Exhibit 10.1

 

 

CREDIT AGREEMENT

 

by and among

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Administrative Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as the Sole Lead Arranger and Book Runner,

 

THE LENDERS THAT ARE PARTIES HERETO

 

as the Lenders,

 

and

 

INVENTURE FOODS, INC. and

 

THE OTHER BORROWER(S) FROM TIME TO TIME PARTY HERETO

 

as Borrowers

 

Dated as of November 18, 2015

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS AND CONSTRUCTION

1

 

1.1

Definitions

1

 

1.2

Accounting Terms

1

 

1.3

Code

1

 

1.4

Construction

1

 

1.5

Time References

2

 

1.6

Schedules and Exhibits

2

 

 

 

 

2.

LOANS AND TERMS OF PAYMENT

2

 

2.1

Revolving Loans

2

 

2.2

[Reserved]

3

 

2.3

Borrowing Procedures and Settlements

3

 

2.4

Payments; Reductions of Commitments; Prepayments

9

 

2.5

Promise to Pay; Promissory Notes

13

 

2.6

Interest Rates and Letter of Credit Fee; Rates, Payments, and Calculations

13

 

2.7

Crediting Payments

14

 

2.8

Designated Account

15

 

2.9

Maintenance of Loan Account; Statements of Obligations

15

 

2.10

Fees

15

 

2.11

Letters of Credit

16

 

2.12

LIBOR Option

21

 

2.13

Capital Requirements

23

 

2.14

Accordion

24

 

2.15

Joint and Several Liability of Borrowers

26

 

 

 

 

3.

CONDITIONS; TERM OF AGREEMENT

27

 

3.1

Conditions Precedent to the Initial Extension of Credit

27

 

3.2

Conditions Precedent to all Extensions of Credit

28

 

3.3

Maturity

28

 

3.4

Effect of Maturity

28

 

3.5

Early Termination by Borrowers

28

 

3.6

Conditions Subsequent

28

 

i

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

(continued)

 

 

 

Page

 

 

 

4.

REPRESENTATIONS AND WARRANTIES

28

 

4.1

Due Organization and Qualification; Subsidiaries

29

 

4.2

Due Authorization; No Conflict

29

 

4.3

Governmental Consents

30

 

4.4

Binding Obligations; Perfected Liens

30

 

4.5

Title to Assets; No Encumbrances

30

 

4.6

Litigation

30

 

4.7

Compliance with Laws

30

 

4.8

No Material Adverse Effect

31

 

4.9

Solvency

31

 

4.10

Employee Benefits

31

 

4.11

Environmental Condition

32

 

4.12

Complete Disclosure

32

 

4.13

Patriot Act

32

 

4.14

Indebtedness

32

 

4.15

Payment of Taxes

32

 

4.16

Margin Stock

33

 

4.17

Governmental Regulation

33

 

4.18

OFAC

33

 

4.19

Employee and Labor Matters

33

 

4.20

Leases

33

 

4.21

Eligible Accounts

34

 

4.22

Eligible Inventory

34

 

4.23

Location of Inventory and Farm Products

34

 

4.24

Inventory and Farm Products Records

34

 

4.25

Hedge Agreements

34

 

4.26

Material Contracts

34

 

4.27

Food Security Act

34

 

4.28

Food Products Laws

34

 

4.29

Food Security Laws

35

 

ii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

(continued)

 

 

 

Page

 

 

 

 

 

4.30

Immaterial Subsidiaries

35

 

 

 

 

5.

AFFIRMATIVE COVENANTS

35

 

5.1

Financial Statements, Reports, Certificates

35

 

5.2

Reporting

35

 

5.3

Existence

35

 

5.4

Maintenance of Properties

35

 

5.5

Taxes

35

 

5.6

Insurance

35

 

5.7

Inspection

36

 

5.8

Compliance with Laws

36

 

5.9

Environmental

36

 

5.10

Disclosure Updates

37

 

5.11

Formation of Subsidiaries

37

 

5.12

Further Assurances

37

 

5.13

Lender Meetings

38

 

5.14

Compliance with ERISA and the IRC

38

 

5.15

Location of Inventory and Farm Products

38

 

5.16

Bank Products

38

 

5.17

Food Security Act

39

 

5.18

Food Products Laws

39

 

5.19

Material Contracts

39

 

5.20

Flood Hazard Insurance

39

 

 

 

 

6.

NEGATIVE COVENANTS

39

 

6.1

Indebtedness

40

 

6.2

Liens

40

 

6.3

Restrictions on Fundamental Changes

40

 

6.4

Disposal of Assets

40

 

6.5

Nature of Business

40

 

6.6

Prepayments and Amendments

40

 

6.7

Restricted Payments

41

 

iii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

(continued)

 

 

 

Page

 

 

 

 

 

6.8

Accounting Methods

42

 

6.9

Investments

42

 

6.10

Transactions with Affiliates

42

 

6.11

Use of Proceeds

42

 

6.12

Limitation on Issuance of Equity Interests

43

 

6.13

Inventory and Farm Products with Bailees

43

 

6.14

Restrictive Agreements

43

 

6.15

Employee Benefits

43

 

6.16

Hedge Agreements

43

 

6.17

Immaterial Subsidiaries

44

 

6.18

Compliance with Governmental Regulations

44

 

 

 

 

7.

FINANCIAL COVENANT

44

 

 

 

8.

EVENTS OF DEFAULT

44

 

 

 

 

8.1

Payments

44

 

8.2

Covenants

45

 

8.3

Judgments

45

 

8.4

Voluntary Bankruptcy, etc.

45

 

8.5

Involuntary Bankruptcy, etc.

45

 

8.6

Default Under Other Agreements

45

 

8.7

Representations, etc.

45

 

8.8

Guaranty

46

 

8.9

Security Documents

46

 

8.10

Loan Documents

46

 

8.11

Change of Control

46

 

8.12

ERISA

46

 

 

 

 

9.

RIGHTS AND REMEDIES

46

 

9.1

Rights and Remedies

46

 

9.2

Remedies Cumulative

47

 

9.3

Curative Equity

47

 

 

 

10.

WAIVERS; INDEMNIFICATION

48

 

iv

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

(continued)

 

 

 

Page

 

 

 

 

 

10.1

Demand; Protest; etc.

48

 

10.2

The Lender Group’s Liability for Collateral

48

 

10.3

Indemnification

48

 

 

 

11.

NOTICES

49

 

 

 

12.

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION

50

 

 

 

13.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

52

 

13.1

Assignments and Participations

52

 

13.2

Successors

55

 

 

 

14.

AMENDMENTS; WAIVERS

55

 

14.1

Amendments and Waivers

55

 

14.2

Replacement of Certain Lenders

57

 

14.3

No Waivers; Cumulative Remedies

58

 

 

 

 

15.

AGENT; THE LENDER GROUP

58

 

15.1

Appointment and Authorization of Agent

58

 

15.2

Delegation of Duties

59

 

15.3

Liability of Agent

59

 

15.4

Reliance by Agent

59

 

15.5

Notice of Default or Event of Default

59

 

15.6

Credit Decision

59

 

15.7

Costs and Expenses; Indemnification

60

 

15.8

Agent in Individual Capacity

60

 

15.9

Successor Agent

61

 

15.10

Lender in Individual Capacity

61

 

15.11

Collateral Matters

61

 

15.12

Restrictions on Actions by Lenders; Sharing of Payments

63

 

15.13

Agency for Perfection

63

 

15.14

Payments by Agent to the Lenders

63

 

15.15

Concerning the Collateral and Related Loan Documents

63

 

v

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

(continued)

 

 

 

Page

 

 

 

 

 

15.16

Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information

64

 

15.17

Several Obligations; No Liability

64

 

15.18

Arranger and Book Runner

65

 

 

 

 

16.

WITHHOLDING TAXES

65

 

16.1

Payments

65

 

16.2

Exemptions

65

 

16.3

Reductions

66

 

16.4

Refunds

67

 

 

 

17.

GENERAL PROVISIONS

67

 

17.1

Effectiveness

67

 

17.2

Section Headings

67

 

17.3

Interpretation

67

 

17.4

Severability of Provisions

67

 

17.5

Bank Product Providers

67

 

17.6

Debtor-Creditor Relationship

68

 

17.7

Counterparts; Electronic Execution

68

 

17.8

Revival and Reinstatement of Obligations; Certain Waivers

68

 

17.9

Confidentiality

69

 

17.10

Survival

70

 

17.11

Patriot Act

70

 

17.12

Integration

71

 

17.13

Parent Borrower as Agent for Borrowers

71

 

17.14

Intercreditor Agreement

71

 

17.15

Waiver of Rights Under Farm Credit Act

71

 

vi

--------------------------------------------------------------------------------

 

EXHIBITS AND SCHEDULES

 

Exhibit A-1

Form of Assignment and Acceptance

Exhibit B-1

Form of Borrowing Base Certificate

Exhibit B-2

Form of Bank Product Provider Agreement

Exhibit C-1

Form of Compliance Certificate

Exhibit L-1

Form of LIBOR Notice

Exhibit P-1

Form of Perfection Certificate

 

 

Schedule A-1

Agent’s Account

Schedule A-2

Authorized Persons

Schedule C-1

Commitments

Schedule D-1

Designated Account

Schedule E-1

Location of Inventory and Farm Products

Schedule P-1

Permitted Investments

Schedule P-2

Permitted Liens

Schedule R-1

Real Property Collateral

Schedule 1.1

Definitions

Schedule 3.1

Conditions Precedent

Schedule 3.6

Conditions Subsequent

Schedule 4.1(b)

Capitalization of Borrowers

Schedule 4.1(c)

Capitalization of Borrowers’ Subsidiaries

Schedule 4.1(d)

Subscriptions, Options, Warrants, Calls

Schedule 4.3

Governmental Consents

Schedule 4.6

Litigation

Schedule 4.10

Employee Benefits

Schedule 4.11

Environmental Matters

Schedule 4.14

Permitted Indebtedness

Schedule 4.23

Location of Inventory and Farm Products

Schedule 4.26

Material Contracts

Schedule 5.1

Financial Statements, Reports, Certificates

Schedule 5.2

Collateral Reporting

Schedule 6.5

Nature of Business

 

vii

--------------------------------------------------------------------------------

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of November 18,
2015, by and among the lenders identified on the signature pages hereof (each of
such lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity, “Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as the sole arranger (in such capacity, together with its
successors and assigns in such capacity, the “Arranger”), WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as the sole book runner
(in such capacity, together with its successors and assigns in such capacity,
the “Book Runner”), INVENTURE FOODS, INC., a Delaware corporation (the “Parent
Borrower”), and the Subsidiaries of the Parent Borrower identified on the
signature pages hereof (such Subsidiaries, together with the Parent Borrower,
are referred to hereinafter each individually as a “Borrower”, and individually
and collectively, jointly and severally, as “Borrowers”).

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1                               Definitions.  Capitalized terms used in this
Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2                               Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP;
provided, that if Borrowers notify Agent that Borrowers request an amendment to
any provision hereof to eliminate the effect of any Accounting Change occurring
after the Closing Date or in the application thereof on the operation of such
provision (or if Agent notifies Borrowers that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such Accounting Change or in the
application thereof, then Agent and Borrowers agree that they will negotiate in
good faith amendments to the provisions of this Agreement that are directly
affected by such Accounting Change with the intent of having the respective
positions of the Lenders and Borrowers after such Accounting Change conform as
nearly as possible to their respective positions as of the date of this
Agreement and, until any such amendments have been agreed upon and agreed to by
the Required Lenders, the provisions in this Agreement shall be calculated as if
no such Accounting Change had occurred.  When used herein, the term “financial
statements” shall include the notes and schedules thereto.  Whenever the term
“Borrowers” is used in respect of a financial covenant or a related definition,
it shall be understood to mean Parent Borrower and its Subsidiaries on a
consolidated basis, unless the context clearly requires otherwise. 
Notwithstanding anything to the contrary contained herein, (a) all financial
statements delivered hereunder shall be prepared, and the financial covenant
contained herein shall be calculated, without giving effect to any election
under the Statement of Financial Accounting Standards No. 159 (or any similar
accounting principle) permitting a Person to value its financial liabilities or
Indebtedness at the fair value thereof, and (b) the term “unqualified opinion”
as used herein to refer to opinions or reports provided by accountants shall
mean an opinion or report that is (i) unqualified, and (ii) does not include any
explanation, supplemental comment, or other comment concerning the ability of
the applicable Person to continue as a going concern or concerning the scope of
the audit.

 

1.3                               Code.  Any terms used in this Agreement that
are defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein; provided that to the extent that the Code is
used to define any term herein and such term is defined differently in different
Articles of the Code, the definition of such term contained in Article 9 of the
Code shall govern.

 

1.4                               Construction.  Unless the context of this
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar

 

--------------------------------------------------------------------------------

 

terms in this Agreement or any other Loan Document referred to this Agreement or
such other Loan Document, as the case may be, as a whole (including the
schedules to this Agreement or such other Loan Document) and not to any
particular provision of this Agreement or such other Loan Document, as the case
may be.  Section, subsection, clause, schedule, and exhibit references herein
are to this Agreement unless otherwise specified.  Any reference in this
Agreement or in any other Loan Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean
(a) the payment or repayment in full in immediately available funds of (i) the
principal amount of, and interest accrued and unpaid with respect to, all
outstanding Loans, together with the payment of any premium applicable to the
repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are
unpaid regardless of whether demand has been made therefor, (iii) all fees or
charges that have accrued hereunder or under any other Loan Document (including
the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the
case of contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, (c) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization, (d) the receipt by Agent of cash collateral in order
to secure any other contingent Obligations for which a claim or demand for
payment has been made on or prior to such time or in respect of matters or
circumstances known to Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys’
fees and legal expenses), such cash collateral to be in such amount as Agent
reasonably determines is appropriate to secure such contingent Obligations,
(e) the payment or repayment in full in immediately available funds of all other
outstanding Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Hedge Agreements provided by Hedge
Providers) other than (i) unasserted contingent indemnification Obligations,
(ii) any Bank Product Obligations (other than Hedge Obligations) that, at such
time, are allowed by the applicable Bank Product Provider to remain outstanding
without being required to be repaid or cash collateralized, and (iii) any Hedge
Obligations that, at such time, are allowed by the applicable Hedge Provider to
remain outstanding without being required to be repaid, and (f) the termination
of all of the Commitments of the Lenders.  Any reference herein to any Person
shall be construed to include such Person’s successors and assigns.  Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.

 

1.5                               Time References.  Unless the context of this
Agreement or any other Loan Document clearly requires otherwise, all references
to time of day refer to Pacific standard time or Pacific daylight saving time,
as in effect in Los Angeles, California on such day.  For purposes of the
computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to and including”; provided that, with respect to a computation of fees
or interest payable to Agent or any Lender, such period shall in any event
consist of at least one full day.

 

1.6                               Schedules and Exhibits.  All of the schedules
and exhibits attached to this Agreement shall be deemed incorporated herein by
reference.

 

2.                                      LOANS AND TERMS OF PAYMENT.

 

2.1                               Revolving Loans.

 

(a)                                 Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender agrees (severally,
not jointly or jointly and severally) to make revolving loans (“Revolving
Loans”) to Borrowers in an amount at any one time outstanding not to exceed the
lesser of:

 

(i)                                     such Lender’s Commitment, or

 

(ii)                                  such Lender’s Pro Rata Share of an amount
equal to the lesser of:

 

2

--------------------------------------------------------------------------------

 

(A)                               the amount equal to (1) the Maximum Revolver
Amount less (2) the sum of (x) the Letter of Credit Usage at such time, plus
(y) the principal amount of Swing Loans outstanding at such time, plus (z) the
amount of reserves established by Agent under Section 2.1(c), and

 

(B)                               the amount equal to (1) the Borrowing Base
then in effect as of such date (based upon the most recent Borrowing Base
Certificate delivered by Borrowers to Agent) less (2) the sum of (x) the Letter
of Credit Usage at such time, plus (y) the principal amount of Swing Loans
outstanding at such time (the lesser of clauses (A) and (B), the “Maximum
Available Amount”).

 

(b)                                 Amounts borrowed pursuant to this
Section 2.1 may be repaid and, subject to the terms and conditions of this
Agreement, reborrowed at any time during the term of this Agreement.  The
outstanding principal amount of the Revolving Loans, together with interest
accrued and unpaid thereon, shall constitute Obligations and shall be due and
payable on the Maturity Date or, if earlier, on the date on which they are
declared due and payable pursuant to the terms of this Agreement.

 

(c)                                  Anything to the contrary in this
Section 2.1 notwithstanding, Agent shall have the right (but not the
obligation), in the exercise of its Permitted Discretion, to establish and
increase or decrease Receivable Reserves, Inventory Reserves, Bank Product
Reserves, FSA Reserves, Food Products Payable Reserves, Landlord Reserves and
other Reserves against the Borrowing Base or the Maximum Revolver Amount.  The
amount of any Receivable Reserves, Inventory Reserves, Bank Product Reserves,
FSA Reserves, Food Products Payable Reserves, Landlord Reserves, or other
Reserve established by Agent shall have a reasonable relationship to the event,
condition, other circumstance, or fact that is the basis for such reserve and
shall not be duplicative of any other reserve established and currently
maintained.

 

(d)                                 Anything to the contrary in this Section 2.1
notwithstanding, Borrowing Base shall be automatically recalculated on and as of
each (i) November 15, using the advance rates reflected in the Off-Season
Borrowing Base and such advance rates shall be used until the end of the
Off-Season on the following July 14 and (ii) July 15, using the advance rates
reflected in the Peak-Season Borrowing Base and such advance rates shall be used
until the end of the Peak-Season on November 14, in each case, whether or not a
Borrowing Base Certificate has been delivered on November 15 and/or July 15 and
the Maximum Available Amount shall be determined based upon such calculation. 
For the avoidance of doubt, the Peak-Season Borrowing Base for each month
commencing on the 15th day of such month shall be based off of the Borrowing
Base Certificate, dated (or required to be delivered) as of the last day of the
last month occurring.

 

2.2                               [Reserved].

 

2.3                               Borrowing Procedures and Settlements.

 

(a)                                 Procedure for Borrowing Revolving Loans. 
Each Borrowing shall be made by a written request by an Authorized Person
delivered to Agent and received by Agent no later than 10:00 a.m. (i) on the
Business Day that is the requested Funding Date in the case of a request for a
Swing Loan, and (ii) on the Business Day that is 1 Business Day prior to the
requested Funding Date in the case of all other requests, specifying (A) the
amount of such Borrowing, and (B) the requested Funding Date (which shall be a
Business Day); provided, that Agent may, in its sole discretion, elect to accept
as timely requests that are received later than 10:00 a.m. on the applicable
Business Day.  At Agent’s election, in lieu of delivering the above-described
written request, any Authorized Person may give Agent telephonic notice of such
request by the required time.  In such circumstances, Borrowers agree that any
such telephonic notice will be confirmed in writing within 24 hours of the
giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request.

 

(b)                                 Making of Swing Loans.  In the case of a
request for a Revolving Loan and so long as either (i) the aggregate amount of
Swing Loans made since the last Settlement Date, minus all payments or other
amounts applied to Swing Loans since the last Settlement Date, plus the amount
of the requested Swing Loan does not exceed $5,000,000, or (ii) Swing Lender, in
its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing
limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan
made by Swing

 

3

--------------------------------------------------------------------------------

 

Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and
all such Revolving Loans being referred to as “Swing Loans”) available to
Borrowers on the Funding Date applicable thereto by transferring immediately
available funds in the amount of such requested Borrowing to the Designated
Account. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and
shall be subject to all the terms and conditions (including Section 3)
applicable to other Revolving Loans, except that all payments (including
interest) on any Swing Loan shall be payable to Swing Lender solely for its own
account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall
not make and shall not be obligated to make any Swing Loan if Swing Lender has
actual knowledge that (i) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date.  Swing Lender shall not otherwise be required
to determine whether the applicable conditions precedent set forth in Section 3
have been satisfied on the Funding Date applicable thereto prior to making any
Swing Loan.  The Swing Loans shall be secured by Agent’s Liens, constitute
Revolving Loans and Obligations, and bear interest at the rate applicable from
time to time to Revolving Loans that are Base Rate Loans.  Upon notice from the
Swing Lender, the Lenders shall be irrevocably and unconditionally obligated to
purchase participations in any Swing Loan based upon their Pro Rata Share of
their Commitments.

 

(c)                                  Making of Revolving Loans.

 

(i)                                     In the event that Swing Lender is not
obligated to make a Swing Loan, then after receipt of a request for a Borrowing
pursuant to Section 2.3(a), Agent shall notify the Lenders by telecopy,
telephone, email, or other electronic form of transmission, of the requested
Borrowing; such notification to be sent on the Business Day that is 1 Business
Day prior to the requested Funding Date.  If Agent has notified the Lenders of a
requested Borrowing on the Business Day that is 1 Business Day prior to the
Funding Date, then each Lender shall make the amount of such Lender’s Pro Rata
Share of the requested Borrowing available to Agent in immediately available
funds, to Agent’s Account, not later than 10:00 a.m. on the Business Day that is
the requested Funding Date.  After Agent’s receipt of the proceeds of such
Revolving Loans from the Lenders, Agent shall make the proceeds thereof
available to Borrowers on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, that, subject to the provisions of
Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving
Loan, if (1) one or more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.

 

(ii)                                  Unless Agent receives notice from a Lender
prior to 9:30 a.m. on the Business Day that is the requested Funding Date
relative to a requested Borrowing as to which Agent has notified the Lenders of
a requested Borrowing that such Lender will not make available as and when
required hereunder to Agent for the account of Borrowers the amount of that
Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has
made or will make such amount available to Agent in immediately available funds
on the Funding Date and Agent may (but shall not be so required), in reliance
upon such assumption, make available to Borrowers a corresponding amount.  If,
on the requested Funding Date, any Lender shall not have remitted the full
amount that it is required to make available to Agent in immediately available
funds and if Agent has made available to Borrowers such amount on the requested
Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata
Share of the requested Borrowing available to Agent in immediately available
funds, to Agent’s Account, no later than 10:00 a.m. on the Business Day that is
the first Business Day after the requested Funding Date (in which case, the
interest accrued on such Lender’s portion of such Borrowing for the Funding Date
shall be for Agent’s separate account).  If any Lender shall not remit the full
amount that it is required to make available to Agent in immediately available
funds as and when required hereby and if Agent has made available to Borrowers
such amount, then that Lender shall be obligated to immediately remit such
amount to Agent, together with interest at the Defaulting Lender Rate for each
day until the date on which such amount is so remitted.  A notice submitted by
Agent to any Lender with respect to amounts owing under this
Section 2.3(c)(ii) shall be conclusive, absent manifest error.  If the amount
that a Lender is required to remit is made available to Agent, then such payment
to Agent shall constitute such Lender’s Revolving Loan for all purposes of this
Agreement.  If such amount is not made available to Agent on the Business Day
following the Funding Date, Agent will notify Borrowers of such failure to fund
and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s
account,

 

4

--------------------------------------------------------------------------------

 

together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Revolving Loans composing such Borrowing.

 

(d)                                 Protective Advances and Optional
Overadvances.

 

(i)                                     Any contrary provision of this Agreement
or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv),
at any time (A) after the occurrence and during the continuance of a Default or
an Event of Default, or (B) that any of the other applicable conditions
precedent set forth in Section 3 are not satisfied, Agent hereby is authorized
by Borrowers and the Lenders, from time to time, in Agent’s sole discretion, to
make Revolving Loans to, or for the benefit of, Borrowers, on behalf of the
Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable
(1) to preserve or protect the Collateral, or any portion thereof, or (2) to
enhance the likelihood of repayment of the Obligations (other than the Bank
Product Obligations) (the Revolving Loans described in this
Section 2.3(d)(i) shall be referred to as “Protective Advances”). 
Notwithstanding the foregoing, the aggregate amount of all Protective Advances
outstanding at any one time shall not exceed $5,000,000.

 

(ii)                                  Any contrary provision of this Agreement
or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv),
the Lenders hereby authorize Agent or Swing Lender, as applicable, and either
Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly
and intentionally, continue to make Revolving Loans (including Swing Loans) to
Borrowers notwithstanding that an Overadvance exists or would be created
thereby, so long as (A) after giving effect to such Revolving Loans, the
outstanding Revolver Usage does not exceed the Borrowing Base by more than
$5,000,000, and (B) after giving effect to such Revolving Loans, the outstanding
Revolver Usage (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver
Amount.  In the event Agent obtains actual knowledge that the Revolver Usage
exceeds the amounts permitted by the immediately foregoing provisions,
regardless of the amount of, or reason for, such excess, Agent shall notify the
Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral or its value,
in which case Agent may make such Overadvances and provide notice as promptly as
practicable thereafter), and the Lenders with Commitments thereupon shall,
together with Agent, jointly determine the terms of arrangements that shall be
implemented with Borrowers intended to reduce, within a reasonable time, the
outstanding principal amount of the Revolving Loans to Borrowers to an amount
permitted by the preceding sentence.  In such circumstances, if any Lender with
a Commitment objects to the proposed terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.  The foregoing
provisions are meant for the benefit of the Lenders and Agent and are not meant
for the benefit of Borrowers, which shall continue to be bound by the provisions
of Section 2.4(e)(i).  Each Lender with a Commitment shall be obligated to
settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as
applicable) for the amount of such Lender’s Pro Rata Share of any unintentional
Overadvances by Agent reported to such Lender, any intentional Overadvances made
as permitted under this Section 2.3(d)(ii), and any Overadvances resulting from
the charging to the Loan Account of interest, fees, or Lender Group Expenses. 
No Overadvance may remain outstanding hereunder for more than thirty (30) days
without the consent of the Required Lenders.

 

(iii)                               Each Protective Advance and each Overadvance
(each, an “Extraordinary Advance”) shall be deemed to be a Revolving Loan
hereunder, except that no Extraordinary Advance shall be eligible to be a LIBOR
Rate Loan and, prior to Settlement therefor, all payments on the Extraordinary
Advances shall be payable to Agent solely for its own account.  The
Extraordinary Advances shall be repayable on demand, secured by Agent’s Liens,
constitute Obligations hereunder, and bear interest at the rate applicable from
time to time to Revolving Loans that are Base Rate Loans.  The provisions of
this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and
the Lenders and are not intended to benefit Borrowers (or any other Loan Party)
in any way.

 

(iv)                              Notwithstanding anything contained in this
Agreement or any other Loan Document to the contrary: no Extraordinary Advance
may be made by Agent (A) if such Extraordinary Advance

 

5

--------------------------------------------------------------------------------

 

would cause the aggregate principal amount of Extraordinary Advances outstanding
to exceed an amount equal to 10% of the Maximum Revolver Amount or (B) to the
extent that the making of any Extraordinary Advance causes the aggregate
Revolver Usage to exceed the Maximum Revolver Amount, such portion of such
Extraordinary Advance shall be for Agent’s sole and separate account and not for
the account of any Lender and shall be entitled to priority in repayment in
accordance with Section 2.4(b).

 

(e)                                  Settlement.  It is agreed that each
Lender’s funded portion of the Revolving Loans is intended by the Lenders to
equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving
Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of Borrowers) that
in order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among the Lenders as to the Revolving Loans, the Swing
Loans, and the Extraordinary Advances shall take place on a periodic basis in
accordance with the following provisions:

 

(i)                                     Agent shall request settlement
(“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis
if so determined by Agent in its sole discretion (1) on behalf of Swing Lender,
with respect to the outstanding Swing Loans, (2) for itself, with respect to the
outstanding Extraordinary Advances, and (3) with respect to Borrowers’ or any of
their Subsidiaries’ payments or other amounts received, as to each by notifying
the Lenders by telecopy, telephone, or other similar form of transmission, of
such requested Settlement, no later than 2:00 p.m. on the Business Day
immediately prior to the date of such requested Settlement (the date of such
requested Settlement being the “Settlement Date”).  Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Revolving
Loans, Swing Loans, and Extraordinary Advances for the period since the prior
Settlement Date.  Subject to the terms and conditions contained herein
(including Section 2.3(g)):  (y) if the amount of the Revolving Loans (including
Swing Loans, and Extraordinary Advances) made by a Lender that is not a
Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans
(including Swing Loans, and Extraordinary Advances) as of a Settlement Date,
then Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer
in immediately available funds to a Deposit Account of such Lender (as such
Lender may designate), an amount such that each such Lender shall, upon receipt
of such amount, have as of the Settlement Date, its Pro Rata Share of the
Revolving Loans (including Swing Loans, and Extraordinary Advances), and (z) if
the amount of the Revolving Loans (including Swing Loans, and Extraordinary
Advances) made by a Lender is less than such Lender’s Pro Rata Share of the
Revolving Loans (including Swing Loans, and Extraordinary Advances) as of a
Settlement Date, such Lender shall no later than 12:00 p.m. on the Settlement
Date transfer in immediately available funds to Agent’s Account, an amount such
that each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing
Loans and Extraordinary Advances).  Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be applied against the
amounts of the applicable Swing Loans or Extraordinary Advances and, together
with the portion of such Swing Loans or Extraordinary Advances representing
Swing Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such
Lenders.  If any such amount is not made available to Agent by any Lender on the
Settlement Date applicable thereto to the extent required by the terms hereof,
Agent shall be entitled to recover for its account such amount on demand from
such Lender together with interest thereon at the Defaulting Lender Rate.

 

(ii)                                  In determining whether a Lender’s balance
of the Revolving Loans, Swing Loans, and Extraordinary Advances is less than,
equal to, or greater than such Lender’s Pro Rata Share of the Revolving Loans,
Swing Loans, and Extraordinary Advances as of a Settlement Date, Agent shall, as
part of the relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to principal, interest,
fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds
of Collateral.

 

(iii)                               Between Settlement Dates, Agent, to the
extent Extraordinary Advances or Swing Loans are outstanding, may pay over to
Agent or Swing Lender, as applicable, any payments or other amounts received by
Agent, that in accordance with the terms of this Agreement would be applied to
the reduction of the Revolving Loans, for application to the Extraordinary
Advances or Swing Loans.  Between Settlement Dates, Agent, to the extent no
Extraordinary Advances or Swing Loans are outstanding, may pay over to Swing
Lender any payments or other amounts received by Agent, that in accordance with
the terms of this Agreement would be applied to the reduction of the Revolving
Loans, for application to Swing Lender’s Pro Rata Share of the Revolving

 

6

--------------------------------------------------------------------------------

 

Loans.  If, as of any Settlement Date, payments or other amounts of Borrowers or
their Subsidiaries received since the then immediately preceding Settlement Date
have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans other
than to Swing Loans, as provided for in the previous sentence, Swing Lender
shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the
Lenders (other than a Defaulting Lender if Agent has implemented the provisions
of Section 2.3(g)), to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each such Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving
Loans.  During the period between Settlement Dates, Swing Lender with respect to
Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with
respect to the Revolving Loans other than Swing Loans and Extraordinary
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the daily amount of funds employed by Swing Lender,
Agent, or the Lenders, as applicable.

 

(iv)                              Anything in this Section 2.3(e) to the
contrary notwithstanding, in the event that a Lender is a Defaulting Lender,
Agent shall be entitled to refrain from remitting settlement amounts to the
Defaulting Lender and, instead, shall be entitled to elect to implement the
provisions set forth in Section 2.3(g).

 

(f)                                   Notation.  Agent, as a non-fiduciary agent
for Borrowers, shall maintain a register showing the principal amount of the
Revolving Loans, owing to each Lender, including the Swing Loans owing to Swing
Lender, and Extraordinary Advances owing to Agent, and the interests therein of
each Lender, from time to time and such register shall, absent manifest error,
conclusively be presumed to be correct and accurate.

 

(g)                                  Defaulting Lenders.

 

(i)                                     Notwithstanding the provisions of
Section 2.4(b)(iii), if for any reason any Lender shall become a Defaulting
Lender, Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender’s benefit or any
proceeds of Collateral that would otherwise be remitted hereunder to the
Defaulting Lender, and, in the absence of such transfer to the Defaulting
Lender, Agent shall transfer any such payments (A) first, to Swing Lender to the
extent of any Swing Loans that were made by Swing Lender and that were required
to be, but were not, paid by the Defaulting Lender, (B) second, to Issuing Bank,
to the extent of the portion of a Letter of Credit Disbursement that was
required to be, but was not, paid by the Defaulting Lender, (C) third, to each
Non-Defaulting Lender ratably in accordance with their Commitments (but, in each
case, only to the extent that such Defaulting Lender’s portion of a Revolving
Loan (or other funding obligation) was funded by such other Non-Defaulting
Lender), (D) to a suspense account maintained by Agent, the proceeds of which
shall be retained by Agent and may be made available to be re-advanced to or for
the benefit of Borrowers (upon the request of Borrowers and subject to the
conditions set forth in Section 3.2) as if such Defaulting Lender had made its
portion of Revolving Loans (or other funding obligations) hereunder, and
(E) from and after the date on which all other Obligations have been paid in
full, to such Defaulting Lender in accordance with tier (L) of
Section 2.4(b)(iii).  Subject to the foregoing, Agent may hold and, in its
discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender.  Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided,
that the foregoing shall not apply to any of the matters governed by
Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall
remain effective with respect to such Defaulting Lender until the earlier of
(y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Bank,
and Borrowers shall have waived, in writing, the application of this
Section 2.3(g) to such Defaulting Lender, or (z) the date on which such
Defaulting Lender makes payment of all amounts that it was obligated to fund
hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of
the amounts that it was obligated to fund hereunder, and, if requested by Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder (on which earlier date, so long as no Event of Default has occurred
and is continuing, any remaining cash collateral held by Agent pursuant to
Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this
Section 2.3(g) shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by any Borrower of its duties and

 

7

--------------------------------------------------------------------------------

 

obligations hereunder to Agent, Issuing Bank, or to the Lenders other than such
Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it
was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrowers, at their
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided,
that any such assumption of the Commitment of such Defaulting Lender shall not
be deemed to constitute a waiver of any of the Lender Group’s or Borrowers’
rights or remedies against any such Defaulting Lender arising out of or in
relation to such failure to fund.  In the event of a direct conflict between the
priority provisions of this Section 2.3(g) and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.

 

(ii)                                  If any Swing Loan or Letter of Credit is
outstanding at the time that a Lender becomes a Defaulting Lender then:

 

(A)                               such Defaulting Lender’s Swing Loan Exposure
and Letter of Credit Exposure shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Shares but only to the
extent (x) the sum of all Non-Defaulting Lenders’ Revolving Loan Exposures plus
such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure does
not exceed the total of all Non-Defaulting Lenders’ Commitments and (y) the
conditions set forth in Section 3.2 are satisfied at such time;

 

(B)                               if the reallocation described in clause
(A) above cannot, or can only partially, be effected, Borrowers shall within one
Business Day following notice by Agent (x) first, prepay such Defaulting
Lender’s Swing Loan Exposure (after giving effect to any partial reallocation
pursuant to clause (A) above) and (y) second, cash collateralize such Defaulting
Lender’s Letter of Credit Exposure (after giving effect to any partial
reallocation pursuant to clause (A) above), pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
Agent, for so long as such Letter of Credit Exposure is outstanding; provided,
that Borrowers shall not be obligated to cash collateralize any Defaulting
Lender’s Letter of Credit Exposure if such Defaulting Lender is also the Issuing
Bank;

 

(C)                               if Borrowers cash collateralize any portion of
such Defaulting Lender’s Letter of Credit Exposure pursuant to this
Section 2.3(g)(ii), Borrowers shall not be required to pay any Letter of Credit
Fees to Agent for the account of such Defaulting Lender pursuant to
Section 2.6(b) with respect to such cash collateralized portion of such
Defaulting Lender’s Letter of Credit Exposure during the period such Letter of
Credit Exposure is cash collateralized;

 

(D)                               to the extent the Letter of Credit Exposure of
the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii),
then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to
Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’
Letter of Credit Exposure;

 

(E)                                to the extent any Defaulting Lender’s Letter
of Credit Exposure is neither cash collateralized nor reallocated pursuant to
this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of
the Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would
have otherwise been payable to such Defaulting Lender under Section 2.6(b) with
respect to such portion of such Letter of Credit Exposure shall instead be
payable to the Issuing Bank until such portion of such Defaulting Lender’s
Letter of Credit Exposure is cash collateralized or reallocated;

 

8

--------------------------------------------------------------------------------

 

(F)                                 so long as any Lender is a Defaulting
Lender, the Swing Lender shall not be required to make any Swing Loan and the
Issuing Bank shall not be required to issue, amend, or increase any Letter of
Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share
of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this
Section 2.3(g)(ii) or (y) the Swing Lender or Issuing Bank, as applicable, has
not otherwise entered into arrangements reasonably satisfactory to the Swing
Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing
Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s
participation in Swing Loans or Letters of Credit; and

 

(G)                               Agent may release any cash collateral provided
by Borrowers pursuant to this Section 2.3(g)(ii) to the Issuing Bank and the
Issuing Bank may apply any such cash collateral to the payment of such
Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is
not reimbursed by Borrowers pursuant to Section 2.11(d).

 

(h)                                 Independent Obligations.  All Revolving
Loans (other than Swing Loans and Extraordinary Advances) shall be made by the
Lenders contemporaneously and in accordance with their respective Pro Rata
Shares.  It is understood that (i) no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make any Revolving Loan
(or other extension of credit) hereunder, nor shall any Commitment of any Lender
be increased or decreased as a result of any failure by any other Lender to
perform its obligations hereunder, and (ii) no failure by any Lender to perform
its obligations hereunder shall excuse any other Lender from its obligations
hereunder.

 

2.4                               Payments; Reductions of Commitments;
Prepayments.

 

(a)                                 Payments by Borrowers.

 

(i)                                     Except as otherwise expressly provided
herein, all payments by Borrowers shall be made to Agent’s Account for the
account of the Lender Group and shall be made in immediately available funds, no
later than 1:30 p.m. on the date specified herein.  Any payment received by
Agent later than 1:30 p.m. shall be deemed to have been received (unless Agent,
in its sole discretion, elects to credit it on the date received) on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.

 

(ii)                                  Unless Agent receives notice from
Borrowers prior to the date on which any payment is due to the Lenders that
Borrowers will not make such payment in full as and when required, Agent may
assume that Borrowers have made (or will make) such payment in full to Agent on
such date in immediately available funds and Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender.  If and to the
extent Borrowers do not make such payment in full to Agent on the date when due,
each Lender severally shall repay to Agent on demand such amount distributed to
such Lender, together with interest thereon at the Defaulting Lender Rate for
each day from the date such amount is distributed to such Lender until the date
repaid.

 

(b)                                 Apportionment and Application.

 

(i)                                     So long as no Application Event has
occurred and is continuing and except as otherwise provided herein with respect
to Defaulting Lenders, all principal and interest payments received by Agent
shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Obligations to which such payments relate held by each
Lender) and all payments of fees and expenses received by Agent (other than fees
or expenses that are for Agent’s separate account or for the separate account of
Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata
Share of the type of Commitment or Obligation to which a particular fee or
expense relates.

 

(ii)                                  Subject to Section 2.4(b)(v) and
Section 2.4(e), all payments to be made hereunder by Borrowers shall be remitted
to Agent and all such payments, and all proceeds of Collateral received by
Agent, shall be applied, so long as no Application Event has occurred and is
continuing and except as otherwise provided

 

9

--------------------------------------------------------------------------------

 

herein with respect to Defaulting Lenders, to reduce the balance of the
Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

 

(iii)                               At any time that an Application Event has
occurred and is continuing and except as otherwise provided herein with respect
to Defaulting Lenders, all payments remitted to Agent and all proceeds of
Collateral received by Agent shall be applied as follows:

 

(A)                               first, to pay any Lender Group Expenses
(including cost or expense reimbursements) or indemnities then due to Agent
under the Loan Documents, until paid in full,

 

(B)                               second, to pay any fees or premiums then due
to Agent under the Loan Documents until paid in full,

 

(C)                               third, to pay interest due in respect of all
Protective Advances until paid in full,

 

(D)                               fourth, to pay the principal of all Protective
Advances until paid in full,

 

(E)                                fifth, ratably, to pay any Lender Group
Expenses (including cost or expense reimbursements) or indemnities then due to
any of the Lenders under the Loan Documents, until paid in full,

 

(F)                                 sixth, ratably, to pay any fees or premiums
then due to any of the Lenders under the Loan Documents until paid in full,

 

(G)                               seventh, to pay interest accrued in respect of
the Swing Loans until paid in full,

 

(H)                              eighth, to pay the principal of all Swing Loans
until paid in full,

 

(I)                                   ninth, ratably, to pay interest accrued in
respect of the Revolving Loans (other than Protective Advances) until paid in
full,

 

(J)                                   tenth, ratably

 

i.                                          ratably, to pay the principal of all
Revolving Loans until paid in full,

 

ii.                                       to Agent, to be held by Agent, for the
benefit of Issuing Bank (and for the ratable benefit of each of the Lenders that
have an obligation to pay to Agent, for the account of Issuing Bank, a share of
each Letter of Credit Disbursement), as cash collateral in an amount up to 105%
of the Letter of Credit Usage (to the extent permitted by applicable law, such
cash collateral shall be applied to the reimbursement of any Letter of Credit
Disbursement as and when such disbursement occurs and, if a Letter of Credit
expires undrawn, the cash collateral held by Agent in respect of such Letter of
Credit shall, to the extent permitted by applicable law, be reapplied pursuant
to this Section 2.4(b)(iii), beginning with tier (A) hereof),

 

iii.                                    ratably, up to the greater of (y) the
amount (after taking into account any amounts previously paid pursuant to this
clause iii. during the continuation of the applicable Application Event) of the
most recently established Bank Product Reserve, which amount was established
prior to the occurrence of, and not in contemplation of, the subject Application
Event and (z) $5,000,000 in the aggregate (after taking into account any amounts
previously paid pursuant to this clause iii. during the continuation of the
applicable Application Event), to (I) the Bank Product Providers based upon
amounts then certified by the applicable Bank Product Provider to Agent (in form
and substance satisfactory to Agent) to be due and payable to such Bank Product
Providers on account of Bank Product Obligations, and (II) with any balance to
be paid to Agent, to be held by Agent, for the ratable benefit of the Bank
Product Providers, as cash collateral (which cash

 

10

--------------------------------------------------------------------------------

 

collateral may be released by Agent to the applicable Bank Product Provider and
applied by such Bank Product Provider to the payment or reimbursement of any
amounts due and payable with respect to Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Bank Product Obligations are paid
or otherwise satisfied in full, the cash collateral held by Agent in respect of
such Bank Product Obligations shall be reapplied pursuant to this
Section 2.4(b)(iii), beginning with tier (A) hereof,

 

(K)                               eleventh, to pay any other Obligations other
than Obligations owed to Defaulting Lenders (including being paid, ratably, to
the Bank Product Providers on account of all amounts then due and payable in
respect of Bank Product Obligations, with any balance to be paid to Agent, to be
held by Agent, for the ratable benefit of the Bank Product Providers, as cash
collateral (which cash collateral may be released by Agent to the applicable
Bank Product Provider and applied by such Bank Product Provider to the payment
or reimbursement of any amounts due and payable with respect to Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such Bank
Product Obligations are paid or otherwise satisfied in full, the cash collateral
held by Agent in respect of such Bank Product Obligations shall be reapplied
pursuant to this Section 2.4(b)(iii), beginning with tier (A) hereof),

 

(L)                                twelfth, ratably to pay any Obligations owed
to Defaulting Lenders, and

 

(M)                            thirteenth, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

 

(iv)                              Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided in Section 2.3(e).

 

(v)                                 In each instance, so long as no Application
Event has occurred and is continuing, Section 2.4(b)(ii) shall not apply to any
payment made by Borrowers to Agent and specified by Borrowers to be for the
payment of specific Obligations then due and payable (or prepayable) under any
provision of this Agreement or any other Loan Document.

 

(vi)                              For purposes of Section 2.4(b)(iii), “paid in
full” of a type of Obligation means payment in cash or immediately available
funds of all amounts owing on account of such type of Obligation, including
interest accrued after the commencement of any Insolvency Proceeding, default
interest, interest on interest, and expense reimbursements, irrespective of
whether any of the foregoing would be or is allowed or disallowed in whole or in
part in any Insolvency Proceeding.

 

(vii)                           In the event of a direct conflict between the
priority provisions of this Section 2.4 and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, if the conflict
relates to the provisions of Section 2.3(g) and this Section 2.4, then the
provisions of Section 2.3(g) shall control and govern, and if otherwise, then
the terms and provisions of this Section 2.4 shall control and govern.

 

(c)                                  Reduction of Commitments.  The Commitments
shall terminate on the Maturity Date.  Borrowers may reduce the Commitments,
without premium or penalty, to an amount that is not less than $5,000,000 and,
in any event, not less than the sum of (A) the Revolver Usage as of such date,
plus (B) the principal amount of all Revolving Loans not yet made as to which a
request has been given by Borrowers under Section 2.3(a), plus (C) the amount of
all Letters of Credit not yet issued as to which a request has been given by
Borrowers pursuant to Section 2.11(a).  Each such reduction shall be in an
amount which is not less than $5,000,000 (unless the Commitments are being
reduced to $5,000,000 and the amount of the Commitments in effect immediately
prior to such reduction are less than $10,000,000), shall be made by providing
not less than 10 Business Days prior written notice to Agent, and shall be
irrevocable.  The Commitments once reduced may not be

 

11

--------------------------------------------------------------------------------

 

increased.  Each such reduction of the Commitments shall reduce the Commitments
of each Lender proportionately in accordance with its ratable share thereof.

 

(d)                                 Optional Prepayments.  Borrowers may prepay
the principal of any Revolving Loan at any time in whole or in part, without
premium or penalty.

 

(e)                                  Mandatory Prepayments.

 

(i)                                     Borrowing Base.  If, at any time,
(A) the Revolver Usage on such date exceeds (B) the Maximum Available Amount,
including as a result of application of Section 2.1(d), then Borrowers shall
immediately prepay the Obligations in accordance with Section 2.4(f)(i) in an
aggregate amount equal to the amount of such excess.

