Exhibit 10.1

 

Execution Version

 

 

 

 

 

 

 

 

 

 

$16,000,000

 

Senior Secured Credit Agreement

 

Dated as of May 24, 2018

 

Among

 

LogicMark, LLC
as Borrower,

 

The Lenders Party Hereto,

 

and

 

Sagard Holdings Manager LP
as Administrative Agent and Collateral Agent

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

Table of Contents

 

Section Heading Page       Article I Definitions and Accounting Terms 1      
Section 1.01. Defined Terms 1 Section 1.02. Other Interpretive Provisions 31
Section 1.03. Accounting Terms 31 Section 1.04. Rounding 32 Section 1.05.
References to Agreements, Laws, Etc. 32 Section 1.06. Times of Day 32 Section
1.07. Timing of Payment or Performance 32       Article II The Commitments and
Credit Extensions 33       Section 2.01. The Term Loan 33 Section 2.02.
Prepayments 33 Section 2.03. Repayment of Loans 36 Section 2.04. Interest 36
Section 2.05. Fees 37 Section 2.06. Computation of Interest and Fees 37 Section
2.07. Evidence of Indebtedness 37 Section 2.08. Payments Generally 37 Section
2.09. Sharing of Payments 39 Section 2.10. LIBO Not Determinable,
Impracticability or Illegality 39 Section 2.11. Removal or Replacement of a
Lender 40       Article III Taxes, Increased Costs Protection and Illegality 40
      Section 3.01. Taxes 40 Section 3.02. Illegality 44 Section 3.03. Increased
Cost and Reduced Return; Capital Adequacy 45 Section 3.04. Matters Applicable to
All Requests for Compensation 46 Section 3.05. Survival 46       Article IV
Conditions Precedent 46       Section 4.01. Conditions to the Closing Date 46  
    Article V Representations and Warranties 50       Section 5.01. Existence,
Qualification and Power; Compliance with Laws 50 Section 5.02. Authorization; No
Contravention 50 Section 5.03. Governmental Authorization; Other Consents 51
Section 5.04. Binding Effect 51 Section 5.05. Financial Statements; No Material
Adverse Effect 51 Section 5.06. Litigation 51 Section 5.07. Ownership of
Property; Liens 51

 

 -i- 

 

 

Section 5.08. Perfection of Security Interests 52 Section 5.09. Environmental
Compliance 52 Section 5.10. Taxes 53 Section 5.11. Compliance with ERISA 54
Section 5.12. Labor Matters 54 Section 5.13. Insurance 54 Section 5.14.
Subsidiaries; Equity Interests 54 Section 5.15. Margin Regulations; Investment
Company Act; PATRIOT Act 55 Section 5.16. Disclosure 55 Section 5.17.
Intellectual Property 56 Section 5.18. Solvency 56 Section 5.19. Material
Agreements 56       Article VI Affirmative Covenants 56       Section 6.01.
Financial Statements 56 Section 6.02. Certificates; Reports; Other Information
58 Section 6.03. Notice Requirements; Other Information 60 Section 6.04.
Environmental Matters 62 Section 6.05. Maintenance of Existence 63 Section 6.06.
Maintenance of Properties 64 Section 6.07. Maintenance of Insurance 64 Section
6.08. Compliance with Laws 64 Section 6.09. Books and Records 64 Section 6.10.
Inspection Rights/Lender Meetings 65 Section 6.11. Covenant to Guarantee
Obligations and Give Security 65 Section 6.12. Use of Proceeds 68 Section 6.13.
Further Assurances 68 Section 6.14. Taxes 69 Section 6.15. End of Fiscal Years;
Fiscal Quarters 69 Section 6.16. ERISA 69 Section 6.17. Board Observer Rights 70
Section 6.18. Post-Closing Obligations 70 Section 6.19. Account Control
Agreement 70       Article VII Negative Covenants 70       Section 7.01. Liens
70 Section 7.02. Investments 72 Section 7.03. Indebtedness 73 Section 7.04.
Fundamental Changes 74 Section 7.05. Dispositions 74 Section 7.06. Restricted
Payments 75 Section 7.07. Change in Nature of Business 76 Section 7.08.
Transactions with Affiliates 76 Section 7.09. Prepayments of Certain
Indebtedness; Modifications of Certain Indebtedness and Material Agreements 76

 

 -ii- 

 

 

Section 7.10. Negative Pledge 77 Section 7.11. Amendments to Constitutive
Documents 77 Section 7.12. Sale Leasebacks 77 Section 7.13. Financial Covenants
78 Section 7.14. Activities of Parent 79 Section 7.15. Accounting Changes 79
Section 7.16. OFAC 79       Article VIII Events of Default and Remedies 79      
Section 8.01. Events of Default 79 Section 8.02. Remedies Upon Event of Default
82 Section 8.03. Application of Funds 83 Section 8.04. Other Amounts Due 84    
  Article IX Administrative Agent and Other Agents 84       Section 9.01.
Appointment and Authorization of Agents 84 Section 9.02. Delegation of Duties 85
Section 9.03. Liability of Agents 86 Section 9.04. Reliance by Agents 86 Section
9.05. Notice of Default 87 Section 9.06. Credit Decision; Disclosure of
Information by Agents 87 Section 9.07. Indemnification of Agents 88 Section
9.08. Agents in their Individual Capacities 88 Section 9.09. Successor Agents 89
Section 9.10. Administrative Agent May File Proofs of Claim 89 Section 9.11.
Release of Collateral and Guaranty 90       Article X Miscellaneous 91      
Section 10.01. Amendments, Etc. 91 Section 10.02. Notices and Other
Communications 93 Section 10.03. No Waiver; Cumulative Remedies 94 Section
10.04. Costs and Expenses 95 Section 10.05. Indemnification by Borrower 95
Section 10.06. Payments Set Aside 96 Section 10.07. Successors and Assigns 97
Section 10.08. Confidentiality 100 Section 10.09. Setoff 101 Section 10.11.
Integration 101 Section 10.12. Survival of Representations and Warranties 102
Section 10.13. Severability 102 Section 10.14. Governing Law 102 Section 10.15.
Waiver of Right To Trial By Jury 103 Section 10.16. Binding Effect 103 Section
10.17. Lender Action 103 Section 10.18. PATRIOT Act 103 Section 10.19. No
Advisory or Fiduciary Responsibility 104 Section 10.20. OID Legend 104

 

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Schedules

 

Schedule 1 — Guarantors Schedule 2.01(a) — Term Loan Commitments Schedule
2.01(b) — Warrant Shares Schedule 5.02 — Authorizations; No Contravention
Schedule 5.03 — Governmental Authorization; Other Consents Schedule 5.07(b) —
Real Property Schedule 5.08 — Collateral Filings and Perfection Matters Schedule
5.09 — Environmental Compliance Schedule 5.10 — Taxes Schedule 5.14 —
Subsidiaries and Other Equity Investments Schedule 5.17 — Intellectual Property
Schedule 5.19 — Material Agreements Schedule 6.18 — Post-Closing Obligations
Schedule 7.01 — Existing Liens Schedule 7.02 — Existing Investments Schedule
7.03 — Surviving Indebtedness Schedule 10.02 — Administrative Agent’s Office,
Certain Addresses for Notices

 

Exhibits

 

Exhibit A — Form of Prepayment Notice Exhibit B — Form of Note Exhibit C-1 —
Form of Monthly Compliance Certificate Exhibit C-2 — Form of Quarterly/Annual
Compliance Certificate Exhibit D — Form of Assignment and Assumption Exhibit E —
Form of Guaranty Exhibit F — Form of Security Agreement Exhibit G — Form of
Securities Pledge Agreement Exhibit H — Form of Intellectual Property Security
Agreement Exhibit I — Form of Officer’s Certificate Exhibit J — Form of Solvency
Certificate Exhibit K — Form of Mortgage Exhibit L — Form of Warrant Certificate

 

 -iv- 

 

 

Senior Secured Credit Agreement

 

This Senior Secured Credit Agreement (this “Agreement”) is entered into as of
May 24, 2018 among LogicMark, LLC, a Delaware limited liability company
(“Borrower”), each financial institution from time to time party hereto as
lender (each, a “Lender” and collectively, the “Lenders”), and Sagard Holdings
Manager LP, as administrative agent for the Lenders (in such capacity, and
together with its successors and assigns, the “Administrative Agent”) and as
collateral agent for the Lenders (in such capacity, and together with its
successors and assigns, the “Collateral Agent”).

 

Recitals

 

Whereas, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Article I hereof;

 

Whereas, Lenders have agreed to extend a Term Loan pursuant to the terms and
conditions hereof;

 

Now, Therefore, in consideration of the premises and the mutual covenants and
agreements herein contained and of the Term Loan, the parties hereto agree as
follows:

 

Article I

 

Definitions and Accounting Terms

 

Section 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:

 

“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).

 

“Administrative Agent” has the meaning specified in the first paragraph of this
Agreement or any successor administrative agent appointed in accordance with
Section 9.09.

 

“Administrative Agent’s Office” means, the Administrative Agent’s address and,
as appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify Borrower and
the Lenders.

 

   

 

 

“Affiliate” means, in respect of any Person:

 

(a) any Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person; and for the purposes of this definition,
“control” (including, with correlative meanings, the terms “controlled by” or
“under common control with”) means the power to direct or cause the direction of
the management and policies of any Person, whether through the ownership of
voting Equity Interests or by contract or otherwise;

 

(b) any Person who beneficially owns or holds 10% or more of any class of shares
(or, in the case of a Person that is not a corporation, 10% or more of the
partnership or other Equity Interests) of such Person; or

 

(c) any Person, 10% or more of any class of shares (or in the case of a Person
that is not a corporation, 10% or more of the partnership or other Equity
Interests) of which is beneficially owned or held by such Person or a Subsidiary
of such Person.

 

“Agent-Related Persons” means the Agents, together with their respective
Affiliates, and the officers, directors, employees, partners, agents and
attorneys-in-fact of such Agents and their Affiliates.

 

“Agents” means, collectively, the Administrative Agent and the Collateral Agent.

 

“Aggregate Commitments” means the Term Loan Commitments of all the Lenders as in
effect from time to time. As of the Closing Date, the amount of the Aggregate
Commitments is $16,000,000.

 

“Agreement” has the meaning specified in the introductory paragraph hereto.

 

“Annual Excess Cash Flow” has the meaning specified in the definition of “Excess
ECF Adjustment”.

 

“Applicable Lending Office” means for any Lender, such Lender’s office, branch
or affiliate as notified to the Administrative Agent and Borrower or as
otherwise specified in the Assignment and Assumption pursuant to which such
Lender became a party hereto, any of which offices may, subject to
Section 3.01(e) and Section 3.02, be changed by such Lender upon ten (10) days’
prior written notice to the Administrative Agent and Borrower; provided that for
the purposes of the definition of “Excluded Taxes” and Section 3.01, any such
change shall be deemed an assignment made pursuant to an Assignment and
Assumption.

 

“Approved Fund” means any Fund that is administered, advised or managed by (a) a
Lender, (b) an Affiliate of a Lender, or (c) an entity or Affiliate of an entity
that administers, advises or manages a Lender.

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit D.

 

“Attorney Costs” means and includes all reasonable and documented fees,
out-of-pocket expenses and actual disbursements of any law firm or, other than
with respect to the fees and expenses set forth in Section 10.04(a) and (b),
other external legal counsel.

 

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“Attributable Indebtedness” means, at any date, (a) in respect of any Capital
Lease Obligation (other than a lease resulting from a Sale Leaseback) of any
Person, the capitalized amount thereof that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP, (b) in respect of
any Synthetic Lease Obligation of any Person, the capitalized or principal
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease or other agreement were accounted for as a Capital
Lease, (c) in respect of any Sale Leaseback, the lesser of (i) the present
value, discounted in accordance with GAAP at the interest rate implicit in the
related lease, of the obligations of the lessee for net rental payments over the
remaining term of such lease (including any period for which such lease has been
extended or may, at the option of the lessor be extended) and (ii) the fair
market value of the assets subject to such transaction, and (d) all Synthetic
Debt of such Person.

 

“Audited Financial Statements” means the audited financial statements described
in Section 4.01(e)(i).

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

 

“Board” has the meaning specified in Section 6.17.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the Laws of, or are
in fact closed in, the State of New York; provided, however, that when used in
connection with determining the LIBO Rate, the term “Business Day” shall exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.

 

“Capital Expenditures” means, for any period and with respect to any Person, any
and all expenditures made by such Person or any of its Subsidiaries in such
period for assets added to or reflected in its property, plant and equipment
accounts or other similar capital asset accounts or comparable items or any
other capital expenditures that are, or should be, set forth as “additions to
plant, property and equipment” on the consolidated financial statements of such
Person and its Subsidiaries prepared in accordance with GAAP, whether such asset
is purchased for cash or financed as an account payable or by the incurrence of
Indebtedness, accrued as a liability or otherwise.

 

“Capital Lease” means, with respect to any Person, any leasing or similar
arrangement conveying the right to use any property, whether real or personal
property, or a combination thereof, by that Person as lessee that, in conformity
with GAAP, is required to be accounted for as a capital lease on the balance
sheet of such Person.

 

 -3- 

 

 

“Capital Lease Obligation” means, with respect to any Person, all monetary or
financial obligations of such Person and its Subsidiaries under any Capital
Leases, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP and the stated maturity thereof shall
be the date of the last payment of rent or any other amount due under such lease
prior to the first date on which such lease may be terminated by the lessee
without payment of a penalty; provided that any obligations that were not
required to be included on the balance sheet of such Person as capital lease
obligations when incurred but are subsequently re-characterized as capital lease
obligations due to a change in accounting rules after the Closing Date shall for
all purposes hereunder not be treated as a Capital Lease Obligation.

 

“Cash Equivalents” means any of the following, to the extent owned by the Loan
Parties free and clear of all Liens other than Liens created under the
Collateral Documents and having a maturity of not greater than 365 days from the
date of acquisition thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of deposit of or time
deposits with any domestic commercial bank having capital and surplus in excess
of $500,000,000, (c) repurchase obligations of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than thirty (30) days, with respect to securities issued or fully guaranteed or
insured by the Government of the United States, (d) securities with maturities
of 365 days or less from the date of acquisition that are issued or fully
guaranteed by any state, district or territory of the United States, by any
political subdivision or taxing authority of any such state, district or
territory or by any foreign government, the securities of which state, district
or territory, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s, (e) securities with maturities of six
(6) months or less from the date of acquisition backed by standby letters of
credit issued by any commercial bank satisfying the requirements of clause (b)
of this definition, (f) money market mutual or similar funds that invest
substantially all of their assets in one or more type of securities satisfying
the requirements of clauses (a) through (e) of this definition, or
(g) Investments, classified in accordance with GAAP as Current Assets of the
Loan Parties, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by financial
institutions having capital of at least $500,000,000, and the portfolios of
which are limited solely to Investments of the character, quality and maturity
described in clauses (a) and (b) of this definition.

 

“Casualty Event” means any casualty, loss, damage, destruction or other similar
loss with respect to real or personal property or improvements.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“CFC” means an entity that is a controlled foreign corporation within the
meaning of Section 957 of the Code and with respect to which any Loan Party is a
“United States shareholder,” within the meaning of Section 951(b) of the Code.

 

“CFC Pledge Restrictions” has the meaning specified in Section 6.11(h).

 

 -4- 

 

 

“Change in Law” means (a) the adoption of any law, treaty, order, policy, rule
or regulation after the date of this Agreement, (b) any change in any law,
treaty, order, policy, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) the making or issuance of any guideline, request or directive
issued or made after the date hereof by any central bank or other Governmental
Authority (whether or not having the force of law); provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
implementation thereof and (y) all requests, rules, guidelines, requirements or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States regulatory authorities, in each case pursuant to Basel III, shall
in each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted, issued or implemented.

 

“Change of Control” means (a) any Person or “group” (within the meaning of Rules
13d-3 and 13d-5 under the Exchange Act) (i) shall have acquired beneficial
ownership of 51% or more on a fully diluted basis of the voting and/or economic
interest in the Equity Interests of Parent or (ii) shall have obtained the power
(whether or not exercised) to elect a majority of the members of the board of
directors (or similar governing body) of Parent; (b) the majority of the seats
(other than vacant seats) on the board of directors (or similar governing body)
of Parent cease to be occupied by Persons who either (i) were members of the
board of directors of Parent on the Closing Date, or (ii) were nominated for
election by the board of directors of Parent, a majority of whom were directors
on the Closing Date or whose election or nomination for election was previously
approved by a majority of such directors; or (c) Parent shall cease to own 100%
of the voting and economic Equity Interests of its Subsidiaries.

 

“Closing Date” means the date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time.

 

“Collateral” means all the “Collateral” as defined in any Collateral Document
and all other property or assets that are required under the terms of the Loan
Documents to be subject to Liens in favor of the Administrative Agent and/or the
Collateral Agent for the benefit of the Secured Parties and shall include the
Mortgaged Properties, if any.

 

“Collateral Agent” has the meaning specified in the first paragraph of this
Agreement or any successor collateral agent appointed in accordance with
Section 9.09.

 

“Collateral and Guarantee Requirement” means, at any time, the requirement that:

 

(a) the Collateral Agent shall have received each Collateral Document required
to be delivered on the Closing Date pursuant to Section 4.01 or pursuant to
Section 6.11 or Section 6.13 at such time, in each case duly executed by each
Loan Party party thereto;

 

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(b) all Obligations shall have been unconditionally guaranteed (the
“Guarantees”) jointly and severally on a senior basis by each Subsidiary of
Parent (other than Borrower) and Borrower and their respective Subsidiaries,
(other than any Subsidiary that is treated as an entity disregarded from its
owner for U.S. federal income tax purposes and is Wholly-owned by a CFC, subject
to Section 6.11(h)), including, as of the Closing Date, those that are listed on
Schedule 1 hereto (each, a “Guarantor”);

 

(c) the Obligations and the Guarantees shall have been secured by a first
priority security interest in (i) all the Equity Interests of the Loan Parties
(other than Parent and any Subsidiary that is treated as an entity disregarded
from its owner for U.S. federal income tax purposes and is Wholly-owned by a
CFC); provided that any Equity Interests constituting “stock entitled to vote”
within the meaning of Treasury Regulations Section 1.956-2(c)(2) shall be
treated as voting Equity Interests for purposes of this clause (c), (ii) 65% of
the issued and outstanding voting Equity Interests and 100% of the non-voting
Equity Interests of each Subsidiary that is treated as a CFC for U.S. federal
income tax purposes and that is directly held by the Loan Parties (other than
another CFC) and (iii) all of the Equity Interests of any Subsidiary that is a
Foreign Subsidiary (other than a CFC) that is directly held by the Loan Parties
(other than any Subsidiary that is a CFC or that is treated as an entity
disregarded from its owner for U.S. federal income tax purposes and is
Wholly-owned by a CFC), and, in the case of each of clauses (i), (ii) and (iii)
above, the Collateral Agent shall have received all certificates or other
instruments (if any) representing such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed in blank;

 

(d) the Obligations and the Guarantees shall have been secured by a
first-priority security interest in all Indebtedness of any Loan Party that is
owing to any other Loan Party, which shall be evidenced by a promissory note or
an instrument and shall have been pledged pursuant to the applicable Collateral
Document, and the Collateral Agent shall have received all such promissory notes
or certificated instruments, together with note powers or other instruments of
transfer with respect thereto endorsed in blank;

 

(e) except to the extent otherwise provided hereunder or under any Collateral
Document, the Obligations and the Guarantees shall have been secured by a
perfected first priority security interest (subject to Liens permitted under
Section 7.01) in, and mortgages on, substantially all tangible and intangible
assets of the Loan Parties (including but not limited to accounts receivable,
deposit accounts, inventory, machinery and equipment, investment property, cash,
Intellectual Property, other general intangibles, owned real property,
intercompany Indebtedness and proceeds of the foregoing); provided, however,
that (v) no security interest in fee-owned real property other than Material
Owned Property shall be required, (w) no security interest in motor vehicles and
other assets subject to certificates of title shall be required, (x) subject to
Section 6.13, no security interests (including in respect of interests in
partnerships, joint ventures and other non-Wholly-owned entities) to the extent
(and for the duration) that the granting of a security interest in such asset
would be prohibited by applicable law or agreements containing enforceable
anti-assignment clauses not overridden by the Uniform Commercial Code or other
applicable law shall be required, (y) any security interest in Intellectual
Property shall exclude any intent-to-use trademark application prior to the
filing of a “Statement of Use” or “Amendment to Allege Use” with respect
thereto, to the extent, if any, that, and solely during the period, if any, in
which, the grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark application under applicable
federal law and (z) no security interest in property created or incurred
pursuant to Section 7.01(h) subject to Capital Lease or purchase money financing
permitted under Section 7.03(c) to the extent (and for the duration) that the
granting of a security interest in such asset would be prohibited under the
agreement evidencing or otherwise governing the related Indebtedness and not
overridden by the Uniform Commercial Code or other applicable law (the assets
described in the foregoing clauses (v) through (z), collectively, “Excluded
Property”).

 

 -6- 

 

 

(f) none of the Collateral shall be subject to any Liens other than Liens
permitted by Section 7.01; and

 

(g) the Administrative Agent shall have received the Mortgages with respect to
each Material Owned Property required to be delivered pursuant to this
Collateral and Guarantee Requirement or Section 6.11 at such time as set forth
therein (the “Mortgaged Properties”), together with:

 

(i) evidence that counterparts of the Mortgages with respect to the Mortgaged
Properties have been duly executed, acknowledged and delivered and are in form
suitable for filing or recording in all filing or recording offices as necessary
to create a valid first and subsisting Lien on the property described therein in
favor of the Collateral Agent for the benefit of the Secured Parties (subject
only to Liens of the nature referred to in Section 5.07(b)) along with evidence
reasonably satisfactory to the Administrative Agent that all filing and
recording taxes and fees payable with respect to the Mortgages have been paid or
received by the issuer of the Mortgage Policies (or, in the event that the
Administrative Agent waives a Mortgage Policy for any Mortgaged Property, an
escrow agent reasonably satisfactory to the Administrative Agent);

 

(ii) fully paid American Land Title Association Lender’s Extended Coverage (or
other reasonably satisfactory coverage if such coverage is not available in the
applicable jurisdiction) title insurance policies (the “Mortgage Policies”) in
form and substance reasonably satisfactory to the Administrative Agent, together
with such endorsements that are reasonably required by the Administrative Agent
and which lenders typically receive in the jurisdiction where the Mortgaged
Property is located, in an amount reasonably acceptable to the Administrative
Agent, issued by title insurers reasonably acceptable to the Administrative
Agent and insuring the Mortgages to be valid first and subsisting Liens on the
real property described therein, in a customary form in the jurisdiction where
the Mortgaged Property is located free and clear of all Liens (including, but
not limited to, mechanics’ and materialmen’s Liens) and encumbrances (provided
that if a survey is not available pursuant to paragraph (iii) below, such
Mortgage Policies may include the standard survey exception and the
Administrative Agent shall not require any endorsement that will require
delivery of a survey), except Liens of the nature referred to in
Section 5.07(b);

 

 -7- 

 

 

(iii) American Land Title Association/American Congress on Surveying and Mapping
form surveys, for which all necessary fees (where applicable) have been paid,
dated no more than ninety (90) days before the date of delivery of such surveys
(or such date as the Administrative Agent agrees in its reasonable discretion),
certified to the Administrative Agent and the issuer of the Mortgage Policies in
a manner reasonably satisfactory to the Administrative Agent by a land surveyor
duly registered and licensed in the States in which the real property described
in such surveys is located, showing no material defects except Liens of the
nature referred to in Section 5.07(b) and otherwise reasonably acceptable to the
Administrative Agent;

 

(iv) satisfactory evidence of insurance required to be maintained pursuant to
Section 6.07, or otherwise required by the terms of the Mortgages, in respect of
Mortgaged Properties;

 

(v) favorable opinions of local counsel for the Loan Parties (i) in states in
which the Mortgaged Properties are located, with respect to the enforceability
and perfection of the Mortgages and any related fixture filings in form and
substance reasonably satisfactory to the Administrative Agent and (ii) in states
in which the Loan Parties to the Mortgages are organized or formed, with respect
to the valid existence, corporate power and authority of such Loan Parties in
the granting of the Mortgages, in form and substance reasonably satisfactory to
the Administrative Agent;

 

(vi) (A) evidence as to whether each Material Owned Property is in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards (a “Flood Hazard Property”) pursuant to a standard flood
hazard determination form ordered and received by the Collateral Agent, and
(B) if such Material Owned Property is a Flood Hazard Property, (1) evidence as
to whether the community in which such Material Owned Property is located is
participating in the National Flood Insurance Program, (2) the applicable Loan
Party’s written acknowledgment of receipt of written notification from the
Collateral Agent as to the fact that such Material Owned Property is a Flood
Hazard Property and as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance Program and
(3) copies of the applicable Loan Party’s application for a flood insurance
policy plus proof of premium payment, a declaration page confirming that flood
insurance has been issued, or such other evidence of flood insurance
satisfactory to the Collateral Agent and naming the Collateral Agent as sole
loss payee on behalf of the Secured Parties; and

 

 -8- 

 

 

(vii) such consents and agreements of other third parties, such estoppel letters
and other confirmations, and such other actions that, in each case, the
Administrative Agent and the Collateral Agent may reasonably deem necessary in
order to create valid and subsisting Liens on the property described in the
Mortgages shall have been delivered or taken, in each case to the extent the
same can be obtained or taken with the use of commercially reasonable efforts.

 

The foregoing definition shall not require the creation or perfection of pledges
of or security interests in, or the delivery of particular documents with
respect to, particular assets if and for so long as the Administrative Agent and
Borrower mutually agree in their reasonable discretion that the cost of creating
or perfecting such pledges or security interests in such assets or obtaining
title insurance or surveys in respect of such assets shall be excessive in
relation to the benefits to be obtained by the Lenders therefrom.

 

The Administrative Agent may grant extensions of time for the perfection of
security interests in or the obtaining of title insurance and surveys with
respect to particular assets (including extensions beyond the time as set forth
therein for the perfection of security interests in the assets of the Loan
Parties on such date) where it reasonably determines, in its discretion, that
perfection cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by this Agreement or the
Collateral Documents.

