilities of the Company to the Banks (including the Issuing Lenders) and the Administrative Agent, whenever arising, under this Agreement, the Notes or any of the other Loan Documents, including principal, interest, fees,
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reimbursements and indemnification obligations and other amounts (including any interest and fees accruing after the commencement by or against the Company of any proceeding under any Debtor Relief Law naming the Company as the debtor in such proceeding, regardless of whether such interest and fees constitute an allowed claim in such proceeding).
“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely 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).
“Other Taxes”: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to subsection 2.17).
“Participant”: as defined in subsection 9.6(d).
“Participant Register”: as defined in subsection 9.6(d).
“Participating Member State”: each country so described in any EMU Legislation.
“Participation Interest”: with respect to each Bank and each Letter of Credit, as defined in subsection 2.22(c).
“Patriot Act”: the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001.
“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).
“Person”: an individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, Governmental Authority or other entity of whatever nature.
“Plan”: at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Platform”: as defined in subsection 9.2(b).
“Pounds Sterling”: British pounds sterling, the lawful currency of the United Kingdom.
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“Principal Facility”: the real property, fixtures, machinery and equipment relating to any facility owned by the Company or any Subsidiary, except for any facility that, in the opinion of the Board of Directors of the Company, is not of material importance to the business conducted by the Company and its Subsidiaries, taken as a whole.
“PTE”: as defined in subsection 8.11.
“Purchasing Bank”: as defined in subsection 9.6(b).
“Rating”: the respective rating of each of the Rating Agencies applicable to the long-term senior unsecured non-credit enhanced debt of the Company, as announced by the Rating Agencies from time to time.
“Rating Agencies”: together, S&P and Moody’s, and each a “Rating Agency”.
“Rating Category”: each of Rating I, Rating II, Rating III, Rating IV and Rating V.
“Rating I”, “Rating II”, “Rating III”, “Rating IV” and “Rating V”: the respective Ratings set forth below:

