Exhibit 10.2

 

 

 

CREDIT AGREEMENT

by and among

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent and Issuing Bank,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Sole Lead Arranger and Bookrunner,

THE LENDERS PARTY HERETO,

as Lenders,

INDEPENDENCE CONTRACT DRILLING, INC.

ICD OPERATING LLC

PATRIOT SARATOGA MERGER SUB, LLC,

as Borrower

THE OTHER PARTIES HERETO,

as Guarantors,

Dated as of October 1, 2018

 

 

 

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TABLE OF CONTENTS

 

          Page  

1.  DEFINITIONS AND CONSTRUCTION

     1  

1.1

   Definitions      1  

1.2

   Accounting Terms      44  

1.3

   UCC      44  

1.4

   Construction      44  

1.5

   Time References      45  

1.6

   Schedules and Exhibits      45  

2.  LOANS AND TERMS OF PAYMENT

        46       

2.1

   Revolving Loans      46  

2.2

   Reserved      46  

2.3

   Borrowing Procedures and Settlements      46  

2.4

   Payments; Reductions of Commitments; Prepayments      52  

2.5

   Promise to Pay; Promissory Notes      56  

2.6

   Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations   
  56  

2.7

   Crediting Payments      58  

2.8

   Designated Account      58  

2.9

   Maintenance of Loan Account; Statements of Obligations      58  

2.10

   Fees      58  

2.11

   Letters of Credit      59  

2.12

   LIBOR Option      67  

2.13

   Capital Requirements      69  

2.14

   Reserved      70  

2.15

   Reserved      70  

2.16

   Joint and Several Liabilities of Borrowers      71  

3.  CONDITIONS; TERM OF AGREEMENT

        73       

3.1

   Conditions Precedent to the Initial Extension of Credit      73  

3.2

   Conditions Precedent to all Extensions of Credit      73  

3.3

   Maturity      74  

3.4

   Effect of Maturity      74  

3.5

   Early Termination by Borrowers      74  

3.6

   Conditions Subsequent      74  

4.  REPRESENTATIONS AND WARRANTIES

        74       

4.1

   Due Organization and Qualification; Subsidiaries      75  

4.2

   Due Authorization; No Conflict      75  

4.3

   Governmental Consents      76  

4.4

   Binding Obligations; Perfected Liens      76  

4.5

   Title to Assets; No Encumbrances      76  

4.6

   Litigation      77  

 

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4.7

   Compliance with Laws      77  

4.8

   No Material Adverse Effect      77  

4.9

   Solvency      77  

4.10

   Employee Benefits      77  

4.11

   Environmental Condition      78  

4.12

   Complete Disclosure      78  

4.13

   Patriot Act      78  

4.14

   Indebtedness      79  

4.15

   Payment of Taxes      79  

4.16

   Margin Stock      79  

4.17

   Governmental Regulation      79  

4.18

   OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws      79  

4.19

   Employee and Labor Matters      80  

4.20

   [Reserved]      80  

4.21

   Leases      80  

4.22

   Eligible Accounts      80  

4.23

   Hedge Agreements      80  

4.24

   Closing Date Merger Documents; Term Loan Documents      80  

5.  AFFIRMATIVE COVENANTS

        81       

5.1

   Financial Statements, Reports, Certificates      81  

5.2

   Reporting      82  

5.3

   Existence      82  

5.4

   Maintenance of Properties      82  

5.5

   Taxes      82  

5.6

   Insurance      82  

5.7

   Inspection      83  

5.8

   Compliance with Laws      83  

5.9

   Environmental      83  

5.10

   Disclosure Updates      84  

5.11

   Formation or Acquisition of Subsidiaries      84  

5.12

   Further Assurances      84  

5.13

   Location of Chief Executive Office      85  

5.14

   OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws      85  

6.  NEGATIVE COVENANTS

        85       

6.1

   Indebtedness      85  

6.2

   Liens      85  

6.3

   Restrictions on Fundamental Changes      85  

6.4

   Disposal of Assets      86  

6.5

   Nature of Business      86  

6.6

   Prepayments and Amendments      86  

6.7

   Restricted Payments; Management Fees      86  

6.8

   Accounting Methods      87  

6.9

   Investments      87  

6.10

   Transactions with Affiliates      87  

6.11

   Use of Proceeds      88  

6.12

   Limitation on Issuance of Equity Interests      88  

 