 

“Collateral Documents” means, collectively, the Security Agreement, the
Securities Pledge Agreement, the Intellectual Property Security Agreement, the
Mortgages, the ECF Lockbox Control Agreement, any collateral assignments, any
security agreements, pledge agreements or other similar agreements, or any
supplements to any of the foregoing, delivered to the Collateral Agent and the
Lenders pursuant to the Collateral and Guarantee Requirement, Section 4.01(c)
and (d), Section 6.11, or Section 6.13, the Guaranty and each of the other
agreements, instruments or documents that creates or purports to create a Lien
or Guarantee in favor of the Collateral Agent for the benefit of the Secured
Parties.

 

“Collateral Questionnaire” means a certificate in form satisfactory to
Collateral Agent that provides information with respect to the personal or mixed
property of each Loan Party.

 

“Committee” has the meaning specified in Section 6.17.

 

“Communications” has the meaning specified in Section 10.02(e).

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 or Exhibit C-2, as applicable.

 

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Borrower and its Subsidiaries on a consolidated basis equal to (a)  the sum,
without duplication, of the amounts for such period of (i) Consolidated Net
Income, plus (ii) Consolidated Interest Expense, plus (iii) provisions for taxes
based on income, plus (iv) total depreciation expense, plus (v) total
amortization expense, plus (vi) other non-cash items reducing Consolidated Net
Income (excluding any such non-cash item to the extent that it represents an
accrual or reserve for potential cash items in any future period or amortization
of a prepaid cash item that was paid in a prior period), minus (b) the sum,
without duplication of the amounts for such period of (i) other non-cash items
increasing Consolidated Net Income for such period (excluding any such non-cash
item to the extent it represents the reversal of an accrual or reserve for
potential cash item in any prior period), plus (ii) interest income, plus
(iii) other income; provided that for the purpose of testing the financial
covenants set forth in Section 7.13, Consolidated Adjusted EBITDA for the Fiscal
Quarter ending on (A) September 30, 2017 shall be equal to $1,132,359, (B)
December 31, 2017 shall be equal to $1,962,717, and (C) March 31, 2018 shall be
equal to $1,879,105.

 

 -9- 

 

 

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Borrower and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
“purchase of property and equipment or which should otherwise be capitalized” or
similar items reflected in the consolidated statement of cash flows of Borrower
and its Subsidiaries.

 

“Consolidated Fixed Charges” means, for any period, the sum, without
duplication, of the amounts determined for Borrower and its Subsidiaries on a
consolidated basis equal to (a) Consolidated Interest Expense, (b) scheduled
payments of principal on Consolidated Total Debt, (c) Consolidated Capital
Expenditures (other than Consolidated Capital Expenditures made with proceeds of
Investments made by Parent in Borrower and Borrower’s Subsidiaries (if any)),
and (d) the current portion of taxes provided for with respect to such period in
accordance with GAAP.

 

“Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Borrower and its Subsidiaries on a consolidated
basis with respect to all outstanding Consolidated Total Debt, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under Swap Contracts.

 

“Consolidated Net Income” means, for any period, (a) the net income (or loss) of
Borrower and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP, minus (b) the sum
of (i) the income (or loss) of any Person (other than a Subsidiary of Borrower)
in which any other Person (other than Borrower or any of its Subsidiaries) has a
joint interest, plus (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Borrower or is merged into or consolidated
with any of Borrower’s Subsidiaries or that Person’s assets are acquired by
Borrower or any of Borrower’s Subsidiaries, plus (iii) the income of any
Subsidiary of Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, plus (iv) any gains or losses attributable to
Dispositions, plus (v) (to the extent not included in clauses (i) through
(v) above) any net extraordinary gains or net extraordinary losses.

 

“Consolidated Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

 

 -10- 

 

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Credit Extension” means a borrowing consisting of the Term Loan made by the
Lenders pursuant to Section 2.01.

 

“Cumulative Monthly Excess Cash Flow” has the meaning specified in the
definition of “Excess ECF Adjustment”.

 

“Cumulative Quarterly Excess Cash Flow” has the meaning specified in the
definition of “Excess ECF Adjustment”.

 

“Current Assets” means, at any date, all assets of Borrower which under GAAP
would be classified as current assets (excluding any cash or Cash Equivalents).

 

“Current Liabilities” means, at any date, all liabilities of Borrower which
under GAAP would be classified as current liabilities, other than current
maturities of long term Indebtedness which is not then in default or otherwise
due and payable.

 

“Debt Equivalents” means, in respect of any Person, (a) any Equity Interest of
such Person which by its terms (or by the terms of any security for which it is
convertible or for which it is exchangeable or exercisable), or upon the
happening of any event or otherwise (including an event which would constitute a
Change of Control), (i) matures or is mandatorily redeemable or subject to any
mandatory repurchase requirement, pursuant to a sinking fund or otherwise,
(ii) is convertible into or exchangeable for Indebtedness or Debt Equivalents,
or (iii) is redeemable or subject to any repurchase requirement arising at the
option of the holder thereof, in whole or in part, on or prior to the date that
is ninety-one (91) days following the Maturity Date, (b) if such Person is a
Subsidiary of Parent, any preferred stock of such Person which by its terms is
mandatorily redeemable or redeemable at the option of the holder prior to the
date which is ninety-one (91) days following the Maturity Date and (c) any
Disqualified Equity Interests of such Person.

 

“Debt Service” means, for any period, cash interest expense of Borrower for such
period plus scheduled principal amortization of all Indebtedness of Borrower for
such period.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, fraudulent transfer,
reorganization, or similar debtor relief Laws of the United States or any
similar foreign, federal or state law for the relief of debtors from time to
time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

 -11- 

 

 

“Default Rate” means an interest rate equal to the interest rate otherwise
applicable to the Term Loan plus 2.0% per annum.

 

“Deposit Account” means any deposit account (as such term is defined in the UCC
as adopted and in effect in the State of New York), including without
limitation, a demand, time, savings, passbook or like account with a bank,
savings and loan association, credit union or like organization, other than an
account evidenced by a negotiable certificate of deposit.

 

“Disposition” or “Dispose” means a sale, lease or sub lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer, license or
other disposition to, or any exchange of property with, any Person (other than
to or with a Loan Party), in one transaction or a series of transactions, of all
or any part of any Loan Party’s businesses, assets or properties of any kind,
whether real, personal, or mixed and whether tangible or intangible, whether now
owned or hereafter acquired, including, without limitation, the Equity Interests
of any Loan Party. For purposes of clarification, “Disposition” shall include
(x) the sale or other disposition for value of any contracts or (y) the early
termination or modification of any contract resulting in the receipt by any Loan
Party of a cash payment or other consideration in exchange for such event (other
than payments in the ordinary course for accrued and unpaid amounts due through
the date of termination or modification).

 

“Disqualified Equity Interests” means, with respect to any Person, any Equity
Interest of such Person which, 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 Term Loan and all other Obligations that
are accrued and payable), (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 ninety-one (91) days after the Maturity Date; provided
that, if such Equity Interests are issued pursuant to a plan for the benefit of
employees of any Loan Party or by any such plan to such employees, such Equity
Interests shall not constitute Disqualified Equity Interests solely because they
may be required to be repurchased by any Loan Party in order to satisfy
applicable statutory or regulatory obligations.

 

“Dollars” means lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States, any state thereof or the District of Columbia.

 

“ECF Lockbox Account” means the Deposit Account at Bank of America, in the name
of the Borrower, with account number 4451288163, and subject to the ECF Lockbox
Control Agreement.

 

“ECF Lockbox Control Agreement” means a control agreement that grants exclusive
control of the ECF Lockbox Account to the Collateral Agent.

 

 -12- 

 

 

“ECF Percentage” means (a) for the period commencing on the Closing Date through
and including the first anniversary of the Closing Date, 40% and (b) for all
times thereafter, 50%.

 

“ECF Prepayment Election Period” means the period commencing on the date that
the Administrative Agent receives the Compliance Certificate pursuant to Section
6.01(d) calculating Monthly Excess Cash Flow through and including the date that
is the last day of the twelve-months thereafter.

 

“Eligible Assignee” means (a) any Lender, (b) any Approved Fund of any Lender,
(c) any Affiliate of any Lender and (d) any other Person that is a commercial
bank, insurance company, finance company, financial institution, any fund that
invests in loans or any other “accredited investor” (as defined in Regulation D
of the Securities Act); provided that in any event, “Eligible Assignee” shall
not include (i) any natural person or (ii) any Loan Party or any of their
respective Subsidiaries or Affiliates.

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, proceeding, consent order or consent agreement relating to any
Environmental Law, any Environmental Permit or Hazardous Material or arising
from alleged injury or threat to health and safety as it relates to any
Hazardous Material or the environment, including, without limitation, (a) by any
Governmental Authority for enforcement, cleanup, removal, response, remedial or
other actions or damages relating to Releases of Hazardous Materials or actual
or alleged violations of Environmental Laws and (b) by any Governmental
Authority or third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.

 

“Environmental Laws” means any and all federal, provincial, local and foreign
statutes, laws, regulations, ordinances, rules, decrees or other governmental
restrictions of legal effect relating to the environment, to the release of any
Hazardous Materials into the environment or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials but only to the extent such Environmental Laws are legally
applicable to any Loan Party pursuant to any Environmental Law.

 

“Environmental Liability” means, in respect of any Person, any and all legal
obligations and liabilities under Environmental Laws for any Release caused by
such Person or which is discovered or uncovered during the ownership or control
of any real property by such Person and which adversely impacts any Person,
property or the environment whether or not caused by a breach of applicable laws
(including Environmental Laws).

 

“Environmental Permit” means any permit, approval, hazardous waste
identification number, license or other authorization issued by or submitted to
a Governmental Authority required under any Environmental Law.

 

 -13- 

 

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time and Treasury regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is under common control with any Loan Party and is treated as a single employer
within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations at any facility of any Loan Party or ERISA Affiliate as described in
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party
or any ERISA Affiliate from a Multiemployer Plan, notification of any Loan Party
or ERISA Affiliate concerning the imposition of withdrawal liability or
notification that a Multiemployer Plan is insolvent or is in reorganization
within the meaning of Title IV of ERISA (or that is in endangered or critical
status, within the meaning of Section 305 of ERISA); (d) the filing of a notice
of intent to terminate, the treatment of a Pension Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (g) a
determination that any Pension Plan is, or is expected to be, in “at-risk”
status (within the meaning of Section 303(i)(4) of ERISA or Section 430(i)(4) of
the Code); or (h) the conditions for imposition of a lien under Section 303(k)
of ERISA shall have been met with respect to any Pension Plan.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excess Cash Flow” means, for the most recently completed Test Period,
Consolidated Adjusted EBITDA for such period, minus, without duplication:

 

(a) Debt Service for such period;

 

(b) permanent repayments of Indebtedness (so long as not already reflected in
Debt Service) made with cash by Borrower during such period (it being understood
that the foregoing deductions shall not duplicate deductions from Excess Cash
Flow taken pursuant to Section 2.02(b)(i));

 

 -14- 

 

 

(c) Consolidated Capital Expenditures (other than Consolidated Capital
Expenditures made with proceeds of Investments made by Parent in Borrower and
Borrower’s Subsidiaries (if any));

 

(d) income and franchise taxes of Borrower that were paid in cash during such
period or will be paid within six (6) months after the end of such period and
for which reserves have been established; and

 

(e) the absolute value of the difference, if negative, of the amount of Net
Working Capital at the end of the prior Test Period in excess of the amount of
Net Working Capital at the end of such period;

 

provided that any amount deducted pursuant to any of the foregoing clauses that
will be paid after the close of such period shall not be deducted again in a
subsequent period;

 

plus, without duplication, the difference, if positive, of the amount of Net
Working Capital at the end of the prior Test Period in excess of the amount of
Net Working Capital at the end of such period.

 

“Excess ECF Adjustment” means (a) with respect to calculation of Excess Cash
Flow contained in the Compliance Certificate delivered with the quarterly
financial statements pursuant to Section 6.01(b), to the extent that Excess Cash
Flow set forth in such Compliance Certificate (the “Quarterly Excess Cash Flow”)
is greater than the sum of all of the Monthly Excess Cash Flow calculations for
the three month period during such Fiscal Quarter (the “Cumulative Monthly
Excess Cash Flow”), the amount equal to the difference of the Quarterly Excess
Cash Flow minus the Cumulative Monthly Excess Cash Flow and (b) with respect to
calculation of Excess Cash Flow contained in the Compliance Certificate
delivered with the annual financial statements pursuant to Section 6.01(c), to
the extent that Excess Cash Flow set forth in such Compliance Certificate (the
“Annual Excess Cash Flow”) is greater than the sum of all of the Quarterly
Excess Cash Flow calculations for the four Fiscal Quarter period during such
Fiscal Year (the “Cumulative Quarterly Excess Cash Flow”), the amount equal to
the difference of the Annual Excess Cash Flow minus the Cumulative Quarterly
Excess Cash Flow.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

 

“Excluded Property” has the meaning specified in the definition of “Collateral
and Guarantee Requirement.”

 

 -15- 

 

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated
and whether or not arising out of this Agreement), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Recipient being
organized under the laws of, or having its principal office or, in the case of
any Lender, its applicable lending office located in, the jurisdiction imposing
such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Foreign Lender, U.S. federal withholding
Taxes imposed on amounts payable to or for the account of such Lender with
respect to an applicable interest in the Term Loan or Term Loan Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Term Loan or Term Loan Commitment or (ii) such Lender changes
its lending office, except in each case to the extent that, pursuant to
Section 3.01, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 3.01(g) and (d)
any U.S. federal withholding Taxes imposed under FATCA.

 

“Exworks Facility” means that certain Loan and Security Agreement, dated as of
July 25, 2016, by and among Parent, as borrower, Exworks Capital Fund I, L.P.
(“Exworks”), as agent and the other lenders party thereto.

 

“Facility” means the facility provided under this Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively
comparable), any current or future regulations or official interpretations
thereof and any agreements entered into pursuant to Section 1471(b)(1) of the
Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent.

 

“Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Parent that such financial statements fairly present,
in all material respects, the financial condition of Parent and its Subsidiaries
as at the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments.

 

“Financial Plan” has the meaning specified in Section 6.01(f).

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of the Loan Parties, as applicable, ending
on December 31 of each calendar year.

 

 -16- 

 

 

“Fit Pay” means Fit Pay, Inc., a Delaware corporation.

 

“Fit Pay Earnout” means the cumulative amount of those certain “Earnout
Payments”, as such term is defined in the Fit Pay Merger Agreement.

 

“Fit Pay Merger Agreement” means that certain Agreement and Plan of Merger,
dated as of May 19, 2017, by and among Parent, Fit Pay, Fit Merger Sub, Inc.,
Michael Orlando, Giesecke & Devrient Mobile Security America, Inc., the other
stockholders of Fit Pay, and Michael Orlando as the “Shareholder Representative”
representing the other stockholders.

 

“Fixed Charge Coverage Ratio” means the ratio as of the last day of (a) the
first Fiscal Quarter ending after the Closing Date of (i) Consolidated Adjusted
EBITDA for such Fiscal Quarter, to (ii) Consolidated Fixed Charges for such
Fiscal Quarter, (b) the second Fiscal Quarter ending after the Closing Date of
(i) Consolidated Adjusted EBITDA for the two Fiscal Quarters period ending on
such date, to (ii) Consolidated Fixed Charges for such two Fiscal Quarters,
(c) the third Fiscal Quarter period ending after the Closing Date of
(i) Consolidated Adjusted EBITDA for the three Fiscal Quarter period ending on
such date, to (ii) Consolidated Fixed Charges for such three Fiscal Quarter
period, and (d) any other Fiscal Quarter of (i) Consolidated Adjusted EBITDA for
the four-Fiscal Quarter period then ending, to (ii) Consolidated Fixed Charges
for such four-Fiscal Quarter period.

 

“Flood Hazard Property” has the meaning specified in clause (g)(vi) of the
definition of “Collateral and Guarantee Requirement.”

 

“Foreign Lender” means (a) if Borrower is a U.S. Person, a Lender that is not a
U.S. Person, and (b) if Borrower is not a U.S. Person, a Lender that is a
resident or organized under the laws of a jurisdiction other than that in which
Borrower is a resident for tax purposes.

 

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Fund” means any Person (other than an individual) that is or will be engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

 

“GAAP” means United States generally accepted accounting principles in effect as
of the date of determination thereof.

 

“Governmental Authority” means any nation or government, any provincial, state,
local, municipal or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Governmental Authorization” means any authorization, approval, consent,
franchise, license, covenant, order, ruling, permit, certification, exemption,
notice, declaration or similar right, undertaking or other action of, to or by,
or any filing, qualification or registration with, any Governmental Authority.

 

 -17- 

 

 

“Granting Lender” has the meaning specified in Section 10.07(g).

 

“Guarantee” has the meaning specified in the definition of “Collateral and
Guarantee Requirement” and shall be substantially in the form of Exhibit E.

 

“Guarantee Obligations” means, with respect to any Person, any obligation or
arrangement of such Person to guarantee or intended to guarantee any
Indebtedness or other payment obligations (“primary obligations”) of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, (a) the direct or indirect guarantee, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
Obligation of a primary obligor, (b) the obligation to make take-or-pay or
similar payments, if required, regardless of non-performance by any other party
or parties to an agreement or (c) any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof.
The amount of any Guarantee Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Guarantee Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

 

“Guarantor Subsidiary” means each Guarantor that is a Subsidiary of Parent
(other than Borrower) or Borrower and each of their respective Subsidiaries.

 

“Guarantors” has the meaning specified in the definition of “Collateral and
Guarantee Requirement.”

 

“Guaranty” means, collectively, (a) the Guarantee and (b) each other guaranty
and guaranty supplement delivered pursuant to the Collateral and Guarantee
Requirement or Section 6.11.

 

“Hazardous Materials” means any material, substance or waste that is regulated,
classified, or otherwise characterized under or pursuant to any Environmental
Law as “hazardous,” “toxic,” a “pollutant,” a “contaminant,” a “deleterious
substance,” “dangerous goods,” “radioactive” or words of similar meaning or
effect, including petroleum and its by-products, asbestos, polychlorinated
biphenyls, radon, greenhouse gases, mold, urea formaldehyde insulation,
chlorofluorocarbons and all other ozone-depleting substances.

 

 -18- 

 

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding (i) accounts
payable and other accrued liabilities incurred in the ordinary course of
business not past due for more than one hundred twenty (120) days after its
stated due date (except for accounts payable contested in good faith), (ii) any
earn-out obligation until such obligation is both required to be reflected as a
liability on the balance sheet of such Person in accordance with GAAP and not
paid after becoming due and payable and (iii) deferred or equity compensation
arrangements entered into in the ordinary course of business and payable to
directors, officers or employees), (e) all Indebtedness (excluding prepaid
interest thereon) of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed but, in the case of Indebtedness
which is not assumed by such Person, limited to the lesser of (x) the amount of
such Indebtedness and (y) the fair market value of such property, (f) all
Guarantee Obligations by such Person of Indebtedness of others, (g) all
Attributable Indebtedness of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty (excluding the portion thereof that has been fully cash
collateralized in a manner permitted by this Agreement), (i) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances,
surety bonds and performance bonds, whether or not matured, (j) all Debt
Equivalents of such Person and (k) the Swap Termination Value under outstanding
Swap Contracts at such time to which such Person is a party. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is directly liable therefor as a result of such Person’s ownership interest in
or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. Anything herein to
the contrary notwithstanding, obligations in respect of any Indebtedness that
has been irrevocably defeased (either covenant or legal) or satisfied and
discharged pursuant to the terms of the instrument creating or governing such
Indebtedness shall not constitute Indebtedness.

 

“Indemnified Liabilities” has the meaning specified in Section 10.05.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 10.05.

 

“Information” has the meaning specified in Section 10.08.

 

“Intellectual Property” has the meaning specified in Section 5.17.

 

 -19- 

 

 

“Intellectual Property Security Agreement” means, collectively, (a) the
Intellectual Property Security Agreement executed by the Loan Parties in the
form of Exhibit H, and (b) each other Intellectual Property Security Agreement
Supplement executed and delivered pursuant to the Collateral and Guarantee
Requirement or Section 6.11.

 

“Intellectual Property Security Agreement Supplement” has the meaning specified
in Section 6.11.

 

“Interest Payment Date” means, the last Business Day of each month commencing on
the first such date to occur after the Closing Date.

 

“Interest Period” means, (a) initially, the period beginning on (and including)
the Closing Date and ending on (and including) the last day of the calendar
month in which the Closing Date occurs and (b) thereafter, the period beginning
on (and including) the first day of each succeeding calendar month and ending on
the earlier of (and including) (i) the last day of such calendar month and (ii)
the Maturity Date.

 

“Investment” in any Person, means (a) any direct or indirect purchase or other
acquisition by a Loan Party of, or of a beneficial interest in, any of the
Equity Interests of such Person; (b) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Subsidiary of Parent
from any Person, of any Equity Interests of such Person; and (c) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contributions by Parent or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.

 

“Laws” means, collectively, all international, foreign, federal, state,
provincial and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority.

 

“Lender” means any Lender that may be a party to this Agreement from time to
time and, in the case of each such Lender, including their respective successors
and assigns as permitted hereunder (each of which is referred to herein as a
“Lender”).

 

“Lender Allocated ECF” has the meaning specified in Section 2.02(b).

 

“Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter of
(a)(i) Consolidated Total Debt as of such day, minus (ii) the amount of cash in
the ECF Lockbox Account as of such date, to (b) Consolidated Adjusted EBITDA for
the four-Fiscal Quarter period ending on such date.

 

 -20- 

 

 

“LIBO Rate” shall mean, with respect to any Interest Period, the rate determined
by the Administrative Agent to be the offered rate for deposits in Dollars for
the applicable Interest Period normally published in the Money Rates section of
The Wall Street Journal or another national publication selected by the
Administrative Agent two (2) Business Days prior to the first day of such
Interest Period; provided, that in no event shall the LIBO Rate be less than
1.25%.

 

“Lien” means any assignment, mortgage, charge, pledge, lien, encumbrance, title
retention agreement (including Capital Leases but excluding operating leases) or
any other security interest whatsoever, howsoever created or arising, whether
fixed or floating, legal or equitable, perfected or not, but specifically
excludes any legal, contractual or equitable right of set-off.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Collateral Documents, (d) any Guarantee, (e) any agency fee letter entered into
between Borrower and the Administrative Agent in connection with the Facility,
(f) each Warrant Certificate, and (g) all other instruments and documents
executed and delivered from time to time by or on behalf of any Loan Party in
connection herewith or therewith.

 

“Loan Parties” means, collectively, (a) Parent, (b) Borrower and (c) each
Guarantor.

 

“Master Agreement” has the meaning specified in the definition of “Swap
Contract.”

 

“Material Adverse Effect” means a material adverse effect on and/or material
adverse developments with respect to (a) the business operations, properties,
assets, condition (financial or otherwise) or prospects of Borrower and its
Subsidiaries taken as a whole; (b) a significant portion of the industry or
business segment in which Borrower or its Subsidiaries operate or rely upon if
such effect or development is reasonably likely to have a material adverse
effect on Borrower and its Subsidiaries taken as a whole; (c) the ability of any
Loan Party to fully and timely perform its Obligations; (d) the legality,
validity, binding effect, or enforceability against a Loan Party of a Loan
Document to which it is a party; or (e) the rights, remedies and benefits
available to, or conferred upon, any Agent and any Lender or any Secured Party
under any Loan Document.

 

“Material Agreements” means, collectively, (a) the agreements which are listed
in Schedule 5.19 and (b) all other agreements to which any Loan Party or any of
its properties are bound, from time to time, the absence or termination of any
of which would reasonably be expected to result in a Material Adverse Effect.

 

“Material Owned Property” means (a) the real properties owned by any Loan Party
listed on Schedule 5.07(b) and (b) any other real property owned by any Loan
Party with a fair market value in excess of $500,000.

 

“Maturity Date” shall mean May 24, 2023.

 

“Monthly Excess Cash Flow” has the meaning specified in Section 2.02(b).

 

 -21- 

 

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Mortgage” means collectively, the deeds of trust, trust deeds, deeds to secure
debt and mortgages creating and evidencing a Lien on a Mortgaged Property made
by the Loan Parties in favor or for the benefit of the Collateral Agent on
behalf of the Secured Parties, substantially in the form of Exhibit K (with such
changes as may be reasonably satisfactory to the Collateral Agent and its
counsel to account for local law matters) and otherwise in form and substance
reasonably satisfactory to the Collateral Agent, executed and delivered pursuant
to Section 4.01(d) (if applicable), Section 6.11 or Section 6.13, in each case
as amended, restated, supplemented or otherwise modified from time to time.

 

“Mortgage Policies” has the meaning specified in paragraph (g) of the definition
of “Collateral and Guarantee Requirement.”

 

“Mortgaged Properties” has the meaning specified in paragraph (g) of the
definition of “Collateral and Guarantee Requirement.”

 

“Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.

 

“Narrative Report” means, with respect to the financial statements for which
such narrative report is required, a narrative report describing the operations
of Parent and its Subsidiaries in the form prepared for presentation to senior
management thereof for the applicable month, Fiscal Quarter or Fiscal Year and
for the period from the beginning of the then current Fiscal Year to the end of
such period to which such financial statements relate with comparison to and
variances from the immediately preceding period and budget.