Rating
Category	S&P	Moody’s	
Rating I	greater than or equal to A-	greater than or equal to A3	
Rating II	equal to BBB+	equal to Baa1	
Rating III	equal to BBB	equal to Baa2	
Rating IV	equal to BBB-	equal to Baa3	
Rating V	less than BBB-	less than Baa3	
provided that (i) if on any day the Ratings of the Rating Agencies do not fall in the same Rating Category, and the lower of such Ratings (i.e., the Rating Category designated by a numerically higher Roman numeral) is one Rating Category lower than the higher of such Ratings, then the Rating Category of the higher of such Ratings shall be applicable for such day, (ii) if on any day the Ratings of the Rating Agencies do not fall in the same Rating Category, and the lower of such Ratings is more than one Rating Category lower than the higher of such Ratings, then the Rating Category next lower from that of the higher of such Ratings shall be applicable for such day, (iii) if on any day the Rating of only one of the Rating Agencies is available, then the Rating Category determined by such Rating shall be applicable for such day and (iv) if on any day a Rating is available from neither of the Rating Agencies, then Rating V shall be applicable for such day. Any change in the applicable Rating Category resulting from a change in the Rating of a Rating Agency shall become effective on the date such change is publicly announced by such Rating Agency.
“Receivables”: accounts receivable, lease receivables or other rights to receive payment or income of the Company or any of its Subsidiaries, and accounts receivable purchased by the Company or any of its Subsidiaries from third parties and not originally created by the sale of goods or services by the Company or any of its Subsidiaries.
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“Receivables Financing”: any financing transaction pursuant to which Receivables are sold, transferred, securitized or otherwise financed by any Receivables Subsidiary and as to which there is no recourse to the Company or any of its other Subsidiaries (other than customary representations and warranties made in connection with the sale or transfer of Receivables).
“Receivables Subsidiary”: any Subsidiary of the Company that purchases Receivables directly or to which Receivables are transferred by the Company or any of its Subsidiaries, in either case with the intention of engaging in a Receivables Financing.
“Recipient”: (i) the Administrative Agent, (ii) any Bank or (iii) any Issuing Lender, as applicable.
“Register”: as defined in subsection 9.6(c).
“Regulation D”: Regulation D of the Federal Reserve Board.
“Regulation U”: Regulation U of the Federal Reserve Board.
“Regulation X”: Regulation X of the Federal Reserve Board.
“Reimbursement Obligation”: the obligation of the Company to reimburse the Issuing Lenders pursuant to subsection 2.22(d) for amounts drawn under Letters of Credit.
“Related Parties”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Reportable Event”: any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the thirty day notice period is waived by the PBGC.
“Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law (including Environmental Laws), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserve Requirement”: with respect to any Interest Period, the reserve percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) in effect from time to time during such Interest Period, as provided by the Federal Reserve Board, applied for determining the maximum reserve requirements (including basic, supplemental, marginal and emergency reserves) applicable to Citibank under Regulation D with respect to “Eurocurrency liabilities” within the meaning of Regulation D, or under any similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency funding.
“Responsible Officer”: the chairman and the chief executive officer of the Company, the chief financial officer of the Company, the senior vice president and treasurer of the Company or the senior vice president and chief accounting officer of the Company.
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“Revaluation Date”: with respect to any Extension of Credit, each of the following: (i) in connection with the origination of any new Extension of Credit, the Business Day which is the earliest of the date such credit is extended or the date the rate is set; (ii) in connection with any extension or conversion or continuation of an existing Loan, the Business Day that is the earlier of the date such advance is extended, converted or continued, or the date the rate is set, as applicable, in connection with any extension, conversion or continuation; (iii) each date a Letter of Credit is issued or renewed or amended in such a way as to modify the LOC Obligations; (iv) the date of any reduction of the Commitments; and (v) such additional dates as the Administrative Agent or the Majority Banks shall deem necessary. For purposes of determining availability hereunder, the rate of exchange for any Foreign Currency shall be the Spot Rate.
“S&P”: S&P Global Ratings.
“Sanctioned Country”: at any time, a country, region or territory which is itself the subject or target of any comprehensive Sanctions.
“Sanctioned Person”: 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, the U.S. Department of State, or by the United Nations Security Council, Her Majesty’s Treasury of the United Kingdom, 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 50% or more, whether individually or in the aggregate, directly or indirectly, by any such Person or Persons described in the foregoing clauses (a) or (b).
“Sanctions”: 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.
“SEC”: the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Short-Term Ratings”: with respect to any Person, the short-term debt ratings of such Person issued by the Rating Agencies.
“Significant Subsidiary”: at any date, any Subsidiary of the Company which, together with its Subsidiaries, (i) has a proportionate share of Consolidated Net Assets that exceeds 10% at the time of determination or (ii) has equity in the Consolidated Net Income that exceeds 10% for the period of the four most recently completed fiscal quarters preceding the time of determination.
“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.
“SOFR”: a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
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“SOFR Administrator” the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SONIA”: with respect to any applicable determination date, a rate equal to the Sterling Overnight Index Average as administered by the SONIA Administrator, published on the fifth Business Day preceding such date on the SONIA Administrator’s Website (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time); provided however that if such applicable determination date is not a Business Day, SONIA means such rate that applied on the fifth Business Day preceding on the first Business Day immediately prior thereto. If by 5:00 pm (London time) on the second Business Day immediately following any determination date SONIA in respect of such day has not been published on the SONIA Administrator’s Website, then SONIA will be as published in respect of the first preceding Business Day for which SONIA was published on the SONIA Administrator’s Website; provided that SONIA determined pursuant to this sentence shall be utilized for no more than three consecutive days. If SONIA is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“SONIA Adjustment”: 0.0326% per annum.
“SONIA Administrator”: the Bank of England (or any successor administrator of the Sterling Overnight Index Average).
“SONIA Administrator’s Website”: the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SONIA Loan”: any Loan the rate of interest applicable to which is based upon the Adjusted SONIA Rate.
“Specified Transaction”: any transaction or series of related transactions resulting in (a) the acquisition or disposition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition or disposition of in excess of 50% of the capital stock of any Person or (c) a merger or consolidation or any other combination with another Person (other than the Company or any of its Subsidiaries), in each case, involving consideration in an amount equal to or greater than $500,000,000.
“Spot Rate”: with respect to any Foreign Currency, the rate quoted by Citibank as the spot rate for the purchase by Citibank of such Foreign Currency with Dollars through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made.
“Subsidiary”: as to any Person, a corporation, partnership or other entity (whether or not existing as at the date hereof) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.
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“Successor Rate”: as defined in subsection 2.11(b).
“Successor Rate Conforming Changes”: as defined in subsection 2.11(b).
“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Benchmark Loan”: any Loan the rate of interest applicable to which is based upon the Adjusted Term SOFR Rate or the Adjusted EURIBO Rate.
“Term Benchmark Rate”: (i) with respect to any Loan denominated in Dollars, the Adjusted Term SOFR Rate and (ii) with respect to any Loan denominated in Euros, the Adjusted EURIBO Rate.
“Term SOFR”:
(a) for any calculation with respect to a SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b) for any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “ABR Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any ABR Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three U.S. Government Securities Business Days prior to such ABR SOFR Determination Day.
“Term SOFR Adjustment”: 0.10% per annum.
“Term SOFR Administrator”: CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
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“Term SOFR Loan”: at any time, any Loan that bears interest at such time at the applicable Adjusted Term SOFR Rate.
“Term SOFR Reference Rate”: the forward-looking term rate based on SOFR.
“Termination Date”: January 8, 2024, subject to the extension thereof pursuant to subsection 2.25; provided, however, that the Termination Date of any Bank that is a Non-Extending Bank to any requested extension pursuant to subsection 2.25 shall be the Termination Date in effect immediately prior to the applicable Extension Date for all purposes of this Agreement.
“Tranche”: the reference to all LIBORTerm Benchmark Loans the Interest Periods of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day); Tranches may be identified as “LIBORTerm Benchmark Tranches.”
“Transferee”: means any Participant or Purchasing Bank.
“Treaty on European Union”: the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on February 1, 1992 and came into force on November 1, 1993), and as further amended from time to time.
“Type”: as to any Loan, its nature as a Base Rate Loan, a Term Benchmark Loan or a LIBORSONIA Loan.
“U.S. Government Securities Business Day”: any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person”: any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate”: as defined in subsection 2.15(f).
“Withholding Agent”: the Company and the Administrative Agent.
“Write-Down and Conversion Powers”: with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Loan Documents or any certificate or other document made or delivered pursuant hereto.
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(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Company and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.
(c) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Sections, subsections, Exhibits and Schedules shall be construed to refer to Sections and subsections of, and Exhibits and Schedules to, this Agreement, (v) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(d) All references herein to the Banks or any of them shall be deemed to include the Issuing Lenders unless specifically provided otherwise or unless context otherwise requires.
(e) Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).
(f) All references to “knowledge” or “awareness” of the Company or any Subsidiary are to the actual knowledge of a senior officer of the Company or such Subsidiary.
1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, and all accounting determinations hereunder shall be made, in
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accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Company delivered to the Banks; provided that if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, and the Company, the Majority Banks or the Administrative Agent shall so request, the Administrative Agent, the Banks and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Majority Banks); provided further that until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding anything to the contrary in the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, the effects of Accounting Standards Codification 842 on capital lease or debt obligations shall be disregarded.
1.4 Exchange Rates; Currency Equivalents.
(a) The Administrative Agent shall determine the Spot Rates as of each Revaluation Date to be used for calculating the Dollar Amounts of Extensions of Credit and amounts outstanding hereunder denominated in Foreign Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by the Company hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency for purposes of the Loan Documents shall be such Dollar Amount as so determined by the Administrative Agent.
(b) Wherever in this Agreement in connection with an Extension of Credit, conversion, continuation or prepayment of a Loan, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Extension of Credit or Loan is denominated in a Foreign Currency, such amount shall be the relevant Foreign Currency Equivalent of such Dollar Amount (rounded upwards to the nearest 1,000 units of such Foreign Currency), as determined by the Administrative Agent.
1.5 Computation of Dollar Amounts. References herein to minimum Dollar Amounts and integral multiples stated in Dollars, where they shall also be applicable to Foreign Currency, shall be deemed to refer to approximate Foreign Currency Equivalents.
1.6 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
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SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments.
(a) Subject to the terms and conditions hereof, each Bank severally agrees to make revolving credit loans (each, a “Loan”; collectively, the “Loans”) in Dollars and in Foreign Currencies to the Company from time to time during the Commitment Period applicable to such Bank in an aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) at any one time outstanding that, when added to the amount of such Bank’s Commitment Percentage of the aggregate principal amount of all LOC Obligations then outstanding, shall not exceed the amount of such Bank’s Commitment; provided that (i) after giving effect to the use of proceeds of Loans to repay any LOC Obligations, the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of Loans and LOC Obligations outstanding at any one time shall not exceed the aggregate amount of the Commitments at such time; and (ii) the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of Loans that are Foreign Currency Loans outstanding to the Company shall not exceed $250,000,000. During the Commitment Period the Company may use the Commitments by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.
(b) The Loans may from time to time be (i) LIBORTerm Benchmark Loans, (ii) Base Rate Loans, or (iii) SONIA Loans, or (iv) a combination thereof, as determined by the Company and notified to the Administrative Agent in accordance with subsections 2.3 and 2.7; provided that (1) no Loan shall be made as a LIBORTerm Benchmark Loan after the day that is one month prior to the final Termination Date and, (2) all Foreign Currency Loans must be LIBORLoans denominated in Euro must be Term Benchmark Loans and (3) all Loans denominated in British Pound Sterling must be SONIA Loans.
2.2 Notes. The Loans made by each Bank shall, if requested by such Bank, be evidenced by a promissory note of the Company, substantially in the form of Exhibit A with appropriate insertions as to payee, date and principal amount (a “Note”), payable to such Bank or its registered assigns and in a principal Dollar Amount equal to such Bank’s Commitment. Each Bank is hereby authorized to record the date, Type, currency and amount of each Loan made by such Bank, each continuation thereof, each conversion of all or a portion thereof to another Type, the date and amount of each payment or prepayment of principal thereof and, in the case of LIBORTerm Benchmark Loans, the length of each Interest Period with respect thereto, on the schedule annexed to and constituting a part of its Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of any Bank to make any such recordation (or any error in such recordation) shall not affect the obligations of the Company hereunder or under any Note in respect of the Loans. Each Note shall (i) be dated the Closing Date, (ii) be stated to mature on the Termination Date (as the same may be extended as to any Bank in accordance with subsection 2.25) and (iii) provide for the payment of interest in accordance with subsection 2.9.
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2.3 Procedure for Borrowing.
(a) The Company may borrow under the Commitments during the Commitment Period on any Business Day; provided that the Company shall deliver to the Administrative Agent a Borrowing Certificate, which certificate to be effective on the requested Borrowing Date must be received by the Administrative Agent (ai) prior to 12:00 noon three U.S. Government Securities Business Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially LIBORTerm SOFR Loans (other than Foreign Currency Loans), (bii) prior to 10:00 a.m. (London, England time) four Business Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be Foreign Currency Loans or (eiii) prior to 12:30 p.m. on the requested Borrowing Date, otherwise, in each case specifying (i1) the amount to be borrowed, (ii2) the currency to be borrowed, (iii3) the requested Borrowing Date, (iv4) whether the borrowing is to be of LIBORTerm Benchmark Loans, Base Rate Loans, SONIA Loans or a combination thereof (if the borrowing is to be denominated in a Foreign CurrencyEuro, the borrowing must be comprised entirely of LIBOREURIBOR Loans and if the borrowing is to be denominated in British Pound Sterling, the borrowing must be comprised entirely of SONIA Loans) and (v5) if the borrowing is to be entirely or partly of LIBORTerm Benchmark Loans, the aggregate amount of such LIBORTerm Benchmark Loans and the amounts of each such LIBORTerm Benchmark Loan and the respective length of the initial Interest Period therefor. Each borrowing under the Commitments shall be in a Dollar Amount equal to (x) in the case of Base Rate Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Available Commitments are less than $5,000,000, such lesser amount) or (y) in the case of LIBORTerm Benchmark Loans or SONIA Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of a Borrowing Certificate, the Administrative Agent shall promptly notify each Bank thereof.
(b) Each Bank will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Company at the applicable office of the Administrative Agent specified in subsection 9.2 or such other office specified by the Administrative Agent from time to time prior to (i) 2:30 p.m. in the case of Base Rate Loans or 12:00 noon in the case of LIBORTerm Benchmark Loans denominated in Dollars or (ii) the Applicable Time specified by the Administrative Agent in the case of any Foreign Currency Loan, in each case on the Borrowing Date requested by the Company in Dollars or the applicable Foreign Currency and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Company by the Administrative Agent crediting the account of the Company on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Banks and in like funds as received by the Administrative Agent.
2.4 Fees.
(a) The Company agrees to pay to the Administrative Agent, for the account of each Bank, a facility fee for the period from and including the Closing Date through and including the Termination Date applicable to such Bank, calculated as an amount equal to the product of (i) the Facility Fee Rate and (ii) the average daily amount of the Commitment of such Bank (regardless of usage) during the period for which such facility fee is
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calculated, payable in arrears on the last day of each December, March, June and September (for the quarterly period ended on such date) and on the Termination Date applicable to such Bank or such earlier date on which the Commitments shall terminate as provided herein (for the period from the last quarterly payment date to the applicable Termination Date or such other date, as applicable). Such payments shall commence on December 31, 2018, and such first payment shall be for the period from the Closing Date through December 31, 2018.
(b) The Company agrees to pay to the Administrative Agent, the Syndication Agents and the Lead Arrangers for their own account, as the case may be, the fees in the respective amounts and at the respective times set forth in the Fee Letters.
(c) In consideration of the LOC Commitments, the Company agrees to pay to the Administrative Agent a fee (the “Letter of Credit Fee”) equal to the Applicable Margin for LIBORTerm Benchmark Loans per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration. The Letter of Credit Fee shall be payable for the ratable benefit of each Bank (including the Issuing Lenders) quarterly in arrears on the last day of each December, March, June and September (for the quarterly period ended on such date) and on the Termination Date applicable to such Bank. Such payments shall commence on March 31, 2019, and such first payment shall be for the period from the Closing Date through March 31, 2019.
(d) In addition to the Letter of Credit Fees payable pursuant to subsection 2.4(c), the Company shall pay to each Issuing Lender for its own account without sharing by the other Banks the reasonable and customary charges from time to time of such Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing Lender Fees”). Each Issuing Lender may charge, and retain for its own account without sharing by the other Banks, an additional facing fee (the “Letter of Credit Facing Fee”) in the amount per annum specified in its Fee Letter with the Company on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it. The Letter of Credit Facing Fee shall be payable for the account of the applicable Issuing Lender quarterly in arrears on the last day of each December, March, June and September (for the quarterly period ended on such date), on the Termination Date applicable to such Issuing Lender and thereafter on demand until all Letters of Credit issued by such Issuing Lender have been canceled or terminated.
2.5 Termination or Reduction of Commitments. The Company shall have the right, upon not less than five Business Days’ notice to the Administrative Agent, to terminate the Commitments or, from time to time, to reduce the amount of the Commitments; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of the Loans and LOC Obligations then outstanding would exceed the Commitments then in effect; provided further that a notice of termination of the Commitments delivered by the Company may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of proceeds from the
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issuance of other Indebtedness, in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Upon receipt of any such notice the Administrative Agent shall promptly notify each Bank thereof. Any reduction of the Commitments made in accordance with this subsection 2.5 shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof, shall be applied to the Commitment of each Bank according to its Commitment Percentage and shall reduce permanently the Commitments then in effect.
2.6 Prepayments.
(a) Subject to subsection 2.16, the Company may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice to the Administrative Agent given prior to 10:00 a.m. at least three U.S. Government Securities Business Days in advance in the case of LIBORTerm SOFR Loans, at least three Business Days in advance in the case of EURIBOR Loans and SONIA Loans and on the requested prepayment date in the case of Base Rate Loans, specifying the date and amount of prepayment and whether the prepayment is of LIBORTerm Benchmark Loans (identifying the applicable Tranche or Tranches), Base Rate Loans, SONIA Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of any such notice the Administrative Agent shall promptly notify each Bank thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Partial prepayments shall be in an aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
(b) If at any time after the Closing Date, (i) the sum of the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of outstanding Loans and LOC Obligations shall exceed the aggregate amount of the Commitments at such time or (ii) the aggregate principal Dollar Amount (determined as of the most recent Revaluation Date) of Loans that are Foreign Currency Loans outstanding to the Company exceeds $250,000,000, then, in each case, the Loans shall be prepaid in an amount sufficient to eliminate such excess within one Business Day following the Company’s receipt of notice thereof.
(c) No prepayment under this subsection 2.6 shall result in the reduction of any Commitments unless otherwise effected pursuant to subsection 2.5.
2.7 Conversion and Continuation Options.
(a) The Company may elect from time to time to convert Loans that are LIBORTerm SOFR Loans denominated in Dollars to Base Rate Loans, by giving the Administrative Agent at least two U.S. Government Securities Business Days’ prior irrevocable notice of such election; provided that any such conversion of LIBORTerm SOFR Loans may only be made on the last day of an Interest Period with respect thereto. The Company may elect from time to time to convert Base Rate Loans to LIBORTerm SOFR Loans denominated in Dollars by giving the Administrative Agent at least three U.S. Government Securities Business Days’ prior irrevocable notice of such election. Any such
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notice of conversion to LIBORTerm SOFR Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each Bank thereof. All or any part of outstanding LIBORTerm SOFR Loans denominated in Dollars and Base Rate Loans may be converted as provided herein; provided that (i) no Loan may be converted into a LIBORTerm SOFR Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Majority Banks have determined to not permit such a conversion; (ii) any such conversion may only be made if, after giving effect thereto, subsection 2.8 shall not have been contravened; and (iii) no Loan may be converted into a LIBORTerm SOFR Loan after the date that is one month prior to the final Termination Date.
(b) Any Loans that are LIBORTerm Benchmark Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Company giving at least three Business Days’ prior irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans; provided that no LIBORTerm Benchmark Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Administrative Agent or the Majority Banks have determined to not permit such a continuation; (ii) if, after giving effect thereto, subsection 2.8 would be contravened; or (iii) after the date that is one month prior to the final Termination Date. Upon receipt of any such notice the Administrative Agent shall promptly notify each Bank thereof.
(c) Unless otherwise agreed to by the Majority Banks, upon the occurrence and during the continuance of any Event of Default, all Foreign Currency Loans then outstanding shall be exchanged into Dollars (based on the Dollar Amount (determined as of the most recent Revaluation Date) of such Foreign Currency Loans on the date of redenomination) on the last day of the then current Interest Periods of such Foreign Currency Loans (if such Loans are EURIBOR Loans) or immediately (if such Loans are SONIA Loans); provided that in each case the Company shall be liable for any currency exchange loss related to such payments and shall promptly pay to each Bank upon receipt of notice thereof by the Company from such Bank the amount of any such loss incurred by such Bank.
2.8 Minimum Amounts of Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each LIBORTerm Benchmark Tranche shall be equal to a Dollar Amount (determined as of the most recent Revaluation Date) of at least $5,000,000 and, solely with respect to Loans denominated in Dollars, in a whole multiple of $1,000,000.
2.9 Interest Rates and Payment Dates.
(a) Each Base Rate Loan shall bear interest at a rate per annum equal to the Adjusted Base Rate.
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(b) (i) Each Loan that is a LIBORTerm SOFR Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Adjusted LIBORTerm SOFR Rate for such Interest Period.;
(ii) Each Loan that is a EURIBOR Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Adjusted EURIBO Rate for such Interest Period; and
(iii) Each Loan that is a SONIA Loan shall bear interest at a rate per annum equal to the Adjusted SONIA Rate.
(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto plus 2%; and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any fee or other amount payable hereunder or under any Note or Fee Letter shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the Adjusted Base Rate plus 2%; in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).
(d) Interest on each Loan shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to subsection 2.9(c) shall be payable on demand.
(e) Nothing contained in this Agreement or in any other Loan Document shall be deemed to establish or require the payment of interest to any Bank at a rate in excess of the maximum rate permitted by applicable law. If the amount of interest payable for the account of any Bank on any interest payment date would exceed the maximum amount permitted by applicable law to be charged by such Bank, the amount of interest payable for its account on such interest payment date shall be automatically reduced to such maximum permissible amount. In the event of any such reduction affecting any Bank, if from time to time thereafter the amount of interest payable for the account of such Bank on any interest payment date would be less than the maximum amount permitted by applicable law to be charged by such Bank, then the amount of interest payable for its account on such subsequent interest payment date shall be automatically increased to such maximum permissible amount; provided that at no time shall the aggregate amount by which interest paid for the account of any Bank has been increased pursuant to this sentence exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to the previous sentence.
2.10 Computation of Interest and Fees.
(a) Interest on Base Rate Loans (whenever it is calculated on the basis of Citibank’s base rate) and interest on Foreign Currency Loans denominated in Pounds Sterling shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for
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the actual days elapsed; otherwise, interest and fees shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Company and the Banks of each determination of a LIBORTerm Benchmark Rate and of the effective date and the amount of each such change in interest rate; provided, however, that the failure of the Administrative Agent to provide the Company or the Banks with any such notice shall neither affect any obligations of the Company or the Banks hereunder nor result in any liability on the part of the Administrative Agent to the Company or any Bank.
(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement (including each determination of the Reserve Requirement) shall be conclusive and binding on the Company and the Banks in the absence of demonstrable error. The Administrative Agent shall, at the request of the Company, deliver to the Company a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.9(a) or 2.9(b).
2.11 Inability to Determine Interest Rate. (a) In the event that prior to the first day of any Interest Period, prior to the borrowing of any SONIA Loans or at any time that SONIA Loans are outstanding:
(i) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Company) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBORTerm Benchmark Rate for such Interest Period or SONIA, or
(ii) the Administrative Agent shall have received notice from the Majority Banks that the LIBORTerm Benchmark Rate determined or to be determined for such Interest Period, or SONIA, as applicable, will not adequately and fairly reflect the cost to such Banks (as conclusively certified by such Banks) of making or maintaining their affected Loans during such Interest Period,
then the Administrative Agent shall give telecopy or telephonic (confirmed in writing) notice thereof to the Company and the Banks as soon as practicable thereafter. If such notice is given (wv) all affected Foreign Currency Loans requested to be made on the first day of such Interest Period shall be made, at the sole option of the Company, in Dollars as Base Rate Loans or such request shall be cancelled, (xw) all LIBORTerm SOFR Loans denominated in Dollars requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (yx) all Loans that were to have been converted on the first day of such Interest Period to LIBORTerm SOFR Loans shall be converted to or continued as Base Rate Loans in Dollars and, (zy) all Loans that pursuant to subsection 2.7(b) were to have been continued on the first day of such Interest Period as LIBORTerm Benchmark Loans shall be converted to Base Rate Loans in Dollars and (z) all SONIA Loans shall bear interest at the Central Bank Rate plus the Applicable Margin applicable to SONIA Loans. Until such notice has been withdrawn by the Administrative Agent or the Majority Banks, as the case may be, no further LIBORTerm Benchmark Loans or SONIA Loans shall be made or continued as such, nor shall the Company have the right to convert Loans to LIBORTerm SOFR Loans.
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(b) Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Majority Banks notify the Administrative Agent (with a copy to the Company) that the Majority Banks have determined, that:
(i) adequate and reasonable means do not exist for ascertaining the LIBOR RateTerm SOFR Reference Rate, EURIBOR Rate, or SONIA, as applicable, for any requested Interest Period, including, without limitation, because the LIBOR Ratesuch rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii) the supervisor for the administrator of the LIBORTerm SOFR Reference Rate, EURIBOR Rate or SONIA, as applicable, or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBOR Ratesuch rate shall no longer be made available, or used for determining the interest rate of loans,
then, after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Company may amend this Agreement to replace the LIBOR RateTerm SOFR Reference Rate, EURIBOR Rate or SONIA, as applicable, with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein) that has been broadly accepted by the syndicated loan market in the United States of America in lieu of the LIBORTerm SOFR Reference Rate, EURIBOR Rate or SONIA, as applicable (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes (as defined below) and, notwithstanding anything to the contrary in Section 9.1, any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Banks and the Company unless, prior to such time, Banks comprising the Majority Banks have delivered to the Administrative Agent notice that such Majority Banks do not accept such amendment.
If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist, the obligation of the Banks to make or maintain LIBOR Loans bearing interest at the applicable rate shall be suspended (to the extent of the affected LIBOR Loans or Interest Periods). Upon receipt of such notice, (w) all affected Foreign Currency Loans requested to be made on the first day of such Interest Period shall be made, at the sole option of the Company, as Base Rate Loans or such request shall be cancelled, (x) all LIBORTerm Benchmark Loans denominated in Dollars requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) all Loans that were to have been converted on the first day of such Interest Period to LIBORTerm Benchmark Loans shall be converted to or continued as Base Rate Loans in Dollars and (z) all Loans that pursuant to subsection 2.7(b) were to have been continued on the first day of such Interest Period as LIBORTerm Benchmark Loans shall be converted to Base Rate Loans in Dollars. Until such notice has been withdrawn by the Administrative Agent or the Majority Banks, as the case may be, no further LIBORTerm Benchmark Loans shall be made or continued as such, nor shall the Company have the right to convert Loans to LIBORTerm Benchmark Loans.
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“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definitions of Base Rate, Adjusted Base Rate, Adjusted LIBOR Rate,SOFR, Term SOFR Reference Rate, Adjusted Term SOFR Rate, EURIBOR Rate, Adjusted EURIBOR Rate, SONIA, Adjusted SONIA Rate and Interest Period and LIBOR Rate and any defined terms used therein, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the reasonable discretion of the Administrative Agent in consultation with the Company, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Company).
2.12 Pro Rata Treatment and Payments.
(a) Each borrowing of Loans and any reduction of the Commitments shall be made pro rata according to the respective Commitment Percentages of the Banks (except as otherwise provided in subsection 2.25). Unless otherwise required by the terms of this Agreement, each payment under this Agreement or any other Loan Documents shall be applied, first, to any fees then due and owing by the Company pursuant to subsection 2.4, second, to interest then due and owing in respect of the Loans of the Company, third, to principal then due and owing hereunder and under the Notes of the Company, and, fourth, to any other amounts then due and owing under the Loan Documents. Each payment on account of any fees pursuant to subsection 2.4 for the account of Banks shall be made pro rata in accordance with the respective amounts due and owing (except as to the Letter of Credit Facing Fee and the Issuing Lender Fees). Each payment by the Company on account of principal of and interest on the Loans shall be made pro rata according to the respective amounts due and owing. Without limiting the terms of the preceding sentence, accrued interest on any Loans denominated in a Foreign Currency shall be payable in the same Foreign Currency as such Loan. Payments made pursuant to subsection 2.13 shall be applied in accordance with such section. All payments (including prepayments) to be made by the Company on account of principal, interest and fees shall be made without defense, set-off or counterclaim (except as provided in subsection 2.15) and shall be made to the Administrative Agent for the account of the applicable Banks at the Administrative Agent’s office specified in subsection 9.2 or such other office specified by the Administrative Agent in immediately available funds and (i) in the case of Loans or other amounts denominated in Dollars, shall be made in Dollars not later than 12:00 noon on the date when due and (ii) in the case of Loans or other amounts denominated in a Foreign Currency, unless otherwise specified herein, shall be made in such Foreign Currency not later than the Applicable Time specified by the Administrative Agent on the date when due. Any payment received after the foregoing deadlines shall be deemed received on the next Business Day. The Administrative Agent shall distribute such payments to the Banks entitled thereto promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension; provided,
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however, that with respect to any LIBORTerm Benchmark Loan to which clause (A) of the definition of “Interest Period” applies, such payment shall be the next preceding Business Day.
(b) Notwithstanding any other provisions of this Agreement to the contrary, after the exercise of remedies by the Administrative Agent or the Banks pursuant to Section 7 (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Loan Documents (including the maximum amount of all contingent liabilities under Letters of Credit) shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Bank on account of the Obligations or any other amounts outstanding under any of the Loan Documents shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Banks under the Loan Documents;
SECOND, to the payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Banks in connection with enforcing its rights under the Loan Documents or otherwise with respect to the Obligations owing to such Bank;
FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the Obligations and the payment or Cash Collateralization of the outstanding LOC Obligations;
SIXTH, to all other Obligations and other obligations which shall have become due and payable under the Loan Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Banks shall receive an amount equal to its pro rata share (based on such Bank’s proportion of the amount owing under such clause) of amounts available to be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (A) first, to reimburse the Issuing Lenders from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other
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obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this subsection 2.12(b).
(c) Unless the Administrative Agent shall have received notice from a Bank, prior to the proposed time of any borrowing, that such Bank will not make available to the Administrative Agent such Bank’s share of such borrowing, the Administrative Agent may assume that such Bank has made such share available on such date in accordance with subsection 2.3(b) and may, in reliance upon such assumption, make available to the Company a corresponding amount. In such event, if a Bank has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Bank and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Bank, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Company, the interest rate applicable to Base Rate Loans. If the Company and such Bank shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Company the amount of such interest paid by the Company for such period. If such Bank pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Bank’s Loan included in such borrowing. Any payment by the Company shall be without prejudice to any claim the Company may have against a Bank that shall have failed to make such payment to the Administrative Agent.
(d) Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Administrative Agent for the account of the Bank or the Issuing Lenders hereunder that the Company will not make such payment, the Administrative Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Banks or the Issuing Lenders, as the case may be, the amount due. In such event, if the Company has not in fact made such payment, then each of the Banks or the Issuing Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Bank or Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
2.13 Illegality.
(a) Notwithstanding any other provision herein, if any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Bank to make or maintain LIBORTerm Benchmark Loans or SONIA Loans as contemplated by this Agreement, such Bank shall forthwith so notify the Administrative Agent and the Company. Upon such notice, (i) the commitment of such Bank hereunder to make LIBORTerm Benchmark Loans or SONIA Loans, continue LIBORTerm
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Benchmark Loans as such and convert Base Rate Loans to LIBORTerm SOFR Loans shall forthwith be cancelled and (ii) such Bank’s Loans then outstanding as LIBORTerm Benchmark Loans or SONIA, if any, shall be converted automatically to Base Rate Loans denominated in Dollars on the respective last days of the then current Interest Periods with respect to such Term Benchmark Loans or within such earlier period as required by law or, in the case of SONIA Loans, as required by law. If any such conversion of a LIBORTerm Benchmark Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay to such Bank such amounts, if any, as may be required pursuant to subsection 2.16.
(b) Notwithstanding any other provision herein, if there shall have occurred any change in national or international financial, political or economic conditions (including the imposition of or any change in exchange controls) or currency exchange rates that would make it unlawful or impossible for any Bank to make Loans denominated in any Foreign Currency to the Company, as contemplated by this Agreement, such Bank shall forthwith so notify the Administrative Agent and the Company. Upon such notice, (i) the commitment of such Bank hereunder to make Foreign Currency Loans shall forthwith be cancelled and (ii) such Bank’s Loans then outstanding as Foreign Currency Loans, if any, shall be converted automatically to Base Rate Loans denominated in Dollars. If any conversion of a Foreign Currency Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay to such Bank such amounts, if any, as may be required pursuant to subsection 2.16.
2.14 Requirements of Law.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Bank (except any reserve requirement reflected in the Adjusted LIBOREURIBO Rate) or any Issuing Lender;
(ii) subject any Recipient to any Taxes (other than Connection Income Taxes, Indemnified Taxes and Taxes described in any of clauses (i) through (iv) of the definition of Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii) impose on any Bank or any Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Bank or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Bank or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Bank,
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such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Bank, Issuing Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Bank, Issuing Lender or other Recipient, setting forth the calculations thereof in reasonable detail, the Company will pay to such Bank, Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Bank, Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Bank or Issuing Lender determines that any Change in Law affecting such Bank or Issuing Lender or any lending office of such Bank or such Bank’s or Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Bank’s or Issuing Lender’s capital or on the capital of such Bank’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Bank or the Loans made by, or participations in Letters of Credit held by, such Bank, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Bank or Issuing Lender or such Bank’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Bank’s or Issuing Lender’s policies and the policies of such Bank’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Company will pay to such Bank or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Bank or Issuing Lender or such Bank’s or Issuing Lender’s holding company for any such reduction suffered.