 

(ii)                                  Dispositions.  Within 1 Business Day of
the date of receipt by any Borrower or any of its Subsidiaries of the Net Cash
Proceeds of any voluntary or involuntary sale or disposition by such Borrower or
any of its Subsidiaries of ABL Priority Collateral (including insurance proceeds
and proceeds from casualty losses or condemnations) (but other than dispositions
which qualify as Permitted Dispositions under clauses (b), (c), (d), (e), (j),
(k), (l), (m) and (n) of the definition thereof), Borrowers shall prepay the
outstanding principal amount of the Obligations in accordance with
Section 2.4(f)(i) in an amount equal to 100% of such Net Cash Proceeds
(including condemnation awards and payments in lieu thereof) received by such
Person in connection with such sales or dispositions; provided that, so long as
(A) no Default or Event of Default shall have occurred and is continuing or
would result therefrom, (B) Borrowers shall have given Agent prior written
notice of Borrowers’ intention to apply such monies to the cost of replacement
of the properties or assets that are the subject of such sale or disposition or
the cost of purchase or construction of other assets useful in the business of
Borrowers or their Subsidiaries, (C) the monies are held in a Deposit Account in
which Agent has a perfected first-priority security interest, and (D) Borrower
or their Subsidiaries, as applicable, complete such replacement, purchase, or
construction within 270 after the initial receipt of such monies, then the Loan
Party whose assets were the subject of such disposition shall have the option to
apply such monies to the cost of replacement of the assets that are the subject
of such sale or disposition unless and to the extent that such applicable period
shall have expired without such replacement, purchase, or construction being
made or completed, in which case, any amounts remaining in the Deposit Account
referred to in clause (C) above shall be paid to Agent and applied in accordance
with Section 2.4(f); provided, further, that no Borrower nor any of its
Subsidiaries shall have the right to use such Net Cash Proceeds to make such
replacements, purchases, or construction in excess of $10,000,000 in any given
fiscal year.  Nothing contained in this Section 2.4(e)(ii) shall permit any
Borrower or any of its Subsidiaries to sell or otherwise dispose of any assets
other than in accordance with Section 6.4.

 

(iii)                               Curative Equity.  Within 1 Business Day of
the date of receipt by any Borrowers of the proceeds of any Curative Equity
pursuant to Section 9.3 with respect to a breach of the Specified Financial
Covenant, Borrowers shall prepay the outstanding principal of the Obligations in
accordance with Section 2.4(f) in an amount equal to 50% of such proceeds.

 

12

--------------------------------------------------------------------------------

 

(f)                                   Application of Payments.  Each prepayment
pursuant to Section 2.4(e)(i), Section 2.4(e)(ii) and Section 2.4(e)(iii) shall,
(A) so long as no Application Event shall have occurred and be continuing, be
applied, first, to the outstanding principal amount of the Revolving Loans until
paid in full, second, to cash collateralize the Letters of Credit in an amount
equal to 105% of the then outstanding Letter of Credit Usage, and (B) if an
Application Event shall have occurred and be continuing, be applied in the
manner set forth in Section 2.4(b)(iii).

 

(g)                                  If one (1) or more LIBOR Rate Loans are
outstanding along with Base Rate Loans, all payments from Borrowers applied to
the Loans pursuant to Section 2.4(a), Section 2.4(d), Section 2.4(e), or
Section 2.4(f), shall be applied first to the principal amount of the Base Rate
Loans outstanding, and then to the principal amount of the LIBOR Rate Loans, and
if there is more than one (1) LIBOR Rate Loan outstanding, the payments shall be
applied to the LIBOR Rate Loans in the order of occurrence of the last date of
the Interest Period for such Loans.

 

2.5                               Promise to Pay; Promissory Notes.

 

(a)                                 Borrowers agree to pay the Lender Group
Expenses on the earlier of (i) the first day of the month following the date on
which the applicable Lender Group Expenses were first incurred or (ii) the date
on which demand therefor is made by Agent (it being acknowledged and agreed that
any charging of such costs, expenses or Lender Group Expenses to the Loan
Account pursuant to the provisions of Section 2.6(d) shall be deemed to
constitute a demand for payment thereof for the purposes of this subclause
(ii)).  Borrowers promise to pay all of the Obligations (including principal,
interest, premiums, if any, fees, costs, and expenses (including Lender Group
Expenses)) in full on the Maturity Date or, if earlier, on the date on which the
Obligations (other than the Bank Product Obligations) become due and payable
pursuant to the terms of this Agreement.  Borrowers agree that their obligations
contained in the first sentence of this Section 2.5(a) shall survive payment or
satisfaction in full of all other Obligations.

 

(b)                                 Any Lender may request that any portion of
its Commitments or the Loans made by it be evidenced by one or more promissory
notes.  In such event, Borrowers shall execute and deliver to such Lender the
requested promissory notes payable to the order of such Lender in a form
furnished by Agent and reasonably satisfactory to Borrowers.  Thereafter, the
portion of the Commitments and Loans evidenced by such promissory notes and
interest thereon shall at all times be represented by one or more promissory
notes in such form payable to the order of the payee named therein.

 

2.6                               Interest Rates and Letter of Credit Fee;
Rates, Payments, and Calculations.

 

(a)                                 Interest Rates.  Except as provided in
Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest as follows:

 

(i)                                     each Revolving Loan which is a (x) LIBOR
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the LIBOR Rate plus the LIBOR
Rate Margin and (y) Base Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Base Rate Margin; and

 

(ii)                                  each Swing Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Base Rate Margin.

 

(b)                                 Letter of Credit Fee.  Borrowers shall pay
Agent (for the ratable benefit of the Lenders), a Letter of Credit fee (the
“Letter of Credit Fee”) (which fee shall be in addition to the fronting fees and
commissions, other fees, charges and expenses set forth in Section 2.11(k)) that
shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Letter
of Credit Usage.

 

(c)                                  Default Rate.  Upon the occurrence and
during the continuation of an Event of Default and at the election of Agent or
the Required Lenders,

 

13

--------------------------------------------------------------------------------

 

(i)                                     all Obligations (except for undrawn
Letters of Credit) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable thereunder, and

 

(ii)                                  the Letter of Credit Fee shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.

 

(d)                                 Payment.  Except to the extent provided to
the contrary in Section 2.10, Section 2.11(k) or Section 2.12(a), (i) all
interest, all Letter of Credit Fees and all other fees payable hereunder or
under any of the other Loan Documents shall be due and payable, in arrears, on
the first day of each month and (ii) all costs and expenses payable hereunder or
under any of the other Loan Documents, and all Lender Group Expenses shall be
due and payable on the earlier of (x) the first day of the month following the
date on which the applicable costs, expenses, or Lender Group Expenses were
first incurred or (y) the date on which demand therefor is made by Agent (it
being acknowledged and agreed that any charging of such costs, expenses or
Lender Group Expenses to the Loan Account pursuant to the provisions of the
following sentence shall be deemed to constitute a demand for payment thereof
for the purposes of this subclause (y)).  Borrowers hereby authorize Agent, from
time to time without prior notice to Borrowers, to charge to the Loan Account
(A) on the first day of each month (or with respect to LIBOR Rate Loans, the
date when interest is due and payable as provided in Section 2.12(a)), all
interest accrued during the prior month (or Interest Period or prior three
months, as applicable, in case of LIBOR Rate Loans) on the Revolving Loans
hereunder, (B) on the first day of each month, all Letter of Credit Fees accrued
or chargeable hereunder during the prior month, (C) as and when incurred or
accrued, all fees and costs provided for in Section 2.10 (a) or (c), (D) on the
first day of each month, the Unused Line Fee accrued during the prior month
pursuant to Section 2.10(b), (E) as and when due and payable, all other fees
payable hereunder or under any of the other Loan Documents, (F) as and when
incurred or accrued, the fronting fees and all commissions, other fees, charges
and expenses provided for in Section 2.11(k), (G) as and when incurred or
accrued, all other Lender Group Expenses, and (H) as and when due and payable
all other payment obligations payable under any Loan Document or any Bank
Product Agreement (including any amounts due and payable to the Bank Product
Providers in respect of Bank Products).  All amounts (including interest, fees,
costs, expenses, Lender Group Expenses, or other amounts payable hereunder or
under any other Loan Document or under any Bank Product Agreement) charged to
the Loan Account shall thereupon constitute Revolving Loans hereunder, shall
constitute Obligations hereunder, and shall initially accrue interest at the
rate then applicable to Revolving Loans that are Base Rate Loans (unless and
until converted into LIBOR Rate Loans in accordance with the terms of this
Agreement).

 

(e)                                  Computation.  All interest and fees
chargeable under the Loan Documents shall be computed on the basis of a 360 day
year, in each case, for the actual number of days elapsed in the period during
which the interest or fees accrue.  In the event the Base Rate is changed from
time to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.

 

(f)                                   Intent to Limit Charges to Maximum Lawful
Rate.  In no event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable.  Borrowers and the Lender
Group, in executing and delivering this Agreement, intend legally to agree upon
the rate or rates of interest and manner of payment stated within it; provided
that, anything contained herein to the contrary notwithstanding, if such rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement, Borrowers
are and shall be liable only for the payment of such maximum amount as is
allowed by law, and payment received from Borrowers in excess of such legal
maximum, whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.

 

2.7                               Crediting Payments.  The receipt of any
payment item by Agent shall not be required to be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to Agent’s Account or unless and until such payment item is
honored when presented for payment.  Should any payment item not be honored when
presented for payment, then Borrowers shall be deemed not to have

 

14

--------------------------------------------------------------------------------

 

made such payment and interest shall be calculated accordingly.  Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed
received by Agent only if it is received into Agent’s Account on a Business Day
on or before 1:30 p.m.  If any payment item is received into Agent’s Account on
a non-Business Day or after 1:30 p.m. on a Business Day (unless Agent, in its
sole discretion, elects to credit it on the date received), it shall be deemed
to have been received by Agent as of the opening of business on the immediately
following Business Day.

 

2.8                               Designated Account.  Agent is authorized to
make the Revolving Loans, and Issuing Bank is authorized to issue the Letters of
Credit, under this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person or, without
instructions, if pursuant to Section 2.6(d).  Borrowers agree to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Revolving Loans requested by Borrowers and made
by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and
Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by
Agent or the Lenders hereunder shall be made to the Designated Account.

 

2.9                               Maintenance of Loan Account; Statements of
Obligations.  Agent shall maintain an account on its books in the name of
Borrowers (the “Loan Account”) on which Borrowers will be charged with all
Revolving Loans (including Extraordinary Advances and Swing Loans) made by
Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the
Letters of Credit issued or arranged by Issuing Bank for Borrowers’ account, and
with all other payment Obligations hereunder or under the other Loan Documents,
including, accrued interest, fees and expenses, and Lender Group Expenses.  In
accordance with Section 2.7, the Loan Account will be credited with all payments
received by Agent from Borrowers or for Borrowers’ account.  Agent shall make
available to Borrowers monthly statements regarding the Loan Account, including
the principal amount of the Revolving Loans, interest accrued hereunder, fees
accrued or charged hereunder or under the other Loan Documents, and a summary
itemization of all charges and expenses constituting Lender Group Expenses
accrued hereunder or under the other Loan Documents, and each such statement,
absent manifest error, shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after Agent first makes such a statement available to Borrowers,
Borrowers shall deliver to Agent written objection thereto describing the error
or errors contained in such statement.

 

2.10                        Fees.

 

(a)                                 Agent Fees.  Borrowers shall pay to Agent,
for the account of Agent, as and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter.

 

(b)                                 Unused Line Fee.  Borrowers shall pay to
Agent, for the ratable account of the Lenders, an unused line fee (the “Unused
Line Fee”) in an amount equal to the Applicable Unused Line Fee Percentage per
annum times the result of (i) the aggregate amount of the Commitments, less
(ii) the Average Revolver Usage during the immediately preceding month (or
portion thereof), which Unused Line Fee shall be due and payable, in arrears, on
the first day of each month from and after the Closing Date up to the first day
of the month prior to the date on which the Obligations are paid in full and on
the date on which the Obligations are paid in full.

 

(c)                                  Field Examination and Other Fees. 
Borrowers shall pay to Agent, field examination, appraisal, and valuation fees
and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000
per day, per examiner, plus out-of-pocket expenses (including travel, meals, and
lodging) for each field examination of any Borrower performed by personnel
employed by Agent, and (ii) the fees or charges paid or incurred by Agent (but,
in any event, no less than a charge of $1,000 per day, per Person, plus
out-of-pocket expenses (including travel, meals, and lodging)) if it elects to
employ the services of one or more third Persons to perform field examinations
of any Borrower or its Subsidiaries, to establish electronic collateral
reporting systems, to appraise the Collateral, or any portion thereof, or to
assess any Borrower’s or its Subsidiaries’ business valuation; provided, that so
long as no Event of Default shall have occurred and be continuing, Borrowers
shall not be obligated to reimburse Agent for more than two (2) field
examinations during any calendar year and more than one (1) appraisal of each
type of Collateral during any calendar year.

 

15

--------------------------------------------------------------------------------

 

2.11                        Letters of Credit.

 

(a)                                 Subject to the terms and conditions of this
Agreement, upon the request of Borrowers made in accordance herewith, and prior
to the Maturity Date, Issuing Bank agrees to issue a requested Letter of Credit
for the account of Borrowers.  Unless such Letters of Credit have been made the
subject of Letter of Credit Collateralization (on and as of the Maturity Date),
no Letters of Credit shall have an expiry date that is later than the Maturity
Date.  By submitting a request to Issuing Bank for the issuance of a Letter of
Credit, Borrowers shall be deemed to have requested that Issuing Bank issue the
requested Letter of Credit.  Each request for the issuance of a Letter of
Credit, or the amendment, renewal, or extension of any outstanding Letter of
Credit, shall be irrevocable and shall be made in writing by an Authorized
Person and delivered to Issuing Bank via telefacsimile or other electronic
method of transmission reasonably acceptable to Issuing Bank and reasonably in
advance of the requested date of issuance, amendment, renewal, or extension. 
Each such request shall be in form and substance reasonably satisfactory to
Issuing Bank and (i) shall specify (A) the amount of such Letter of Credit,
(B) the date of issuance, amendment, renewal, or extension of such Letter of
Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name
and address of the beneficiary of the Letter of Credit, and (E) such other
information (including, the conditions to drawing, and, in the case of an
amendment, renewal, or extension, identification of the Letter of Credit to be
so amended, renewed, or extended) as shall be necessary to prepare, amend,
renew, or extend such Letter of Credit, and (ii) shall be accompanied by such
Issuer Documents as Agent or Issuing Bank may request or require, to the extent
that such requests or requirements are consistent with the Issuer Documents that
Issuing Bank generally requests for Letters of Credit in similar circumstances. 
Bank’s records of the content of any such request will be conclusive.  Anything
contained herein to the contrary notwithstanding, Issuing Bank may, but shall
not be obligated to, issue a Letter of Credit that supports the obligations of
Borrowers or one of their Subsidiaries in respect of (x) a lease of real
property, or (y) an employment contract.

 

(b)                                 Issuing Bank shall have no obligation to
issue a Letter of Credit if any of the following would result after giving
effect to the requested issuance:

 

(i)                                     the Letter of Credit Usage would exceed
$5,000,000, or

 

(ii)                                  the Letter of Credit Usage would exceed
the Maximum Revolver Amount less the sum of (x) the outstanding amount of
Revolving Loans (including Swing Loans) plus (y) the amount of reserves
established by Agent under Section 2.1(c), or

 

(iii)                               the Letter of Credit Usage would exceed the
Borrowing Base then in effect at such time less the outstanding principal
balance of the Revolving Loans (inclusive of Swing Loans) at such time.

 

(c)                                  In the event there is a Defaulting Lender
as of the date of any request for the issuance of a Letter of Credit, the
Issuing Bank shall not be required to issue or arrange for such Letter of Credit
to the extent (i) the Defaulting Lender’s Letter of Credit Exposure with respect
to such Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii),
or (ii) the Issuing Bank has not otherwise entered into arrangements reasonably
satisfactory to it and Borrowers to eliminate the Issuing Bank’s risk with
respect to the participation in such Letter of Credit of the Defaulting Lender,
which arrangements may include Borrowers cash collateralizing such Defaulting
Lender’s Letter of Credit Exposure in accordance with Section 2.3(g)(ii). 
Additionally, Issuing Bank shall have no obligation to issue a Letter of Credit
if (A) any order, judgment, or decree of any Governmental Authority or
arbitrator shall, by its terms, purport to enjoin or restrain Issuing Bank from
issuing such Letter of Credit, or any law applicable to Issuing Bank or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Issuing Bank shall prohibit or
request that Issuing Bank refrain from the issuance of letters of credit
generally or such Letter of Credit in particular, (B) the issuance of such
Letter of Credit would violate one or more policies of Issuing Bank applicable
to letters of credit generally, or (C) if amounts demanded to be paid under any
Letter of Credit will or may not be in United States Dollars.

 

(d)                                 Any Issuing Bank (other than Wells Fargo or
any of its Affiliates) shall notify Agent in writing no later than the Business
Day immediately following the Business Day on which such Issuing Bank issued any
Letter of Credit; provided that (i) until Agent advises any such Issuing Bank
that the provisions of Section 3.2

 

16

--------------------------------------------------------------------------------

 

are not satisfied, or (ii) unless the aggregate amount of the Letters of Credit
issued in any such week exceeds such amount as shall be agreed by Agent and such
Issuing Bank, such Issuing Bank shall be required to so notify Agent in writing
only once each week of the Letters of Credit issued by such Issuing Bank during
the immediately preceding week as well as the daily amounts outstanding for the
prior week, such notice to be furnished on such day of the week as Agent and
such Issuing Bank may agree.  Each Letter of Credit shall be in form and
substance reasonably acceptable to Issuing Bank, including the requirement that
the amounts payable thereunder must be payable in Dollars.  If Issuing Bank
makes a payment under a Letter of Credit, Borrowers shall pay to Agent an amount
equal to the applicable Letter of Credit Disbursement on the Business Day such
Letter of Credit Disbursement is made and, in the absence of such payment, the
amount of the Letter of Credit Disbursement immediately and automatically shall
be deemed to be a Revolving Loan hereunder (notwithstanding any failure to
satisfy any condition precedent set forth in Section 3) and, initially, shall
bear interest at the rate then applicable to Revolving Loans that are Base Rate
Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan
hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit
Disbursement to Issuing Bank shall be automatically converted into an obligation
to pay the resulting Revolving Loan.  Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to Issuing Bank or, to the extent that Lenders have made payments
pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Lenders and
Issuing Bank as their interests may appear.

 

(e)                                  Promptly following receipt of a notice of a
Letter of Credit Disbursement pursuant to Section 2.11(d), each Lender agrees to
fund its Pro Rata Share of any Revolving Loan deemed made pursuant to
Section 2.11(d) on the same terms and conditions as if Borrowers had requested
the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing
Bank the amounts so received by it from the Lenders.  By the issuance of a
Letter of Credit (or an amendment, renewal, or extension of a Letter of Credit)
and without any further action on the part of Issuing Bank or the
Lenders, Issuing Bank shall be deemed to have granted to each Lender, and each
Lender shall be deemed to have purchased, a participation in each Letter of
Credit issued by Issuing Bank, in an amount equal to its Pro Rata Share of such
Letter of Credit, and each such Lender agrees to pay to Agent, for the account
of Issuing Bank, such Lender’s Pro Rata Share of any Letter of Credit
Disbursement made by Issuing Bank under the applicable Letter of Credit.  In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to Agent, for the account of Issuing Bank,
such Lender’s Pro Rata Share of each Letter of Credit Disbursement made by
Issuing Bank and not reimbursed by Borrowers on the date due as provided in
Section 2.11(d), or of any reimbursement payment that is required to be refunded
(or that Agent or Issuing Bank elects, based upon the advice of counsel, to
refund) to Borrowers for any reason.  Each Lender acknowledges and agrees that
its obligation to deliver to Agent, for the account of Issuing Bank, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section 2.11(e) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation of an
Event of Default or Default or the failure to satisfy any condition set forth in
Section 3.  If any such Lender fails to make available to Agent the amount of
such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in
this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of Issuing Bank) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.

 

(f)                                   Each Borrower agrees to indemnify, defend
and hold harmless each member of the Lender Group (including Issuing Bank and
its branches, Affiliates, and correspondents) and each such Person’s respective
directors, officers, employees, attorneys and agents (each, including Issuing
Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), which may be incurred by
or awarded against any such Letter of Credit Related Person (other than Taxes,
which shall be governed by Section 16) (the “Letter of Credit Indemnified
Costs”), and which arise out of or in connection with, or as a result of:

 

(i)                                     any Letter of Credit or any pre-advice
of its issuance;

 

17

--------------------------------------------------------------------------------

 

(ii)                                  any transfer, sale, delivery, surrender or
endorsement of any Drawing Document at any time(s) held by any such Letter of
Credit Related Person in connection with any Letter of Credit;

 

(iii)                               any action or proceeding arising out of, or
in connection with, any Letter of Credit (whether administrative, judicial or in
connection with arbitration), including any action or proceeding to compel or
restrain any presentation or payment under any Letter of Credit, or for the
wrongful dishonor of, or honoring a presentation under, any Letter of Credit;

 

(iv)                              any independent undertakings issued by the
beneficiary of any Letter of Credit;

 

(v)                                 any unauthorized instruction or request made
to Issuing Bank in connection with any Letter of Credit or requested Letter of
Credit or error in computer or electronic transmission;

 

(vi)                              an adviser, confirmer or other nominated
person seeking to be reimbursed, indemnified or compensated;

 

(vii)                           any third party seeking to enforce the rights of
an applicant, beneficiary, nominated person, transferee, assignee of Letter of
Credit proceeds or holder of an instrument or document;

 

(viii)                        the fraud, forgery or illegal action of parties
other than the Letter of Credit Related Person;

 

(ix)                              Issuing Bank’s performance of the obligations
of a confirming institution or entity that wrongfully dishonors a confirmation;
or

 

(x)                                 the acts or omissions, whether rightful or
wrongful, of any present or future de jure or de facto governmental or
regulatory authority or cause or event beyond the control of the Letter of
Credit Related Person;

 

in each case, including that resulting from the Letter of Credit Related
Person’s own negligence; provided, however, that such indemnity shall not be
available to any Letter of Credit Related Person claiming indemnification under
clauses (i) through (x) above to the extent that such Letter of Credit
Indemnified Costs may be finally determined in a final, non-appealable judgment
of a court of competent jurisdiction to have resulted directly from the gross
negligence or willful misconduct of the Letter of Credit Related Person claiming
indemnity.  Borrowers hereby agree to pay the Letter of Credit Related Person
claiming indemnity on demand from time to time all amounts owing under this
Section 2.11(f).  If and to the extent that the obligations of Borrowers under
this Section 2.11(f) are unenforceable for any reason, Borrowers agree to make
the maximum contribution to the Letter of Credit Indemnified Costs permissible
under applicable law.  This indemnification provision shall survive termination
of this Agreement and all Letters of Credit.

 

(g)                                  The liability of Issuing Bank (or any other
Letter of Credit Related Person) under, in connection with or arising out of any
Letter of Credit (or pre-advice), regardless of the form or legal grounds of the
action or proceeding, shall be limited to direct damages suffered by Borrowers
that are caused directly by Issuing Bank’s gross negligence or willful
misconduct in (i) honoring a presentation under a Letter of Credit that on its
face does not at least substantially comply with the terms and conditions of
such Letter of Credit, (ii) failing to honor a presentation under a Letter of
Credit that strictly complies with the terms and conditions of such Letter of
Credit or (iii) retaining Drawing Documents presented under a Letter of Credit. 
Issuing Bank shall be deemed to have acted with due diligence and reasonable
care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit
Practice or in accordance with this Agreement.  Borrowers’ aggregate remedies
against Issuing Bank and any Letter of Credit Related Person for wrongfully
honoring a presentation under any Letter of Credit or wrongfully retaining
honored Drawing Documents shall in no event exceed the aggregate amount paid by
Borrowers to Issuing Bank in respect of the honored presentation in connection
with such Letter of Credit under Section 2.11(d), plus interest at the rate then
applicable to Base Rate Loans hereunder.  Borrowers shall take action to avoid
and mitigate the amount of any damages claimed against Issuing Bank or any other
Letter of Credit Related Person, including by enforcing its rights against the
beneficiaries of the Letters of Credit.  Any claim by Borrowers under or in

 

18

--------------------------------------------------------------------------------

 

connection with any Letter of Credit shall be reduced by an amount equal to the
sum of (x) the amount (if any) saved by Borrowers as a result of the breach or
alleged wrongful conduct complained of; and (y) the amount (if any) of the loss
that would have been avoided had Borrowers taken all reasonable steps to
mitigate any loss, and in case of a claim of wrongful dishonor, by specifically
and timely authorizing Issuing Bank to effect a cure.

 

(h)                                 Borrowers are responsible for preparing or
approving the final text of the Letter of Credit as issued by Issuing Bank,
irrespective of any assistance Issuing Bank may provide such as drafting or
recommending text or by Issuing Bank’s use or refusal to use text submitted by
Borrowers.  Borrowers are solely responsible for the suitability of the Letter
of Credit for Borrowers’ purposes.  With respect to any Letter of Credit
containing an “automatic amendment” to extend the expiration date of such Letter
of Credit, Issuing Bank, in its sole and absolute discretion, may give notice of
nonrenewal of such Letter of Credit and, if Borrowers do not at any time want
such Letter of Credit to be renewed, Borrowers will so notify Agent and Issuing
Bank at least 15 calendar days before Issuing Bank is required to notify the
beneficiary of such Letter of Credit or any advising bank of such nonrenewal
pursuant to the terms of such Letter of Credit.

 

(i)                                     Borrowers’ reimbursement and payment
obligations under this Section 2.11 are absolute, unconditional and irrevocable
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, including the following:

 

(i)                                     any lack of validity, enforceability or
legal effect of any Letter of Credit or this Agreement or any term or provision
therein or herein;

 

(ii)                                  payment against presentation of any draft,
demand or claim for payment under any Drawing Document that does not comply in
whole or in part with the terms of the applicable Letter of Credit or which
proves to be fraudulent, forged or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, or which is signed, issued or
presented by a Person or a transferee of such Person purporting to be a
successor or transferee of the beneficiary of such Letter of Credit;

 

(iii)                               Issuing Bank or any of its branches or
Affiliates being the beneficiary of any Letter of Credit;

 

(iv)                              Issuing Bank or any correspondent honoring a
drawing against a Drawing Document up to the amount available under any Letter
of Credit even if such Drawing Document claims an amount in excess of the amount
available under the Letter of Credit;

 

(v)                                 the existence of any claim, set-off, defense
or other right that any Borrower or any of its Subsidiaries may have at any time
against any beneficiary, any assignee of proceeds, Issuing Bank or any other
Person;

 

(vi)                              any other event, circumstance or conduct
whatsoever, whether or not similar to any of the foregoing that might, but for
this Section 2.11(i), constitute a legal or equitable defense to or discharge
of, or provide a right of set-off against, any Borrower’s or any of its
Subsidiaries’ reimbursement and other payment obligations and liabilities,
arising under, or in connection with, any Letter of Credit, whether against
Issuing Bank, the beneficiary or any other Person; or

 

(vii)                           the fact that any Default or Event of Default
shall have occurred and be continuing;

 

provided, however, that subject to Section 2.11(g) above, the foregoing shall
not release Issuing Bank from such liability to Borrowers as may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction against Issuing Bank following reimbursement or payment of the
obligations and liabilities, including reimbursement and other payment
obligations, of Borrowers to Issuing Bank arising under, or in connection with,
this Section 2.11 or any Letter of Credit.

 

(j)                                    Without limiting any other provision of
this Agreement, Issuing Bank and each other Letter of Credit Related Person (if
applicable) shall not be responsible to Borrowers for, and Issuing Bank’s rights

 

19

--------------------------------------------------------------------------------

 

and remedies against Borrowers and the obligation of Borrowers to reimburse
Issuing Bank for each drawing under each Letter of Credit shall not be impaired
by:

 

(i)                                     honor of a presentation under any Letter
of Credit that on its face substantially complies with the terms and conditions
of such Letter of Credit, even if the Letter of Credit requires strict
compliance by the beneficiary;

 

(ii)                                  honor of a presentation of any Drawing
Document that appears on its face to have been signed, presented or issued
(A) by any purported successor or transferee of any beneficiary or other Person
required to sign, present or issue such Drawing Document or (B) under a new name
of the beneficiary;

 

(iii)                               acceptance as a draft of any written or
electronic demand or request for payment under a Letter of Credit, even if
nonnegotiable or not in the form of a draft or notwithstanding any requirement
that such draft, demand or request bear any or adequate reference to the Letter
of Credit;

 

(iv)                              the identity or authority of any presenter or
signer of any Drawing Document or the form, accuracy, genuineness or legal
effect of any Drawing Document (other than Issuing Bank’s determination that
such Drawing Document appears on its face substantially to comply with the terms
and conditions of the Letter of Credit);

 

(v)                                 acting upon any instruction or request
relative to a Letter of Credit or requested Letter of Credit that Issuing Bank
in good faith believes to have been given by a Person authorized to give such
instruction or request;

 

(vi)                              any errors, omissions, interruptions or delays
in transmission or delivery of any message, advice or document (regardless of
how sent or transmitted) or for errors in interpretation of technical terms or
in translation or any delay in giving or failing to give notice to Borrowers;

 

(vii)                           any acts, omissions or fraud by, or the
insolvency of, any beneficiary, any nominated person or entity or any other
Person or any breach of contract between any beneficiary and any Borrower or any
of the parties to the underlying transaction to which the Letter of Credit
relates;

 

(viii)                        assertion or waiver of any provision of the ISP or
UCP that primarily benefits an issuer of a letter of credit, including any
requirement that any Drawing Document be presented to it at a particular hour or
place;

 

(ix)                              payment to any paying or negotiating bank
(designated or permitted by the terms of the applicable Letter of Credit)
claiming that it rightfully honored or is entitled to reimbursement or indemnity
under Standard Letter of Credit Practice applicable to it;

 

(x)                                 acting or failing to act as required or
permitted under Standard Letter of Credit Practice applicable to where Issuing
Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the
case may be;

 

(xi)                              honor of a presentation after the expiration
date of any Letter of Credit notwithstanding that a presentation was made prior
to such expiration date and dishonored by Issuing Bank if subsequently Issuing
Bank or any court or other finder of fact determines such presentation should
have been honored;

 

(xii)                           dishonor of any presentation that does not
strictly comply or that is fraudulent, forged or otherwise not entitled to
honor; or

 

(xiii)                        honor of a presentation that is subsequently
determined by Issuing Bank to have been made in violation of international,
federal, state or local restrictions on the transaction of business with certain
prohibited Persons.

 

20

--------------------------------------------------------------------------------

 

(k)           Borrowers shall pay immediately upon demand to Agent for the
account of Issuing Bank as non-refundable fees, commissions, and charges (it
being acknowledged and agreed that any charging of such fees, commissions, and
charges to the Loan Account pursuant to the provisions of Section 2.6(d) shall
be deemed to constitute a demand for payment thereof for the purposes of this
Section 2.11(k)):  (i) a fronting fee which shall be imposed by Issuing Bank
upon the issuance of each Letter of Credit of 0.125% per annum of the face
amount thereof, plus (ii) any and all other customary commissions, fees and
charges then in effect imposed by, and any and all expenses incurred by, Issuing
Bank, or by any adviser, confirming institution or entity or other nominated
person, relating to Letters of Credit, at the time of issuance of any Letter of
Credit and upon the occurrence of any other activity with respect to any Letter
of Credit (including transfers, assignments of proceeds, amendments, drawings,
renewals or cancellations).

 

(l)            If by reason of (x) any Change in Law, or (y) compliance by
Issuing Bank or any other member of the Lender Group with any direction,
request, or requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Board of Governors as from time to time in effect (and any successor thereto):

 

(i)            any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued or caused to be
issued hereunder or hereby, or

 

(ii)           there shall be imposed on Issuing Bank or any other member of the
Lender Group any other condition regarding any Letter of Credit,

 

and the result of the foregoing is to increase, directly or indirectly, the cost
to Issuing Bank or any other member of the Lender Group of issuing, making,
participating in, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof, then, and in any such case, Agent may, at any
time within a reasonable period after the additional cost is incurred or the
amount received is reduced, notify Borrowers, and Borrowers shall pay within 30
days after demand therefor, such amounts as Agent may specify to be necessary to
compensate Issuing Bank or any other member of the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder; provided, that (A) Borrowers shall not
be required to provide any compensation pursuant to this Section 2.11(l) for any
such amounts incurred more than 180 days prior to the date on which the demand
for payment of such amounts is first made to Borrowers, and (B) if an event or
circumstance giving rise to such amounts is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.  The determination by Agent of any amount due pursuant to this
Section 2.11(l), as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest or demonstrable
error, be final and conclusive and binding on all of the parties hereto.

 

(i)            Unless otherwise expressly agreed by Issuing Bank and Borrowers
when a Letter of Credit is issued, (i) the rules of the ISP and the UCP shall
apply to each standby Letter of Credit, and (ii) the rules of the UCP shall
apply to each commercial Letter of Credit.

 

(j)            In the event of a direct conflict between the provisions of this
Section 2.11 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other.  In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.11 shall control and
govern.

 

2.12        LIBOR Option.

 

(a)           Interest and Interest Payment Dates.  In lieu of having interest
charged at the rate based upon the Base Rate, Borrowers shall have the option,
subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or
a portion of the Revolving Loans be charged (whether at the time when made
(unless otherwise provided herein), upon conversion from a Base Rate Loan to a
LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan)
at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR

 

21

--------------------------------------------------------------------------------

 

Rate Loans shall be payable on the earliest of (i) the last day of the Interest
Period applicable thereto; provided, that, subject to the following clauses
(ii) and (iii), in the case of any Interest Period greater than 3 months in
duration, interest shall be payable at 3 month intervals after the commencement
of the applicable Interest Period and on the last day of such Interest Period),
(ii) the date on which all or any portion of the Obligations are accelerated
pursuant to the terms hereof, or (iii) the date on which this Agreement is
terminated pursuant to the terms hereof.  On the last day of each applicable
Interest Period, unless Borrowers have properly exercised the LIBOR Option with
respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the interest rate then applicable to Base Rate
Loans of the same type hereunder.  At any time that an Event of Default has
occurred and is continuing, at the written election of Agent (which notice Agent
may elect to give or not give in its discretion unless Agent is directed to give
such notice by the Required Lenders, in which case, it shall give the notice to
Borrowers) or the Required Lenders, Borrowers no longer shall have the option to
request that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

 

(b)           LIBOR Election.

 

(i)            Borrowers may, at any time and from time to time, so long as
Parent Borrower has not received a notice from Agent (which notice Agent may
elect to give or not give in its discretion unless Agent is directed to give
such notice by the Required Lenders, in which case, it shall give the notice to
Parent Borrower), after the occurrence and during the continuance of an Event of
Default, to terminate the right of Borrowers to exercise the LIBOR Option during
the continuance of such Event of Default, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. at least 1 Business Day prior to the
commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of
Borrowers’ election of the LIBOR Option for a permitted portion of the Revolving
Loans and an Interest Period pursuant to this Section shall be made by delivery
to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be confirmed
by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. on
the same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall
provide a copy thereof to each of the affected Lenders.

 

(ii)           Each LIBOR Notice shall be irrevocable and binding on Borrowers. 
In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend,
and hold Agent and the Lenders harmless against any loss, cost, or expense
actually incurred by Agent or any Lender as a result of (A) the payment of any
principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(B) the conversion of any LIBOR Rate Loan other than on the last day of the
Interest Period applicable thereto, or (C) the failure to borrow, convert,
continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice
delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). 
A certificate of Agent or a Lender delivered to Borrowers setting forth in
reasonable detail any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.12 shall be conclusive absent manifest
error.  Borrowers shall pay such amount to Agent or the Lender, as applicable,
within 30 days of the date of its receipt of such certificate.  If a payment of
a LIBOR Rate Loan on a day other than the last day of the applicable Interest
Period would result in a Funding Loss, Agent may, in its sole discretion at the
request of Borrowers, hold the amount of such payment as cash collateral in
support of the Obligations until the last day of such Interest Period and apply
such amounts to the payment of the applicable LIBOR Rate Loan on such last day,
it being agreed that Agent has no obligation to so defer the application of
payments to any LIBOR Rate Loan and that, in the event that Agent does not defer
such application, Borrowers shall be obligated to pay any resulting Funding
Losses.

 

(iii)          Unless Agent, in its sole discretion, agrees otherwise, Borrowers
shall have not more than seven (7) LIBOR Rate Loans in effect at any given
time.  Borrowers may only exercise the LIBOR Option for proposed LIBOR Rate
Loans of at least $500,000.

 

(c)           Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate
Loans at any time; provided, that in the event that LIBOR Rate Loans are
converted or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any prepayment through the required
application by Agent of any payments or proceeds of Collateral in accordance
with Section 2.4(b) or for any other reason, including early termination of the
term of this Agreement or acceleration of all or any portion of the Obligations

 

22

--------------------------------------------------------------------------------

 

pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.12 (b)(ii).

 

(d)           Special Provisions Applicable to LIBOR Rate.

 

(i)            The LIBOR Rate may be adjusted by Agent with respect to any
Lender on a prospective basis to take into account any additional or increased
costs to such Lender of maintaining or obtaining any eurodollar deposits or
increased costs, in each case, due to changes in applicable law occurring
subsequent to the commencement of the then applicable Interest Period, including
any Changes in Law (including any changes in tax laws (except changes of general
applicability in corporate income tax laws)) and changes in the reserve
requirements imposed by the Board of Governors, which additional or increased
costs would increase the cost of funding or maintaining loans bearing interest
at the LIBOR Rate.  In any such event, the affected Lender shall give Borrowers
and Agent notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender,  Borrowers may, by notice to such affected Lender
(A) require such Lender to furnish to Borrowers a statement setting forth in
reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of
such Lender with respect to which such adjustment is made (together with any
amounts due under Section 2.12(b)(ii)).

 

(ii)           In the event that any change in market conditions or any Change
in Law shall at any time after the date hereof, in the reasonable opinion of any
Lender, make it unlawful or impractical for such Lender to fund or maintain
LIBOR Rate Loans or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall give notice of such
changed circumstances to Agent and Borrowers and Agent promptly shall transmit
the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of
such Lender that are outstanding, the date specified in such Lender’s notice
shall be deemed to be the last day of the Interest Period of such LIBOR Rate
Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall
accrue interest at the rate then applicable to Base Rate Loans, and
(z) Borrowers shall not be entitled to elect the LIBOR Option until such Lender
determines that it would no longer be unlawful or impractical to do so.

 

(e)           No Requirement of Matched Funding.  Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.

 

2.13        Capital Requirements.

 

(a)           If, after the date hereof, Issuing Bank or any Lender determines
that (i) any Change in Law regarding capital or reserve requirements for banks
or bank holding companies, or (ii) compliance by Issuing Bank or such Lender, or
their respective parent bank holding companies, with any guideline, request or
directive of any Governmental Authority regarding capital adequacy or liquidity
requirements (whether or not having the force of law), has the effect of
reducing the return on Issuing Bank’s, such Lender’s, or such holding companies’
capital as a consequence of Issuing Bank’s or such Lender’s commitments
hereunder to a level below that which Issuing Bank, such Lender, or such holding
companies could have achieved but for such Change in Law or compliance (taking
into consideration Issuing Bank’s, such Lender’s, or such holding companies’
then existing policies with respect to capital adequacy or liquidity
requirements and assuming the full utilization of such entity’s capital) by any
amount deemed by Issuing Bank or such Lender to be material, then Issuing Bank
or such Lender may notify Borrowers and Agent thereof.  Following receipt of
such notice, Borrowers agree to pay Issuing Bank or such Lender on demand the
amount of such reduction of return of capital as and when such reduction is
determined, payable within 30 days after presentation by Issuing Bank or such
Lender of a statement in the amount and setting forth in reasonable detail
Issuing Bank’s or such Lender’s calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error).  In determining such amount, Issuing Bank or
such Lender may use any reasonable averaging and attribution methods.  Failure
or delay on the part of Issuing Bank or any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of Issuing Bank’s or such
Lender’s right to demand such compensation; provided that Borrowers shall not be
required to compensate Issuing Bank or a Lender pursuant to this Section for any
reductions

 

23

--------------------------------------------------------------------------------

 

in return incurred more than 180 days prior to the date that Issuing Bank or
such Lender notifies Borrowers of such Change in Law giving rise to such
reductions and of such Lender’s intention to claim compensation therefor;
provided further that if such claim arises by reason of the Change in Law that
is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

(b)           If Issuing Bank or any Lender requests additional or increased
costs referred to in Section 2.11(l) or Section 2.12(d)(i) or amounts under
Section 2.13(a) or sends a notice under Section 2.12(d)(ii) relative to changed
circumstances (such Issuing Bank or Lender, an “Affected Lender”), then such
Affected Lender shall use reasonable efforts to promptly designate a different
one of its lending offices or to assign its rights and obligations hereunder to
another of its offices or branches, if (i) in the reasonable judgment of such
Affected Lender, such designation or assignment would eliminate or reduce
amounts payable pursuant to Section 2.11(l), Section 2.12(d)(i) or
Section 2.13(a), as applicable, or would eliminate the illegality or
impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the
reasonable judgment of such Affected Lender, such designation or assignment
would not subject it to any material unreimbursed cost or expense and would not
otherwise be materially disadvantageous to it.  Borrowers agree to pay all
reasonable out-of-pocket costs and expenses incurred by such Affected Lender in
connection with any such designation or assignment.  If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrowers’ obligation to pay any future amounts to such Affected
Lender pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as
applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers
(without prejudice to any amounts then due to such Affected Lender under
Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable) may,
unless prior to the effective date of any such assignment the Affected Lender
withdraws its request for such additional amounts under Section 2.11(l), 
Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates that it is no
longer unlawful or impractical to fund or maintain LIBOR Rate Loans, may
designate a different Issuing Bank or substitute a Lender, in each case, 
reasonably acceptable to Agent to purchase the Obligations owed to such Affected
Lender and such Affected Lender’s commitments hereunder (a “Replacement
Lender”), and if such Replacement Lender agrees to such purchase, such Affected
Lender shall assign to the Replacement Lender its Obligations and commitments,
and upon such purchase by the Replacement Lender, which such Replacement Lender
shall be deemed to be “Issuing Bank” or a “Lender” (as the case may be) for
purposes of this Agreement and such Affected Lender shall cease to be “Issuing
Bank”, “Swing Lender”, or a “Lender” (as the case may be) for purposes of this
Agreement.

 

(c)           Notwithstanding anything herein to the contrary, the protection of
Sections 2.11(l), 2.12(d), and 2.13 shall be available to Issuing Bank and each
Lender (as applicable) regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, judicial ruling, judgment,
guideline, treaty or other change or condition which shall have occurred or been
imposed, so long as it shall be customary for issuing banks or lenders affected
thereby to comply therewith.  Notwithstanding any other provision herein,
neither Issuing Bank nor any Lender shall demand compensation pursuant to this
Section 2.13 if it shall not at the time be the general policy or practice of
Issuing Bank or such Lender (as the case may be) to demand such compensation in
similar circumstances under comparable provisions of other credit agreements, if
any.

 

2.14        Accordion.

 

(a)           At any time during the period after the Closing Date through but
excluding the date that is the 4 year anniversary of the Closing Date, at the
option of Borrowers (but subject to the conditions set forth in clause
(b) below), the Revolver Commitments and the Maximum Revolver Amount may be
increased by an amount in the aggregate for all such increases of the Revolver
Commitments and the Maximum Revolver Amount not to exceed the Available Revolver
Increase Amount (each such increase, an “Increase”).  Agent shall invite each
Lender to increase its Revolver Commitments (it being understood that no Lender
shall be obligated to increase its Revolver Commitments) in connection with a
proposed Increase at the interest margin proposed by Borrowers, and if
sufficient Lenders do not agree to increase their Revolver Commitments in
connection with such proposed Increase, then Agent or Borrowers may invite any
prospective lender who is reasonably satisfactory to Agent and Borrowers to
become a Lender in connection with a proposed Increase.  Any Increase shall be
in an amount of at least $2,500,000 and integral multiples of $2,500,000 in
excess thereof.  In no event may the Revolver

 

24

--------------------------------------------------------------------------------

 

Commitments and the Maximum Revolver Amount be increased pursuant to this
Section 2.14 on more than 3 occasions in the aggregate for all such Increases.

 

(b)           Each of the following shall be conditions precedent to any
Increase of the Revolver Commitments and the Maximum Revolver Amount in
connection therewith:

 

(i)            Agent or Borrowers have obtained the commitment of one or more
Lenders (or other prospective lenders) reasonably satisfactory to Agent and
Borrowers to provide the applicable Increase and any such Lenders (or
prospective lenders), Borrowers, and Agent have signed a joinder agreement to
this Agreement (an “Increase Joinder”), in form and substance reasonably
satisfactory to Agent, to which such Lenders (or prospective lenders),
Borrowers, and Agent are party,

 

(ii)           each of the conditions precedent set forth in Section 3.2 are
satisfied,

 

(iii)          Borrowers have delivered to Agent updated pro forma Projections
(after giving effect to the applicable Increase) for Parent Borrower and its
Subsidiaries evidencing compliance on a pro forma basis with Section 7 (whether
or not then in effect) for the 4 fiscal quarters (on a quarter-by-quarter basis)
immediately following the proposed date of the applicable Increase, and

 

(iv)          Borrowers shall have reached agreement with the Lenders (or
prospective lenders) agreeing to the increased Revolver Commitments with respect
to the interest margins applicable to Revolving Loans to be made pursuant to the
increased Revolver Commitments (which interest margins may be with respect to
Revolving Loans made pursuant to the increased Revolver Commitments, higher than
or equal to the interest margins applicable to Revolving Loans set forth in this
Agreement immediately prior to the date of the increased Revolver Commitments
(the date of the effectiveness of the increased Revolver Commitments and the
Maximum Revolver Amount, the “Increase Date”)) and shall have communicated the
amount of such interest margins to Agent.  Any Increase Joinder may, with the
consent of Agent, Borrowers and the Lenders or prospective lenders agreeing to
the proposed Increase, effect such amendments to this Agreement and the other
Loan Documents as may be necessary or appropriate to effectuate the provisions
of this Section 2.14 (including any amendment necessary to effectuate the
interest margins for the Revolving Loans to be made pursuant to the increased
Revolver Commitments).  Anything to the contrary contained herein
notwithstanding, if the interest margin that is to be applicable to the
Revolving Loans to be made pursuant to the increased Revolver Commitments are
higher than the interest margin applicable to the Revolving Loans immediately
prior to the applicable Increase Date (the amount by which the interest margin
is higher, the “Excess”), then the interest margin applicable to the Revolving
Loans immediately prior to the Increase Date shall be increased by the amount of
the Excess, effective on the applicable Increase Date, and without the necessity
of any action by any party hereto.

 

(c)           Unless otherwise specifically provided herein, all references in
this Agreement and any other Loan Document to Revolving Loans shall be deemed,
unless the context otherwise requires, to include Revolving Loans made pursuant
to the increased Revolver Commitments and Maximum Revolver Amount pursuant to
this Section 2.14.