 

“Net Cash Proceeds” means:

 

(a) with respect to the Disposition of any asset by any Loan Party or any
Casualty Event the excess, if any, of (i) the sum of cash and Cash Equivalents
received in connection with such Disposition or Casualty Event (including any
cash or Cash Equivalents received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received and, with respect to any Casualty Event, any insurance proceeds or
condemnation awards in respect of such Casualty Event actually received by or
paid to or for the account of any Loan Party) over (ii) (A) the reasonable
out-of-pocket expenses actually incurred and paid by any Loan Party in
connection with such Disposition or Casualty Event (including, reasonable
attorney’s, accountant’s and other similar professional advisor’s fees,
investment banking fees, survey costs, title insurance premiums, and related
search and recording charges, transfer taxes, deed or mortgage recording taxes,
other customary expenses and brokerage, consultant, and other customary fees) to
third parties (other than the Loan Parties or any of their Affiliates) and
(B) taxes paid or reasonably estimated to be actually payable or that are
actually accrued in connection therewith with respect to the current tax year as
a result of any gain recognized in connection therewith by such Person or any of
the direct or indirect stockholders thereof and attributable to such Disposition
or Casualty Event; provided that, if the amount of any estimated taxes pursuant
to this subclause (B) exceeds the amount of taxes actually required to be paid
in cash, the aggregate amount of such excess shall constitute Net Cash Proceeds;
and

 

 -22- 

 

 

(b) with respect to the incurrence or issuance of any Indebtedness by the Loan
Parties not permitted under Section 7.03, the excess, if any, of (i) the sum of
the cash received in connection with such incurrence or issuance over (ii) the
investment banking fees, underwriting discounts, commissions, costs and other
out-of-pocket expenses and other customary expenses (including reasonable
attorney’s, accountant’s and other similar professional advisor’s fees),
incurred by such Loan Party in connection with such incurrence or issuance to
third parties (other than the Loan Parties or any of their Affiliates).

 

“Net Working Capital” means, at any time, Current Assets at such time minus
Current Liabilities at such time.

 

“Non-Consenting Lender” shall have the meaning set forth in Section 2.11.

 

“Note” means a promissory note of Borrower payable to a Lender or its permitted
assigns, substantially in the form of Exhibit B hereto, evidencing the aggregate
Indebtedness of Borrower to such Lender resulting from the Term Loan made by
such Lender.

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party or other Subsidiary arising under any
Loan Document (including, without limitation, Warrant Obligations) or otherwise
with respect to the Term Loan entered into with a Lender, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
other Subsidiary of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding. Without limiting the generality of
the foregoing, the Obligations of the Loan Parties under the Loan Documents (and
of any of their Subsidiaries to the extent they have obligations under the Loan
Documents) include (a) the obligation (including Guarantee Obligations) to pay
principal, interest, reimbursement obligations, charges, expenses, fees
(including, without limitation, the Upfront Fee), premiums (including, without
limitation, any Yield Maintenance Premium and Prepayment Premium), Attorney
Costs, indemnities and other amounts payable by any Loan Party or any other
Subsidiary under any Loan Document and (b) the obligation of any Loan Party or
any other Subsidiary to reimburse any amount in respect of any of the foregoing
that any Lender, in its sole discretion, may elect to pay or advance on behalf
of such Loan Party or such Subsidiary.

 

“Observer” has the meaning specified in Section 6.17.

 

“OID” shall have the meaning set forth in Section 2.05.

 

 -23- 

 

 

“Organization Documents” means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any
agreement, declaration, instrument, filing or notice with respect thereto filed
in connection with its formation or organization with the applicable
Governmental Authority in the jurisdiction of its formation or organization and,
if applicable, any certificate or articles of formation or organization of such
entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in the Term Loan or Loan
Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

 

“Outstanding Amount” means, on any date, the outstanding principal amount of the
Term Loan, after giving effect to any borrowings, accretion of debt, and/or
prepayments or repayments of the Term Loan occurring on such date.

 

“Parent” means NXT-ID, Inc., a Delaware corporation.

 

“Participant” has the meaning specified in Section 10.07(d).

 

“Participant Register” has the meaning specified in Section 10.07(d).

 

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as the same
may be amended, supplemented, modified, replaced or otherwise in effect from
time to time.

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor
thereof).

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA) other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or
any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time in the past five (5) years.

 

 -24- 

 

 

“Permitted Indebtedness” has the meaning specified in Section 7.03.

 

“Permitted Liens” means Liens permitted to be incurred pursuant to Section 7.01.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.

 

“Prepayment Date” has the meaning specified in Section 2.02(a)(i).

 

“Prepayment Notice” means a notice of prepayment in respect of any voluntary or
mandatory prepayment in substantially the form of Exhibit A.

 

“Prepayment Premium” has the meaning specified in Section 2.02(d).

 

“Pro Rata Share” means, with respect to each Lender at any time a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Term Loan Commitments of such Lender
under the Facility at such time and the denominator of which is the amount of
the Aggregate Commitments under the Facility at such time; provided that if any
Term Loan Commitment has been terminated, then the Pro Rata Share of each Lender
shall be determined based on the outstanding principal amount of the Term Loan
held by such Lender divided by the aggregate principal amount of the outstanding
Term Loan held by all Lenders.

 

“Projections” has the meaning specified in Section 4.01(e).

 

“Promissory Note” means that certain Promissory Note, dated as of May 19, 2017,
made by Parent in favor of Michael Orlando, with a face amount of $851,841.89.

 

“Qualified Equity Interests” means any Equity Interests that are not
Disqualified Equity Interests.

 

“Quarterly Excess Cash Flow” has the meaning specified in the definition of
“Excess ECF Adjustment”.

 

“Recipient” means (a) the Administrative Agent or (b) any Lender, as applicable.

 

“Reference Rate” means for any day, the rate per annum equal to the greater of:
(a) the rate of interest published from time to time in the “Money Rates”
section of The Wall Street Journal as the U.S. Prime Rate for such day (or, if
such source is not available, such alternate source as determined by the
Administrative Agent) and (b) the sum of (i) the Federal Funds Rate plus
(ii) 1.25%.

 

“Register” has the meaning specified in Section 10.07(c).

 

 -25- 

 

 

“Registered” means, with respect to Intellectual Property, issued by, registered
with, renewed by or the subject of a pending application before any Governmental
Authority or Internet domain name registrar.

 

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, leeching or migration of any
Hazardous Material in or into the environment (including the abandonment or
disposal of any barrels, tanks, containers or receptacles containing any
Hazardous Material), or out of any vessel or facility, including the movement of
any Hazardous Material through the air, soil, subsoil, surface, water, ground
water, rock formation or otherwise.

 

“Replacement Lender” shall have the meaning set forth in Section 2.11.

 

“Reportable Event” means with respect to any Plan any of the events set forth in
Section 4043(c) of ERISA or the regulations issued thereunder, other than events
for which the thirty (30) day notice period has been waived.

 

“Required Lenders” means, as of any date of determination, one or more Lenders
having more than 50% of the Total Facility Exposure held by all Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or, except for purposes of Sections 6.03 or 6.04,
any other similar officer or a Person performing similar functions of a Loan
Party (and, as to any document delivered on the Closing Date, to the extent
acceptable to the Administrative Agent in its sole discretion or required by the
terms of this Agreement, any secretary or assistant secretary of a Loan Party).
Any document delivered hereunder that is signed by a Responsible Officer of a
Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, retraction, redemption, retirement,
defeasance, acquisition, cancellation or termination of any such capital stock
or other Equity Interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof) and
including any thereof acquired through the exercise of warrants or rights of
conversion, exchange or purchase.

 

“Retained ECF” has the meaning specified in Section 2.02(b).

 

“S&P” means Standard & Poor’s Ratings Services LLC, a division of The
McGraw-Hill Companies, Inc., and its successors.

 

 -26- 

 

 

“Sale Leaseback” means any transaction or series of related transactions
pursuant to which any Loan Party (a) sells, transfers or otherwise disposes of
any property, real or personal, whether now owned or hereafter acquired, and
(b) as part of such transaction, thereafter rents or leases such property or
other property that it intends to use for substantially the same purpose or
purposes as the property being sold, transferred or disposed.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Secured Obligations” has the meaning specified in the Security Agreement.

 

“Secured Parties” means, collectively, the Administrative Agent, the Collateral
Agent and the Lenders.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Securities Pledge Agreement” means, collectively, (a) the Securities Pledge
Agreement executed by certain Loan Parties substantially in the form of
Exhibit G and (b) each Securities Pledge Agreement Supplement executed and
delivered pursuant to the Collateral and Guarantee Requirement or Section 6.11.

 

“Securities Pledge Agreement Supplement” has the meaning specified in
Section 6.11.

 

“Security Agreement” means, collectively, (a) the Security Agreement executed by
the Loan Parties substantially in the form of Exhibit F and (b) each Security
Agreement Supplement executed and delivered pursuant to the Collateral and
Guarantee Requirement or Section 6.11.

 

“Security Agreement Supplement” has the meaning specified in Section 6.11.

 

“Series C Designation” means Parent’s certain Certificate of Designations,
Preferences and Rights of Series C Non-Convertible Voting Preferred Stock, as
was filed with the Secretary of State of the State of Delaware on May 23, 2017.

 

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Loan Parties as of that date determined in
accordance with GAAP.

 

“Shortfall ECF Adjustment” means (a) with respect to calculation of Quarterly
Excess Cash Flow, to the extent that Quarterly Excess Cash Flow is less than the
Cumulative Monthly Excess Cash Flow, the amount equal to the difference of the
Cumulative Monthly Excess Cash Flow minus the Quarterly Excess Cash Flow and (b)
with respect to calculation of Annual Excess Cash Flow, to the extent that
Annual Excess Cash Flow is less than the Cumulative Quarterly Excess Cash Flow,
the amount equal to the difference of the Cumulative Quarterly Excess Cash Flow
minus the Annual Excess Cash Flow.

 

 -27- 

 

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property (for the
avoidance of doubt, calculated to include goodwill and other intangibles) of
such Person is greater than the total amount of liabilities, including
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“SPC” has the meaning specified in Section 10.07(g).

 

“Subsidiary” of a Person means:

 

(a) a corporation of which another person alone or in conjunction with its other
Subsidiaries owns an aggregate number of voting Equity Interests sufficient to
enable the election of a majority of the directors regardless of the manner in
which other voting Equity Interests are voted;

 

(b) a corporation of which another person alone or in conjunction with its other
Subsidiaries has, through the operation of any agreement or otherwise, the
ability to elect or cause the election of a majority of the directors or
otherwise exercise control over the management and policies of such corporation;

 

(c) any partnership of which at least a majority of the outstanding income or
capital interests and/or at least a majority of the voting interests of such
partnership or, in the case of a limited partnership, any general partner
thereof, are owned by a person alone or in conjunction with its other
Subsidiaries; and

 

(d) any trust or other person of which at least a majority of the outstanding
beneficial or ownership interests (however designated) are owned by a person
alone or in conjunction with its other Subsidiaries.

 

“Surviving Indebtedness” means any Indebtedness of Parent or any of its
Subsidiaries outstanding immediately before and after giving effect to the
Transaction as specified on Schedule 7.03.

 

“Swap Contract” means (a) any and all interest rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

 -28- 

 

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the mark to
market value(s) for such Swap Contracts, as determined by the applicable
counterparty in accordance with the terms thereof and in accordance with
customary methods for calculating mark-to-market values under similar
arrangements by such counterparty.

 

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including any Sale Leaseback),
in each case, creating obligations that do not appear on the balance sheet of
such Person but which could be characterized as the indebtedness of such Person
(without regard to accounting treatment).

 

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, stamp taxes, withholdings or other charges
imposed by any Governmental Authority (including additions to tax, penalties and
interest with respect thereto).

 

“Term Loan” has the meaning specified in Section 2.01(a).

 

“Term Loan Commitment” has the meaning specified in Section 2.01. As of the
Closing Date the aggregate amount of Term Loan Commitments is $16,000,000.

 

“Termination Date” has the meaning specified in Section 9.11(a).

 

“Test Period” means, at any date of determination, with respect to any
measurement of Excess Cash Flow (a) on a monthly basis, the most recently
completed month for which financial statements were delivered pursuant to
Section 6.01(a), (b) on a quarterly basis, the most recently completed Fiscal
Quarter for which financial statements were delivered pursuant to Section
6.01(b) and (c) on an annual basis, the most recently completed four consecutive
Fiscal Quarters of Borrower ending on or prior to such date for which the
consolidated financial statements of Borrower and its Subsidiaries have been (or
were required to have been) delivered pursuant to Section 6.01(c).

 

 -29- 

 

 

“Threshold Amount” means $250,000.

 

“Total Facility Exposure” means, as of any date of determination, the sum of
(a) Total Outstandings as of such date and (b) the then unfunded Term Loan
Commitments (if any).

 

“Total Outstandings” means, as of any date of determination, the then aggregate
Outstanding Amount of the Term Loan.

 

“Transaction” means, collectively, (a) extension of the Term Loan Commitments
under this Agreement and the funding of the Term Loan on the Closing Date, (b)
the consummation of any other transactions in connection with the foregoing and
(c) the payment of the fees and expenses, including prepayment premiums,
incurred in connection with any of the foregoing.

 

“Unaudited Financial Statements” means the unaudited financial statements
described in Section 4.01(e)(ii) and (e)(iii).

 

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as the same
may from time to time be in effect in the State of New York or the Uniform
Commercial Code (or similar code or statute) of another jurisdiction, to the
extent it may be required to apply to any security interest in any item or items
of Collateral.

 

“United States” and “U.S.” mean the United States of America.

 

“Upfront Fee” has the meaning specified in Section 2.05.

 

“U.S. Tax Compliance Certificate” has the meaning specified in
Section 3.01(g)(ii)(B)(3).

 

“Warrant Certificate” means each Warrant Certificate in substantially the form
of Exhibit L, pursuant to which Parent has granted to each Lender the right to
purchase Equity Interests of Parent, per the Warrant Shares table on
Schedule 2.01(b).

 

“Warrant Obligations” means, with respect to Parent, all of its Obligations
arising out of, under or in connection with, any Warrant Certificate.

 

“Wholly-owned” means, with respect to a Subsidiary of a Person, a Subsidiary of
such Person all of the outstanding Equity Interests of which (other than
(x) director’s qualifying shares and (y) shares issued to foreign nationals to
the extent required by applicable Law) are owned by such Person and/or by one or
more wholly-owned Subsidiaries of such Person.

 

“Withdrawal Liability” means the liability of 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.

 

“Withholding Agent” means any Loan Party and the Administrative Agent.

 

“Yield Maintenance Premium” has the meaning specified in Section 2.02(c).

 

 -30- 

 

 

Section 1.02. Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

 

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

 

(b) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

 

(ii) Article, Section, paragraph, clause, subclause, Exhibit and
Schedule references are to the Loan Document in which such reference appears.

 

(iii) The term “including” is by way of example and not limitation.

 

(iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including.”

 

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

(e) Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine or neuter forms.

 

Section 1.03. Accounting Terms. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein; provided, however, that if Borrower notifies the
Administrative Agent that Borrower requests 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,
regardless of whether any such notice is given before or after such Accounting
Change or in the application thereof, then the Administrative Agent and Borrower
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 Borrower 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, (i) the provisions in this Agreement shall be calculated as if no such
Accounting Change had occurred and (ii) Borrower shall provide to the
Administrative Agent and the Lenders a written reconciliation in form and
substance reasonably satisfactory to the Administrative Agent, between
calculations of any applicable ratios, baskets and other requirements hereunder
before and after giving effect to such Accounting Change.

 

 -31- 

 

 

(b) Where reference is made to a Person “and its Subsidiaries on a consolidated
basis” or similar language, such consolidation shall not include any
subsidiaries other than Subsidiaries.

 

(c) Where reference is made to consolidating financial statements of Parent and
its Subsidiaries, for the avoidance of doubt, such financial statements shall
include standalone financial statements of the Borrower, Parent, Fit Pay, and
each other Subsidiary of Parent.

 

Section 1.04. Rounding. Any financial ratios required to be satisfied in order
for a specific action to be permitted under this Agreement shall be calculated
by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is
expressed herein and rounding the result up or down to the nearest number (with
a rounding-up if there is no nearest number).

 

Section 1.05. References to Agreements, Laws, Etc. Unless otherwise expressly
provided herein, (a) references to documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, amendments and restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, amendments and restatements, extensions, supplements
and other modifications are permitted by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.

 

Section 1.06. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

 

Section 1.07. Timing of Payment or Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment or performance shall extend to the immediately succeeding Business
Day.

 

 -32- 

 

 

Article II

 

The Term Loan Commitments and Credit Extension

 

Section 2.01. The Term Loan. (a) Subject to the terms and conditions set forth
herein, on the Closing Date, each Lender agrees to make a term loan (the “Term
Loan”) in an aggregate principal amount not to exceed the Term Loan Commitment
set forth opposite such Lender’s name in Schedule 2.01(a) (such amount being
referred to herein as such Lender’s “Term Loan Commitment”). The Term Loan
Commitment of each Lender shall be automatically and permanently reduced by the
principal amount of each Term Loan made by such Lender on the Closing Date.

 

(b) Amounts borrowed under this Section 2.01 and repaid or prepaid may not be
re-borrowed.

 

(c) All the outstanding principal amount of the Term Loan, together with all
accrued and unpaid interest thereon, and any fees and other amounts payable
hereunder, shall be due and payable on the earlier of (i) the Maturity Date and
(ii) the date of the acceleration of the Term Loan pursuant to Section 8.02.

 

Section 2.02. Prepayments.

 

(a) Optional Prepayments. (i) Borrower may, upon delivery of a Prepayment Notice
to the Administrative Agent, at any time or from time to time, commencing on the
first Business Day following the first anniversary of the Closing Date,
voluntarily prepay, in whole or in part (in a minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount for each partial
prepayment) the outstanding principal amount of the Term Loan on any Business
Day (the “Prepayment Date”) for an amount equal to the portion of the Term Loan
being prepaid on such Prepayment Date, plus any accrued but unpaid interest on
the aggregate principal amount of the portion of the Term Loan being prepaid,
plus any applicable Yield Maintenance Premium and Prepayment Premium.

 

(ii) Any Prepayment Notice must be received by the Administrative Agent not
later than 12:00 noon (New York, New York time) three (3) Business Days prior to
any Prepayment Date and shall specify the date and amount of such prepayment.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Pro Rata Share of such
prepayment. If such notice is given by Borrower, Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Each prepayment of the Term Loan pursuant
to this Section 2.02(a) shall be paid to the Lenders in accordance with their
respective Pro Rata Shares.

 

(iii) No partial prepayment shall be made under this Section 2.02(a) in
connection with any event described in Section 2.02(b).

 

 -33- 

 

 

(b) Mandatory Prepayments.

 

(i) Excess Cash Flow. Within five (5) Business Days after delivery of the
financial statements of Borrower for the relevant Test Period, to the extent
that such financial statements demonstrate Excess Cash Flow (the “Monthly Excess
Cash Flow”), Borrower shall allocate the applicable ECF Percentage of such
Monthly Excess Cash Flow for the prepayment of the Term Loan (the “Lender
Allocated ECF”). Any Monthly Excess Cash Flow amounts shall be increased by any
Excess ECF Adjustment from the immediately preceding Test Period. With respect
to any Shortfall ECF Adjustment, Borrower shall promptly repay the Term Loan as
set forth in Section 2.02(e) in an amount equal to the ECF Percentage (as in
effect during the period in which the original Excess Cash Flow was calculated)
of such Shortfall ECF Adjustment. All Excess Cash Flow amounts that are not
Lender Allocated ECF may be retained by Borrower (such amounts, the “Retained
ECF”) and may be used by Borrower (i) to make Restricted Payments to Parent
pursuant to Section 7.06(c) (and subsequently invested by Parent into Fit Pay
pursuant to Section 7.02(f)) or (ii) for working capital and any other general
corporate purposes. Each Lender shall have the option to require Borrower to
elect to pay down its Term Loan with its Pro Rata Share of the Lender Allocated
ECF by providing the Administrative Agent with written notice of its election
(which the Administrative Agent shall promptly provide to Borrower), which
notice must be received by Borrower during the ECF Prepayment Election Period.
To the extent that any Lender does not elect to receive a prepayment from its
Pro Rata Share of the Lender Allocated ECF prior to the applicable expiration of
the ECF Prepayment Election Period, such amounts shall become Retained ECF.
Until the expiration of the ECF Prepayment Election Period, all Lender Allocated
ECF that has not been elected for prepayment shall be deposited into the ECF
Lockbox Account.

 

(ii) Dispositions. No later than the fifth Business Day following the date any
Loan Party receives Net Cash Proceeds from the Disposition of any property
(excluding Dispositions permitted pursuant to Section 7.05 (other than pursuant
to Section 7.05(f))), Borrower shall prepay the Term Loan as set forth in
Section 2.02(e) in an aggregate amount equal to 100% of all such Net Cash
Proceeds realized or received in connection with such Disposition. For the
avoidance of doubt, any prepayment made pursuant to this Section 2.02(b)(ii) as
a result of a Disposition shall not be deemed to be a consent to any such
Disposition or a cure or waiver of any Event of Default which occurs in
connection with such Disposition, it being understood that such Event of Default
may only be waived with the express consent of Required Lenders.

 

(iii) Casualty Events. No later than the fifth Business Day following the date
any Loan Party receives Net Cash Proceeds from any Casualty Event, Borrower
shall prepay the Term Loan as set forth in Section 2.02(e) in an aggregate
amount equal to 100% of all such Net Cash Proceeds realized or received in
connection with such Casualty Event; provided, so long as no Default or Event of
Default shall have occurred and be continuing, Borrower shall have the option,
instead of prepaying the Term Loan therewith, to invest such Net Cash Proceeds
within one hundred eighty (180) days of receipt thereof in productive assets of
the general type used in the business of Borrower, which investment may include
the repair, restoration or replacement of the applicable assets thereof. If
Borrower elects to invest such Net Cash Proceeds pursuant to the proviso above,
Borrower shall provide notice of such election to the Administrative Agent at or
prior to such time as prepayment would otherwise be due.

 

(iv) Indebtedness. On the date of receipt by any Loan Party from the incurrence
or issuance of any Indebtedness (including Debt Equivalents) not expressly
permitted to be incurred or issued pursuant to Section 7.03, Borrower shall
prepay the Term Loan as set forth in Section 2.02(e) in an aggregate amount
equal to 100% of all such Net Cash Proceeds received therefrom. For the
avoidance of doubt, any prepayment made pursuant to this Section 2.02(b)(iv)
shall not be deemed to be a consent to the incurrence or issuance of any such
Indebtedness or a cure or waiver of any Event of Default which occurs in
connection therewith, it being understood that such Event of Default may only be
waived with the express consent of Required Lenders.

 

 -34- 

 

 

(c) Yield Maintenance Premium. If Borrower prepays all or any part of the
principal balance of the Term Loan pursuant to Section 2.02(a) or makes a
mandatory prepayment of all or any part of the principal balance of the Term
Loan pursuant to Sections 2.02(b)(ii) or (iv), in each case, on or prior to the
date that is the first anniversary of the Closing Date, Borrower shall pay to
Administrative Agent, for the benefit of all Lenders entitled to a portion of
such prepayment, an amount (the “Yield Maintenance Premium”) equal to (1) the
aggregate amount of interest (including, without limitation, interest payable in
cash, in kind or deferred) which would have otherwise been payable on the amount
of the principal prepayment from the date of prepayment or reduction until the
first anniversary of the Closing Date, minus (2) the aggregate amount of
interest Lenders would earn if the prepaid or reduced principal amount were
reinvested for the period from the date of prepayment or reduction until the
first anniversary of the Closing Date, at the Treasury Rate, plus (3) the
Prepayment Premium payable on the Term Loan as set forth in Section 2.02(d)(i).
The term “Treasury Rate” shall mean a rate per annum (computed on the basis of
actual days elapsed over a year of 360 days) equal to the rate determined by
Administrative Agent on the date three (3) Business Days prior to the date of
prepayment, to be the yield expressed as a rate listed in The Wall Street
Journal for United States Treasury securities having a maturity date closest to
the first anniversary of the Closing Date. For the avoidance of doubt, payment
of the Yield Maintenance Premium shall not be deemed to be a consent to any
repayment or prepayment prior to the first anniversary of the Closing Date or a
cure or waiver of any Event of Default which occurs in connection with
therewith, it being understood that such Event of Default may only be waived
with the express consent of Required Lenders.

 

(d) Call Protection. If Borrower prepays, for any reason, all or any part of the
principal balance of Term Loan pursuant to Section 2.02(a) or makes a mandatory
prepayment of all or any part of the principal balance of the Term Loan pursuant
to Sections 2.02(b)(ii) or (iv), in addition to the Yield Maintenance Premium
set forth above, Borrower shall pay to Administrative Agent, for the benefit of
all Lenders entitled to a portion of such prepayment a prepayment premium (the
“Prepayment Premium”) on the amount so prepaid as follows (i) if the prepayment
occurs on or prior to the second anniversary of the Closing Date, 4% of the
amount so prepaid, (ii) if the prepayment occurs on the date immediately
following the second anniversary of the Closing Date but on or prior to the
third anniversary of the Closing Date, 3% of the amount so prepaid, (iii) if the
prepayment occurs on the date immediately following the third anniversary of the
Closing Date but on or prior to the fourth anniversary of the Closing Date, 2%
of the amount so prepaid and (iv) if the prepayment occurs on the date
immediately following the fourth anniversary of the Closing Date and prior to
the Maturity Date, 1% of the amount so prepaid.

 

(e) Application of Prepayments by Type of Loans. Each voluntary and mandatory
prepayment of the Term Loan pursuant to Section 2.02(a) and Section 2.02(b)
shall be applied as follows:

 

first, to the payment of all fees, and all expenses specified in Section 10.04,
to the full extent thereof;

 

second, to the payment of any accrued interest at the Default Rate, if any;

 

third, to the payment of any accrued interest (other than Default Rate
interest);

 

 -35- 

 

 

fourth, except in the case of a prepayment pursuant to Section 2.02(b)(i) and
(iii), to the payment of the Prepayment Premium and Yield Maintenance Premium,
if any, on the Term Loan; and

 

fifth, to prepay the Term Loan on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof).

 

Borrower shall notify the Administrative Agent in writing of any mandatory
prepayment of the Term Loan required to be made pursuant
Section 2.02(b) pursuant to a Prepayment Notice. Each such notice shall specify
the date of such prepayment and provide a reasonably detailed calculation of the
amount of such prepayment. The Administrative Agent will promptly notify each
Lender of the contents of Borrower’s Prepayment Notice and of such Lender’s Pro
Rata Share of the prepayment.

 

(f) Interest. All prepayments under this Section 2.02 shall be accompanied by
all accrued interest thereon.