(c) A certificate of a Bank or Issuing Lender setting forth in reasonable detail the calculations of the amount or amounts necessary to compensate such Bank or Issuing Lender or its holding company, as the case may be, as specified in subsection 2.14(a) or 2.14(b) and delivered to the Company, shall be conclusive absent demonstrable error. The Company shall pay such Bank or Issuing Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Bank or Issuing Lender to demand compensation pursuant to this subsection 2.14 shall not constitute a waiver of such Bank’s or Issuing Lender’s right to demand such compensation; provided that the Company shall not be required to compensate a Bank or Issuing Lender pursuant to this subsection 2.14 for any increased costs, requirements, Taxes or expenses incurred or reductions suffered more than six months prior to the date that such Bank or Issuing Lender, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions, and of such Bank’s or Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).
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2.15 Taxes.
(a) Any and all payments by or on account of any obligation of the Company under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Company shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this subsection 2.15) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) The Company shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c) The Company shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this subsection 2.15) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Company shall not be required to indemnify a Recipient for such Taxes or expenses resulting from the gross negligence, willful misconduct or breach in bad faith of such Recipient, including as a result of a failure by the Administrative Agent to remit to the appropriate Governmental Authority any amounts paid over by the Company pursuant to this subsection 2.15. A certificate as to the amount of such payment or liability delivered to the Company by a Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Bank, shall be conclusive absent demonstrable error.
(d) Each Bank shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Bank (but only to the extent that the Company has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Company to do so), (ii) any Taxes attributable to such Bank’s failure to comply with the provisions of subsection 9.6(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Bank, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Bank by the Administrative Agent shall be conclusive absent demonstrable error. Each Bank authorizes
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the Administrative Agent to set off and apply any and all amounts at any time owing to such Bank under any Loan Document or otherwise payable by the Administrative Agent to the Bank from any other source against any amount due to the Administrative Agent under this subsection 2.15(d).
(e) As soon as practicable after any payment of Taxes by the Company to a Governmental Authority pursuant to this subsection 2.15, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(f) (i) Any Bank, which for purposes of this Section 2.15(f) includes any Recipient, that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Company and the Administrative Agent, at the time or times reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Company or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Bank, if reasonably requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Bank 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 subsection 2.15(f)(ii)(A), 2.15(f)(ii)(B) or 2.15(f)(ii)(D)) shall not be required if in the Bank’s reasonable judgment such completion, execution or submission would subject such Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Bank.
(ii) So long as the Company is a U.S. Person:
(A) any Bank that is a U.S. Person shall deliver to the Company and the Administrative Agent on or prior to the date on which such Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Bank is exempt from U.S. federal backup withholding tax;
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company 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 Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), whichever of the following is applicable:
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(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States of America is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) 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 G-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 Company 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 originals of IRS Form W-8BEN or W-8BEN-E; or
(4) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS 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 G-4 on behalf of each such direct and indirect partner;
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company 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 Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Company or the Administrative Agent to determine the withholding or deduction required to be made; and
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(D) if a payment made to a Bank under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Company and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply with their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this subsection 2.15(f)(ii)(D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Bank agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.
(g) If any party determines, in its sole discretion exercised in good faith, that it has received a refund (including, for the avoidance of doubt, benefits received solely in lieu of receiving a cash refund) of any Taxes as to which it has been indemnified pursuant to subsection 2.14(a)(ii) or this subsection 2.15 (including by the payment of additional amounts pursuant to this subsection 2.15), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under subsection 2.14(a)(ii) or this subsection 2.15 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection 2.15(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection 2.15(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection 2.15(g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Taxes subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts in respect of such Tax had never been paid. This subsection 2.15(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h) Each party’s obligations under this subsection 2.15 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or
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the replacement of, a Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document. For purposes of this Section 2.15, the term “applicable law” includes FATCA.
2.16 Indemnity. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense that such Bank may sustain or incur as a consequence of (i) default by the Company in payment when due of the principal amount of or interest on any LIBORTerm Benchmark Loan, (ii) default by the Company in making a borrowing of, conversion into or continuation of LIBORTerm Benchmark Loans after the Company has given a notice requesting the same in accordance with the provisions of this Agreement, (iii) default by the Company in making any prepayment of LIBORTerm Benchmark Loans after the Company has given a notice thereof in accordance with the provisions of this Agreement or (iv) the making of a prepayment or conversion, or the purchase pursuant to subsection 2.17, of LIBORTerm Benchmark Loans on a day which is not the last day of an Interest Period with respect thereto, including, in each case, any such loss (other than non-receipt of the Applicable Margin or, without duplication, anticipated profits) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained (it being understood that any such calculation will be made on notional amounts as the Banks are not required to show that they matched deposits specifically). A certificate as to any additional amounts payable pursuant to this subsection submitted by such Bank, through the Administrative Agent, to the Company in good faith shall be conclusive in the absence of demonstrable error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
2.17 Action of Affected Banks.
(a) If any Bank provides a notice under subsection 2.13, requests compensation under subsection 2.14, or requires the Company to pay any Indemnified Taxes or additional amounts to any Bank or any Governmental Authority for the account of any Bank pursuant to subsection 2.15, then such Bank shall (at the request of the Company) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Bank, such designation or assignment (i) would eliminate the illegality that gave rise to the notice under subsection 2.13 or would eliminate or reduce amounts payable pursuant to subsection 2.14 or 2.15, as the case may be, in the future, and (ii) would not subject such Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Bank. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Bank in connection with any such designation or assignment.
(b) If any Bank provides a notice under subsection 2.13, requests compensation under subsection 2.14, or if the Company is required to pay any Indemnified Taxes or additional amounts to any Bank or any Governmental Authority for the account of any Bank pursuant to subsection 2.15 and, in each case, such Bank has declined or is unable to designate a different lending office in accordance with subsection 2.17(a), or if any Bank is a Defaulting Bank or a Non-Consenting Bank, then the Company may, at its sole expense, upon notice to such Bank and the Administrative Agent, require such Bank to
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assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, subsection 9.6), all of its interests, rights (other than its existing rights to payments pursuant to subsection 2.14 or 2.15) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Bank, if a Bank accepts such assignment); provided that:
(i) the Company shall have paid to the Administrative Agent the assignment fee (if any) specified in subsection 9.6;
(ii) such Bank shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LOC Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under subsection 2.16) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts);
(iii) in the case of any such assignment resulting from a claim for compensation under subsection 2.14 or payments required to be made pursuant to subsection 2.15, such assignment will result in a reduction in such compensation or payments thereafter;
(iv) such assignment does not conflict with applicable law; and
(v) in the case of any assignment resulting from a Bank becoming a Non-Consenting Bank, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
A Bank shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Bank or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.
2.18 [Reserved].
2.19 [Reserved].
2.20 Increase of Commitments.
(a) At the request of the Company to the Administrative Agent, the aggregate Commitments hereunder may be increased after the Closing Date on one or more occasions by not more than $750,000,000; provided that (i) each such increase is in a minimum amount of $25,000,000 or $10,000,000 increments in excess thereof, (ii) the sum of the aggregate Commitments hereunder shall not exceed $2,250,000,000 after giving effect to such increases, (iii) the Commitment of any Bank may not be increased without its consent, (iv) the consent of the Administrative Agent and each Issuing Lender that has an outstanding Letter of Credit is obtained (which consent shall not be unreasonably withheld, conditioned or delayed), (v) no Default or Event of Default shall have occurred and be continuing on and as of the date of each such increase or after giving effect thereto, and
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(vi) each of the representations and warranties made on the Closing Date are true and correct in all material respects (except (x) to the extent such representations and warranties expressly relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date and (y) to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) on and as of the date of each such increase.
(b) In the event that the Company and one or more of the Banks (or other financial institutions that may elect to participate with the consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned or delayed)) shall agree, in accordance with subsection 2.20(a), upon such an increase in the aggregate Commitments, the Company, the Administrative Agent and each financial institution in question shall enter into a Commitment Increase Supplement (a form of which is attached hereto as Exhibit F) setting forth the amounts of the increase in Commitments and providing that the additional financial institutions participating shall be deemed to be included as Banks for all purposes of this Agreement. Upon the execution and delivery of such Commitment Increase Supplement as provided above, and upon the satisfaction of such other conditions as the Administrative Agent may reasonably specify (including the delivery of certificates and legal opinions on behalf of the Company relating to the amendment and new Notes), this Agreement shall be deemed to be amended accordingly.
(c) No Bank shall have any obligation to increase its Commitment in the event of such a request by the Company hereunder.
2.21 Payment in Full at Maturity. The Company shall pay to the Administrative Agent, for the account of each Bank, the entire outstanding principal amount owing to such Bank under this Agreement or under any other Loan Documents, together with accrued but unpaid interest thereon and all other sums owing to such Bank under this Agreement, on the Termination Date applicable to such Bank unless accelerated sooner pursuant to Section 7.
2.22 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions that the Issuing Lenders may reasonably require, during the Commitment Period the Issuing Lenders may at their sole discretion issue, and the Banks shall participate in, Letters of Credit for the account of the Company from time to time upon request in a form acceptable to the applicable Issuing Lender; provided, however, that (i) the aggregate amount of LOC Obligations shall not at any time exceed $250,000,000; (ii) the Dollar Amount (determined as of the most recent Revaluation Date) of outstanding Loans plus outstanding LOC Obligations shall not exceed the aggregate amount of the Commitments at such time; (iii) Letters of Credit shall be issued for lawful corporate purposes and may be issued as standby letters of credit; and (iv) all Letters of Credit shall be denominated in Dollars or a Foreign Currency. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any LOC Document, the terms and conditions of this Agreement shall control. Except as otherwise expressly agreed upon by all the Banks, no Letter of
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Credit shall have an original expiry date more than 12 months from the date of issuance; provided, however, that subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Company or by operation of the terms of the applicable Letter of Credit to a date not more than 12 months from the date of extension; provided further that (x) no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date that is 30 days prior to the final Termination Date and (y) no Letter of Credit may expire after the Termination Date of any Non-Extending Bank if, after giving effect to such issuance or renewal, the aggregate Commitments of the Consenting Banks (including any replacement Banks) for the period following such Termination Date would be less than the LOC Obligations for Letters of Credit expiring after such Termination Date. Each Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of Credit shall be a Business Day. Any Letters of Credit issued hereunder shall be in a minimum original face amount of $50,000.
(b) Notice and Reports. The request for the issuance of a Letter of Credit shall be submitted to the applicable Issuing Lender at least five Business Days prior to the requested date of issuance. Each Issuing Lender will promptly, upon the issuance, amendment or expiration of any Letter of Credit, or upon request, provide to the Administrative Agent for dissemination to the Banks a detailed report specifying the Letters of Credit that are then issued and outstanding and any activity with respect thereto that shall have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount and the expiry date of each such Letter of Credit as well as any payments or expirations that shall have occurred with respect thereto. Each Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit. Each Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.
(c) Participations. Each Bank, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the applicable Issuing Lender in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Commitment Percentage of the obligations under such Letter of Credit (a “Participation Interest”), and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the applicable Issuing Lender therefor and discharge when due, its Commitment Percentage of the obligations arising under such Letter of Credit. Without limiting the scope and nature of each Bank’s participation in any Letter of Credit, to the extent that an Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Bank shall pay to such Issuing Lender its Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by such Issuing Lender of an unreimbursed drawing pursuant to and in accordance with the provisions of subsection 2.22(d) if such notice is received at or before 2:00 p.m. on a Business Day, otherwise such payment shall be made at or before 12:00 noon on the Business Day next succeeding the day such notice is received. The obligation of each Bank to so reimburse the Issuing Lenders shall be absolute and unconditional and shall not be
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affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Company to reimburse the Issuing Lenders under any Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of Credit, the applicable Issuing Lender will promptly notify the Company and the Administrative Agent. The Company shall reimburse the applicable Issuing Lender on the day of a drawing under any Letter of Credit (with the proceeds of a Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC Documents. Unless the Company shall immediately notify the applicable Issuing Lender and the Administrative Agent of its intent to otherwise reimburse such Issuing Lender, the Company shall be deemed to have requested an LOC Mandatory Borrowing in the amount of the drawing as provided in subsection 2.22(f), the proceeds of which will be used to satisfy the applicable Reimbursement Obligation. In the event that any LOC Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including as a result of the commencement of a proceeding under any Debtor Relief Law), the applicable Issuing Lender shall notify the Banks of such inability and each Bank hereby agrees that it shall forthwith fund (as of the date that the LOC Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Company on or after such date and prior to such purchase) its Participation Interest in the outstanding Reimbursement Obligations owed to such Issuing Lender. Each Bank shall promptly pay to the Administrative Agent for the account of the applicable Issuing Lender, in Dollars and in immediately available funds, the amount of such Bank’s Commitment Percentage of such Reimbursement Obligation. Such payment shall be made on the day such notice is received by such Bank from such Issuing Lender if such notice is received at or before 2:00 p.m. on a Business Day, otherwise such payment shall be made at or before 12:00 noon on the Business Day next succeeding the day such notice is received. If such Bank does not pay such amount to the applicable Issuing Lender in full upon such request, such Bank shall, on demand, pay to the Administrative Agent for the account of the applicable Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Bank pays such amount to such Issuing Lender in full at a rate per annum equal to, if paid within two Business Days of the date of drawing, the Federal Funds Rate or, if paid thereafter, the Base Rate. Each Bank’s obligation to make such payment to the Issuing Lenders, and the right of each Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Repayment Obligation Absolute. The Company’s Reimbursement Obligations shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following circumstances (it being understood that any such payment by the Company is without prejudice to, and does not constitute a waiver of, any rights the Company might have or might acquire as a result of the payment by any Issuing Lender or any Bank of any draft or the reimbursement by the Company thereof):
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(i) any lack of validity or enforceability of any Loan Document;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Company in respect of Loan Document or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other right that the Company may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Lender, the Administrative Agent, any Bank or any other Person, whether in connection with the transactions contemplated by the Loan Documents or any unrelated transaction;
(iv) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by any Issuing Lender under a Letter of Credit against presentation of a draft or certificate that does not substantially comply with the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Obligations of the Company in respect of the Loan Documents; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or a guarantor.
(f) Repayment with Loans. On any day on which the Company shall have requested, or been deemed to have requested, a Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Banks that a Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Loan borrowing comprised entirely of Base Rate Loans (each such borrowing, an “LOC Mandatory Borrowing”) shall be immediately made (without giving effect to any termination of the Commitments pursuant to Section 7) pro rata based on each Bank’s respective Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7). The proceeds of such LOC Mandatory Borrowing shall be paid directly to the applicable Issuing Lender for application to the respective LOC Obligations. Each Bank hereby irrevocably agrees to make such Loans immediately upon any such request or deemed request on account of each LOC Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) that the amount of the LOC Mandatory Borrowing may not comply with the minimum amount for borrowings of Loans otherwise required hereunder; (ii) whether any conditions specified in subsection 4.2 are then satisfied; (iii)
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whether a Default or an Event of Default then exists; (iv) the failure for any such request or deemed request for Loan to be made by the time otherwise required in subsection 2.3; (v) the date of such LOC Mandatory Borrowing; or (vi) any reduction in the aggregate amount of the Commitments after any such Letter of Credit may have been drawn upon.
(g) Modification, Extension. The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.
(h) Letter of Credit Governing Law. Unless otherwise expressly agreed by the applicable Issuing Lender and the Company when a Letter of Credit is issued, the rules of “International Standby Practices 1998,” as most recently published by the Institute of International Banking Law & Practice at the time of issuance, shall apply to each standby Letter of Credit.
2.23 Indemnification of Issuing Lenders; Nature of Issuing Lenders’ Duties.
(a) In addition to its other obligations under subsection 2.22, the Company hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) that any Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit on behalf such Company or (ii) the refusal of an Issuing Lender to honor a demand for payment under a Letter of Credit issued on behalf of the Company (A) as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions, herein called “Government Acts”) or (B) if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit.
(b) As between the Company and the Issuing Lenders, the Company shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. No Issuing Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any consequences arising from causes beyond the control of the applicable Issuing Lender, including any Government Acts. None of the above shall affect, impair, or prevent the vesting of the Issuing Lenders’ rights or powers hereunder.
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(c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by an Issuing Lender, under or in connection with any Letter of Credit or the related certificates, if taken or omitted in the absence of gross negligence, willful misconduct or breach in bad faith, shall not put such Issuing Lender under any resulting liability to the Company. It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Issuing Lenders against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Company, including any and all risks of the acts or omissions, whether rightful or wrongful, of any Governmental Authority. No Issuing Lender shall, in any way, be liable for any failure by an Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of such Issuing Lender. Notwithstanding anything to the contrary herein, the Company shall have a claim against any Issuing Lender and such Issuing Lender shall be liable to the Company, to the extent of any direct, but not consequential, damages suffered by the Company that the Company proves were caused by (i) such Issuing Lender’s willful misconduct, gross negligence or breach in bad faith in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) such Issuing Lender’s willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, such Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.
(d) Except as provided in subsection 2.23(e), nothing in this subsection 2.23 is intended to limit the Reimbursement Obligation of the Company contained in subsection 2.22(d). The obligations of the Company under this subsection 2.23 shall survive the termination of this Agreement. No acts or omissions of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Issuing Lenders to enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this subsection 2.23, the Company shall have no obligation to indemnify an Issuing Lender in respect of any liability incurred by such Issuing Lenders arising out of the gross negligence, willful misconduct or breach in bad faith of such Issuing Lender (including action not taken by such Issuing Lender), as finally determined by a court of competent jurisdiction.
2.24 Defaulting Banks.
(a) Notwithstanding anything to the contrary contained in this Agreement, if any Bank becomes a Defaulting Bank, then, until such time as such Bank is no longer a Defaulting Bank, to the extent permitted by applicable law:
(i) Such Defaulting Bank’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Majority Banks.
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(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Bank (whether voluntary or mandatory, at maturity, pursuant to Section 7 or otherwise) or received by the Administrative Agent from a Defaulting Bank pursuant to subsection 9.7(b) shall be applied as follows:
(A) FIRST to the payment of any amounts owing by such Defaulting Bank to the Administrative Agent hereunder;
(B) SECOND to the payment on a pro rata basis of any amounts owing by such Defaulting Bank to any Issuing Lender hereunder;
(C) THIRD to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Bank in accordance with subsection 2.26;
(D) FOURTH as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;
(E) FIFTH if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Bank’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Bank with respect to future Letters of Credit issued under this Agreement, in accordance with subsection 2.26;
(F) SIXTH to the payment of any amounts owing to the Banks, the Issuing Lender as a result of any judgment of a court of competent jurisdiction obtained by any Bank or the Issuing Lenders against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement;
(G) SEVENTH so long as no Default or Event of Default exists, to the payment of any amounts owing to the Company as a result of any judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement; and
(H) EIGHTH to such Defaulting Bank or as otherwise directed by a court of competent jurisdiction;
provided that if (x) such payment is a payment of the principal amount of any Loans or Reimbursement Obligation in respect of which such Defaulting Bank has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in subsection 4.2 were satisfied or
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waived, such payment shall be applied solely to pay the Loans of, and Reimbursement Obligations owed to, all Non-Defaulting Banks on a pro rata basis prior to being applied to the payment of any Loans of, or Reimbursement Obligations owed to, such Defaulting Bank until such time as all Loans and funded and unfunded participations in LOC Obligations are held by the Banks pro rata in accordance with the Commitments without giving effect to subsection 2.24(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Bank that are applied (or held) to pay amounts owed by a Defaulting Bank or to post Cash Collateral pursuant to this subsection 2.24(a)(ii) shall be deemed paid to and redirected by such Defaulting Bank, and each Bank irrevocably consents hereto.
(iii) (A) Each Defaulting Bank shall be entitled to receive a facility fee for any period during which such Bank is a Defaulting Bank only to the extent allocable to the sum of (1) the outstanding principal amount of the Loans funded by it, and (2) its Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to subsection 2.26.
(B) Each Defaulting Bank shall be entitled to receive Letter of Credit Fees for any period during which such Bank is a Defaulting Bank only to the extent allocable to its Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to subsection 2.26.
(C) With respect to any facility fee or Letter of Credit Fee not required to be paid to any Defaulting Bank pursuant to clause (A) or (B) above, the Company shall (x) pay to each Non-Defaulting Bank that portion of any such fee otherwise payable to such Defaulting Bank with respect to such Defaulting Bank’s participation in LOC Obligations that has been reallocated to such Non-Defaulting Bank pursuant to subsection 2.24(a)(iv), (y) pay to each Issuing Lender the amount of any such fee otherwise payable to such Defaulting Bank to the extent allocable to such Issuing Lender’s Fronting Exposure to such Defaulting Bank, and (z) not be required to pay the remaining amount of any such fee.
(iv) All or any part of such Defaulting Bank’s participation in LOC Obligations shall be reallocated among the Non-Defaulting Banks in accordance with their respective Commitment Percentages (calculated without regard to such Defaulting Bank’s Commitment) but only to the extent that (x) the conditions set forth in subsection 4.2 are satisfied at the time of such reallocation (and, unless the Company shall have otherwise specifically notified the Administrative Agent, the Company shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate principal amount of the Loans and Participation Interests of any Non-Defaulting Bank to exceed such Non-Defaulting Bank’s Commitment. Subject to subsection 9.20, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Bank arising from that Bank having become a Defaulting Bank, including any claim of a Non-Defaulting Bank as a
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result of such Non-Defaulting Bank’s increased exposure following such reallocation.
(v) If the reallocation described in subsection 2.24(a)(iv) cannot, or can only partially, be effected, the Company shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in subsection 2.26.
(b) If the Company, the Administrative Agent and each Issuing Lender agree in writing that a Bank is no longer a Defaulting Bank, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Bank will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Banks or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Banks in accordance with the Commitments (without giving effect to subsection 2.24(a)(iv)), whereupon such Bank will cease to be a Defaulting Bank; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Company while that Bank was a Defaulting Bank; provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Bank to Bank will constitute a waiver or release of any claim of any party hereunder arising from that Bank’s having been a Defaulting Bank.
2.25 Extension of Termination Date.
(a) At least 35 days but not more than 70 days prior to any anniversary of the Closing Date, the Company, by written notice to the Administrative Agent, may request an extension of the Termination Date in effect at such time by one year from its then scheduled expiration; provided that the Company may make no more than two such requests. The Administrative Agent shall promptly notify each Bank of such request, and each Bank shall in turn, in its sole discretion, not later than 25 days prior to the applicable anniversary date, notify the Company and the Administrative Agent in writing as to whether such Bank will consent to such extension. If any Bank shall fail to notify the Administrative Agent and the Company in writing of its consent to any such request for extension of the Termination Date at least 25 days prior to the applicable anniversary date, such Bank shall be deemed to be a Non-Extending Bank with respect to such request. The Administrative Agent shall notify the Company not later than 20 days prior to the applicable anniversary date of the decision of the Banks regarding the Company’s request for an extension of the Termination Date.
(b) If Banks holding more than 50% of the aggregate amount of the Commitments then in effect (including Banks assuming or increasing their Commitments in accordance with subsection 2.25(c), each a “Consenting Bank”) consent in writing to any such request in accordance with subsection 2.25(a), the Termination Date of each Consenting Bank in effect at such time shall, effective as at the applicable anniversary date (the “Extension
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Date”), be extended for one year, but shall not be extended as to any other Bank (each a “Non-Extending Bank”); provided that on each Extension Date (i) no Default or Event of Default shall have occurred and be continuing and (ii) each of the representations and warranties made on the Closing Date is true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) on and as of the Extension Date (unless such representation or warranty was made solely as of the Closing Date or any other day specified therein). To the extent that the Termination Date is not extended as to a Bank pursuant to this subsection 2.25 and the Commitment of such Bank is not assumed in accordance with subsection 2.25(c) on or prior to the applicable Extension Date, the Company may, with the consent of all of the Banks other than such Non-Extending Bank (which consents shall not be unreasonably withheld) terminate in whole the Commitment of such Non-Extending Bank as of the Extension Date or, if not so earlier terminated, the Commitment of such Non-Extending Bank shall automatically terminate in whole on such unextended Termination Date without any further notice or other action by the Company, such Bank or any other Person; provided that such Non-Extending Bank’s rights under subsections 2.14, 2.15, 2.16 and 9.5 and its obligations under subsection 8.7 shall survive the Termination Date for such Bank as to matters occurring prior to such date. It is understood and agreed that no Bank shall have any obligation whatsoever to agree to any request made by the Company for any requested extension of the Termination Date.
(c) If less than all of the Banks consent to any such request pursuant to subsection 2.25(a), the Company may arrange for one or more Consenting Banks or other banks or financial institutions approved by the Company, the Administrative Agent and each Issuing Lender that has an outstanding Letter of Credit (which consents shall not be unreasonably withheld) as Purchasing Banks (x) to assume, effective as of the Extension Date or such other date as may be agreed among the Company, the applicable Non-Extending Bank, the assignee Consenting Bank(s) or Purchasing Bank(s) and the Administrative Agent, all of such Non-Extending Bank’s Commitment and all of the obligations of such Non-Extending Bank under this Agreement thereafter arising, without recourse to or warranty by, or expense to, such Non-Extending Bank and (y) to accept, effective as of the Extension Date or such other date as any Purchasing Bank executes and delivers a Commitment Transfer Supplement, the Termination Date applicable to the Consenting Banks; provided, however, that the amount of the Commitment of any such Purchasing Bank as a result of such substitution shall in no event be less than $10,000,000 unless the amount of the Commitment of such Non-Extending Bank is less than $10,000,000, in which case such Purchasing Bank shall assume all of such lesser amount; provided further that:
(i) any such Consenting Bank or Purchasing Bank shall have paid to such Non-Extending Bank an amount equal to (A) the aggregate principal amount of, and any interest accrued and unpaid to the effective date of the assignment on, the outstanding Loans, if any, of such Non-Extending Bank plus (B) any accrued but unpaid facility fees owing to such Non-Extending Bank as of the effective date of such assignment; and
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(ii) all additional cost reimbursements, expense reimbursements and indemnities payable to such Non-Extending Bank, and all other accrued and unpaid amounts owing to such Non-Extending Bank hereunder, as of the effective date of such assignment shall have been paid to such Non-Extending Bank;
provided further that such Non-Extending Bank’s rights under subsections 2.14, 2.15, 2.16 and 9.5 and its obligations under subsection 8.7, shall survive such substitution as to matters occurring prior to the date of substitution. At least three Business Days prior to any Extension Date, (A) each such Purchasing Bank, if any, shall have delivered to the Company and the Administrative Agent a Commitment Transfer Supplement, duly executed by such Purchasing Bank, such Non-Extending Bank, the Company and the Administrative Agent and (B) each applicable Consenting Bank shall have delivered confirmation in writing satisfactory to the Company and the Administrative Agent as to the increase in the amount of its Commitment. Each Non-Extending Bank being replaced pursuant to this subsection 2.25 shall, upon the request of either the Administrative Agent or the Company, promptly deliver any Note or Notes held by such Non-Extending Bank. Upon the payment or prepayment of all amounts referred to in subsection 2.25(c)(i) or 2.25(c)(ii), each such Consenting Bank or Purchasing Bank, as of the Extension Date, will be substituted for such Non-Extending Bank under this Agreement and shall be a Bank for all purposes of this Agreement, without any further acknowledgment by or the consent of the other Banks, and the obligations of each such Non-Extending Bank hereunder shall, by the provisions hereof, be released and discharged.
(d) If (after giving effect to any assignments or assumptions pursuant to subsection 2.25(c)) the Banks having Commitments equal to at least 50% of the Commitments in effect immediately prior to the Extension Date consent in writing to a requested extension (whether by execution or delivery of an Assumption Agreement or otherwise) not later than one Business Day prior to such Extension Date, the Administrative Agent shall so notify the Company, and, subject to (i) no Default or Event of Default having occurred and continuing and (ii) each of the representations and warranties made on the Closing Date being true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) on and as of the Extension Date, then the Termination Date then in effect with respect to each Consenting Bank and Purchasing Bank shall be extended for the additional one-year period as described in subsection 2.25(a), and all references in the Loan Documents to the “Termination Date” shall, with respect to each Consenting Bank and each Purchasing Bank for such Extension Date, refer to the Termination Date as so extended. Promptly following each Extension Date, the Administrative Agent shall notify the Banks (including each Purchasing Bank) of the extension of the scheduled Termination Date in effect immediately prior thereto and shall thereupon record in the Register the relevant information with respect to each such Consenting Bank and each such Purchasing Bank.
2.26 Cash Collateral.
(a) If at any time a Bank becomes a Defaulting Bank, within one Business Day following the written request of the Administrative Agent or any Issuing Lender (with a
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copy to the Administrative Agent), such Defaulting Bank shall Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Bank in an amount not less than the applicable Fronting Exposure. At any time that there shall exist a Defaulting Bank, within one Business Day following the written request of the Administrative Agent or any Issuing Lender (with a copy to the Administrative Agent), the Company shall Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Bank (determined after giving effect to subsection 2.24(a)(iv) and any Cash Collateral provided by such Defaulting Bank) in an amount not less than the applicable Fronting Exposure. If, as of the termination of the Commitments hereunder, any LOC Obligation remains outstanding, the Company shall immediately Cash Collateralize all outstanding LOC Obligations.
(b) The Company, and to the extent provided by any Defaulting Bank, such Defaulting Bank, hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the obligations to which such Cash Collateral was required to be furnished, to be applied pursuant to subsection 2.26(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Lenders as herein provided, or that the total amount of such Cash Collateral is less than the aggregate Fronting Exposures or the LOC Obligations with respect to any Issuing Lender as the case may be, the Company will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Bank).
(c) Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under subsection 2.24 or this subsection 2.26 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific LOC Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Bank, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.
(d) Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this subsection 2.26 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Bank status of the applicable Bank) or (ii) the determination by the Administrative Agent and each Issuing Lender that there exists excess Cash Collateral, and upon demand by the Person providing such Cash Collateral, such Cash Collateral (or the appropriate portion thereof) shall be returned to such Person; provided that, subject to subsection 2.24, the Person providing Cash Collateral and each Issuing Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.
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SECTION 3
REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement and to extend credit hereunder, the Company hereby represents and warrants to the Administrative Agent and each Bank as of the Closing Date and as of the date of each Extension of Credit that:
3.1 Financial Condition. The consolidated financial statements of the Company and its Subsidiaries delivered to the Administrative Agent in connection with this Agreement, including the audited financial statements for the fiscal year ended December 31, 2017, and the unaudited financial statements for the fiscal quarter ended September 30, 2018, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Company and its Subsidiaries as of the dates and for the periods indicated. Neither the Company nor any of its Subsidiaries had, at the date of the most recent balance sheet referred to above, any guarantee obligation, contingent liability or liability for taxes, or any long-term lease or unusual forward or long-term commitment, including any interest rate or foreign currency swap or exchange transaction, that is not reflected in the foregoing statements or in the notes thereto and that, to the best of the Company’s knowledge, would have a Material Adverse Effect.
3.2 No Change. Except as disclosed in any Form 10-K, 10-Q, 8-K or other public filing of the Company with the Securities Exchange Commission filed after the date thereof but prior to the Closing Date, during the period from December 31, 2017, to and including the Closing Date, no change, or development or event involving a prospective change, has occurred that has had or could reasonably be expected to have a Material Adverse Effect; provided, however, that the foregoing representation is made solely as of the Closing Date, on the effective date of any commitment increase pursuant to subsection 2.20 and on the effective date of any extension of the Termination Date pursuant to subsection 2.25.
3.3 Corporate Existence; Compliance with Law. Each of the Company and its Significant Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, except to the extent that, in the aggregate, the failure of any such Subsidiaries to be duly organized, validly existing or in good standing would not have a Material Adverse Effect, (ii) has the corporate (or other) power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except to the extent that, in the aggregate, the failure of any such Subsidiaries to have any such power, authority or legal right would not have a Material Adverse Effect, (iii) is duly qualified and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that, in the aggregate, the failure of the Company and its Subsidiaries to so qualify or be in good standing would not have a Material Adverse Effect, and (iv) is in compliance with all Requirements of Law except to the extent that, in the aggregate, the failure of the Company and its Subsidiaries to comply therewith would not have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. The Company has the corporate power and authority, and the legal right, to make, deliver and perform this Agreement
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and the other existing Loan Documents and to borrow hereunder and has taken all necessary corporate action to authorize its Obligations on the terms and conditions of this Agreement and the other existing Loan Documents and to authorize the execution, delivery and performance of this Agreement and the other existing Loan Documents. No consent or authorization of, filing with or other act by or in respect of any Governmental Authority or any other Person (except as have been obtained or made) is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or the other existing Loan Documents. This Agreement has been, and each other Loan Document will be, duly executed and delivered on behalf of the Company. This Agreement constitutes, and each other Loan Document when executed and delivered will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the Obligations hereunder and the use of the proceeds hereof will not directly or, to the knowledge of the Company, indirectly, violate any Requirement of Law or Contractual Obligation of the Company or of any of its Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened in writing by or against the Company or any of its Subsidiaries or against any of its or their respective properties or revenues that (i) except as listed on Schedule 3.6 or disclosed in any filing of the Company with the SEC made prior to the Closing Date, on the Closing Date, on the effective date of any commitment increase pursuant to subsection 2.20 and on the effective date of any extension of the Termination Date pursuant to subsection 2.25, would have a Material Adverse Effect or (ii) would have a Material Adverse Effect on the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Administrative Agent or the Banks hereunder or thereunder; provided, however, that the representation in clause (i) of this subsection 3.6 is made solely as of the Closing Date, on the date of any commitment increase pursuant to subsection 2.20 and on the date of any extension of the Termination Date pursuant to subsection 2.25.