 

(d)           Each of the Lenders having a Revolver Commitment prior to the
Increase Date (the “Pre-Increase Revolver Lenders”) shall assign to any Lender
which is acquiring a new or additional Revolver Commitment on the Increase Date
(the “Post-Increase Revolver Lenders”), and such Post-Increase Revolver Lenders
shall purchase from each Pre-Increase Revolver Lender, at the principal amount
thereof, such interests in the Revolving Loans and participation interests in
Letters of Credit on such Increase Date as shall be necessary in order that,
after giving effect to all such assignments and purchases, such Revolving Loans
and participation interests in Letters of Credit will be held by Pre-Increase
Revolver Lenders and Post-Increase Revolver Lenders ratably in accordance with
their Pro Rata Share after giving effect to such increased Revolver Commitments.

 

(e)           The Revolving Loans, Revolver Commitments, and Maximum Revolver
Amount established pursuant to this Section 2.14 shall constitute Revolving
Loans, Revolver Commitments, and Maximum Revolver Amount under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan

 

25

--------------------------------------------------------------------------------

 

Documents, and shall, without limiting the foregoing, benefit equally and
ratably from any guarantees and the security interests created by the Loan
Documents.  Borrowers shall take any actions reasonably required by Agent to
ensure and demonstrate that the Liens and security interests granted by the Loan
Documents continue to be perfected under the Code or otherwise after giving
effect to the establishment of any such new Revolver Commitments and Maximum
Revolver Amount.

 

2.15        Joint and Several Liability of Borrowers.

 

(a)           Each Borrower is accepting joint and several liability hereunder
and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.

 

(b)           Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including any Obligations arising under
this Section 2.15), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them.

 

(c)           If and to the extent that any Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation until such time as all of the Obligations are paid in full.

 

(d)           The Obligations of each Borrower under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of the provisions of this Agreement (other than this
Section 2.15(d)) or any other circumstances whatsoever.

 

(e)           Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any Revolving Loans or Letters of Credit issued under or pursuant to
this Agreement, notice of the occurrence of any Default, Event of Default, or of
any demand for any payment under this Agreement, notice of any action at any
time taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement).  Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Agent or Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower.  Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this
Section 2.15, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of each Borrower
under this Section 2.15 shall not be discharged except by performance and then
only to the extent of such performance.  The Obligations of each Borrower under
this Section 2.15 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any other Borrower or any Agent or Lender.

 

26

--------------------------------------------------------------------------------

 

(f)            Each Borrower represents and warrants to Agent and Lenders that
such Borrower is currently informed of the financial condition of Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations.  Each Borrower further
represents and warrants to Agent and Lenders that such Borrower has read and
understands the terms and conditions of the Loan Documents.  Each Borrower
hereby covenants that such Borrower will continue to keep informed of Borrowers’
financial condition and of all other circumstances which bear upon the risk of
nonpayment or nonperformance of the Obligations.

 

(g)           The provisions of this Section 2.15 are made for the benefit of
Agent, each member of the Lender Group, each Bank Product Provider, and their
respective successors and assigns, and may be enforced by it or them from time
to time against any or all Borrowers as often as occasion therefor may arise and
without requirement on the part of Agent, any member of the Lender Group, any
Bank Product Provider, or any of their successors or assigns first to marshal
any of its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy.  The provisions of this
Section 2.15 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied.  If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any Borrower, or otherwise, the provisions of
this Section 2.15 will forthwith be reinstated in effect, as though such payment
had not been made.

 

(h)           Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to Agent or Lenders with respect to any of the
Obligations or any collateral security therefor until such time as all of the
Obligations have been paid in full in cash.  Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or any
member of the Lender Group hereunder or under any of the Bank Product Agreements
are hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
any other Borrower therefor.

 

(i)            Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.4(b).

 

3.             CONDITIONS; TERM OF AGREEMENT.

 

3.1          Conditions Precedent to the Initial Extension of Credit.  The
obligation of each Lender to make the initial extensions of credit provided for
hereunder is subject to the fulfillment, to the satisfaction of Agent and each
Lender, of each of the conditions precedent set forth on Schedule 3.1 (the
making of such initial extensions of credit by a Lender being conclusively
deemed to be its satisfaction or waiver of the conditions precedent ).

 

27

--------------------------------------------------------------------------------

 

3.2          Conditions Precedent to all Extensions of Credit.  The obligation
of the Lender Group (or any member thereof) to make any Revolving Loans
hereunder (or to extend any other credit hereunder) at any time shall be subject
to the following conditions precedent:

 

(a)           the representations and warranties of each Borrower or its
Subsidiaries contained in this Agreement or in the other Loan Documents shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date); and

 

(b)           no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof.

 

3.3          Maturity.  This Agreement shall continue in full force and effect
for a term ending on the Maturity Date (unless terminated earlier in accordance
with the terms of this Agreement).

 

3.4          Effect of Maturity.  On the Maturity Date, all commitments of the
Lender Group to provide additional credit hereunder shall automatically be
terminated and all of the Obligations immediately shall become due and payable
without notice or demand and Borrowers shall be required to repay all of the
Obligations in full.  No termination of the obligations of the Lender Group
(other than payment in full of the Obligations and termination of the
Commitments) shall relieve or discharge any Loan Party of its duties,
obligations, or covenants hereunder or under any other Loan Document and Agent’s
Liens in the Collateral shall continue to secure the Obligations and shall
remain in effect until all Obligations have been paid in full and the
Commitments have been terminated.  When all of the Obligations have been paid in
full and the Lender Group’s obligations to provide additional credit under the
Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole
expense, execute and deliver any termination statements, lien releases,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, Agent’s Liens and all notices of security interests
and liens previously filed by Agent.

 

3.5          Early Termination by Borrowers.  Borrowers have the option, at any
time upon 10 Business Days prior written notice to Agent, to terminate this
Agreement and terminate the Commitments hereunder by repaying to Agent all of
the Obligations in full.  The foregoing notwithstanding, (a) Borrowers may
rescind termination notices relative to proposed payments in full of the
Obligations with the proceeds of third party Indebtedness if the closing for
such issuance or incurrence does not happen on or before the date of the
proposed termination (in which case, a new notice shall be required to be sent
in connection with any subsequent termination), and (b) Borrowers may extend the
date of termination at any time with the consent of Agent (which consent shall
not be unreasonably withheld or delayed).

 

3.6          Conditions Subsequent.  The obligation of the Lender Group (or any
member thereof) to continue to make Revolving Loans (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of the conditions subsequent set forth on Schedule 3.6 (the failure by
Borrowers to so perform or cause to be performed such conditions subsequent as
and when required by the terms thereof (unless such date is extended, in
writing, by Agent, which Agent may do without obtaining the consent of the other
members of the Lender Group), shall constitute an Event of Default).

 

4.             REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true,

 

28

--------------------------------------------------------------------------------

 

correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
date of the making of each Revolving Loan (or other extension of credit) made
thereafter, as though made on and as of the date of such Revolving Loan (or
other extension of credit) (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:

 

4.1          Due Organization and Qualification; Subsidiaries.

 

(a)           Each Loan Party (i) is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified could
reasonably be expected to result in a Material Adverse Effect, and (iii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated thereby.

 

(b)           Set forth on Schedule 4.1(b) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement) is a complete and accurate description of the authorized Equity
Interests of each Borrower, by class, and, as of the Closing Date, a description
of the number of shares of each such class that are issued and outstanding.  No
Borrower is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its Equity Interests or any security
convertible into or exchangeable for any of its Equity Interests.

 

(c)           Set forth on Schedule 4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement) is a complete and accurate list of the Loan Parties’ direct and
indirect Subsidiaries, showing: (i) the number of shares of each class of common
and preferred Equity Interests authorized for each of such Subsidiaries, and
(ii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Parent Borrower.  All of the outstanding Equity
Interests of each such Subsidiary has been validly issued and is fully paid and
non-assessable.

 

(d)           Except as set forth on Schedule 4.1(d), there are no
subscriptions, options, warrants, or calls relating to any shares of any
Borrower’s or any of its Subsidiaries’ Equity Interests, including any right of
conversion or exchange under any outstanding security or other instrument.

 

4.2          Due Authorization; No Conflict.

 

(a)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Loan Party.

 

(b)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party do not and will not
(i) violate the Governing Documents of any Loan Party or its Subsidiaries,
(ii) violate any order, judgment, or decree of any court or other Governmental
Authority binding on any Loan Party or its Subsidiaries or violate any provision
of federal, state, or local law or regulation applicable to any Loan Party or
its Subsidiaries, which violation could individually or in the aggregate
reasonably be expected to result in a Material Adverse Effect, (iii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material agreement of any Loan Party or its
Subsidiaries where any such conflict, breach or default could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect,
(iv) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any assets of any Loan Party, other than Permitted Liens, or
(v) require any approval of any holder of Equity Interests of a Loan Party or
any approval or consent of any Person under any material agreement of any Loan
Party, other than consents or approvals that have been obtained and that are
still in force and effect and except, in the case of

 

29

--------------------------------------------------------------------------------

 

material agreements, for consents or approvals, the failure to obtain could not
individually or in the aggregate reasonably be expected to cause a Material
Adverse Effect.

 

4.3          Governmental Consents.  The execution, delivery, and performance by
each Loan Party of the Loan Documents to which such Loan Party is a party and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than
(a) filings and recordings with respect to the Collateral to be made, or
otherwise delivered to Agent for filing or recordation, as of the Closing Date
and (b) registrations, consents, approvals, notices, or other actions (i) that
have been obtained and that are still in force and effect, (ii) that are listed
on Schedule 4.3 or (iii) the failure of which to be obtained or made could not
reasonably be expected to have a Material Adverse Effect.

 

4.4          Binding Obligations; Perfected Liens.

 

(a)           Each Loan Document has been duly executed and delivered by each
Loan Party that is a party thereto and is the legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally.

 

(b)           Agent’s Liens are validly created, perfected (other than (i) in
respect of motor vehicles that are subject to a certificate of title,
(ii) money, (iii) letter-of-credit rights (other than supporting obligations,
(iv) commercial tort claims (other than those that, by the terms of the Guaranty
and Security Agreement, are required to be perfected), and (v) any Deposit
Accounts and Securities Accounts not subject to a Control Agreement as permitted
by Section 7(k)(iv) of the Guaranty and Security Agreement, and subject only to
the filing of financing statements, the recordation of the Copyright Security
Agreement, and the recordation of the Mortgages, in each case, in the
appropriate filing offices), and first priority Liens, subject only to Permitted
Liens which are non-consensual Permitted Liens, Liens in respect of the Term
Loan Credit Agreement (subject to the terms of the Intercreditor Agreement),
permitted purchase money Liens, or the interests of lessors under Capital
Leases.

 

4.5          Title to Assets; No Encumbrances.  Each of the Loan Parties and its
Subsidiaries has (a) good, sufficient and legal title to (in the case of fee
interests in Real Property), (b) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (c) good and marketable
title to (in the case of all other personal property), all of their respective
assets reflected in their most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements to the extent permitted hereby.  All of such assets are
free and clear of Liens except for Permitted Liens.

 

4.6          Litigation.

 

(a)           There are no actions, suits, or proceedings pending or, to the
knowledge of any Borrower, after due inquiry, threatened in writing against a
Loan Party or any of its Subsidiaries that either individually or in the
aggregate could reasonably be expected to result in a Material Adverse Effect.

 

(b)           Schedule 4.6(b) sets forth a complete and accurate description,
with respect to each of the actions, suits, or proceedings with asserted
liabilities in excess of, or that could reasonably be expected to result in
liabilities in excess of, $500,000 that, as of the Closing Date, is pending or,
to the knowledge of any Borrower, after due inquiry, threatened against a Loan
Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or
proceedings, (ii) the nature of the dispute that is the subject of such actions,
suits, or proceedings, (iii) the procedural status, as of the Closing Date, with
respect to such actions, suits, or proceedings, and (iv) whether any liability
of the Loan Parties’ and their Subsidiaries in connection with such actions,
suits, or proceedings is covered by insurance.

 

4.7          Compliance with Laws.  No Loan Party nor any of its Subsidiaries is
(a) in violation of any applicable laws, rules, regulations, executive orders,
or codes (including Environmental Laws, Food Security Laws, and Food Products
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material

 

30

--------------------------------------------------------------------------------

 

Adverse Effect, or (b) subject to or in default with respect to any final
judgments, writs, injunctions, decrees, agreements, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

 

4.8          No Material Adverse Effect.  All historical financial statements
relating to the Loan Parties and their Subsidiaries that have been delivered by
Borrowers to Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Subsidiaries’ consolidated financial
condition as of the date thereof and results of operations for the period then
ended.  Since December 27, 2014, no event, circumstance, or change has occurred
that has or could reasonably be expected to result in a Material Adverse Effect
with respect to the Loan Parties and their Subsidiaries.

 

4.9          Solvency.

 

(a)           Each Loan Party is Solvent.

 

(b)           No transfer of property is being made by any Loan Party and no
obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of such
Loan Party.

 

4.10        Employee Benefits.

 

(a)           Except as set forth on Schedule 4.10 (as such Schedule may be
updated from time to time, without the consent of Agent, to include retirement
and severance plans that are required by a Governmental Authority outside of the
United States so long as such updated Schedule is delivered together with
written notice thereof to Agent), no Loan Party, none of their Subsidiaries, nor
any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

 

(b)           Each Loan Party and each of the ERISA Affiliates has complied in
all material respects with ERISA, the IRC and all applicable laws regarding each
Employee Benefit Plan.

 

(c)           Each Employee Benefit Plan is, and has been, maintained in
substantial compliance with ERISA, the IRC, all applicable laws and the terms of
each such Employee Benefit Plan.

 

(d)           Each Employee Benefit Plan that is intended to qualify under
Section 401(a) of the IRC has received a favorable determination letter from the
Internal Revenue Service or an application for such letter is currently being
processed by the Internal Revenue Service.  To the best knowledge of each Loan
Party and the ERISA Affiliates after due inquiry, nothing has occurred which
would prevent, or cause the loss of, such qualification.

 

(e)           No liability to the PBGC (other than for the payment of current
premiums which are not past due) by any Loan Party or ERISA Affiliate has been
incurred or is expected by any Loan Party or ERISA Affiliate to be incurred with
respect to any Pension Plan.

 

(f)            No Notification Event exists or has occurred in the past six
(6) years.

 

(g)           No Loan Party or ERISA Affiliate sponsors, maintains, or
contributes to any Employee Benefit Plan, including, without limitation, any
such plan maintained to provide benefits to former employees of such entities
that may not be terminated by any Loan Party or ERISA Affiliate in its sole
discretion at any time without material liability.

 

(h)           No Loan Party or ERISA Affiliate has provided any security under
Section 436 of the IRC.

 

31

--------------------------------------------------------------------------------

 

4.11        Environmental Condition.  Except as set forth on Schedule 4.11,
(a) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’
properties or assets has ever been used by a Loan Party, its Subsidiaries, or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such disposal,
production, storage, handling, treatment, release or transport was in violation,
in any material respect, of any applicable Environmental Law, (b) to each
Borrower’s knowledge, after due inquiry, no Loan Party’s nor any of its
Subsidiaries’ properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) to each Loan Party’s knowledge, no Loan Party nor any of its
Subsidiaries has received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by a Loan
Party or its Subsidiaries, and (d) to each Loan Party’s knowledge, no Loan Party
nor any of its Subsidiaries nor any of their respective facilities or operations
is subject to any outstanding written order, consent decree, or settlement
agreement with any Person relating to any Environmental Law or Environmental
Liability that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

 

4.12        Complete Disclosure.  All factual information taken as a whole
(other than forward-looking information and projections and information of a
general economic nature and general information about Borrowers’ industry)
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent or any Lender (including all information contained in the Schedules hereto
or in the other Loan Documents) for purposes of or in connection with this
Agreement or the other Loan Documents, and all other such factual information
taken as a whole (other than forward-looking information and projections and
information of a general economic nature and general information about
Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its
Subsidiaries in writing to Agent or any Lender will be, true and accurate, in
all material respects, on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.  The Projections delivered to Agent on September 21, 2015 represent,
and as of the date on which any other Projections are delivered to Agent, such
additional Projections represent, Borrowers’ good faith estimate, on the date
such Projections are delivered, of the Loan Parties’ and their Subsidiaries’
future performance for the periods covered thereby based upon assumptions
believed by Borrowers to be reasonable at the time of the delivery thereof to
Agent (it being understood that such Projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Loan Parties and their Subsidiaries, and no assurances can be given that such
Projections will be realized, and although reflecting Borrowers’ good faith
estimate, projections or forecasts based on methods and assumptions which
Borrowers believed to be reasonable at the time such Projections were prepared,
are not to be viewed as facts, and that actual results during the period or
periods covered by the Projections may differ materially from projected or
estimated results).

 

4.13        Patriot Act.  To the extent applicable, each Loan Party is in
compliance, in all material respects, with the (a) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (b) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part
of the proceeds of the loans made hereunder will be used by any Loan Party or
any of their Affiliates, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

4.14        Indebtedness.  Set forth on Schedule 4.14 is a true and complete
list of all Indebtedness of each Loan Party and each of its Subsidiaries
outstanding immediately prior to the Closing Date that is to remain outstanding
immediately after giving effect to the closing hereunder on the Closing Date and
such Schedule accurately sets forth the aggregate principal amount of such
Indebtedness as of the Closing Date.

 

4.15        Payment of Taxes.  Except as otherwise permitted under Section 5.5,
all tax returns and reports of each Loan Party and its Subsidiaries required to
be filed by any of them have been timely filed, and all taxes,

 

32

--------------------------------------------------------------------------------

 

assessments, fees and other governmental charges shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon a
Loan Party and its Subsidiaries and upon their respective assets, income,
businesses and franchises that are due and payable have been paid when due and
payable.  Each Loan Party and each of its Subsidiaries have made adequate
provision in accordance with GAAP for all taxes not yet due and payable.  No
Borrower knows of any proposed tax assessment against a Loan Party or any of its
Subsidiaries that is not being actively contested by such Loan Party or such
Subsidiary diligently, in good faith, and by appropriate proceedings; provided
such reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.

 

4.16        Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No part of
the proceeds of the loans made to Borrowers will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or for any purpose that violates the provisions of
Regulation T, U or X of the Board of Governors.

 

4.17        Governmental Regulation.  No Loan Party nor any of its Subsidiaries
is subject to regulation under the Federal Power Act or the Investment Company
Act of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.  No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.

 

4.18        OFAC.  No Loan Party nor any of its Subsidiaries nor any director,
officer, employee, agent or Affiliate of such Loan Party or such Subsidiary is
in violation of any of the country or list based economic and trade sanctions
administered and enforced by OFAC.  No Loan Party nor any of its Subsidiaries
(a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in
Sanctioned Entities, or (c) derives revenues from investments in, or
transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any
loan made hereunder will be used, directly or indirectly, to fund any operations
in, finance any investments or activities in, or make any payments to, a
Sanctioned Person or a Sanctioned Entity.

 

4.19        Employee and Labor Matters.  There is (i) no unfair labor practice
complaint pending or, to the knowledge of any Borrower, threatened against any
Borrower or its Subsidiaries before any Governmental Authority and no grievance
or arbitration proceeding pending or threatened against any Borrower or its
Subsidiaries which arises out of or under any collective bargaining agreement
and that could reasonably be expected to result in a material liability, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance pending
or threatened in writing against any Borrower or its Subsidiaries that could
reasonably be expected to result in a material liability, or (iii) to the
knowledge of any Borrower, no union representation question existing with
respect to the employees of any Borrower or its Subsidiaries and no union
organizing activity taking place with respect to any of the employees of any
Borrower or its Subsidiaries.  None of any Borrower or its Subsidiaries has
incurred any liability or obligation under the Worker Adjustment and Retraining
Notification Act or similar state law, which remains unpaid or unsatisfied.  The
hours worked and payments made to employees of each Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable legal requirements, except to the extent such violations could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.  All material payments due from any Borrower or its
Subsidiaries on account of wages and employee health and welfare insurance and
other benefits have been paid or accrued as a liability on the books of
Borrowers, except where the failure to do so could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

 

4.20        Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such leases are valid and subsisting and no default by the
applicable Loan Party or its Subsidiaries exists under any of them.

 

33

--------------------------------------------------------------------------------

 

4.21        Eligible Accounts.  As to each Account that is identified by
Borrowers as an Eligible Account in a Borrowing Base Certificate submitted to
Agent, such Account, as of the date of such Borrowing Base Certificate, is (a) a
bona fide existing payment obligation of the applicable Account Debtor created
by the sale and delivery of Inventory or Designated Goods or the rendition of
services to such Account Debtor in the ordinary course of Borrowers’ business,
(b) owed to a Borrower without any known defenses, disputes, offsets,
counterclaims, or rights of return or cancellation, and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria (other than any
Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

4.22        Eligible Inventory.  As to each item of Inventory and Designated
Goods that is identified by Borrowers as Eligible Inventory, Eligible Finished
Goods Inventory, Eligible Raw Materials Inventory or Eligible By-Products
Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory and
Designated Goods, as of the date of such Borrowing Base Certificate, is (a) of
good and merchantable quality, free from known defects, and (b) not excluded as
ineligible by virtue of one or more of the excluding criteria (other than any
Agent-discretionary criteria) set forth in the definition of Eligible Inventory,
Eligible Finished Goods Inventory, Eligible Raw Material Inventory or Eligible
By-Products Inventory.

 

4.23        Location of Inventory and Farm Products.  Except as set forth on
Schedule 4.23 (as such Schedule may be updated pursuant to Section 5.15), other
than Inventory and Farm Products having an aggregate value of $500,000 or less,
the Inventory and Farm Products of Borrowers and their Subsidiaries is not
stored with a bailee, warehouseman, or similar party and is located only at, or
in-transit between, the locations identified on Schedule 4.23 (as such Schedule
may be updated pursuant to Section 5.15).

 

4.24        Inventory and Farm Products Records.  Each Loan Party keeps correct
and accurate records itemizing and describing the type, quality, and quantity of
its and its Subsidiaries’ Inventory and Farm Products and the book value
thereof.

 

4.25        Hedge Agreements.  On each date that any Hedge Agreement is executed
by any Hedge Provider, each Borrower and each other Loan Party satisfy all
eligibility, suitability and other requirements under the Commodity Exchange Act
(7 U.S.C. § 1, et seq., as in effect from time to time) and the Commodity
Futures Trading Commission regulations.

 

4.26        Material Contracts.  Set forth on Schedule 4.26 (as such Schedule
may be updated from time to time in accordance herewith) is a list reasonably
identifying the Material Contracts of each Loan Party and its Subsidiaries as of
the Closing Date or the most recent date on which Borrowers provided the
Compliance Certificate pursuant to Section 5.1, as applicable; provided,
however, that Borrowers may amend Schedule 4.26 to add additional Material
Contracts so long as such amendment occurs by written notice to Agent on the
date that Borrowers provide the Compliance Certificate.  Except for matters
which, either individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, each Material Contract (other than those
that have expired at the end of their normal terms or have been terminated by
one or more parties thereto in accordance with their terms, other than as a
result of a breach or default thereunder or in respect thereof) (a) is in full
force and effect and is binding upon and enforceable against the applicable Loan
Party or its Subsidiary and, to each Borrowers’ knowledge, after due inquiry,
each other Person that is a party thereto in accordance with its terms, (b) has
not been otherwise amended or modified (other than amendments or modifications
permitted by Section 6.6(b)), and (c) is not in default due to the action or
inaction of the applicable Loan Party or its Subsidiary.

 

4.27        Food Security Act.  Borrowers have registered, as contemplated by
the Food Security Act, with the Secretary of State of each State in which farm
products purchased by any Borrower are produced and which has established, or
hereafter establishes, a central filing system (as defined in the Food Security
Act) as a buyer of farm products produced in such State (such registrations,
“FSA Registrations”) and each FSA Registration is in full force and effect.

 

4.28        Food Products Laws.  Borrowers are in compliance in all material
respects with all Food Products Notices delivered pursuant to Food Products
Laws.

 

34

--------------------------------------------------------------------------------

 

4.29        Food Security Laws.  Borrowers are in compliance in all material
respects with all Food Security Laws that are applicable to their business,
including the manufacture, storage, transportation, import, export, sale and
distribution of their products.

 

4.30        Immaterial Subsidiaries.  No Immaterial Subsidiary (a) owns any
assets (other than assets of a de minimis nature), (b) has any liabilities
(other than liabilities of a de minimis nature), or (c) engages in any business
activity.

 

5.             AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:

 

5.1          Financial Statements, Reports, Certificates.  Borrowers (a) will
deliver to Agent, with copies to each Lender, each of the financial statements,
reports, and other items set forth on Schedule 5.1 no later than the times
specified therein, (b) agree that no Subsidiary of a Loan Party will have a
fiscal year different from that of Parent Borower, (c) agree to maintain a
system of accounting that enables Borrowers to produce financial statements in
accordance with GAAP, and (d) agree that they will, and will cause each other
Loan Party to, (i) keep a reporting system that shows all additions, sales,
claims, returns, and allowances with respect to their and their Subsidiaries’
sales, and (ii) maintain their billing systems and practices substantially as in
effect as of the Closing Date and shall only make material modifications thereto
with notice to, and with the consent of, Agent.

 

5.2          Reporting.  Borrowers (a) will deliver to Agent (and if so
requested by Agent, with copies for each Lender) each of the reports set forth
on Schedule 5.2 at the times specified therein, and (b) agree to use
commercially reasonable efforts in cooperation with Agent to facilitate and
implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth on such Schedule.

 

5.3          Existence.  Except as otherwise permitted under Section 6.3 or
Section 6.4, each Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect such Person’s valid
existence and good standing in its jurisdiction of organization and, except as
could not reasonably be expected to result in a Material Adverse Effect, good
standing with respect to all other jurisdictions in which it is qualified to do
business and any rights, franchises, permits, licenses, accreditations,
authorizations, or other approvals material to their businesses.

 

5.4          Maintenance of Properties.  Each Borrower will, and will cause each
of its Subsidiaries to, maintain and preserve all of its assets that are
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear, tear, casualty, and condemnation and Permitted
Dispositions excepted.

 

5.5          Taxes.  Each Borrower will, and will cause each of its Subsidiaries
to, pay in full before delinquency or before the expiration of any extension
period all material governmental assessments and taxes imposed, levied, or
assessed against it, or any of its assets or in respect of any of its income,
businesses, or franchises, except to the extent that the validity of such
governmental assessment or tax is the subject of a Permitted Protest.

 

5.6          Insurance.  Each Borrower will, and will cause each of its
Subsidiaries to, at Borrowers’ expense, (a) maintain insurance respecting each
of each Borrower’s and its Subsidiaries’ assets wherever located, covering
liabilities, losses or damages as are customarily are insured against by other
Persons engaged in same or similar businesses and similarly situated and located
and (b) obtain flood insurance in such total amount as Agent may from time to
time reasonably require and in any event no less than the amount required by
Flood Insurance Laws, if at any time the area in which any improvements located
on any mortgaged property is designated a “flood hazard area” in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), and otherwise comply with the Flood Insurance Laws.  All such
policies of insurance shall be with financially sound and reputable insurance
companies acceptable to Agent and in such amounts as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and located and, in any event, in amount, adequacy, and scope
reasonably satisfactory to Agent (it being agreed that the

 

35

--------------------------------------------------------------------------------

 

amount, adequacy, and scope of the policies of insurance of Borrowers in effect
as of the Closing Date are acceptable to Agent).  All property insurance
policies covering the Collateral are to be made payable to Agent for the benefit
of Agent and the Lenders, as their interests may appear, in case of loss,
pursuant to a standard loss payable endorsement with a standard non contributory
“lender” or “secured party” clause and are to contain such other provisions as
Agent may reasonably require to fully protect the Lenders’ interest in the
Collateral and to any payments to be made under such policies.  All certificates
of property and general liability insurance are to be delivered to Agent, with
the loss payable (but only in respect of Collateral) and additional insured
endorsements in favor of Agent and shall provide for not less than 30 days (10
days in the case of non-payment) prior written notice to Agent of the exercise
of any right of cancellation.  If any Borrower or its Subsidiaries fails to
maintain such insurance, Agent may arrange for such insurance, but at Borrowers’
expense and without any responsibility on Agent’s part for obtaining the
insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims.  Borrowers shall give Agent prompt notice
of any loss exceeding $500,000 covered by their or their Subsidiaries’ casualty
or business interruption insurance.  Upon the occurrence and during the
continuance of an Event of Default, Agent shall have the sole right to file
claims under any property and general liability insurance policies in respect of
the Collateral, to receive, receipt and give acquittance for any payments that
may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any such
insurance policies.

 

5.7          Inspection.

 

(a)           Each Borrower will, and will cause each of its Subsidiaries to,
permit Agent, any Lender, and each of their respective duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees (provided an authorized
representative of a Borrower shall be allowed to be present) at such reasonable
times and intervals as Agent or any Lender, as applicable, may designate and, so
long as no Default or Event of Default has occurred and is continuing, with
reasonable prior notice to Borrowers and during regular business hours.

 

(b)           Each Borrower will, and will cause each of its Subsidiaries to,
permit Agent and each of its duly authorized representatives or agents to
conduct appraisals and valuations at such reasonable times and intervals as
Agent may designate.  So long as no Default or Event of Default has occurred and
is continuing, Agent agrees to provide Borrowers with a copy of the report for
any such valuation upon request by Borrowers so long as (i) such report exists,
(ii) the third person employed by Agent to perform such valuation consents to
such disclosure, and (iii) Borrowers execute and deliver to Agent a non-reliance
letter reasonably satisfactory to Agent.

 

5.8          Compliance with Laws.  Each Borrower will, and will cause each of
its Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations, and orders of any Governmental Authority (including all Food
Security Laws, Food Products Laws and ERISA), other than laws, rules,
regulations, and orders the non-compliance with which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

5.9          Environmental.  Each Borrower will, and will cause each of its
Subsidiaries to,

 

(a)           Keep any property either owned or operated by any Borrower or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,

 

(b)           Comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests in writing,

 

(c)           Promptly notify Agent of any release of which any Borrower has
knowledge of a Hazardous Material in any reportable quantity from or onto
property owned or operated by any Borrower or its Subsidiaries and take any
Remedial Actions required to abate said release or otherwise to come into
compliance, in all material respects, with applicable Environmental Law, and

 

36

--------------------------------------------------------------------------------

 

(d)           Promptly, but in any event within 5 Business Days of its receipt
thereof, provide Agent with written notice of any of the following:  (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of a Borrower or its Subsidiaries, (ii) commencement of any
Environmental Action or written notice that an Environmental Action will be
filed against a Borrower or its Subsidiaries, and (iii) written notice of a
violation, citation, or other administrative order from a Governmental
Authority.

 

5.10        Disclosure Updates.  Each Borrower will, promptly and in no event
later than 5 Business Days after obtaining knowledge thereof, notify Agent if
any written information, exhibit, or report furnished to Agent or the Lenders
contained, at the time it was furnished, any untrue statement of a material fact
or omitted to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made.  The
foregoing to the contrary notwithstanding, any notification pursuant to the
foregoing provision will not cure or remedy the effect of the prior untrue
statement of a material fact or omission of any material fact nor shall any such
notification have the effect of amending or modifying this Agreement or any of
the Schedules hereto.

 

5.11        Formation of Subsidiaries.  Each Borrower will, at the time that any
Loan Party forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date, within 10 days of such formation or
acquisition (or such later date as permitted by Agent in its sole discretion)
(a) cause such new Subsidiary to provide to Agent a joinder to the Guaranty and
Security Agreement, together with such other security agreements (including
mortgages with respect to any Real Property owned in fee of such new Subsidiary
with a fair market value greater than $1,000,000), as well as appropriate
financing statements (and with respect to all property subject to a mortgage,
fixture filings), all in form and substance reasonably satisfactory to Agent
(including being sufficient to grant Agent a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary); provided, that the joinder to the Guaranty and Security Agreement,
and such other security agreements shall not be required to be provided to Agent
with respect to any Subsidiary of any Borrower that is a CFC, (b) provide, or
cause the applicable Loan Party to provide, to Agent a pledge agreement (or an
addendum to the Guaranty and Security Agreement) and appropriate certificates
and powers or financing statements, pledging all of the direct or beneficial
ownership interest in such new Subsidiary in form and substance reasonably
satisfactory to Agent; provided, that only 65% of the total outstanding voting
Equity Interests of any first tier Subsidiary of a Borrower that is a CFC (and
none of the Equity Interests of any Subsidiary of such CFC) shall be required to
be pledged (which pledge, if reasonably requested by Agent, shall be governed by
the laws of the jurisdiction of such Subsidiary), and (c) provide to Agent all
other documentation, including one or more opinions of counsel reasonably
satisfactory to Agent, which, in its opinion, is appropriate with respect to the
execution and delivery of the applicable documentation referred to above
(including policies of title insurance, surveys or other documentation with
respect to all Real Property owned in fee and subject to a mortgage, including
flood insurance).  Any document, agreement, or instrument executed or issued
pursuant to this Section 5.11 shall constitute a Loan Document.  To the extent
any item of property that is not (x) Collateral on the Closing Date, is
subsequently included in the definition of Collateral, or (y) in the Borrowing
Base on the Closing Date, is subsequently included in Borrowing Base, then, in
each case, Agent and Lenders shall request and receive such documents,
agreements and instruments as they reasonably request in order to include such
items of property in Collateral and/or Borrowing Base.

 

5.12        Further Assurances.  Each Borrower will, and will cause each of the
other Loan Parties to, at any time upon the reasonable request of Agent, execute
or deliver to Agent any and all financing statements, fixture filings, security
agreements, pledges, assignments, mortgages, deeds of trust, opinions of
counsel, title policies, surveys, evidence of flood insurance and all other
documents (the “Additional Documents”) that Agent may reasonably request in form
and substance reasonably satisfactory to Agent, to create, perfect, and continue
perfected or to better perfect Agent’s Liens in all of the assets of each
Borrower and its Subsidiaries (whether now owned or hereafter arising or
acquired, tangible or intangible, real or personal), to create and perfect Liens
in favor of Agent in any Real Property acquired by any Borrower or any other
Loan Party with a fair market value in excess of $1,000,000, and in order to
fully consummate all of the transactions contemplated hereby and under the other
Loan Documents; provided that the foregoing shall not apply to any Subsidiary of
a Borrower that is a CFC.  To the maximum extent permitted by applicable law, if
any Borrower or any other Loan Party refuses or fails to execute or deliver any
reasonably requested Additional Documents within a reasonable period of time
following the request

 

37

--------------------------------------------------------------------------------

 

to do so, each Borrower and each other Loan Party hereby authorizes Agent to
execute any such Additional Documents in the applicable Loan Party’s name and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office.  In furtherance of, and not in limitation of, the foregoing, each
Loan Party shall take such actions as Agent may reasonably request from time to
time to ensure that the Obligations are guaranteed by the Guarantors and are
secured by substantially all of the assets of each Borrower and its
Subsidiaries, including all of the outstanding capital Equity Interests of each
direct and indirect subsidiary of Parent Borrower (subject to exceptions and
limitations contained in the Loan Documents with respect to CFCs).  To the
extent any item of property that is not (x) Collateral on the Closing Date, is
subsequently included in the definition of Collateral, or (y) in the Borrowing
Base on the Closing Date, is subsequently included in Borrowing Base, then, in
each case, Agent and Lenders shall request and receive such documents,
agreements and instruments as they reasonably request in order to include such
items of property in Collateral and/or Borrowing Base.

 

5.13        Lender Meetings.  Borrowers will, within 90 days after the close of
each fiscal year of Parent Borrower, at the request of Agent or of the Required
Lenders and upon reasonable prior notice, hold a meeting (at a mutually
agreeable location and time or, at the option of Agent, by conference call) with
all Lenders who choose to attend such meeting at which meeting shall be reviewed
the financial results of the previous fiscal year and the financial condition of
Borrowers and their Subsidiaries and the projections presented for the current
fiscal year of Parent Borrower.

 

5.14        Compliance with ERISA and the IRC.  In addition to and without
limiting the generality of Section 5.8, (a) comply in all material respects with
applicable provisions of ERISA and the IRC with respect to all Employee Benefit
Plans, (b) without the prior written consent of Agent and the Required Lenders,
not take any action or fail to take action the result of which could result in a
Loan Party or ERISA Affiliate incurring a material liability to the PBGC or to a
Multiemployer Plan (other than to pay contributions or premiums payable in the
ordinary course), (c) allow any facts or circumstances to exist with respect to
one or more Employee Benefit Plans that, in the aggregate, reasonably could be
expected to result in a Material Adverse Effect, (d) not participate in any
prohibited transaction that could result in other than a de minimis civil
penalty excise tax, fiduciary liability or correction obligation under ERISA or
the IRC, (e) operate each Employee Benefit Plan in such a manner that will not
incur any material tax liability under the IRC (including Section 4980B of the
IRC), and (e) furnish to Agent upon Agent’s written request such additional
information about any Employee Benefit Plan for which any Loan Party or ERISA
Affiliate could reasonably expect to incur any material liability.  With respect
to each Pension Plan (other than a Multiemployer Plan) except as could not
reasonably be expected to result in liability to the Loan Parties, the Loan
Parties and the ERISA Affiliates shall (i) satisfy in full and in a timely
manner, without incurring any late payment or underpayment charge or penalty and
without giving rise to any Lien, all of the contribution and funding
requirements of the IRC and of ERISA, and (ii) pay, or cause to be paid, to the
PBGC in a timely manner, without incurring any late payment or underpayment
charge or penalty, all premiums required pursuant to ERISA.

 

5.15        Location of Inventory and Farm Products.  Each Borrower will, and
will cause each of its Subsidiaries to, keep its Inventory and Farm Products
only at the locations identified on Schedule 4.23 (other than Inventory and Farm
Products having an aggregate value of $500,000 or less and are not stored with a
bailee, warehouseman, or similar party and is located only at, or in-transit
between in the ordinary course of business, the locations identified in Schedule
4.23) and their chief executive offices only at the locations identified on
Schedule 4.23); provided, that Borrowers may amend Schedule 4.23 so long as such
amendment occurs by written notice to Agent not less than 10 days prior to the
date on which such Inventory and Farm Products are moved to such new location or
such chief executive office is relocated and so long as such new location is
within the continental United States.

 

5.16        Bank Products.  On or before the 30th day after the Closing Date,
the Loan Parties shall establish their primary depository and treasury
management relationships with Wells Fargo or one or more of its Affiliates and
will maintain such depository and treasury management relationships at all times
during the term of the Agreement.  The foregoing notwithstanding, the Loan
Parties may maintain depository relationships with other financial institutions
so long as the aggregate cash and other property deposited in all such accounts
with all such institutions shall not exceed $250,000 at any time.

 

38

--------------------------------------------------------------------------------

 

5.17        Food Security Act.  The Borrowers will maintain their FSA
Registrations where applicable and will cooperate fully with Agent in its
efforts to obtain and analyze any information with respect to filings of
“effective financing statements” or notices to Borrowers under the Food Security
Act.  Borrowers will issue joint checks to growers or suppliers and their
respective secured parties or otherwise obtain a release of such secured party’s
Lien in accordance with the Food Security Act.

 

5.18        Food Products Laws.

 

(a)           So long as Borrowers or any of their Subsidiaries purchase
agricultural products from Food Products Sellers, Borrowers shall monitor the
receipt of notices of Liens and/or trusts on their assets under any Food
Products Law and provide prompt written notice thereof to Agent upon receipt
thereof.

 

(b)           [reserved].

 

(c)           Borrowers and their Subsidiaries shall comply at all times with
all existing and future Food Products Notices during their period of
effectiveness under any Food Products Law, including directions to make payments
to the Food Products Sellers by issuing payment instruments directly to the
secured party with respect to any assets of the Food Products Sellers or jointly
payable to the Food Products Sellers and any secured party with respect to the
assets of such Food Products Sellers, as specified in the Food Products Notice,
so as to terminate or release the Lien on any Food Products maintained by such
Food Products Sellers or any secured party with respect to the assets of such
Food Products Sellers under any Food Products Law.

 

(d)           In the event any Borrower or any of its Subsidiaries receives a
Food Products Notice, such Person shall pay the related invoice within the
payment terms specified therein and notify Agent of such receipt; provided,
however, that such invoice may remain unpaid if, and only so long as
(A) appropriate legal or administrative action has been commenced in good faith
and is being diligently pursued or defended by such Person, (B) adequate
reserves with respect to such contest are maintained on the books of such Loan
Party, in accordance with GAAP, (C) Agent shall have established a Food Products
Payable Reserve in with respect to the relevant invoice, (D) such Person shall
promptly pay or discharge such contested invoice and all additional charges,
interest, penalties, and expenses, if any, and shall deliver to Agent evidence
reasonably acceptable to Agent of such payment, if such contest is terminated or
discontinued adversely to such Person or the conditions set forth in this
Section 5.18(d) are no longer met, and (E) Agent has not advised such Person in
writing that it reasonably believes that nonpayment thereof could reasonably be
expected to have or result in a Material Adverse Effect.

 

5.19        Material Contracts.  Contemporaneously with the delivery of each
Compliance Certificate pursuant to Section 5.1 in respect of any calendar month,
each Borrower will provide Agent with copies of (a) each Material Contract
entered into since the delivery of the previous Compliance Certificate, and
(b) each material amendment or modification of any Material Contract entered
into since the delivery of the previous Compliance Certificate.

 

5.20        Flood Hazard Insurance.

 

With respect to each parcel of Real Property subject to a Mortgage, Agent has
received (a) such flood hazard certifications, notices and confirmations
thereof, and effective flood hazard insurance policies as are reasonably
required by Agent (after giving effect to any extension of time in Schedule 3.6)
with respect to Real Property collateral, (b) all flood hazard insurance
policies required hereunder shall remain in full force and effect, and the
premiums thereon shall be paid in full at all times, and (c) except as Borrowers
have previously given written notice thereof to Agent, there has been no
redesignation of any real property into or out of a special flood hazard area.

 

6.             NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:

 

39

--------------------------------------------------------------------------------

 

6.1          Indebtedness.  Each Borrower will not, and will not permit any of
its Subsidiaries to create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness.

 

6.2          Liens.  Each Borrower will not, and will not permit any of its
Subsidiaries to create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.

 

6.3          Restrictions on Fundamental Changes.  Each Borrower will not, and
will not permit any of its Subsidiaries to,

 

(a)           other than in order to consummate a Permitted Acquisition, enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Equity Interests, except for (i) any merger between Loan Parties,
provided, that a Borrower must be the surviving entity of any such merger to
which it is a party (and in case of any merger between Parent Borrower and any
other Borrower, Parent Borrower must be the surviving entity of any such
merger), (ii) any merger between a Loan Party and a Subsidiary of such Loan
Party that is not a Loan Party so long as such Loan Party is the surviving
entity of any such merger, and (iii) any merger between Subsidiaries of any
Borrower, in each case that are not Loan Parties,

 

(b)           liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), except for (i) the liquidation or dissolution of non-operating
Subsidiaries of any Borrower with nominal assets and nominal liabilities,
(ii) the liquidation or dissolution of a Loan Party (other than any Borrower) or
any of its wholly-owned Subsidiaries so long as all of the assets (including any
interest in any Equity Interests) of such liquidating or dissolving Loan Party
or Subsidiary are transferred to a Loan Party that is not liquidating or
dissolving, or (iii) the liquidation or dissolution of a Subsidiary of any
Borrower that is not a Loan Party so long as all of the assets of such
liquidating or dissolving Subsidiary are transferred to a Subsidiary of a
Borrower that is not liquidating or dissolving and the Equity Interests of which
(or any portion thereof) is subject to a Lien in favor of Agent, or

 

(c)           suspend or cease operating a substantial portion of its or their
business, except as permitted pursuant to clauses (a) or (b) above or in
connection with a transaction permitted under Section 6.4.

 

6.4          Disposal of Assets.  Other than Permitted Dispositions or
transactions expressly permitted by Sections 6.3 or 6.9, each Borrower will not,
and will not permit any of its Subsidiaries to convey, sell, lease (including
sale/leaseback transactions), license, assign, transfer, or otherwise dispose of
(or enter into an agreement to convey, sell, lease (including sale/leaseback
transactions), license, assign, transfer, or otherwise dispose of) any of its or
their assets.

 

6.5          Nature of Business.  Each Borrower will not, and will not permit
any of its Subsidiaries to make any change in the nature of its or their
business as described in Schedule 6.5 or acquire any properties or assets that
are not reasonably related to the conduct of such business activities; provided,
that the foregoing shall not prevent any Borrower and its Subsidiaries from
engaging in any business that is reasonably related or ancillary to its or their
business.

 

6.6          Prepayments and Amendments.  Each Borrower will not, and will not
permit any of its Subsidiaries to,

 

(a)           Except in connection with Refinancing Indebtedness permitted by
Section 6.1; provided that any Refinancing Indebtedness of the Term Loan Credit
Agreement shall be subject to the terms of the Intercreditor Agreement and shall
not have maturity date prior to the maturity date of (or have shorter weighted
average life to maturity than) the Term Loan Credit Agreement on the Closing
Date,

 

(i)            mandatorily or optionally prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness of any Borrower or its Subsidiaries, other
than (A) the Obligations in accordance with this Agreement, and (B) Permitted
Intercompany Advances; provided that the foregoing shall not prohibit (I) any
voluntary prepayment of the Term Loan Obligations (each, a “Voluntary Term Loan
Prepayment”) so long as (A)

 

40

--------------------------------------------------------------------------------

 

no Event of Default shall have occurred and be continuing or would result
therefrom; and (B) (x) Excess Availability on the date of such Voluntary Term
Loan Prepayment (calculated on a pro forma basis after giving effect to such
Term Loan Prepayment), Excess Availability for the 30 consecutive days
immediately preceding such Voluntary Term Loan Prepayment and (on a projected
basis) for the 30 consecutive days immediately following such Voluntary Term
Loan Prepayment (each calculated on a pro forma basis after giving effect to
such Term Loan Prepayment), in each case, shall not be less than the greater of
25% of the Maximum Revolver Amount and $12,500,000 or (y) each of (p) Excess
Availability on the date of such Voluntary Term Loan Prepayment (calculated on a
pro forma basis after giving effect to such Term Loan Prepayment), Excess
Availability for the 30 consecutive days immediately preceding such Voluntary
Term Loan Prepayment and (on a projected basis) for the 30 consecutive days
immediately following such Voluntary Term Loan Prepayment (each calculated on a
pro forma basis after giving effect to such Term Loan Prepayment), in each case,
shall not be less than the greater of 20% of the Maximum Revolver Amount and
$10,000,000 and (q) the Fixed Charge Coverage Ratio for Parent and its
Subsidiaries for the immediately preceding twelve (12) consecutive months shall
be at least 1.10 to 1.00, and the case of this clause (I), the Parent Borrower
shall have delivered a customary officer’s certificate to Agent certifying
compliance, (II) any mandatory prepayment of Term Loan Obligations if no Event
of Default shall have occurred and be continuing or would result therefrom. and
the Parent Borrower shall have delivered a customary officer’s certificate to
Agent certifying compliance, (III) mandatory prepayments of the Term Loan
Obligations from proceeds of sale Term Loan Priority Collateral (other than
proceeds of issuance of Equity Interest) (and any such mandatory prepayment of
the “loans” under the Term Loan Credit Agreement shall also be subject to the
terms of the Intercreditor Agreement) or (IV) payment or prepayment of other
secured Indebtedness (other than Term Loan Obligations) that becomes due as a
result of the sale or transfer of, or casualty or condemnation event with
respect to, the property or assets securing such Indebtedness if (in the case of
a sale or transfer) such sale or transfer is permitted hereunder and such
Indebtedness is repaid on or prior to three (3) Business Days after the receipt
of proceeds therefrom, or

 

(ii)           make any payment on account of Indebtedness that has been
contractually subordinated in right of payment or security to the Obligations if
such payment is not permitted at such time under the subordination terms and
conditions.