 

Section 2.03. Repayment of Loans. Borrower shall repay in full, in cash on the
Maturity Date to the Administrative Agent (for the ratable account of the
Lenders) of all outstanding Obligations of the Loan Parties that are due and
payable on such date. For the avoidance of doubt, any repayment pursuant to this
Section 2.03 shall be reduced as a result of the application of prepayments in
accordance with Section 2.02 solely to the extent of any such amounts applied to
the prepayment of the Term Loan.

 

Section 2.04. Interest. (a) Subject to the provisions of Section 2.04(b), the
Term Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period in an amount equal to the LIBO Rate plus 9.50% per annum
payable in cash.

 

(b) Commencing upon the occurrence and during the continuance of any Event of
Default, Borrower shall pay interest on (i) the principal amount of the Term
Loan and (ii) to the extent then due and payable all other outstanding
Obligations hereunder, in each case under clauses (i) and (ii) at a fluctuating
interest rate per annum at all times equal to the interest rate set forth in
Section 2.04(a) plus, the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest to the fullest extent permitted by applicable
Laws) shall be due and payable upon demand.

 

(c) Interest on the Term Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after any judgment.

 

 -36- 

 

 

Section 2.05. Fees. Borrower agrees to pay the Lenders an upfront fee equal to
$320,000 (the “Upfront Fee”) of which $160,000 shall be payable on the Closing
Date and the remaining $160,000 due and payable on the date that is the first
anniversary of the Closing Date.  The Upfront Fee shall be in all respects fully
earned on the Closing Date; provided however, that in lieu of payment of the
portion of the Upfront Fee due on the Closing Date, Borrower agrees that such
Upfront Fee will be paid in the form of original issue discount (“OID”) equal to
one percent (1%) of the aggregate principal amount of the Term Loan funded on
the Closing Date; provided further however, that the portion of the Upfront Fee
payable on the first anniversary of the Closing Date shall be deemed to be
deferred OID for purposes of the Code.  For the avoidance of doubt, proceeds of
the Term Loan delivered to Borrower on the Closing Date shall be $15,840,000.

 

Section 2.06. Computation of Interest and Fees. All computations of fees and
interest shall be made on the basis of a three hundred and sixty (360) day year
and actual days elapsed. Interest shall accrue on the Term Loan for the day on
which the Term Loan is made, and shall not accrue on the Term Loan, or any
portion thereof, for the day on which the Term Loan or such portion is paid.
Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

Section 2.07. Evidence of Indebtedness. (a) The Credit Extension made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender. The accounts or records maintained by each Lender shall be prima facie
evidence absent manifest error of the amount of the Credit Extension made by the
Lenders to Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, Borrower shall execute and deliver
to such Lender (through the Administrative Agent) a Note payable to such Lender,
which shall evidence such Lender’s Pro Rata Share of the Term Loan in addition
to such accounts or records. Each Lender may attach schedules to its Note and
endorse thereon the date, amount and maturity of its Pro Rata Share of the Term
Loan and payments with respect thereto.

 

(b) Entries made in good faith by each Lender in its account or accounts
pursuant to Section 2.07(a), shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from
Borrower to such Lender, under this Agreement and the other Loan Documents,
absent manifest error; provided that the failure of such Lender to make an
entry, or any finding that an entry is incorrect, in such account or accounts
shall not limit or otherwise affect the obligations of Borrower under this
Agreement and the other Loan Documents.

 

Section 2.08. Payments Generally. (a) All payments to be made by Borrower shall
be made without condition or deduction for any counterclaim, defense, recoupment
or setoff. Except as otherwise expressly provided herein, all payments by
Borrower hereunder shall be made to the Administrative Agent, for the account of
the respective Lenders to which such payment is owed, at the applicable
Administrative Agent’s Office and in immediately available funds not later than
3:00 p.m. (New York City time) on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Applicable Lending Office. All payments
received by the Administrative Agent after 3:00 p.m. (New York City time) shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.

 

 -37- 

 

 

(b) If any payment to be made by Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be; provided that if such extension would cause payment of interest on or
principal of the Term Loan to be made in the next succeeding Fiscal Quarter,
such payment shall be made on the immediately preceding Business Day.

 

(c) Unless Borrower has notified the Administrative Agent, prior to the date any
payment is required to be made by it to the Administrative Agent hereunder, that
Borrower will not make such payment, the Administrative Agent may assume that
Borrower has timely made such payment and may (but shall not be so required to),
in reliance thereon, make available a corresponding amount to the Person
entitled thereto. If and to the extent that such payment was not in fact made to
the Administrative Agent in immediately available funds, then each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in
immediately available funds at the Federal Funds Rate. A notice by the
Administrative Agent to Borrower with respect to any amount owing under this
Section 2.08(c) shall be conclusive, absent manifest error.

 

(d) If any Lender makes available to the Administrative Agent funds for the Term
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to Borrower by the
Administrative Agent because the conditions to the Credit Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(e) The obligations of the Lenders hereunder to fund their portion of the Term
Loan are several and not joint. The failure of any Lender to fund its portion of
the Term Loan shall not relieve any other Lender of its corresponding obligation
to do so on such date, and neither the Administrative Agent nor any Lender shall
be responsible for the failure of any other Lender to fund its portion of the
Term Loan.

 

(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for its Term Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
its Term Loan in any particular place or manner.

 

 -38- 

 

 

(g) Whenever any payment received by the Administrative Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Administrative Agent and the Lenders under or in
respect of this Agreement and the other Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in the
applicable provisions of Section 2.02(e) or Section 8.03. If the Administrative
Agent receives funds for application to the Obligations of the Loan Parties
under or in respect of the Loan Documents under circumstances for which the Loan
Documents do not specify the manner in which such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each of the Lenders in accordance with such Lender’s Pro Rata
Share of the Outstanding Amount of the Term Loan at such time, in repayment or
prepayment of such of the outstanding Term Loan or other Obligations then owing
to such Lender.

 

Section 2.09. Sharing of Payments. If, other than as expressly provided
elsewhere herein (including, without limitation, in Section 10.07), any Lender
shall obtain on account of its Pro Rata Share of the Term Loan made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its Pro Rata Share (or other share
contemplated hereunder) thereof, such Lender shall promptly (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Pro Rata Share of the Term Loan made by them as shall be
necessary to cause such purchasing Lender to share the excess payment in respect
of the Term Loan or such participations, as the case may be, pro rata with each
of them; provided that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. Borrower agrees that any Lender so purchasing a participation
from another Lender may, to the fullest extent permitted by applicable Law,
exercise all its rights of payment (including the right of setoff, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation. Each
Lender that purchases a participation pursuant to this Section 2.09 shall from
and after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing
Lender were the original owner of the Obligations purchased.

 

Section 2.10. LIBO Not Determinable, Impracticability or Illegality. If on or
before the day on which the LIBO Rate is to be determined the Administrative
Agent determines in good faith or, with respect to the following clauses (ii)
and (iii), the Required Lenders advise the Administrative Agent, that, (i) the
LIBO Rate cannot be determined for any reason, (ii) the LIBO Rate will not
adequately and fairly reflect the cost of maintaining the Term Loan or
(iii) Dollar deposits in the principal amount of the Term Loan are not available
in the London interbank market, the Administrative Agent shall, as soon as
practicable thereafter, give written notice of such determination to Borrower
and the Lenders. Upon any such determination, the LIBO Rate shall be converted
into the Reference Rate at the end of the then current Interest Period and shall
at all times thereafter bear interest at the Reference Rate until the
Administrative Agent (or the Required Lenders, as applicable) determine that the
circumstances set forth in clauses (i) through (iii) above cease to exist. Each
determination by the Administrative Agent and Required Lenders hereunder shall
be conclusive and binding absent manifest error.

 

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Section 2.11. Removal or Replacement of a Lender. Anything contained herein to
the contrary notwithstanding, in the event that in connection with any proposed
amendment, modification, termination, waiver or consent with respect to any of
the provisions hereof as contemplated by Section 10.01(a) or (b), the consent of
Administrative Agent and Required Lenders shall have been obtained but the
consent of one or more of such other Lenders (each a “Non-Consenting Lender”)
whose consent is required shall not have been obtained; then, with respect to
such Non-Consenting Lender, Administrative Agent may, by giving written notice
to Borrower and any Non-Consenting Lender of its election to do so, elect to
cause such Non-Consenting Lender (and such Non-Consenting Lender hereby
irrevocably agrees) to assign its outstanding Term Loan in full to one or more
Eligible Assignees (each a “Replacement Lender”) in accordance with the
provisions of Section 10.07 and such Non-Consenting Lender shall pay any fees
payable thereunder in connection with such assignment; provided, (i) on the date
of such assignment, the Replacement Lender shall pay to the Non-Consenting
Lender an amount equal to the sum of an amount equal to the principal of, and
all accrued interest on, all of the outstanding Term Loan of the Non-Consenting
Lender, plus any Yield Maintenance Premium or Prepayment Premium, to the extent
applicable; and (ii) each Replacement Lender shall consent, at the time of such
assignment, to each matter in respect of which such Lender was a Non-Consenting
Lender. Upon the prepayment of all amounts owing to any Non-Consenting Lender,
such Non-Consenting Lender shall no longer constitute a “Lender” for purposes
hereof; provided, any rights of such Non-Consenting Lender to indemnification
hereunder shall survive as to such Non-Consenting Lender.

 

Article III

 

Taxes, Increased Costs Protection and Illegality

 

Section 3.01. Taxes.

 

(a) Defined Terms. For purposes of this Section 3.01, the term “applicable law”
includes FATCA.

 

(b) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

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(c) Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

 

(d) Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor
accompanied by an explanation in reasonable detail, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto.
A certificate as to the amount of such payment or liability delivered to
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 10.07(d) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

(f) Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 3.01, such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

 -41- 

 

 

(g) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to Borrower and the Administrative Agent, at the time or
times reasonably requested by Borrower or the Administrative Agent, such
properly completed and executed documentation reasonably requested by Borrower
or the Administrative Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by Borrower or the Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by
Borrower or the Administrative Agent as will enable Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

(ii) Without limiting the generality of the foregoing, in the event that
Borrower is a U.S. Borrower:

 

(A) any Lender that is a U.S. Person shall deliver to Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower or the Administrative Agent), executed copies of
IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;

 

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrower and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrower or the Administrative Agent),
whichever of the following is applicable:

 

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN (or
W-8BEN-E, as applicable) establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN (or W-8BEN-E, as applicable) establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “business profits” or
“other income” article of such tax treaty;

 

(2) executed copies of IRS Form W-8ECI;

 

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

 

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

 

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrower and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrower or the Administrative Agent),
executed copies of any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit Borrower or the Administrative Agent to determine
the withholding or deduction required to be made; and

 

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by Borrower or
the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by Borrower or the Administrative
Agent as may be necessary for Borrower and the Administrative Agent to comply
with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify Borrower and the Administrative Agent
in writing of its legal inability to do so.

 

(h) Treatment of Certain Refunds. If any party determines, in its reasonable
discretion, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 3.01 (including by the payment of
additional amounts pursuant to this Section 3.01), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

 -43- 

 

 

(i) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Term Loan
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

 

Section 3.02. Illegality. (a) If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority that is a court, statutory board or
commission has asserted that it is unlawful, for any Lender or its Applicable
Lending Office to make, maintain or fund its portion of the Term Loan (and, in
the opinion of such Lender, the designation of a different lending office would
either not avoid such unlawfulness or would be disadvantageous to such Lender),
then such Lender shall promptly notify Borrower thereof following which (a) the
Lender’s Term Loan Commitment shall be suspended until such time as such Lender
may again make and maintain its portion of the Term Loan hereunder and (b) if
such Law shall so mandate, the Term Loan held by such Lender shall be prepaid by
Borrower on or before such date as shall be mandated by such Law in an amount
equal to 100% of the aggregate principal amount of the Term Loan held by such
Lender, plus any accrued but unpaid interest on the aggregate principal amount
of the Term Loan being prepaid.

 

(b) If any provision of this Agreement or any of the other Loan Documents would
obligate Borrower to make any payment of interest with respect to the Facility
or other amount payable to the Administrative Agent or any Lender in an amount
or calculated at a rate which would be prohibited by any Law then,
notwithstanding such provision, such amount or rates shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by any applicable law or so
result in a receipt by the Administrative Agent or such Lender of interest with
respect to its Term Loan and Term Loan Commitments at a criminal rate, such
adjustment to be effected, to the extent necessary, as follows:

 

(i) first, by reducing the amount or rate of interest required to be paid to the
Administrative Agent or the affected Lender under Section 2.04; and

 

(ii) thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid to the Administrative Agent or the affected Lender which
would constitute interest with respect to the Term Loan or Term Loan Commitments
for purposes of any applicable law.

 

 -44- 

 

 

Section 3.03. Increased Cost and Reduced Return; Capital Adequacy. (a) If any
Lender reasonably determines that as a result of the introduction of or any
Change in Law or a change in the interpretation of any Law with which such
Lender or any lending office of such Lender, if any, is required to comply, in
each case, after the date hereof, there shall be any increase in the cost to
such Lender agreeing to make, making or maintaining the Term Loan, or a
reduction in the amount received or receivable by such Lender in connection with
any of the foregoing (excluding for purposes of this Section 3.03(a) any such
increased costs or reduction in amount resulting from (i) Indemnified Taxes,
(ii) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes or (iii) Other Connection Taxes), then from time to time within fifteen
(15) days after demand by such Lender setting forth in reasonable detail such
increased costs (with a copy of such demand to the Administrative Agent given in
accordance with Section 3.04), Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.

 

(b) If any Lender reasonably determines that the introduction of any Law
regarding (i) capital adequacy or any change therein or in the interpretation
thereof or (ii) liquidity requirement, or in each case any change therein or in
the interpretation thereof with which such Lender (or its Applicable Lending
Office) is required to comply, in each case after the date hereof, would have
the effect of reducing the rate of return on the capital of such Lender, or any
corporation controlling such Lender, to a level below that which such Lender, or
the corporation controlling such Lender, could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of any
corporation controlling such Lender with respect to capital adequacy) as a
consequence of such Lender’s obligations hereunder, then from time to time upon
demand of such Lender setting forth in reasonable detail the charge and the
calculation of such reduced rate of return (with a copy of such demand to the
Administrative Agent given in accordance with Section 3.04), Borrower shall pay
to such Lender such additional amounts as will compensate such Lender for such
reduction within fifteen (15) days after receipt of such demand.

 

(c) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section 3.03 shall not constitute a waiver of such Lender’s right to
demand such compensation.

 

(d) If any Lender requests compensation under this Section 3.03, then such
Lender will, if requested by Borrower, use commercially reasonable efforts to
designate another Applicable Lending Office for its Term Loan affected by such
event; provided that such efforts are made on terms that, in the reasonable
judgment of such Lender, cause such Lender and its Applicable Lending Office(s)
to suffer no material economic, legal or regulatory disadvantage; and provided
further that nothing in this Section 3.03(d) shall affect or postpone any of the
Obligations of Borrower or the rights of such Lender pursuant to
Section 3.03(a), (b) or (c).

 

 -45- 

 

 

(e) As of the Closing Date, each Lender to its knowledge, is unaware of any
Change in Law that would cause increased costs, reduced return, or adjustment of
capital adequacy as contemplated by this Section 3.03.

 

Section 3.04. Matters Applicable to All Requests for Compensation. The
Administrative Agent or any Lender claiming compensation under this Article III
shall deliver a certificate to Borrower setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder, which shall be
conclusive absent manifest error. In determining such amount, the Administrative
Agent or such Lender, as the case may be, may use any reasonable averaging and
attribution methods. With respect to any Lender’s claim for compensation under
Section 3.01, Section 3.02 or Section 3.03, Borrower shall not be required to
compensate such Lender for any amount incurred more than ninety (90) days prior
to the date that such Lender notifies Borrower of the event that gives rise to
such claim; provided that if the circumstance giving rise to such claim is
retroactive, then such 90-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

Section 3.05. Survival. All of Borrower’s obligations under this Article III
shall survive termination of the Term Loan Commitments and repayment of all
other Obligations hereunder.

 

Article IV

 

Conditions Precedent

 

Section 4.01. Conditions to the Closing Date. The obligation of each Lender to
make the Term Loan hereunder is subject to satisfaction or waiver in writing by
the Lenders of the following conditions precedent:

 

(a) The Administrative Agent’s receipt of the following, each properly executed
by a Responsible Officer of the signing Loan Party, and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:

 

(i) executed counterparts of this Agreement and the other Loan Documents by each
Loan Party, Agent and Lender, as applicable;

 

(ii) an original Note executed by Borrower in favor of each Lender that has
requested in writing a Note;

 

(iii) such certificates (including a certificate substantially in the form of
Exhibit I) of resolutions or other corporate action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party on the Closing
Date;

 

 -46- 

 

 

(iv) an opinion by Robinson Brog Leinwand Greene Genovese & Gluck, P.C., counsel
to the Loan Parties, in form and substance reasonably satisfactory to the
Administrative Agent;

 

(v) a certificate attesting to the Solvency of the Loan Parties (taken as a
whole) on the Closing Date before and after giving effect to the Transaction,
from the chief financial officer of Parent in substantially the form of
Exhibit J hereto;

 

(vi) copies of a recent Lien and judgment search in each jurisdiction reasonably
requested by the Collateral Agent with respect to the Loan Parties together with
evidence that, upon satisfaction of the conditions precedent contained in any
applicable payoff letters, all existing Liens (other than Permitted Liens) will
be terminated and released and all actions required to terminate and release
such Liens have been satisfactorily taken or will be capable of being
satisfactorily undertaken substantially simultaneously with the closing of the
Transaction; and

 

(vii) (A) Organization Documents of each Loan Party and (B) good standing
certificates or certificates of status, as applicable, as of a date reasonably
proximate to the Closing Date, from (1) the applicable Governmental Authority of
each Loan Party’s jurisdiction of incorporation, organization or formation, and
(2) the jurisdictions where the failure of a Loan Party to be qualified and in
good standing could reasonably be expected to have a Material Adverse Effect
and, where available, bring down certificates, for each Loan Party.

 

(b) As of the Closing Date, after giving effect to the Transaction, the Loan
Parties will have no indebtedness other than the Facility and any Surviving
Indebtedness specified on Schedule 7.03. All amounts due or outstanding in
respect of the Exworks Facility and any other Indebtedness other than the
Facility and any Surviving Indebtedness specified on Schedule 7.03 shall have
been repaid in full, all commitments (if any) in respect thereof terminated, all
guarantees (if any) thereof discharged and released and all security therefor
(if any) released, together with all fees and other amounts owing thereon, or
documentation in form and substance reasonably satisfactory to the
Administrative Agent to effect such release upon such repayment and termination
shall have been delivered to the Administrative Agent.

 

(c) In order to create in favor of Collateral Agent, for the benefit of the
Lenders, a valid, perfected first priority security interest in the personal
property Collateral, Collateral Agent shall have received:

 

(i) evidence satisfactory to Collateral Agent of the compliance by each Loan
Party of their obligations under the Collateral Documents (including, without
limitation, their obligations to authorize or execute, as the case may be, and
deliver UCC financing statements, originals of securities, instruments and
chattel paper, deposit account control agreements and any agreements governing
securities accounts as provided therein);

 

 -47- 

 

 

(ii) a completed Collateral Questionnaire dated the Closing Date and executed by
a Responsible Officer of each Loan Party, together with all attachments
contemplated thereby, including (A) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property of any
Loan Party in the jurisdictions specified in the Collateral Questionnaire,
together with copies of all such filings disclosed by such search, and (B) UCC
termination statements (or similar documents) duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements (or equivalent filings)
disclosed in such search (other than any such financing statements in respect of
Permitted Liens);

 

(iii) opinions of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent) with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other matters
governed by the laws of each jurisdiction in which any Loan Party or any
personal property Collateral is located as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent; and

 

(iv) evidence that each Loan Party shall have taken or caused to be taken any
other action, executed and delivered or caused to be executed and delivered any
other agreement, document and instrument (including without limitation, (i) a
landlord personal property collateral access agreement executed by the landlord
of any leasehold property and by the applicable Loan Party and (ii) any
intercompany notes evidencing Indebtedness permitted to be incurred pursuant to
Section 7.03(h)) and made or caused to be made any other filing and recording
(other than as set forth herein) reasonably required by Collateral Agent.

 

(d) The Administrative Agent shall have received the Mortgages (including all
leasehold Mortgages) with respect to each Material Owned Property, together with
all additional documentation required to be delivered pursuant to clause (g) of
the definition of “Collateral and Guarantee Requirement”.

 

(e) The Administrative Agent shall have received (i) the audited consolidated
balance sheets and related statements of income (if any) and Shareholders’
Equity of Parent and its Subsidiaries and unaudited consolidating balance sheets
and related statements of income (if any) for the Fiscal Year of Parent ended
December 31, 2017, (ii) unaudited consolidated and consolidating balance sheets
and related statements of income (if any) of Parent and its Subsidiaries for
each subsequent fiscal quarter after December 31, 2017 ended at least forty-five
(45) days before the Closing Date, (iii) unaudited consolidated and
consolidating balance sheets and related statements of income (if any) of Parent
and its Subsidiaries for each fiscal month ended at least thirty-one (31) days
before the Closing Date, and (iv) forecasts prepared by management of Parent of
consolidated and consolidating balance sheets and income statements of Parent
and its Subsidiaries on a monthly basis for Fiscal Year 2018 and on a quarterly
basis for Fiscal Year 2019 (“Projections”), in each case, in form and substance
satisfactory to the Administrative Agent and prepared in accordance with GAAP as
in effect at the time of such preparation.

 

 -48- 

 

 

(f) The Administrative Agent and the Lenders shall have completed, to their
satisfaction, all legal, tax, environmental, management and background checks,
business and other due diligence with respect to the business, assets,
liabilities, operations and condition (financial or otherwise) of the Loan
Parties (which shall include a review of all Material Agreements with the Loan
Parties’ customers and suppliers), in each case, in scope and determination
satisfactory to the Administrative Agent in its sole discretion. The
Administrative Agent shall have received a quality of earnings report from a
Person who is not an Affiliate of the Borrower, in form and substance
satisfactory to the Administrative Agent.

 

(g) Payment by Borrower of all accrued costs, fees and expenses (including
applicable Attorney Costs and the reasonable and documented out-of-pocket fees
and expenses of any other advisors) and any other compensation due and payable
to the Administrative Agent and Lenders on the Closing Date shall have been
received.

 

(h) The Administrative Agent shall have received reasonably satisfactory
evidence of insurance required to be maintained pursuant to Section 6.07 and the
Collateral Agent shall be named as an additional loss payee and additional
insured, as applicable, thereunder.

 

(i) Borrower shall have delivered to each Lender its duly executed Warrant
Certificates.

 

(j) Borrower shall have established the ECF Lockbox Account.

 

(k) The Lenders shall have received on or prior to the Closing Date all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including without limitation the PATRIOT Act and customary management background
checks, in order to allow the Lenders to comply therewith, in each case, to the
extent requested at least five (5) Business Days prior to the Closing Date.

 

(l) The Administrative Agent shall have received a certificate signed by a
Responsible Officer of Borrower certifying as to Sections 4.01(m), (n) and
(o) in substantially the form of Exhibit I.

 

(m) The representations and warranties of Borrower and each other Loan Party
contained in Article V or any other Loan Document shall be true and correct in
all material respects on and as of the Closing Date; provided that to the extent
that such representations and warranties specifically refer to an earlier date,
they shall be true and correct in all material respects as of such earlier date;
provided further that any representation and warranty that is qualified as to
“materiality”, “Material Adverse Effect” or similar language shall be true and
correct (after giving effect to any qualification therein) in all respects on
such respective dates.

 

 -49- 

 

 

(n) No Default or Event of Default shall exist.

 

(o) There is no action, suit, investigation or proceeding pending or, to the
knowledge of Borrower, threatened in any court or before an arbitrator or
governmental authority that could reasonably be expected to have a Material
Adverse Effect.

 

Article V

 

Representations and Warranties

 

Borrower represents and warrants to the Agents and the Lenders that:

 

Section 5.01. Existence, Qualification and Power; Compliance with Laws. Each
Loan Party and each of its Subsidiaries (a) is duly incorporated, organized or
formed, and validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization (to the extent such concept
exists in such jurisdiction), (b) has all requisite power and authority to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party,
(c) is duly qualified and in good standing (to the extent such concept exists)
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, (d) is in
compliance with all Laws (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System), orders, writs, injunctions
and orders and (e) has all requisite governmental licenses, authorizations,
consents and approvals to operate its business as currently conducted, except,
with respect to the foregoing clauses (c), (d) and (e), as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.

 

Section 5.02. Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is a
party, and the consummation of the Transaction, (a) are within such Loan Party’s
corporate or other powers, (b) have been duly authorized by all necessary
corporate or other organizational action, and (c) do not and will not
(i) contravene the terms of any of such Person’s Organization Documents,
(ii) except as set forth on Schedule 5.02, conflict with or result in any breach
or contravention of, or the creation of any Lien under (other than as permitted
by Section 7.01), or require any payment to be made under (x) any material
Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or any of its Subsidiaries, (y) any material
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject or (z) any Material
Agreement, or (iii) violate any material applicable Law.

 

 -50- 

 

 

Section 5.03. Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, or for the
consummation of the Transaction, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof) or (d) the exercise by the Collateral Agent, the
Administrative Agent or any Lender of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant to the Collateral Documents,
except for (i) filings necessary to perfect the Liens on the Collateral granted
by the Loan Parties in favor of the Secured Parties, (ii) the approvals,
consents, exemptions, authorizations, actions, notices and filings which are set
forth on Schedule 5.03 or have been duly obtained, taken, given or made and are
in full force and effect, (iii) for those filings required by the Exchange Act
and (iv) such approvals, consents, exemptions, authorizations, actions, notices
and filings the failure to obtain or make would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.

 

Section 5.04. Binding Effect. This Agreement and each other Loan Document has
been duly executed and delivered by each Loan Party that is party thereto. This
Agreement and each other Loan Document constitutes a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as such enforceability may be
limited by Debtor Relief Laws and by general principles of equity and principles
of good faith and fair dealing.