3.7 Federal Regulations. No part of the proceeds of any Loans or Letters of Credit will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U or Regulation X if such use would violate, or cause the Loans or the Commitments to be in violation of, the provisions of Regulation U or Regulation X. The value of all “margin stock” (within the meaning of the quoted term under Regulation U) owned by the Company or any of its Significant Subsidiaries does not exceed an amount equal to 25% of the value of all assets of the Company and its Significant Subsidiaries.
3.8 Investment Company Act. Neither the Company nor any of its Subsidiaries is subject to registration as an “investment company” or is “controlled” by such a company, within the meaning of the Investment Company Act of 1940.
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3.9 Purpose of Loans. The proceeds of the Loans and Letters of Credit shall be used by the Company to provide for the working capital and general corporate requirements of the Company and its Subsidiaries, including acquisitions, and to pay any fees and expenses in connection with this Agreement and the other Loan Documents.
3.10 Disclosure. On the Closing Date, on the effective date of any commitment increase pursuant to subsection 2.20 and on the effective date of any extension of the Termination Date pursuant to subsection 2.25, neither this Agreement, the other existing Loan Documents nor (solely with respect to the Closing Date) the Information Materials, taken as a whole with any filing of the Company with the SEC made prior to such date contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they were made, not materially misleading; provided that, with respect to projected financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
3.11 Ranking. The Loans shall remain at least pari passu with all other senior unsecured obligations of the Company.
3.12 AML Laws; Anti-Corruption Laws; Sanctions. The Company has implemented and maintains in effect policies and procedures reasonably designed to provide for compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws, applicable AML Laws and applicable Sanctions, and the Company, its Subsidiaries and their respective officers and, to the knowledge of the Company their respective directors, employees and agents, are, with respect to the business of the Company and its Subsidiaries, in compliance with applicable Anti-Corruption Laws, applicable AML Laws and applicable Sanctions in all material respects. None of (a) the Company, any Subsidiary or to the knowledge of the Company or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of the Company, any agent of the Company or any Subsidiary that is acting in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person (other than agents that are Sanctioned Persons engaged in activities with or on behalf of the Company or its Subsidiaries that are either not prohibited by, or are authorized under, applicable law).
3.13 EEA Financial Institution. The Company is not an EEA Financial Institution.
SECTION 4
CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The amendment and restatement of the Existing Revolving Credit Agreement is subject to the satisfaction of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Company, and (ii) for the account of each Bank that has so requested, a Note conforming to the requirements hereof and executed by a duly authorized officer of the Company.
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(b) Corporate Proceedings of the Company. The Administrative Agent shall have received a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of the Company authorizing (i) the execution, delivery and performance of this Agreement and the Notes and (ii) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company as of the Closing Date, which certificate shall state that the resolutions certified thereby have not been amended, modified, revoked or rescinded and are in full force and effect and shall be in form and substance satisfactory to the Administrative Agent, along with incumbency certificates of Responsible Officers of the Company evidencing the identity, authority and capacity of each Responsible Officer authorized to act in connection with this Agreement and the other Loan Documents.
(c) Corporate Documents. The Administrative Agent shall have received true and complete copies of the certificate of incorporation and by-laws of the Company, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Company, which certificate shall state that the by-laws certified thereby were in effect as of the date of the resolutions described in subsection 4.1(b) and have not been amended or modified since such date.
(d) No Violation. The consummation of the transactions contemplated hereby shall not contravene, violate or conflict with, nor involve the Administrative Agent or any Bank in any violation of, any Requirement of Law.
(e) Fees. The Administrative Agent shall have received the fees to be received on the Closing Date referred to in subsection 2.4.
(f) Legal Opinion. The Administrative Agent shall have received an executed legal opinion of counsel of the Company and the Company hereby instructs its counsel to execute and deliver such opinion to the Administrative Agent. Such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent may reasonably require.
(g) Litigation. Except as disclosed in any form 10-K, 10-Q, 8-K or other public filing of the Company with the SEC prior to the date hereof or in Schedule 3.6, there shall exist no pending or threatened litigation, bankruptcy or insolvency, injunction, order or claim which could have a Material Adverse Effect.
(h) Consents and Approvals. All consents and approvals of the boards of directors, shareholders and other applicable third parties necessary in connection with this Agreement shall have been obtained, and copies thereof shall have been received by the Administrative Agent.
(i) Material Adverse Change. Except as disclosed in any form 10-K, 10-Q, 8‑K or other public filing of the Company with the SEC prior to the date hereof, no material adverse change shall have occurred since December 31, 2017, in the business, assets, liabilities, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole.
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(j) Financial Statements. The Administrative Agent shall have received copies of the financial statements referred to in subsection 3.1, each in form and substance reasonably satisfactory to it.
(k) Patriot Act and Beneficial Ownership Regulation Documentation. The Banks shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation (if applicable), to the extent such documentation is requested at least five (5) Business Days prior to the Closing Date.
(l) Payment of Outstanding Amounts under the Existing Revolving Credit Agreement. The Administrative Agent shall have received evidence satisfactory thereto that all principal, interest and other amounts outstanding under the Company’s Existing Revolving Credit Agreement shall have been repaid and satisfied in full.
Without limiting the generality of the provisions of the last paragraph of subsection 8.3(c), for purposes of determining compliance with the conditions specified in this subsection 4.1, each Bank that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Bank unless the Administrative Agent shall have received written notice from such Bank prior to the proposed Closing Date specifying its objection thereto.
4.2 Conditions to Each Loan. The agreement of each of the Banks to make any Loan (other than the conversion or continuation of any Loan pursuant to subsection 2.7) requested to be made by it on any date (including any Loans requested to be made on the Closing Date) and the agreement of the Issuing Lenders to issue Letters of Credit is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and warranties made by the Company in this Agreement shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) on and as of such date as if made on and as of such date, both before and after giving effect to the making of such Loans or the issuance of such Letter of Credit (except that any representation or warranty relating to or made expressly as of a specific date shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) solely with respect to and as of such specific date).
(b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date.
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(c) Borrowing Certificate. In the case of Loans, the Administrative Agent shall have received, on or prior to the time required for its receipt pursuant to subsection 2.3, a Borrowing Certificate with respect to the Loans requested to be made on such date.
Each borrowing or request for the issuance of a Letter of Credit by the Company hereunder shall constitute a representation and warranty by the Company as of the date of such Loan or such issuance that the conditions contained in subsections 4.2(a) and 4.2(b) have been satisfied.
SECTION 5
AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in effect, any Loan or other Obligation remains outstanding and unpaid or any other amount is owing to any Bank or the Administrative Agent hereunder, the Company shall:
5.1 Financial Statements. Furnish to the Administrative Agent (which shall promptly make available to the Banks):
(a) as soon as available, but in any event no later than the earlier of (i) the date that is five days after the Company is required by the SEC to deliver its Form 10-K for any fiscal year of the Company and (ii) 95 days after the end of each fiscal year of the Company, a copy of the consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and retained earnings and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or any qualification arising out of the scope of the audit, provided that to the extent different components of such consolidated financial statements are separately audited by different independent public accounting firms, the audit report of any such accounting firm may contain a qualification or exception as to scope of such consolidated financial statements by Ernst & Young LLP or other independent certified public accountants of nationally recognized standing not unacceptable to the Majority Banks (it being understood that any of the following accounting firms: Deloitte & Touche, Ernst & Young LLP, KPMG and PricewaterhouseCoopers shall not be unacceptable to the Banks); and
(b) as soon as available, but in any event not later than the earlier of (i) the date that is five days after the Company is required by the SEC to deliver its Form 10-Q for each of the first three quarterly periods of each fiscal year of the Company and (ii) 50 days after the end of each of the first three quarterly periods of each fiscal year of the Company, the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and retained earnings and of cash flows of the Company and its consolidated Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes);
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all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein with a reasonable estimate of the effect on such financial statements on account of such changes in application).
5.2 Certificates; Other Information. Furnish to the Administrative Agent (which shall promptly make available to the Banks):
(a) concurrently with the delivery of the financial statements referred to in subsections 5.1(a) and 5.1(b), a certificate of a Responsible Officer in the form of Exhibit E (a “Compliance Certificate”);
(b) promptly upon receipt thereof, copies of the executive summary portion of any final auditor’s letter or auditor’s report submitted to the Company’s board of directors or any committee thereof relating to internal financial controls of the Company or any Subsidiary;
(c) promptly following any request in writing therefor, information and documentation reasonably requested by the Administrative Agent or any Bank for purposes of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act and the Beneficial Ownership Regulation (if applicable); and
(d) promptly, such additional financial and other information as any Bank through the Administrative Agent may from time to time reasonably request.
5.3 Conduct of Business and Maintenance of Existence.
(a) Continue to engage in businesses of substantially the same general type as now conducted by it or any business reasonably ancillary, complementary or related thereto, taken as a whole, and preserve, renew and keep in full force and effect its legal existence and take such reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business except as otherwise permitted pursuant to subsection 6.4.
(b) Comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith would not, in the aggregate, have a Material Adverse Effect.
(c) Maintain in effect and enforce policies and procedures reasonably designed to provide for compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws, applicable AML Laws and applicable Sanctions.
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5.4 Inspection of Property; Books, Records and Discussions.
(a) Keep proper books of records and account in which full, true and correct entries in material conformity with GAAP and all Requirements of Law are to be made of all dealings and transactions in relation to its business and activities.
(b) Permit representatives of the Administrative Agent and the Banks (other than Excluded Individuals of the Administrative Agent and the Banks) that are not Competitors to visit and inspect at their own expense (unless a Default or Event of Default has occurred and is continuing, in which case at the Company’s expense) any of its properties and examine and make abstracts from any of its books and records at any reasonable time upon reasonable prior notice to the Company and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Company and its Subsidiaries with officers and employees of the Company and its Subsidiaries and with its independent certified public accountants; provided that (i) representatives of the Company shall have the opportunity to be present at any meeting with its independent certified public accountants and (ii) the Company and its Subsidiaries shall have no obligation to provide access to information that is the subject of a confidentiality agreement between the Company or any of its Subsidiaries, on the one hand, and a customer of the Company or of any of its Subsidiaries, on the other hand. The Administrative Agent shall endeavor to coordinate such visits by the Banks in order to minimize inconvenience to the Company, and so long as no Event of Default shall be continuing, such visits shall occur not more frequently than twice per fiscal year.
5.5 Notices. Give notice to the Administrative Agent (and the Administrative Agent shall promptly notify each Bank) promptly after becoming aware of:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of a Change of Control;
(c) any litigation, investigation or proceeding that would have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within 10 Business Days after the Company knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, the commencement of any obligation to contribute to any Multiemployer Plan by the Company or any Commonly Controlled Entity, or any withdrawal from, or the termination or Insolvency of any Multiemployer Plan; (ii) the institution of proceedings or the taking of any other action by the PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating or Insolvency of, any Plan; (iii) the application for a minimum funding waiver with respect to a Plan has been made; and (iv) the satisfaction of all of the requirements for imposition of a lien under Section 303(k) of ERISA with respect to any Plan;
(e) any announcement by any Rating Agency of any change in any Rating; and
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(f) the use of the proceeds of any Loans for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U.
Each notice given pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action, if any, the Company proposes to take with respect thereto.
5.6 Taxes. Pay and discharge all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent; provided, however, that the Company shall not be required to pay (a) any such tax, assessment, charge, levy or claim which is being contested in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP or (b) any such taxes which are not, either individually or in the aggregate, considered material.
SECTION 6
NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in effect, any Loan or other Obligation remains outstanding and unpaid or any other amount is owing to any Bank or the Administrative Agent hereunder, the Company shall not:
6.1 Limitation on Significant Subsidiary Indebtedness. Permit any of its Significant Subsidiaries, directly or indirectly, to create, incur, assume or suffer to exist any Indebtedness (which for purposes of this subsection 6.1 shall include, without duplication, Guarantee Obligations) unless immediately thereafter the aggregate amount, without duplication, of (x) all Indebtedness of Significant Subsidiaries (excluding (A) any Guarantee Obligations in respect of Indebtedness under this Agreement, (B) Indebtedness owed to the Company or a Subsidiary and (C) any renewal or replacement of any obligation under clause (A) or (B)), plus (y) the aggregate amount of indebtedness secured by Liens permitted under subsection 6.2(l) plus (z) the discounted present value of all net rentals payable under leases covered by subsection 6.3(a) (and not expressly excluded therefrom), would not exceed the greater of $400,000,000 and 5% of Consolidated Total Assets; provided, however, that, solely for the purposes of this covenant, Indebtedness shall not include indebtedness incurred in connection with (a) overdraft or similar facilities related to settlement, clearing and related activities by a Significant Subsidiary in the ordinary course of business consistent with past practice; (b) Receivables Financings; (c) to the extent the same constitutes Indebtedness, obligations in respect of net capital adjustments and/or earn-out arrangements pursuant to a purchase or acquisition otherwise permitted under this Agreement; (d) obligations under performance bonds, surety bonds and letter of credit obligations to provide security for workers’ compensation claims or other statutory obligations and obligations in respect of bank overdrafts not more than two days overdue, in each case, incurred in the ordinary course of business; (e) indebtedness owing to insurance companies to finance insurance premiums incurred in the ordinary course of business; and (f) Guarantee Obligations with respect to Indebtedness and other liabilities otherwise permitted under this Agreement; and provided further that any Indebtedness of a Person (i) existing at the time such Person becomes a Significant
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Subsidiary or is merged with or into the Company or a Significant Subsidiary or other entity or (ii) assumed by the Company or a Subsidiary in connection with the acquisition of all or a portion of the business of such Person, shall not be deemed to be Indebtedness created, incurred, assumed or guaranteed by a Significant Subsidiary or otherwise deemed to be Indebtedness of a Significant Subsidiary for the purposes of this covenant.
6.2 Limitation on Liens. Directly or indirectly, create, incur, assume or suffer to exist, or permit any of its Significant Subsidiaries to create, incur, assume or suffer to exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for:
(a) any Lien on any property now owned or hereafter acquired or constructed by the Company or a Subsidiary, or on which property so owned, acquired or constructed is located, which Lien (i) in the case of any property so acquired, existed on such property at the time of acquisition thereby by the Company or such Subsidiary, or (ii) secures or provides for the payment of any part of the purchase or construction price or cost of improvements of such property and was created prior to, contemporaneously with or within 360 days after, such purchase, construction or improvement (and any replacements or refinancings for such Liens); provided that (x) if a firm commitment from a bank, insurance company or other lender or investor (not including the Company, a Subsidiary or another Affiliate of the Company) for the financing of the acquisition or construction of property is made prior to, contemporaneously with or within the 360-day period hereinabove referred to, the applicable Lien shall be deemed to be permitted by this subsection 6.2(a) whether or not created or assumed within such period, and (y) each such Lien does not at any time encumber any property other than the property financed by such Indebtedness and the principal amount of Indebtedness secured thereby is not increased other than for additional payments for the purchase, construction or improvement of such property;
(b) Liens for taxes not yet delinquent or which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves with respect thereto are maintained on the books of the Company or its Subsidiaries, as the case may be, in conformity with GAAP;
(c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business;
(d) Liens of landlords or of mortgagees of landlords arising by operation of law;
(e) pledges, deposits or other Liens in connection with workers’ compensation, unemployment insurance, other social security benefits or other insurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements) and Liens on the proceeds of insurance policies created in connection with any of the foregoing;
(f) Liens arising by reason of any judgment, decree or order of any court or other Governmental Authority that do not result in an Event of Default under subsection 7(i);
(g) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance
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bonds, judgment and like bonds, replevin and similar bonds and other obligations of a like nature incurred in the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way, restrictions on the use of property, other similar encumbrances incurred in the ordinary course of business and minor irregularities of title that do not materially interfere with the ordinary conduct of the business of the Company and its Subsidiaries taken as a whole;
(i) Liens on Receivables and related assets granted in connection with one or more Receivables Financings;
(j) (i) Liens in favor of any bank, broker, futures commission merchant, dealer, clearing agent, clearing house, swaps execution facility, designated contract market or trading facility, on property or assets held in the ordinary course of business in accounts maintained with such institution (or with another institution for the benefit of such institution) in connection with Hedging Agreements, (ii) Liens of a collecting bank arising in the ordinary course of business under Section 4-201 of the Uniform Commercial Code in effect in the relevant jurisdiction and (iii) Liens of any depositary bank or securities intermediary in connection with statutory, common law and contractual rights of set-off and recoupment with respect to any deposit account or securities account;
(k) Liens incurred to secure financings, financial accommodations or other arrangements in support of paycheck protection, business, individual or other loans, guarantees, credit, loan forgiveness or other accommodations (collectively, “SBA Loans”) made by the Company on or before December 31, 2020 under or in connection with the Paycheck Protection Program, a temporary expansion of the traditional SBA 7(a) loan program, provided that each such Lien does not at any time encumber any assets other than such SBA Loans and any rights in connection therewith and any proceeds thereof; and
(l) any Lien not otherwise permitted under this subsection 6.2; provided that the aggregate amount of indebtedness secured by all such Liens, together with (x) the aggregate principal amount of Subsidiary Indebtedness that is subject to limitation under subsection 6.1 and (y) the aggregate sale price of property involved in sale and leaseback transactions not otherwise permitted except under subsection 6.3(a), does not exceed the greater of $400,000,000 and 5% of Consolidated Total Assets.
6.3 Limitation on Sales and Leasebacks. Sell or transfer, or permit any Subsidiary to sell or transfer (except to the Company or one or more of its wholly-owned Subsidiaries, or both), any Principal Facility owned by it on the date of this Agreement with the intention of taking back a lease of such property, other than a lease relating to computer hardware with lease terms of four years or less, unless either:
(a) the sum of (x) the aggregate sale price of property involved in sale and leaseback transactions not otherwise permitted under this subsection 6.3 plus (y) the aggregate principal amount of Subsidiary Indebtedness subject to limitation under subsection 6.1 plus (z) the aggregate amount of indebtedness secured by all Liens not
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otherwise permitted except under subsection 6.2(l) does not exceed the greater of $400,000,000 and 5% of Consolidated Total Assets; or
(b) the Company, within 120 days after the sale or transfer shall have been made by the Company or by any such Subsidiary, applies an amount equal to the greater of (i) the net proceeds of the sale of the Principal Facility sold and leased back pursuant to such arrangement and (ii) the fair market value of the Principal Facility sold and leased back at the time of entering into such arrangement (which may be conclusively determined by the Board of Directors of the Company) to the retirement of Funded Indebtedness of the Company; provided that the amount required to be applied to the retirement of Funded Indebtedness of the Company pursuant to this subsection 6.3(b) shall be reduced by the principal amount of any Funded Indebtedness of the Company voluntarily retired by the Company within 120 days after such sale, whether or not any such retirement of Funded Indebtedness shall be specified as being made pursuant to this subsection 6.3(b). Notwithstanding the foregoing, no retirement referred to in this subsection 6.3(b) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision.
6.4 Limitations on Fundamental Changes. Directly or indirectly, sell, assign, lease, transfer or otherwise dispose of all or substantially all of its consolidated assets or consolidate with or merge into any Person or permit any Person to merge into it; provided that the Company may enter into a consolidation or merger with any Person if (i) the survivor formed by or resulting from such consolidation or merger is the Company and remains organized under the laws of a jurisdiction in the United States of America and (ii) at the time of such consolidation or merger and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing.
6.5 Limitations on Restrictions on Dividends. Permit any Significant Subsidiary exclusively organized under the laws of the United States of America or any state thereof to enter into any arrangement with any Person that in any way prohibits, limits the amount of or otherwise impairs the declaration or distribution by such Subsidiary of dividends on its Capital Stock (other than limitations arising under (i) any Requirement of Law, (ii) any agreement or instrument in effect at the time a Person first became a Subsidiary of the Company or the date such agreement or instrument is otherwise assumed by the Company or any of its Subsidiaries, so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Subsidiary of the Company or such assumption, or (iii) any agreement or instrument entered into in connection with the sale of such Subsidiary) if such arrangement, together with all other similar arrangements, could reasonably be expected to have a Material Adverse Effect.
6.6 Financial Covenant. Permit the ratio of (i) consolidated EBITDA of the Company and its Subsidiaries for any period of four consecutive fiscal quarters for which financial statements have most recently been delivered under subsection 5.1, commencing with the fiscal period ending December 31, 2018, to (ii) interest expense during such period in respect of all Covenant Indebtedness of the Company and its Subsidiaries to be less than 3.00 : 1.00. “Covenant Indebtedness” means all indebtedness that, in accordance with GAAP, is required to be reflected as a liability on a consolidated balance sheet of the Company and its Subsidiaries.
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6.7 Use of Proceeds. Request any Loan or Letter of Credit, nor use, nor permit any of its Subsidiaries or its or their respective directors, officers, employees and agents to use, the proceeds of any Loan or Letter of Credit directly, or to the knowledge of the Company, indirectly (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 applicable Anti-Corruption Laws or applicable AML Laws or (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 in violation of applicable law.
SECTION 7
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) The Company shall fail to pay any principal of any Loan when due in accordance with the terms thereof or hereof; or (ii) the Company shall fail to reimburse the Issuing Lenders for any LOC Obligations when due in accordance with the terms hereof; or (iii) within three Business Days after the same becomes due, the Company shall fail to pay any other amount payable hereunder or under any Note or Fee Letter; or
(b) Any representation or warranty made, or deemed made pursuant to subsection 4.2, by the Company herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect in any material respect on or as of the date made or deemed made or furnished; or
(c) The Company shall default in the observance or performance of any agreement contained in subsection 5.4(b), 5.5(a) or 5.5(b) or Section 6; or
(d) A Change of Control shall occur; or
(e) The Company shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in subsections 7(a) through 7(c)), and such default shall continue unremedied for a period of 30 days after the earlier of (i) the date of written notification to the Company by the Administrative Agent or any Bank of such default and (ii) the date any Responsible Officer becomes aware or, with reasonable diligence, would become aware of such default; or
(f) The Company or any of its Significant Subsidiaries shall (i) default in any payment of principal of or interest on any Indebtedness (other than the Obligations) or in the payment of any Guarantee Obligation, beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness or Guarantee Obligation was created, and such default shall be continuing; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto beyond any applicable period of grace, and such default shall be continuing, or any other event shall occur or condition exist and be
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continuing, the effect of which default or other event or condition is to cause, or permit the holders of such Indebtedness or Guarantee Obligation to cause, such Indebtedness to become due or required to be purchased, redeemed or otherwise defeased prior to its stated maturity or such Guarantee Obligation to become payable; provided that the aggregate principal amount of any such Indebtedness and Guarantee Obligations outstanding at such time, when aggregated with the outstanding principal amount of all other such Indebtedness and Guarantee Obligations in respect of which the Company or any Significant Subsidiary shall have so defaulted or an event shall have occurred or a condition exists as described above, aggregates $100,000,000 or more; or
(g) (i) The Company or any of its Significant Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Company or any of its Significant Subsidiaries shall make a general assignment for the benefit of its creditors; (ii) there shall be commenced against the Company or any of its Significant Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; (iii) the Company or any of its Significant Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i) or (ii) above; or (iv) the Company or any of its Significant Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or
(h) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan excluding any prohibited transaction relating to a late deposit of salary deferral contributions, (ii) any Plan fails to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 303 of ERISA), whether or not waived, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Majority Banks, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, or (v) the Company shall, or in the reasonable opinion of the Majority Banks is likely to, incur any liability in connection with a withdrawal from, or the Insolvency of, a Multiemployer Plan; and in each case in clauses (i) through (v) above, such event or condition, together with all other events or conditions in this subsection 7(h), if any, would have a Material Adverse Effect; or
(i) The rendering against the Company or any Significant Subsidiary of one or more final nonappealable judgments, decrees or orders for the payment of money that,
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either singly or in the aggregate with all other monies in respect of which a final nonappealable judgment, decree or order for payment shall have been rendered against the Company or any Significant Subsidiary, aggregates $100,000,000 or more, and the continuance of such judgments, decrees or orders unsatisfied and in effect for any period of 30 consecutive days or, in the case of a foreign judgment, decree or order the enforcement of which is not being sought in the United States of America, 60 consecutive days without a stay of execution; provided, however, that any such amount shall be calculated after deducting from the sum so payable any amount of such judgment or order that is covered by a valid and binding policy of insurance in favor of the Company or such Subsidiary from an insurer that is rated at least “A” by A.M. Best Company, which policy covers full payment thereof and which insurer has been notified, and has not disputed the claim made for payment, of such amount of such judgment or order;
then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of subsection 7(g) with respect to the Company, automatically the Commitments and the LOC Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including the maximum amount of all contingent liabilities under Letters of Credit) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Majority Banks, the Administrative Agent may, or upon the request of the Majority Banks, the Administrative Agent shall, by notice to the Company declare the Commitments and the LOC Commitments to be terminated forthwith, whereupon the Commitments and the LOC Commitments shall immediately terminate; and (ii) with the consent of the Majority Banks, the Administrative Agent may, or upon the request of the Majority Banks, the Administrative Agent shall, by notice of default to the Company, (x) declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable, and (y) direct the Company to Cash Collateralize the LOC Obligations in an amount equal to the maximum amount that may be drawn under Letters of Credit then outstanding, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section 7, presentment, demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8
THE ADMINISTRATIVE AGENT
8.1 Appointment. Each of the Banks hereby irrevocably appoints Citibank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Each Bank acknowledges that the Company may rely on each action taken by the Administrative Agent on behalf of the Banks hereunder. The provisions of this Section 8 are solely for the benefit of the Administrative Agent, the Banks and the Issuing Lenders, and the Company shall not have rights as a third-party beneficiary of any of such provisions, other than with respect to the immediately preceding sentence and as specified in subsection 8.8. It is understood and agreed that the use of the term
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“agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
8.2 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 8 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the facility established hereunder as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
8.3 Exculpatory Provisions.
(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Majority Banks (or such other number or percentage of the Banks as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Bank in violation of any Debtor Relief Law; and
(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
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(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Banks (or such other number or percentage of the Banks as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 7 and subsection 9.1), or (ii) in the absence of its own gross negligence, willful misconduct or breach in bad faith as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Company, a Bank or an Issuing Lender.
(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
8.4 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Bank or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Bank or Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Bank or Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Bank.
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8.5 Rights as a Bank. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Bank as any other Bank and may exercise the same as though it were not the Administrative Agent, and the term “Bank” or “Banks” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Banks.
8.6 Non-Reliance on Administrative Agent and Other Banks. Each Bank and Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Bank or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank and Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Bank or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
8.7 Indemnification by Banks. The Banks agree to indemnify each of the Administrative Agent and the Issuing Lenders in their capacity as such (to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so to the extent required pursuant to subsection 9.5), ratably according to the respective amounts of their Commitments (or, if the Commitments have been terminated, ratably according to the respective amount of their outstanding Loans or, if no Loans are outstanding, their Commitments as of the date of such termination) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement, the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent or the Issuing Lenders under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s or any Issuing Lender’s gross negligence, willful misconduct or breach in bad faith. The agreements in this subsection 8.7 shall survive the payment of the Obligations and all other amounts payable hereunder.
8.8 Resignation of Administrative Agent.
(a) The Administrative Agent may at any time give notice of its resignation to the Banks, the Issuing Lenders and the Company. Upon receipt of any such notice of resignation, the Majority Banks shall have the right, with the approval of the Company (such approval not to be unreasonably withheld, conditioned or delayed), to appoint a successor, which shall be a bank with an office in the United States of America, or an
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Affiliate of any such bank with an office in the United States of America. If no such successor shall have been so appointed by the Majority Banks and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Majority Banks) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), with the approval of the Company (such approval not to be unreasonably withheld), on behalf of the Banks and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b) If the Person serving as Administrative Agent is a Defaulting Bank pursuant to clause (d) of the definition thereof, the Majority Banks may, to the extent permitted by applicable law, by notice in writing to the Company and such Person remove such Person as Administrative Agent and, with the approval of the Company (such approval not to be unreasonably withheld), appoint a successor. If no such successor shall have been so appointed by the Majority Banks and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Majority Banks) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Bank and Issuing Lender directly, until such time, if any, as a successor Administrative Agent is appointed as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section 8 and subsection 9.5 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.
8.9 No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the Lead Arrangers, Syndication Agents or Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan
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Documents, except in its capacity, as applicable, as the Administrative Agent, a Bank or an Issuing Lender hereunder.
8.10 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law, the Administrative Agent (irrespective of whether the principal of any Loan or LOC Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Company) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LOC Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Banks, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Banks, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Banks, the Issuing Lenders and the Administrative Agent under subsections 2.4 and 9.5) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Bank and Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Banks and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under subsections 2.4 and 9.5.
8.11 Bank ERISA Matters.
(a) Each Bank (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Company, that at least one of the following is and will be true:
(i) such Bank is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments or this Agreement,
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class
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exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii) (A) such Bank is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Bank to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84- 14 and (D) to the best knowledge of such Bank, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Bank.
(b) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or (2) a Bank has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Company, that the Administrative Agent is not a fiduciary with respect to the assets of such Bank involved in such Bank’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
As used in this Section, the following terms shall have the following meanings:
“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
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SECTION 9
MISCELLANEOUS
9.1 Amendments and Waivers. Except as provided in subsection 2.20 with respect to increases in Commitments and subsection 2.11(b), none of this Agreement, any Note or any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this subsection. With the written consent of the Majority Banks, the Administrative Agent and the Company may, from time to time, enter into written amendments, supplements or modifications hereto and to the Loan Documents for the purpose of changing any provisions of or adding any provisions to this Agreement or the Notes or changing in any manner the rights of the Banks or of the Company hereunder or thereunder or waiving, on such terms and conditions as the Administrative Agent may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that (i) each Bank shall receive a form of any such waiver, amendment, supplement or modification prior to the execution thereof by the Majority Banks or the Administrative Agent and (ii) no such waiver and no such amendment, supplement or modification shall (A) forgive all or any portion of the principal amount of any Loan or any accrued but unpaid interest thereon, increase or extend the Commitment of any Bank, the maturity of any Loan or any installment thereof, or reduce the rate or extend the time of payment of interest thereon (other than an amendment of subsection 2.9(c) or waiver of the obligation of the Company to pay any increased interest pursuant to subsection 2.9(c), which may be approved by the Majority Banks or the applicable Issuing Lender), or reduce the amount or extend the time of payment of any fee payable to any Bank hereunder, or change the amount of any Bank’s Commitment (other than as provided in subsection 2.5 or, with respect to any Non-Extending Bank, subsection 2.25(b)), in each case without the consent of the Bank affected thereby, (B) amend, modify or waive any provision of this subsection 9.1 or reduce the percentage specified in the definition of Majority Banks, or consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement, in each case without the written consent of all the Banks, (C) amend, modify or waive any provision of Section 8 without the written consent of the then Administrative Agent, or (D) amend, modify or waive any provision of the Loan Documents affecting the rights or duties of the Administrative Agent or the Issuing Lenders under any Loan Document without the written consent of the Administrative Agent and/or the Issuing Lenders, as applicable, in addition to the Banks required hereinabove to take such action. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Company, the Banks, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Company, the Banks and the Administrative Agent shall be restored to their former position and rights hereunder and under the outstanding Loans, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Notwithstanding anything to the contrary herein, (1) no Defaulting Bank shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Banks or each affected Bank may be effected with the consent of the applicable Banks other than Defaulting Banks), except that (x) the Commitment of any Defaulting Bank may not be increased or extended without the consent of such Bank, nor may the maturity of any Loan that such Defaulting Bank has funded or
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any installment thereof be extended or the rate of interest thereon be reduced, and (y) any waiver, amendment or modification requiring the consent of all Banks or each affected Bank that by its terms affects any Defaulting Bank more adversely than other affected Banks shall require the consent of such Defaulting Bank and (2) the Administrative Agent and the Company shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the Company shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any such provision.
9.2 Notices.
(a) Except as otherwise provided in subsection 9.2(b), all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or five days after being deposited in the mail, postage prepaid, or, in the case of facsimile notice, when received, addressed as follows, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Loans:
The Company: The Western Union Company