 

(b)           Directly or indirectly, amend, modify, or change any of the terms
or provisions of

 

(i)            any agreement, instrument, document, indenture, or other writing
evidencing or concerning Permitted Indebtedness other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Intercompany Advances,
(C) Indebtedness permitted under clauses (c), (h), (j) and (k) of the definition
of Permitted Indebtedness and (D) the Term Loan Documents in accordance with the
terms of the Intercreditor Agreement,

 

(ii)           (A) any Food Product Grower Arrangement except to the extent that
such amendment, modification, or change could not, individually or in the
aggregate, reasonably be expected to be materially adverse to the interest of
any Loan Party or the Lenders or (B) any other Material Contract (other than any
Food Product Grower Arrangement) except to the extent that such amendment,
modification, or change could not, individually or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect (for the avoidance of
doubt, Borrowers may terminate agreements with Seattle’s Best Coffee LLC and
Miles Willard Technologies, LLP), or

 

(iii)          the Governing Documents of any Loan Party or any of its
Subsidiaries if the effect thereof, either individually or in the aggregate,
could reasonably be expected to be materially adverse to the interests of the
Lenders.

 

6.7          Restricted Payments.  Each Borrower will not, and will not permit
any of its Subsidiaries to make any Restricted Payment; provided, that, so long
as it is permitted by law, and so long as no Default or Event of Default shall
have occurred and be continuing or would result therefrom,

 

41

--------------------------------------------------------------------------------

 

(a)           Parent Borrower may make distributions to former employees,
officers, or directors of Parent Borrower (or any spouses, ex-spouses, or
estates of any of the foregoing) on account of redemptions of Equity Interests
of Parent Borrower held by such Persons, provided, that the aggregate amount of
such Restricted Payments made by Parent Borrower during the term of this
Agreement plus the amount of Indebtedness outstanding under clause (l) of the
definition of Permitted Indebtedness, does not exceed $750,000 in the aggregate,
and

 

(b)           Parent Borrower may make distributions to former employees,
officers, or directors of Parent Borrower (or any spouses, ex-spouses, or
estates of any of the foregoing), solely in the form of forgiveness of
Indebtedness of such Persons owing to Parent Borrower on account of repurchases
of the Equity Interests of Parent Borrower held by such Persons; provided that
such Indebtedness being forgiven was incurred by such Persons solely to acquire
Equity Interests of Parent Borrower.

 

6.8          Accounting Methods.  Each Borrower will not, and will not permit
any of its Subsidiaries to modify or change its fiscal year (other than upon
30-days’ prior written notice to Agent and subject to providing Agent with
reasonably requested documents, including financial statements (including any
stub year financials)) or its method of accounting (other than as may be
required to conform to GAAP).

 

6.9          Investments.  Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, make or acquire any Investment or
incur any liabilities (including contingent obligations) for or in connection
with any Investment except for Permitted Investments.

 

6.10        Transactions with Affiliates.  Each Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into or permit
to exist any transaction with any Affiliate of any Borrower or any of its
Subsidiaries except for :

 

(a)           transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between such Borrower or its Subsidiaries, on the
one hand, and any Affiliate of such Borrower or its Subsidiaries, on the other
hand, so long as such transactions (i) are fully disclosed to Agent prior to the
consummation thereof, if they involve one or more payments by such Borrower or
its Subsidiaries in excess of $1,000,000 for any single transaction or series of
related transactions, and (ii) are no less favorable, taken as a whole, to such
Borrower or its Subsidiaries, as applicable, than would be obtained in an arm’s
length transaction with a non-Affiliate,

 

(b)           so long as it has been approved by such Borrower’s or its
applicable Subsidiary’s Board of Directors (or comparable governing body) in
accordance with applicable law, any indemnity provided for the benefit of
directors (or comparable managers) of such Borrower or its applicable
Subsidiary,

 

(c)           so long as it has been approved by such Borrower’s or its
applicable Subsidiary’s Board of Directors (or comparable governing body) in
accordance with applicable law, the payment of reasonable compensation,
severance, or employee benefit arrangements to employees, officers, and outside
directors of such Borrower and its Subsidiaries in the ordinary course of
business and consistent with industry practice, and

 

(d)           transactions permitted by Section 6.3 or Section 6.7, or any
Permitted Intercompany Advance.

 

6.11        Use of Proceeds.  Each Borrower will not, and will not permit any of
its Subsidiaries to use the proceeds of any loan made hereunder for any purpose
other than (a) on the Closing Date, (i) to repay, in full, the outstanding
principal, accrued interest, and accrued fees and expenses owing under or in
connection with the Existing Credit Facility, and (ii) to pay the fees, costs,
and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, in each case,
as set forth in the Flow of Funds Agreement, and (b) thereafter, consistent with
the terms and conditions hereof, for their lawful and permitted purposes
(including that no part of the proceeds of the loans made to Borrowers will be
used to purchase or carry any such Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any such Margin Stock or for any
purpose that violates the provisions of Regulation T, U or X of the Board of
Governors).

 

42

--------------------------------------------------------------------------------

 

6.12        Limitation on Issuance of Equity Interests.  Except for the issuance
or sale of Qualified Equity Interests by Parent Borrower, each Borrower will
not, and will not permit any of its Subsidiaries to issue or sell or enter into
any agreement or arrangement for the issuance or sale of any of its Equity
Interests.

 

6.13        Inventory and Farm Products with Bailees.  Each Borrower will not,
and will not permit any of its Subsidiaries to store its Inventory and Farm
Products at any time with a bailee, warehouseman, or similar party, unless, in
each case, either (a) such bailee, warehouseman, or similar party has executed a
Landlord Waiver under which it expressly agrees to subordinate its legal and
contractual liens to Agent’s Liens or (b) a reserve in an amount equal to the
greater of (i) the number of months’ rent for which such bailee, warehouseman,
or similar party will have, under applicable law or contract, a Lien in the
Inventory and Farm Products of such Borrower to secure the payment of rent or
other amounts under the lease or contract relative to such location, or (ii) 3
months’ rent under the lease or contract relative to such location.

 

6.14        Restrictive Agreements.  Each Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement that prohibits, restricts or imposes any condition upon
(a) the ability of Parent Borrower or any Subsidiary to create, incur or permit
any Lien upon any of its assets or properties, whether now owned or hereafter
acquired, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its Equity Interest, to make or repay loans or
advances to Parent Borrower or any other Subsidiary, to Guarantee the
Obligations of Borrowers or any other Subsidiary or to transfer any of its
property or assets to Parent Borrower or any Subsidiary of Parent Borrower;
provided that the foregoing shall not apply to restrictions or conditions
imposed by law, by this Agreement, any other Loan Document (including the
Intercreditor Agreement), or the Term Loan Credit Agreement and related
documents in effect on the date hereof or, so long as such restrictions or
conditions are no more onerous than those imposed under this Agreement or any
other Loan Documents.

 

6.15        Employee Benefits.

 

(a)           Terminate, or permit any ERISA Affiliate to terminate, any Pension
Plan in a manner, or take any other action with respect to any Plan, which could
reasonably be expected to result in any liability of any Loan Party or ERISA
Affiliate to the PBGC.

 

(b)           Fail to make, or permit any ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Benefit Plan,
agreement relating thereto or applicable Law, any Loan Party or ERISA Affiliate
is required to pay if such failure could reasonably be expected to have a
Material Adverse Effect.

 

(c)           Permit to exist, or allow any ERISA Affiliate to permit to exist,
any accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan which
exceeds $50,000 with respect to all Pension Plans in the aggregate.

 

(d)           Acquire, or permit any ERISA Affiliate to acquire, an interest in
any Person that causes such Person to become an ERISA Affiliate with respect to
a Loan Party or with respect to any ERISA Affiliate if such Person sponsors,
maintains or contributes to, or at any time in the six-year period preceding
such acquisition has sponsored, maintained, or contributed to, (i) any Pension
or (ii) any Multiemployer Plan.

 

(e)           Contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any Multiemployer Plan not set forth on Schedule 4.10.

 

(f)            Amend, or permit any ERISA Affiliate to amend, a Pension Plan
resulting in a material increase in current liability such that a Loan Party or
ERISA Affiliate is required to provide security to such Plan under the IRC.

 

6.16        Hedge Agreements.  Each Borrower will not, and will not permit any
of its Subsidiaries to, enter into any Hedge Agreements, other than Hedge
Agreements entered into in the ordinary course of business to hedge

 

43

--------------------------------------------------------------------------------

 

or mitigate risks to which any Borrower or any Subsidiary thereof is exposed in
the conduct of its business or the management of its liabilities.

 

6.17        Immaterial Subsidiaries.  Borrowers will not permit any Immaterial
Subsidiary to (a) own any assets (other than assets of a de minimis nature),
(b) have any liabilities (other than liabilities of a de minimis nature), or
(c) engage in any business activity.

 

6.18        Compliance with Governmental Regulations.

 

(a)           The Borrowers will not, and will not permit any of their
Subsidiaries to, (i) be or become subject at any time to any law, regulation or
list of any Governmental Authority of the United States (including, without
limitation, the OFAC list) that prohibits or limits the Lenders or Agent from
making any advance or extension of credit to the Borrowers or from otherwise
conducting business with the Loan Parties, or (b) fail to provide documentary
and other evidence of the identity of the Loan Parties as may be requested by
the Lenders or Agent at any time to enable the Lenders or Agent to verify the
identity of the Loan Parties or to comply with any applicable law or regulation,
including, without limitation, Section 326 of the Patriot Act at 31 U.S.C.
Section 5318.

 

(b)           The Borrowers will not, and will not permit any of their
Subsidiary to, use any Loan or the proceeds of any Loan, or lend, contribute or
otherwise make available any Loan or the proceeds of any Loan to any Sanctioned
Person, to fund any activities of or business with any Sanctioned Person or in
any Sanctioned Country, or in any other manner that will result in a violation
by any Person (including any Person participating in the transaction, whether as
Agent, any Lender or otherwise) of Sanctions.

 

(c)           The Borrowers will not, and will not permit any Subsidiary to, use
any Loan or the proceeds therefrom for any purpose that would violate the
Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and any similar
anti-corruption legislation or laws in any other jurisdiction.

 

7.             FINANCIAL COVENANT.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, commencing from and after
the date on which a Financial Covenant Triggering Period has commenced and is
continuing and until the date such Financial Covenant Triggering Period no
longer is continuing, Borrowers will have a Fixed Charge Coverage Ratio,
measured on a month-end basis (calculated on a trailing twelve month basis,
commencing as of the end of the twelve month period most recently ended prior to
the date on which a Financial Covenant Trigger Event first occurs for which
Borrowers are required to deliver to Agent monthly quarterly or annual financial
statements pursuant to Schedule 5.1 to the Agreement and as of each month end
thereafter until the date such Financial Covenant Triggering Period no longer is
continuing), of at least 1.10:1.00.

 

8.             EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

 

8.1          Payments.  If Borrowers fail to pay when due and payable, or when
declared due and payable, (a) all or any portion of the Obligations consisting
of interest, fees, or charges due the Lender Group, reimbursement of Lender
Group Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of 3 Business Days, (b) all
or any portion of the principal of the Loans, or (c) any amount payable to
Issuing Bank in reimbursement of any drawing under a Letter of Credit;

 

44

--------------------------------------------------------------------------------

 

8.2          Covenants.  If any Loan Party or any of its Subsidiaries:

 

(a)           fails to perform or observe any covenant or other agreement
contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is
not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if
any Borrower refuses to allow Agent or its representatives or agents to visit
any Borrower’s properties, inspect its assets or books or records, examine and
make copies of its books and records, or discuss Borrowers’ affairs, finances,
and accounts with officers and employees of any Borrower), 5.10, 5.11, 5.13, or
5.14, 5.15, 5.16, 5.17, and 5.18 of this Agreement, (ii) Section 6 of this
Agreement, (iii) Section 7 of this Agreement, or (iv) Section 7 of the Guaranty
and Security Agreement;

 

(b)           fails to perform or observe any covenant or other agreement
contained in any of Sections 5.3 (other than if any Borrower is not in good
standing in its jurisdiction of organization), 5.4, 5.5, 5.8, 5.12 and 5.19 of
this Agreement and such failure continues for a period of 10 days (or, for a
period of 3 days in the case of Section 5.19) after the earlier of (i) the date
on which such failure shall first become known to any officer of any Borrower or
(ii) the date on which written notice thereof is given to Borrowers by Agent; or

 

(c)           fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 8 (in which event such other provision of this
Section 8 shall govern), and such failure continues for a period of 30 days
after the earlier of (i) the date on which such failure shall first become known
to any officer of any Borrower or (ii) the date on which written notice thereof
is given to Borrowers by Agent;

 

8.3          Judgments.  If one or more judgments, orders, or awards for the
payment of money involving an aggregate amount of $500,000, or more (except to
the extent fully covered (other than to the extent of customary deductibles) by
insurance pursuant to which the insurer has not denied coverage) is entered or
filed against a Loan Party or any of its Subsidiaries, or with respect to any of
their respective assets, and either (a) there is a period of 30 consecutive days
at any time after the entry of any such judgment, order, or award during which
(i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(ii) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;

 

8.4          Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is
commenced by a Loan Party or any of its Subsidiaries;

 

8.5          Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is
commenced against a Loan Party or any of its Subsidiaries (other than any
Immaterial Subsidiary) and any of the following events occur: (a) such Loan
Party or such Subsidiary (other than any Immaterial Subsidiary) consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
such Loan Party or its Subsidiary (other than any Immaterial Subsidiary), or
(e) an order for relief shall have been issued or entered therein;

 

8.6          Default Under Other Agreements.  If there is a default under the
Term Loan Credit Agreement or in one or more other agreements to which a Loan
Party or any of its Subsidiaries is a party with one or more third Persons
relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an
aggregate amount of $750,000 or more, and such default (a) occurs at the final
maturity of the obligations thereunder, or (b) results in a right by such third
Person, irrespective of whether exercised, to accelerate the maturity of such
Loan Party’s or its Subsidiary’s obligations thereunder;

 

8.7          Representations, etc.  If any warranty, representation,
certificate, statement, or Record made herein or in any other Loan Document or
delivered in writing to Agent or any Lender in connection with this Agreement or
any other Loan Document proves to be untrue in any material respect (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of the date of issuance or making or deemed making thereof;

 

45

--------------------------------------------------------------------------------

 

8.8          Guaranty.  If the obligation of any Guarantor under the guaranty
contained in the Guaranty and Security Agreement is limited or terminated by
operation of law or by such Guarantor (other than in accordance with the terms
of this Agreement);

 

8.9          Security Documents.  If the Guaranty and Security Agreement or any
other Loan Document that purports to create a Lien, shall, for any reason, fail
or cease to create a valid and perfected and, except to the extent of Permitted
Liens which are non-consensual Permitted Liens, Liens in respect of the Term
Loan Credit Agreement (subject to the terms of the Intercreditor Agreement),
permitted purchase money Liens or the interests of lessors under Capital Leases,
first priority Lien on the Collateral covered thereby, except (a) as a result of
a disposition of the applicable Collateral in a transaction permitted under this
Agreement, (b) with respect to Collateral the aggregate value of which, for all
such Collateral, does not exceed at any time, $500,000, or (c) as the result of
an action or failure to act on the part of Agent;

 

8.10        Loan Documents.  The validity or enforceability of any Loan Document
shall at any time for any reason (other than solely as the result of an action
or failure to act on the part of Agent) be declared to be null and void, or a
proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any
Governmental Authority having jurisdiction over a Loan Party or its
Subsidiaries, seeking to establish the invalidity or unenforceability thereof,
or a Loan Party or its Subsidiaries shall deny that such Loan Party or its
Subsidiaries has any liability or obligation purported to be created under any
Loan Document; or

 

8.11        Change of Control.  A Change of Control shall occur, whether
directly or indirectly.

 

8.12        ERISA.  The occurrence of any of the following events:  (a) any Loan
Party or ERISA Affiliate fails to make full payment when due of all amounts
which any Loan Party or ERISA Affiliate is required to pay as contributions,
installments, or otherwise to or with respect to a Pension Plan or Multiemployer
Plan, and such failure could reasonably be expected to result in liability in
excess of $50,000, (b) an accumulated funding deficiency or funding shortfall in
excess of $50,000 occurs or exists, whether or not waived, with respect to any
Pension Plan, individually or in the aggregate, (c) a Notification Event, which
could reasonably be expected to result in liability in excess of $50,000, either
individually or in the aggregate, or (d) any Loan Party or ERISA Affiliate
completely or partially withdraws from one or more Multiemployer Plans and
incurs Withdrawal Liability in excess of $50,000 in the aggregate, or fails to
make any Withdrawal Liability payment when due.

 

9.             RIGHTS AND REMEDIES.

 

9.1          Rights and Remedies.  Upon the occurrence and during the
continuation of an Event of Default, Agent may, and, at the instruction of the
Required Lenders, shall (in each case under clauses (a) or (b) by written notice
to Borrowers), in addition to any other rights or remedies provided for
hereunder or under any other Loan Document or by applicable law, do any one or
more of the following:

 

(a)           (i) declare the principal of, and any and all accrued and unpaid
interest and fees in respect of, the Loans and all other Obligations (other than
the Bank Product Obligations), whether evidenced by this Agreement or by any of
the other Loan Documents to be immediately due and payable, whereupon the same
shall become and be immediately due and payable and Borrowers shall be obligated
to repay all of such Obligations in full, without presentment, demand, protest,
or further notice or other requirements of any kind, all of which are hereby
expressly waived by each Borrower, and (ii) direct Borrowers to provide (and
Borrowers agree that upon receipt of such notice Borrowers will provide) Letter
of Credit Collateralization to Agent to be held as security for Borrowers’
reimbursement obligations for drawings that may subsequently occur under issued
and outstanding Letters of Credit;

 

(b)           declare the Commitments terminated, whereupon the Commitments
shall immediately be terminated together with (i) any obligation of any Lender
to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing
Loans, and (iii) the obligation of Issuing Bank to issue Letters of Credit; and

 

(c)           exercise all other rights and remedies available to Agent or the
Lenders under the Loan Documents, under applicable law, or in equity; provided,
that, with respect to any Event of Default resulting solely

 

46

--------------------------------------------------------------------------------

 

from failure of Borrowers to comply with the financial covenant set forth in
Section 7, neither Agent nor the Required Lenders may exercise the foregoing
remedies in this Section 9.1 until the date that is the earlier of (1) 10
Business Days after the day on which financial statements are required to be
delivered for the applicable fiscal month and (2) the date that Agent receives
notice that there will not be a Curative Equity contribution made for such
fiscal month.

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of the
principal of, and any and all accrued and unpaid interest and fees in respect
of, the Loans and all other Obligations (other than the Bank Product
Obligations), whether evidenced by this Agreement or by any of the other Loan
Documents, shall automatically become and be immediately due and payable and
Borrowers shall automatically be obligated to repay all of such Obligations in
full (including Borrowers being obligated to provide (and Borrowers agree that
they will provide) (1) Letter of Credit Collateralization to Agent to be held as
security for Borrowers’ reimbursement obligations in respect of drawings that
may subsequently occur under issued and outstanding Letters of Credit and
(2) Bank Product Collateralization to be held as security for Borrowers’ or
their Subsidiaries’ obligations in respect of outstanding Bank Products),
without presentment, demand, protest, or notice or other requirements of any
kind, all of which are expressly waived by Borrowers.

 

9.2          Remedies Cumulative.  The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative.  The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver.  No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.

 

9.3          Curative Equity.

 

(a)           Subject to the limitations set forth in clause (e) below,
Borrowers may cure (and shall be deemed to have cured) an Event of Default
arising out of a breach of any of the financial covenant set forth in Section 7
(the “Specified Financial Covenant”) if they receive the cash proceeds of an
investment of Curative Equity within 10 Business Days after the date on which
the Specified Financial Covenant is first required to be tested pursuant to the
terms hereof.

 

(b)           Borrowers shall promptly notify Agent of its receipt of any
proceeds of Curative Equity (and shall immediately apply the same to the payment
of the Obligations in the manner specified in Section 2.4(e)(iii)).

 

(c)           Any investment of Curative Equity shall be in immediately
available funds.

 

(d)           Upon delivery of a certificate by Borrowers to Agent as to the
amount of the proceeds of such Curative Equity and that such amount (i) has been
applied in accordance with clause (b) above, and (ii) is in an amount equal to
or greater than the amount required by clause (c) above, then any Event of
Default that occurred and is continuing from a breach of any of the Specified
Financial Covenant shall be deemed cured with no further action required by the
Required Lenders.  Prior to the date of the delivery of a certificate conforming
to the requirements of this Section, any Event of Default that has occurred as a
result of a breach of any of the Specified Financial Covenant shall be deemed to
be continuing and, as a result, the Lenders (including the Swing Lender and the
Issuing Bank) shall have no obligation to make additional loans or otherwise
extend additional credit hereunder.  In the event Borrowers do not cure all
financial covenant violations as provided in this Section 9.3, the existing
Event(s) of Default shall continue unless waived in writing by the Required
Lenders in accordance herewith.

 

(e)           Notwithstanding anything to the contrary contained in the
foregoing or this Agreement, (i) Borrowers’ rights under this Section 9.3 may
(A) not be exercised on or prior to the fiscal quarter ended June 25,

 

47

--------------------------------------------------------------------------------

 

2016, (B) be exercised not more than three (3) times during the term of this
Agreement, (C) not be exercised twice within any 180 day period, (D) not be
exercised if the amount of the proposed investment of Curative Equity, together
with the amount of all prior investments of Curative Equity, exceeds
$10,000,000, (E) not be exercised if the amount of the proposed investment of
Curative Equity exceeds $2,000,000, (ii) the Curative Equity contributed in any
fiscal quarter shall be no greater than the amount required to cause Borrowers
to be in compliance with the Specified Financial Covenant as at the end of such
fiscal quarter, and (iii) the Curative Equity shall be disregarded for all
purposes under the Loan Documents other than curing the breach of the Specified
Financial Covenant for such fiscal quarter, including for purposes of
determining EBITDA for any pricing, financial covenant based conditions or any
baskets with respect to the covenants contained in this Agreement and there
shall be no pro forma reduction in Indebtedness with the proceeds of any
Curative Equity for determining compliance with the any of the financial
covenants set forth in Section 7 or for any other purpose under the Loan
Documents, including determining any pricing, financial covenant based
conditions or baskets with respect to the covenants contained in this Agreement,
in each case in the quarter in which such Curative Equity is used, but shall be
added to EBITDA solely for purposes of calculating compliance with the Specified
Financial Covenant.

 

10.          WAIVERS; INDEMNIFICATION.

 

10.1        Demand; Protest; etc.  Each Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any Borrower may in any way be liable.

 

10.2        The Lender Group’s Liability for Collateral.  Each Borrower hereby
agrees that:  (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3        Indemnification.  Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an “Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution and delivery (provided that Borrowers
shall not be liable for costs and expenses (including attorneys’ fees) of any
Lender (other than Wells Fargo) incurred in advising, structuring, drafting,
reviewing, administering or syndicating the Loan Documents), enforcement,
performance, or administration (including any restructuring or workout with
respect hereto) of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby or the monitoring of Borrowers’ and
their Subsidiaries’ compliance with the terms of the Loan Documents (provided,
that the indemnification in this clause (a) shall not extend to (i) disputes
solely between or among the Lenders that do not involve any acts or omissions of
any Loan Party, or (ii) disputes solely between or among the Lenders and their
respective Affiliates that do not involve any acts or omissions of any Loan
Party; it being understood and agreed that the indemnification in this clause
(a) shall extend to Agent (but not the Lenders) relative to disputes between or
among Agent on the one hand, and one or more Lenders, or one or more of their
Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to
Taxes, which shall be governed by Section 16), (b) with respect to any actual or
prospective investigation, litigation, or proceeding related to this Agreement,
any other Loan Document, the making of any Loans or issuance of any Letters of
Credit hereunder, or the use of the proceeds of the Loans or the Letters of
Credit provided hereunder (irrespective of whether any Indemnified Person is a
party thereto), or any act, omission, event, or circumstance in any manner
related thereto, and (c) in connection with or arising out of any presence or
release of Hazardous Materials at, on, under, to or from any assets or
properties owned, leased or operated by any Borrower or any of its Subsidiaries
or any Environmental Actions, Environmental Liabilities or Remedial Actions
related in

 

48

--------------------------------------------------------------------------------

 

any way to any such assets or properties of any Borrower or any of its
Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). 
The foregoing to the contrary notwithstanding, no Borrower shall have any
obligation to any Indemnified Person under this Section 10.3 with respect to any
Indemnified Liability that a court of competent jurisdiction determines pursuant
to a final nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnified Person or its officers, directors,
employees, attorneys, or agents.  This provision shall survive the termination
of this Agreement and the repayment in full of the Obligations.  If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY
TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF
SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

 

11.          NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile.  In the case of notices or
demands to any Borrower or Agent, as the case may be, they shall be sent to the
respective address set forth below:

 

If to any Borrower:

c/o Parent Borrower

 

Inventure Foods, Inc.

 

5415 East High Street, Suite 350

 

Phoenix, Arizona 85054

 

Attn: Steve Weinberger

 

Fax No.: 602.522.2690

 

 

with copies to:

DLA Piper LLP (US)

 

2525 East Camelback Road, Suite 1000

 

Phoenix, Arizona 85016

 

Attn: Gregory R. Hall

 

Fax No.: 480.606.5528

 

 

If to Agent:

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

2450 Colorado Avenue, Suite 3000W

 

Santa Monica, California

 

Attn: Business Finance Division Manager

 

Fax No.: 310.453.7413

 

 

with copies to:

Paul Hastings LLP

 

75 East 55th Street

 

New York, New York 10022

 

Attn: Jennifer S. Yount

 

Fax No.: 212.319.4090

 

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this

 

49

--------------------------------------------------------------------------------

 

Section 11, shall be deemed received on the earlier of the date of actual
receipt or 3 Business Days after the deposit thereof in the mail; provided, that
(a) notices sent by overnight courier service shall be deemed to have been given
when received, (b) notices by facsimile shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient) and (c) notices by electronic mail shall be
deemed received upon the sender’s receipt of an acknowledgment from the intended
recipient (such as by the “return receipt requested” function, as available,
return email or other written acknowledgment).

 

12.          CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE
PROVISION.

 

(a)           THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND
ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA;
PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND.  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER
AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF
ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS
(EACH A “CLAIM”).  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

(d)           EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF LOS ANGELES AND THE STATE OF CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
AGENT MAY

 

50

--------------------------------------------------------------------------------

 

OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS
OF ANY JURISDICTION.

 

(e)                                  NO CLAIM MAY BE MADE BY ANY LOAN PARTY
AGAINST AGENT, THE SWING LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR
ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF
CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY
HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.

 

(f)                                   IN THE EVENT ANY LEGAL PROCEEDING IS FILED
IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY
HERETO IN CONNECTION WITH ANY CLAIM AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE
IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:

 

(i)                                     WITH THE EXCEPTION OF THE MATTERS
SPECIFIED IN SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL
REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF
CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1.  THE PARTIES INTEND THIS GENERAL
REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE.  VENUE FOR THE REFERENCE
PROCEEDING SHALL BE IN THE COUNTY OF LOS ANGELES, CALIFORNIA.

 

(ii)                                  THE FOLLOWING MATTERS SHALL NOT BE SUBJECT
TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY
INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES
(INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND
(D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES (INCLUDING WRITS OF
ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS, OR PRELIMINARY
INJUNCTIONS).  THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE
OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY
SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE
IN A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY OTHER
MATTER.

 

(iii)                               UPON THE WRITTEN REQUEST OF ANY PARTY, THE
PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. 
IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN
REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A
REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).  THE
REFEREE SHALL BE APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW. 
PENDING APPOINTMENT OF THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE
TEMPORARY OR PROVISIONAL REMEDIES.

 

(iv)                              EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE
PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF
PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE
COURSE OF THE REFERENCE PROCEEDING.  ALL PROCEEDINGS AND HEARINGS

 

51

--------------------------------------------------------------------------------

 

CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A
COURT REPORTER, EXCEPT WHEN ANY PARTY SO REQUESTS A COURT REPORTER AND A
TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE USED AND THE REFEREE SHALL BE
PROVIDED A COURTESY COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH REQUEST SHALL
HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE COURT REPORTER,
PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE
BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

 

(v)                                 THE REFEREE MAY REQUIRE ONE OR MORE
PREHEARING CONFERENCES.  THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND
THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY,
AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT
JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA.

 

(vi)                              THE REFEREE SHALL APPLY THE RULES OF EVIDENCE
APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE
ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW.  THE
REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE
ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR
DEFAULT JUDGMENT OR SUMMARY JUDGMENT.  THE REFEREE SHALL REPORT HIS OR HER
DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF
LAW.  THE REFEREE SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF
CIVIL PROCEDURE, SECTION 644, THE REFEREE’S DECISION SHALL BE ENTERED BY THE
COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE
COURT.  THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE DECISION OR ORDER
ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY
THE COURT.

 

(vii)                           THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS
RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A
REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY HERETO KNOWINGLY AND
VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION
SHALL APPLY TO ANY DISPUTE BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

13.                               ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1                        Assignments and Participations.

 

(a)                                 (i)  Subject to the conditions set forth in
clause (a)(ii) below, any Lender may assign and delegate all or any portion of
its rights and duties under the Loan Documents (including the Obligations owed
to it and its Commitments) to one or more assignees so long as such prospective
assignee is an Eligible Transferee (each, an “Assignee”), with the prior written
consent (such consent not be unreasonably withheld or delayed) of:

 

(A)                               Borrowers; provided, that no consent of
Borrowers shall be required (1)  if an Event of Default has occurred and is
continuing or (2) in connection with an assignment to a Person that is a Lender
or an Affiliate (other than natural persons) of a Lender; provided further, that
Borrowers shall be deemed to have consented to a proposed assignment unless they
object thereto by written notice to Agent within 5 Business Days after having
received notice thereof; and

 

(B)                               Agent, Swing Lender, and Issuing Bank.

 

(ii)                                  Assignments shall be subject to the
following additional conditions:

 

52

--------------------------------------------------------------------------------

 

(A)                               no assignment may be made (i) to a Competitor,
or (ii) to a natural person,

 

(B)                               no assignment may be made to a Loan Party or
an Affiliate of a Loan Party,

 

(C)                               the amount of the Commitments and the other
rights and obligations of the assigning Lender hereunder and under the other
Loan Documents subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to Agent)
shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such
minimum amount shall not apply to (I) an assignment or delegation by any Lender
to any other Lender, an Affiliate of any Lender, or a Related Fund of such
Lender or (II) a group of new Lenders, each of which is an Affiliate of each
other or a Related Fund of such new Lender to the extent that the aggregate
amount to be assigned to all such new Lenders is at least $5,000,000),

 

(D)                               each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement,

 

(E)                                the parties to each assignment shall execute
and deliver to Agent an Assignment and Acceptance; provided, that Borrowers and
Agent may continue to deal solely and directly with the assigning Lender in
connection with the interest so assigned to an Assignee until written notice of
such assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Borrowers and Agent
by such Lender and the Assignee,

 

(F)                                 unless waived by Agent, the assigning Lender
or Assignee has paid to Agent, for Agent’s separate account, a processing fee in
the amount of $3,500, and

 

(G)                               the assignee, if it is not a Lender, shall
deliver to Agent an administrative questionnaire in a form approved by Agent.

 

(b)                                 From and after the date that Agent receives
the executed Assignment and Acceptance and, if applicable, payment of the
required processing fee, (i) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall
have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assigning Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (except with respect to
Section 10.3) and be released from any future obligations under this Agreement
(and in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement and
the other Loan Documents, such Lender shall cease to be a party hereto and
thereto); provided, that nothing contained herein shall release any assigning
Lender from obligations that survive the termination of this Agreement,
including such assigning Lender’s obligations under Section 15 and
Section 17.9(a).

 

(c)                                  By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as follows: 
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or the performance or observance by any
Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto, (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such Assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (v) such Assignee appoints and
authorizes Agent to take such actions and to exercise such powers under this
Agreement and the other Loan Documents as are delegated

 

53

--------------------------------------------------------------------------------

 

to Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.

 

(d)                                 Immediately upon Agent’s receipt of the
required processing fee, if applicable, and delivery of notice to the assigning
Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom.  The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.

 

(e)                                  Any Lender may at any time sell to one or
more commercial banks, financial institutions, or other Persons (a
“Participant”) participating interests in all or any portion of its Obligations,
its Commitment, and the other rights and interests of that Lender (the
“Originating Lender”) hereunder and under the other Loan Documents; provided,
that (i) the Originating Lender shall remain a “Lender” for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the
participating interest in the Obligations, the Commitments, and the other rights
and interests of the Originating Lender hereunder shall not constitute a
“Lender” hereunder or under the other Loan Documents and the Originating
Lender’s obligations under this Agreement shall remain unchanged, (ii) the
Originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal
solely and directly with the Originating Lender in connection with the
Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or
substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender (other than a waiver of default interest), or
(E) decreases the amount or postpones the due dates of scheduled principal
repayments or prepayments or premiums payable to such Participant through such
Lender, (v) no participation shall be sold to a natural person, (vi) no
participation shall be sold to a Loan Party or an Affiliate of a Loan Party,
(vii) no participations shall be sold to any “lender”, “secured party” or
“agent” under the Term Loan Credit Agreement unless such Person is a Lender on
the Closing Date, and (viii) all amounts payable by Borrowers hereunder shall be
determined as if such Lender had not sold such participation, except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.  The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, the Collateral, or otherwise in respect of the
Obligations.  No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.

 

(f)                                   In connection with any such assignment or
participation or proposed assignment or participation or any grant of a security
interest in, or pledge of, its rights under and interest in this Agreement, a
Lender may, subject to the provisions of Section 17.9, disclose all documents
and information which it now or hereafter may have relating to any Borrower and
its Subsidiaries and their respective businesses.

 

(g)                                  Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal
Reserve Bank, any central bank, the Farm Credit Funding Corp. or to any entity
organized under the Farm Credit Act and such Person may enforce such pledge or
security interest in any manner permitted under applicable law.

 

54

--------------------------------------------------------------------------------

 

(h)                                 Agent (as a non-fiduciary agent on behalf of
Borrowers) shall maintain, or cause to be maintained, a register (the
“Register”) on which it enters the name and address of each Lender as the
registered owner of the Commitments and Loan (and the principal amount thereof
and stated interest thereon) held by such Lender (each, a “Registered Loan”). 
Other than in connection with an assignment by a Lender of all or any portion of
its portion of the Commitments and Loan to an Affiliate of such Lender or a
Related Fund of such Lender (i) a Registered Loan (and the registered note, if
any, evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide) and (ii) any assignment or sale of all or part
of such Registered Loan (and the registered note, if any, evidencing the same)
may be effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s).  Prior to the registration of assignment or sale
of any Registered Loan (and the registered note, if any evidencing the same),
Borrowers shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.  In the case of any assignment by a
Lender of all or any portion of its Commitments and Loan to an Affiliate of such
Lender or a Related Fund of such Lender, and which assignment is not recorded in
the Register, the assigning Lender, on behalf of Borrowers, shall maintain a
register comparable to the Register.

 

(i)                                     In the event that a Lender sells
participations in the Registered Loan, such Lender, as a non-fiduciary agent on
behalf of Borrowers, shall maintain (or cause to be maintained) a register on
which it enters the name of all participants in the Registered Loans held by it
(and the principal amount (and stated interest thereon) of the portion of such
Registered Loans that is subject to such participations) (the “Participant
Register”).  A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide).  Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.

 

(j)                                    Agent shall make a copy of the Register
(and each Lender shall make a copy of its Participant Register in the event it
is required to have one) available for review by Borrowers from time to time as
Borrowers may reasonably request.

 

13.2                        Successors.  This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, that no Borrower may assign this Agreement or any rights or duties
hereunder without the Lenders’ prior written consent and any prohibited
assignment shall be absolutely void ab initio.  No consent to assignment by the
Lenders shall release any Borrower from its Obligations.  A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 13.1 and, except as expressly required
pursuant to Section 13.1, no consent or approval by any Borrower is required in
connection with any such assignment.

 

14.                               AMENDMENTS; WAIVERS.

 

14.1                        Amendments and Waivers.

 

(a)                                 No amendment, waiver or other modification
of any provision of this Agreement or any other Loan Document (other than Bank
Product Agreements or the Fee Letter), and no consent with respect to any
departure by any Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by Agent at the written
request of the Required Lenders) and the Loan Parties that are party thereto and
then any such waiver or consent shall be effective, but only in the specific
instance and for the specific purpose for which given; provided, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders directly affected thereby and all of the Loan Parties that are party
thereto, do any of the following:

 

55

--------------------------------------------------------------------------------

 

(i)                                     increase the amount of or extend the
expiration date of any Commitment of any Lender or amend, modify, or eliminate
the last sentence of Section 2.4(c)(i),

 

(ii)                                  postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due hereunder or under any other Loan Document,

 

(iii)                               reduce the principal of, or the rate of
interest on, any loan or other extension of credit hereunder, or reduce any fees
or other amounts payable hereunder or under any other Loan Document (except in
connection with the waiver of applicability of Section 2.6(c) (which waiver
shall be effective with the written consent of the Required Lenders)),

 

(iv)                              amend, modify, or eliminate this Section or
any provision of this Agreement providing for consent or other action by all
Lenders,

 

(v)                                 amend, modify, or eliminate Section 3.1 or
3.2,

 

(vi)                              amend, modify, or eliminate this Section 14.1
or Section 15.11,

 

(vii)                           other than as permitted by Section 15.11,
release Agent’s Lien in and to any of the Collateral,

 

(viii)                        amend, modify, or eliminate the definitions of
“Required Lenders”. “Supermajority Lenders” or “Pro Rata Share”,

 

(ix)                              contractually subordinate any of Agent’s Liens
or subordinate the Obligations,

 

(x)                                 other than in connection with a merger,
liquidation, dissolution or sale of such Person expressly permitted by the terms
hereof or the other Loan Documents, release any Borrower or any Guarantor from
any obligation for the payment of money or consent to the assignment or transfer
by any Borrower or any Guarantor of any of its rights or duties under this
Agreement or the other Loan Documents, or

 

(xi)                              amend, modify, or eliminate any of the
provisions of Section 2.4(b)(i), (ii) or (iii) or Section 2.4(e) or (f);

 

(b)                                 No amendment, waiver, modification, or
consent shall amend, modify, waive, or eliminate,

 

(i)                                     the definition of, or any of the terms
or provisions of, the Fee Letter, without the written consent of Agent and
Borrowers (and shall not require the written consent of any of the Lenders),

 

(ii)                                  any provision of Section 15 pertaining to
Agent, or any other rights or duties of Agent under this Agreement or the other
Loan Documents, without the written consent of Agent, Borrowers, and the
Required Lenders;

 

(c)                                  No amendment, waiver, modification,
elimination, or consent shall, without written consent of Agent, Borrowers and
the Supermajority Lenders, amend, modify, or eliminate the definition of
Borrowing Base or any of the defined terms (including the definitions of
Eligible Accounts, Eligible Inventory, Eligible Finished Goods Inventory,
Eligible Raw Material Inventory or Eligible By-Products Inventory) that are used
in such definition to the extent that any such change results in more credit
being made available to Borrowers based upon the Borrowing Base, but not
otherwise, or the definition of Maximum Revolver Amount, or change
Section 2.1(c);

 

(d)                                 No amendment, waiver, modification,
elimination, or consent shall amend, modify, or waive any provision of this
Agreement or the other Loan Documents pertaining to Issuing Bank, or any other
rights or duties of Issuing Bank under this Agreement or the other Loan
Documents, without the written consent of Issuing Bank, Agent, Borrowers, and
the Required Lenders;

 

56

--------------------------------------------------------------------------------

 

(e)                                  No amendment, waiver, modification,
elimination, or consent shall amend, modify, or waive any provision of this
Agreement or the other Loan Documents pertaining to Swing Lender, or any other
rights or duties of Swing Lender under this Agreement or the other Loan
Documents, without the written consent of Swing Lender, Agent, Borrowers, and
the Required Lenders; and

 

(f)                                   Anything in this Section 14.1 to the
contrary notwithstanding, (i) any amendment, modification, elimination, waiver,
consent, termination, or release of, or with respect to, any provision of this
Agreement or any other Loan Document that relates only to the relationship of
the Lender Group among themselves, and that does not affect the rights or
obligations of any Borrower, shall not require consent by or the agreement of
any Loan Party, and (ii) any amendment, waiver, modification, elimination, or
consent of or with respect to any provision of this Agreement or any other Loan
Document may be entered into without the consent of, or over the objection of,
any Defaulting Lender other than any of the matters governed by
Section 14.1(a)(i) through (iii) that affect such Lender.

 

(g)                                  Anything in this Section 14.1 to the
contrary notwithstanding, the Borrowers and Agent may, without the input or
consent of any other Lender, effect amendments to this Agreement and the other
Loan Documents if Agent and Borrowers have jointly identified an ambiguity,
mistake, defect, inconsistency, obvious error or any error or omission of a
technical nature or any necessary or desirable administrative change, in each
case, in any provision of any Loan Document, then Agent and Borrowers shall be
permitted to amend such provision without the consent of any Lender, and the
resulting amendment shall become effective without any further action or consent
of any other party to any Loan Document if the Required Lenders do not provide
to Agent written notice of their objection to such amendment within ten
(10) Business Days following receipt of written notice of such amendment and
guarantees, collateral security documents and related documents executed by any
Loan Party in connection with this Agreement may be in a form reasonably
determined by Agent and may be amended, supplemented or waived without the
consent of any Lender if such amendment, supplement or waiver is delivered in
order to (x) comply with local law or advice of local counsel, (y) cure
ambiguities, omissions, mistakes or defects or (z) cause such guarantee,
collateral security document or other document to be consistent with this
Agreement and the other Loan Documents.

 

14.2                        Replacement of Certain Lenders.

 

(a)                                 If (i) any action to be taken by the Lender
Group or Agent hereunder requires the consent, authorization, or agreement of
all Lenders or all Lenders affected thereby and if such action has received the
consent, authorization, or agreement of the Required Lenders but not of all
Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for
compensation under Section 16, then Borrowers or Agent, upon at least 5 Business
Days prior irrevocable notice, may permanently replace any Lender that failed to
give its consent, authorization, or agreement (a “Non-Consenting Lender”) or any
Lender that made a claim for compensation (a “Tax Lender”) with one or more
Replacement Lenders, and the Non-Consenting Lender or Tax Lender, as applicable,
shall have no right to refuse to be replaced hereunder.  Such notice to replace
the Non-Consenting Lender or Tax Lender, as applicable, shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.

 

(b)                                 Prior to the effective date of such
replacement, the Non-Consenting Lender or Tax Lender, as applicable, and each
Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Non-Consenting Lender or Tax Lender, as applicable, being
repaid in full its share of the outstanding Obligations relating to its
Commitments (without any premium or penalty of any kind whatsoever, but
including (i) all interest, fees and other amounts that may be due in payable in
respect thereof, and (ii) an assumption of its Pro Rata Share of participations
in the Letters of Credit).  If the Non-Consenting Lender or Tax Lender, as
applicable, shall refuse or fail to execute and deliver any such Assignment and
Acceptance prior to the effective date of such replacement, Agent may, but shall
not be required to, execute and deliver such Assignment and Acceptance in the
name of and on behalf of the Non-Consenting Lender or Tax Lender, as applicable,
and irrespective of whether Agent executes and delivers such Assignment and
Acceptance, the Non-Consenting Lender or Tax Lender, as applicable, shall be
deemed to have executed and delivered such Assignment and Acceptance.  The
replacement of any Non-Consenting Lender or Tax Lender, as applicable, shall be
made in accordance with the terms of Section

 

57

--------------------------------------------------------------------------------

 

13.1.  Until such time as one or more Replacement Lenders shall have acquired
all of the Obligations, the Commitments, and the other rights and obligations of
the Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the
other Loan Documents, the Non-Consenting Lender or Tax Lender, as applicable,
shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as
applicable, Pro Rata Share of Revolving Loans and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of
participations in such Letters of Credit.

 

14.3                        No Waivers; Cumulative Remedies.  No failure by
Agent or any Lender to exercise any right, remedy, or option under this
Agreement or any other Loan Document, or delay by Agent or any Lender in
exercising the same, will operate as a waiver thereof.  No waiver by Agent or
any Lender will be effective unless it is in writing, and then only to the
extent specifically stated.  No waiver by Agent or any Lender on any occasion
shall affect or diminish Agent’s and each Lender’s rights thereafter to require
strict performance by Borrowers of any provision of this Agreement.  Agent’s and
each Lender’s rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.

 

15.                               AGENT; THE LENDER GROUP.

 

15.1                        Appointment and Authorization of Agent.  Each Lender
hereby designates and appoints Wells Fargo as its agent under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to designate, appoint, and authorize) Agent to execute and deliver each
of the other Loan Documents on its behalf and to take such other action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
Agent by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Agent agrees to act as agent
for and on behalf of the Lenders (and the Bank Product Providers) on the
conditions contained in this Section 15.  Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein or in the other Loan Documents, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender (or Bank
Product Provider), and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against Agent.  Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement or
the other Loan Documents with reference to 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 merely as a matter
of market custom, and is intended to create or reflect only a representative
relationship between independent contracting parties.  Each Lender hereby
further authorizes (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to authorize) Agent to act as the secured party
under each of the Loan Documents that create a Lien on any item of Collateral. 
Except as expressly otherwise provided in this Agreement, Agent shall have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights or taking or refraining from taking any
actions that Agent expressly is entitled to take or assert under or pursuant to
this Agreement and the other Loan Documents.  Without limiting the generality of
the foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect: 
(a) maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, payments and
proceeds of Collateral, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, (c) make Revolving Loans, for itself or on
behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive,
apply, and distribute payments and proceeds of the Collateral as provided in the
Loan Documents, (e) open and maintain such bank accounts and cash management
arrangements as Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce
any and all other rights and remedies of the Lender Group with respect to any
Borrower or its Subsidiaries, the Obligations, the Collateral, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

 

58

--------------------------------------------------------------------------------

 

15.2                        Delegation of Duties.  Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact
that it selects as long as such selection was made without gross negligence or
willful misconduct.