 

Section 5.05. Financial Statements; No Material Adverse Effect. (a) The Audited
Financial Statements and Unaudited Financial Statements (A) fairly present in
all material respects the financial condition of Parent as of the dates thereof
and Parent’s results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the periods covered thereby, except,
in the case of the Unaudited Financial Statements, changes resulting from
customary year-end adjustments consistent with past practice and the absence of
footnotes and (B) show all material Indebtedness and other liabilities, direct
or contingent, of the Loan Parties as of the date hereof that are required to be
reflected on a balance sheet prepared in accordance with GAAP, except for such
Indebtedness and other liabilities incurred since the date of the Unaudited
Financial Statements in the ordinary course of business.

 

 (b) Since December 31, 2017, there has been no event or circumstance, either
individually or in the aggregate, that has had or would reasonably be expected
to have a Material Adverse Effect.

 

 (c) The Projections furnished to the Administrative Agent prior to the Closing
Date are based on good faith estimates and assumptions made by the management of
Borrower; provided, the Projections are not to be viewed as facts and that
actual results during the period or periods covered by the Projections may
differ from such Projections and that the differences may be material; provided
further, as of the Closing Date, management of Borrower believed that the
Projections were reasonable and attainable.

 

(d) (i) The audited consolidated financial statements of the Loan Parties most
recently delivered pursuant to Section 6.01(c) and (ii) the unaudited
consolidated and consolidating financial statements of the Loan Parties most
recently delivered pursuant to Section 6.01(a) and (b), and the related
consolidated and consolidating statements of income (if any) or operations and
Shareholders’ Equity for such periods (A) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (B) fairly present in all material respects the
financial condition of the Loan Parties as of the date thereof and their results
of operations for the period covered thereby, subject, in the case of unaudited
financial statements, to the absence of footnotes and to customary year-end
adjustments consistent with past practice.

 

(e) The consolidated forecasted monthly expenses, balance sheets and statements
of income (if any) the Loan Parties delivered to the Lenders pursuant to
Section 6.01(f) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were reasonable in light of the conditions
existing at the time of delivery of such forecasts; it being understood that
actual results may vary from such forecasts and that such variations may be
material.

 

Section 5.06. Litigation. There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or its Subsidiaries, including any
Environmental Action, pending or to the knowledge of the Loan Parties,
threatened before any Governmental Authority or arbitrator that (i) would be
reasonably likely to have a Material Adverse Effect or (ii) purports to affect
the legality, validity or enforceability of any Loan Document or the
consummation of the Transaction.

 

Section 5.07. Ownership of Property; Liens. (a) Each Loan Party and its
Subsidiaries is the legal and beneficial owner of the Collateral pledged by it
free and clear of any Lien, except for the Liens and security interests created
or permitted under the Loan Documents including, any Liens permitted under
Section 7.01.

 

(b) Each Loan Party and each of its Subsidiaries has good and marketable title
in fee simple to, or valid leasehold interests in, or easements or other limited
property interests in, all real property used in the ordinary conduct of its
business, free and clear of all Liens except for defects in title that do not
materially interfere with its ability to conduct its business or to utilize such
assets for their intended purposes and Liens permitted by Section 7.01 and
except where the failure to have such title or other interest would not
reasonably be expected to have a Material Adverse Effect. Set forth on
Schedule 5.07(b) hereto is a complete and accurate list of all real property
owned by any Loan Party or any of its Subsidiaries, showing, as of the date
hereof, the street address, state and any other relevant jurisdiction, record
owner and fair market value. Set forth on Schedule 5.07(b) hereto is a complete
and accurate list of all leases of real property under which any Loan Party or
any Subsidiary is the tenant, showing as of the date hereof the street address,
state and any other relevant jurisdiction, parties thereto, sublessee (if any),
expiration date and annual base rental cost thereof.

 

 -51- 

 

 

(c) Except for the properties set forth on Schedule 5.07(b), as of the Closing
Date, no Loan Party or any of its Subsidiaries owns any Material Owned Property.

 

Section 5.08. Perfection of Security Interests. Upon the making of the filings
and taking of the other actions set forth on Schedule 5.08, all filings and
other actions necessary to perfect the security interest in the Collateral
created under the Collateral Documents have been duly made or taken and are in
full force and effect, and the Collateral Documents create in favor of the
Collateral Agent for the benefit of the Secured Parties a valid and, together
with such filings and other actions, perfected first priority security interest
in the Collateral, securing the payment of the Secured Obligations, and having
priority over all other Liens on the Collateral except in the case of
(a) non-consensual Liens permitted under Section 7.01, to the extent any such
Liens would have priority over the Liens in favor of the Collateral Agent
pursuant to any applicable Law, and (b) Liens not required to be perfected by
control or possession pursuant to the Collateral and Guarantee Requirement to
the extent that all filings and other actions necessary or desirable to perfect
such security interest have been duly taken.

 

Section 5.09. Environmental Compliance. Except as set forth on Schedule 5.09:

 

(a) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws and Environmental Permits, all past non-compliance with such Environmental
Laws and Environmental Permits has been resolved without ongoing obligations or
costs, and no circumstances exist that would be reasonably likely to (i) to the
knowledge of the Loan Parties, form the basis of an Environmental Action against
any Loan Party or any Subsidiary or any of their properties or (ii) cause any
such property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law, which, in each case, individually
or in the aggregate could not reasonably be expected to result in a Material
Adverse Effect.

 

(b) (i) None of the properties currently or, to the knowledge of the Loan
Parties, formerly, owned or operated by any Loan Party or any of its
Subsidiaries is listed or, to such Loan Party’s or each of its Subsidiaries’
knowledge, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such property; (ii) there are
no, and, to the knowledge of the Loan Parties, never have been, any underground
or aboveground storage tanks other than in compliance with applicable
Environmental Laws or any surface impoundments, septic tanks, pits, sumps or
lagoons in which Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by any Loan Party or any of
its Subsidiaries or, to the best of its knowledge, on any property formerly
owned or operated by any Loan Party or any of its Subsidiaries other than in
compliance with applicable Environmental Laws; (iii) other than in compliance
with applicable Environmental Laws, there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or any of
its Subsidiaries; and (iv) Hazardous Materials have not been released,
discharged or disposed of by any Loan Party or any of its Subsidiaries on any
property currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries other than in material compliance with applicable Environmental
Laws.

 

 -52- 

 

 

(c) (i) Neither any Loan Party nor any of its Subsidiaries is undertaking, and
has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and (ii) all Hazardous Materials
generated, used, treated, handled or stored at, or transported by or on behalf
of any Loan Party or any of its Subsidiaries to or from, any property currently
or formerly owned or operated by any Loan Party or any of its Subsidiaries have,
to the knowledge of the Loan Parties, been disposed of in a manner not
reasonably expected to result in material liability to any Loan Party or any of
its Subsidiaries.

 

(d) The Loan Parties have obtained all material Environmental Permits required
for ownership and operation of their property and business as presently
conducted. No Loan Party has received any written notification pursuant to any
applicable Environmental Law or otherwise has knowledge that (i) any work,
repairs, construction or Capital Expenditures are required to be made in order
to be in or continue to be in compliance with any applicable Environmental Laws
or any material Environmental Permit or (ii) any Environmental Permit is about
to be reviewed, made subject to new limitations or conditions, revoked,
withdrawn or terminated.

 

(e) Except as would not reasonably be expected to result in a material
liability, no Loan Party nor any of its Subsidiaries has contractually assumed
any liability or obligation under or relating to any applicable Environmental
Law.

 

(f) Nothing contained in this Section 5.09 is intended to apply to any action,
suit, investigation, litigation or proceeding (including any Environmental
Action) relating to exposure to asbestos, in any form, or any asbestos
containing materials.

 

Section 5.10. Taxes. (a) Each of the Loan Parties has timely filed all income
and all other material tax returns and reports required to be filed, and has
timely paid all Taxes (whether or not shown on such tax returns or reports) and
all other amounts of federal, provincial, state, municipal, foreign and other
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those which are set forth on Schedule 5.10 or are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP.

 

 -53- 

 

 

(b) Except as set forth on Schedule 5.10 or as would not, individually or in the
aggregate, be reasonably likely to result in any material liability, (i) there
are no claims being asserted in writing with respect to any amounts of taxes,
(ii) there are no presently effective waivers or extensions of statutes in
writing with respect to any amounts of taxes, and (iii) no tax returns are being
examined by, and no written notification of intention to examine has been
received from, the Internal Revenue Service or any other taxing authority, in
each case, with respect to the Loan Parties.

 

(c) No Loan Party is party to any tax sharing agreement other than with an
affiliate included in a consolidated or combined tax return, provided that any
such tax sharing agreement shall be subject to the restrictions in Section 7.08.

 

Section 5.11. Compliance with ERISA. (a) Each Plan is in compliance with the
applicable provisions of ERISA, the Code and other federal or state Laws, except
as is not, either individually or in the aggregate, reasonably likely to have a
Material Adverse Effect.

 

(b) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) none of the Loan Parties or any of their Subsidiaries has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 et seq. or 4243 of ERISA with respect to a
Multiemployer Plan; and (iii) none of the Loan Parties or any of their
Subsidiaries or any ERISA Affiliate has engaged in a transaction that would be
subject to Section 4069 or 4212(c) of ERISA.

 

Section 5.12. Labor Matters. There are no strikes pending or to the knowledge of
the Loan Parties, threatened against the Loan Parties that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.
The hours worked and payments made to employees of the Loan Parties have not
been in violation in any material respect of the Fair Labor Standards Act or any
other applicable Law dealing with such matters. All material payments due from
the Loan Parties or for which any claim may be made against the Loan Parties, 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 the Loan Parties to the
extent required by GAAP. The consummation of the Transaction will not give rise
to a right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which any Loan Party (or any
predecessor) is bound, other than collective bargaining agreements that,
individually or in the aggregate, are not material to the Loan Parties.

 

Section 5.13. Insurance. The properties of the Loan Parties and their
Subsidiaries are insured in the manner contemplated by Section 6.07.

 

Section 5.14. Subsidiaries; Equity Interests. As of the date hereof and the date
of delivery of any supplemental Schedules pursuant to Section 6.02(c) and
Section 6.11, none of the Loan Parties have any Subsidiaries other than those
specifically disclosed in Schedule 5.14, and all of the outstanding Equity
Interests in each such Person and each such Subsidiary have been validly issued,
are fully paid and non-assessable. As of the date hereof and the date of
delivery of any supplemental Schedules pursuant to Section 6.02(c) and
Section 6.11, Schedule 5.14 (a) sets forth the name and jurisdiction of
organization of each Subsidiary of each of the Loan Parties, (b) sets forth the
ownership interest of each Loan Party and each of its Subsidiaries in each of
their respective Subsidiaries, including the percentage of such ownership and
(c) identifies each Person the Equity Interests of which are required to be
pledged pursuant to the Collateral and Guarantee Requirement and Section 6.11.

 

 -54- 

 

 

Section 5.15. Margin Regulations; Investment Company Act; PATRIOT Act. (a) None
of the Loan Parties or any of their Subsidiaries is engaged nor will engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of the Credit Extension will be used for any purpose that violates
Regulation U issued by the FRB.

 

(b) None of the Loan Parties or any of their Subsidiaries or any Person
controlling such Loan Party or any of its Subsidiaries is required to be
registered as an “investment company” under the Investment Company Act of 1940,
as amended.

 

(c) None of the Loan Parties or any of their Subsidiaries is in material
violation of any applicable laws relating to money laundering, including the
PATRIOT Act, or terrorism, including Executive Order No. 13224 on Terrorist
Financing, effective September 23, 2001, and the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended), or any
enabling legislation or executive order relating thereto. None of the Loan
Parties or any of their Subsidiaries will knowingly use the proceeds of the Term
Loan in violation of any of the foregoing statutes.

 

(d) No Loan Party (i) is a person whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner that violates Section 2 of such executive order, or (iii) is a person on
the list of “Specially Designated Nationals and Blocked Persons” or subject to
blocking or specific trade restrictions under any other U.S. Department of
Treasury’s Office of Foreign Assets Control regulation or implementing executive
order.

 

Section 5.16. Disclosure. No report, financial statement, certificate or other
written information furnished by or on behalf of the Loan Parties to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or any other Loan Document (as modified or supplemented by other information so
furnished) when taken as a whole contains when furnished any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading; provided that with respect to projections and
other forward-looking information, Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time of preparation, it being understood that such projections
may vary from actual results and that such variances may be material. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to Borrower (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.

 

 -55- 

 

 

Section 5.17. Intellectual Property. As of the date hereof and the date of
delivery of any supplemental Schedules pursuant to Section 6.02(c) and
Section 6.11, set forth on Schedule 5.17 is a complete and accurate list of all
Registered patents, trademarks, service marks, domain names and copyrights,
owned by the Loan Parties as of such date, showing as of such date the
jurisdiction in which each such item of Registered Intellectual Property is
registered or in which an application is pending and the registration or
application number. Each Loan Party owns or has the right to use, all of the
trademarks, service marks, trade names, domain names, copyrights, patents,
know-how, technology and other intellectual property recognized under applicable
Law (collectively, “Intellectual Property”) that are material to the operation
of their respective businesses as currently conducted and, to the knowledge of
the Loan Parties, the use of such Intellectual Property by such Person or the
operation of their respective businesses is not infringing upon any Intellectual
Property rights held by any other Person except as would not, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect.

 

Section 5.18. Solvency. After giving effect to the Transaction and the other
transactions contemplated hereby, the Loan Parties are, on a consolidated basis,
Solvent.

 

Section 5.19. Material Agreements. Schedule 5.19 contains a true, correct and
complete list of all the Material Agreements in effect on the Closing Date,
which, together with any updates provided pursuant to Section 6.03(l), are in
full force and effect and no defaults currently exist thereunder (other than as
described in Schedule 5.19 or in such updates).

 

Article VI

 

Affirmative Covenants

 

So long as any Lender shall have any Term Loan Commitment hereunder, any portion
of the Term Loan or other Obligation hereunder which is accrued and payable
shall remain unpaid or unsatisfied, Borrower shall, and shall cause each Loan
Party to:

 

Section 6.01. Financial Statements. Deliver to the Administrative Agent for
prompt further distribution to each Lender:

 

(a) Monthly Reports. As soon as available, and in any event within thirty
(30) days after the end of each month, the consolidated and consolidating
balance sheet of Parent and its Subsidiaries as at the end of such month and the
related consolidated and consolidating statements of income, stockholders’
equity and cash flows of Parent and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the end of such
month, setting forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, all in reasonable
detail, together with a schedule of reconciliations for any reclassifications
with respect to prior months or periods (and, in connection therewith, copies of
any restated financial statements for any impacted month or period), a Financial
Officer Certification and a Narrative Report with respect thereto and any other
operating reports prepared by management for such period;

 

 -56- 

 

 

(b) Quarterly Financial Statements. As soon as available, and in any event
within forty-five (45) days after the end of each Fiscal Quarter of each Fiscal
Year (including the fourth Fiscal Quarter), the consolidated and consolidating
balance sheets of Parent and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated and consolidating statements of income,
stockholders’ equity and cash flows of Parent and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, all in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto;

 

(c) Annual Financial Statements. As soon as available, and in any event within
ninety (90) days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of Parent and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated and consolidating statements of
income, stockholders’ equity and cash flows of Parent and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding figures
from the Financial Plan for the Fiscal Year covered by such financial
statements, in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto; and (ii) with respect
to such consolidated financial statements a report thereon of Marcum LLP or
other independent certified public accountants of recognized national standing
selected by Parent, and reasonably satisfactory to Administrative Agent (which
report shall be unqualified as to going concern and scope of audit, and shall
state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Parent and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Loan Documents,
(2) whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof (such report
shall also include (x) a detailed summary of any audit adjustments; (y) a
reconciliation of any audit adjustments or reclassifications to the previously
provided monthly or quarterly financials; and (z) restated monthly or quarterly
financials for any impacted periods);

 

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(d) Compliance Certificate. Together with each delivery of financial statements
of Parent and its Subsidiaries pursuant to Sections 6.01(a) (solely with respect
to the calculation of Monthly Excess Cash Flow), 6.01(b) and 6.01(c), a duly
executed and completed Compliance Certificate;

 

(e) Statements of Reconciliation after Change in Accounting Principles. If, as a
result of any change in accounting principles and policies from those used in
the preparation of the Audited Financial Statements, the consolidated financial
statements of Parent and its Subsidiaries delivered pursuant to Section 6.01(b)
or 6.01(c) will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had no
such change in accounting principles and policies been made, then, together with
the first delivery of such financial statements after such change, one or more
statements of reconciliation for all such prior financial statements in form and
substance satisfactory to Administrative Agent; and

 

(f) Financial Plan. As soon as practicable and in any event no later than the
last day of each Fiscal Year, a consolidated plan and financial forecast for
such Fiscal Year and each Fiscal Year (or portion thereof) through the Maturity
Date (a “Financial Plan”), including (i) a forecasted consolidated and
consolidating balance sheet and forecasted consolidated and consolidating
statements of income and cash flows of Parent and its Subsidiaries for each such
Fiscal Year, together with pro forma Compliance Certificates for each such
Fiscal Year and an explanation of the assumptions on which such forecasts are
based, (ii) forecasted consolidated and consolidating statements of income and
cash flows of Parent and its Subsidiaries for each month of each such Fiscal
Year, (iii) forecasts demonstrating projected compliance with the requirements
of Section 7.13 through the Maturity Date, and (iv) forecasts demonstrating
adequate liquidity through the Maturity Date, together, in each case, with an
explanation of the assumptions on which such forecasts are based all in form and
substance reasonably satisfactory to the Administrative Agent.

 

Section 6.02. Certificates; Reports; Other Information. Promptly deliver to the
Administrative Agent for further distribution to each Lender:

 

(a) promptly after the same are publicly available, (i) copies of all annual,
regular, periodic and special reports and registration statements which Parent
files with the SEC or with any successor Governmental Authority (other than
amendments to any registration statement (to the extent such registration
statement, in the form it became effective, is delivered), exhibits to any
registration statement and, if applicable, any registration statement on Form
S-8), and (ii) all press releases and other statements made available generally
by any Loan Party to the public concerning material developments in the business
of the Loan Parties;

 

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(b) promptly after the receipt or furnishing thereof, copies of any material
requests or material notices received by any Loan Party or any of its
Subsidiaries (other than in the ordinary course of business) in respect of any
instrument, indenture, loan or credit or similar agreement relating to
Indebtedness in excess of the Threshold Amount;

 

(c) together with the delivery of each Compliance Certificate pursuant to
Section 6.01(d) (other than with respect to a Compliance Certificate delivered
with the financial statements pursuant to Section 6.01(a)), (i) a description of
each event, condition or circumstance during the last Fiscal Quarter covered by
such Compliance Certificate requiring a prepayment under Section 2.02(b), (ii) a
list of Subsidiaries as of the date of delivery of such Compliance Certificate
or a confirmation that there is no change in such information since the later of
the Closing Date or the date of the last such list, (iii) a report supplementing
Schedules 5.07(b) and 5.17 and Schedules I and IV of the Security Agreement and
(iv) such other information required by the Compliance Certificate;

 

(d) within fifteen (15) days of filing or receipt of any written notification,
copies of all Tax returns, waivers, amendments, requests for extension and other
written notifications which any Loan Party files with, or receives from, the
Internal Revenue Service or any other taxing authority;

 

(e) promptly after the same are available to the applicable Loan Parties, copies
of all monthly bank statements for each Deposit Account that is subject to an
account control agreement naming the Collateral Agent as secured party (or the
equivalent) thereunder; and

 

(f) promptly, such additional information regarding the business, legal,
financial or corporate affairs of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender through the Administrative Agent may from time to time reasonably
request.

 

Documents required to be delivered pursuant to Section 6.01 or Section 6.02
shall be delivered electronically to the Administrative Agent for further
distribution to each Lender; provided that upon written request by the
Administrative Agent, Borrower shall deliver paper copies of such documents to
the Administrative Agent for further distribution to each Lender until a written
request to cease delivering paper copies is given by the Administrative Agent.
Notwithstanding the foregoing, Borrower shall deliver originally executed
Compliance Certificates to the Administrative Agent (in addition to the
electronic copies pursuant to the foregoing). Each Lender shall be solely
responsible for timely accessing electronically provided documents or requesting
delivery of paper copies of such documents from the Administrative Agent and
maintaining its copies of such documents.

 

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Section 6.03. Notice Requirements; Other Information. (i) Promptly after a
Responsible Officer obtains knowledge thereof, notify the Administrative Agent
of each of the following events or circumstances, and, (ii) as soon as
available, provide to the Administrative Agent, for prompt further distribution
to each Lender, the following information and documents:

 

(a) the occurrence of any Default, which notice shall specify the nature
thereof, the period of existence thereof and what action Borrower has taken or
proposes to take with respect thereto;

 

(b) the occurrence of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect;

 

(c) the commencement of, or any material development in, any litigation or
governmental proceeding (including without limitation pursuant to any applicable
Environmental Law) pending against any Loan Party that could reasonably be
expected to be determined adversely and, if so determined, to result in a
Material Adverse Effect;

 

(d) the occurrence of any ERISA Event above the Threshold Amount or the breach
of any representation in Section 5.12;

 

(e) the occurrence of any event triggering a Collateral and Guarantee
Requirement under Section 6.11;

 

(f) any information with respect to environmental matters as required by
Section 6.04(b);

 

(g) copies of all notices, requests and other documents received by any Loan
Party or any of its Subsidiaries under or pursuant to any instrument, indenture,
loan or credit or similar agreement relating to Indebtedness in excess of the
Threshold Amount regarding or related to any event of default by any Loan Party
party thereto or any other event that could otherwise have a Material Adverse
Effect and copies of any amendment, modification or waiver of any provision of
any such instrument, indenture, loan or credit or similar agreement relating to
any Indebtedness in excess of the Threshold Amount and, from time to time upon
request by the Administrative Agent, such information and reports regarding such
instruments, indentures and loan and credit and similar agreements relating to
any Indebtedness in excess of the Threshold Amount as the Administrative Agent
may reasonably request;

 

(h) a tax event or liability not previously disclosed in writing by Borrower to
the Administrative Agent which would reasonably be expected to result in a
liability having a Material Adverse Effect, together with any other information
as may be reasonably requested by the Administrative Agent to enable the
Administrative Agent to evaluate such matters;

 

(i) any occurrence of a Change of Control;

 

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(j) any change (i) in any Loan Party’s corporate name, (ii) any Loan Party’s
identity and corporate structure, (iii) any Loan Party’s taxpayer identification
number or (iv) any Loan Party’s location of its principal place of business.
Borrower agrees that it will not, and will not permit any of its Subsidiaries
to, permit or make any change referred to in this Section 6.03(j) unless all
filings have been made under the Uniform Commercial Code within the time periods
provided therein or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to have a valid, legal and
perfected first priority security interest in the Collateral and for the
Collateral Agent at all times following such change to have a valid, legal and
perfected first priority security interest as contemplated by the Collateral
Documents;

 

(k) promptly upon the discovery of any material inaccuracy, miscalculation or
misstatement contained in any Compliance Certificate or other certificate
provided for any period that affects any financial or other calculations,
representations or warranties or other statements impacting any provision of
this Agreement and any other Loan Document in any material respect, notice of
such inaccuracy, miscalculation or misstatement together with an updated
certificate including the corrected information, calculation or statement, as
applicable;

 

(l) promptly, and in any event within ten (10) Business Days after (i) any
Material Agreement of any Loan Party is terminated or amended in a manner that
is materially adverse to any Loan Party, as the case may be, or (ii) any new
Material Agreement is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, delivered to
Administrative Agent (to the extent such delivery is permitted by the terms of
any such Material Agreement, provided, no such prohibition on delivery shall be
effective if it were bargained for by any Loan Party with the intent of avoiding
compliance with this Section 6.03(l)), and an explanation of any actions being
taken with respect thereto;

 

(m) each year, at the time of delivery of annual financial statements with
respect to the preceding Fiscal Year pursuant to Section 6.01(c), Borrower shall
deliver to Collateral Agent an Officer’s Certificate either (i) confirming that
there has been no change in such information since the date of the Collateral
Questionnaire delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this Section and/or identifying such changes,
or (ii) certifying that all UCC financing statements (including fixtures
filings, as applicable) or other appropriate filings, recordings or
registrations, have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified in the Collateral
Questionnaire or pursuant to clause (i) above to the extent necessary to perfect
the security interests under the Collateral Documents for a period of not less
than eighteen (18) months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period);

 

(n) any management letter delivered to management of any Loan Party by an
independent registered public accounting firm; and

 

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(o) any and all material information and/or documentation regarding any
potential merger, acquisition or Change of Control transaction contemplated by
any Loan Party, provided that the provision of any such information shall not be
deemed to be a consent to any such merger or Change of Control transaction or a
cure or waiver of any Event of Default which occurs in connection with such
merger or Change of Control transaction, it being understood that such Event of
Default may only be waived with the express consent of Required Lenders.

 

Section 6.04. Environmental Matters. (a) (i) Comply and cause each of its
Subsidiaries and take all commercially reasonable efforts to cause all lessees
and other Persons operating or occupying any real property owned or leased by
the Loan Parties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; (ii) obtain and renew, and cause
each of its Subsidiaries to obtain, maintain and timely renew, all Environmental
Permits required under Environmental Laws for its operations and properties; and
(iii) conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action required to remove and clean up all releases or threatened releases
of Hazardous Materials from any of its properties, as required under, and in
accordance with the requirements of all Environmental Laws; provided, however,
that none of the Loan Parties shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and, to the extent
required by GAAP, appropriate reserves are being maintained with respect to such
circumstances.