7001 East Belleview Avenue
Denver, CO 80237
Attention: Treasurer – HQ10
Facsimile: (720) 332-0507
Confirmation Telephone: (720) 332-5269
with a copy of
any notice to
the Company to:
The Western Union Company

7001 East Belleview Avenue
Denver, CO 80237
Attention: General Counsel’s Office – HQ8
Facsimile: (720) 332-3840
Confirmation Telephone: (720) 332-5711
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The Administrative
Agent, generally:
Citibank, N.A., as Administrative Agent
1615 Brett Road, Building #3.
New Castle, DE 19720
Attention: Bank Loan Syndications
Facsimile: (646) 274-5080
Email: GLAgentOfficeOps@citi.com
Any Issuing Lender: The address or other information set forth in its Administrative Questionnaire most recently delivered to the Company and the Administrative Agent
Any Bank: The address or other information set forth in its Administrative Questionnaire most recently delivered to the Company and the Administrative Agent.
provided that any notice, request or demand to or upon the Administrative Agent or the Banks pursuant to subsection 2.3, 2.5, 2.6, 2.7 or 2.25 shall not be effective until received.
(b) So long as Citibank or any of its Affiliates is the Administrative Agent, the Company shall use commercially reasonable efforts to deliver to the Administrative Agent materials required to be delivered pursuant to Section 5.1 in an electronic medium in a format acceptable to the Administrative Agent and the Company by e-mail at GLAgentOfficeOps@citi.com. The Company agrees that the Administrative Agent may make such materials, and, without warranty or liability to the Company, other written information, documents, instruments and other material relating to the Company, any of its Subsidiaries or any other materials or matters relating to this Agreement, the other Loan Documents or any of the transactions contemplated hereby (collectively, the “Communications”) available to the Banks by posting such notices on a confidential basis on DebtDomain or a substantially similar electronic system (the “Platform”) mutually acceptable to the Administrative Agent and the Company. The Company acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Administrative Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform in the absence of gross negligence, willful misconduct or breach in bad faith of the Administrative Agent or its Affiliates. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Administrative Agent or any of its Affiliates in connection with the Platform.
(c) The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address as set forth above, and each Bank agrees that
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notice to it (as provided in the next sentence) (a “Notice”) specifying that any Communications have been posted to the Platform, in each case, shall constitute effective delivery of such information, documents or other materials to the Administrative Agent and such Bank for purposes of this Agreement; provided that if requested by any Bank the Administrative Agent shall deliver a copy of the Communications to such Bank by email or facsimile. Each Bank agrees (i) to notify the Administrative Agent in writing of such Bank’s e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Bank becomes a party to this Agreement (and from time to time thereafter to ensure that the Administrative Agent has on record an effective e-mail address for such Bank) and (ii) that any Notice may be sent to such e-mail address.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the other Loan Documents.
9.5 Payment of Expenses. The Company agrees (i) to pay or reimburse the Administrative Agent for all its reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable and documented out-of-pocket fees, disbursements and other charges of counsel to the Administrative Agent (limited to one primary counsel, one local counsel in each reasonably necessary jurisdiction, one specialty counsel in each reasonably necessary specialty area, and one or more additional counsel if one or more actual conflicts of interest arise), (ii) to pay or reimburse each Bank and the Administrative Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including fees and disbursements of counsel to the Administrative Agent and to the several Banks and (iii) to pay, and indemnify and hold harmless each Bank and the Administrative Agent and each of their respective officers, directors, employees, agents and affiliates from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents, and any such other documents (all the foregoing, collectively, the “indemnified liabilities”); provided that the Company shall have no obligation hereunder to the Administrative Agent or any Bank with respect to indemnified liabilities arising from (A) the gross negligence, willful misconduct or breach in bad faith of the Administrative Agent or such Bank, (B) legal
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proceedings commenced or claims against the Administrative Agent or such Bank by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, (C) legal proceedings commenced or claims against the Administrative Agent or such Bank by any other Bank or by any Transferee or (D) claims settled without the consent of the Company. In the case of any investigation, litigation or other proceeding or action to which the indemnity in this subsection 9.5 applies, such indemnity shall be effective whether or not such investigation, litigation or other proceeding or action is brought by the Company or any affiliate of the Company, whether or not the party seeking indemnity is otherwise a party thereto and whether or not any aspect of the transactions contemplated hereby is consummated. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. This Section 9.5 shall not apply with respect to Taxes other than Taxes that represent liabilities arising from a non-Tax claim.
9.6 Successors and Assigns; Participations; Purchasing Banks.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Bank, and no Bank may assign or otherwise transfer any of its rights or obligations hereunder except (i) to a Purchasing Bank in accordance with the provisions of subsection 9.6(b), (ii) by way of participation in accordance with the provisions of subsection 9.6(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection 9.6(e) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection 9.6(d) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Banks) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Bank may at any time assign to one or more assignees (each, a “Purchasing Bank”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) (B) in the case of an assignment of the entire remaining amount of the assigning Bank’s Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in subsection 9.6(b)(i)(B) in the aggregate or in the case of an assignment to a Bank, an Affiliate of a Bank or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection 9.6(b)(i)(A), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
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Bank subject to each such assignment (determined as of the date the Commitment Transfer Supplement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Commitment Transfer Supplement, as of the Trade Date) shall not be less than $10,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed).
(ii) Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Bank’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.
(iii) No consent shall be required for any assignment except to the extent required by subsection 9.6(b)(i)(B) and, in addition:
(A) the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Bank, an Affiliate of a Bank or an Approved Fund which, in the case of any such Affiliate, has Short-Term Ratings which are no lower than the Short-Term Ratings of the assigning Bank; and
(B) the consent of each of the Administrative Agent and each Issuing Lender that has a Letter of Credit outstanding (such consents not to be unreasonably withheld or delayed) shall be required for assignments to a Person who is not a Bank, an Affiliate of a Bank or an Approved Fund.
(iv) The parties to each assignment shall execute and deliver to the Administrative Agent a Commitment Transfer Supplement, together with a processing and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The Purchasing Bank, if it is not a Bank, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No such assignment shall be made to (A) the Company or any of the Company’s Affiliates or Subsidiaries or (B) to any Defaulting Bank or any of its Subsidiaries, or any Person who, upon becoming a Bank hereunder, would constitute any of the foregoing Persons described in this subsection 9.6(b)(v).
(vi) No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person).
(vii) In connection with any assignment of rights and obligations of any Defaulting Bank hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may
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be outright payment, purchases by the Purchasing Bank of participations or subparticipations, or other compensating actions, including funding, with the consent of the Company and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Bank, to each of which the applicable Purchasing Bank and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Bank to the Administrative Agent, each Issuing Lender and each other Bank hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Bank hereunder shall become effective under applicable law without compliance with the provisions of this subsection 9.6(b)(vii), then the Purchasing Bank of such interest shall be deemed to be a Defaulting Bank for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection 9.6(c), from and after the effective date specified in each Commitment Transfer Supplement, the Purchasing Bank thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Commitment Transfer Supplement, have the rights and obligations of a Bank under this Agreement, and the assigning Bank thereunder shall, to the extent of the interest assigned by such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer Supplement covering all of the assigning Bank’s rights and obligations under this Agreement, such Bank shall cease to be a party hereto) but shall continue to be entitled to the benefits and obligations, if any, of subsection 2.14, 2.15 and 9.5 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Bank will constitute a waiver or release of any claim of any party hereunder arising from that Bank’s having been a Defaulting Bank. Any assignment or transfer by a Bank of rights or obligations under this Agreement that does not comply with this subsection 9.6(b) shall be treated for purposes of this Agreement as a sale by such Bank of a participation in such rights and obligations in accordance with subsection 9.6(d).
(c) The Administrative Agent, acting solely for this purpose as an agent of the Company, shall maintain at one of its offices in New Castle, Delaware, a copy of each Commitment Transfer Supplement delivered to it and a register for the recordation of the names and addresses of the Banks, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Bank pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent demonstrable error, and the Company, the Administrative Agent and the Banks shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Company and any Bank, at any reasonable time and from time to time upon reasonable prior notice.
(d) (ii) Any Bank may at any time, without the consent of, or notice to, the Company, any Issuing Lender or the Administrative Agent, sell participations to any
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Person (other than a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person), a Competitor, or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Bank’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Bank’s obligations under this Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Company, the Administrative Agent, the Issuing Lenders and the Banks shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement. For the avoidance of doubt, each Bank shall be responsible for the indemnity under subsection 8.7 with respect to any payments made by such Bank to its Participant(s).
(ii) Any agreement or instrument pursuant to which a Bank sells such a participation shall provide that such Bank shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement. The Company agrees that each Participant shall be entitled to the benefits of subsections 2.14, 2.15 and 2.16 (subject to the requirements and limitations therein, including the requirements under subsection 2.15(f) (it being understood that the documentation required under subsection 2.15(f) shall be delivered to the participating Bank)) to the same extent as if it were a Bank and had acquired its interest by assignment pursuant to subsection 9.6(b); provided that such Participant (A) agrees to be subject to the provisions of subsection 2.17 as if it were an Purchasing Bank under subsection 9.6(b); and (B) shall not be entitled to receive any greater payment under subsections 2.14 or 2.15, with respect to any participation, than its participating Bank would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Bank that sells a participation agrees, at the Company’s request and expense, to use reasonable efforts to cooperate with the Company to effectuate the provisions of subsection 2.17 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of subsection 9.7(b) as though it were a Bank; provided that such Participant agrees to be subject to subsection 9.7(a) as though it were a Bank. Each Bank that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent demonstrable error, and such Bank shall treat each Person whose name is recorded
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in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e) Any Bank may at any time pledge or assign a security interest in all of any portion of its rights under this Agreement to secure obligations of such Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Bank from any of its obligations hereunder or substitute any such pledge or assignee for such Bank as a party hereto.
9.7 Adjustments; Set-off.
(a) If any Bank shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Bank receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Bank receiving such greater proportion shall (i) notify the Administrative Agent of such fact and (ii) purchase (for cash at face value) participations in the Loans and such other obligations of the other Banks, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Banks ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this subsection 9.7(a) shall not be construed to apply to (x) any payment made by the Company pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Bank), or (y) any payment obtained by a Bank as consideration for the assignment of or sale of a participation in any of its Loans or participations in Reimbursement Obligations to any assignee or participant, other than to the Company or any Subsidiary thereof (as to which the provisions of this subsection 9.7(a) shall apply).
The Company consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Bank acquiring a participation pursuant to the foregoing arrangements may exercise against the Company rights of setoff and counterclaim with respect to such participation as fully as if such Bank were a direct creditor of the Company in the amount of such participation.
(b) If an Event of Default shall have occurred and be continuing, each Bank, each Issuing Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any
87