 

15.3                        Liability of Agent.  None of the Agent-Related
Persons shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Lenders
(or Bank Product Providers) for any recital, statement, representation or
warranty made by any Borrower or any of its Subsidiaries or Affiliates, or any
officer or director thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower or its Subsidiaries or any other
party to any Loan Document to perform its obligations hereunder or thereunder. 
No Agent-Related Person shall be under any obligation to any Lenders (or Bank
Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of any Borrower or its Subsidiaries.

 

15.4                        Reliance by Agent.  Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telefacsimile or other
electronic method of transmission, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent, or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to Borrowers or counsel to
any Lender), independent accountants and other experts selected by Agent.  Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable.  If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product
Providers) against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.  Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders (and Bank Product
Providers).

 

15.5                        Notice of Default or Event of Default.  Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the payment of principal,
interest, fees, and expenses required to be paid to Agent for the account of the
Lenders and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Borrowers referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.”  Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge.  If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable.

 

15.6                        Credit Decision.  Each Lender (and Bank Product
Provider) acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by Agent hereinafter taken,
including any review of the affairs of any Borrower and its Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender (or Bank Product Provider).  Each Lender
represents (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to

 

59

--------------------------------------------------------------------------------

 

represent) to Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such due diligence, documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of each Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers.  Each Lender also represents (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of each Borrower or any other Person
party to a Loan Document.  Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons.  Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the
extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into Agent’s
or its Affiliates’ or representatives’ possession before or after the date on
which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).

 

15.7                        Costs and Expenses; Indemnification.  Agent may
incur and pay Lender Group Expenses to the extent Agent reasonably deems
necessary or appropriate for the performance and fulfillment of its functions,
powers, and obligations pursuant to the Loan Documents, including court costs,
attorneys’ fees and expenses, fees and expenses of financial accountants,
advisors, consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrowers are
obligated to reimburse Agent or Lenders for such expenses pursuant to this
Agreement or otherwise.  Agent is authorized and directed to deduct and retain
sufficient amounts from payments or proceeds of the Collateral received by Agent
to reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders (or Bank Product Providers).  In the
event Agent is not reimbursed for such costs and expenses by Borrowers or their
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay
to Agent such Lender’s ratable thereof.  Whether or not the transactions
contemplated hereby are consummated, each of the Lenders, on a ratable basis,
shall indemnify and defend the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrowers and without limiting the obligation of
Borrowers to do so) from and against any and all Indemnified Liabilities;
provided, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person’s gross negligence or willful misconduct nor shall any Lender be liable
for the obligations of any Defaulting Lender in failing to make a Revolving Loan
or other extension of credit hereunder.  Without limitation of the foregoing,
each Lender shall reimburse Agent upon demand for such Lender’s ratable share of
any costs or out of pocket expenses (including attorneys, accountants, advisors,
and consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrowers.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.

 

15.8                        Agent in Individual Capacity.  Wells Fargo and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, provide Bank Products to, acquire Equity Interests in, and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with any Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Document as though Wells Fargo
were not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group.  The

 

60

--------------------------------------------------------------------------------

 

other members of the Lender Group acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge)
that, pursuant to such activities, Wells Fargo or its Affiliates may receive
information regarding a Borrower or its Affiliates or any other Person party to
any Loan Document that is subject to confidentiality obligations in favor of
such Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them.  The terms “Lender” and
“Lenders” include Wells Fargo in its individual capacity.

 

15.9                        Successor Agent.  Agent may resign as Agent upon 30
days (10 days if an Event of Default has occurred and is continuing) prior
written notice to the Lenders (unless such notice is waived by the Required
Lenders) and Borrowers (unless such notice is waived by Borrowers) and without
any notice to the Bank Product Providers.  If Agent resigns under this
Agreement, the Required Lenders shall be entitled, with (so long as no Event of
Default has occurred and is continuing) the consent of Borrowers (such consent
not to be unreasonably withheld, delayed, or conditioned), appoint a successor
Agent for the Lenders (and the Bank Product Providers).  If, at the time that
Agent’s resignation is effective, it is acting as Issuing Bank or the Swing
Lender, such resignation shall also operate to effectuate its resignation as
Issuing Bank or the Swing Lender, as applicable, and it shall automatically be
relieved of any further obligation to issue Letters of Credit, or to make Swing
Loans.  If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Lenders and
Borrowers, a successor Agent.  Agent’s resignation shall be effective upon the
earlier of (a) 30 days from the date of Agent’s resignation or (b) the
appointment of a successor agent and execution of agency transfer documents.  If
Agent has materially breached or failed to perform any material provision of
this Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace Agent with a successor Agent from among the Lenders with
(so long as no Event of Default has occurred and is continuing) the consent of
Borrowers (such consent not to be unreasonably withheld, delayed, or
conditioned).  In any such event, upon the acceptance of its appointment as
successor Agent hereunder, such successor Agent shall succeed to all the rights,
powers, and duties of the retiring Agent and the term “Agent” shall mean such
successor Agent and the retiring Agent’s appointment, powers, and duties as
Agent shall be terminated.  After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.  If no successor Agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.

 

15.10                 Lender in Individual Capacity.  Any Lender and its
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, provide Bank Products to, acquire Equity Interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with any Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Document as though such Lender
were not a Lender hereunder without notice to or consent of the other members of
the Lender Group (or the Bank Product Providers).  The other members of the
Lender Group acknowledge (and by entering into a Bank Product Agreement, each
Bank Product Provider shall be deemed to acknowledge) that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding a Borrower or its Affiliates or any other Person party to any Loan
Document that is subject to confidentiality obligations in favor of such
Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.

 

15.11                 Collateral Matters.

 

(a)                                 The Lenders hereby irrevocably authorize
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to authorize) Agent to release any Lien on any Collateral

 

61

--------------------------------------------------------------------------------

 

(i) upon the termination of the Commitments and payment and satisfaction in full
by Borrowers of all of the Obligations, (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if
Borrowers certify to Agent that the sale or disposition is permitted under
Section 6.4 (and Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting property in which no Borrower or its
Subsidiaries owned any interest at the time Agent’s Lien was granted nor at any
time thereafter, (iv) constituting property leased or licensed to a Borrower or
its Subsidiaries under a lease or license that has expired or is terminated in a
transaction permitted under this Agreement, or (v) in connection with a credit
bid or purchase authorized under this Section 15.11.  The Loan Parties and the
Lenders hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based
upon the instruction of the Required Lenders, to (a) consent to the sale of,
credit bid, or purchase (either directly or indirectly through one or more
entities) all or any portion of the Collateral at any sale thereof conducted
under the provisions of the Bankruptcy Code, including Section 363 of the
Bankruptcy Code, (b) credit bid or purchase (either directly or indirectly
through one or more entities) all or any portion of the Collateral at any sale
or other disposition thereof conducted under the provisions of the Code,
including pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or
purchase (either directly or indirectly through one or more entities) all or any
portion of the Collateral at any other sale or foreclosure conducted or
consented to by Agent in accordance with applicable law in any judicial action
or proceeding or by the exercise of any legal or equitable remedy.  In
connection with any such credit bid or purchase, (i) the Obligations owed to the
Lenders and the Bank Product Providers shall be entitled to be, and shall be,
credit bid on a ratable basis (with Obligations with respect to contingent or
unliquidated claims being estimated for such purpose if the fixing or
liquidation thereof would not impair or unduly delay the ability of Agent to
credit bid or purchase at such sale or other disposition of the Collateral and,
if such contingent or unliquidated claims cannot be estimated without impairing
or unduly delaying the ability of Agent to credit bid at such sale or other
disposition, then such claims shall be disregarded, not credit bid, and not
entitled to any interest in the Collateral that is the subject of such credit
bid or purchase) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) in the Collateral that is the subject of
such credit bid or purchase (or in the Equity Interests of the any entities that
are used to consummate such credit bid or purchase), and (ii) Agent, based upon
the instruction of the Required Lenders, may accept non-cash consideration,
including debt and equity securities issued by any entities used to consummate
such credit bid or purchase and in connection therewith Agent may reduce the
Obligations owed to the Lenders and the Bank Product Providers (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) based upon the value of such non-cash
consideration.  Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers).  Upon request by Agent or Borrowers at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, that (1) anything to the
contrary contained in any of the Loan Documents notwithstanding, Agent shall not
be required to execute any document or take any action necessary to evidence
such release on terms that, in Agent’s opinion, could expose Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly released) upon (or obligations of Borrowers in
respect of) any and all interests retained by any Borrower, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.  Each Lender further hereby irrevocably authorize (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
irrevocably authorize) Agent, at its option and in its sole discretion, to
subordinate any Lien granted to or held by Agent under any Loan Document to the
holder of any Permitted Lien on such property if such Permitted Lien secures
Permitted Purchase Money Indebtedness.

 

(b)                                 Agent shall have no obligation whatsoever to
any of the Lenders (or the Bank Product Providers) (i) to verify or assure that
the Collateral exists or is owned by Borrowers or their Subsidiaries or is cared
for, protected, or insured or has been encumbered, (ii) to verify or assure that
Agent’s Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, (iii) to

 

62

--------------------------------------------------------------------------------

 

verify or assure that any particular items of Collateral meet the eligibility
criteria applicable in respect thereof, (iv) to impose, maintain, increase,
reduce, implement, or eliminate any particular reserve hereunder or to determine
whether the amount of any reserve is appropriate or not, or (v) to exercise at
all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, subject to the terms and conditions contained herein,
Agent may act in any manner it may deem appropriate, in its sole discretion
given Agent’s own interest in the Collateral in its capacity as one of the
Lenders and that Agent shall have no other duty or liability whatsoever to any
Lender (or Bank Product Provider) as to any of the foregoing, except as
otherwise expressly provided herein.

 

15.12                 Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                 Each of the Lenders agrees that it shall
not, without the express written consent of Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the written request of Agent, set
off against the Obligations, any amounts owing by such Lender to any Borrower or
its Subsidiaries or any deposit accounts of any Borrower or its Subsidiaries now
or hereafter maintained with such Lender.  Each of the Lenders further agrees
that it shall not, unless specifically requested to do so in writing by Agent,
take or cause to be taken any action, including, the commencement of any legal
or equitable proceedings to enforce any Loan Document against any Borrower or
any Guarantor or to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.

 

(b)                                 If, at any time or times any Lender shall
receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations, except for any such
proceeds or payments received by such Lender from Agent pursuant to the terms of
this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata
Share of all such distributions by Agent, such Lender promptly shall (A) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(B) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Share; provided, that to the extent that such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.

 

15.13                 Agency for Perfection.  Agent hereby appoints each other
Lender (and each Bank Product Provider) as its agent (and each Lender hereby
accepts (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to accept) such appointment) for the purpose of
perfecting Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected by possession or
control.  Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

 

15.14                 Payments by Agent to the Lenders.  All payments to be made
by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire
transfer of immediately available funds pursuant to such wire transfer
instructions as each party may designate for itself by written notice to Agent. 
Concurrently with each such payment, Agent shall identify whether such payment
(or any portion thereof) represents principal, premium, fees, or interest of the
Obligations.

 

15.15                 Concerning the Collateral and Related Loan Documents. 
Each member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents.  Each member of the Lender Group agrees
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to agree) that any action taken by Agent in accordance with the terms
of this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together

 

63

--------------------------------------------------------------------------------

 

with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders (and such Bank Product Provider).

 

15.16                 Field Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information.  By becoming a party to this Agreement,
each Lender:

 

(a)                                 is deemed to have requested that Agent
furnish such Lender, promptly after it becomes available, a copy of each field
examination report respecting any Borrower or its Subsidiaries (each, a
“Report”) prepared by or at the request of Agent, and Agent shall so furnish
each Lender with such Reports,

 

(b)                                 expressly agrees and acknowledges that Agent
does not (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall not be liable for any information contained in any
Report,

 

(c)                                  expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any field examination will inspect only specific information
regarding Borrowers and their Subsidiaries and will rely significantly upon
Borrowers’ and their Subsidiaries’ books and records, as well as on
representations of Borrowers’ personnel,

 

(d)                                 agrees to keep all Reports and other
material, non-public information regarding Borrowers and their Subsidiaries and
their operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.9, and

 

(e)                                  without limiting the generality of any
other indemnification provision contained in this Agreement, agrees:  (i) to
hold Agent and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrowers, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect,
and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys’ fees and costs)
incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.

 

(f)                                   In addition to the foregoing, (x) any
Lender may from time to time request of Agent in writing that Agent provide to
such Lender a copy of any report or document provided by any Borrower or its
Subsidiaries to Agent that has not been contemporaneously provided by such
Borrower or such Subsidiary to such Lender, and, upon receipt of such request,
Agent promptly shall provide a copy of same to such Lender, (y) to the extent
that Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from any Borrower or its Subsidiaries, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Borrowers the additional reports or information reasonably specified
by such Lender, and, upon receipt thereof from such Borrower or such Subsidiary,
Agent promptly shall provide a copy of same to such Lender, and (z) any time
that Agent renders to Borrowers a statement regarding the Loan Account, Agent
shall send a copy of such statement to each Lender.

 

15.17                 Several Obligations; No Liability.  Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 15.7, no member

 

64

--------------------------------------------------------------------------------

 

of the Lender Group shall have any liability for the acts of any other member of
the Lender Group.  No Lender shall be responsible to any Borrower or any other
Person for any failure by any other Lender (or Bank Product Provider) to fulfill
its obligations to make credit available hereunder, nor to advance for such
Lender (or Bank Product Provider) or on its behalf, nor to take any other action
on behalf of such Lender (or Bank Product Provider) hereunder or in connection
with the financing contemplated herein.

 

15.18                 Arranger and Book Runner.  Each of the Arranger and Book
Runner, in such capacities, shall not have any right, power, obligation,
liability, responsibility, or duty under this Agreement other than those
applicable to it in its capacity as a Lender, as Agent, as Swing Lender, or as
Issuing Bank.  Without limiting the foregoing, each of the Arranger and Book
Runner, in such capacities, shall not have or be deemed to have any fiduciary
relationship with any Lender or any Loan Party.  Each Lender, Agent, Swing
Lender, Issuing Bank, and each Loan Party acknowledges that it has not relied,
and will not rely, on the Arranger and Book Runner in deciding to enter into
this Agreement or in taking or not taking action hereunder.  Each of the
Arranger and Book Runner, in such capacities, shall be entitled to resign at any
time by giving notice to Agent and Borrowers.

 

16.                               WITHHOLDING TAXES.

 

16.1                        Payments.  All payments made by Borrowers hereunder
or under any other Loan Document will be made without setoff, counterclaim, or
other defense.  In addition, all such payments will be made free and clear of,
and without deduction or withholding for, any present or future Indemnified
Taxes, and in the event any deduction or withholding of Indemnified Taxes is
required, Borrowers shall comply with the next sentence of this Section 16.1. 
If any Indemnified Taxes are so levied or imposed, Borrowers agree to pay the
full amount of such Indemnified Taxes and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or any
other Loan Document, including any amount paid pursuant to this Section 16.1
after withholding or deduction for or on account of any Indemnified Taxes, will
not be less than the amount provided for herein.  Borrowers will furnish to
Agent as promptly as possible after the date the payment of any Indemnified Tax
is due pursuant to applicable law, certified copies of tax receipts evidencing
such payment by Borrowers.  Borrowers agree to pay any present or future stamp,
value added or documentary taxes or any other excise or property taxes, charges,
or similar levies that arise from any payment made hereunder or from the
execution, delivery, performance, recordation, or filing of, or otherwise with
respect to this Agreement or any other Loan Document.

 

16.2                        Exemptions.

 

(a)                                 If a Lender or Participant is entitled to
claim an exemption or reduction from United States withholding tax, such Lender
or Participant agrees with and in favor of Agent, to deliver to Agent (or, in
the case of a Participant, to the Lender granting the participation only) one of
the following before receiving its first payment under this Agreement:

 

(i)                                     if such Lender or Participant is
entitled to claim an exemption from United States withholding tax pursuant to
the portfolio interest exception, (A) a statement of the Lender or Participant,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Parent Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled
foreign corporation related to Borrowers within the meaning of
Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS
Form W-8BEN or Form W-8IMY (with proper attachments);

 

(ii)                                  if such Lender or Participant is entitled
to claim an exemption from, or a reduction of, withholding tax under a United
States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii)                               if such Lender or Participant is entitled to
claim that interest paid under this Agreement is exempt from United States
withholding tax because it is effectively connected with a United States trade
or business of such Lender, a properly completed and executed copy of IRS
Form W-8ECI;

 

65

--------------------------------------------------------------------------------

 

(iv)                              if such Lender or Participant is entitled to
claim that interest paid under this Agreement is exempt from United States
withholding tax because such Lender or Participant serves as an intermediary, a
properly completed and executed copy of IRS Form W-8IMY (with proper
attachments); or

 

(v)                                 a properly completed and executed copy of
any other form or forms, including IRS Form W-9, as may be required under the
IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax.

 

(b)                                 Each Lender or Participant shall provide new
forms (or successor forms) upon the expiration or obsolescence of any previously
delivered forms and to promptly notify Agent (or, in the case of a Participant,
to the Lender granting the participation only) of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.  Each
Lender, on or prior to the date on which such Lender becomes a Lender hereunder,
and each Participant, on or prior to the date on which such Participant acquires
a participation hereunder, and in each case, from time to time thereafter,
either upon the request of the Parent Borrower or Agent or upon the expiration
or obsolescence of any previously delivered documentation, shall furnish to the
Parent Borrower and Agent any documentation that is required under FATCA to
enable Borrowers or Agent to determine and execute its obligations, duties and
liabilities with respect to FATCA, including but not limited to any taxes it may
be required to withhold in respect of FATCA.

 

(c)                                  If a Lender or Participant claims an
exemption from withholding tax in a jurisdiction other than the United States,
such Lender or such Participant agrees with and in favor of Agent, to deliver to
Agent (or, in the case of a Participant, to the Lender granting the
participation only) any such form or forms, as may be required under the laws of
such jurisdiction as a condition to exemption from, or reduction of, foreign
withholding or backup withholding tax before receiving its first payment under
this Agreement, but only if such Lender or such Participant is legally able to
deliver such forms, provided, that nothing in this Section 16.2(c) shall require
a Lender or Participant to disclose any information that it deems to be
confidential (including without limitation, its tax returns).  Each Lender and
each Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

 

(d)                                 If a Lender or Participant claims exemption
from, or reduction of, withholding tax and such Lender or Participant sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to such Lender or Participant, such Lender or
Participant agrees to notify Agent (or, in the case of a sale of a participation
interest, to the Lender granting the participation only) of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrowers
to such Lender or Participant.  To the extent of such percentage amount, Agent
will treat such Lender’s or such Participant’s documentation provided pursuant
to Section 16.2(a) or 16.2(c) as no longer valid.  With respect to such
percentage amount, such Participant or Assignee may provide new documentation,
pursuant to Section 16.2(a) or 16.2(c), if applicable.  Borrowers agree that
each Participant shall be entitled to the benefits of this Section 16 with
respect to its participation in any portion of the Commitments and the
Obligations so long as such Participant complies with the obligations set forth
in this Section 16 with respect thereto.

 

16.3                        Reductions.

 

(a)                                 If a Lender or a Participant is subject to
an applicable withholding tax, Agent (or, in the case of a Participant, the
Lender granting the participation) may withhold from any payment to such Lender
or such Participant an amount equivalent to the applicable withholding tax.  If
the forms or other documentation required by Section 16.2(a) or 16.2(c) are not
delivered to Agent (or, in the case of a Participant, to the Lender granting the
participation), then Agent (or, in the case of a Participant, to the Lender
granting the participation) may withhold from any payment to such Lender or such
Participant not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.

 

66

--------------------------------------------------------------------------------

 

(b)                                 If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
(or, in the case of a Participant, to the Lender granting the participation) did
not properly withhold tax from amounts paid to or for the account of any Lender
or any Participant due to a failure on the part of the Lender or any Participant
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent (or such Participant failed to notify
the Lender granting the participation) of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify and hold Agent harmless (or,
in the case of a Participant, such Participant shall indemnify and hold the
Lender granting the participation harmless) for all amounts paid, directly or
indirectly, by Agent (or, in the case of a Participant, to the Lender granting
the participation), as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation
only) under this Section 16, together with all costs and expenses (including
attorneys’ fees and expenses).  The obligation of the Lenders and the
Participants under this subsection shall survive the payment of all Obligations
and the resignation or replacement of Agent.

 

16.4                        Refunds.  If Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Indemnified Taxes to which
Borrowers have paid additional amounts pursuant to this Section 16, so long as
no Default or Event of Default has occurred and is continuing, it shall pay over
such refund to Borrowers (but only to the extent of payments made, or additional
amounts paid, by Borrowers under this Section 16 with respect to Indemnified
Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent
or such Lender and without interest (other than any interest paid by the
applicable Governmental Authority with respect to such a refund); provided, that
Borrowers, upon the request of Agent or such Lender, agrees to repay the amount
paid over to Borrowers (plus any penalties, interest or other charges, imposed
by the applicable Governmental Authority, other than such penalties, interest or
other charges imposed as a result of the willful misconduct or gross negligence
of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority.  Notwithstanding
anything in this Agreement to the contrary, this Section 16 shall not be
construed to require Agent or any Lender to make available its tax returns (or
any other information which it deems confidential) to Borrowers or any other
Person.  Notwithstanding anything to the contrary in this Section 16.4, in no
event will Agent or any Lender be required to pay any amount to Borrowers
pursuant to this Section 16.4 the payment of which would place Agent or such
Lender in a less favorable net after-Tax position than Agent or such Lender
would have been in if the indemnification payments or additional amounts giving
rise to such refund had never been paid.

 

17.                               GENERAL PROVISIONS.

 

17.1                        Effectiveness.  This Agreement shall be binding and
deemed effective when executed by each Borrower, Agent, and each Lender whose
signature is provided for on the signature pages hereof.

 

17.2                        Section Headings.  Headings and numbers have been
set forth herein for convenience only.  Unless the contrary is compelled by the
context, everything contained in each Section applies equally to this entire
Agreement.

 

17.3                        Interpretation.  Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed against the Lender Group or
any Borrower, whether under any rule of construction or otherwise.  On the
contrary, this Agreement has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

17.4                        Severability of Provisions.  Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

 

17.5                        Bank Product Providers.  Each Bank Product Provider
in its capacity as such shall be deemed a third party beneficiary hereof and of
the provisions of the other Loan Documents for purposes of any reference in a
Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to
act as agent for such Bank Product Providers and, by virtue of entering into a
Bank Product Agreement, the applicable Bank Product Provider

 

67

--------------------------------------------------------------------------------

 

shall be automatically deemed to have appointed Agent as its agent and to have
accepted the benefits of the Loan Documents.  It is understood and agreed that
the rights and benefits of each Bank Product Provider under the Loan Documents
consist exclusively of such Bank Product Provider’s being a beneficiary of the
Liens and security interests (and, if applicable, guarantees) granted to Agent
and the right to share in payments and collections out of the Collateral as more
fully set forth herein. In addition, each Bank Product Provider, by virtue of
entering into a Bank Product Agreement, shall be automatically deemed to have
agreed that Agent shall have the right, but shall have no obligation, to
establish, maintain, relax, or release reserves in respect of the Bank Product
Obligations and that if reserves are established there is no obligation on the
part of Agent to determine or insure whether the amount of any such reserve is
appropriate or not.  In connection with any such distribution of payments or
proceeds of Collateral, Agent shall be entitled to assume no amounts are due or
owing to any Bank Product Provider unless such Bank Product Provider has
provided a written certification (setting forth a reasonably detailed
calculation) to Agent as to the amounts that are due and owing to it and such
written certification is received by Agent a reasonable period of time prior to
the making of such distribution.  Agent shall have no obligation to calculate
the amount due and payable with respect to any Bank Products, but may rely upon
the written certification of the amount due and payable from the applicable Bank
Product Provider.  In the absence of an updated certification, Agent shall be
entitled to assume that the amount due and payable to the applicable Bank
Product Provider is the amount last certified to Agent by such Bank Product
Provider as being due and payable (less any distributions made to such Bank
Product Provider on account thereof).  Borrowers may obtain Bank Products from
any Bank Product Provider, although Borrowers are not required to do so.  Each
Borrower acknowledges and agrees that no Bank Product Provider has committed to
provide any Bank Products and that the providing of Bank Products by any Bank
Product Provider is in the sole and absolute discretion of such Bank Product
Provider.  Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, no provider or holder of any Bank Product shall have any
voting or approval rights hereunder (or be deemed a Lender) solely by virtue of
its status as the provider or holder of such agreements or products or the
Obligations owing thereunder, nor shall the consent of any such provider or
holder be required (other than in their capacities as Lenders, to the extent
applicable) for any matter hereunder or under any of the other Loan Documents,
including as to any matter relating to the Collateral or the release of
Collateral or Guarantors.

 

17.6                        Debtor-Creditor Relationship.  The relationship
between the Lenders and Agent, on the one hand, and the Loan Parties, on the
other hand, is solely that of creditor and debtor.  No member of the Lender
Group has (or shall be deemed to have) any fiduciary relationship or duty to any
Loan Party arising out of or in connection with the Loan Documents or the
transactions contemplated thereby, and there is no agency or joint venture
relationship between the members of the Lender Group, on the one hand, and the
Loan Parties, on the other hand, by virtue of any Loan Document or any
transaction contemplated therein.

 

17.7                        Counterparts; Electronic Execution.  This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.

 

17.8                        Revival and Reinstatement of Obligations; Certain
Waivers.

 

(a)                                 If any member of the Lender Group or any
Bank Product Provider repays, refunds, restores, or returns in whole or in part,
any payment or property (including any proceeds of Collateral) previously paid
or transferred to such member of the Lender Group or such Bank Product Provider
in full or partial satisfaction of any Obligation or on account of any
other obligation of any Loan Party under any Loan Document or any Bank Product
Agreement, because the payment, transfer, or the incurrence of the obligation so
satisfied is asserted or declared to be void, voidable, or otherwise recoverable
under any law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable
or

 

68

--------------------------------------------------------------------------------

 

recoverable obligations or transfers (each, a “Voidable Transfer”), or
because such member of the Lender Group or Bank Product Provider elects to do so
on the reasonable advice of its counsel in connection with a claim that the
payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to
any such Voidable Transfer, or the amount thereof that such member of the Lender
Group or Bank Product Provider elects to repay, restore, or return (including
pursuant to a settlement of any claim in respect thereof), and as to all
reasonable costs, expenses, and attorneys’ fees of such member of the Lender
Group or Bank Product Provider related thereto, (i) the liability of the Loan
Parties with respect to the amount or property paid, refunded, restored, or
returned will automatically and immediately be revived, reinstated, and restored
and will exist and (ii) Agent’s Liens securing such liability shall be
effective, revived, and remain in full force and effect, in each case, as fully
as if such Voidable Transfer had never been made.  If, prior to any of the
foregoing, (A) Agent’s Liens shall have been released or terminated or (B) any
provision of this Agreement shall have been terminated or cancelled, Agent’s
Liens, or such provision of this Agreement, shall be reinstated in full force
and effect and such prior release, termination, cancellation or surrender shall
not diminish, release, discharge, impair or otherwise affect the obligation of
any Loan Party in respect of such liability or any Collateral securing
such liability.

 

(b)                                 Anything to the contrary contained herein
notwithstanding, if Agent or any Lender accepts a guaranty of only a portion of
the Obligations pursuant to any guaranty, each Borrower hereby waive its right
under Section 2822(a) of the California Civil Code or any similar laws of any
other applicable jurisdiction to designate the portion of the Obligations
satisfied by the applicable guarantor’s partial payment.

 

17.9                        Confidentiality.

 

(a)                                 Agent and Lenders each individually (and not
jointly or jointly and severally) agree that material, non-public information
regarding Borrowers and their Subsidiaries, their operations, assets, and
existing and contemplated business plans (“Confidential Information”) shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except:  (i) to attorneys for and other advisors, accountants,
auditors, and consultants to any member of the Lender Group and to employees,
directors and officers of any member of the Lender Group (the Persons in this
clause (i), “Lender Group Representatives”) on a “need to know” basis in
connection with this Agreement and the transactions contemplated hereby and on a
confidential basis, (ii) to Subsidiaries and Affiliates of any member of the
Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Borrowers with prior notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior notice to Borrowers pursuant to the terms of the applicable
statute, decision, or judicial or administrative order, rule, or regulation and
(y) any disclosure under this clause (iv) shall be limited to the portion of the
Confidential Information as may be required by such statute, decision, or
judicial or administrative order, rule, or regulation, (v) as may be agreed to
in advance in writing by Borrowers, (vi) as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process,
provided, that, (x) prior to any disclosure under this clause (vi) the
disclosing party agrees to provide Borrowers with prior written notice thereof,
to the extent that it is practicable to do so and to the extent that the
disclosing party is permitted to provide such prior written notice to Borrowers
pursuant to the terms of the subpoena or other legal process and (y) any
disclosure under this clause (vi) shall be limited to the portion of the
Confidential Information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders or the Lender Group
Representatives), (viii) to current or prospective assignees or participants,
direct or contractual counterparties to any Hedge Agreement and to their
respective Affiliates, officers, directors, employees, attorneys, and agents,
provided that prior to receipt of Confidential Information any such current or
prospective assignee, participant, current or prospective or pledgee shall have
agreed in writing to receive such Confidential Information either subject to the
terms of this Section 17.9 or pursuant to confidentiality requirements
substantially similar to those contained in this Section 17.9 (and such Person
may disclose such Confidential Information to Persons employed or engaged by
them as described in clause (i) above), (ix) in connection with any litigation
or other

 

69

--------------------------------------------------------------------------------

 

adversary proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents; provided that, prior to any
disclosure to any Person (other than any Loan Party, Agent, any Lender, any of
their respective Affiliates, or their respective counsel) under this clause
(ix) with respect to litigation involving any Person (other than any Borrower,
Agent, any Lender, any of their respective Affiliates, or their respective
counsel), the disclosing party agrees to provide Borrowers with prior written
notice thereof, (x) to the National Association of Insurance Commissioners,
CUSIP Service Bureau or any similar organization, regulatory authority, examiner
or nationally recognized ratings agency and (xi) in connection with, and to the
extent reasonably necessary for, the exercise of any secured creditor remedy
under this Agreement or under any other Loan Document.

 

(b)                                 Anything in this Agreement to the contrary
notwithstanding, Agent may disclose information concerning the terms and
conditions of this Agreement and the other Loan Documents to loan syndication
and pricing reporting services or in its marketing or promotional materials,
with such information to consist of deal terms and other information customarily
found in such publications or marketing or promotional materials and may
otherwise use the name, logos, and other insignia of any Borrower or the other
Loan Parties and the Commitments provided hereunder in any “tombstone” or other
advertisements, on its website or in other marketing materials of Agent.

 

(c)                                  The Loan Parties hereby acknowledge that
Agent or its Affiliates may make available to the Lenders materials or
information provided by or on behalf of Borrowers hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks, SyndTrak
or another similar electronic system (the “Platform”) and certain of the Lenders
may be “public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Loan Parties or their securities). 
The Loan Parties shall be deemed to have authorized Agent and its Affiliates and
the Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time
filed with the SEC as not containing any material non-public information with
respect to the Loan Parties or their securities for purposes of United States
federal and state securities laws.  All Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated as
“Public Investor” (or another similar term).  Agent and its Affiliates and the
Lenders shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” or that are not at any time filed with the SEC as being suitable only
for posting on a portion of the Platform not marked as “Public Investor” (or
such other similar term).

 

17.10                 Survival.  All representations and warranties made by the
Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that Agent, Issuing Bank, or any Lender may have had notice or knowledge of any
Default or Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of, or any accrued interest on, any Loan or any fee or any
other amount payable under this Agreement is outstanding or unpaid or any Letter
of Credit is outstanding and so long as the Commitments have not expired or been
terminated.

 

17.11                 Patriot Act.  Each Lender that is subject to the
requirements of the Patriot Act hereby notifies Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies each Borrower, which information includes the name and address
of each Borrower and other information that will allow such Lender to identify
each Borrower in accordance with the Patriot Act.  In addition, if Agent is
required by law or regulation or internal policies to do so, it shall have the
right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and
customary individual background checks for the Loan Parties and (b) OFAC/PEP
searches and customary individual background checks for the Loan Parties’ senior
management and key principals, and each Borrower agrees to cooperate in respect
of the conduct of such searches and further agrees that the reasonable costs and
charges for such searches shall constitute Lender Group Expenses hereunder and
be for the account of Borrowers.

 

70

--------------------------------------------------------------------------------

 

17.12                 Integration.  This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.  The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.

 

17.13                 Parent Borrower as Agent for Borrowers.  Each Borrower
hereby irrevocably appoints Parent Borrower as the borrowing agent and
attorney-in-fact for all Borrowers which appointment shall remain in full force
and effect unless and until Agent shall have received prior written notice
signed by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Parent Borrower.  Each Borrower hereby irrevocably
appoints and authorizes the Parent Borrower (a) to provide Agent with all
notices with respect to Revolving Loans and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and the other Loan Documents (and any notice or instruction provided
by Parent Borrower shall be deemed to be given by Borrowers hereunder and shall
bind each Borrower), (b) to receive notices and instructions from members of the
Lender Group (and any notice or instruction provided by any member of the Lender
Group to the Parent Borrower in accordance with the terms hereof shall be deemed
to have been given to each Borrower), and (c) to take such action as the Parent
Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters
of Credit and to exercise such other powers as are reasonably incidental thereto
to carry out the purposes of this Agreement.  It is understood that the handling
of the Loan Account and Collateral in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof.  Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. 
To induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(i) the handling of the Loan Account and Collateral of Borrowers as herein
provided, or (ii) the Lender Group’s relying on any instructions of the Parent
Borrower, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this Section 17.13 with
respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.

 

17.14                 Intercreditor Agreement.  Each Lender (a) hereby consents
to the priority of the Liens securing the Obligations on the terms set forth in
the Intercreditor Agreement, (b) hereby agrees that it will be bound by and will
take no actions contrary to the provisions of the Intercreditor Agreement and
(c) hereby authorizes and instructs Agent to enter into the Intercreditor
Agreement.

 

17.15                 Waiver of Rights Under Farm Credit Act.  Each Borrower,
having been represented by legal counsel in connection with this Agreement and
the other Loan Documents and, in particular, in connection with the waiver
contained in this Section 17.15, does hereby voluntarily and knowingly waive,
relinquish, and agree not to assert at any time, any and all rights that it may
have or be afforded under the sections of the Agricultural Credit Act of 1987
designated as 12 U.S.C. Sections 2199 through 2202e and the implementing Farm
Credit Administration regulations as set forth in 12 C.F.R Sections 617.7000
through 617.7630, including those provisions which may afford such Borrower
certain rights, and/or impose on any lender to a borrower certain duties, with
respect to the collection of any amounts owing hereunder or the foreclosure of
any liens securing any such amounts, or which require Agent or any present or
future Lender or participant to disclose to a Borrower the nature of any such
rights or duties.  This waiver is given by Borrowers pursuant to the provisions
of 12 C.F.R. Section 617.7010(c) to induce the Lenders to fund and extend to
Borrowers the credit facilities described herein and to induce those Lenders
which are Farm Credit Lenders to agree to provide such credit facilities
commensurate with their individual commitments as they may exist from time to
time.

 

71

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

BORROWERS:

 

 

INVENTURE FOODS, INC., a Delaware corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

RADER FARMS, INC., a Delaware corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

FRESH FROZEN FOODS, INC., a Delaware corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

WILLAMETTE VALLEY FRUIT COMPANY, a Delaware corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

POORE BROTHERS-BLUFFTON, LLC, a Delaware limited liability company

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

BOULDER NATURAL FOODS, INC., an Arizona corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

TEJAS PB DISTRIBUTING, INC., an Arizona corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

LA COMETA PROPERTIES, INC., an Arizona corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

 

 

 

 

BN FOODS, INC., a Colorado corporation

 

 

 

 

By:

/s/ Steve Weinberger

 

Name: Steve Weinberger

 

Title: Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
Agent, as Arranger, as Book Runner and as a Lender

 

 

 

 

By:

/s/ Kathleen Davenport

 

Name: Kathleen Davenport

 

Title:  Director

 

--------------------------------------------------------------------------------

 

EXHIBIT A-1

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered
into as of                             between                   (“Assignor”)
and                          (“Assignee”).  Reference is made to the Credit
Agreement described in Annex I hereto (the “Credit Agreement”).  Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Credit Agreement.

 

1.             In accordance with the terms and conditions of Section 13 of the
Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor’s rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and Assignor’s
portion of the Commitments, all to the extent specified on Annex I.

 

2.             The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim and (ii) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby;
(b) makes no representation or warranty and assumes no responsibility with
respect to (i) any statements, representations or warranties made in or in
connection with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrowers or any Guarantor or the performance or
observance by Borrowers or any Guarantor of any of their respective obligations
under the Loan Documents or any other instrument or document furnished pursuant
thereto, and (d) represents and warrants that the amount set forth as the
Purchase Price on Annex I represents the amount owed by Borrowers to Assignor
with respect to Assignor’s share of the Revolving Loans assigned hereunder, as
reflected on Assignor’s books and records.

 

3.             The Assignee (a) confirms that it has received copies of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (b) agrees that it will,
independently and without reliance upon Agent, Assignor, or any other Lender,
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under the Loan Documents; (c) confirms that it is an Eligible Transferee;
(d) appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; [and] (e) agrees that 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 Lender; [and (f) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee’s
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty.]

 

4.             Following the execution of this Assignment Agreement by the
Assignor and Assignee, the Assignor will deliver this Assignment Agreement to
the Agent for recording by the Agent. 

 

--------------------------------------------------------------------------------

 

The effective date of this Assignment (the “Settlement Date”) shall be the
latest to occur of (a) the date of the execution and delivery hereof by the
Assignor and the Assignee, (b) the receipt by Agent for its sole and separate
account a processing fee in the amount of $3,500 (if required by the Credit
Agreement), (c) the receipt of any required consent of the Agent, and (d) the
date specified in Annex I.

 

5.             As of the Settlement Date (a) the Assignee shall be a party to
the Credit Agreement and, to the extent of the interest assigned pursuant to
this Assignment Agreement, have the rights and obligations of a Lender
thereunder and under the other Loan Documents, and (b) the Assignor shall, to
the extent of the interest assigned pursuant to this Assignment Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Loan Documents, provided, however, that nothing
contained herein shall release any assigning Lender from obligations that
survive the termination of the Credit Agreement, including such assigning
Lender’s obligations under Article 15 and Section 17.9(a) of the Credit
Agreement.

 

6.             Upon the Settlement Date, Assignee shall pay to Assignor the
Purchase Price (as set forth in Annex I).  From and after the Settlement Date,
Agent shall make all payments that are due and payable to the holder of the
interest assigned hereunder (including payments of principal, interest, fees and
other amounts) to Assignor for amounts which have accrued up to but excluding
the Settlement Date and to Assignee for amounts which have accrued from and
after the Settlement Date.  On the Settlement Date, Assignor shall pay to
Assignee an amount equal to the portion of any interest, fee, or any other
charge that was paid to Assignor prior to the Settlement Date on account of the
interest assigned hereunder and that are due and payable to Assignee with
respect thereto, to the extent that such interest, fee or other charge relates
to the period of time from and after the Settlement Date.

 

7.             This Assignment Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.  This Assignment Agreement may be executed and
delivered by telecopier or other facsimile transmission all with the same force
and effect as if the same were a fully executed and delivered original manual
counterpart.

 

8.             THIS ASSIGNMENT AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS
REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET
FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE
INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

[signature pages follow]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and
Annex I hereto to be executed by their respective officers, as of the first date
written above.

 

 

[NAME OF ASSIGNOR],

 

as Assignor

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

[NAME OF ASSIGNEE],

 

as Assignee

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACCEPTED THIS      DAY OF

 

 

 

 

 

 

 

 

WELLS FARGO BANK, NATIONAL

 

 

ASSOCIATION, a national banking

 

 

association, as Agent, as Issuing Bank and as Swing Lender(1)

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

[INVENTURE FOODS, INC., a Delaware corporation,

 

 

as Parent Borrower

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

](2)

 

 

 

--------------------------------------------------------------------------------

(1)  Include consent of any additional Issuing Bank or Swing Lender.

(2)  Include if Parent Borrower’s consent is required by Section 13.1 of the
Credit Agreement.

 

--------------------------------------------------------------------------------

 

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

 

ANNEX I

 

1.

Borrowers: Inventure Foods, Inc., a Delaware corporation (“Parent Borrower”),
and the Subsidiaries of Parent Borrower identified on the signature pages of the
Credit Agreement

 

 

2.

Name and Date of Credit Agreement:

 

 

 

Credit Agreement dated as of November 18, 2015 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”)
by and among Borrowers, the lenders identified on the signature pages thereof,
Wells Fargo Bank, National Association, a national banking association (“Wells
Fargo”), as administrative agent for each member of the Lender Group and the
Bank Product Providers, Wells Fargo, as the sole arranger, and Wells Fargo, as
the sole book runner.

 

 

3.

Date of Assignment Agreement:

 

 

4.

Amounts:

 

 

 

a.             Assigned Amount of Revolver Commitment

$

 

 

 

 

b.             Assigned Amount of Revolving Loans

$

 

 

 

5.

Settlement Date:

 

 

 

 

6.

Purchase Price

$

 

 

 

7.

Notice and Payment Instructions, etc.

 

 

 

 

 

Assignee:

 

Assignor:

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B-1

 

FORM OF BORROWING BASE CERTIFICATE

 

[see attached]

 

--------------------------------------------------------------------------------

 

Summary Page Borrowing Base Certificate Date Name Inventure Foods, Inc. A/R As
of: Inventory As of: Accounts Receivable Balance per Aging Report Assigned To
Wells Fargo Capital Finance Less Ineligibles (detailed on page 2) Eligible
Accounts Receivable Accounts Receivable Availability before Sublimit(s) Net
Available Accounts Receivable after Sublimit(s) Inventory Balance Assigned To
Wells Fargo Capital Finance Less Ineligibles (detailed on page 3) Eligible
Inventory Inventory Availability before Sublimit(s) Available Inventory after
Sublimit(s) Net Available after Sublimit(s) and before Reserves Total Collateral
Availability Reserves Total Reserves Calculated before the Credit Line Total
Collateral Availability Suppressed Availability - Availability after Reserves
Total Credit Line 50,000,000.00 Reserves Total Reserves Calculated after the
Credit Line Total Availability after Reserves before Loan Balance and LCs Letter
of Credit Balance Loan Ledger Balance As of: As of: - Net Availability
Authorized Signer Additionally, the undersigned hereby certifies and represents
and warrants to the Lender Group on behalf of Borrower that (i) as of the date
hereof, each representation or warranty contained in or pursuant to any Loan
Document, any agreement, instrument, certificate, document or other writing
furnished at any time under or in connection with any Loan Document, and as of
the effective date of any advance, continuation or conversion requested above is
true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date), (ii) each of
the covenants and agreements contained in any Loan Document have been performed
(to the extent required to be performed on or before the date hereof or each
such effective date), (iii) no Default or Event of Default has occurred and is
continuing on the date hereof, nor will any thereof occur after giving effect to
the request above, and (iv) all of the foregoing is true and correct as of the
effective date of the calculations set forth above and that such calculations
have been made in accordance with the requirements of the Credit Agreement. - -
- - - - Summary Inventory Accounts Receivable The undersigned, (“Borrower”),
pursuant to that certain Credit Agreement dated as of (as amended, restated,
modified, supplemented, refinanced, renewed, or extended from time to time, the
“Credit Agreement”), entered into among Borrower, the lenders signatory thereto
from time to time and Wells Fargo Bank, N.A. as the arranger and administrative
agent (in such capacity, together with its successors and assigns, if any, in
such capacity, “Agent”), hereby certifies to Agent that the following items,
calculated in accordance with the terms and definitions set forth in the Credit
Agreement for such items are true and correct, and that Borrower is in
compliance with and, after giving effect to any currently requested Advances,
will be in compliance with, the terms, conditions, and provisions of the Credit
Agreement.

GRAPHIC [g238251ks21i001.gif]

 

 

EXHIBIT B-2

 

FORM OF BANK PRODUCT PROVIDER AGREEMENT

 

[Letterhead of Specified Bank Products Provider]

 

[Date]

 

Wells Fargo Bank, National Association, as Agent
2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404
Attention: Business Finance Division Manager

Fax No.:  310.453.7413

 

Reference hereby is made to that certain Credit Agreement dated as of
November 19, 2015 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”) by and among Inventure Foods, Inc., a
Delaware corporation (“Parent Borrower” and “Administrative Borrower”), the
Subsidiaries of the Parent Borrower identified on the signature pages thereof
(such Subsidiaries, together with the Parent Borrower, are referred to herein
each individually as a “Borrower” and individually and collectively, jointly and
severally, as “Borrowers”), the lenders party thereto as “Lenders” (each of such
Lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”), Wells Fargo Bank, National Association, a national
banking association (“Wells Fargo”), as administrative agent for each member of
the Lender Group and the Bank Product Providers (in such capacity, together with
its successors and assigns in such capacity, the “Agent”), Wells Fargo, as the
sole arranger, and Wells Fargo, as the sole book runner.  Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement.

 

Reference is also made to that certain [describe the Bank Product Agreement or
Agreements] (the “Specified Bank Product Agreement [Agreements]”) dated as of
          , by and between [Lender or Affiliate of Lender] (the “Specified Bank
Products Provider”) and [identify the Loan Party].

 

1.                                      Appointment of Agent.   The Specified
Bank Products Provider hereby designates and appoints Agent, and Agent by its
signature below hereby accepts such appointment, as its agent under the Credit
Agreement and the other Loan Documents. The Specified Bank Products Provider
hereby acknowledges that it has reviewed Sections 15.1 through 15.15 and
Sections 15.17, 15.18, and 17.5 (collectively such sections are referred to
herein as the “Agency Provisions”), including, as applicable, the defined terms
used therein.  Specified Bank Products Provider and Agent each agree that the
Agency Provisions which govern the relationship, and certain representations,
acknowledgements, appointments, rights, restrictions, and agreements, between
the Agent, on the one hand, and the Lenders or the Lender Group, on the other
hand, shall, from and after the date of this letter agreement also apply to and
govern, mutatis mutandis, the relationship between the Agent, on the one hand,
and the Specified Bank Product Provider with respect to the Bank Products
provided pursuant to the Specified Bank Product Agreement[s], on the other hand.