 

(b) Environmental Reporting Requirements. Promptly, and in any event within
ten (10) Business Days, after a Responsible Officer obtains knowledge thereof,
notify the Administrative Agent of or, deliver to the Administrative Agent, for
further distribution to each Lender copies of any and all material,
non-privileged written communications and material, non-privileged documents
concerning:

 

(i) any Environmental Action against or of any non-compliance by any Loan Party
or any of its Subsidiaries with any Environmental Law or Environmental Permit
that would (1) reasonably be expected to result in a liability to any Loan Party
in excess of $100,000 or (2) cause any Mortgaged Properties to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law;

 

(ii) to the extent any of the following is reasonably expected to result in a
liability to any Loan Party in excess of $100,000: (1) any occurrence of any
release or threatened release of Hazardous Materials required to be reported to
any Governmental Authority under applicable Environmental Law, (2) any remedial
actions taken by any Loan Party or its Subsidiaries in respect of any such
release or threatened release that could reasonably be expected to result in an
Environmental Action or (3) the Loan Parties’ discovery of any occurrence of or
condition on any real property adjoining or in the vicinity of any site or
facility that would be reasonably expected to cause such site or facility or any
part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws;

 

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(iii) to the extent reasonably expected to result in a liability to any Loan
Party in excess of $100,000, any action proposed to be taken by any Loan Party
to modify current operations in a manner that would reasonably be expected to
subject the Loan Parties to any material additional obligations or requirements
under Environmental Laws;

 

(iv) copies of all material environmental reports or audits (whether produced by
any Loan Party or any third party or Governmental Authority) and any Phase I or
Phase II reports in respect of any sites or real property owned, leased or
operated by any Loan Party that are in possession or control of any Loan Party;

 

(v) to the extent any of the following is reasonably expected to result in a
liability to any Loan Party in excess of $100,000: copies of any and all
material, non-privileged written communications with respect to (A) any
Environmental Action, (B) any release or threatened release or non-compliance
with any Environmental Law required to be reported to any Governmental Authority
and (C) any request for information from a Governmental Authority that suggests
such Governmental Authority is investigating the potential responsibility of any
Loan Party as a potentially responsible party;

 

(vi) the good faith belief that a release of Hazardous Materials, or a violation
of Environmental Law reasonably likely to result in a fine or penalty in excess
of $100,000, has occurred on or after the Closing Date, and within sixty (60)
days after such request and at the expense of Borrower, any additional
environmental site assessment reports for any of its or its Subsidiaries’
properties described in such request prepared by an environmental consulting
firm acceptable to the Administrative Agent, indicating the presence or absence
of such Hazardous Materials and the estimated cost of any compliance, removal or
remedial action in connection with any such Hazardous Materials on such
properties; without limiting the generality of the foregoing, if the
Administrative Agent reasonably determines at any time that a material risk
exists that any such report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental consulting firm to
prepare such report at the expense of Borrower, and Borrower hereby grants and
agrees to cause any Subsidiary that owns any property described in such request
to grant at the time of such request to the Administrative Agent, the Lenders,
such firm and any agents or representatives thereof, the right, subject to the
rights of tenants, to enter onto their respective properties to undertake such
an assessment; and

 

(vii) any such other documents and information as the Administrative Agent may
reasonably request from time to time.

 

Section 6.05. Maintenance of Existence. (a) Preserve, renew and maintain in full
force and effect its legal existence, structure and name under the Laws of the
jurisdiction of its organization and (b) take all commercially reasonable action
to maintain all rights, privileges (including its good standing), permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except pursuant to a transaction permitted by Section 7.04 and Section
7.05.

 

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Section 6.06. Maintenance of Properties. Maintain, preserve and protect all of
its material properties and equipment that are used or useful in the operation
of its business in good working order, repair and condition, ordinary wear and
tear excepted and casualty or condemnation excepted, and make all commercially
reasonable and appropriate repairs, renewals, replacements, modifications,
improvements, upgrades, extensions and additions thereof except where failure to
do so would not reasonably be expected to materially adversely affect the use of
the related property.

 

Section 6.07. Maintenance of Insurance. Maintain or cause to be maintained, with
financially sound and reputable insurers, (i) business interruption insurance
reasonably satisfactory to Administrative Agent, and (ii) casualty insurance,
such public liability insurance, third party property damage insurance with
respect to liabilities, losses or damage in respect of the assets, properties
and businesses of Parent and its Subsidiaries as may customarily be carried or
maintained under similar circumstances by Persons of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for such Persons. Without
limiting the generality of the foregoing, Parent and its Subsidiaries will
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and
(b) replacement value casualty insurance on the Collateral under such policies
of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses. Each such policy of insurance shall (i) name Collateral
Agent, on behalf of Lenders as an additional insured thereunder as its interests
may appear, and (ii) in the case of each casualty insurance policy, contain a
loss payable clause or endorsement, satisfactory in form and substance to
Collateral Agent, that names Collateral Agent, on behalf of Secured Parties as
the loss payee thereunder and provides for at least thirty (30) days’ prior
written notice to Collateral Agent of any modification or cancellation of such
policy. The Administrative Agent agrees that as of the Closing Date, the
insurance coverages of Borrower and each other Loan Party complies with the
terms of this Section.

 

Section 6.08. Compliance with Laws. Comply with the requirements of all Laws and
all orders, writs, injunctions, decrees and judgments applicable to it or to its
business or property, except where such non-compliance is not, either
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect.

 

Section 6.09. Books and Records. Maintain proper books of record and account, in
which entries that are full, true and correct in all material respects and as
are sufficient to permit the preparation of financial statements in conformity
with GAAP consistently applied shall be made of all material financial
transactions and matters involving the assets and business of the Loan Parties,
as the case may be.

 

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Section 6.10. Inspection Rights/Lender Meetings. (a) Permit representatives of
the Administrative Agent to visit and inspect any properties of the Loan Parties
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, all at the reasonable expense of Borrower
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to Borrower, subject to such
representative being subject to the supervision of Borrower’s personnel;
provided, however, that the Administrative Agent shall not exercise such rights
more than four (4) times during any Fiscal Year absent the occurrence of an
Event of Default.

 

(b) Borrower will (or Parent, as applicable), schedule one (1) telephonic or, at
the discretion of the Administrative Agent, in-person conference per Fiscal
Quarter among the Administrative Agent, the Lenders and the chief financial
officer and chief executive officer of Parent to be held at Parent’s corporate
offices (or at such other location as may be agreed to by Borrower and
Administrative Agent) at such time as may be agreed to by Borrower and
Administrative Agent.

 

Section 6.11. Covenant to Guarantee Obligations and Give Security. Upon (x) the
formation or acquisition of any new direct or indirect Subsidiaries by any Loan
Party or (y) the acquisition of any property by any Loan Party (it being
understood that, in the case of real property under the foregoing clauses (x)
and (y), only the requirements of Section 6.11(g), which requirements shall
apply only to Material Owned Property, Section 6.11(b) and Section 6.11(f) shall
apply), and such property, in the sole judgment of the Collateral Agent, shall
not already be subject to a perfected first priority security interest in favor
of the Collateral Agent for the benefit of the Secured Parties, then each Loan
Party shall, in each case at such Loan Party’s expense:

 

(a) in connection with the formation or acquisition of a Subsidiary, within
thirty (30) days after such formation or acquisition (or such longer period as
the Collateral Agent may agree in its sole discretion), cause each such
Subsidiary that is required to be a Guarantor pursuant to the Collateral and
Guarantee Requirement, to duly execute and deliver to the Collateral Agent a
guaranty or guaranty supplement, in form and substance reasonably satisfactory
to the Collateral Agent, guaranteeing the other Loan Parties’ Obligations under
the Loan Documents;

 

(b) within thirty (30) days after (or such longer period as the Collateral Agent
may agree in its sole discretion) such formation or acquisition, furnish to the
Collateral Agent a description of the Material Owned Properties and material
personal properties of such Subsidiary that is required to become a Guarantor
under the Collateral and Guarantee Requirement or the Material Owned Property
and personal properties so acquired, in each case in detail reasonably
satisfactory to the Collateral Agent;

 

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(c) within thirty (30) days after (or such longer period as the Collateral Agent
may agree in its sole discretion) (i) acquisition of property by any Loan Party,
duly execute and deliver, and cause each Loan Party to duly execute and deliver,
to the Collateral Agent such additional pledges, assignments, Security Agreement
Supplements, Securities Pledge Agreement Supplements, Intellectual Property
Security Agreement Supplements and other security agreements (which, to the
extent applicable and if relating to the type of Collateral the granting of a
security interest in which can be effected through the execution of a joinder
agreement or supplement to the Securities Pledge Agreement (a “Securities Pledge
Agreement Supplement”), a joinder agreement or supplement to the Security
Agreement (a “Security Agreement Supplement”) or a joinder agreement or
supplement to the Intellectual Property Security Agreement (an “Intellectual
Property Security Agreement Supplement”) shall be effected in such manner), as
specified by, and in form and substance reasonably satisfactory to the
Collateral Agent, in each case securing payment of all the Obligations of such
Loan Party under the Loan Documents and granting Liens on all such properties
and (ii) such formation or acquisition of any new Subsidiary that is required to
become a Guarantor under the Collateral and Guarantee Requirement, duly execute
and deliver and cause such Subsidiary that is required to become a Guarantor
under the Collateral and Guarantee Requirement and each Loan Party acquiring
Equity Interests in such Subsidiary to duly execute and deliver to the
Collateral Agent pledges, assignments, Security Agreement Supplements,
Intellectual Property Security Agreement Supplements and other security
agreements (which, to the extent applicable and if relating to the type of
Collateral the granting of a security interest in which can be effected through
the execution of a Security Agreement Supplement or Intellectual Security
Agreement Supplement shall be effected in such manner) as specified by, and in
form and substance reasonably satisfactory to, the Collateral Agent, in each
case securing payment of all of the Obligations of such Subsidiary or Loan
Party, respectively, under the Loan Documents and granting Liens on all
properties of such new Subsidiary;

 

(d) within thirty (30) days (or such longer period as the Collateral Agent may
agree in its sole discretion) after such formation or acquisition, take, and
cause each Loan Party and each newly acquired or newly formed Subsidiary that is
required to become a Guarantor under the Collateral and Guarantee Requirement to
take or cause to be taken, whatever action (including, without limitation, the
filing of Uniform Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) as may be necessary or
advisable in the reasonable opinion of the Collateral Agent to vest in the
Collateral Agent (or in any representative of the Collateral Agent designated by
it) valid, perfected (subject to the Collateral and Guarantee Requirement) Liens
on the properties purported to be subject to the pledges, assignments, Security
Agreement Supplements, Intellectual Property Security Agreement Supplements and
security agreements delivered pursuant to this Section 6.11, enforceable against
all third parties in accordance with their terms;

 

(e) within thirty (30) days (or such longer period as the Collateral Agent may
agree in its sole discretion) after such formation or acquisition, deliver to
the Collateral Agent, upon the request of the Collateral Agent in its sole
discretion, a signed copy of a favorable opinion in customary form, addressed to
the Collateral Agent and the other Secured Parties, of counsel for the Loan
Parties reasonably acceptable to the Collateral Agent addressing such matters as
the Collateral Agent may reasonably request;

 

 -66- 

 

 

(f) at any time and from time to time, promptly execute and deliver, and cause
each Loan Party and each newly acquired or newly formed Subsidiary that is
required to become a Guarantor under the Collateral and Guarantee Requirement to
execute and deliver, any and all further instruments and documents and take, and
cause each Loan Party and each newly acquired or newly formed Subsidiary that is
required to become a Guarantor under the Collateral and Guarantee Requirement to
take, all such other action as the Collateral Agent may deem reasonably
necessary or desirable to satisfy the Collateral and Guarantee Requirement in
obtaining the full benefits of, or in perfecting and preserving the Liens
granted pursuant to (as applicable), such guaranties, Mortgages, pledges,
assignments, Security Agreement Supplements, Intellectual Property Security
Agreement supplements and security agreements;

 

(g) after the Closing Date, promptly within sixty (60) days after (x) the
acquisition of any Material Owned Property by any Loan Party or (y) the
formation or acquisition of any new direct or indirect Subsidiaries that owns
any Material Owned Property, in each case if such Material Owned Property shall
not already be subject to a perfected Lien pursuant to the Collateral and
Guarantee Requirement, Borrower shall give notice thereof to the Administrative
Agent and promptly thereafter shall cause such real property to be subjected to
a Lien to the extent required by the Collateral and Guarantee Requirement, and
otherwise satisfy the Collateral and Guarantee Requirement with respect to such
real property, and will take, or cause the relevant Loan Party to take, such
actions as shall be necessary or reasonably requested by the Administrative
Agent or the Collateral Agent to grant and perfect or record such Lien; and

 

(h) upon the written request of the Administrative Agent following a Change in
Law pursuant to which the Administrative Agent reasonably determines that (x)
the circumstances causing the undistributed earnings of any Foreign Subsidiary
(as determined for United States federal income tax purposes) to be treated as a
deemed dividend to Borrower or any other Domestic Subsidiary for United States
federal income tax purposes or (y) such other circumstances no longer subject
Borrower or any other Domestic Subsidiary to liability for any additional United
States income taxes by virtue of Section 956 of the Code or any other applicable
provision of the Code (“CFC Pledge Restrictions”), then that portion of such
Foreign Subsidiary’s outstanding Equity Interests issued by such Foreign
Subsidiary not theretofore pledged pursuant to the relevant Collateral Document
shall be pledged to the Collateral Agent for the benefit of the Secured Parties
pursuant to a supplement to the relevant Collateral Document (or another pledge
agreement in substantially identical form, if needed) to the extent that
entering into such Collateral Document is permitted by the Laws of the
respective foreign jurisdiction and with all documents delivered pursuant to
this Section 6.11(h) to be in form, scope and substance reasonably satisfactory
to the Collateral Agent, unless counsel for Borrower reasonably acceptable to
the Administrative Agent provides, within sixty (60) days after such written
request of the Administrative Agent, a written opinion addressed to Borrower and
the Administrative Agent, in form and substance mutually satisfactory to
Borrower and the Administrative Agent to the effect that, with respect to any
direct Foreign Subsidiary of any Loan Party that has not already had all of the
Equity Interests issued by it pledged pursuant to the Collateral Documents, a
pledge of more than 65% of the total combined voting power of all classes of
Equity Interests of such Foreign Subsidiary entitled to vote could reasonably be
expected, despite such Change in Law, to continue to be subject to a CFC Pledge
Restriction.

 

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Section 6.12. Use of Proceeds. The proceeds of the Term Loan shall be used to
(i) make a dividend to Parent in order to permit Parent to repay the Exworks
Facility, together with any other Indebtedness of Parent identified to the
Administrative Agent to be repaid on the Closing Date (other than the Surviving
Indebtedness), (ii) repay fees and expenses associated with the financing and
(iii) fund cash on the balance sheet for working capital and other general
corporate purposes.

 

Section 6.13. Further Assurances. At any time or from time to time upon the
request of Administrative Agent or Collateral Agent, each Loan Party will, at
its expense:

 

(a) correct, and cause each of its Subsidiaries promptly to correct, any
material defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof;

 

(b) do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all such further acts, deeds, conveyances,
pledge agreements, Mortgages, deeds of trust, trust deeds, assignments,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, collateral access agreements, assurances
and other instruments as any Agent, or any Lender through the Administrative
Agent, may reasonably require from time to time in order to (i) carry out more
effectively the purposes of the Loan Documents, (ii) to the fullest extent
permitted by applicable Law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents,
(iii) perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and any of the Liens intended to be created thereunder
and (iii) assure, convey, grant, assign, transfer, preserve, protect and confirm
more effectively unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan Document or under
any other instrument executed in connection with any Loan Document to which any
Loan Party or any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so;

 

(c) use commercially reasonable efforts to cause any third parties to deliver or
cause to be delivered such documents and instruments necessary to create,
perfect and protect the security interests of the Secured Parties in the
Collateral, subject to the express limitations of the Collateral and Guarantee
Requirement; and

 

(d) use commercially reasonable efforts to obtain the applicable consents to
security interests in assets in which the granting of a security interest is
prohibited by applicable law or agreements containing anti-assignment clauses
(it being understood that the Loan Parties shall not be required to commence
litigation or expend any sums of money (except reasonable expenses in obtaining
such consents) to obtain such consents).

 

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Section 6.14. Taxes. (a) Pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, all Taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, in each case on a timely basis, which, if unpaid
when due and payable, may reasonably be expected to become a tax Lien upon any
properties of the Loan Parties not otherwise permitted under this Agreement;
provided that no Loan Party shall be required to pay any such Tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP unless and until any tax Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors.

 

(b) With respect to Parent, be classified as a corporation for United States
federal income tax purposes.

 

Section 6.15. End of Fiscal Years; Fiscal Quarters. Cause (i) its Fiscal Year to
end on or about December 31 of each calendar year and (ii) its Fiscal Quarters
to end on or about March 31, June 30, September 30 and December 31 of each
calendar year, in each case unless otherwise approved by the Administrative
Agent.

 

Section 6.16. ERISA. Deliver to the Administrative Agent:

 

(a) ERISA Events and ERISA Reports (i) promptly and in any event within ten (10)
days after any Loan Party, any Subsidiary or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of a Responsible
Officer of Borrower describing such ERISA Event and the action, if any, that
such Loan Party, such Subsidiary or such ERISA Affiliate has taken and proposes
to take with respect thereto and (ii) within ten (10) days of the date any
records, documents or other information must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records,
documents and information;

 

(b) Plan Terminations. Promptly and in any event within two (2) Business Days
after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each
notice from the PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan.

 

(c) Plan Annual Reports. Promptly and in any event within thirty (30) days after
the filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Plan.

 

(d) Multiemployer Plan Notices. Promptly and in any event within five (5)
Business Days after receipt thereof by any Loan Party, any Subsidiary or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such Multiemployer
Plan, (ii) the reorganization or termination, or a determination that such
Multiemployer Plan is in endangered or critical status, within the meaning of
Title IV of ERISA, of any such Multiemployer Plan or (iii) the amount of
liability incurred, or that may be incurred, by such Loan Party, such Subsidiary
or such ERISA Affiliate in connection with any event described in clause (i) or
(ii).

 

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Section 6.17. Board Observer Rights. Parent and its Subsidiaries shall permit
the Administrative Agent on behalf of all of the Lenders (the “Observer”) to
attend and observe (but not vote) at all meetings of Parent’s (or any
Subsidiary’s, as applicable) board of directors or similar governing body (the
“Board”) or any committee thereof (each a “Committee”), whether in person, by
telephone or otherwise as requested by the Observer. Parent and such
Subsidiaries shall notify the Observer in writing at the same time as furnished
to members of the applicable Board or Committee of (i) the date and time for
each general or special meeting of any such Board or Committee and (ii) the
adoption of any resolutions or actions by any such Board or any such Committee
by written consent (describing, in reasonable detail, the nature and substance
of such action). Parent and each of its Subsidiaries shall concurrently deliver
to the Observer all notices and any materials delivered to the official members
of such Board or Committee in connection with a meeting or action to be taken by
written consent, including a draft of any material resolutions or actions
proposed to be adopted by written consent. Notwithstanding the foregoing, the
Observer shall not be entitled to receive materials relating to, or be in
attendance for any discussions relating to topics which (x) are subject to
attorney client privilege, or (y) present a conflict of interest for the
Observer. All such discussions and materials shall be subject to the
confidentiality provisions set forth in Section 10.08.

 

Section 6.18. Post-Closing Obligations. Within the time periods specified on
Schedule 6.18 (as each may be extended by the Administrative Agent in its
reasonable discretion), complete such undertakings as are set forth on Schedule
6.18.

 

Section 6.19. Account Control Agreement. In the event that the balance of cash
in Parent’s deposit account at Bank of America with account number ending xx6147
exceeds the Threshold Amount, Parent shall, within 30 days of such occurrence
(or such longer period as may be agreed to by the Collateral Agent in its sole
discretion), enter into a deposit account control agreement with respect to such
account for the benefit of Collateral Agent, in form and substance reasonably
satisfactory to the Collateral Agent.

 

Article VII

 

Negative Covenants

 

So long as any Lender shall have any Term Loan Commitment hereunder, any portion
of the Term Loan or other Obligation hereunder which is accrued and payable
shall remain unpaid or unsatisfied, Borrower shall not, nor shall Borrower
permit any Loan Party to, directly or indirectly:

 

Section 7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues (including accounts receivable), whether now
owned or hereafter acquired, other than the following:

 

(a) Liens pursuant to any Loan Document;

 

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(b) Liens existing on the date hereof and listed on Schedule 7.01;

 

(c) Liens for taxes, assessments or governmental charges which are not overdue
for a period of more than forty-five (45) days or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person to the extent
required in accordance with GAAP;

 

(d) statutory or common law Liens of landlords, carriers, warehousemen,
mechanics, materialmen, repairmen, suppliers, construction contractors or other
like Liens arising in the ordinary course of business which secure amounts not
overdue for a period of more than forty five (45) days or if more than forty
five (45) days overdue, are unfiled (or if filed have been discharged or stayed)
and no other action has been taken to enforce such Lien or which are being
contested in good faith, if adequate reserves with respect thereto are
maintained on the books of the applicable Person to the extent required in
accordance with GAAP;

 

(e) (i) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, (ii) pledges and deposits in the ordinary course of business
securing liability for reimbursement or indemnification obligations of
(including obligations in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers providing property, casualty or liability
insurance to the Loan Parties and (iii) Liens securing the financing of
insurance premiums (to the extent such Liens extend to the unearned premiums for
such insurance);

 

(f) deposits to secure the performance of bids, trade contracts, governmental
contracts and leases (other than Indebtedness for borrowed money), statutory
obligations, surety, stay, indemnity, customs and appeal bonds, performance
bonds and other obligations of a like nature (including those to secure health,
safety and environmental obligations) incurred in the ordinary course of
business;

 

(g) easements, rights-of-way, covenants, conditions, restrictions,
encroachments, and other survey defects protrusions and other similar
encumbrances and minor title defects affecting real property which were not
incurred in connection with Indebtedness and do not in any case materially and
adversely interfere with the use of the property encumbered thereby for its
intended purposes;

 

(h) Liens securing Indebtedness permitted under Section 7.03(c); provided that
(i) such Liens attach concurrently with or within one hundred twenty (120) days
after the acquisition, or the completion of the construction, repair,
replacement or improvement (as applicable) of the property subject to such
Liens, (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness, replacements thereof and additions and
accessions to such property and the proceeds and the products thereof and
customary security deposits, and (iii) with respect to Capital Leases, such
Liens do not at any time extend to or cover any assets (except for additions and
accessions to such assets, replacements and products thereof and customary
security deposits) other than the assets subject to such Capital Leases;

 

 -71- 

 

 

(i) Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks or other financial institutions
not given in connection with the incurrence of Indebtedness, (ii) relating to
pooled deposit or sweep accounts of the Loan Parties or any Subsidiary (so long
as such Subsidiary remains a Subsidiary) to permit satisfaction of overdraft or
similar obligations incurred in the ordinary course of business of the Loan
Parties or such Subsidiary or (iii) relating to purchase orders and other
agreements entered into with customers of the Loan Parties in the ordinary
course of business;

 

(j) Liens arising from precautionary Uniform Commercial Code financing statement
filings regarding leases entered into by Borrower in the ordinary course of
business;

 

(k) any zoning, land-use or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property; and

 

(l) the modification, replacement, renewal or extension of any Lien permitted by
clause (b) of this Section 7.01; provided that (i) the Lien does not extend to
any additional property other than (A) after-acquired property that is affixed
or incorporated into the property covered by such Lien or financed by
Indebtedness permitted under Section 7.03, and (B) proceeds and products
thereof; and (ii) the renewal, extension or refinancing of the obligations
secured or benefited by such Liens is permitted by Section 7.03.

 

Section 7.02. Investments. Make any Investments, except:

 

(a) Investments in cash and Cash Equivalents;

 

(b) equity Investments owned as of the Closing Date in any Subsidiary and
Investments made by Parent after the Closing Date in Borrower and any
wholly-owned Guarantor Subsidiary (including, without limitation, with proceeds
of issuances of the Equity Interests of Parent);

 

(c) intercompany loans to the extent permitted by Section 7.03(h);

 

(d) to the extent constituting Investments, Liens, Indebtedness, fundamental
changes, Dispositions and Restricted Payments expressly permitted under
Section 7.01, Section 7.03, Section 7.05 and Section 7.06, respectively;
provided, however, that no Investments may be made solely pursuant to this
Section 7.02(d);

 

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(e) Investments existing on the date hereof and disclosed on Schedule 7.02 and
Investments consisting of any modification, replacement, renewal, reinvestment
or extension of any such Investment existing on the date hereof; provided that
the amount of any Investment permitted pursuant to this Section 7.02(e) is not
increased from the amount of such Investment on the Closing Date; and

 

(f) other Investments made by Parent in Fit Pay with the proceeds of Retained
ECF received by Parent pursuant to Section 7.06(c).

 

Section 7.03. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except the following, without duplication (which constitutes
“Permitted Indebtedness”):

 

(a) Obligations of the Loan Parties under the Loan Documents;

 

(b) Surviving Indebtedness listed on Schedule 7.03, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to the Lenders than the Indebtedness
being refinanced or extended, and the average life to maturity thereof is
greater than or equal to that of the Indebtedness being refinanced or extended;
provided, such Indebtedness permitted under the immediately preceding clause (i)
or (ii) above shall not (A) include Indebtedness of an obligor that was not an
obligor with respect to the Indebtedness being extended, renewed or refinanced,
(B) exceed in a principal amount the Indebtedness being renewed, extended or
refinanced, or (C) be incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;

 

(c) Indebtedness with respect to Capital Leases and purchase money Indebtedness
in an amount not to exceed $100,000 in the aggregate at any time outstanding;
provided that any such Indebtedness (x) in the case of additional Capital Leases
or purchase money Indebtedness, shall be secured by the asset subject to such
additional Capital Leases or acquired asset in connection with the incurrence of
such Indebtedness, as the case may be, and (y) in the case of purchase money
Indebtedness, shall constitute not less than 75% of the aggregate consideration
paid with respect to such asset;

 

(d) Indebtedness in respect of Swap Contracts designed to hedge against interest
rates, foreign exchange rates or commodities pricing risks incurred in the
ordinary course of business and not for speculative purposes;

 

(e) Indebtedness incurred by Borrower in respect of letters of credit, bank
guarantees, bankers’ acceptances, warehouse receipts or similar instruments
issued or created in the ordinary course of business, including in respect of
workers compensation claims, health, disability or other employee benefits or
property, casualty or liability insurance or self-insurance or other
Indebtedness with respect to reimbursement-type obligations regarding workers
compensation claims;

 

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(f) Indebtedness incurred by Borrower in respect of accounts payable to trade
creditors for goods and services and current operating liabilities (not the
result of the borrowing of money) incurred in the ordinary course of business in
accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate proceedings and reserved for
substantially in accordance with GAAP;

 

(g) Indebtedness consisting of guarantees resulting from endorsement of
negotiable instruments for collection by Borrower in the ordinary course of
business;

 

(h) Indebtedness of (i) Parent to any Guarantor Subsidiary, (ii) any Guarantor
Subsidiary to any other Guarantor Subsidiary and (iii) any Guarantor Subsidiary
to Parent; provided, (x) all such Indebtedness shall be evidenced by promissory
notes and all such notes shall be subject to a first priority Lien pursuant to
the Collateral Documents and (y) all such Indebtedness shall be unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to the
Administrative Agent; and

 

(i) Indebtedness consisting of the Fit Pay Earnout.