and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Bank, such Issuing Lender or any such Affiliate, to or for the credit or the account of the Company against any and all of the obligations of the Company now or hereafter existing under this Agreement or any other Loan Document to such Bank or such Issuing Lender or their respective Affiliates, irrespective of whether or not such Bank, Issuing Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Company may be contingent or unmatured or are owed to a branch, office or Affiliate of such Bank or such Issuing Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Bank shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of subsection 2.24 and, pending such payment, shall be segregated by such Defaulting Bank from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders, and the Banks, and (y) the Defaulting Bank shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Bank as to which it exercised such right of setoff. The rights of each Bank, each Issuing Lender and their respective Affiliates under this subsection 9.6(d) are in addition to other rights and remedies (including other rights of setoff) that such Bank, such Issuing Lender or their respective Affiliates may have. Each Bank and Issuing Lender agrees to notify the Company and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
9.8 Table of Contents and Section Headings. The table of contents and the section and subsection headings herein are intended for convenience only and shall be ignored in construing this Agreement.
9.9 Confidentiality. Each of the Banks and the Administrative Agent agrees to keep confidential (and to cause its officers, directors, employees, agents and representatives, and its Affiliates’ officers, directors, employees, agents and representatives who gain access to Confidential Materials (as defined below), to keep confidential) any information which is or has been obtained pursuant to the terms of this Agreement (including subsection 5.4(b)) (collectively, the “Confidential Materials”), except that such Bank or the Administrative Agent, as the case may be, shall be permitted to disclose the Confidential Materials (i) to such of the officers, directors, employees, agents, independent auditors and representatives of the Bank or any of its Affiliates as need to know such Confidential Materials in connection with its administration of its Commitment and Loans (provided such persons are informed of the confidential nature of the Confidential Materials and the restrictions imposed by this subsection), (ii) to the extent required by law (including disclosure to bank examiners and regulatory officials or self-regulatory bodies) or legal process (in which event such Bank or the Administrative Agent, as the case may be, will promptly notify the Company of any such requirement), (iii) to the extent such Confidential Materials become publicly available other than as a result of a breach of the provisions of this subsection, (iv) to the extent the Company shall have consented to such disclosure in writing, (v) subject to a written agreement to be bound by the terms of this subsection 9.9 as if it were a Bank party to this Agreement, to (A) a prospective Transferee, (B) a direct, indirect, actual or prospective
88