 

2.                                      Acknowledgement of Certain Provisions of
Credit Agreement.  The Specified Bank Products Provider hereby acknowledges that
it has reviewed the provisions of Sections 2.4(b)(ii), 14.1, 15, and 17.5 of the
Credit Agreement, including, as applicable, the defined terms used therein, and
agrees to be bound by the provisions thereof.  Without limiting the generality
of any of the foregoing referenced provisions, Specified Bank Product Provider
understands and agrees that its rights and benefits under the

 

--------------------------------------------------------------------------------

 

Loan Documents consist solely of it being a beneficiary of the Liens and
security interests granted to Agent and the right to share in proceeds of the
Collateral to the extent set forth in the Credit Agreement.

 

3.                                      Reporting Requirements.   Agent shall
have no obligation to calculate the amount due and payable with respect to any
Bank Products.  On a monthly basis (not later than the 10th Business Day of each
calendar month) or as more frequently as Agent shall request, the Specified Bank
Products Provider agrees to provide Agent with a written report, in form and
substance satisfactory to Agent, detailing Specified Bank Products Provider’s
reasonable determination of the liabilities and obligations (and mark- to-market
exposure) of the Borrowers and the other Loan Parties in respect of the Bank
Products provided by Specified Bank Products Provider pursuant to the Specified
Bank Products Agreement[s].  If Agent does not receive such written report
within the time period provided above, Agent shall be entitled to assume that
the reasonable determination of the liabilities and obligations of the Borrowers
and the other Loan Parties with respect to the Bank Products provided pursuant
to the Specified Bank Products Agreement[s] is zero.

 

4.                                      Bank Product Reserve Conditions.
Specified Bank Products Provider further acknowledges and agrees that Agent
shall have the right (to the extent permitted pursuant to the Credit Agreement),
but shall have no obligation to establish, maintain, relax, or release reserves
in respect of any of the Bank Product Obligations and that if reserves are
established there is no obligation on the part of the Agent to determine or
insure whether the amount of any such reserve is appropriate or not (including
whether it is sufficient in amount).  If Agent chooses to implement a reserve,
Specified Bank Products Provider acknowledges and agrees that Agent shall be
entitled to rely on the information in the reports described above to establish
the Bank Product Reserve Amount.

 

5.                                      Bank Product Obligations.  From and
after the delivery to Agent of this agreement duly executed by Specified Bank
Product Provider and the acknowledgement of this agreement by Agent and
Administrative Borrower, the obligations and liabilities of the Borrowers and
the other Loan Parties to Specified Bank Product Provider in respect of Bank
Products evidenced by the Specified Bank Product Agreement[s] shall constitute
Bank Product Obligations (and which, in turn, shall constitute Obligations), and
Specified Bank Product Provider shall constitute a Bank Product Provider until
such time as Specified Bank Products Provider or its Affiliate is no longer a
Lender. Specified Bank Products Provider acknowledges that other Bank Products
(which may or may not be Specified Bank Products) may exist at any time.

 

6.                                      Notices.  All notices and other
communications provided for hereunder shall be given in the form and manner
provided in Section 11 of the Credit Agreement, and, if to Agent, shall be
mailed, sent, or delivered to Agent in accordance with Section 11 in the Credit
Agreement, if to Administrative Borrower, shall be mailed, sent, or delivered to
Administrative Borrower in accordance with Section 11 in the Credit Agreement,
and, if to Specified Bank Products Provider, shall be mailed, sent, or delivered
to the address set forth below, or, in each case as to any party, at such other
address as shall be designated by such party in a written notice to the other
party.

 

If to Specified Bank Products Provider:

 

 

 

 

 

 

Attn:

 

Fax No.

 

--------------------------------------------------------------------------------

 

7.                                      Miscellaneous.  This agreement shall
bind and inure to the benefit of the respective successors and assigns of each
of the parties hereto (including any successor agent pursuant to Section 15.9 of
the Credit Agreement); provided, that no Borrower may assign this agreement or
any rights or duties hereunder without the other parties’ prior written consent
and any prohibited assignment shall be absolutely void ab initio.  Unless the
context of this agreement clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the terms
“includes” and “including” are not limiting, and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  
This agreement may be executed in any number of counterparts and by different
parties on separate counterparts.  Each of such counterparts shall be deemed to
be an original, and all of such counterparts, taken together, shall constitute
but one and the same agreement.  Delivery of an executed counterpart of this
letter by telefacsimile or other means of electronic transmission shall be
equally effective as delivery of a manually executed counterpart.

 

8.                                      Governing Law, Etc.  THIS AGREEMENT
SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT,
AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

[signature pages to follow]

 

--------------------------------------------------------------------------------

 

 

Sincerely,

 

 

 

[SPECIFIED BANK PRODUCTS PROVIDER]

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

Acknowledged, accepted, and agreed

as of the date first written above:

 

 

INVENTURE FOODS, INC., a Delaware corporation,

as Parent Borrower

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

--------------------------------------------------------------------------------

 

Acknowledged, accepted, and

agreed as of

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

a national banking association,

as Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C-1

 

FORM OF COMPLIANCE CERTIFICATE

 

[on Parent Borrower’s letterhead]

 

To:                             Wells Fargo Bank, National Association

2450 Colorado Avenue, Suite 3000 West

Santa Monica, California 90404

Attn:  Business Finance Division Manager

 

Re:                             Compliance Certificate dated                 ,
20

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement dated as of November 18, 2015
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Inventure Foods, Inc., a Delaware
corporation (“Parent Borrower”), the Subsidiaries of the Parent Borrower
identified on the signature pages thereof (such Subsidiaries, together with the
Parent Borrower, are referred to herein each individually as a “Borrower” and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and permitted assigns, is referred to hereinafter as a “Lender”),
Wells Fargo Bank, National Association, a national banking association (“Wells
Fargo”), as administrative agent for each member of the Lender Group and the
Bank Product Providers (in such capacity, together with its successors and
assigns in such capacity, the “Agent”), Wells Fargo, as the sole arranger, and
Wells Fargo, as the sole book runner.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement.

 

Pursuant to Section 5.1 of the Credit Agreement, the undersigned officer of
Parent Borrower hereby certifies as of the date hereof that:

 

1.                                      The financial information of Parent
Borrower and its Subsidiaries furnished in Schedule 1 attached hereto has been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for year-end audit adjustments and the lack of footnotes), and
fairly presents in all material respects the financial condition of Parent
Borrower and its Subsidiaries as of the date set forth therein.

 

2.                                      Such officer has reviewed the terms of
the Credit Agreement and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the transactions and financial
condition of Parent Borrower and its Subsidiaries during the accounting period
covered by the financial statements delivered pursuant to Section 5.1 of the
Credit Agreement.

 

3.                                      Such review has not disclosed the
existence on and as of the date hereof, and the undersigned does not have
knowledge of the existence as of the date hereof, of any event or condition that
constitutes a Default or Event of Default, except for such conditions or events
listed on Schedule 2 attached hereto, in each case specifying the nature and
period of existence thereof and what action Parent Borrower and/or its
Subsidiaries have taken, are taking, or propose to take with respect thereto.

 

--------------------------------------------------------------------------------

 

4.                                      Except as set forth on Schedule 3
attached hereto, the representations and warranties of Parent Borrower and its
Subsidiaries set forth in the Credit Agreement and the other Loan Documents are
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date hereof (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date.

 

5.                                      [Parent Borrower and its Subsidiaries
are in compliance with the covenant contained in Section 7 of the Credit
Agreement as demonstrated on Schedule 4 hereof.](1)

 

[Signature page follows.]

 

--------------------------------------------------------------------------------

(1)  Required only if a Financial Covenant Triggering Event has occurred and
continuing as of each month end thereafter.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this      day of                , 20   .

 

 

 

INVENTURE FOODS, INC.,

 

a Delaware corporation, as Parent Borrower

 

 

 

 

By:

 

 

Name:

 

 

Title:

Chief Financial Officer

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

Financial Information

 

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

Default or Event of Default

 

--------------------------------------------------------------------------------

 

SCHEDULE 3

 

Representations and Warranties

 

--------------------------------------------------------------------------------

 

[SCHEDULE 4

 

Financial Covenants

 

Fixed Charge Coverage Ratio.

 

Borrowers’ Fixed Charge Coverage Ratio, measured on a month-end basis, for the
12 month period ending                  , 20   , is    :1.0, which ratio [is/is
not] greater than or equal to the ratio set forth in Section 7 of the Credit
Agreement for the corresponding period.]

 

--------------------------------------------------------------------------------

 

EXHIBIT L-1

 

FORM OF LIBOR NOTICE

 

Wells Fargo Bank, National Association, as Agent
under the below referenced Credit Agreement
2450 Colorado Avenue

Suite 3000 West

Santa Monica, California  90404

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Credit Agreement dated as of
November 18, 2015 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”) by and among Inventure Foods, Inc., a
Delaware corporation (“Parent Borrower”), the Subsidiaries of the Parent
Borrower identified on the signature pages thereof (such Subsidiaries, together
with the Parent Borrower, are referred to herein each individually as a
“Borrower” and individually and collectively, jointly and severally, as
“Borrowers”), the lenders party thereto as “Lenders” (each of such Lenders,
together with its successors and permitted assigns, is referred to hereinafter
as a “Lender”), Wells Fargo Bank, National Association, a national banking
association (“Wells Fargo”), as administrative agent for each member of the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, the “Agent”), Wells Fargo, as the sole
arranger, and Wells Fargo, as the sole book runner.  Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with
respect to outstanding Revolving Loans in the amount of $         (the “LIBOR
Rate Advance”)[, and is a written confirmation of the telephonic notice of such
election given to Agent].

 

The LIBOR Rate Advance will have an Interest Period of [1, 2, 3, or 6]
month(s) commencing on                  .

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of
determining the rate of interest based on the LIBOR Rate under the Credit
Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Parent Borrower represents and warrants that (i) as of the date hereof, the
representations and warranties of Parent Borrower contained in the Credit
Agreement and in the other Loan Documents are true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) on and as of the date hereof, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an

 

--------------------------------------------------------------------------------

 

earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date)), (ii) each of the covenants and agreements contained in any Loan Document
have been performed (to the extent required to be performed on or before the
date hereof or each such effective date), and (iii) no Default or Event of
Default has occurred and is continuing on the date hereof, nor will any thereof
occur after giving effect to the request above.

 

 

 

Dated:

 

 

 

 

 

 

 

 

INVENTURE FOODS, INC., a Delaware corporation, as Parent Borrower

 

 

 

 

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

 

Acknowledged by:

 

 

 

WELLS FARGO BANK, NATIONAL

 

ASSOCIATION, a national banking

 

association, as Agent

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

2

--------------------------------------------------------------------------------

 

EXHIBIT P-1

 

FORM OF PERFECTION CERTIFICATE

 

Reference is hereby made to (a) that certain Credit Agreement dated as of
November 18, 2015 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”) by and among the lenders identified
on the signature pages thereof, Wells Fargo Bank, National Association, a
national banking association (“Wells Fargo”), as administrative agent for each
member of the Lender Group and the Bank Product Providers (in such capacity,
together with its successors and assigns in such capacity, “Agent”), Wells
Fargo, as the sole arranger, Wells Fargo, as the sole book runner, Inventure
Foods, Inc., a Delaware corporation (the “Parent Borrower”) and the Subsidiaries
of the Parent Borrower identified on the signature pages thereof (such
Subsidiaries, together with the Parent Borrower, are referred to herein each
individually as a “Borrower” and individually and collectively, jointly and
severally, as “Borrowers”) and (b) that certain Guaranty and Security Agreement
dated as of November [  ], 2015 (as amended, restated, supplemented, or
otherwise modified from time to time, the “Guaranty and Security Agreement”) by
and among Borrowers, the Subsidiaries of Borrowers parties thereto as
“Grantors”, and Agent.

 

All initially capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Credit Agreement.  Any terms (whether
capitalized or lower case) used in this Perfection Certificate that are defined
in the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein or in the Credit Agreement; provided that to the extent
that the Code is used to define any term used herein and if such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern.  As used herein, the term “Loan
Parties” shall mean the “Loan Parties” as that term is defined in the Credit
Agreement and “Code” shall mean the “Code” as that term is defined in the
Guaranty and Security Agreement.

 

The undersigned, the          of               (1), hereby certifies (in my
capacity as            and not in my individual capacity) to Agent and each of
the other members of the Lender Group and the Bank Product Providers as follows
as of November 18, 2015:

 

1.                                      Names.

 

(a)                                 The exact legal name of each Loan Party, as
such name appears in its certified certificate of incorporation, articles of
incorporation, certificate of formation, or any other organizational document,
is set forth in Schedule 1(a).  Each Loan Party is (i) the type of entity
disclosed next to its name in Schedule 1(a) and (ii) a registered organization
except to the extent disclosed in Schedule 1(a).  Also set forth in Schedule
1(a) is the organizational identification number, if any, of each Loan Party
that is a registered organization, the Federal Taxpayer Identification Number of
each Loan Party and the jurisdiction of formation of each Loan Party.  Each Loan
Party has qualified to do business in the states listed on Schedule 1(a).

 

(b)                                 Set forth in Schedule 1(b) hereto is a list
of any other legal names each Loan Party has had in the past five years,
together with the date of the relevant name change.

 

--------------------------------------------------------------------------------

(1)                                 Insert appropriate officer(s), as
applicable.

 

--------------------------------------------------------------------------------

 

(c)                                  Set forth in Schedule 1(c) is a list of all
other names used by each Loan Party in connection with any business or
organization to which such Loan Party became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise or on any filings with the Internal Revenue Service,
in each case, at any time in the past five years.  Except as set forth in
Schedule 1(c), no Loan Party has changed its jurisdiction of organization at any
time during the past four months.

 

2.                                      Chief Executive Offices.  The chief
executive office of each Loan Party is located at the address set forth in
Schedule 2 hereto.

 

3.                                      Real Property.

 

(a)                                 Attached hereto as Schedule 3(a) is a list
of all (i) Real Property (as defined in the Guaranty and Security Agreement) of
each Loan Party, (ii) filing offices for any mortgages encumbering the Real
Property or to encumber, the Real Property as of the Closing Date, (iii) common
names, addresses and uses of each parcel of Real Property (stating improvements
located thereon) and (iv) other information relating thereto required by such
Schedule.  Except as described on Schedule 3(a) attached hereto:  (A) no Loan
Party has entered into any leases, subleases, tenancies, franchise agreements,
licenses or other occupancy arrangements as owner, lessor, sublessor, licensor,
franchisor or grantor with respect to any of the real property described on
Schedule 3(a) and (B) no Loan Party has any leases which require the consent of
the landlord, tenant or other party thereto to the transactions contemplated by
the Loan Documents.

 

(b)                                 Schedule 3(b) sets forth all third parties
(“Bailees”) with possession of any Collateral (including inventory and
equipment) of the Loan Parties, including the name and address of such Bailee, a
description of the inventory and equipment in such Bailee’s possession and the
location of such inventory and equipment (if none please so state).

 

4.                                      Extraordinary Transactions.  Except for
those purchases, mergers, acquisitions, consolidations, and other transactions
described on Schedule 4 attached hereto, all of the Collateral has been
originated by each Loan Party in the ordinary course of business or consists of
goods which have been acquired by such Loan Party in the ordinary course of
business from a person in the business of selling goods of that kind.

 

5.                                      File Search Reports.  Attached hereto as
Schedule 5 is a true and accurate summary of certified file search reports from
(a) the Uniform Commercial Code filing offices (i) in each jurisdiction of
formation identified in Section 1(a) and in each location identified Section 2
with respect to each legal name set forth in Section 1 and (ii) in each
jurisdiction described in Schedule 1(c) or Schedule 3 relating to any of the
transactions described in Schedule 1(c) or Schedule 4 with respect to each legal
name of the person or entity from which each Loan Party purchased or otherwise
acquired any assets and (b) each filing office in each real estate recording
office identified on Schedule 3(a) for any Real Property Collateral.(2)  A true
copy of each financing statement, including judgment and tax liens, bankruptcy
and pending lawsuits or other filing identified in such file search reports has
been delivered to Agent.

 

--------------------------------------------------------------------------------

(2)                                 Please note that the list of real estate
locations that need to be searched shall be determined after Schedule 3(a) is
provided.

 

2

--------------------------------------------------------------------------------

 

6.                                      UCC Filings.  The financing statements
(duly authorized by each Loan Party constituting the debtor therein), including
the indications of the collateral, attached as Schedule 6 relating to the
Guaranty and Security Agreement or the Real Property, are in the appropriate
forms for filing in the filing offices in the jurisdictions identified in
Schedule 6 hereof.

 

7.                                      Schedule of Filings.  Attached hereto as
Schedule 7 is a schedule of (i) the appropriate filing offices for the financing
statements attached hereto as Schedule 6 and (ii) the appropriate filing offices
for the filings described in Schedule 11(c) and (iii) any other actions required
to create, preserve, protect and perfect the security interests in the
Collateral (as defined in the Guaranty and Security Agreement) granted, assigned
or pledged to Agent pursuant to the Guaranty and Security Agreement or any other
Loan Document.  No other filings or actions are required to create, preserve,
protect and perfect the security interests in the Collateral granted, assigned
or pledged to Agent pursuant to the Loan Documents.

 

8.                                      Termination Statements.  Attached hereto
as Schedule 8 are the duly authorized termination statements in the appropriate
form for filing in each applicable jurisdiction identified in Schedule 8 hereto
with respect to each Lien described therein.

 

9.                                      Stock Ownership and Other Equity
Interests.  Attached hereto as Schedule 9(a) is a true and correct list of each
of all of the authorized, and the issued and outstanding, Equity Interests of
each Loan Party and its Subsidiaries and the record and beneficial owners of
such Equity Interests.  Also set forth on Schedule 9(a) is each equity
investment of each Loan Party that represents 50% or less of the equity of the
entity in which such investment was made.  Attached hereto as Schedule 9(b) is a
true and correct organizational chart of Parent Borrower and its Subsidiaries.

 

10.                               Instruments and Chattel Paper.  Attached
hereto as Schedule 10 is a true and correct list of all promissory notes,
instruments (other than checks to be deposited in the ordinary course of
business), tangible chattel paper, electronic chattel paper and other evidence
of Indebtedness held by each Loan Party as of November [  ], 2015 having an
aggregate value or face amount in excess of $250,000, including all intercompany
notes between or among any two or more Loan Parties or any of their
Subsidiaries.

 

11.                               Intellectual Property.

 

(a)                                 Schedule 11(a) provides a complete and
correct list of all registered Copyrights (as defined in the Guaranty and
Security Agreement) owned by any Loan Party, all applications for registration
of Copyrights owned by any Loan Party, and all other Copyrights owned by any
Loan Party and material to the conduct of the business of any Loan Party. 
Schedule 11(a) provides a complete and correct list of all Patents (as defined
in the Guaranty and Security Agreement) owned by any Loan Party and all
applications for Patents owned by any Loan Party.  Schedule 11(a) provides a
complete and correct list of all registered Trademarks (as defined in the
Guaranty and Security Agreement) owned by any Loan Party, all applications for
registration of Trademarks owned by any Loan Party, and all other Trademarks
owned by any Loan Party and material to the conduct of the business of any Loan
Party.

 

(b)                                 Schedule 11(b) provides a complete and
correct list of all Intellectual Property Licenses (as defined in the Guaranty
and Security Agreement) entered into by any Loan Party pursuant to which (i) any
Loan Party has provided any license or other rights in Intellectual Property (as
defined in the Guaranty and Security Agreement) owned or controlled by such Loan
Party to any other Person (other than non-exclusive software licenses granted in
the ordinary course of business) or (ii) any Person has granted to any Loan
Party any license or other rights in Intellectual Property owned or controlled
by such Person that is material to the business of such Loan Party, including
any Intellectual Property that is

 

3

--------------------------------------------------------------------------------

 

incorporated in any Inventory, software, or other product marketed, sold,
licensed, or distributed by such Loan Party;

 

(c)                                  Attached hereto as Schedule 11(c) in proper
form for filing with the United States Patent and Trademark Office and United
States Copyright Office (as applicable) are the filings necessary to preserve,
protect and perfect the security interests in the United States Trademarks,
United Patents, United States Copyrights and Intellectual Property Licenses set
forth on Schedule 11(a) and Schedule 11(b), including duly signed copies of each
of the Patent Security Agreement, Trademark Security Agreement and the Copyright
Security Agreement, as applicable.

 

12.                               Commercial Tort Claims.  Attached hereto as
Schedule 12 is a true and correct list of all commercial tort claims that exceed
$250,000 held by each Loan Party, including a brief description thereof.

 

13.                               Commodities Accounts, Deposit Accounts and
Securities Accounts.  Attached hereto as Schedule 13 is a true and complete list
of all Commodities Accounts, Deposit Accounts and Securities Accounts (each as
defined in the Guaranty and Security Agreement) maintained by each Loan Party,
including the name of each institution where each such account is held, the name
of each such account and the name of each entity that holds each account.

 

14.                               Letter-of-Credit Rights.  Attached hereto as
Schedule 14 is a true and correct list of all letters of credit issued in favor
of any Loan Party, as beneficiary thereunder, having an aggregate value or face
amount in excess of $250,000.

 

15.                               Motor Vehicles.  Attached hereto as Schedule
15 is a true and correct list of all motor vehicles and other goods (covered by
certificates of title or ownership) and the owner and approximate fair market
value of such motor vehicles.

 

16.                               Farm Products.  Attached hereto as Schedule 16
is a true and correct list of all of the locations in the United States of
America and any other jurisdiction in which any Loan Party possess any farm
products as defined in UCC §9-102(34).

 

17.                               Timber.  Attached hereto as Schedule 17 is a
true and correct list of all of the locations in the United States of America
and any other jurisdiction in which any Loan Party possess any timber to be cut.

 

18.                               Other Assets:  A Loan Party owns the following
kinds of assets:

 

Aircraft:

Yes o No o

 

 

Vessels, boats or ships:

Yes o No o

 

 

Railroad rolling stock:

Yes o No o

 

If the answer is yes to any of these other types of assets, please describe on
Schedule 18.

 

[The Remainder of this Page has been intentionally left blank]

 

4

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
this      day of November, 2015.

 

 

INVENTURE FOODS, INC., a Delaware corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

RADER FARMS, INC., a Delaware corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

FRESH FROZEN FOODS, INC., a Delaware corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

WILLAMETTE VALLEY FRUIT COMPANY, a Delaware corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

POORE BROTHERS-BLUFFTON, LLC, a Delaware limited liability company

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

BOULDER NATURAL FOODS, INC., an Arizona corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

5

--------------------------------------------------------------------------------

 

 

TEJAS PB DISTRIBUTING, INC., an Arizona corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

LA COMETA PROPERTIES, INC., an Arizona corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

BN FOODS, INC., a Colorado corporation

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

6

--------------------------------------------------------------------------------

 

Schedule 1(a)

 

Legal Names, Etc.

 

Legal Name

 

Type of Entity

 

Registered
Organization
(Yes/No)

 

Organizational
Number(3)

 

Federal Taxpayer
Identification Number

 

Jurisdiction of Formation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(3)                                 If none, so state.

 

7

--------------------------------------------------------------------------------

 

Schedule 1(b)

 

Prior Names

 

Loan Party/Subsidiary

 

Prior Name

 

Date of Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

--------------------------------------------------------------------------------

 

Schedule 1(c)

 

Changes in Corporate Identity; Other Names

 

Loan
Party/Subsidiary

 

Name of Entity

 

Action

 

Date of
Action

 

State of
Formation

 

List of All Other
Names Used on Any
Filings with the
Internal Revenue
Service During Past
Five Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Add Information required by Section 1 to the extent required by Section 1(c) of
the Perfection Certificate]

 

9

--------------------------------------------------------------------------------

 

Schedule 2

 

Chief Executive Offices

 

Loan
Party/Subsidiary

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

--------------------------------------------------------------------------------

 

Schedule 3(a)

 

Real Property

 

Entity of
Record

 

Common
Name and
Address

 

Owned,
Leased or
Other
Interest

 

Landlord
/ Owner
if Leased
or Other
Interest

 

Description
of
Lease or
Other
Documents
Evidencing
Interest

 

Purpose/
Use

 

Improvements
Located on
Real
Property

 

Legal
Description

 

Encumbered
or to be
Encumbered
by Mortgage

 

Filing
Office for
Mortgage

 

Option to
Purchase/Right
of First Refusal

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[SEE EXHIBIT A-[ ] ATTACHED HERETO]

 

[YES/NO]

 

[ ]

 

[YES/NO]

 

11

--------------------------------------------------------------------------------

 

Schedule 3(a)

 

Real Property (cont.)

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

 

I. Landlord’s / Tenant’s Consent Required

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE LANDLORD’S / TENANT’S CONSENT IS
REQUIRED].

 

II. Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other
Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s /
Grantor’s Interest

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE ANY LOAN PARTY HOLDS LANDLORD’S /
GRANTOR’S INTEREST]

 

12

--------------------------------------------------------------------------------

 

Schedule 3(b)

 

Bailees

 

13

--------------------------------------------------------------------------------

 

Schedule 4

 

Transactions Other Than in the Ordinary Course of Business

 

Loan Party/Subsidiary

 

Description of Transaction Including Parties
Thereto

 

Date of
Transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

--------------------------------------------------------------------------------

 

Schedule 5

 

Certified File Search Reports

 

Loan Party/Subsidiary

 

Search Report dated

 

Prepared by

 

Jurisdiction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See attached.

 

15

--------------------------------------------------------------------------------

 

Schedule 6

 

Copy of Financing Statements To Be Filed

 

See attached.

 

16

--------------------------------------------------------------------------------

 

Schedule 7

 

Filings/Filing Offices

 

Type of Filing(4)

 

Entity

 

Applicable Collateral
Document
[Mortgage, Security
Agreement or Other]

 

Jurisdictions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(4)                                 UCC-1 financing statement, fixture filing,
mortgage, intellectual property filing or other necessary filing.

 

17

--------------------------------------------------------------------------------

 

Schedule 8

 

Attached hereto is a true copy of each termination statement filing duly
acknowledged or otherwise identified by the filing officer.

 

Termination Statement Filings

 

Debtor

 

Jurisdiction

 

Secured Party

 

Type of Collateral

 

UCC-1
File Date

 

UCC-1
File
Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

--------------------------------------------------------------------------------

 

Schedule 9(a)

 

(a)  Equity Interests of Loan Parties and Subsidiaries

 

Current Legal
Entities Owned

 

Record Owner

 

Certificate No.

 

No. Shares/Interest

 

Percent
Pledged

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Other Equity Interests

 

19

--------------------------------------------------------------------------------

 

Schedule 9(b)

 

Organizational Chart

 

20

--------------------------------------------------------------------------------

 

Schedule 10

 

Instruments and Chattel Paper

 

1.                                      Promissory Notes:

 

Entity

 

Principal
Amount

 

Date of Issuance

 

Interest Rate

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.                                      Chattel Paper:

 

21

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks

 

UNITED STATES COPYRIGHTS

 

Registrations:

 

OWNER

 

TITLE

 

REGISTRATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COPYRIGHTS

 

Registrations:

 

OWNER

 

COUNTRY/STATE

 

TITLE

 

REGISTRATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

COUNTRY/STATE

 

APPLICATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES PATENTS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER PATENTS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES TRADEMARKS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER TRADEMARKS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

COUNTRY/STATE

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

COUNTRY/STATE

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

--------------------------------------------------------------------------------

 

Schedule 11(b)

 

Intellectual Property Licenses

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

REGISTRATION/
APPLICATION
NUMBER, IF
ANY

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

--------------------------------------------------------------------------------

 

Schedule 11(c)

 

Intellectual Property Filings

 

26

--------------------------------------------------------------------------------

 

Schedule 12

 

Commercial Tort Claims

 

27

--------------------------------------------------------------------------------

 

Schedule 13

 

Commodities Accounts, Deposit Accounts and Securities Accounts

 

OWNER

 

TYPE OF ACCOUNT

 

BANK OR
INTERMEDIARY

 

ACCOUNT
NUMBERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28

--------------------------------------------------------------------------------

 

Schedule 14

 

Letter-of-Credit Rights

 

29

--------------------------------------------------------------------------------

 

Schedule 15

 

Motor Vehicles

 

30

--------------------------------------------------------------------------------

 

Schedule 16

 

Farm Products

 

31

--------------------------------------------------------------------------------

 

Schedule 17

 

Timber

 

32

--------------------------------------------------------------------------------

 

Schedule 18

 

Other Assets

 

33

--------------------------------------------------------------------------------

 

FORM OF SUPPLEMENT TO PERFECTION CERTIFICATE

 

Supplement (this “Supplement”), dated as of     , 20  , to the Perfection
Certificate, dated as of November 18, 2015 (as amended, restated, supplemented
or otherwise modified from time to time, the “Perfection Certificate”) by each
of the parties listed on the signature pages thereto and those additional
entities that thereafter become Loan Parties (collectively, jointly and
severally, “Grantors” and each individually “Grantor”).

 

Reference is hereby made to (a) that certain Credit Agreement dated as of
November 18, 2015 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”) by and among  the lenders identified
on the signature pages thereof, Wells Fargo Bank, National Association, a
national banking association (“Wells Fargo”), as administrative agent for each
member of the Lender Group and the Bank Product Providers (in such capacity,
together with its successors and assigns in such capacity, “Agent”), Wells
Fargo, as the sole arranger, Wells Fargo, as the sole book runner, Inventure
Foods, Inc., a Delaware corporation (the “Parent Borrower”) and the Subsidiaries
of the Parent Borrower identified on the signature pages thereof (such
Subsidiaries, together with the Parent Borrower, are referred to herein each
individually as a “Borrower” and individually and collectively, jointly and
severally, as “Borrowers”) and (b) that certain Guaranty and Security Agreement
dated as of November [  ], 2015 (as amended, restated, supplemented, or
otherwise modified from time to time, the “Guaranty and Security Agreement”) by
and among Borrowers, the Subsidiaries of Borrowers parties thereto as
“Grantors”, and Agent.

 

All initially capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Credit Agreement.  Any terms (whether
capitalized or lower case) used in this Perfection Certificate that are defined
in the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein or in the Credit Agreement; provided that to the extent
that the Code is used to define any term used herein and if such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern.  As used herein, the term
“Code” shall mean the “Code” as that term is defined in the Guaranty and
Security Agreement.

 

WHEREAS, pursuant to Section 5.2 of the Credit Agreement, the Loan Parties must
execute and deliver a Perfection Certificate and the execution and delivery of
the Perfection Certificate may be accomplished by the execution of this
Supplement in favor of Agent, for the benefit of each member of the Lender Group
and the Bank Product Providers;

 

In accordance with Section 5.2 of the Credit Agreement, the undersigned, the
         of          (5), hereby certify (in my capacity as            and not
in my individual capacity) to Agent and each of the other members of the Lender
Group and the Bank Product Providers as follows as of        , 20  :  [the
information in the Perfection Certificate delivered on or prior to the Closing
Date is true, correct, and complete on and as of the date hereof.] [Schedule
1(a), “Legal Names, Etc.”, Schedule 1(b), “Prior Names”, Schedule 1(c), “Changes
in Corporate Identity; Other Names”, Schedule 2, “Chief Executive Offices”,
Schedule 3(a), “Real Property”, Schedule 3(b), “Bailees”, Schedule 4,
“Transactions Other Than in the Ordinary Course of Business”,  Schedule 9(a),
“Equity Interests”, Schedule 9(b), “Organizational Chart” Schedule 10,
“Instruments and Chattel Paper”, Schedule 11(a), “Copyrights, Patents and
Trademarks”, Schedule 11(b), “Intellectual Property Licenses”, Schedule 12,
“Commercial Tort Claims”, Schedule 13, “Commodities Accounts, Deposit Accounts
and Securities Accounts”, Schedule 14, “Letter-of-Credit Rights”, Schedule 15,
“Motor Vehicles”, Schedule 16, “Farm Products”, Schedule 17, “Timber”, and
Schedule 18, “Other Assets” attached hereto supplement Schedule 1(a), Schedule
1(b), Schedule 1(c),

 

--------------------------------------------------------------------------------

(5)           Insert appropriate officer(s), as applicable.

 

34

--------------------------------------------------------------------------------

 

Schedule 2, Schedule 3, Schedule 4, Schedule 9(a), Schedule 9(b),  Schedule 10,
Schedule 11(a), Schedule 11(b), Schedule 12, Schedule 13, Schedule 14, Schedule
15, Schedule 16, Schedule 17, Schedule 18 respectively, to the Perfection
Certificate and shall be deemed a part thereof for all purposes of the
Perfection Certificate.]

 

The undersigned officers of each of the Loan Parties hereby certify as of the
date hereof on behalf of the Loan Parties in their capacity as officers of the
Loan Parties and not in their individual capacities that no additional filings
or actions are required to create, preserve or perfect the security interests in
the Collateral granted, assigned or pledged to Agent pursuant to the Loan
Documents.

 

Except as expressly supplemented hereby, the Perfection Certificate shall remain
in full force and effect.

 

IN WITNESS WHEREOF, we have hereunto signed this Supplement to Perfection
Certificate as of this      day of                 , 20  .

 

 

INVENTURE FOODS, INC., a Delaware corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

RADER FARMS, INC., a Delaware corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

FRESH FROZEN FOODS, INC., a Delaware corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

WILLAMETTE VALLEY FRUIT COMPANY, a Delaware corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

35

--------------------------------------------------------------------------------

 

 

POORE BROTHERS-BLUFFTON, LLC, a Delaware limited liability company

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

BOULDER NATURAL FOODS, INC., an Arizona corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

TEJAS PB DISTRIBUTING, INC., an Arizona corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

LA COMETA PROPERTIES, INC., an Arizona corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

BN FOODS, INC., a Colorado corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Each of the Guarantors]

 

36

--------------------------------------------------------------------------------

 

Schedule 1(a)

 

Legal Names, Etc.

 

Legal Name

 

Type of Entity

 

Registered
Organization
(Yes/No)

 

Organizational
Number(6)

 

Federal Taxpayer
Identification Number

 

Jurisdiction of Formation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(6)           If none, so state.

 

37

--------------------------------------------------------------------------------

 

Schedule 1(b)

 

Prior Names

 

Loan Party/Subsidiary

 

Prior Name

 

Date of Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

--------------------------------------------------------------------------------

 

Schedule 1(c)

 

Changes in Corporate Identity; Other Names

 

Loan
Party/Subsidiary

 

Name of Entity

 

Action

 

Date of
Action

 

State of
Formation

 

List of All Other
Names Used on Any
Filings with the
Internal Revenue
Service During Past
Five Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Add Information required by Section 1 to the extent required by Section 1(c) of
the Perfection Certificate]

 

39

--------------------------------------------------------------------------------

 

Schedule 2

 

Chief Executive Offices

 

Loan
Party/Subsidiary

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40

--------------------------------------------------------------------------------

 

Schedule 3(a)

 

Real Property

 

Entity of
Record

 

Common
Name and
Address

 

Owned,
Leased or
Other
Interest

 

Landlord
/ Owner
if Leased
or Other
Interest

 

Description
of
Lease or
Other
Documents
Evidencing
Interest

 

Purpose/
Use

 

Improvements
Located on
Real
Property

 

Legal
Description

 

Encumbered
or to be
Encumbered
by Mortgage

 

Filing
Office for
Mortgage

 

Option to
Purchase/Right
of First Refusal

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[ ]

 

[SEE EXHIBIT A-[ ] ATTACHED HERETO]

 

[YES/NO]

 

[ ]

 

[YES/NO]

 

 

41

--------------------------------------------------------------------------------

 

Schedule 3(a)

 

Real Property (cont.)

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

 

I. Landlord’s / Tenant’s Consent Required

 

1.         [LIST EACH LEASE OR OTHER INSTRUMENT WHERE LANDLORD’S / TENANT’S
CONSENT IS REQUIRED].

 

II. Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other
Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s /
Grantor’s Interest

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE ANY LOAN PARTY HOLDS LANDLORD’S /
GRANTOR’S INTEREST

 

42

--------------------------------------------------------------------------------

 

Schedule 3(a)

 

Real Property (cont.)

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

 

I. Landlord’s / Tenant’s Consent Required

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE LANDLORD’S / TENANT’S CONSENT IS
REQUIRED].

 

II. Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other
Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s /
Grantor’s Interest

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE ANY LOAN PARTY HOLDS LANDLORD’S /
GRANTOR’S INTEREST]

 

43

--------------------------------------------------------------------------------

 

Schedule 3(b)

 

Bailees

 

44

--------------------------------------------------------------------------------

 

Schedule 4

 

Transactions Other Than in the Ordinary Course of Business

 

Loan Party/Subsidiary

 

Description of Transaction Including Parties
Thereto

 

Date of
 Transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45

--------------------------------------------------------------------------------

 

Schedule 9(a)

 

(a)  Equity Interests of Loan Parties and Subsidiaries

 

Current Legal
Entities Owned

 

Record Owner

 

Certificate No.

 

No. Shares/Interest

 

Percent
Pledged

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Other Equity Interests

 

46

--------------------------------------------------------------------------------

 

Schedule 9(b)

 

Organizational Chart

 

47

--------------------------------------------------------------------------------

 

Schedule 10

 

Instruments and Chattel Paper

 

1.                                      Promissory Notes:

 

Entity

 

Principal
Amount

 

Date of Issuance

 

Interest Rate

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.                                      Chattel Paper:

 

48

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks

 

UNITED STATES COPYRIGHTS

 

Registrations:

 

OWNER

 

TITLE

 

REGISTRATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COPYRIGHTS

 

Registrations:

 

OWNER

 

COUNTRY/STATE

 

TITLE

 

REGISTRATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

COUNTRY/STATE

 

APPLICATION NUMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

49

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES PATENTS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER PATENTS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50

--------------------------------------------------------------------------------

 

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES TRADEMARKS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER TRADEMARKS:

 

Registrations:

 

OWNER

 

REGISTRATION
NUMBER

 

COUNTRY/STATE

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

COUNTRY/STATE

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

51

--------------------------------------------------------------------------------

 

Schedule 11(b)

 

Intellectual Property Licenses

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

REGISTRATION/
APPLICATION
NUMBER, IF
ANY

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

52

--------------------------------------------------------------------------------

 

Schedule 12

 

Commercial Tort Claims

 

53

--------------------------------------------------------------------------------

 

Schedule 13

 

Commodities Accounts, Deposit Accounts and Securities Accounts

 

OWNER

 

TYPE OF ACCOUNT

 

BANK OR
INTERMEDIARY

 

ACCOUNT
NUMBERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54

--------------------------------------------------------------------------------

 

Schedule 14

 

Letter of Credit Rights

 

55

--------------------------------------------------------------------------------

 

Schedule 15

 

Motor Vehicles

 

56

--------------------------------------------------------------------------------

 

Schedule 16

 

Farm Products

 

57

--------------------------------------------------------------------------------

 

Schedule 17

 

Timber

 

58

--------------------------------------------------------------------------------

 

Schedule 18

 

Other Assets

 

59

--------------------------------------------------------------------------------

 

Schedule 1.1

 

As used in the Agreement, the following terms shall have the following
definitions:

 

“ABL Priority Collateral” has the meaning specified therefor in the
Intercreditor Agreement.

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).

 

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by a Borrower or any of its Subsidiaries in a Permitted
Acquisition; provided, that such Indebtedness (a) is either (i) purchase money
Indebtedness or a Capital Lease with respect to Equipment, (ii) mortgage
financing with respect to Real Property or (iii) a reimbursement obligation in
respect of a fully cash collateralized or back-stopped letters of credit,
(b) was in existence prior to the date of such Permitted Acquisition, and
(c) was not incurred in connection with, or in contemplation of, such Permitted
Acquisition.

 

“Acquisition” means (a) the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all or substantially all of the Equity Interests of any other
Person.

 

“Additional Documents” has the meaning specified therefor in Section 5.12 of the
Agreement.

 

“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the
Agreement.

 

“Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person.  For purposes of
this definition, “control” means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Equity Interests, by contract, or
otherwise; provided, that, for purposes of the definition of Eligible Accounts
and Section 6.10 of the Agreement: (a) any Person which owns directly or
indirectly 10% or more of the Equity Interests having ordinary voting power for
the election of directors or other members of the governing body of a Person or
10% or more of the partnership or other ownership interests of a Person (other
than as a limited partner of such Person) shall be deemed an Affiliate of such
Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership in which a Person is a
general partner shall be deemed an Affiliate of such Person.

 

“Agent” has the meaning specified therefor in the preamble to the Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1
to this Agreement (or such other Deposit Account of Agent that has been
designated as such, in writing, by Agent to Borrowers and the Lenders).

 

“Agent’s Liens” means the Liens granted by each Borrower or its Subsidiaries to
Agent under the Loan Documents and securing the Obligations.

 

--------------------------------------------------------------------------------

 

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

 

“Applicable Margin” means, as of any date of determination and with respect to
Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set
forth in the following table that corresponds to the Average Excess Availability
of Borrowers for the most recently completed fiscal month; provided, that for
the period from the Closing Date through and including November 30, 2015, the
Applicable Margin shall be set at the margin in the row styled “Level II”;
provided further, that any time an Event of Default has occurred and is
continuing, the Applicable Margin shall be set at the margin in the row styled
“Level III”:

 

Level

 

Average Excess
Availability

 

Applicable Margin
Relative to Base Rate
Loans (the “Base Rate
Margin”)

 

Applicable Margin
Relative to LIBOR
Rate Loans (the
“LIBOR Rate
Margin”)

I

 

> $33,000,000

 

0.50 percentage points

 

1.50 percentage points

II

 

< $33,000,000 and > $16,000,000

 

0.75 percentage points

 

1.75 percentage points

III

 

< $16,000,000

 

1.00 percentage points

 

2.00 percentage points

 

The Applicable Margin shall be re-determined as of the first day of each fiscal
month of Borrowers.

 

“Applicable Unused Line Fee Percentage” means, as of any date of determination,
the applicable percentage set forth in the following table that corresponds to
the Average Revolver Usage (calculated exclusive of Swing Loans) of Borrowers
for the most recently completed fiscal month as determined by Agent in its
Permitted Discretion; provided, that any time an Event of Default has occurred
and is continuing, the Applicable Unused Line Fee Percentage shall be set at
“Level II”:

 

Level

 

Average Revolver Usage

 

Applicable Unused Line Fee
Percentage

I

 

> $25,000,000

 

0.25 percentage points

II

 

< $25,000,000

 

0.375 percentage points

 

The Applicable Unused Line Fee Percentage shall be re-determined on the first
date of each fiscal month by Agent.

 

“Application Event” means the occurrence of (a) a failure by Borrowers to repay
all of the Obligations in full on the Maturity Date, or (b) an Event of Default
and the election by Agent or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.4(b)(iii) of the
Agreement.

 

“Arranger” has the meaning set forth in the preamble to the Agreement.

 

2

--------------------------------------------------------------------------------

 

“Assignee” has the meaning specified therefor in Section 13.1(a) of the
Agreement.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1 to the Agreement.

 

“Authorized Person” means any one of the individuals identified on Schedule A-2
to the Agreement, as such schedule is updated from time to time by written
notice from Borrowers to Agent.

 

“Availability” means, as of any date of determination, the amount that Borrowers
are entitled to borrow as Revolving Loans under Section 2.1 of the Agreement
(after giving effect to the then outstanding Revolver Usage and Reserves).

 

“Available Revolver Increase Amount” means, as of any date of determination, an
amount equal to the result of (a) $10,000,000 minus (b) the aggregate principal
amount of Increases to the Revolver Commitments previously made pursuant to
Section 2.14 of the Agreement.

 

“Average Excess Availability” means, with respect to any period, the sum of the
aggregate amount of Excess Availability for each Business Day in such period
(calculated as of the end of each respective Business Day) divided by the number
of Business Days in such period.

 

“Average Revolver Usage” means, with respect to any period, the sum of the
aggregate amount of Revolver Usage for each Business Day in such period
(calculated as of the end of each respective Business Day) divided by the number
of Business Days in such period.

 

“Bank Product” means any one or more of the following financial products or
accommodations extended to a Borrower or its Subsidiaries by a Bank Product
Provider:  (a) credit cards (including commercial cards (including so-called
“purchase cards”, “procurement cards” or “p-cards”)), (b) credit card processing
services, (c) debit cards, (d) stored value cards, (e) Cash Management Services,
or (f) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time
by a Borrower or its Subsidiaries with a Bank Product Provider in connection
with the obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by each Borrower and its Subsidiaries to
any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or
any Lender is obligated to pay to a Bank Product Provider as a result of Agent
or such Lender purchasing participations from, or executing guarantees or
indemnities or reimbursement obligations to, a Bank Product Provider with
respect to the Bank Products provided by such Bank Product Provider to a
Borrower or its Subsidiaries; provided, in order for any item described in
clauses (a) (b), or (c) above, as applicable, to constitute “Bank Product
Obligations”, if the applicable Bank Product Provider is any Person other than
Wells Fargo or its Affiliates, then the applicable Bank Product must have been
provided on or after the Closing Date and Agent shall have received a Bank
Product Provider Agreement within 10 days after the date of the provision of the
applicable Bank Product to a Borrower or its Subsidiaries.

 

3

--------------------------------------------------------------------------------

 

“Bank Product Provider” means any Lender or any of its Affiliates, including
each of the foregoing in its capacity, if applicable, as a Hedge Provider;
provided, that no such Person (other than Wells Fargo or its Affiliates) shall
constitute a Bank Product Provider with respect to a Bank Product unless and
until Agent receives a Bank Product Provider Agreement from such Person and with
respect to the applicable Bank Product within 10 days after the provision of
such Bank Product to a Borrower or its Subsidiaries; provided; further, that if,
at any time, a Lender ceases to be a Lender under the Agreement, then, from and
after the date on which it ceases to be a Lender thereunder, neither it nor any
of its Affiliates shall constitute Bank Product Providers and the obligations
with respect to Bank Products provided by such former Lender or any of its
Affiliates shall no longer constitute Bank Product Obligations.

 

“Bank Product Provider Agreement” means an agreement in substantially the form
attached hereto as Exhibit B-2 to the Agreement, in form and substance
satisfactory to Agent, duly executed by the applicable Bank Product Provider,
Borrowers, and Agent.

 

“Bank Product Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate to establish (based upon the Bank
Product Providers’ determination of the liabilities and obligations of each
Borrower and its Subsidiaries in respect of Bank Product Obligations) in respect
of Bank Products then provided or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

 

“Base Rate” means the greatest of (a) the Federal Funds Rate plus ½%, (b) the
LIBOR Rate (which rate shall be calculated based upon an Interest Period of 1
month and shall be determined on a daily basis), plus 1 percentage point, and
(c) the rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate.