 

Section 7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except:

 

(a) Dispositions pursuant to Section 7.05; and

 

(b) any Guarantor Subsidiary may be merged with or into any other Guarantor
Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to any
Guarantor Subsidiary.

  

Section 7.05. Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:

 

(a) Dispositions of obsolete, worn out or surplus property, whether now owned or
hereafter acquired, in the ordinary course of business and Dispositions of
property no longer used or useful in the conduct of the business of Borrower;

 

(b) Dispositions of inventory and immaterial assets in the ordinary course of
business (including allowing any registrations or any applications for
registration of any immaterial Intellectual Property to lapse or go abandoned in
the ordinary course of business);

 

 -74- 

 

 

(c) Dispositions permitted by Section 7.02, Section 7.04, Section 7.06 and
Section 7.13 and Liens permitted by Section 7.01;

 

(d) Dispositions in the ordinary course of business of cash and Cash
Equivalents;

 

(e) Dispositions, the proceeds of which are less than $100,000 in any Fiscal
Year; and

 

(f) Dispositions resulting from Casualty Events; provided that the Net Cash
Proceeds thereof shall be applied in accordance with the requirements of
Section 2.02(b)(iii).

 

Section 7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, except:

 

(a) any Subsidiary may make Restricted Payments to Borrower;

 

(b) to the extent constituting Restricted Payments, the Loan Parties may enter
into and consummate transactions expressly permitted by any provision of
Section 7.02 or Section 7.08;

 

(c) Restricted Payments made by Borrower to Parent with the proceeds of Retained
ECF; provided that at the time of such Restricted Payment and after giving
effect thereto (i) no Event of Default shall have occurred and is continuing and
(ii) Borrower is in pro forma compliance with the financial covenants set forth
in Section 7.13;

 

(d) Restricted Payments made by Borrower to Parent on the Closing Date with the
proceeds from the Term Loan in order to permit Parent to repay in full the
Exworks Facility, together with any other Indebtedness identified by Parent to
the Administrative Agent;

 

(e) distributions with respect to Parent’s Equity Interests payable solely in
shares of its Qualified Equity Interests (or the equivalent thereof);

 

(f) the Parent’s purchase, redemption, retirement, or other acquisition of
shares of its Equity Interests with the proceeds received from a substantially
concurrent issue of new shares of its Qualified Equity Interests;

 

(g) cash payments made to redeem, purchase, repurchase or retire the Warrant
Obligations in accordance with the terms of the Warrant Certificates;

 

(h) Fit Pay may make Restricted Payments to Parent; and

 

(i) cash payments made by Parent to the holders of Parent’s Series C
Non-Convertible Voting Preferred Stock to pay dividends in such amounts and at
such times as is specified in the Series C Designation; provided that at the
time of such Restricted Payment and after giving effect thereto (i) no Event of
Default shall have occurred and is continuing and (ii) Borrower is in pro forma
compliance with the financial covenants set forth in Section 7.13.

 

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Section 7.07. Change in Nature of Business. Engage in any line of business other
than those lines of business conducted by the Loan Parties on the Closing Date.

 

Section 7.08. Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of Parent, whether or not in the ordinary course of
business, other than:

 

(a) transactions on terms substantially as favorable to Parent or such
Subsidiary as would be obtainable by Parent or such Subsidiary at the time in a
comparable arm’s-length transaction with a Person other than an Affiliate;

 

(b) the Transaction, including entering into this Agreement and the Loan
Documents, together with all agreements ancillary hereto or thereto;

 

(c) customary compensation and indemnification of, and other employment
arrangements with, directors, officers and employees of Parent and its
Subsidiaries in the ordinary course of business; and

 

(d) Restricted Payments permitted under Section 7.06.

 

Section 7.09. Prepayments of Certain Indebtedness; Modifications of Certain
Indebtedness and Material Agreements. Except in each case as otherwise expressly
permitted by this Agreement:

 

(a) directly or indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in respect of
any Indebtedness prior to its scheduled maturity, other than (i) the Obligations
and (ii) Indebtedness secured by a Permitted Lien if the asset securing such
Indebtedness has been sold or otherwise disposed of in accordance with
Section 7.05;

 

(b) amend or permit any amendments to, or terminate or waive any provision of,
any Material Agreement if such amendment, termination, or waiver would be
adverse to the Lenders;

 

(c) amend or permit any amendments to the Promissory Note in any manner that is
adverse to the Lenders (which shall include, without limitation, increases to
the principal amount, increases to the interest rate thereof and shortening the
timing for payments thereunder);

 

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(d) directly or indirectly, voluntarily or involuntarily purchase, redeem,
defease, pay or prepay any principal of, premium, if any, interest or other
amount payable in respect of the Fit Pay Earnout on or prior to its scheduled
maturity, unless at the time of such payment and after giving effect thereto (i)
no Event of Default shall have occurred and is continuing and (ii) Borrower is
in pro forma compliance with the financial covenants set forth in Section 7.13;

 

(e) amend or permit any amendments to the Fit Pay Merger Agreement that affect
the Fit Pay Earnout in any manner that is adverse to the Lenders (which shall
include, without limitation, increases to the Fit Pay Earnout and shortening the
timing for payments thereunder); and

 

(f) amend or permit any amendments to the Series C Designation in any manner
that is adverse to the Lenders (which shall include, without limitation,
increases to the “Dividend Rate” as defined therein, increases to the “Stated
Value” as defined therein, shortening the timing for payments of dividends
thereunder, and any other amendments that have the effect of increasing the
dividends or other amounts payable thereunder or accelerating the payment
thereof).

 

Section 7.10. Negative Pledge. Except as provided herein, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary of Parent to (a) pay
dividends or make any other distributions on any of such Subsidiary’s Equity
Interests owned by Parent or any other Subsidiary of Parent, (b) repay or prepay
any Indebtedness owed by such Subsidiary to Parent or any other Subsidiary of
Parent, (c) make loans or advances to Borrower or any Subsidiary of Parent, or
(d) transfer any of its property or assets to Borrower or any other Subsidiary
of Parent other than restrictions (i) in agreements evidencing purchase money
Indebtedness permitted by Section 7.03(c) that impose restrictions on the
property so acquired, (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, and (iii) that are or were created by virtue of any transfer of,
agreement to transfer or option or right with respect to any property, assets or
Equity Interests not otherwise prohibited under this Agreement.

 

Section 7.11. Amendments to Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other
constitutive documents in a manner adverse to the interests of the Lenders.

 

Section 7.12. Sale Leasebacks. Permit or permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal
or mixed), whether now owned or hereafter acquired, which such Loan Party
(a) has sold or transferred or is to sell or to transfer to any other Person or
(b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Loan Party to any Person
in connection with such lease.

 

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Section 7.13. Financial Covenants.

 

(a) Fixed Charge Coverage Ratio. Borrower shall not permit the Fixed Charge
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with June 30,
2018, to be less than the correlative ratio indicated:

 

Fiscal
Quarter   Fixed Charge
Coverage Ratio       June 30, 2018   3.00:1.00 September 30, 2018   3.00:1.00
December 31, 2018   3.00:1.00 March 31, 2019   3.25:1.00 June 30, 2019  
3.25:1.00 September 30, 2019   3.50:1.00 December 31, 2019   3.50:1.00 March 31,
2020   3.75:1.00 June 30, 2020   3.75:1.00 September 30, 2020   3.75:1.00
December 31, 2020   3.75:1.00 March 31, 2021 and thereafter   4.00:1.00

 

(b) Leverage Ratio. Borrower shall not permit the Leverage Ratio as of the last
day of any Fiscal Quarter, beginning with June 30, 2018, to exceed the
correlative ratio indicated:

 

Fiscal
Quarter   Leverage
Ratio       June 30, 2018   2.60:1.00 September 30, 2018   2.60:1.00 December
31, 2018   2.60:1.00 March 31, 2019   2.25:1.00 June 30, 2019   2.25:1.00
September 30, 2019   2.25:1.00 December 31, 2019   2.25:1.00 March 31, 2020 and
thereafter   2.00:1.00

 

(c) Certain Calculations. With respect to any period during which a Disposition
has occurred, for purposes of determining compliance with the financial
covenants set forth in this Section 7.13, Consolidated Adjusted EBITDA and the
components of Consolidated Fixed Charges shall be calculated with respect to
such period on a pro forma basis (including pro forma adjustments approved by
Administrative Agent in its reasonable discretion) using the historical audited
financial statements of any business sold or to be sold and the consolidated
financial statements of Parent and its Subsidiaries which shall be reformulated
as if such Disposition, and any Indebtedness repaid in connection therewith, had
been consummated or repaid at the beginning of such period.

 

 -78- 

 

 

Section 7.14. Activities of Parent. Parent shall not engage in any business
activities and shall not own any property other than (a) ownership of 100% of
the Equity Interests of its Subsidiaries, (b) activities and contractual rights
incidental to maintenance of its corporate existence and ownership of the Equity
Interests of its Subsidiaries, and (c) the performance of its obligations under
(i) the Loan Documents to which it is a party, (ii) its Organization Documents,
(iii) customary indemnification agreements with directors and officers of Parent
entered into in the ordinary course of business, and (iv) transactions entered
into in connection with that certain Master Product Development Agreement, dated
as of December 31, 2015, by and among Parent and WorldVentures Holdings, LLC, a
Nevada limited liability company.

 

Section 7.15. Accounting Changes. Make any change in (a) accounting policies or
reporting practices, except as required by GAAP or (b) Fiscal Year.

 

Section 7.16. OFAC. (a)  Become a person whose property or interest in property
is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (b) engage in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner that violates Section 2 of such executive order or (c) become a person on
the list of “Specially Designated Nationals and Blocked Persons” or subject to
blocking or specific trade restrictions under any other U.S. Department of
Treasury’s Office of Foreign Assets Control regulation or implementing executive
order.

 

Article VIII

 

Events of Default and Remedies

 

Section 8.01. Events of Default. Any of the following events referred to in any
of clauses (a) through (n) inclusive of this Section 8.01 shall constitute an
“Event of Default”:

 

(a) Non-Payment. Any Loan Party fails to pay (i) when and as required to be paid
herein, any amount of principal of the Term Loan or (ii) within three (3)
Business Days after the same becomes due, any interest on Term Loan or any other
amount payable hereunder or with respect to any other Loan Document; or

 

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(b) Specific Covenants. Borrower fails to perform or observe any term, covenant
or agreement contained in any of Section 6.01, Section 6.02, Section 6.03,
Section 6.05, Section 6.06, Section 6.08, Section 6.11, Section 6.12,
Section 6.14, Section 6.16, Section 6.17 or Article VII; provided, however, that
Borrower’s failure to observe any term, covenant or agreement contained in
Section 6.02(a), (b) or (e), Section 6.03(d), (e), (f), (g), (h), (j), (n) or
(o), or in Section 6.16 shall not be an Event of Default under this Section
8.01(b) if such failure is cured within five (5) Business Days following the
occurrence of such event; or

 

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for thirty (30) days after receipt by Borrower of written notice
thereof by the Administrative Agent or the Required Lenders; or

 

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Loan Party
herein, in any other Loan Document, or in any document required to be delivered
in connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or

 

(e) Cross-Default. Any Loan Party or any Subsidiary (i) fails to make any
payment beyond the applicable grace period with respect thereto, if any (whether
by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Indebtedness (other than Indebtedness hereunder) having an
aggregate principal amount of not less than the Threshold Amount or (ii) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness, or any other event occurs, the effect of which default or other
event is to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity; or

 

(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
any Loan Party in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against any Loan Party under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Loan Party, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of any Loan Party for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of any Loan Party, and
any such event described in this clause (ii) shall continue for sixty (60) days
without having been dismissed, bonded or discharged; or

 

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(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Any Loan Party shall
have an order for relief entered with respect to it or shall commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or any Loan
Party shall make any assignment for the benefit of creditors; or (ii) any Loan
Party shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the board of directors
(or similar governing body) of any Loan Party (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to herein or in Section 8.01(f); or

 

(h) Judgments and Attachments. Any money judgment, writ or warrant of attachment
or similar process involving (i) in any individual case an amount in excess of
$100,000 or (ii) in the aggregate at any time an amount in excess of $250,000
(in either case to the extent not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against any Loan Party or any of their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty
(60) days (or in any event later than five (5) days prior to the date of any
proposed sale thereunder); or

 

(i) Dissolution. Any order, judgment or decree shall be entered against any Loan
Party decreeing the dissolution or split up of such Loan Party and such order
shall remain undischarged or unstayed for a period in excess of thirty (30)
days; or

 

(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or would reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA in an aggregate amount
which would reasonably be expected to exceed the Threshold Amount, (ii) any Loan
Party, Subsidiary or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its Withdrawal Liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount which would reasonably be expected to exceed the
Threshold Amount, or (iii) any Loan Party, Subsidiary or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties, the
Subsidiaries and the ERISA Affiliates to all Multiemployer Plans that are then
in reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an aggregate amount which would
reasonably be expected to exceed the Threshold Amount; or

 

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(k) Invalidity of Loan Documents. (i) Any material provision of any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or the satisfaction in full
of all the Obligations, ceases to be in full force and effect; (ii) any Loan
Party contests in any manner the validity or enforceability of any provision of
any Loan Document; or (iii) any Loan Party denies that it has any or further
liability or obligation under any Loan Document (other than as a result of
repayment in full of the Obligations and termination of the Aggregate
Commitments), purports to revoke or rescind any Loan Document or asserts that
any Guarantee, Collateral Document or subordination provision in respect of any
Indebtedness in excess (in the aggregate) of the Threshold Amount is invalid or
unenforceable; or

 

(l) Change of Control. There occurs any Change of Control; or

 

(m) Guaranties, Collateral Documents and other Loan Documents. At any time after
the execution and delivery thereof, (i) the Guaranty for any reason, other than
the satisfaction in full of all Obligations, shall cease to be in full force and
effect (other than in accordance with its terms) or shall be declared to be null
and void or any Guarantor shall repudiate its obligations thereunder, (ii) this
Agreement or any Collateral Document ceases to be in full force and effect
(other than by reason of a release of Collateral in accordance with the terms
hereof or thereof or the satisfaction in full of the Obligations in accordance
with the terms hereof) or shall be declared null and void, or Collateral Agent
shall not have or shall cease to have a valid and perfected Lien in any
Collateral purported to be covered by the Collateral Documents with the priority
required by the relevant Collateral Document, in each case for any reason other
than the failure of Collateral Agent or any Secured Party to take any action
within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loam Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or

 

(n) Warrant Registration. Parent fails to comply with its covenant to file a
registration statement as set forth in Section 5(e) of the Warrant Certificates,
for any reason other than the failure of Sagard Credit Partners, LP to take any
action within its control.

 

Section 8.02. Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent may and, at the request of the Required
Lenders, shall take any or all of the following actions:

 

(a) declare the unpaid principal amount of the outstanding Term Loan, all
interest accrued and unpaid thereon, and all other amounts, which, for the
avoidance of doubt, shall include the Yield Maintenance Premium (if any) and the
Prepayment Premium (if any) owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by
Borrower;

 

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(b) set-off against any outstanding Obligations amounts held for the account of
the Loan Parties as cash collateral or in the accounts of any Loan Party
maintained by or with the Administrative Agent, any Lender or their respective
Affiliates; and

 

(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law;

 

provided that upon the occurrence of an Event of Default under Sections 8.01(f)
or (g), the unpaid principal amount of the outstanding Term Loan and all
interest and other amounts as aforesaid, which, for the avoidance of doubt,
shall include the Yield Maintenance Premium (if any) and the Prepayment Premium
(if any), shall automatically become due and payable without further act of any
Agent or any Lender.

 

Section 8.03. Application of Funds. If after the exercise of remedies provided
for in Section 8.02 (or after the Term Loan has automatically become immediately
due and payable), including in any bankruptcy or insolvency proceeding, any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including Attorney Costs payable under Section 10.04 and Section 10.05 and
amounts payable under Article III) payable to each Agent in its capacity as
such;

 

Second, to payment of that portion of the Obligations constituting indemnities
and other amounts (other than principal and interest) payable to the Lenders
(including amounts payable under Article III), ratably among them in proportion
to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued,
unpaid interest (including, but not limited to, Default Rate interest and
post-petition interest) and the Yield Maintenance Premium (if any) and the
Prepayment Premium (if any), ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to them;

 

Fourth, to prepay the Term Loan on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof);

 

Fifth, to the payment of all other Obligations of the Loan Parties that are due
and payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured Parties on
such date; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Law.

 

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Section 8.04. Other Amounts Due. In the event of repayment of the Obligations at
any time prior to the Maturity Date, for any reason, including (i) upon
acceleration after the occurrence and during the continuance of an Event of
Default, (ii) foreclosure and sale of the Collateral, (iii) sale of the
Collateral in any insolvency proceeding or (iv) pursuant to any restructuring,
reorganization or compromise of the Obligations by the confirmation of a plan of
reorganization or any other plan of compromise, restructure or arrangement in
any insolvency proceeding, then in view of the impracticability and extreme
difficulty of ascertaining the actual amount of damages to the Administrative
Agent and the Lenders or profits lost by the Administrative Agent and the
Lenders as a result of such early termination, and by mutual agreement of the
parties as to a reasonable estimate and calculation of the lost profits or
damages of the Administrative Agent and the Lenders, the full amount of the
Yield Maintenance Premium (if any) and the Prepayment Premium (if any) shall be
due and payable upon such date. In the event of an acceleration of the
Obligations under this Agreement whether pursuant to the actions of the Required
Lenders or automatically, then, without any further action by the Lenders or the
Administrative Agent, there shall be an amount due and payable to the Lenders
equal to the applicable Yield Maintenance Premium (if any) and the Prepayment
Premium (if any) that would have been payable pursuant to Sections 2.02(c) and
(d) hereof as if the Obligations were voluntarily repaid on such date of
acceleration.

 

Article IX

 

Administrative Agent and Other Agents

 

Section 9.01. Appointment and Authorization of Agents. (a) Each Lender hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
such 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 it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained in this Agreement or in
any other Loan Document, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or Participant, 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 the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term “agent” herein and in the other Loan Documents with
reference to any 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 an administrative relationship between independent
contracting parties.

 

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Notwithstanding any provision contained in this Agreement providing for any
action in the Administrative Agent’s reasonable discretion or approval of any
action or matter in the Administrative Agent’s reasonable satisfaction, the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents); provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable Law. The
Administrative Agent shall not, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower, any other Loan Party
or any of their respective Affiliates that is communicated to or obtained by the
Person serving as the Administrative Agent or any other Agent-Related Person in
any capacity.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of (and to hold any
security interest, charge or other Lien created by the Collateral Documents for
and on behalf of or on trust for) such Lender for purposes of acquiring, holding
and enforcing any and all Liens on Collateral granted by any of the Loan Parties
to secure any of the Obligations, together with such powers and discretion as
are reasonably incidental thereto. In this connection, the Administrative Agent,
as “collateral agent” (and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.02 for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof) granted
under the Collateral Documents, or for exercising any rights and remedies
thereunder at the direction of the Administrative Agent), shall be entitled to
the benefits of all provisions of this Article IX (including Section 9.07, as
though such co-agents, sub-agents and attorneys-in-fact were the “collateral
agent” under the Loan Documents) as if set forth in full herein with respect
thereto.

 

Section 9.02. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through Affiliates, agents, employees or
attorneys-in-fact, such sub-agents as shall be deemed necessary by the
Administrative Agent, and shall be entitled to advice of counsel, both internal
and external, and other consultants or experts concerning all matters pertaining
to such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or sub-agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.

 

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Section 9.03. Liability of Agents. No Agent-Related Person shall (a) be liable
to any Lender 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, as determined by the final judgment of a court of competent
jurisdiction, in connection with its duties expressly set forth herein), or
(b) be responsible in any manner to any Lender or Participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative 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 the perfection
or priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party 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 Lender
or Participant 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 properties, books or records of any Loan
Party or any Affiliate thereof.

 

Section 9.04. Reliance by Agents. (a) Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail 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 any Loan
Party), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each 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 (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the Closing Date specifying its objection
thereto.

 

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Section 9.05. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default”. The Administrative Agent will promptly
notify the Lenders of its receipt of any such notice. The Administrative Agent
shall take such action with respect to any Event of Default as may be directed
by the Required Lenders in accordance with Article VIII; provided that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable or in the best interest of the Lenders.

 

Section 9.06. Credit Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in
their possession. Each Lender represents to each Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such 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 the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to Borrower and the other Loan
Parties hereunder. Each Lender also represents 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 Borrower and the
other Loan Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by any Agent herein, such Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any of the Loan Parties or
any of their respective Affiliates which may come into the possession of any
Agent-Related Person.

 

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Section 9.07. Indemnification of Agents. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities to the extent incurred by it; provided that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities to the extent resulting from such Agent-Related
Person’s own gross negligence or willful misconduct, as determined by the final
non-appealable judgment of a court of competent jurisdiction; provided that no
action taken in accordance with the directions of the Required Lenders (or such
other number or percentage of the Lenders as shall be required by the Loan
Documents) shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section 9.07. In the case of any investigation, litigation
or proceeding giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person. Without limitation of the foregoing, each Lender
shall reimburse the Administrative Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative 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, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower; provided that such reimbursement by the Lenders shall not affect
Borrower’s continuing reimbursement obligations with respect thereto, if any.
The undertaking in this Section 9.07 shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

 

Section 9.08. Agents in their Individual Capacities. Each Agent and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire Equity Interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Loan Parties and their respective Affiliates as though such Agent were not
an Agent hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, each Agent or its Affiliates may
receive information regarding any Loan Party or any Affiliate of a Loan Party
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that no Agent shall
be under any obligation to provide such information to them. With respect to its
portion of the Term Loan, each Agent shall have the same rights and powers under
this Agreement as any other Lender and may exercise such rights and powers as
though it were not an Agent, and the terms “Lender” and “Lenders” include such
Agent in its individual capacity.

 

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Section 9.09. Successor Agents. The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Lenders and Borrower.
If the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint a successor agent for the Lenders, which appointment of a
successor agent shall require the consent of Borrower at all times other than
during the existence of an Event of Default (which consent of Borrower shall not
be unreasonably withheld or delayed). If no successor agent is appointed prior
to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and, if no
Default has occurred and is continuing, Borrower, a successor agent from among
the Lenders. Upon the acceptance of its appointment as successor agent
hereunder, the Person acting as such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent”, shall mean such successor administrative agent and/or
supplemental administrative agent, as the case may be, and the retiring
Administrative Agent’s appointment, powers and duties as the Administrative
Agent shall be terminated. After the retiring Administrative Agent’s resignation
hereunder as the Administrative Agent, the provisions of this Article IX and
Section 10.04 and Section 10.05 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent under
this Agreement. If no successor agent has accepted appointment as the
Administrative Agent by the date which is thirty (30) days following the
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Lenders assuming the role of Administrative Agent
as specified in the immediately preceding sentence shall assume the rights and
obligations of the Administrative Agent (including the indemnification
provisions set forth in Section 9.07) as if each such Lender were the
Administrative Agent. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
reasonably request, in order to (a) continue the perfection of the Liens granted
or purported to be granted by the Collateral Documents or (b) otherwise ensure
that the Collateral and Guarantee Requirement is satisfied, the successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents.

 

Section 9.10. Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of the Term Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Term Loan and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 2.04, Section 10.04 and Section 10.05 or
otherwise hereunder) allowed in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and

 

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(c) any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due to the
Administrative Agent under Section 2.04, Section 10.04 and Section 10.05 or
otherwise hereunder.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

Section 9.11. Release of Collateral and Guaranty. The Lenders irrevocably agree,
authorize and direct the Administrative Agent and Collateral Agent:

 

(a) to release any Lien on any property granted to or held by the Collateral
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full in cash of all Obligations (other than (A) contingent
indemnification obligations not yet accrued and payable and (B) any other
obligation (including a guarantee) that is contingent in nature) (the date upon
which the conditions in this Section 9.11(a)(i) shall have been satisfied, the
“Termination Date”), (ii) upon any permitted sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without
limitation, as a result of the sale, in accordance with the terms of the Loan
Documents, of the Loan Party that owns such Collateral) in accordance with the
terms of the Loan Documents, (iii) subject to Section 10.01, if the release of
such Lien is approved, authorized or ratified in writing by the Required
Lenders, or (iv) if the property subject to such Lien is owned by a Guarantor,
upon release of such Guarantor from its obligations under its Guaranty pursuant
to clause (b) below;

 

(b) to release any Guarantor from its obligations under the Guaranty upon (i) in
the case of any Subsidiary, such Person ceasing to be subject to the Collateral
and Guarantee Requirement and Section 6.11 as a result of a transaction
permitted hereunder (as certified by a Responsible Officer) and Borrower
notifying the Administrative Agent in writing that it wishes such Guarantor to
be released from its obligations under the Guaranty or (ii) the Termination
Date; and

 

(c) to subordinate any Lien on any property granted to or held by the Collateral
Agent under any Loan Document to the holder of any Lien on such property that is
permitted by Sections 7.01(h) and (i).

 

The Collateral Agent will, at Borrower’s expense, execute and deliver to such
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of Collateral pursuant to this Section 9.11 from the assignment and
security interest granted under the Collateral Documents (or the release of the
Guarantor from its Guarantee of the Obligations) in accordance with the terms of
the Loan Documents (provided that Borrower shall have delivered to the
Collateral Agent a certificate of a Responsible Officer certifying that such
transaction has been consummated in compliance with the Loan Documents). Upon
request by the Collateral Agent at any time, the Required Lenders will confirm
in writing the Collateral Agent’s authority to release its interest in
particular types or items of property in accordance with this Section 9.11.