counterparty (and its advisors) to any swap, derivative or securitization transaction relating to the Company and the Obligations or (C) a credit insurance provider relating to the Company and the Obligations, (vi) to a Governmental Authority in connection with litigation involving this Agreement or the other Loan Documents, (vii) to Gold Sheets and other similar bank trade publications (such information to consist of deal terms and other information regarding the credit facilities evidenced by this Agreement customarily found in such publications) and (viii) in connection with any suit, action or proceeding for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies or interests under or in connection with this Agreement or any other Loan Document; provided that in no event shall any such Bank or the Administrative Agent disclose any of the Confidential Materials to any of its Excluded Individuals.
9.10 Patriot Act Notice; Beneficial Ownership Regulation. Each Bank and the Administrative Agent (for itself and not on behalf of any other party) hereby notifies the Company that, pursuant to the requirements of the Patriot Act and the Beneficial Ownership Regulation (if applicable), it is required to obtain, verify and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow such Bank or the Administrative Agent, as applicable, to identify the Company in accordance with the Patriot Act and the Beneficial Ownership Regulation (if applicable).
9.11 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.
9.12 Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.
9.13 Integration. This Agreement represents the entire agreement of the Company, the Administrative Agent and the Banks with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Bank relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
9.14 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
89

NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.15 Submission To Jurisdiction; Waivers. Each of the Company, the Administrative Agent and the Banks hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in subsection 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages.
9.16 Acknowledgements. Each of the Company, the Administrative Agent and the Banks hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Bank has any fiduciary relationship to the Company, and the relationship between the Administrative Agent and the Banks, on the one hand, and the Company, on the other hand, is solely that of debtor and creditor;
(c) the Administrative Agent, each Bank and their Affiliates may have economic interests that conflict with those of the Company, its stockholders and/or its Affiliates; and
(d) no joint venture exists among the Banks or among the Company and the Banks.
90

9.17 WAIVERS OF JURY TRIAL. THE COMPANY, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES AND FOR ANY COUNTERCLAIM THEREIN. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9.18 Effectiveness. This Agreement shall become effective on the date on which all of the conditions set forth in subsection 4.1 have been satisfied or waived by the Banks and all of the parties have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent pursuant to subsection 9.2 or, in the case of the Banks, shall have given to the Administrative Agent written, facsimile or telex notice (actually received) at such office that the same has been signed and mailed to it.
9.19 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or under any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Company in respect of any such sum due from it to the Administrative Agent or any Bank hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than currency required to be paid hereunder (the “Contract Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or such Bank of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Bank may in accordance with normal banking procedures purchase the Contract Currency with the Judgment Currency. If the amount of the Contract Currency so purchased is less than the sum originally due to the Administrative Agent or such Bank in such Contract Currency, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Bank or the Person to whom such obligation was owing against such loss. If the amount of the Contract Currency so purchased is greater than the sum originally due to the Administrative Agent or such Bank in such currency, the Administrative Agent and the Banks agree to apply such excess to any Loans or other amounts then due and payable hereunder.
 
9.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
91

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
9.21 Electronic Execution of Assignments and Certain Other Documents. The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumption Agreements, amendments or other modifications, Borrowing Certificates, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.
 
9.22 Amendment and Restatement. Upon this Agreement becoming effective pursuant to subsection 4.1, from and after the Closing Date: (i) the terms and conditions of the Existing Revolving Credit Agreement shall be amended as set forth herein and, as so amended, shall be restated in their entirety, but shall be amended only with respect to the rights, duties and obligations among the Company, the Banks, the Issuing Lenders and the Administrative Agent accruing from and after the Closing Date; (ii) all indemnification obligations of the Company under the Existing Revolving Credit Agreement and any other “Loan Document” as defined therein shall survive the execution and delivery of this Agreement and shall continue in full force and effect for the benefit of the “Banks”, the “Issuing Lenders” or the “Administrative Agent” (as such terms are defined in the Existing Revolving Credit Agreement) at any time prior to the Closing Date; (iii) the “Obligations” (as such term is defined in the Existing Revolving Credit Agreement) incurred under the Existing Revolving Credit Agreement shall, to the extent
92

outstanding on the Closing Date and not repaid on the Closing Date, continue to be outstanding under this Agreement and shall not be deemed to be paid, released, discharged or otherwise satisfied by the execution of this Agreement, and this Agreement shall not constitute a substitution or novation of such Obligations or any of the other rights, duties and obligations of the parties hereunder; (iv) the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of the “Banks”, “Issuing Lenders” or the “Administrative Agent” (as such terms are defined in the Existing Revolving Credit Agreement) under the Existing Revolving Credit Agreement, nor constitute a waiver of any covenant, agreement or obligation under the Existing Revolving Credit Agreement, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby; and (v) any and all references in the Loan Documents to the Existing Revolving Credit Agreement shall, without further action of the parties, be deemed a reference to the Existing Revolving Credit Agreement, as amended and restated by this Agreement, and as this Agreement shall be further amended, modified, supplemented or amended and restated from time to time hereafter in accordance with the terms of this Agreement.
 
[Signature pages follow]
93

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
 
COMPANY: THE WESTERN UNION COMPANY,
a Delaware corporation

By: ______________________
Name: Bradley A. Windbigler
Title: Senior Vice President and Treasurer

 
Signature Page to Amended and Restated Credit Agreement

 
ADMINISTRATIVE AGENT
AND BANKS: CITIBANK, N.A.,
as Administrative Agent, Issuing Lender and a Bank

By: _____________________
Name: Michael Vondriska
Title: Vice President

 
Signature Page to Amended and Restated Credit Agreement

 
BANK OF AMERICA, N.A.,
as Issuing Lender and a Bank

By: _____________________
Name: William Borden
Title: Director

 
Signature Page to Amended and Restated Credit Agreement

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

By: ______________________
Name: Jill Ta
Title: Managing Director

 
Signature Page to Amended and Restated Credit Agreement

 
BARCLAYS BANK PLC,
as a Bank

By: _____________________
Name: David J. Williams
Title: Director

 
Signature Page to Amended and Restated Credit Agreement

 
JPMORGAN CHASE BANK, N.A.,
as a Bank

By: ___________________
Name: Evelyn Crisci
Title: Executive Director
Signature Page to Amended and Restated Credit Agreement

 
U.S. BANK NATIONAL ASSOCIATION,
as a Bank

By: ___________________
Name: Jeff Benedix
Title: Vice President

 
Signature Page to Amended and Restated Credit Agreement

 
FIFTH THIRD BANK,
as a Bank

By: ____________________
Name: Kelly Shields
Title: Director

 
Signature Page to Amended and Restated Credit Agreement

 
MIZUHO BANK, LTD.,
as a Bank

By: ______________________
Name: Donna DeMagistris
Title: Authorized Signatory

 

 
Signature Page to Amended and Restated Credit Agreement

 
THE BANK OF NEW YORK MELLON,
as a Bank

By:____________________
Name: John T. Smathers
Title: Director

 
Signature Page to Amended and Restated Credit Agreement

 
BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH,
as a Bank

By: ______________________
Name: Veronica Incera
Title: Managing Director
 
By: _______________________
Name: Nurys Maleki
Title: Executive Director

 
Signature Page to Amended and Restated Credit Agreement

 
BMO HARRIS BANK N.A.,
as a Bank

By: _____________________
Name: Joan Murphy
Title: Managing Director

 
Signature Page to Amended and Restated Credit Agreement

 
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH,
as a Bank

By: _______________________
Name: Robert Robin
Title: Authorized Signatory

By: ________________________
Name: Dominic Sorresso
Title: Authorized Signatory

 

Signature Page to Amended and Restated Credit Agreement

 
HSBC BANK USA, NATIONAL ASSOCIATION,
as a Bank

By: ____________________
Name: Jeff A. French
Title: Managing Director
Signature Page to Amended and Restated Credit Agreement

 
ROYAL BANK OF CANADA,
as a Bank

By: ___________________
Name: Jennifer Flann
Title: Vice President
Signature Page to Amended and Restated Credit Agreement

 
SOCIETE GENERALE,
as a Bank

By:____________________
Name: Andrew Johnman
Title: Director

 

 
 
Signature Page to Amended and Restated Credit Agreement

 
SUNTRUST BANK,
as a Bank

By: __________________
Name: Justin Lien
Title: Director

 

 
Signature Page to Amended and Restated Credit Agreement

 
THE BANK OF NOVA SCOTIA,
as a Bank

By: ___________________
Name: Kevin Chan
Title: Director

 
Signature Page to Amended and Restated Credit Agreement

 
THE NORTHERN TRUST COMPANY,
as a Bank

By: _____________________
Name: Molly Drennan
Title: Senior Vice President

 
Signature Page to Amended and Restated Credit Agreement

 
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as a Bank

By: _______________________
Name: Judith E. Smith
Title: Authorized Signatory

By: ________________________
Name: Brady Bingham
Title: Authorized Signatory
Signature Page to Amended and Restated Credit Agreement

 
Schedule 1.1
BANKS AND COMMITMENTS

			
Bank	Revolving Commitments	Revolving Commitment Percentage	
Citibank, N.A.	$170,000,000.00	11.333333333%	
Bank of America, N.A.	$170,000,000.00	11.333333333%	
Wells Fargo Bank, National Association	$170,000,000.00	11.333333333%	
Barclays Bank PLC	$130,000,000.00	8.666666667%	
JPMorgan Chase Bank, N.A.	$130,000,000.00	8.666666667%	
U.S. Bank National Association	$130,000,000.00	8.666666667%	
Fifth Third Bank	$70,000,000.00	4.666666667%	
Mizuho Bank, Ltd.	$70,000,000.00	4.666666667%	
The Bank of New York Mellon	$70,000,000.00	4.666666667%	
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch	$40,000,000.00	2.666666667%	
BMO Harris Bank N.A.	$40,000,000.00	2.666666667%	
Canadian Imperial Bank of Commerce, New York Branch	$40,000,000.00	2.666666667%	
HSBC Bank USA, National Association	$40,000,000.00	2.666666667%	
Royal Bank of Canada	$40,000,000.00	2.666666667%	
Societe Generale	$40,000,000.00	2.666666667%	
SunTrust Bank	$40,000,000.00	0.026666667	
The Bank of Nova Scotia	$40,000,000.00	2.666666667%	
The Northern Trust Company	$40,000,000.00	2.666666667%	
Credit Suisse AG, Cayman Islands Branch	$30,000,000.00	2.000000000%	
Total:	$1,500,000,000	100.000000000%	

 
NYDOCS02/1171655

 
Schedule 3.6
MATERIAL LITIGATION
 
None.