 

“Base Rate Loan” means each portion of the Revolving Loans that bears interest
at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which any Borrower or any of its Subsidiaries or ERISA Affiliates has
been an “employer” (as defined in Section 3(5) of ERISA) within the past six
years.

 

“Board of Directors” means, as to any Person, the board of directors (or
comparable managers) of such Person, or any committee thereof duly authorized to
act on behalf of the board of directors (or comparable managers).

 

“Board of Governors” means the Board of Governors of the Federal Reserve System
of the United States (or any successor).

 

“Book Runner” has the meaning set forth in the preamble to the Agreement.

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to the Agreement.

 

“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of
the Agreement.

 

4

--------------------------------------------------------------------------------

 

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a
Swing Loan, or by Agent in the case of an Extraordinary Advance.

 

“Borrowing Base” means,

 

(a) during the period from and including July 15 through and including
November 14 of each calendar year (“Peak-Season”), as of any date of
determination during such period, the result of:

 

(i)            85% of the amount of Eligible Accounts, less the amount, if any,
of the Dilution Reserve, plus

 

(ii)           the lowest of

 

(A) $50,000,000,

 

(B) the lesser of (A) the product of 75% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Eligible Finished Goods Inventory, Eligible Raw
Material Inventory and Eligible By-Products Inventory, in each case, at such
time, and (B) the product of 100% multiplied by the Net Recovery Percentage
identified in the most recent appraisal of Inventory and Designated Goods
ordered and obtained by Agent multiplied by the value (calculated at the lower
of cost or market on a basis consistent with Borrowers’ historical accounting
practices) of Eligible Finished Goods Inventory, Eligible Raw Material Inventory
and Eligible By-Products Inventory (such determination may be made as to
different categories of Eligible Finished Goods Inventory, Eligible Raw Material
Inventory and Eligible By-Products Inventory based upon the Net Recovery
Percentage applicable to such categories) at such time, minus

 

(iii)          the aggregate amount of reserves, if any, established by Agent
under Section 2.1(c) of the Agreement;

 

(this clause (a), the “Peak-Season Borrowing Base”), or

 

(b) during the period (x) from and including January 1 through and including
July 14 and (y) from and including November 15 through and including December 31
of each calendar year, as of any date of determination during such period
(clauses (x) and (y), “Off-Season”), the result of:

 

(i)            85% of the amount of Eligible Accounts, less the amount, if any,
of the Dilution Reserve, plus

 

(ii)           the lowest of

 

(A) $40,000,000,

 

(B) the lesser of (A) the product of 65% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Eligible Finished Goods Inventory, Eligible Raw
Material Inventory and Eligible By-Products Inventory, in each case, at such
time, and (B) the product of 85% multiplied by the Net Recovery Percentage
identified in the most recent appraisal of Inventory and Designated Goods
ordered and obtained by Agent multiplied by the value (calculated at the lower
of cost or market on a basis consistent with Borrowers’

 

5

--------------------------------------------------------------------------------

 

historical accounting practices) of Eligible Finished Goods Inventory, Eligible
Raw Material Inventory and Eligible By-Products Inventory (such determination
may be made as to different categories of Eligible Finished Goods Inventory,
Eligible Raw Material Inventory and Eligible By-Products Inventory) based upon
the Net Recovery Percentage applicable to such categories) at such time, minus

 

(iii)          the aggregate amount of reserves, if any, established by Agent
under Section 2.1(c) of the Agreement

 

(this clause (b), the “Off-Season Borrowing Base”).  Notwithstanding anything to
the contrary, the Borrowing Base component of Availability shall exclude
Eligible By-Products Inventory (whether during Peak-Season Borrowing Base or
during Off-Season Borrowing Base) in excess of $2,000,000.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the State of California,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.

 

“Capital Expenditures” means, with respect to any Person for any period, the
amount of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed, but excluding, without
duplication (a) expenditures made during such period in connection with the
replacement, substitution or restoration of assets or properties pursuant to
Section 2.4(e)(ii) of the Agreement, (b) with respect to the purchase price of
assets that are purchased substantially contemporaneously with the trade-in of
existing assets during such period, the amount that the gross amount of such
purchase price is reduced by the credit granted by the seller of such assets for
the assets being traded in at such time, (c) expenditures made during such
period to consummate one or more Permitted Acquisitions, (d) capitalized
software development costs to the extent such costs are deducted from net
earnings under the definition of EBITDA for such period, and (e) expenditures
during such period that, pursuant to a written agreement, are reimbursed by a
third Person (excluding any Borrower or any of its Affiliates).

 

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

 

“Cash Dominion Period” means the period commencing from the date (a) an Event of
Default has occurred and is continuing, or (b) Excess Availability (calculated
as of the end such day) is less than the greater of (i) 15% of the Maximum
Revolver Amount and (ii) $7,500,000, to the date (x) if such Cash Dominion
Period was triggered by clause (a) above, the date that all Events of Default
have been cured or waived, and (y) if such Cash Dominion Period was triggered by
clause (b) above, such time as Excess Availability has at all times been greater
than the greater of (i) 15% of the Maximum Revolver Amount and (ii) $7,500,000
for thirty (30) consecutive days; provided that in no event may a Cash Dominion
Period cease to exist or cease to continue more than three (3) times during the
term of the Agreement.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such

 

6

--------------------------------------------------------------------------------

 

state or any public instrumentality thereof maturing within 1 year from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or
Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no
more than 270 days from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof or the District of Columbia or any United States branch of a foreign
bank having at the date of acquisition thereof combined capital and surplus of
not less than $1,000,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the full amount maintained with any such other bank is insured by the Federal
Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or recognized
securities dealer having combined capital and surplus of not less than
$1,000,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt
securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by any commercial bank satisfying the
criteria described in clause (d) above, and (h) Investments in money market
funds substantially all of whose assets are invested in the types of assets
described in clauses (a) through (g) above.

 

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement,  merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other customary cash
management arrangements.

 

“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).

 

“Change of Control” means that:

 

(a)    any Person or two or more Persons acting in concert, shall have acquired
beneficial ownership, directly or indirectly, of Equity Interests of Parent
Borrower (or other securities convertible into such Equity Interests)
representing 35% or more of the combined voting power of all Equity Interests of
Parent Borrower entitled (without regard to the occurrence of any contingency)
to vote for the election of members of the Board of Directors of Parent
Borrower;

 

(b)    any Person or two or more Persons acting in concert, shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Parent Borrower or control over the Equity Interests
of such Person entitled to vote for members of the Board of Directors of Parent
Borrower on a fully-diluted basis (and taking into account all such Equity
Interests that such Person or group has the right to acquire pursuant to any
option right) representing 35% or more of the combined voting power of such
Equity Interests;

 

(c)    during any period of 24 consecutive months commencing on or after the
Closing Date, the occurrence of a change in the composition of the Board of
Directors of Parent Borrower such that a majority of the members of such Board
of Directors are not Continuing Directors; or

 

(d)    Parent Borrower fails to own and control, directly or indirectly, 100% of
the Equity Interests of each other Loan Party, other than a result of a
dissolution, liquidation or disposition permitted hereunder;

 

(e)    the occurrence of any “Change of Control” as defined in Term Loan Credit
Agreement.

 

7

--------------------------------------------------------------------------------

 

“Change in Law” means the occurrence after the date of the Agreement of: 
(a) the adoption or effectiveness of any law, rule, regulation, judicial ruling,
judgment or treaty, (b) any change in any law, rule, regulation, judicial
ruling, judgment or treaty or in the administration, interpretation,
implementation or application by any Governmental Authority of any law, rule,
regulation, guideline or treaty, or (c) the making or issuance by any
Governmental Authority of any request, rule, guideline or directive, whether or
not having the force of law; provided that notwithstanding anything in the
Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (ii) all requests, rules, guidelines or
directives concerning capital adequacy or liquidity requirements promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities shall, in each case, be deemed to be a “Change in
Law,” regardless of the date enacted, adopted or issued.

 

“Closing Date” means the date of the making of the initial Revolving Loan (or
other extension of credit) under the Agreement.

 

“Code” means the California Uniform Commercial Code, as in effect from time to
time.

 

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by any Borrower or its Subsidiaries in or upon which
a Lien is granted by such Person in favor of Agent or the Lenders under any of
the Loan Documents.  For the avoidance of doubt, the term Collateral shall not
include any Excluded Collateral (as defined in the Guaranty and Security
Agreement).

 

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Borrower’s or its Subsidiaries’ books and records, Inventory and Farm
Products, in form and substance reasonably satisfactory to Agent.

 

“Commitment” means, with respect to each Lender, its Commitment, and, with
respect to all Lenders, their Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such
Lender became a Lender under the Agreement, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of Section 13.1 of the Agreement.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

“Competitor” means any Person which is a direct competitor of Borrowers or their
Subsidiaries if, at the time of a proposed assignment, Agent and the assigning
Lender have actual knowledge that such Person is a direct competitor of
Borrowers or their Subsidiaries; provided, that in connection with any
assignment or participation, the Assignee or Participant with respect to such
proposed assignment or participation that is an investment bank, a commercial
bank, a finance company, a fund, or other Person which merely has an economic
interest in any such direct competitor, and is not itself such a direct
competitor of Borrowers or their Subsidiaries, shall not be deemed to be a
direct competitor for the purposes of this definition.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 to the Agreement delivered by the chief financial officer of Parent
Borrower to Agent.

 

“Confidential Information” has the meaning specified therefor in
Section 17.9(a) of the Agreement.

 

“Continuing Director” means (a) any member of the Board of Directors who was a
director of Parent Borrower on the Closing Date, and (b) any individual who
becomes a member of the Board of Directors

 

8

--------------------------------------------------------------------------------

 

after the Closing Date if such individual was approved, appointed or nominated
for election to the Board of Directors by a majority of the Continuing
Directors.

 

“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by a Borrower or one of its
Subsidiaries, Agent, and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).

 

“Copyright Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

 

“Curative Equity” means the net amount of common equity contributions (or net
proceeds of issuance of common equity by Parent Borrower) received by the Parent
Borrower in immediately available funds and which is designated “Curative
Equity” by Borrowers under Section 9.3 of the Agreement at the time it is
contributed.  For the avoidance of doubt, the forgiveness of antecedent debt
(whether Indebtedness, trade payables, or otherwise) shall not constitute
Curative Equity.

 

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement on the date that it is required
to do so under the Agreement (including the failure to make available to Agent
amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified Borrowers, Agent,
or any Lender in writing that it does not intend to comply with all or any
portion of its funding obligations under the Agreement, (c) has made a public
statement to the effect that it does not intend to comply with its funding
obligations under the Agreement or under other agreements generally (as
reasonably determined by Agent) under which it has committed to extend credit,
(d) failed, within 1 Business Day after written request by Agent, to confirm
that it will comply with the terms of the Agreement relating to its obligations
to fund any amounts required to be funded by it under the Agreement,
(e) otherwise failed to pay over to Agent or any other Lender any other amount
required to be paid by it under the Agreement on the date that it is required to
do so under the Agreement, unless the subject of a good faith dispute, or
(f) (i) becomes or is insolvent or has a parent company that has become or is
insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding,
or has had a receiver, conservator, trustee, or custodian or appointed for it,
or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment; provided that
a Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any Equity Interest in that Lender 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 Lender with immunity from the
jurisdiction of courts within the United States or Canada or from the
enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender.

 

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).

 

“Deposit Account” means any deposit account (as that term is defined in the
Code).

 

“Designated Account” means the Deposit Account of Parent Borrower identified on
Schedule D-1 to the Agreement (or such other Deposit Account of Parent Borrower
located at Designated Account Bank that has been designated as such, in writing,
by Borrowers to Agent).

 

9

--------------------------------------------------------------------------------

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 to
the Agreement (or such other bank that is located within the United States that
has been designated as such, in writing, by Borrowers to Agent).

 

“Designated Goods” means “berries” and “rhubarb” that either constitute
Inventory or Farm Products that have been harvested, packaged and stored and
ready for sale or processing and are not located or growing on trees, vines or
bushes.

 

“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior twelve (12) months, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to Borrowers’ Accounts
during such period, by (b) Borrowers’ billings with respect to Accounts during
such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.

 

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or
by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable and the termination of the
Commitments), (b) is redeemable at the option of the holder thereof (other than
solely for Qualified Equity Interests), in whole or in part, (c) provides for
the scheduled payments of dividends in cash, or (d) is or becomes convertible
into or exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Equity Interests, in each case, prior to the date that
is 180 days after the Maturity Date.

 

“Dollars” or “$” means United States dollars.

 

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit.

 

“Earn-Outs” means unsecured liabilities of a Loan Party arising under an
agreement to make any deferred payment as a part of the Purchase Price for a
Permitted Acquisition, including performance bonuses or consulting payments in
any related services, employment or similar agreement, in an amount that is
subject to or contingent upon the revenues, income, cash flow or profits (or the
like) of the target of such Permitted Acquisition.

 

“EBITDA” means, with respect to any fiscal period,

 

(a) Borrowers’ consolidated net earnings (or loss),

 

minus

 

(b)   without duplication, the sum of the following amounts of Borrowers for
such period to the extent included in determining consolidated net earnings (or
loss) for such period:

 

(i)            any extraordinary, unusual or non-recurring gains,

 

(ii)           interest income,

 

10

--------------------------------------------------------------------------------

 

(iii)          exchange, translation or performance gains relating to any
hedging transactions or foreign currency fluctuations, and

 

(iv)          income arising by reason of the application of FAS 141R,

 

plus

 

(c)           without duplication, the sum of the following amounts of Borrowers
for such period to the extent included in determining consolidated net earnings
(or loss) for such period:

 

(i)            any extraordinary, unusual or non-recurring non-cash losses
(excluding write-downs of current assets),

 

(ii)           Interest Expense,

 

(iii)          income taxes,

 

(iv)          depreciation and amortization for such period,

 

(v)           non-cash compensation expense (including deferred non-cash
compensation expense), or other non-cash expenses or charges, arising from the
sale or issuance of Equity Interests, the granting of stock options, and the
granting of stock appreciation rights and similar arrangements (including any
repricing, amendment, modification, substitution, or change of any such Equity
Interests, stock option, stock appreciation rights, or similar arrangements)
minus the amount of any such expenses or charges when paid in cash to the extent
not deducted in the computation of net earnings (or loss),

 

(vi)          one time non-cash restructuring charges; provided that add-backs
for any charges under this clause (vi), in the aggregate, shall not exceed 10%
of EBITDA for any four-fiscal quarter period (calculated before giving effect to
any such add-backs and adjustments) and shall be reasonably acceptable to Agent,

 

(vii)         non-cash exchange, translation, or performance losses relating to
any hedging transactions or foreign currency fluctuations,

 

(viii)        non-cash losses on sales of fixed assets or write-downs of fixed
or intangible assets,

 

(ix)          Recall Costs; provided that any such Recall Costs under this
clause (ix) (A) shall only apply to the fiscal periods ending on December 26,
2015 and March 26, 2016 and shall be limited to $1,000,000 in the aggregate for
such two fiscal periods and (B) shall not be added back to EBITDA under any
other clause under this definition of EBITDA for the fiscal periods ending on
December 26, 2015 and March 26, 2016, and

 

(x)           Kettle Snack Co-Pack Costs; provided that any such Kettle Snack
Co-Pack Costs under this clause (x) (A) shall only apply to the fiscal periods
ending on December 26, 2015 and March 26, 2016 and shall be limited to
$1,750,000 in the aggregate for such two fiscal periods and (B) shall not be
added back to

 

11

--------------------------------------------------------------------------------

 

EBITDA under any other clause under this definition of EBITDA for the fiscal
periods ending on December 26, 2015 and March 26, 2016,

 

in each case, determined on a consolidated basis in accordance with GAAP.

 

For the purposes of calculating EBITDA for any period of 4 consecutive fiscal
quarters (each, a “Reference Period”), (a) if at any time during such Reference
Period (and after the Closing Date), any Borrower or any of its Subsidiaries
shall have made a Permitted Acquisition, EBITDA for such Reference Period shall
be calculated after giving pro forma effect thereto (including pro forma
adjustments arising out of events which are directly attributable to such
Permitted Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case to be determined on a basis consistent with
Article 11 of Regulation S-X promulgated under the Securities Act and as
interpreted by the staff of the SEC) or in such other manner acceptable to Agent
as if any such Permitted Acquisition or adjustment occurred on the first day of
such Reference Period, (b) EBITDA for the fiscal quarter ended March 28, 2015,
shall be deemed to be $6,929,880, (c) EBITDA for the fiscal quarter ended
June 27, 2015, shall be deemed to be $4,635,815, and (d) EBITDA for the fiscal
quarter ended September 26, 2015, shall be deemed to be $6,321,995.

 

“Eligible Accounts” means those Accounts created by a Borrower in the ordinary
course of its business, that arise out of such Borrower’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, that such criteria may be revised from time to time
by Agent in Agent’s Permitted Discretion to address the results of any due
diligence information with respect to Borrowers’ business or assets of which
Agent becomes aware after the Closing Date, including field examination
performed by (or on behalf of) Agent from time to time after the Closing Date. 
In determining the amount to be included, Eligible Accounts shall be calculated
net of customer deposits, unapplied cash, taxes, discounts, credits, allowances,
and rebates.  Eligible Accounts shall not include the following:

 

(a)  Accounts that the Account Debtor has failed to pay within ninety (90) days
of original invoice date or Accounts with selling terms of more than sixty (60)
days,

 

(b)  Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of
all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,

 

(c)  Accounts with respect to which the Account Debtor is an Affiliate of any
Borrower or an employee or agent of any Borrower or any Affiliate of any
Borrower,

 

(d)  Accounts arising in a transaction wherein goods are placed on consignment
or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval,
a bill and hold, or any other terms by reason of which the payment by the
Account Debtor may be conditional,

 

(e)  Accounts that are not payable in Dollars,

 

(f)  Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any state thereof, or (iii) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless
(A) the Account is supported by an irrevocable letter of credit reasonably
satisfactory to Agent (as to form, substance, and issuer or domestic confirming
bank) that has been delivered to Agent and is directly drawable by Agent,
(B) the Account is covered by credit insurance in form, substance, and amount,
and by an insurer, reasonably satisfactory to Agent or (C) the amount of such
Account when aggregated with all other Accounts, the account debtors of which
are located within a foreign country and which do not

 

12

--------------------------------------------------------------------------------

 

meet the requirements of clauses (A) or (B) above does not exceed $500,000
(provided that in respect of this clause (C), such account debtors that are
located in a foreign country are affiliates of Costco or Wal-Mart, such Accounts
are billed and collected by the Loan Parties at a domestic billing location and
such Accounts are generated in either of Canada, China, Japan, Mexico and the
United Kingdom and Agent may in its sole discretion elect to exclude such
Accounts),

 

(g)  Accounts with respect to which the Account Debtor is either (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Borrowers have complied,
to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31
USC §3727), or (ii) any state of the United States,

 

(h)  Accounts with respect to which the Account Debtor is a creditor of a
Borrower, has or has asserted a right of recoupment or setoff, or has disputed
its obligation to pay all or any portion of the Account, to the extent of such
claim, right of recoupment or setoff, or dispute,

 

(i)  Accounts with respect to an Account Debtor whose total obligations owing to
Borrowers exceed 10% (except in the case of Costco Wholesale Corporation (and
its domestic affiliates), 30% and in the case of each of SAM’s Club (and its
domestic affiliates (other than Wal-Mart Stores, Inc.)), The Kroger Co. (and its
domestic affiliates)] and Wal-Mart Stores, Inc. (and its domestic affiliates
(other than SAM’s Club)), 15%) (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage; provided, that, in each case, the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentage shall be
determined by Agent based on all of the otherwise Eligible Accounts prior to
giving effect to any eliminations based upon the foregoing concentration limit,

 

(j)  Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
any Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,

 

(k)  Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful, including by reason of the Account Debtor’s financial
condition,

 

(l)  Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,

 

(m)  Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,

 

(n)  Accounts with respect to which the Account Debtor is a Sanctioned Person or
Sanctioned Entity,

 

(o)  Accounts that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by the
applicable Borrower of the subject contract for goods or services

 

(p)  Accounts owned by a target acquired in connection with a Permitted
Acquisition, until the completion of an appraisal (which appraisal shall be
conducted by an appraiser acceptable to Agent in its Permitted Discretion, using
scope, methodology and sampling procedure acceptable to Agent in its Permitted
Discretion) and field examination with respect to such target, in each case,
reasonably satisfactory to Agent (which appraisal and field examination may be
conducted prior to the closing of such Permitted Acquisition), or

 

13

--------------------------------------------------------------------------------

 

(q)  Accounts which do not comply in all material respects with all applicable
laws, whether Federal, state or local (including Food Security Laws and Food
Products Laws).

 

“Eligible By-Products Inventory” shall mean Inventory and Designated Goods that
qualify as Eligible Inventory and consists of Inventory and Designated Goods
that are first quality “by-products” that are crumbles, juices or other fruit
by-product which occur when Inventory and Designated Goods are cut, cleaned or
processed.

 

“Eligible Finished Goods Inventory” shall mean Eligible Inventory and consists
of first quality finished goods held for sale in the ordinary course of
Borrowers’ business.

 

“Eligible Inventory” means Inventory or Designated Goods that are (i) finished
goods, (ii) raw materials, (iii) by-products or (iv) ingredients, in each case,
of a Borrower, that complies with each of the representations and warranties
respecting Eligible Inventory made in the Loan Documents, and that is not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth below; provided, that such criteria may be revised from time to time by
Agent in Agent’s Permitted Discretion to address the results of any due
diligence information with respect to Borrowers’ business or assets of which
Agent becomes aware after the Closing Date, including any field examination or
appraisal performed by Agent from time to time after the Closing Date.  In
determining the amount to be so included, Inventory and Designated Goods shall
be valued at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices.  An item of Inventory or Designated Goods shall
not be included in Eligible Inventory if:

 

(a)  a Borrower does not have good, valid, and marketable title thereto,

 

(b)  a Borrower does not have actual and exclusive possession thereof (either
directly or through a bailee or agent of a Borrower),

 

(c)  it is not located at one of the locations in the continental United States
set forth on Schedule E-1 to the Agreement (or in-transit from one such location
to another such location),

 

(d)  it is in-transit to or from a location of a Borrower (other than in-transit
from one location set forth on Schedule E-1 to the Agreement to another location
set forth on Schedule E-1 to the Agreement),

 

(e)  it is located on real property leased by a Borrower or in a contract
warehouse, in each case, unless it is subject to a Collateral Access Agreement
executed by the lessor or warehouseman, as the case may be (provided that in
Agent’s Permitted Discretion a Landlord Reserve may satisfy this condition in
lieu of a Collateral Access Agreement), and unless it is segregated or otherwise
separately identifiable from goods of others, if any, stored on the premises,

 

(f)  it is the subject of a bill of lading or other document of title,

 

(g)  it is not subject to a valid and perfected first priority Agent’s Lien,

 

(h)  it consists of goods returned or rejected by a Borrower’s customers,

 

(i)  it consists of goods that are obsolete or slow moving, Expired Inventory,
restrictive or custom items, work-in-process, or goods that constitute spare
parts, packaging and shipping materials, supplies used or consumed in Borrowers’
business, bill and hold goods, defective goods, “seconds,” or Inventory or
Designated Goods acquired on consignment,

 

14

--------------------------------------------------------------------------------

 

(j)  it is subject to third party trademark, licensing or other proprietary
rights, unless Agent is satisfied that such Inventory or Designated Goods can be
freely sold by Agent on and after the occurrence of an Event of a Default
despite such third party rights,

 

(k)  it is a discontinued product or a component thereof,

 

(l)  it is subject to a recall or similar notice,

 

(m)  it contains or bears any intellectual property rights licensed to any Loan
Party or its Subsidiaries, unless Agent is satisfied that (i) they may sell or
otherwise dispose such Inventory or Designated Goods without (A) the consent of
each applicable licensor, (B) infringing the rights of such licensor,
(C) violating any contract with such licensor or (D) incurring any liability
with respect to payment of royalties other than royalties incurred pursuant to
sale of such Inventory or Designated Goods under current licensing agreement or
(ii) such Inventory and Designated Goods are covered by a valid and enforceable
purchase order satisfactory to Agent in its Permitted Discretion,

 

(n)  with respect to which any covenant, representation or warranty contained in
any Loan Document has been breached or is not true in any material respect
(without duplication of any materiality or similar qualification in any such
covenant, representation or warranty) or which does not conform in any material
respects to all standards imposed by any Governmental Authority,

 

(o)  it was acquired in connection with a Permitted Acquisition, until the
completion of an appraisal and field examination of such Inventory or Designated
Goods, in each case, reasonably satisfactory to Agent (which appraisal and field
examination may be conducted prior to the closing of such Permitted
Acquisition),

 

(p)  it is “poultry” (as such term is defined in any Food Products Law) or
“livestock” (as such term is defined in any Food Products Law),

 

(q)  it is Farm Products, other than “berries” and “rhubarb” that constitute
Farm Products that have been harvested, packaged and stored and ready for sale
or processing and are not located or growing on trees, vines, bushes, or

 

(r)  it is crops grown (other than Designated Goods), growing or to be grown.

 

“Eligible Raw Material Inventory” shall mean Eligible Inventory that consists of
goods that are first quality raw materials Inventory or Designated Goods that
are frozen and ingredients Inventory or Designated Goods that are frozen.

 

“Eligible Transferee” means (a) any Lender (other than a Defaulting Lender), any
Affiliate of any Lender (other than a Defaulting Lender) and any Related Fund of
any Lender (other than a Defaulting Lender); and (b) (i) a commercial bank
organized under the laws of the United States or any state thereof, and having
total assets in excess of $1,000,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States or any state thereof,
and having total assets in excess of $1,000,000,000; (iii) a commercial bank
organized under the laws of any other country or a political subdivision
thereof; provided that (A) (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country, and (B) such bank has
total assets in excess of $1,000,000,000; (d) any other entity (other than a
natural person) that is an “accredited investor” (as defined in Regulation D
under the Securities Act) that extends credit or buys loans as one of its
businesses including insurance companies, investment or mutual funds and lease
financing companies, and having total assets in excess of $1,000,000,000; and
(f) during the continuation of an Event of Default, any other Person approved by

 

15

--------------------------------------------------------------------------------

 

Agent excluding any Loan Party or Affiliate of a Loan Party; provided that an
Eligible Transferee shall not include any “lender” or “secured party” or “agent”
under the Term Loan Credit Agreement unless such Person is a Lender on the
Closing Date; provided, further that this foregoing prohibition shall not
prohibit “lender” or “secured party” or “agent” under the Term Loan Credit
Agreement from purchasing 100% (but not less than 100%) of the Obligations as
provided in the Intercreditor Agreement.

 

“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA, (a) that is or within
the preceding six (6) years has been sponsored, maintained or contributed to by
any Loan Party or ERISA Affiliate or (b) to which any Loan Party or ERISA
Affiliate has, or has had at any time within the preceding six (6) years, any
liability, contingent or otherwise.

 

“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Subsidiary of any Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials generated by
any Borrower, any Subsidiary of any Borrower, or any of their predecessors in
interest.

 

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Borrower or its Subsidiaries, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

 

“Equipment” means equipment (as that term is defined in the Code).

 

“Equity Interest” means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statutes, and all regulations and guidance promulgated
thereunder.  Any reference to a specific section of ERISA shall be deemed to be
a reference to such section of ERISA and any successor statutes, and all
regulations and guidance promulgated thereunder.

 

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of any Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of any Borrower or its Subsidiaries under IRC Section 414(c),
(c) solely for purposes

 

16

--------------------------------------------------------------------------------

 

of Section 302 of ERISA and Section 412 of the IRC, any organization subject to
ERISA that is a member of an affiliated service group of which any Borrower or
any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for
purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject
to ERISA that is a party to an arrangement with any Borrower or any of its
Subsidiaries and whose employees are aggregated with the employees of such
Borrower or its Subsidiaries under IRC Section 414(o).

 

“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.

 

“Excess” has the meaning specified therefor in Section 2.14 of the Agreement.

 

“Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Borrowers and their Subsidiaries aged in excess of historical levels with
respect thereto and all book overdrafts of Borrowers and their Subsidiaries in
excess of historical practices with respect thereto, in each case as determined
by Agent in its Permitted Discretion.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Hedge
Obligation if, and to the extent that, all or a portion of the Obligations of
such Loan Party of, or the grant by such Loan Party of a security interest to
secure, such Hedge Obligation (or any Obligations thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Loan Party’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the
Obligations of such Loan Party or the grant of such security interest becomes
effective with respect to such Hedge Obligation. If a Hedge Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Hedge Obligation that is attributable to swaps
for which such Obligation or security interest is or becomes illegal.

 

“Excluded Taxes” means (i) any tax imposed on the net income or net profits of
any Lender or any Participant (including any branch profits taxes), in each case
imposed by the jurisdiction (or by any political subdivision or taxing authority
thereof) in which such Lender or such Participant is organized or the
jurisdiction (or by any political subdivision or taxing authority thereof) in
which such Lender’s or such Participant’s principal office is located in each
case as a result of a present or former connection between such Lender or such
Participant and the jurisdiction or taxing authority imposing the tax (other
than any such connection arising solely from such Lender or such Participant
having executed, delivered or performed its obligations or received payment
under, or enforced its rights or remedies under the Agreement or any other Loan
Document); (ii) taxes resulting from a Lender’s or a Participant’s failure to
comply with the requirements of Section 16.2 of the Agreement, (iii) any United
States federal withholding taxes that would be imposed on amounts payable to a
Foreign Lender based upon the applicable withholding rate in effect at the time
such Foreign Lender becomes a party to the Agreement (or designates a new
lending office), except that Indemnified Taxes shall include (A) any amount that
such Foreign Lender (or its assignor, if any) was previously entitled to receive
pursuant to Section 16.1 of the Agreement, if any, with respect to such
withholding tax at the time such Foreign Lender becomes a party to the Agreement
(or designates a new lending office), and (B) additional United States federal
withholding taxes that may be imposed after the time such Foreign Lender becomes
a party to the Agreement (or designates a new lending office), as a result of a
change in law, rule, regulation, order or other decision with respect to any of
the foregoing by any Governmental Authority, and (iv) any United States federal
withholding taxes imposed under FATCA.

 

“Existing Credit Facility” means Borrower(s) credit facilities with (a) U.S.
Bank National Association as administrative agent dated as of November 8, 2013
and (b) any and all other loan agreements, capital lease facilities and
agreements for debt for borrowed money that are not listed on Schedule 4.14 (as
in effect on the Closing Date).

 

17

--------------------------------------------------------------------------------

 

“Expired Inventory” means (a) raw material or ingredients or Designated Goods
that have passed their expiration date and/or (b) finished goods Inventory or
Designated Goods that is within ninety (90) days of its expiration.

 

“Extraordinary Advances” has the meaning specified therefor in
Section 2.3(d)(iii) of the Agreement.

 

“Farm Credit Lender” means a lending institution organized and existing pursuant
to the provisions of the Farm Credit Act of 1971, as amended, and under the
regulation of the Farm Credit Administration.

 

“Farm Products” means “farm products” (as that term is defined in the Code).

 

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of the
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

 

“Fee Letter” means that certain fee letter, dated as of even date with the
Agreement, among Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by it.

 

“Financial Covenant Triggering Period” means the period commencing from the date
(a) an Event of Default has occurred and is continuing, or (b) Liquidity is less
than the greater of (i) 12.5% of the Maximum Revolver Amount and
(ii) $6,125,000, to the date (x) if such Financial Covenant Triggering Period
was triggered by clause (a) above, the date that all Events of Default have been
cured or waived, and (y) if such Financial Covenant Triggering Period was
triggered by clause (b) above, such time as Liquidity has at all times been
greater than the greater of (i) 12.5% of the Maximum Revolver Amount and
(ii) $6,125,000 for thirty (30) consecutive days.

 

“Fixed Charges” means, with respect to any fiscal period and with respect to
Borrowers determined on a consolidated basis in accordance with GAAP, the sum,
without duplication, of (a) Interest Expense paid in cash during such period,
(b) scheduled amortization payments in respect of Indebtedness that are required
to be paid during such period and (c) all Restricted Payments paid (whether in
cash or other property, other than Qualified Equity Interest) during such
period.

 

“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with
respect to Borrowers determined on a consolidated basis in accordance with GAAP,
the ratio of (a) EBITDA for such period minus the sum of (i) Capital
Expenditures paid in cash (to the extent not already incurred in a prior period)
or incurred during such period (excluding Capital Expenditures that are financed
with proceeds of Indebtedness (but including Capital Expenditures that are
financed from proceeds of the Loans under the Agreement)) and (ii) all federal,
state, and local and foreign income or franchise taxes paid in cash during such
period, to (b) Fixed Charges for such period.

 

For purposes of calculating Fixed Charges for the measurement periods ending
prior to November 26, 2016, Fixed Charges for each such measurement period shall
be calculated as follows: (i) Interest Expense shall be calculated by taking the
amount of such expense for the period from the Closing Date through the last day
of the

 

18

--------------------------------------------------------------------------------

 

applicable measurement period and multiplying such amount by 364 and dividing
such amount by the number of days that have elapsed from the Closing Date
through the last day of the applicable measurement period; (ii) scheduled
amortization payments in respect of Indebtedness shall be the greater of (A) the
actual scheduled amounts paid on and after the Closing Date and (B) the amounts
scheduled to be paid during the one-year period commencing on the Closing Date;
and (iii) Restricted Payments shall be calculated as the actual amount of such
payments paid on and after the Closing Date.

 

“Flood Insurance Laws” mean, collectively, (a) the National Flood Insurance Act
of 1968 as now or hereafter in effect or any successor statute thereto, (b) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statue thereto, (c) the National Flood Insurance Reform Act of 1994 as
now or hereafter in effect or any successor statute thereto, (d) the Flood
Insurance Reform Act of 2004 as now or hereafter in effect or any successor
statute thereto and (e) Biggert- Waters Flood Insurance Reform Act of 2012 as
now or hereafter in effect or any successor statute thereto.

 

“Flow of Funds Agreement” means a flow of funds agreement, dated as of even date
herewith, in form and substance reasonably satisfactory to Agent, executed and
delivered by each Loan Party and Agent.

 

“Food Security Laws” means all requirements of law relating to food products,
including the Federal Food, Drug and Cosmetic Act, the Food Security Act of
1985, the Federal Trade Commission Act, the Fair Packaging and Labeling Act, the
Consumer Product Safety Commission Act, the Poison Prevention Packaging Act, the
Food Safety Modernization Act, 21 CFR § Part 111, and any other applicable
comparable U.S. State statutes and all regulations promulgated under each of the
foregoing.

 

“Food Products” means all of any Borrower or any of its Subsidiaries’ now owned
or hereafter existing or acquired farm products of every kind and nature,
including agricultural products, crops and products of crops, wherever located,
including (a) “farm products” (as such term is defined in any Food Products Law
or the Uniform Commercial Code), (b) “poultry” (as such term is defined in any
Food Products Law), (c) “livestock” (as such term is defined in any Food
Products Law) and (d) “perishable agricultural commodities” (as such term is
defined in any Food Products Law).

 

“Food Products Grower Arrangement” means any growout contract, marketing
agreement or any other contract, agreement or arrangement (written or oral)
between any Borrower or any of its Subsidiaries and any Food Products Seller.

 

“Food Products Laws” means, (a) the Food Security Act, (b) PACA, (c) Packers and
Stockyards Act and (d) any other federal, state, or local laws from time to time
in effect which regulate any matters pertaining to Food Products, in each case,
as the same now exists or may hereafter from time to time be amended, modified,
recodified, or supplemented, together with all rules and regulations thereunder.

 

“Food Products Notices” means any written notice to any Borrower or any of its
Subsidiaries pursuant to the applicable provisions of any Farms Products Law
from (a) any Food Products Seller, (b) any lender to any Food Products Seller or
any other person with a Lien on the assets of any Food Products Seller or
(c) the Secretary of State (or equivalent official) or other Governmental
Authority of any state, commonwealth or political subdivision thereof in which
any Food Products purchased by any Loan Party are produced, in any case advising
or notifying such Loan Party of the intention of such Food Products Seller or
other person to preserve the benefits of any Lien or trust applicable to any
assets of any Loan Party established in favor of such Food Products Seller or
other person under the provisions of any law or claiming a Lien on any
perishable agricultural commodity or any other Food Products which may be or
have been purchased by a Loan Party or any related or other assets of such Loan
Party.

 

“Food Products Payables” means all amounts owed from time to time by any
Borrower or any of its Subsidiaries to any Food Products Seller in connection
with or on account of any Food Products Grower

 

19

--------------------------------------------------------------------------------

 

Arrangement or otherwise for the purchase price of any Food Products or any
other agricultural products or services (including poultry and livestock).

 

“Food Products Payable Reserve” means, as of any date of determination, the
amount of reserves that Agent has established (without duplication of FSA
Reserves) in respect of then outstanding Food Products Payables.

 

“Food Products Seller” means, individually and collectively, sellers or
suppliers of any Food Products or related services to any Loan Party involved in
the transaction.

 

“Food Security Act” means the Food Security Act of 1985, 7 USC § 1631 et. seq.,
as the same now exists or may hereafter from time to time be amended, modified,
recodified or supplemented, together with all rules and regulations thereunder.

 

“Foreign Lender” means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).

 

“FSA Registrations” has the meaning specified therefor in Section 4.31.

 

“FSA Reserve” means, as of any date of determination, the amount of reserves
that Agent has established (without duplication of Food Products Payable
Reserves) in respect of outstanding payables owing by each Borrower to Food
Products Sellers, to the extent that such Food Products are purchased by such
Borrower subject to Liens created by such sellers and continuing in the
Collateral pursuant to any Food Products Law, but only if the holder of such a
Lien either (A) notifies any Loan Party, Agent or any Lender that such holder
intends to enforce, or shall take any actions (beyond the mere filing of a
financing statement against the seller and an “effective financing statement”
under the Food Security Act or any other Food Products Law) to enforce, such
Lien against any part of the Collateral or (B) takes any action to pursue its
remedies against any Loan Party, Agent or any Lender in respect of such Lien.

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.

 

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

 

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

 

“Governmental Authority” means the government of any nation or any political
subdivision thereof, whether at the national, state, territorial, provincial,
municipal or any other level, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of, or pertaining to, government (including any supra-national bodies such as
the European Union or the European Central Bank).

 

“Guarantor” means (a) each Subsidiary of each Borrower (other than those
Subsidiaries that are Borrowers) and (b) each other Person that becomes a
guarantor after the Closing Date pursuant to Section 5.11 of the Agreement.

 

“Guaranty and Security Agreement” means a guaranty and security agreement, dated
as of even date with the Agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by each of the Borrowers and each
of the Guarantors to Agent.

 

20

--------------------------------------------------------------------------------

 

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement” means a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code.

 

“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of each Loan Party and its Subsidiaries arising under, owing pursuant to, or
existing in respect of Hedge Agreements entered into with one or more of the
Hedge Providers, including any obligation to pay or perform under any agreement,
contract or transaction that constitutes a “swap” within the meaning of section
1a(47) of the Commodity Exchange Act, except that the Obligations of any
Guarantor (other than the Parent Borrower) shall exclude Excluded Swap
Obligations with respect to such Guarantor.

 

“Hedge Provider” means any Lender or any of its Affiliates; provided, that no
such Person (other than Wells Fargo or its Affiliates) shall constitute a Hedge
Provider unless and until Agent receives a Bank Product Provider Agreement from
such Person and with respect to the applicable Hedge Agreement within 10 days
after the execution and delivery of such Hedge Agreement with a Borrower or its
Subsidiaries; provided further, that if, at any time, a Lender ceases to be a
Lender under the Agreement, then, from and after the date on which it ceases to
be a Lender thereunder, neither it nor any of its Affiliates shall constitute
Hedge Providers and the obligations with respect to Hedge Agreements entered
into with such former Lender or any of its Affiliates shall no longer constitute
Hedge Obligations.

 

“Increase” has the meaning specified therefor in Section 2.14.

 

“Increase Date” has the meaning specified therefor in Section 2.14.

 

“Increase Joinder” has the meaning specified therefor in Section 2.14.

 

“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money (including all obligations under the Term Loan Credit Agreement),
(b) all obligations of such Person evidenced by bonds, debentures, notes, or
other similar instruments and all reimbursement or other obligations in respect
of letters of credit, bankers acceptances, or other financial products, (c) all
obligations of such Person as a lessee under Capital Leases, (d) all obligations
or liabilities of others secured by a Lien on any asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices and, for the avoidance of doubt, other
than royalty payments payable in the ordinary course of business in respect of
non-exclusive licenses), (f) all monetary obligations of such Person owing under
Hedge Agreements (which amount shall be calculated based on the amount that
would be payable by such Person if the Hedge Agreement were terminated on the
date of determination), (g) any Disqualified Equity Interests of such Person,
and (h) any obligation of such Person guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (g) above.  For purposes of this
definition, (i) the amount of any Indebtedness represented by a guaranty or
other similar instrument shall be the lesser of the principal amount of the
obligations guaranteed and still

 

21

--------------------------------------------------------------------------------

 

outstanding and the maximum amount for which the guaranteeing Person may be
liable pursuant to the terms of the instrument embodying such Indebtedness, and
(ii) the amount of any Indebtedness which is limited or is non-recourse to a
Person or for which recourse is limited to an identified asset shall be valued
at the lesser of (A) if applicable, the limited amount of such obligations, and
(B) if applicable, the fair market value of such assets securing such
obligation.

 

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.

 

“Indemnified Taxes” means, any Taxes other than Excluded Taxes.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intercompany Subordination Agreement” means an intercompany subordination
agreement, dated as of even date with the Agreement, executed and delivered by
each Borrower, each of its Subsidiaries, and Agent, the form and substance of
which is reasonably satisfactory to Agent.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of even date herewith between Agent and Term Loan Agent.

 

“Interest Expense” means, for any period, the aggregate of the interest expense
of Borrowers for such period, determined on a consolidated basis in accordance
with GAAP.

 

“Immaterial Subsidiary” shall mean, at any time, any Subsidiary of Parent
Borrower (other than a Borrower) (i) having total assets (as determined in
accordance with GAAP) in an amount of less than 2.50% of Consolidated Total
Assets and (ii) contributing less than 2.50% to EBITDA for the most recently
ended Test Period; provided, however, that the total assets (as so determined)
and EBITDA contribution (as so determined) of all Immaterial Subsidiaries shall
not exceed 5.00% of Consolidated Total Assets or 5.00% of EBITDA, as the case
may be, for such Test Period.  In the event that the total assets of all
Immaterial Subsidiaries exceed 5.00% of Consolidated Total Assets or the total
contribution to EBITDA of all Immaterial Subsidiaries exceeds 5.00% of EBITDA,
as the case may be, for any relevant Test Period, (i) the Borrowers shall
designate one or more Subsidiaries as no longer constituting Immaterial
Subsidiaries until such 5.00% threshold is met and (ii) to the extent not
otherwise excluded as a Loan Party, such Subsidiaries designated as no longer
constituting Immaterial Subsidiaries shall comply with Sections 5.11 and 5.12. 
No Person shall be an Immaterial Subsidiary, unless it is also an “immaterial
subsidiary” under the Term Loan Credit Agreement.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter or, if agreed to by
all Lenders, 12 months thereafter; provided, that (a) interest shall accrue at
the applicable rate based upon the LIBOR Rate from and including the first day
of each Interest Period to, but excluding, the day on which any Interest Period
expires, (b) any Interest Period that would end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (c) with respect to an Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period), the Interest Period shall end on the last Business Day of
the calendar month that is 1, 2, 3, 6, or 12 months after the date on which the
Interest Period began, as applicable, and (d) Borrowers may not elect an
Interest Period which will end after the Maturity Date.

 

22

--------------------------------------------------------------------------------

 

“Inventory” means any “inventory” (as that term is defined in the Code).

 

“Inventory Reserves means, as of any date of determination, (a) Landlord
Reserves, and (b) those reserves that Agent deems necessary or appropriate, in
its Permitted Discretion and subject to Section 2.1(c), to establish and
maintain (including reserves for slow moving Inventory and Designated Goods and
Inventory and Designated Goods shrinkage) with respect to Eligible Inventory (or
Eligible Finished Goods Inventory, Eligible Raw Material Inventory or Eligible
By-Products Inventory) or the Maximum Revolver Amount.

 

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide accounts receivable arising in the ordinary course
of business), or acquisitions of Indebtedness, Equity Interests, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP. 
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustment for increases or
decreases in value, or write-ups, write-downs, or write-offs with respect to
such Investment.

 

“IRC” means the Internal Revenue Code of 1986, as amended, and any successor
statutes, and all regulations and guidance promulgated thereunder.  Any
reference to a specific section of the IRC shall be deemed to be a reference to
such section of the IRC and any successor statutes, and all regulations and
guidance promulgated thereunder.

 

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
subsequent revision thereof adopted by the International Chamber of Commerce on
the date such Letter of Credit is issued.

 

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by a Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

 

“Issuing Bank” means Wells Fargo or any other Lender that, at the request of
Borrowers and with the consent of Agent, agrees, in such Lender’s sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2.11 of the Agreement, and Issuing Bank shall be a
Lender.

 

“Kettle Snack Co-Pack Costs” means any incremental costs or expenses, whether in
cash or non-cash, or lost sales or margin, related to the use of third-party
co-packing or other one-time production or distribution arrangements for Boulder
Canyon or other Kettle Snack Products.

 

“Landlord Reserve” means, as to each location at which a Borrower has Inventory
or Farm Products or books and records located and as to which a Collateral
Access Agreement has not been received by Agent, a reserve in an amount equal to
the greater of (a) the number of months’ rent for which the landlord, bailee,
warehouseman, or similar party will have, under applicable law, a Lien in the
Inventory or Farm Products of such Borrower to secure the payment of rent or
other amounts under the lease or other storage or bailment arrangement relative
to such location, or (b) 3 months’ rent under the lease or other storage or
bailment arrangement relative to such location.

 

“Lender” has the meaning set forth in the preamble to the Agreement, shall
include Issuing Bank and the Swing Lender, and shall also include any other
Person made a party to the Agreement pursuant to the provisions of Section 13.1
of the Agreement and “Lenders” means each of the Lenders or any one or more of
them.

 

23

--------------------------------------------------------------------------------

 

“Lender Group” means each of the Lenders (including Issuing Bank and the Swing
Lender) and Agent, or any one or more of them.