 

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Article X

 

Miscellaneous

 

Section 10.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by any Loan Party therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Required Lenders and Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that:

 

(a) no amendment, waiver or consent shall, unless in writing and signed by all
of the Lenders, do any of the following at any time:

 

(i) change the number of Lenders or the percentage of (x) the Term Loan
Commitments or (y) the aggregate unpaid principal amount of the Term Loan that,
in each case, shall be required for the Lenders or any of them to take any
action hereunder (including pursuant to any change to the definition of
“Required Lenders”),

 

(ii) release one or more Guarantors (or otherwise limit such Guarantors’
liability with respect to the Obligations owing to the Agents and the Lenders
under the Guaranties) if such release or limitation is in respect of all or
substantially all of the value represented by the Guaranties to the Lenders,

 

(iii) release, or subordinate the Administrative Agent’s Liens in, all or
substantially all of the Collateral in any transaction or series of related
transactions (other than in connection with any sale of Collateral permitted
herein), or

 

(iv) amend any provision of this Section 10.01;

 

(b) no amendment, waiver or consent shall, unless in writing and signed by each
Lender specified below for such amendment, waiver or consent:

 

(i) increase the Term Loan Commitments of a Lender without the consent of such
Lender;

 

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(ii) reduce the principal of, or stated rate of interest on, or stated premium
payable on, the portion of the Term Loan owed to a Lender or any fees or other
amounts stated to be payable hereunder or under the other Loan Documents to such
Lender without the consent of such Lender; provided if the Required Lenders
agree to waive any Event of Default and such waiver is effective in accordance
with this Section 10.01 or if the Required Lenders agree to change any financial
definitions that would reduce the stated rate of interest or any fees or other
non-principal amounts stated to be payable hereunder or under the other Loan
Documents pursuant to any amendment, waiver or consent not being effected in
order to reduce the stated rate of interest or such fees or other amounts, then
only the consent of the Required Lenders shall be necessary to waive any
obligation of Borrower to pay interest at the Default Rate in connection with
such waived Event of Default or reduce the stated rate of interest or such fees
in connection with such amendment, waiver or consent described in this proviso
to clause (b)(ii), as applicable;

 

(iii) postpone any date scheduled for any payment of principal of, or interest
on, the Term Loan, any date scheduled for payment or for any date fixed for any
payment of fees hereunder in each case payable to a Lender without the consent
of such Lender;

 

(iv) consent to the assignment or transfer by any Loan Party of any of its
rights and obligations under any Loan Document;

 

(v) change the order of application or any prepayment of the Term Loan from the
application thereof set forth in the applicable provisions of Section 2.02(e) or
Section 8.03 in any manner that adversely affects the Lenders under the Facility
without the consent of holders of a majority of the Term Loan Commitments or the
Term Loan outstanding under the Facility or otherwise change any provision
requiring the pro rata distributions hereunder among the Lenders without all
Lenders’ consent;

 

(vi) amend the definition of “Required Lenders” or “Pro Rata Share”; provided,
with the consent of Administrative Agent and the Required Lenders, additional
extensions of credit pursuant hereto may be included in the determination of
“Required Lenders” or “Pro Rata Share”; or

 

(vii) modify Section 2.09 without the consent of each Lender directly and
adversely affected thereby;

 

provided further that no amendment, waiver or consent shall, unless in writing
and signed by an Agent in addition to the Lenders required above to take such
action, affect the rights or duties of such Agent under this Agreement or the
other Loan Documents.

 

Notwithstanding anything to the contrary contained in this Section 10.01, this
Agreement and any other Loan Document may be amended, supplemented and waived
with the consent of the Administrative Agent and Borrower without the need to
obtain the consent of any other Lender if such amendment, supplement or waiver
is delivered in order to (i) cure ambiguities, omissions, mistakes or defects or
(ii) to cause any Collateral Document to be consistent with this Agreement and
the other Loan Documents.

 

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Section 10.02. Notices and Other Communications.

 

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or under any other Loan Document shall be
in writing delivered by electronic transmission (except as to service of
process, which shall be delivered only in writing and in accordance with
applicable law). All such notices shall be delivered to the applicable
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

 

(i) if to Borrower or the Administrative Agent, to the electronic mail address
or telephone number specified for such Person on Schedule 10.02 or to such other
electronic mail address or telephone number as shall be designated by such party
in a notice to the other parties from time to time; and

 

(ii) if to any other Lender, to the electronic mail address or telephone number
specified on Schedule 10.02 or to such other electronic mail address or
telephone number as shall be designated by such party in a written notice to
Borrower and the Administrative Agent.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) if delivered by electronic mail, when delivered; provided that notices and
other communications to Borrower and the Administrative Agent pursuant to
Article II shall not be effective until actually received by such Person during
the Person’s normal business hours. In no event shall a voice mail message be
effective as a notice, communication or confirmation hereunder.

 

(b) Effectiveness of Electronically Transmitted Documents and Signatures. Loan
Documents may be transmitted and/or signed by electronic transmission (including
a .pdf or .tif copy).

 

(c) Reliance by Agents and Lenders. The Administrative Agent and the Lenders
shall be entitled to rely and act upon any notices purportedly given by or on
behalf of the Loan Parties even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Loan Parties shall
indemnify each Agent-Related Person and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of any Loan Party in the absence of
gross negligence or willful misconduct by such Agent-Related Person or such
Lender. All telephonic notices to the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

(d) Notice to other Loan Parties. Borrower agrees that notices to be given to
any other Loan Party under this Agreement or any other Loan Document may be
given to Borrower in accordance with the provisions of this Section 10.02 with
the same effect as if given to such other Loan Party in accordance with the
terms hereunder or thereunder.

 

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(e) Borrower hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to the payment of any principal or other amount
due under this Agreement prior to the scheduled date therefor, (ii) provides
notice of any Default or Event of Default under this Agreement or (iii) is
required to be delivered to satisfy any condition precedent to the effectiveness
of this Agreement and/or the Credit Extension hereunder (all such non-excluded
communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to an electronic mail address specified
by the Administrative Agent to Borrower. In addition, Borrower agrees to
continue to provide the Communications to the Administrative Agent in the manner
specified in the Loan Documents but only to the extent requested by the
Administrative Agent.

 

(f) The Administrative Agent agrees that the receipt in accordance with
Section 10.02 of the Communications by the Administrative Agent at its e-mail
address set forth on Schedule 10.02 shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Loan Documents.
Each Lender agrees (i) to notify the Administrative Agent by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and (ii) that the
foregoing notice may be sent to such e-mail address. Nothing herein shall
prejudice the right of the Administrative Agent or any Lender to give any notice
or other communication pursuant to any Loan Document in any other manner
specified in such Loan Document.

 

Section 10.03. No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law.

 

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Section 10.04. Costs and Expenses. Whether or not the transactions contemplated
hereby shall be consummated, Borrower agrees to pay promptly (a) all the
Administrative Agent’s actual, documented, and reasonable costs and expenses of
preparation of the Loan Documents and any consents, amendments, waivers or other
modifications thereto; (b) all the reasonable and documented fees, expenses and
disbursements of counsel to Agents in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Borrower; (c) all the actual and documented
reasonable costs and expenses of creating and perfecting Liens in favor of
Collateral Agent, for the benefit of Secured Parties, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable and documented fees, expenses and
disbursements of counsel to each Agent and of counsel providing any opinions
that any Agent or Required Lenders may request in respect of the Collateral or
the Liens created pursuant to the Collateral Documents; (d) all the
Administrative Agent’s actual costs and reasonable fees, expenses for, and
disbursements of any of Administrative Agent’s, auditors, accountants,
consultants or appraisers whether internal or external, and all reasonable
attorneys’ fees (including expenses and disbursements of outside counsel)
incurred by Administrative Agent; (e) all the actual and documented reasonable
costs and expenses (including the reasonable and documented fees, expenses and
disbursements of any appraisers, consultants, advisors and agents employed or
retained by Collateral Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (f) all other actual, documented, and
reasonable costs and expenses incurred by each Agent in connection with the
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (g) after the occurrence of a Default or an Event of
Default, all costs and expenses, including reasonable attorneys’ fees (including
allocated costs of internal counsel) and costs of settlement, incurred by any
Agent and Lenders in enforcing any Obligations of or in collecting any payments
due from any Loan Party hereunder or under the other Loan Documents by reason of
such Default or Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
“work out” or pursuant to any insolvency or bankruptcy cases or proceedings.

 

Section 10.05. Indemnification by Borrower. (a) Whether or not the transactions
contemplated hereby are consummated, Borrower shall indemnify and hold harmless
each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents, trustees, investment advisors
and attorneys-in-fact (collectively the “Indemnitees”) from and against any and
all liabilities, obligations, losses, taxes, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements (including
counsel to the Administrative Agent and the Lenders, and to the extent
reasonably necessary, local counsel in any relevant jurisdiction (and, in the
event of any actual conflict of interest, additional counsel to the affected
parties)) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Indemnitee in any way relating to or
arising out of or in connection with (i) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement,
letter or instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby, (ii) any
Term Loan Commitment or the Term Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on, at, under or from any property currently or formerly owned or
operated by any Loan Party, or any Environmental Liability related to any Loan
Party or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) (any
of the foregoing described in this clause (iv), a “Proceeding”) (all the
foregoing described in clauses (i) to (iv), collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee and whether brought by an
Indemnitee, a third party or by any Loan Party or any Loan Party’s directors,
shareholders or creditors, and regardless of whether any Indemnitee is a party
thereto and whether or not any of the transactions contemplated hereby are
consummated; provided that such indemnity shall not, as to any Indemnitees, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements resulted from the gross negligence or willful misconduct of such
Indemnitee as determined by a final non-appealable judgment of a court of
competent jurisdiction, and except to the extent resulting from claims between
or among any Lenders in their capacity as such. No Indemnitee shall be liable
for any damages arising from the use by others of any information or other
materials obtained through any information transmission systems in connection
with this Agreement, nor shall any Indemnitee or any Loan Party have any
liability for any special, punitive, indirect or consequential damages relating
to this Agreement or any other Loan Document. All amounts due in respect of
costs, expenses and disbursements under this Section 10.05 shall be paid within
ten (10) Business Days after demand therefor; provided, that each Indemnitee
receiving any such reimbursement shall repay such amounts to the relevant Loan
Party in the event that such Indemnitee shall not be entitled thereto pursuant
to the provisions hereof. The agreements in this Section 10.05 shall survive the
resignation of any Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

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(b) Borrower shall not be liable for any settlement of any Proceedings effected
without its consent (which consent shall not be unreasonably withheld or
delayed), but if settled with Borrower’s consent or if there is a final judgment
for the plaintiff in such Proceedings, Borrower shall indemnify and hold
harmless each Indemnitee from and against any Indemnified Liabilities in
accordance with the foregoing clause (a). Borrower shall not, without the prior
written consent of an Indemnitee (which consent shall not be unreasonably
withheld or delayed), effect any settlement or consent to the entry of any
judgment of any pending or threatened Proceedings in respect of which indemnity
could have been sought hereunder by such Indemnitee unless (i) such settlement
includes an unconditional release of such Indemnitee in form and substance
satisfactory to such Indemnitee from all liability on claims that are the
subject matter of such Proceedings, (ii) does not include any statement as to or
any admission of fault, culpability or a failure to act by or on behalf of any
Indemnitee and (iii) contains customary confidentiality and non-disparagement
provisions.

 

(c) In the event that an Indemnitee is requested or required to appear as a
witness in any action brought by or on behalf of or against Borrower or any of
its Subsidiaries or Affiliates in which such Indemnitee is not named as a
defendant, Borrower shall reimburse such Indemnitee for all reasonable expenses
incurred by it in connection with such Indemnitee’s appearing and preparing to
appear as such a witness, including without limitation, the reasonable fees and
expenses of its legal counsel.

 

Section 10.06. Payments Set Aside. To the extent that any payment by or on
behalf of Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by any Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Rate.

 

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Section 10.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that, Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder or
under the other Loan Documents without the prior written consent of each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the requirements
of Section 10.07(b), (ii) by way of participation in accordance with the
provisions of Section 10.07(d), (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.07(f) or (iv) to an
SPC in accordance with the provisions of Section 10.07(g) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in
Section 10.07(d) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b) Any Lender may at any time assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Term Loan Commitment(s) and the Term Loan); provided that:

 

(i) (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Term Loan Commitment and the Term Loan at the time owing to
it, no minimum amount shall need be assigned, and (B) in any case not described
in clause (b)(i)(A) of this Section, the aggregate amount of the Term Loan
Commitment (which for this purpose includes the Term Loan outstanding
thereunder) or, if the applicable Term Loan Commitment is not then in effect,
the outstanding principal balance of the portion of the Term Loan held by the
assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent, shall not be less than $1,000,000 unless the
Administrative Agent otherwise consents (each such consent not to be
unreasonably withheld or delayed) except such consent by the Administrative
Agent shall not be required if such assignment is to an Affiliate of a Lender or
an Approved Fund;

 

(ii) 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
with respect to the Term Loan or the Term Loan Commitment assigned;

 

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(iii) no consent shall be required for any assignment except to the extent
required by subsection (b)(i)(B) of this Section and, in addition the consent of
the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment unless such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund related thereto; and

 

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption via an electronic settlement
system acceptable to the Administrative Agent (or, if previously agreed with the
Administrative Agent, manually).

 

From and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be party to this Agreement as a Lender
with respect to the interest assigned and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement in addition to any rights and obligations otherwise
held by such assignee as a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.02, 3.04, 3.05 (or any other increased costs protection provision), 10.04 and
10.05). Upon request, and the surrender by the assigning Lender of its Note (if
any), Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this clause (b) shall not be an
effective assignment hereunder.

 

(c) Each Lender, acting solely for this purpose as an agent of Borrower, shall
maintain at one of its offices a register for the recordation of the name and
address of any assignee of any Lender and the outstanding principal amount (and
stated interest) of the Term Loan owing thereto (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and Borrower shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as the “Lender” hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by Borrower, at any reasonable time and from time to time upon
reasonable prior notice. Notwithstanding anything herein to the contrary, any
assignment of the Term Loan shall be effective only upon appropriate entries
with respect thereto being made in the Register.

 

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(d) Any Lender may at any time, without the consent of, or notice to, Borrower
or the Administrative Agent, sell participations to any Person (other than (x) a
natural person and (y) Borrower or any of its Affiliates) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Term Loan Commitment
and/or the Term Loan owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) Borrower, the Agents and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or the other Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
Section 10.01(a), or Section 10.01(b) that directly affects such Participant.
Subject to Section 10.07(e), Borrower agrees that each Participant shall be
entitled to the benefits of Sections 3.01 (subject to the requirements of
Section 3.01, including Section 3.01(e) and Section 3.01(f)), 3.04 and 3.05
(through the applicable Lender) to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to Section 10.07(b). To the
extent permitted by applicable Law, each Participant also shall be entitled to
the benefits of Section 10.09 as though it were a Lender; provided that such
Participant agrees to be subject to Section 2.09 as though it were a Lender. Any
Lender that sells participations shall maintain a register meeting the
requirements of Treasury Regulation Section 5f.103-1(c) (or any successor
regulation), on which it enters the name and the address of each Participant and
the principal amounts of each Participant’s participation interest in the Term
Loan Commitments and/or Term Loan (or other rights or obligations) held by it
(the “Participant Register”). The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
interest as the owner thereof for all purposes notwithstanding any notice to the
contrary. In maintaining the Participant Register, such Lender shall be acting
as the agent of Borrower solely for purposes of Treasury Regulation
Section 5f.103-1(c) and undertakes no other duty, responsibility or obligation
to Borrower (including, without limitation, in no event shall such Lender be
considered a fiduciary of Borrower for any purpose). In addition to maintaining
the Participant Register, such Lender shall, upon request, show the Participant
Register to Borrower.

 

(e) A Participant shall not be entitled to receive any greater payment under
Section 3.01, 3.04 or 3.05 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with Borrower’s prior
written consent.

 

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank or central bank having jurisdiction
over such Lender; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

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(g) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and Borrower (an “SPC”) the option to provide all or any part of the Term
Loan that such Granting Lender would otherwise be obligated to make pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to fund the Term Loan and (ii) if an SPC elects not to exercise such
option or otherwise fails to make all or any part of the Term Loan, the Granting
Lender shall be obligated to make its Term Loan pursuant to the terms hereof.
Each party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of Borrower under this Agreement
(including its obligations under Section 3.01, 3.04 or 3.05), (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable and such liability shall remain with the
Granting Lender, and (iii) the Granting Lender shall for all purposes, including
the approval of any amendment, waiver or other modification of any provision of
any Loan Document, remain the lender of record hereunder. The making of a Term
Loan by an SPC hereunder shall utilize the Term Loan Commitment of the Granting
Lender to the same extent, and as if, such Term Loan were made by such Granting
Lender. Notwithstanding anything to the contrary contained herein, any SPC may
(i) with notice to, but without prior consent of Borrower and the Administrative
Agent, assign all or any portion of its right to receive payment with respect to
the Term Loan to the Granting Lender and (ii) disclose on a confidential basis
any non-public information relating to its funding of the Term Loan to any
rating agency, commercial paper dealer or provider of any surety or Guarantee
Obligation or credit or liquidity enhancement to such SPC.

 

(h) Notwithstanding anything to the contrary contained herein, (i) any Lender
may in accordance with applicable Law create a security interest in all or any
portion of the Term Loan owing to it and the Note, if any, held by it and
(ii) any Lender that is a Fund may create a security interest in all or any
portion of the Term Loan owing to it and the Note, if any, held by it to the
trustee for holders of obligations owed, or securities issued, by such Fund as
security for such obligations or securities; provided that unless and until such
trustee actually becomes a Lender in compliance with the other provisions of
this Section 10.07, (i) no such pledge shall release the pledging Lender from
any of its obligations under the Loan Documents and (ii) such trustee shall not
be entitled to exercise any of the rights of a Lender under the Loan Documents
even though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

 

Section 10.08. Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information and to not use or disclose such
information, except that Information may be disclosed (a) to its Affiliates and
its and its Affiliates’ directors, officers, employees, trustees, investment
advisors and agents, including accountants, legal counsel and other advisors (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any Governmental
Authority or examiner regulating any Lender; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process;
(d) to any other party to this Agreement; (e) to any pledgee referred to in
Section 10.07(f) or Section 10.07(h), Eligible Assignee of or Participant in, or
any prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (f) with the
written consent of Borrower; (g) to the extent such Information becomes publicly
available other than as a result of a breach of this Section 10.08 by the
disclosing party; (h) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender); (i) to the extent not known by it
to consist of non-public information, (j) for purposes of establishing a “due
diligence” defense or (k) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder. In addition, the Agents and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Term Loan
Commitments, and the Credit Extension. For the purposes of this Section 10.08,
“Information” means all information received from any Loan Party or its
Affiliates or its Affiliates’ directors, officers, employees, trustees,
investment advisors or agents, relating to the Loan Parties or their business,
other than any such information that is publicly available to any Agent or any
Lender prior to disclosure by any Loan Party other than as a result of a breach
of this Section 10.08, including, without limitation, information delivered
pursuant to Section 6.01, 6.02 or 6.03 hereof.

 

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Section 10.09. Setoff. In addition to any rights and remedies of the Agents and
the Lenders provided by Law, upon the occurrence and during the continuance of
any Event of Default, each Lender and its Affiliates and each Agent and its
Affiliates is authorized at any time and from time to time, without prior notice
to the Loan Parties, any such notice being waived by the Loan Parties to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other Indebtedness at any time owing by, such Lender and its
Affiliates or such Agent and its Affiliates, as the case may be, to or for the
credit or the account of the respective Loan Parties and their Subsidiaries
against any and all Obligations owing to such Lender and its Affiliates or such
Agent and its Affiliates hereunder or under any other Loan Document, now or
hereafter existing, irrespective of whether or not such Agent or such Lender or
Affiliate thereof shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
Indebtedness. Each Lender and Agent agrees promptly to notify Borrower and the
Administrative Agent after any such set off and application made by such Lender
or Agent, as the case may be; provided that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Agent and each under this Section 10.09 are in addition to other rights and
remedies (including other rights of setoff) that such Agent and such Lender may
have.

 

Section 10.10. Counterparts. This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
by electronic transmission (including a .pdf or .tif copy) of an executed
counterpart of a signature page to this Agreement and each other Loan Document
shall be effective as delivery of an original executed counterpart of this
Agreement and such other Loan Document.

 

Section 10.11. Integration. This Agreement comprises the complete and integrated
agreement of the parties on the subject matter hereof and thereof and supersedes
all prior agreements, written or oral, on such subject matter. In the event of
any conflict or inconsistency between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control;
provided that the inclusion of supplemental rights or remedies in favor of the
Agents or the Lenders in any other Loan Document shall not be deemed a conflict
or inconsistency with this Agreement. Each Loan Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.

 

 -101- 

 

 

Section 10.12. Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any portion of the Term Loan
or any other Obligation hereunder shall remain unpaid or unsatisfied.

 

Section 10.13. Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby. The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 10.14. Governing Law. (a) This Agreement and each other loan document
shall be governed by, and construed in accordance with, the law of the state of
New York (except, with respect to any other loan document, as otherwise
expressly provided therein).

 

(b) Any legal action or proceeding arising under any loan document or in any way
connected with or related or incidental to the dealings of the parties hereto or
any of them with respect to any loan document, or the transactions related
hereto or thereto, in each case whether now existing or hereafter arising, shall
be brought in the courts of the state of New York sitting in New York County or
of the United States for the southern district of such state, and by execution
and delivery of this agreement, Borrower, each Agent and each Lender consents,
for itself and in respect of its property, to the exclusive jurisdiction of
those courts. Borrower, each Agent and each Lender irrevocably waives any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of any loan
document or other document related thereto.

 

 -102- 

 

 

Section 10.15. Waiver of Right To Trial By Jury. Each party to this Agreement
hereby expressly waives any right to trial by jury of any claim, demand, action
or cause of action arising under any loan document or in any way connected with
or related or incidental to the dealings of the parties hereto or any of them
with respect to any loan document, or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether
founded in contract or tort or otherwise; and each party hereby agrees and
consents that any such claim, demand, action or cause of action shall be decided
by court trial without a jury, and that any party to this Agreement may file an
original counterpart or a copy of this Section 10.15 with any court as written
evidence of the consent of the signatories hereto to the waiver of their right
to trial by jury.

 

Section 10.16. Binding Effect. This Agreement shall become effective when it
shall have been executed by Borrower, the Administrative Agent and the
Collateral Agent, and the Administrative Agent shall have been notified by each
Lender that each such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of Borrower, each such Agent and each Lender and
their respective successors and assigns, except that Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.

 

Section 10.17. Lender Action. Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents (including the exercise of any right of setoff, rights on account of
any banker’s lien or similar claim or other rights of self-help), or institute
any actions or proceedings, or otherwise commence any remedial procedures, with
respect to any Collateral or any other property of any such Loan Party, without
the prior written consent of the Administrative Agent. The provisions of this
Section 10.17 are for the sole benefit of the Lenders and shall not afford any
right to, or constitute a defense available to, any Loan Party.

 

Section 10.18. PATRIOT Act. Each Lender hereby notifies Borrower that pursuant
to the requirements of the PATRIOT Act, it is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow such Lender to
identify Borrower in accordance with the PATRIOT Act. Borrower agrees to
provide, and to cause each other Loan Party to provide, such information
promptly upon request.

 

 -103- 

 

 

Section 10.19. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), Borrower acknowledges and agrees, and acknowledges and agrees that it
has informed its Subsidiaries, that: (i) (A) no fiduciary, advisory or agency
relationship between Borrower and its Subsidiaries and any Agent or any Lender
is intended to be or has been created in respect of any of the transactions
contemplated hereby and by the other Loan Documents, irrespective of whether any
Agent or any Lender has advised or is advising Borrower and its Subsidiaries on
other matters, (B) the arranging and other services regarding this Agreement
provided by the Agents and the Lenders are arm’s-length commercial transactions
between Borrower and its Subsidiaries, on the one hand, and the Agents and the
Lenders, on the other hand, (C) Borrower has consulted its own legal,
accounting, regulatory and tax advisors to the extent they have deemed
appropriate, and (D) Borrower is capable of evaluating, and understand and
accept, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) the Agents and the Lenders each is and
has been acting solely as a principal and, except as may otherwise be expressly
agreed in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary for Borrower and its Subsidiaries or
any of their Affiliates, or any other Person and (B) no Agent or Lender has any
obligation to Borrower and its Subsidiaries or any of its Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the Agents
and the Lenders and their respective Affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of Borrower and
its Subsidiaries and its Affiliates, and no Agent or Lender has any obligation
to disclose any of such interests and transactions to Borrower and its
Subsidiaries or any of its Affiliates. To the fullest extent permitted by law,
Borrower hereby waives and releases any claims that they may have against the
Agents and the Lenders with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated
hereby.

 

Section 10.20. OID Legend. THE TERM LOAN WILL BE ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE TERM LOAN
MAY BE OBTAINED BY WRITING TO THE BORROWER AT THEIR ADDRESS SET FORTH ON
SCHEDULE 10.02

 

[Remainder of Page Intentionally Blank]

 

 -104- 

 

 

In Witness Whereof, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

  LogicMark, LLC   as Borrower,       By:               Name:     Title:

 

[Signature page to Senior Secured Credit Agreement]

 

 -105- 

 

 

  Sagard Holdings Manager LP   as Administrative Agent and Collateral Agent    
  By: Its general partner, Sagard Holdings Manager GP Inc.       By:      
Name:       Title: Authorized Signatory       Signed at Toronto, Canada

  

[Signature page to Senior Secured Credit Agreement]

 

   

 

  

  Sagard Credit Partners, LP,   as Lender       By: Its general partner, Sagard
Credit Partners GP, Inc.         By:       Name:       Title: Authorized
Signatory       Signed at Toronto, Canada

 

[Signature page to Senior Secured Credit Agreement]