 

 
 
EXHIBIT A
[FORM OF NOTE]
NOTE
$__________ ___________ __, 20__
FOR VALUE RECEIVED, the undersigned, THE WESTERN UNION COMPANY, a Delaware corporation (the “Company”), hereby unconditionally promises to pay to [Name of Bank] (or its registered assigns pursuant to Section 9.6(c) of the Credit Agreement hereinafter referred to) (the “Bank”) on the Termination Date at the office of Citibank, N.A. (“Citibank”), as Administrative Agent, located at 1615 Brett Road, Building #3, New Castle, Delaware 19720, in lawful money of the United States of America and in immediately available funds, the principal amount of [the Bank’s Commitment] ($_______________) or, if less, the aggregate unpaid principal amount of all Loans made by the Bank to the Company pursuant to the Credit Agreement, and to pay interest at such office, in like money, from the date hereof on the unpaid principal amount of such Loans from time to time outstanding at the rates and on the dates specified in subsection 2.9 of the Credit Agreement.
The Bank is authorized to record, on the schedules annexed hereto and made a part hereof or on other appropriate records of the Bank, the date, the Type and the amount of each Loan made by the Bank, each continuation thereof, each conversion of all or a portion thereof to a Loan of another Type, the date and amount of each payment or prepayment of principal thereof, and, in the case of LIBORTerm Benchmark Loans, the length of each Interest Period with respect thereto. Any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Bank to make any such recordation (or any error in such recordation) shall not affect the obligations of the Company hereunder or under the Credit Agreement in respect of the Loans.
This Note is one of the Notes referred to in the Amended and Restated Credit Agreement, dated as of December 18, 2018 (as the same may be amended, supplemented, modified, renewed or replaced from time to time, the “Credit Agreement”), among the Company, the Banks and the Issuing Lenders referred to therein and Citibank, as Administrative Agent, and is entitled to the benefits thereof. Capitalized terms used herein without definition have the meanings assigned to them in the Credit Agreement.
This Note is subject to optional prepayment as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid in respect of this Note shall become, or may be declared to be, immediately due and payable as provided therein.
All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.
 
A-1

 
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE WESTERN UNION COMPANY

By
Title:

 
A-2

Schedule 12 to
Note
LIBOR LOANS

Date	Amount of
, Type LIBOR Loans
and Currency of Loans	Interest Period
and LIBORTerm Benchmark
Rate with
 Respect
Thereto, if applicable	Amount of
LIBORTerm SOFR
Loans
Converted to
Base Rate Loans (or vice versa)	Notation
Made By	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 

[Link-to-previous setting changed from off in original to on in modified.].
A-3

Schedule 2 to
Note
BASE RATE LOANS

Date	Amount of
Base Rate
Loans Made
or Converted
from LIBOR
Loans	Amount of
Base Rate
Loans
Converted
To LIBOR
Loans	Notation
Made By	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 
 
A-4

 
EXHIBIT B
[FORM OF BORROWING CERTIFICATE]
Borrowing Certificate
THE WESTERN UNION COMPANY, a Delaware corporation (the “Company”), DOES HEREBY CERTIFY as follows:
1. This Certificate is delivered pursuant to Sections 2 and 3 and subsection 4.2 of the Amended and Restated Credit Agreement, dated as of December 18, 2018 (as the same may be amended, supplemented, modified, renewed or replaced from time to time, the “Credit Agreement”), among the Company, the Banks and the Issuing Lenders referred to therein and Citibank, N.A., as Administrative Agent. Unless otherwise defined herein, terms defined in the Credit Agreement are used in this Certificate as therein defined.
2. The Company hereby gives notice of a requested borrowing under the Credit Agreement as follows:
(i) The Business Day of the requested borrowing is ________, ___.
(ii) The Type(s), currency and initial Interest Period(s) for said Loans are set forth in Schedule 1 hereto.
3. Each of the representations and warranties made by the Company in the Credit Agreement is true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) on and as of the date of this Certificate as if made on and as of such date (except any representation or warranty relating to or made expressly as of specific date is true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality in the text thereof, in which case such representations and warranties shall be true and correct) solely with respect to and as of such specific date).
4. No Default or Event of Default has occurred and is continuing on the date of this Certificate or will occur after giving effect to the making of the requested Loans.
 
B-1

 
IN WITNESS WHEREOF, the Company has executed this Certificate on this ____ day of __________, ____.

THE WESTERN UNION COMPANY

By:
Name:
Title:

 
B-2

Schedule 1 to
Borrowing Certificate

					
 	Amount	Currency	Types (LIBORTerm Benchmark, SONIA or Base Rate)	Initial Interest Period	
$	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	
 	 	 	 	 	
$	 	 	Total Amount of Loans	 	

 
 
B-3

EXHIBIT C
[RESERVED]

 

 
 
EXHIBIT D
[FORM OF COMMITMENT TRANSFER SUPPLEMENT]
COMMITMENT TRANSFER SUPPLEMENT
This Commitment Transfer Supplement (the “Commitment Transfer Supplement”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3 hereunder are several and not joint.]4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Commitment Transfer Supplement as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Bank][their respective capacities as Banks] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any letters of credit, guarantees, and swingline loans included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Bank)][the respective Assignors (in their respective capacities as Banks)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Commitment Transfer Supplement, without representation or warranty by [the][any] Assignor.
1. Assignor[s]: ______________________________
______________________
1 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
2 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
3 Select as appropriate.
4 Include bracketed language if there are either multiple Assignors or multiple Assignees.
D-1

 

______________________________
[Assignor [is] [is not] a Defaulting Bank]
2. Assignee[s]: ______________________________
______________________________
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Bank]]
3. Borrower(s): ______________________________
4. Administrative Agent: ______________________, as the administrative agent under the Credit Agreement
5. Credit Agreement: The Amended and Restated Credit Agreement dated as of December 18, 2018, among The Western Union Company, the Banks parties thereto, Citibank, N.A., as Administrative Agent, and the other agents parties thereto
6. Assigned Interest[s]:

Assignor[s]5	Assignee[s]6	Facility Assigned7	Aggregate Amount of Commitment/Loans for all Banks8	Amount of Commitment/Loans Assigned	Percentage Assigned of Commitment/Loans9	CUSIP Number	

 	 	 	 	 	 	 	

[7. Trade Date: ______________]10

______________________
5 List each Assignor, as appropriate.
6 List each Assignee, as appropriate.
7 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Revolving Credit Commitment” etc.)
8 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
9 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Banks thereunder.
10 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.
 
D-2

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Commitment Transfer Supplement are hereby agreed to:
ASSIGNOR[S] 11
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNOR]
By:
Title:
ASSIGNEE[S]12
[NAME OF ASSIGNEE]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
[Consented to and]13 Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By:
Title:
[Consented to:] 14
[NAME OF RELEVANT PARTY]
By:
Title:
______________________
11 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
12 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
13 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
14 To be added only if the consent of the Company and/or other parties (e.g., Issuing Lender) is required by the terms of the Credit Agreement.
 
D-3

ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
COMMITMENT TRANSFER SUPPLEMENT
1. Representations and Warranties.
1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Commitment Transfer Supplement and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Bank; and (b) 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, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Commitment Transfer Supplement and to consummate the transactions contemplated hereby and to become a Bank under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 9.6(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 9.6(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Bank thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Bank thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Commitment Transfer Supplement and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Commitment Transfer Supplement and to purchase [the][such] Assigned Interest, and (vii) attached to the Commitment Transfer Supplement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Bank, 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 Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Bank.
D-4

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.
3. General Provisions. This Commitment Transfer Supplement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Commitment Transfer Supplement may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Commitment Transfer Supplement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Commitment Transfer Supplement. This Commitment Transfer Supplement shall be governed by, and construed in accordance with, the law of the State of New York.

 
D-5

EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
 
TO: Citibank, N.A., as Administrative Agent
 
RE: Amended and Restated Credit Agreement dated as of December 18, 2018 among The Western Union Company (the “Company”), the Banks and the Issuing Lenders referred to therein and Citibank, N.A., as Administrative Agent (as the same may be amended, supplemented, modified, renewed or replaced from time to time, the “Credit Agreement”)
 
DATE: ____________, 20___
______________________________________________________________________________
 
Pursuant to the terms of the Credit Agreement, I, __________________, [Chief Financial Officer/ Treasurer/ Assistant Treasurer] of The Western Union Company, hereby certify that, as of the fiscal quarter ending __________, 20__, the statements and calculations below are accurate and complete in all respects (all capitalized terms used below shall have the meanings set forth in the Agreement):
 
1. Compliance with Section 6.6:
Ratio of EBITDA to Interest Expense
 
a. EBITDA (see attached) $
 
b. interest expense $
 
c. Ratio of EBITDA to interest expense ________ : ________
 
Minimum Allowed: 3.00 : 1.00.
 
2. No Default or Event of Default exists except as indicated on a separate page attached hereto, together with an explanation of the action taken or proposed to be taken by the Company with respect thereto.

THE WESTERN UNION COMPANY

By:
Name:
Title:
 
E-1

EBITDA
(in accordance with the definition of EBITDA
as set forth in the Agreement)

EBITDA	
Quarter
Ended
__________	
Quarter
Ended
__________	
Quarter
Ended
__________	
Quarter
Ended
__________	Four Quarters
Ended
__________	
net income (or net loss)	 	 	 	 	 	
+ interest expense	 	 	 	 	 	
+ income tax expense	 	 	 	 	 	
+ depreciation, expense	 	 	 	 	 	
+ amortization expense	 	 	 	 	 	
+ non-cash deductions, losses or charges	 	 	 	 	 	
- extraordinary gains	 	 	 	 	 	
= EBITDA	 	 	 	 	 	

 

E-2

 
EXHIBIT F
[FORM OF COMMITMENT INCREASE SUPPLEMENT]
COMMITMENT INCREASE SUPPLEMENT
[DATE]
Citibank, N.A., as Administrative Agent
for the Banks referred to below
1615 Brett Road, Building #3
New Castle, Delaware 19720
Attention: Bank Loan Syndications
Ladies and Gentlemen:
 
The undersigned, The Western Union Company (“we” or the “Company”), refers to the Amended and Restated Credit Agreement, dated as of December 18, 2018 (as the same may be amended, supplemented, modified, renewed or replaced from time to time, the “Credit Agreement”), among the Company, the Banks and the Issuing Lenders referred to therein and Citibank, N.A., as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
The Bank identified on Schedule 1 hereto (the “Increasing Lender”), the Administrative Agent and the Company hereby agree as follows:
(i) As of the Effective Date (as defined below), the Increasing Lender hereby [makes a Commitment to the Company of]
1[increases its Commitment to the Company by]2 the principal amount set forth in Schedule 1 hereto (the “Increased Commitment”). From and after the Effective Date the Increasing Lender will be a Bank under the Credit Agreement with respect to the Increased Commitment.
(ii) The Administrative Agent (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in, or in connection with, the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, the Credit Agreement or any other instrument or document furnished pursuant thereto and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the Banks or the performance or observance by the Company or the Banks of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto. Upon the request of the Increasing Lender, the Company will
______________________
1 Use if the Increasing Lender is not then a Bank under the Credit Agreement.
2 Use if the Increasing Lender is then a Bank under the Credit Agreement.
 
F-1

 
issue a new Note or Notes payable to the Increasing Lender or, if the Increasing Lender is then a Bank under the Credit Agreement, issue a new Note or Notes payable to the Increasing Lender in exchange for any existing Notes held by the Increasing Lender, in each case in amounts which reflect the aggregate Commitment of the Increasing Lender after giving effect to the increase in the Commitments pursuant to this Commitment Increase Supplement.
(iii) The Increasing Lender (a) represents and warrants that it is legally authorized to enter into this Commitment Increase Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to subsections 5.1(a) and 5.1(b) thereof (or if none of such financial statements shall have then been delivered, then copies of the financial statements referred to in subsection 3.1 thereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Commitment Increase Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Bank 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 or any other instrument or document furnished hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Bank; and (f) if the Increasing Lender is organized under the laws of a jurisdiction other than the United States of America or any state thereof and is not then a Bank under the Credit Agreement such Increasing Lender, concurrently with the Effective Date, (i) represents (for the benefit of the Administrative Agent and the Company) that under applicable law and treaties no taxes will be required to be withheld by the Administrative Agent or the Company with respect to any payments to be made to such Increasing Lender in respect of the Loans, (ii) furnishes to the Administrative Agent (and, in the case of any Increasing Lender registered in the Register, the Company) either U.S. Internal Revenue Service Form W-8BEN or W-8BEN-E or U.S. Internal Revenue Service Form W-8ECI or successor applicable form (wherein such Increasing Lender claims entitlement to complete exemption from U.S. federal withholding tax on all interest payments hereunder) and (iii) agrees (for the benefit of the Administrative Agent and the Company) to provide the Administrative Agent (and, in the case of any Increasing Lender registered in the Register, the Company) a new Form W-8BEN or W-8BEN-E or Form W-8ECI or successor applicable form upon the expiration or obsolescence of any previously delivered form and comparable statements in accordance with applicable U.S. laws and regulations and amendments duly executed and completed by such Increasing Lender, and to comply from time to time with all applicable U.S. laws and regulations with regard to such withholding tax exemption.
(iv) The effective date of this Commitment Increase Supplement shall be the Effective Date of Increased Commitment described in Schedule 1 hereto (the “Effective Date”). Following the execution of, and the consent by the Company and the
NYDOCS02/1171655 F-2

 
Administrative Agent to, this Commitment Increase Supplement, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent).
(v) Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Increased Commitment (including payments of principal, interest, facility fees and other amounts) to the Increasing Lender for amounts which has accrued on and subsequent to the Effective Date.
(vi) From and after the Effective Date the Increasing Lender shall be a party to the Credit Agreement with respect to the Increased Commitment and any then existing Commitment made by it under the Credit Agreement and, to the extent provided in this Commitment Increase Supplement, have the rights and obligations of a Bank thereunder and shall be bound by the provisions thereof.
(vii) THIS COMMITMENT INCREASE SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment Increase Supplement to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.

 
NYDOCS02/1171655 F-3

 
Schedule 1
to Commitment Increase Supplement
Name of Increasing Lender: ______________________________
 
Effective Date of Increased
Commitment: ____________________

 
Principal Amount
of Increased Commitment
 
$_______________
 
Total Amount of
Commitment (Including
Increased Commitment)
of Increasing Lender
 
$_______________

[Name of Increasing Lender]
By:_______________________________
Title:

Aggregate Commitments
of all Banks (including
Increased Commitment)
 
$_______________
 
Accepted:
 
THE WESTERN UNION COMPANY CITIBANK, N.A., as Administrative Agent

 
By: ________________________ By: ________________________
Title: Title

 
F-4

 
EXHIBIT G-1
[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Banks That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of December 18, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among The Western Union Company, Citibank, N.A., and each Bank from time to time party thereto.
Pursuant to the provisions of subsection 2.15 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 Company within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Company with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Company and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Company 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 BANK]
By:
Name:
Title:
Date: ________ __, 20[__]

G-1-1

 
 
EXHIBIT G-2
[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of December 18, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among The Western Union Company, Citibank, N.A., and each Bank from time to time party thereto.
Pursuant to the provisions of subsection 2.15 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 Company within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Bank with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Bank in writing, and (2) the undersigned shall have at all times furnished such Bank 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[__]

G-2-1

 
 
EXHIBIT G-3
[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of December 18, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among The Western Union Company, Citibank, N.A., and each Bank from time to time party thereto.
Pursuant to the provisions of subsection 2.15 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 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 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 partners/members is a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Bank with IRS 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 IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E 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 Bank and (2) the undersigned shall have at all times furnished such Bank 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[__]

 
G-3-1

 
EXHIBIT G-4
[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Banks That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of December 18, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among The Western Union Company, Citibank, N.A., and each Bank from time to time party thereto.
Pursuant to the provisions of subsection 2.15 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 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 or any other Loan Document, neither the undersigned nor any of its direct or indirect 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 partners/members is a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Company with IRS 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 IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E 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 Company and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Company 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 BANK]
By:
Name:
Title:
Date: ________ __, 20[__]

 
Exhibit 15
 
Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information
 
The Board of Directors and Stockholders of The Western Union Company
 
We are aware of the incorporation by reference in the following Registration Statements:
(1)Registration Statement (Form S-3 No. 333-267618) of The Western Union Company, and(2)Registration Statement (Form S-8 Nos. 333-137665 and 333-204183) pertaining to The Western Union Company 2006 Long-Term Incentive Plan, The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, The Western Union Company Supplemental Incentive Savings Plan, and The Western Union Company 2015 Long-Term Incentive Plan;
 
of our report dated November 1, 2022, relating to the unaudited condensed consolidated interim financial statements of The Western Union Company that are included in its Form 10-Q for the quarter ended September 30, 2022.

 	/s/ Ernst & Young LLP	
Denver, Colorado	 	
November 1, 2022	 	

 
Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
I, Devin McGranahan, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of The Western Union Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

			
 	 	 	
Date:	November 1, 2022	/s/ DEVIN B. MCGRANAHAN	
 	 	Devin B. McGranahan	
 	 	President and Chief Executive Officer	

 

 

 
Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
I, Matthew Cagwin, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of The Western Union Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

			
 	 	 	
Date:	November 1, 2022	/s/ MATTHEW CAGWIN	
 	 	Matthew Cagwin	
 	 	Interim Chief Financial Officer	

 

 
Exhibit 32
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
The certification set forth below is being submitted in connection with the Quarterly Report of The Western Union Company on Form 10-Q for the period ended September 30, 2022 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code.
Devin McGranahan and Matthew Cagwin certify that, to the best of each of their knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Western Union Company.

 

 	 	 	
Date:	November 1, 2022	/s/ DEVIN B. MCGRANAHAN	
 	 	Devin B. McGranahan	
 	 	President and Chief Executive Officer	

			
 	 	 	
Date:	November 1, 2022	/s/ MATTHEW CAGWIN	
 	 	Matthew Cagwin	
 	 	Interim Chief Financial Officer