 

“Lender Group Expenses” means all (a) costs or expenses (including taxes and
insurance premiums) required to be paid by any Borrower or its Subsidiaries
under any of the Loan Documents that are paid, advanced, or incurred by the
Lender Group, (b) documented out-of-pocket fees or charges paid or incurred by
Agent in connection with the Lender Group’s transactions with each Borrower and
its Subsidiaries under any of the Loan Documents, including, photocopying,
notarization, couriers and messengers, telecommunication, public record
searches, filing fees, recording fees, publication, real estate surveys, real
estate title policies and endorsements, and environmental audits, (c) Agent’s
customary fees and charges imposed or incurred in connection with any background
checks or OFAC/PEP searches related to any Borrower or its Subsidiaries,
(d) Agent’s customary fees and charges (as adjusted from time to time) with
respect to the disbursement of funds (or the receipt of funds) to or for the
account of any Borrower (whether by wire transfer or otherwise), together with
any out-of-pocket costs and expenses incurred in connection therewith,
(e) customary charges imposed or incurred by Agent resulting from the dishonor
of checks payable by or to any Loan Party, (f) reasonable documented
out-of-pocket costs and expenses paid or incurred by the Lender Group to correct
any default or enforce any provision of the Loan Documents, or during the
continuance of an Event of Default, in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (g) field examination, appraisal, and valuation
fees and expenses of Agent related to any field examinations, appraisals, or
valuation to the extent of the fees and charges (and up to the amount of any
limitation) provided in Section 2.10 of the Agreement, (h) Agent’s reasonable
costs and expenses (including reasonable documented attorneys’ fees and
expenses) relative to third party claims or any other lawsuit or adverse
proceeding paid or incurred, whether in enforcing or defending the Loan
Documents or otherwise in connection with the transactions contemplated by the
Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s
relationship with any Borrower or any of its Subsidiaries, (i) Agent’s
reasonable documented costs and expenses (including reasonable documented
attorneys’ fees and due diligence expenses) incurred in advising, structuring,
drafting, reviewing, administering (including travel, meals, and lodging),
syndicating (including CUSIP, DXSyndicate™, SyndTrak or other communication
costs incurred in connection with a syndication of the loan facilities), or
amending, waiving, or modifying the Loan Documents, and (j) Agent’s and each
Lender’s reasonable documented costs and expenses (including reasonable
documented attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
“workout,” a “restructuring,” or an Insolvency Proceeding concerning any
Borrower or any of its Subsidiaries or in exercising rights or remedies under
the Loan Documents), or defending the Loan Documents, irrespective of whether a
lawsuit or other adverse proceeding is brought, or in taking any enforcement
action or any Remedial Action with respect to the Collateral.

 

“Lender Group Representatives” has the meaning specified therefor in
Section 17.9 of the Agreement.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by Issuing Bank.

 

“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit Fees and all commissions,
fees, charges and expenses provided for in Section 2.11(k) of the Agreement
(including any fronting fees) will continue to accrue while the Letters of
Credit are outstanding) to be held by Agent for the benefit of the Lenders in an
amount equal to 105% of the then existing Letter of Credit Usage, (b) delivering
to

 

24

--------------------------------------------------------------------------------

 

Agent documentation executed by all beneficiaries under the Letters of Credit,
in form and substance reasonably satisfactory to Agent and Issuing Bank,
terminating all of such beneficiaries’ rights under the Letters of Credit, or
(c) providing Agent with a standby letter of credit, in form and substance
reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in
its sole discretion) in an amount equal to 105% of the then existing Letter of
Credit Usage (it being understood that the Letter of Credit Fee and all fronting
fees set forth in the Agreement will continue to accrue while the Letters of
Credit are outstanding and that any such fees that accrue must be an amount that
can be drawn under any such standby letter of credit).

 

“Letter of Credit Disbursement” means a payment made by Issuing Bank pursuant to
a Letter of Credit.

 

“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on
such date.

 

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of
the Agreement.

 

“Letter of Credit Indemnified Costs” has the meaning specified therefor in
Section 2.11(f) of the Agreement.

 

“Letter of Credit Related Person” has the meaning specified therefor in
Section 2.11(f) of the Agreement.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement.

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1 to the
Agreement.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the
Agreement.

 

“LIBOR Rate” means with respect to an Interest Period the rate per annum
determined by Agent to be the offered rate for deposits in Dollars with a term
equivalent to such Interest Period appearing on the page of the Reuters Screen
which displays an average of the London interbank offered rate administered by
the ICE Benchmark Administration, determined as of approximately 11:00
a.m. (London, England time) 2 Business Days prior to the commencement of the
requested Interest Period, for a term, and in an amount, comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance
with the Agreement (and, if any such rate is below zero, the LIBOR Rate shall be
deemed to be zero), which determination shall be made by Agent and shall be
conclusive in the absence of manifest error.

 

“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at
a rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any

 

25

--------------------------------------------------------------------------------

 

synthetic or other financing lease having substantially the same economic effect
as any of the foregoing and any lien arising under any Food Products Law.

 

“Liquidity” means, as of any date of determination, the sum of (a) Excess
Availability, plus (b) up to $2,000,000 in Qualified Cash (in each case,
calculated as of the end of each date of determination).

 

“Loan” shall mean any Revolving Loan, Swing Loan or Extraordinary Advance made
(or to be made) hereunder.

 

“Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.

 

“Loan Documents” means the Agreement, the Control Agreements, the Copyright
Security Agreement, any Borrowing Base Certificate, the Fee Letter, the Guaranty
and Security Agreement, the Intercompany Subordination Agreement, any Issuer
Documents, the Letters of Credit, the Mortgages, the Patent Security Agreement,
the Trademark Security Agreement, the Intercreditor Agreement, any note or notes
executed by Borrowers in connection with the Agreement and payable to any member
of the Lender Group, and any other instrument or agreement entered into, now or
in the future, by any Borrower or any of its Subsidiaries and any member of the
Lender Group in connection with the Agreement.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect
from time to time.

 

“Material Adverse Effect” means (a) a material adverse effect in the business,
operations, results of operations, assets, liabilities or financial condition of
Borrowers and their Subsidiaries, taken as a whole, (b) a material impairment of
Borrowers’ and their Subsidiaries ability to perform their obligations under the
Loan Documents to which they are parties or of the Lender Group’s ability to
enforce the Obligations or realize upon the Collateral (other than as a result
of as a result of an action taken or not taken that is solely in the control of
Agent), or (c) a material impairment of the enforceability or priority of
Agent’s Liens with respect to all or a material portion of the Collateral.

 

“Material Contract” means, with respect to any Person, (a) each contract or
agreement to which such Person or any of its Subsidiaries is a party involving
aggregate consideration payable to or by such Person or such Subsidiary of
$10,000,000 or more (other than purchase orders in the ordinary course of the
business of such Person or such Subsidiary and other than contracts that by
their terms may be terminated by such Person or Subsidiary in the ordinary
course of its business upon less than 60 days’ notice without penalty or
premium), (b) all written Food Product Grower Arrangements that allow for
extended payment terms of more than 30 days, (c) license arrangements with
T.G.I. Fridays of Minnesota; Seattle’s Best Coffee LLC; Nathan’s Famous Systems
Inc.; Jamba Juice Company; Vidalia Brands Inc. and Miles Willard Technologies,
LLP and (d) all other contracts or agreements, the loss of which could
reasonably be expected to result in a Material Adverse Effect.

 

“Maturity Date” means November 17, 2020.

 

“Maximum Available Amount” has the meaning specified therefor in
Section 2.1(a) of the Agreement.

 

“Maximum Revolver Amount” means $50,000,000, decreased by the amount of
reductions in the Commitments made in accordance with Section 2.4(c) of the
Agreement.

 

“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.

 

26

--------------------------------------------------------------------------------

 

“Mortgages” means, individually and collectively, one or more mortgages, deeds
of trust, or deeds to secure debt, executed and delivered by a Borrower or one
of its Subsidiaries in favor of Agent, in form and substance reasonably
satisfactory to Agent, that encumber the Real Property Collateral.

 

“Multiemployer Plan” means any multiemployer plan within the meaning of
Section 3(37) or 4001(a)(3) of ERISA with respect to which any Loan Party or
ERISA Affiliate has an obligation to contribute or has any liability, contingent
or otherwise or could be assessed withdrawal liability assuming a complete
withdrawal from any such multiemployer plan.

 

“Net Cash Proceeds” means with respect to any sale or disposition by any
Borrower or any of its Subsidiaries of assets, the amount of cash proceeds
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment of deferred consideration) by or on behalf
of such Borrower or such Subsidiary, in connection therewith after deducting
therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien
on any asset (other than (A) Indebtedness owing to Agent or any Lender under the
Agreement or the other Loan Documents and (B) Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such sale or disposition, (ii) reasonable fees, commissions, and expenses
related thereto and required to be paid by such Borrower or such Subsidiary in
connection with such sale or disposition, (iii) taxes paid or payable to any
taxing authorities by such Borrower or such Subsidiary in connection with such
sale or disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
or payable to a Person that is not an Affiliate of any Borrower or any of its
Subsidiaries, and are properly attributable to such transaction; and (iv) all
amounts that are set aside as a reserve (A) for adjustments in respect of the
purchase price of such assets, (B) for any liabilities associated with such sale
or casualty, to the extent such reserve is required by GAAP, and (C) for the
payment of unassumed liabilities relating to the assets sold or otherwise
disposed of at the time of, or within 30 days after, the date of such sale or
other disposition, to the extent that in each case the funds described above in
this clause (iv) are (x) deposited into escrow with a third party escrow agent
or set aside in a separate Deposit Account that is subject to a Control
Agreement in favor of Agent and (y) paid to Agent as a prepayment of the
applicable Obligations in accordance with Section 2.4(e) of the Agreement at
such time when such amounts are no longer required to be set aside as such a
reserve.

 

“Net Recovery Percentage” means, as of any date of determination, the percentage
of the book value of Borrowers’ Inventory and Designated Goods, as applicable,
that is estimated to be recoverable in an orderly liquidation of such Inventory
and Designated Goods, as applicable, net of all associated costs and expenses of
such liquidation, such percentage to be determined as to each category of
Inventory and Designated Goods and to be as specified in the most recent
appraisal received by Agent from an appraisal company selected by Agent.

 

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of
the Agreement.

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Notification Event” means (a) the occurrence of a “reportable event” described
in Section 4043 of ERISA for which the 30-day notice requirement has not been
waived by applicable regulations issued by the PBGC, (b) the withdrawal of any
Loan Party or ERISA Affiliate from a Pension Plan during a plan year in which it
was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the
termination of a Pension Plan, the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as a termination,
under Section 4041 of ERISA, if the plan assets are not sufficient to pay all
plan liabilities, (d) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC or any
Pension Plan or Multiemployer Plan administrator, (e) any other event or
condition that would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
(f) the imposition of a Lien pursuant to the IRC or

 

27

--------------------------------------------------------------------------------

 

ERISA in connection with any Employee Benefit Plan or the existence of any facts
or circumstances that could reasonably be expected to result in the imposition
of a Lien, (g) the partial or complete withdrawal of any Loan Party or ERISA
Affiliate from a Multiemployer Plan (other than any withdrawal that would not
constitute an Event of Default under Section 8.12), (h) any event or condition
that results in the reorganization or insolvency of a Multiemployer Plan under
Sections of ERISA, (i) any event or condition that results in the termination of
a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate or to appoint a trustee to administer a
Multiemployer Plan under ERISA, (j) any Pension Plan being in “at risk status”
within the meaning of IRC Section 430(i), (k) any Multiemployer Plan being in
“endangered status” or “critical status” within the meaning of IRC
Section 432(b) or the determination that any Multiemployer Plan is or is
expected to be insolvent or in reorganization within the meaning of Title IV of
ERISA, (l) with respect to any Pension Plan, any Loan Party or ERISA Affiliate
incurring a substantial cessation of operations within the meaning of ERISA
Section 4062(e), (m) an “accumulated funding deficiency” within the meaning of
the IRC or ERISA (including Section 412 of the IRC or Section 302 of ERISA) or
the failure of any Pension Plan or Multiemployer Plan to meet the minimum
funding standards within the meaning of the IRC or ERISA (including Section 412
of the IRC or Section 302 of ERISA), in each case, whether or not waived,
(n) the filing of an application for a waiver of the minimum funding standards
within the meaning of the IRC or ERISA (including Section 412 of the IRC or
Section 302 of ERISA) with respect to any Pension Plan or Multiemployer Plan,
(o) the failure to make by its due date a required payment or contribution with
respect to any Pension Plan or Multiemployer Plan, (p) any event that results in
or could reasonably be expected to result in a liability by a Loan Party
pursuant to Title I of ERISA or the excise tax provisions of the IRC relating to
Employee Benefit Plans or any event that results in or could reasonably be
expected to result in a liability to any Loan Party or ERISA Affiliate pursuant
to Title IV of ERISA or Section 401(a)(29) of the IRC, or (q) any of the
foregoing is reasonably likely to occur in the following 30 days.

 

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Letters of Credit (irrespective of whether contingent), premiums,
liabilities (including all amounts charged to the Loan Account pursuant to the
Agreement), obligations (including indemnification obligations), fees (including
the fees provided for in the Fee Letter), Lender Group Expenses (including any
fees or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), guaranties, and all covenants and duties of any
other kind and description owing by any Loan Party arising out of, under,
pursuant to, in connection with, or evidenced by the Agreement or any of the
other Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all other expenses or other amounts that Borrowers are required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents, and (b) all Bank Product Obligations.  Without limiting the
generality of the foregoing, the Obligations of Borrowers under the Loan
Documents include the obligation to pay (i) the principal of the Revolving
Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary
to reimburse Issuing Bank for amounts paid or payable pursuant to Letters of
Credit, (iv) Letter of Credit commissions, fees (including fronting fees) and
charges, (v) Lender Group Expenses, (vi) fees payable under the Agreement or any
of the other Loan Documents, and (vii) indemnities and other amounts payable by
any Loan Party under any Loan Document.  Any reference in the Agreement or in
the Loan Documents to the Obligations shall include all or any portion thereof
and any extensions, modifications, renewals, or alterations thereof, both prior
and subsequent to any Insolvency Proceeding.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

“Off-Season” has the meaning set forth in the definition of Borrowing Base.

 

28

--------------------------------------------------------------------------------

 

“Off-Season Borrowing Base” has the meaning set forth in the definition of
Borrowing Base.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.

 

“Overadvance” means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11.

 

“PACA” means the Perishable Agricultural Commodities Act of 1930, as amended, 7
USC § 499a et. seq., as the same now exists or may from time to time hereafter
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.

 

“Packers and Stockyards Act” means the Packers and Stockyards Act of 1921, as
amended, 7 USC § 181 et. seq., as the same now exists or may from time to time
hereafter be amended, modified, recodified or supplemented, together with all
rules, regulations and interpretations thereunder or related thereto.

 

“Parent Borrower” has the meaning specified therefor in the preamble to the
Agreement.

 

“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.

 

“Participant Register” has the meaning set forth in Section 13.1(i) of the
Agreement.

 

“Patent Security Agreement” has the meaning specified therefor in the Guaranty
and Security Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.13 of the
Agreement.

 

“Payment Conditions” shall mean, at the time of determination with respect to a
Permitted Acquisition, that:

 

(a)           no Default or Event of Default then exists or would arise as a
result of the consummation of such Acquisition,

 

(b)           Excess Availability , at all times during the 30 consecutive days
immediately preceding the date of consummation of such Permitted Acquisition on
a pro forma basis, and on a pro forma basis after giving effect to the Permitted
Acquisition (and including in such calculation any Revolving Loans or Letters of
Credit to be made or issued in connection therewith), in each case is not less
than (i) if the Fixed Charge Coverage Ratio on a pro forma basis is equal to or
greater than 1.10 to 1.00 for the trailing 12 month period most recently ended
for which financial statements are required to have been delivered to Agent
pursuant to Section 5.1, the greater of (A) 17.5% of the Maximum Revolver
Amount, and (B) $8,750,000, and (ii) if the Fixed Charge Coverage Ratio of the
Loan Parties and their Subsidiaries is less than 1.10 to 1.00 for the trailing
12 month period most recently ended for which financial statements are required
to have been delivered to Agent pursuant to Section 5.1, the greater of
(A) 22.5% of the Maximum Revolver Amount, and (B) $11,250,000, and

 

(c)           Parent Borrower shall have delivered to Agent an officer’s
certificate certifying compliance with the conditions described in clauses
(a) and (b) of this definition.

 

Notwithstanding anything to the contrary (including for purposes of clause
(b) above), an asset or property acquired in connection with such Permitted
Acquisition shall not be included in the Borrowing Base until the Administrative
Agent shall have completed a satisfactory appraisals and field exams (at the
sole cost and expense of the Borrowers) and shall have received a satisfactory
(in form and substance) Borrowing Base Certificate.

 

29

--------------------------------------------------------------------------------

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Peak-Season” has the meaning set forth in the definition of Borrowing Base.

 

“Peak-Season Borrowing Base” has the meaning set forth in the definition of
Borrowing Base.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV or Section 302 of ERISA or
Sections 412 or 430 of the Code sponsored, maintained, or contributed to by any
Loan Party or ERISA Affiliate or to which any Loan Party or ERISA Affiliate has
any liability, contingent or otherwise.

 

“Perfection Certificate” means a certificate in the form of Exhibit P-1 to the
Agreement.

 

“Permitted Acquisition” means any Acquisition so long as:

 

(a)  no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual,

 

(b)  no Indebtedness will be incurred, assumed, or would exist with respect to
any Borrower or its Subsidiaries as a result of such Acquisition, other than
Indebtedness permitted under clauses (f), (g), (m) or (u) of the definition of
Permitted Indebtedness and no Liens will be incurred, assumed, or would exist
with respect to the assets of any Borrower or its Subsidiaries as a result of
such Acquisition other than Permitted Liens,

 

(c)  Borrowers have provided Agent with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to such
proposed Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually and reasonably agreed upon by Borrowers and Agent)
created by adding the historical combined financial statements of Borrowers
(including the combined financial statements of any other Person or assets that
were the subject of a prior Permitted Acquisition during the relevant period) to
the historical consolidated financial statements of the Person to be acquired
(or the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition, Borrowers and their Subsidiaries (i) would
have been in pro forma compliance with the financial covenant in Section 7 of
the Agreement (whether or not then in effect) for the fiscal quarter ended
immediately prior to the proposed date of consummation of such proposed
Acquisition, and (ii) are projected to be in compliance with the financial
covenants in Section 7 of the Agreement (whether or not then in effect) for each
of the 4 fiscal quarters in the period ended one year after the proposed date of
consummation of such proposed Acquisition,

 

(d)  Borrowers have provided Agent with its due diligence package relative to
the proposed Acquisition, including forecasted balance sheets, profit and loss
statements, and cash flow statements of the Person or assets to be acquired, all
prepared on a basis consistent with such Person’s (or assets’) historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the 1 year period following the date of
the proposed Acquisition, on a quarter by quarter basis), in form and substance
(including as to scope and underlying assumptions) reasonably satisfactory to
Agent,

 

(e)  the Payment Conditions are satisfied on a pro forma basis,

 

(f)  Borrowers have provided Agent with written notice of the proposed
Acquisition at least 15 Business Days prior to the anticipated closing date of
the proposed Acquisition and, not later than 5 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and

 

30

--------------------------------------------------------------------------------

 

other material documents relative to the proposed Acquisition, which agreement
and documents must be reasonably acceptable to Agent,

 

(g)  the assets being acquired (other than a de minimis amount of assets in
relation to Borrowers’ and their Subsidiaries’ total assets), or the Person
whose Equity Interests are being acquired, are useful in or engaged in, as
applicable, the business of Borrowers and their Subsidiaries or a business
reasonably related thereto,

 

(h)  the assets being acquired are located within the United States or Canada or
the Person whose Equity Interests are being acquired is organized in a
jurisdiction located within the United States or Canada,

 

(i)  the subject assets or Equity Interests, as applicable, are being acquired
directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in
connection therewith, the applicable Loan Party shall have complied with
Section 5.11 or 5.12 of the Agreement, as applicable, of the Agreement and, in
the case of an acquisition of Equity Interests, the applicable Loan Party shall
have demonstrated to Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties,

 

(j)  such Acquisition was not preceded by an unsolicited tender offer for Equity
Interest by, or proxy initiated by an unsolicited tender offer for such Equity
Interest by, or proxy contest initiated by any Loan Party or its Subsidiaries,
and

 

(k)  the Purchase Price payable in respect of all Permitted Acquisitions
(including the proposed Acquisition and including deferred payment obligations)
shall not exceed $10,000,000 (the “Purchase Price Limit”) in the aggregate
during the term of the Agreement; provided that for purposes of this clause (k),
the Purchase Price consideration funded with the net proceeds of a substantially
contemporaneous issuance of Qualified Equity Interests of the Parent Borrower
(including any consideration comprised of Qualified Equity Interests of the
Parent Borrower) shall be excluded when determining whether the Purchase Price
Limit would be exceeded.

 

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Dispositions” means:

 

(a) sales, abandonment, or other dispositions of Equipment that is substantially
worn, damaged, or obsolete or no longer used or useful in the ordinary course of
business and leases or subleases of Real Property not useful in the conduct of
the business of Borrowers and their Subsidiaries,

 

(b) sales of Inventory and Farm Products to buyers in the ordinary course of
business,

 

(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents,

 

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,

 

(e) the granting of Permitted Liens,

 

(f) the sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof,

 

31

--------------------------------------------------------------------------------

 

(g) any involuntary loss, damage or destruction of property,

 

(h) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,

 

(i) the leasing or subleasing of assets of any Borrower or its Subsidiaries in
the ordinary course of business,

 

(j) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Parent Borrower and the sale or issuance of Equity Interests of
any Subsidiary to a Borrower or another Subsidiary,

 

(k) (i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of any Borrower or any of its Subsidiaries to the extent
not economically desirable in the conduct of its business or (ii) the
abandonment of patents, trademarks, copyrights, or other intellectual property
rights in the ordinary course of business so long as (in each case under clauses
(i) and (ii)), (A) with respect to copyrights, such copyrights are not material
revenue generating copyrights, and (B) such lapse is not materially adverse to
the interests of the Lender Group,

 

(l)  the making of Restricted Payments that are expressly permitted to be made
pursuant to the Agreement,

 

(m)  the making of Permitted Investments,

 

(n) so long as no Event of Default has occurred and is continuing or would
immediately result therefrom, transfers of assets (i) from any Borrower or any
of its Subsidiaries to a Loan Party, and (ii) from any Subsidiary of any
Borrower that is not a Loan Party to any other Subsidiary of any Borrower,

 

(o) dispositions of assets acquired by Borrowers and their Subsidiaries pursuant
to a Permitted Acquisition consummated within 12 months of the date of the
proposed disposition so long as (i) the consideration received for the assets to
be so disposed is at least equal to the fair market value of such assets, as
determined in good faith by the Board of Directors of the Borrower or the
Subsidiary effecting the disposition, (ii) the assets to be so disposed are not
necessary or economically desirable in connection with the business of Borrowers
and their Subsidiaries, and (iii) the assets to be so disposed are readily
identifiable as assets acquired pursuant to the subject Permitted Acquisition,
and

 

(p)  sales or dispositions of assets (other than Accounts, Inventory, Farm
Products, Equity Interests of Subsidiaries of any Borrower) not otherwise
permitted in clauses (a) through (o) above so long as made at fair market value,
as determined in good faith by the Board of Directors of the Borrower or the
Subsidiary effecting the disposition, and the aggregate fair market value of all
assets disposed of would not exceed $2,500,000 in any fiscal year (including the
proposed disposition) and $5,000,000 in the aggregate during the term of the
Agreement.

 

“Permitted Indebtedness” means:

 

(a)  Indebtedness evidenced by the Agreement or the other Loan Documents,

 

(b)  Indebtedness set forth on Schedule 4.14 to the Agreement and any
Refinancing Indebtedness in respect of such Indebtedness,

 

(c)  Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,

 

(d)  endorsement of instruments or other payment items for deposit,

 

32

--------------------------------------------------------------------------------

 

(e)  Indebtedness consisting of (i) unsecured guarantees incurred in the
ordinary course of business with respect to surety and appeal bonds, performance
bonds, bid bonds, appeal bonds, completion guarantee and similar obligations;
(ii) unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions; and
(iii) unsecured guarantees with respect to Indebtedness of any Borrower or one
of its Subsidiaries, to the extent that the Person that is obligated under such
guaranty could have incurred such underlying Indebtedness,

 

(f)  unsecured Indebtedness of any Borrower that is incurred on the date of the
consummation of a Permitted Acquisition solely for the purpose of consummating
such Permitted Acquisition so long as (i) no Event of Default has occurred and
is continuing or would result therefrom, (ii) such unsecured Indebtedness is not
incurred for working capital purposes, (iii) such unsecured Indebtedness does
not mature prior to the date that is 180-days after the Maturity Date, (iv) such
unsecured Indebtedness does not amortize until 180-days after the Maturity Date,
(v) such unsecured Indebtedness does not provide for the payment of interest
thereon in cash or Cash Equivalents prior to the date that is 180-days after the
Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to
the Obligations on terms and conditions reasonably satisfactory to Agent,

 

(g)  Acquired Indebtedness in an amount not to exceed $5,000,000 outstanding at
any one time,

 

(h)  Indebtedness incurred in the ordinary course of business under performance,
surety, statutory, or appeal bonds,

 

(i)  Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to any Borrower or any of its Subsidiaries, so long as the
amount of such Indebtedness is not in excess of the amount of the unpaid cost
of, and shall be incurred only to defer the cost of, such insurance for the year
in which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,

 

(j)  the incurrence by any Borrower or its Subsidiaries of Indebtedness under
Hedge Agreements that are incurred for the bona fide purpose of hedging the
interest rate, commodity, or foreign currency risks associated with Borrowers’
and their Subsidiaries’ operations and not for speculative purposes; provided
that if such Indebtedness constitutes Term Loan Obligations, such Indebtedness
shall be subject to the terms of the Intercreditor Agreement,

 

(k)  Indebtedness incurred in the ordinary course of business in respect of
credit cards, credit card processing services, debit cards, stored value cards,
commercial cards (including so-called “purchase cards”, “procurement cards” or
“p-cards”), or Cash Management Services; provided that if such Indebtedness
constitutes Term Loan Obligations, such Indebtedness shall be subject to the
terms of the Intercreditor Agreement,

 

(l)  unsecured Indebtedness of any Borrower owing to former employees, officers,
or directors (or any spouses, ex-spouses, or estates of any of the foregoing)
incurred in connection with the repurchase by such Borrower of the Equity
Interests of Parent Borrower that has been issued to such Persons, so long as
(i) no Default or Event of Default has occurred and is continuing or would
result from the incurrence of such Indebtedness, (ii) the aggregate amount of
all such Indebtedness outstanding at any one time does not exceed $750,000, and
(iii) such Indebtedness is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent,

 

(m)  unsecured Indebtedness owing to sellers of assets or Equity Interests to a
Loan Party that is incurred by the applicable Loan Party in connection with the
consummation of one or more Permitted Acquisitions so long as (i) the aggregate
principal amount for all such unsecured Indebtedness does not exceed $750,000 at
any one time outstanding, (ii) is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent, and (iii) is otherwise on terms and
conditions (including all economic terms and the absence of covenants)
reasonably acceptable to Agent,

 

33

--------------------------------------------------------------------------------

 

(n)  contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligation of any Loan
Party incurred in connection with the consummation of one or more Permitted
Acquisitions,

 

(o)  Indebtedness composing Permitted Investments,

 

(p)  unsecured Indebtedness incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business,

 

(q)  unsecured Indebtedness of any Borrower owing to employees, former
employees, officers, former officers, directors, or former directors (or any
spouses, ex-spouses, or estates of any of the foregoing) incurred in connection
with the redemption by such Borrower of the Equity Interests of Parent Borrower
that has been issued to such Persons, so long as (i) no Default or Event of
Default has occurred and is continuing or would result therefrom, (ii) the
aggregate amount of all such Indebtedness outstanding at any one time does not
exceed $750,000, and (iii) such Indebtedness is subordinated in right of payment
to the Obligations on terms and conditions reasonably acceptable to Agent,

 

(r)  unsecured Indebtedness of any Borrower or its Subsidiaries in respect of
Earn-Outs owing to sellers of assets or Equity Interests to such Borrower or its
Subsidiaries that is incurred in connection with the consummation of one or more
Permitted Acquisitions so long as such unsecured Indebtedness is on terms and
conditions reasonably acceptable to Agent,

 

(s)  Indebtedness in an aggregate outstanding principal amount not to exceed
$2,500,000 at any time outstanding for all Subsidiaries of each Borrower that
are CFCs; provided, that such Indebtedness is not directly or indirectly
recourse to any of the Loan Parties or of their respective assets,

 

(t)  accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness,

 

(u)  Subordinated Indebtedness, the aggregate outstanding amount of which does
not exceed $5,000,000,

 

(v)  any other unsecured Indebtedness incurred by any Borrower or any of its
Subsidiaries in an aggregate outstanding amount not to exceed $3,000,000 at any
one time, and

 

(w)  Indebtedness in respect of the Term Loan Credit Agreement in an aggregate
principal amount not to exceed $121,000,000, so long as such Indebtedness and
the holders thereof are subject to the terms of the Intercreditor Agreement.

 

“Permitted Intercompany Advances” means loans made by (a) a Loan Party to
another Loan Party, (b) a Subsidiary of a Borrower that is not a Loan Party to
another Subsidiary of a Borrower that is not a Loan Party, (c) a Subsidiary of a
Borrower that is not a Loan Party to a Loan Party, so long as the parties
thereto are party to the Intercompany Subordination Agreement, and (d) a Loan
Party to a Subsidiary of a Borrower that is not a Loan Party so long as (i) the
aggregate amount of all such loans (by type, not by the borrower) does not
exceed $250,000 outstanding at any one time and (ii) at the time of the making
of such loan, no Event of Default has occurred and is continuing or would result
therefrom.

 

“Permitted Investments” means:

 

(a) Investments in cash and Cash Equivalents,

 

34

--------------------------------------------------------------------------------

 

(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,

 

(c) advances made in connection with purchases of goods or services in the
ordinary course of business, including prepaid crop purchases,

 

(d) Investments received in settlement of amounts due to any Loan Party or any
of its Subsidiaries effected in the ordinary course of business or owing to any
Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an account debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries,

 

(e) Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule P-1 to the Agreement,

 

(f) guarantees permitted under the definition of Permitted Indebtedness,

 

(g) Permitted Intercompany Advances,

 

(h) Equity Interests or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,

 

(i) deposits of cash made in the ordinary course of business to secure
performance of operating leases,

 

(j) (i) non-cash loans and advances to employees, officers, and directors of a
Borrower or any of its Subsidiaries for the purpose of purchasing Equity
Interests in Parent Borrower so long as the proceeds of such loans are used in
their entirety to purchase such Equity Interests in Parent Borrower, and
(ii) loans and advances to employees and officers of a Borrower or any of its
Subsidiaries in the ordinary course of business for any other business purpose
and in an aggregate amount not to exceed $750,000 at any one time,

 

(k) Permitted Acquisitions,

 

(l) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any Loan Party in any other Loan Party (other than
capital contributions to or the acquisition of Equity Interests of Parent
Borrower),

 

(m) Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to Indebtedness that is permitted under clause (j) of
the definition of Permitted Indebtedness,

 

(n) equity Investments by any Loan Party in any Subsidiary of such Loan Party
which is required by law to maintain a minimum net capital requirement or as may
be otherwise required by applicable law,

 

(o) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition, and

 

(p) so long as no Event of Default has occurred and is continuing or would
result therefrom, any other Investments in an aggregate amount not to exceed
$1,000,000 during the term of the Agreement.

 

35

--------------------------------------------------------------------------------

 

“Permitted Liens” means

 

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

(b) Liens for unpaid taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) do not have priority over
Agent’s Liens and the underlying taxes, assessments, or charges or levies are
the subject of Permitted Protests,

 

(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3
of the Agreement,

 

(d) Liens set forth on Schedule P-2 to the Agreement; provided, that to qualify
as a Permitted Lien, any such Lien described on Schedule P-2 to the Agreement
shall only secure the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,

 

(e) the interests of lessors under operating leases and licensors under license
agreements entered into in the ordinary course of business (so long as, in the
case of exclusive licenses, title to the licensed property is not transferred as
a matter of law),

 

(f) purchase money Liens or the interests of lessors under Capital Leases to the
extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as (i) such Lien attaches only to the asset purchased or acquired
and the proceeds thereof and the other assets financed pursuant to this clause
(f) by the lender providing such Permitted Purchase Money Indebtedness, and
(ii) such Lien only secures the Indebtedness that was incurred to acquire the
asset purchased or acquired and the other assets financed pursuant to this
clause (f) by the lender providing such Permitted Purchase Money Indebtedness or
any Refinancing Indebtedness in respect thereof,

 

(g) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers (including suppliers’
statutory Liens arising under Food Products Laws), incurred in the ordinary
course of business and not in connection with the borrowing of money, and which
Liens either (i) are for sums not yet delinquent, or (ii) are the subject of
Permitted Protests,

 

(h) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries
obligations in connection with worker’s compensation or other unemployment
insurance,

 

(i) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries
obligations in connection with the making or entering into of bids, tenders, or
leases in the ordinary course of business and not in connection with the
borrowing of money,

 

(j) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries
reimbursement obligations with respect to surety or appeal bonds obtained in the
ordinary course of business,

 

(k) with respect to any Real Property, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof,

 

(l) licenses of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary course of business (so long as, in the case of exclusive
licenses, title to the licensed property is not transferred as a matter of law),

 

(m) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

 

36

--------------------------------------------------------------------------------

 

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such Deposit Accounts in the ordinary course of
business,

 

(o) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness,

 

(p) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods,

 

(q) Liens solely on any cash earnest money deposits made by a Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
with respect to a Permitted Acquisition,

 

(r) Liens assumed by any Borrower or its Subsidiaries in connection with a
Permitted Acquisition that secure Acquired Indebtedness,

 

(s) other Liens which do not secure Indebtedness for borrowed money or letters
of credit and as to which the aggregate amount of the obligations secured
thereby does not exceed $1,000,000,

 

(t) Liens securing Indebtedness described in clause (w) of the definition of
Permitted Indebtedness, so long as such Liens and the holders thereof are
subject to the terms of the Intercreditor Agreement, and

 

(u) Liens against assets of CFCs to secure Indebtedness described in clause
(s) of the Permitted Indebtedness definition and as to which the aggregate
amount of the obligations secured thereby does not exceed $2,500,000.

 

“Permitted Protest” means the right of any Borrower or any of its Subsidiaries
to protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on such Borrower’s or its Subsidiaries’ books
and records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by such Borrower or its
Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while
any such protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of Agent’s Liens.

 

“Permitted Purchase Money Indebtedness” means, as of any date of
determination, Indebtedness (other than the Obligations, but including
Capitalized Lease Obligations), incurred after the Closing Date and at the time
of, or within 120 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof, in an
aggregate principal amount outstanding at any one time not in excess of
$15,000,000.

 

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

 

“Platform” has the meaning specified therefor in Section 17.9(c) of the
Agreement.

 

“Post-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.14 of the Agreement.

 

37

--------------------------------------------------------------------------------

 

“Pre-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.14 of the Agreement.

 

“Projections” means Borrowers’ forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Borrowers’ historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)  with respect to a Lender’s obligation to make all or a portion of the
Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the Revolving Loans, and with
respect to all other computations and other matters related to the Commitments
or the Revolving Loans, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of
all Lenders,

 

(b)  with respect to a Lender’s obligation to participate in the Letters of
Credit, with respect to such Lender’s obligation to reimburse Issuing Bank, and
with respect to such Lender’s right to receive payments of Letter of Credit
Fees, and with respect to all other computations and other matters related to
the Letters of Credit, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of
all Lenders; provided, that if all of the Revolving Loans have been repaid in
full and all Commitments have been terminated, but Letters of Credit remain
outstanding, Pro Rata Share under this clause shall be determined as if the
Commitments had not been terminated and based upon the Commitments as they
existed immediately prior to their termination, and

 

(c)  with respect to all other matters and for all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 15.7 of the Agreement), the percentage obtained by dividing (i) the
Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to Section 13.1; provided, that if
all of the Loans have been repaid in full, all Letters of Credit have been made
the subject of Letter of Credit Collateralization, and all Commitments have been
terminated, Pro Rata Share under this clause shall be determined as if the
Revolving Loan Exposures had not been repaid, collateralized, or terminated and
shall be based upon the Revolving Loan Exposures as they existed immediately
prior to their repayment, collateralization, or termination.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of
the Agreement.

 

“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
fair market value of any Equity Interests of Parent Borrower issued in
connection with such Acquisition and including the maximum amount of Earn-Outs),
paid or delivered by a Borrower or one of its Subsidiaries in connection with
such Acquisition (whether paid at the closing thereof or payable thereafter and
whether fixed or contingent), but excluding therefrom (a) any cash of the seller
and its Affiliates used to fund any portion of such consideration and (b) any
cash or Cash Equivalents acquired in connection with such Acquisition.

 

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Borrowers and their Subsidiaries that
is in Deposit Accounts or in Securities Accounts, or any combination thereof,
and which such Deposit Accounts or Securities Accounts are (i) the subject of
Control Agreements and are maintained by a branch office of a bank or securities
intermediary located within the United States or (ii) maintained by a branch
office of Agent and Agent has a first-priority, perfected security interest
therein.

 

38

--------------------------------------------------------------------------------

 

“Qualified ECP Guarantor” means, in respect of any Hedge Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
Obligation or grant of the relevant security interest becomes effective with
respect to such Hedge Obligation or such other person as constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualified Equity Interest” means and refers to (a) any Equity Interests issued
by Parent Borrower that is not a Disqualified Equity Interest and (b) any Equity
Interests (other than Disqualified Equity Interests) issued by a Subsidiary to
Parent Borrower or another Loan Party in connection with its formation and
acquisition (in the case of a Permitted Acquisition).

 

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Borrower or one of its Subsidiaries and the
improvements thereto.

 

“Real Property Collateral” means (a) the Real Property identified on Schedule
R-1 to the Agreement, (b) any Real Property hereafter acquired by any Borrower
or one of its Subsidiaries with a fair market value in excess of $1,000,000 and
(c) to the extent not included in clauses (a) and (b), the Real Property subject
to the Mortgages required to be delivered pursuant to Schedule 3.1 and Schedule
3.6.

 

“Recall Costs” means any costs or expenses, whether in cash or non-cash, related
to the recall of Fresh Frozen or related products as announced on April 23,
2015, including co-packing arrangement costs, excess distribution or storage
costs, impairment charges, legal and regulatory expenses, lost sales or higher
expense impact on EBITDA, fines, slotting expenses, buy out of competitor
inventory and any other cost or expense that is reasonably attributable to such
recall.

 

“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(c), to establish and maintain (including reserves for
rebates, discounts, warranty claims, and returns) with respect to the Eligible
Accounts or the Maximum Revolver Amount.

 

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

 

“Reference Period” has the meaning set forth in the definition of EBITDA.

 

“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness so long as:

 

(a) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and the fees and expenses
incurred in connection therewith and by the amount of unfunded commitments with
respect thereto,

 

(b) such refinancings, renewals, or extensions do not result in a shortening of
the average weighted maturity (measured as of the refinancing, renewal, or
extension) of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are or could reasonably be
expected to be materially adverse to the interests of the Lenders,

 

(c) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include

 

39

--------------------------------------------------------------------------------

 

subordination terms and conditions that are at least as favorable to the Lender
Group as those that were applicable to the refinanced, renewed, or extended
Indebtedness, and

 

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended.

 

“Register” has the meaning set forth in Section 13.1(h) of the Agreement.

 

“Registered Loan” has the meaning set forth in Section 13.1(h) of the Agreement.

 

“Related Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course and that is administered, advised or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.

 

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of
the Agreement.

 

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.

 

“Required Availability” means that the Liquidity exceeds $10,000,000.

 

“Required Lenders” means, at any time, Lenders having or holding more than 50%
of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the
Revolving Loan of any Defaulting Lender shall be disregarded in the
determination of the Required Lenders and (ii) at any time there are 2 or more
Lenders, “Required Lenders” must include at least 2 Lenders (who are not
Affiliates of one another).

 

“Reserves” means, as of any date of determination, those reserves (other than
Receivable Reserves, Bank Product Reserves, Inventory Reserves, FSA Reserves and
Food Products Payable Reserves) that Agent deems necessary or appropriate, in
its Permitted Discretion and subject to Section 2.1(c), to establish and
maintain (including, but not limited to, reserves with respect to (a) sums that
any Borrower or its Subsidiaries are required to pay under any Section of the
Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and has failed to pay, and (b) amounts owing by any Borrower or its
Subsidiaries to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral, which Lien or trust, in the Permitted Discretion of Agent
likely would have a priority superior to Agent’s Liens (such as Liens or trusts
in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers,
or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral) with respect to the Borrowing Base or the Maximum Revolver Amount.

 

“Restricted Payment” means to (a) declare or pay any dividend or make any other
payment or distribution, directly or indirectly, on account of Equity Interests
issued by Parent Borrower (including any payment in connection with any merger
or consolidation involving Parent Borrower) or to the direct or indirect holders
of Equity Interests issued by Parent Borrower in their capacity as such (other
than dividends or

 

40

--------------------------------------------------------------------------------

 

distributions payable in Qualified Equity Interests issued by Parent Borrower,
or (b) purchase, redeem, make any sinking fund or similar payment, or otherwise
acquire or retire for value (including in connection with any merger or
consolidation involving Parent Borrower but excluding any Equity Interests
deemed repurchased upon a cashless exercise of options or warrants) any Equity
Interests issued by Parent Borrower, and (c) make any payment to retire, or to
obtain the surrender of, any outstanding warrants, options, or other rights to
acquire Equity Interests of Parent Borrower now or hereafter outstanding, and
(d) make, or cause or suffer to permit any Borrower or any of its Subsidiaries
to make, any payment or prepayment of principal of, premium, if any, or interest
on, or redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness not permitted by the subordination terms for such
Indebtedness.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective
Advances), plus (b) the amount of the Letter of Credit Usage.

 

“Revolving Loan Exposure” means, with respect to any Lender, as of any date of
determination (a) prior to the termination of the Commitments, the amount of
such Lender’s Commitment, and (b) after the termination of the Commitments, the
aggregate outstanding principal amount of the Revolving Loans of such Lender.

 

“Revolving Loans” has the meaning specified therefor in Section 2.1(a) of the
Agreement.

 

“Sanctioned Country” means, at any time, a country, region or territory that is,
or whose government is,  the subject or target of any Sanctions.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union or
any EU member state, (b) any Person located, organized or resident in a
Sanctioned Country or (c) any Person controlled by any such Person.

 

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

 

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the
Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

 

41

--------------------------------------------------------------------------------

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

 

“Solvent” means, with respect to any Person as of any date of determination,
that (a) at fair valuations, the sum of such Person’s debts (including
contingent liabilities) is less than all of such Person’s assets, (b) such
Person is not engaged or about to engage in a business or transaction for which
the remaining assets of such Person are unreasonably small in relation to the
business or transaction or for which the property remaining with such Person is
an unreasonably small capital, and (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is “solvent” or not “insolvent”, as applicable within the
meaning given those terms and similar terms under applicable laws relating to
fraudulent transfers and conveyances.  For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Specified Financial Covenant” has the meaning specified therefor in
Section 9.3(a) of the Agreement.

 

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or
foreign law or letter of credit practices applicable in the city in which
Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

 

“Subordinated Indebtedness” means any unsecured Indebtedness of any Borrower or
its Subsidiaries incurred from time to time that is subordinated in right of
payment to the Obligations and (a) that is only guaranteed by the Guarantors,
(b) that is not subject to scheduled amortization, redemption, sinking fund or
similar payment and does not have a final maturity, in each case, on or before
the date that is six months after the Maturity Date, (c) that does not include
any financial covenants or any covenant or agreement that is more restrictive or
onerous on any Loan Party in any material respect than any comparable covenant
in the Agreement and is otherwise on terms and conditions reasonably acceptable
to Agent, (d) shall be limited to cross-payment default and cross-acceleration
to designated “senior debt” (including the “Obligations”), and (e) the terms and
conditions of the subordination are reasonably acceptable to Agent.

 

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the Equity Interests having ordinary voting power to elect a majority
of the Board of Directors of such corporation, partnership, limited liability
company, or other entity.

 

“Supermajority Lenders” means, at any time, Lenders having or holding more than
66 2/3% of the sum of the aggregate Revolving Loan Exposure of all Lenders;
provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be
disregarded in the determination of the Required Lenders and (ii) at any time
there are 2 or more Lenders, “Supermajority Lenders” must include at least 2
Lenders (who are not Affiliates of one another).

 

“Swing Lender” means Wells Fargo or any other Lender that, at the request of
Borrowers and with the consent of Agent agrees, in such Lender’s sole
discretion, to become the Swing Lender under Section 2.3(b) of the Agreement.

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.

 

42

--------------------------------------------------------------------------------

 

“Swing Loan Exposure” means, as of any date of determination with respect to any
Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

 

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein, and all
interest, penalties or similar liabilities with respect thereto.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.

 

“Term Loan Agent” mean BSP Agency, LLC.

 

“Term Loan Credit Agreement” means that certain Credit Agreement, dated as of
the Closing Date, by and among Parent Borrower, the Lenders (as defined therein)
party thereto, and Term Loan Agent, as amended, modified, supplemented or
restated from time to time in accordance with the terms thereof, the Agreement,
and the Intercreditor Agreement.

 

“Term Loan Documents” means the Term Loan Credit Agreement and the other “Loan
Documents” as such term is defined in the Term Loan Credit Agreement and any
documents, instruments and agreements entered into in connection with any
amendment, supplement, restatement, replacement or refinancing thereof, as
amended, modified, supplemented or restated from time to time in accordance with
the terms of the Term Loan Credit Agreement, this Agreement, and the
Intercreditor Agreement.

 

“Term Loan Maturity Date” “ means “Maturity Date” as such term is defined in the
Term Loan Credit Agreement.

 

“Term Loan Obligations” means “Obligations” as such term is defined in the Term
Loan Credit Agreement.

 

“Term Loan Priority Collateral” has the meaning specified therefor in the
Intercreditor Agreement.

 

“Test Period” shall mean, on any date of determination, the period of twelve
consecutive months (taken as one accounting period) of the Borrowers then most
recently ended for which financial statements have been delivered pursuant to
Section 5.1 of the Agreement.

 

“Trademark Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any subsequent revision thereof adopted by the
International Chamber of Commerce on the date such Letter of Credit is issued.

 

“United States” means the United States of America.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of the
Agreement.

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

 

43

--------------------------------------------------------------------------------

 

“Withdrawal Liability” means liability with respect to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

44

--------------------------------------------------------------------------------