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7.  FINANCIAL COVENANT

        88       

7.1

   Fixed Charge Coverage Ratio      88  

7.2

   Right to Cure      88  

8.  EVENTS OF DEFAULT

        89       

8.1

   Payments      89  

8.2

   Covenants      89  

8.4

   Voluntary Bankruptcy, Etc.      90  

8.5

   Involuntary Bankruptcy, Etc.      90  

8.6

   Default under Other Agreements      90  

8.7

   Representations, Etc.      91  

8.8

   Guaranty      91  

8.9

   Security Documents      91  

8.10

   Loan Documents      91  

8.11

   Change of Control      91  

8.12

   ERISA      91  

8.13

   Subordination; Intercreditor Agreement      91  

9.  RIGHTS AND REMEDIES

        92       

9.1

   Rights and Remedies      92  

9.2

   Remedies Cumulative      92  

10.  WAIVERS; INDEMNIFICATION

     92  

10.1

   Demand; Protest; etc.      92  

10.2

   The Lender Group’s Liability for Collateral      92  

10.3

   Indemnification      93  

11.  NOTICES

        94       

12.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

        95       

13.  ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

        96       

13.1

   Assignments and Participations      96  

13.2

   Successors      99  

14.  AMENDMENTS; WAIVERS

        99       

14.1

   Amendments and Waivers      99  

14.2

   Replacement of Certain Lenders      100  

14.3

   No Waivers; Cumulative Remedies      101  

15.  AGENT; THE LENDER GROUP

       101     

15.1

   Appointment and Authorization of Agent      101  

15.2

   Delegation of Duties      102  

15.3

   Liability of Agent      102  

 

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15.4

   Reliance by Agent      103  

15.5

   Notice of Default or Event of Default      103  

15.6

   Credit Decision      103  

15.7

   Costs and Expenses; Indemnification      104  

15.8

   Agent in Individual Capacity      104  

15.9

   Successor Agent      105  

15.10

   Lender in Individual Capacity      105  

15.11

   Collateral Matters      105  

15.12

   Restrictions on Actions by Lenders; Sharing of Payments      107  

15.13

   Agency for Perfection      107  

15.14

   Payments by Agent to Lenders      107  

15.15

   Concerning the Collateral and Related Loan Documents      108  

15.16

   Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information      108  

15.17

   Several Obligations; No Liability      109  

15.18

   Sole Lead Arranger and Book Runner      109  

16.  TAX MATTERS

       109     

16.1

   Payments      109  

16.2

   Exemptions      110  

16.3

   Reductions      111  

16.4

   Refunds      112  

17.  GENERAL PROVISIONS

       112     

17.1

   Effectiveness      112  

17.2

   Section Headings      112  

17.3

   Interpretation      112  

17.4

   Severability of Provisions      113  

17.5

   Bank Product Providers      113  

17.6

   Debtor-Creditor Relationship      113  

17.7

   Counterparts; Electronic Execution      113  

17.8

   Revival and Reinstatement of Obligations      114  

17.9

   Confidentiality      114  

17.10

   Lender Group Expenses      115  

17.11

   Survival      115  

17.12

   Patriot Act      115  

17.13

   Integration      115  

17.14

   Keepwell      116  

17.15

   Judgment Currency      116  

17.16

   Parent as Administrative Agent for Borrowers      116  

17.17

   “Know Your Customer” Checks      117  

17.18

   Acknowledgment and Consent to Bail-In of EEA Financial Institutions      117
 

17.19

   Conflicts with Intercreditor Agreement      118  

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

   Form of Assignment and Acceptance

Exhibit B-1

   Form of Borrowing Base Certificate

Exhibit C-1

   Form of Compliance Certificate

Exhibit J-1

   Form of Joinder

Exhibit L-1

   Form of LIBOR Notice

Exhibit P-1

   Form of Perfection Certificate

Exhibit S-1

   Form of Solvency Certificate

Schedule A-1

   Agent’s Accounts

Schedule A-2

   Authorized Persons

Schedule C-1

   Commitments

Schedule D-1

   Designated Account

Schedule P-1

   Permitted Investments

Schedule P-2

   Permitted Liens

Schedule 2.11

   Existing Letters of Credit

Schedule 3.1

   Conditions Precedent to Initial Extension of Credit

Schedule 3.6

   Conditions Subsequent

Schedule 4.1(b)

   Chief Executive Offices, Etc.

Schedule 4.1(c)

   Capitalization of Loan Parties and Subsidiaries

Schedule 4.2(d)

   Subscription, Options, Warrants, Calls

Schedule 4.6(b)

   Litigation

Schedule 4.10

   Employee Benefits Plans

Schedule 4.11

   Environmental Matters

Schedule 4.14

   Indebtedness

Schedule 5.1

   Financial Statements, Reports, Certificates

Schedule 5.2

   Collateral Reporting

Schedule 6.5

   Nature of Business

 

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of October 1, 2018
by and among the lenders identified on the signature pages hereof (each of such
lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS
FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for each member of the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”), INDEPENDENCE CONTRACT
DRILLING, INC., a Delaware corporation (“Parent”), as lead borrower for the
Borrowers referenced below (in such capacity, together with its successors and
assigns in such capacity, “Lead Borrower”), PATRIOT SARATOGA MERGER SUB, LLC,
Delaware limited liability company (“Merger Sub”), ICD OPERATING LLC, a Delaware
limited liability company formerly known as Sidewinder Drilling LLC (“ICD
Operating”) and the other Affiliates of Parent party hereto from time to time as
borrowers (such Affiliates together with Parent, Merger Sub and ICD Operating,
each individually a “Borrower”, and collectively, jointly and severally,
“Borrowers”), and each Affiliate of Parent party hereto from time to time as
guarantors (each individually a “Guarantor” and collectively, jointly and
severally, as “Guarantors”).

WHEREAS, the Borrowers have requested that the Lenders provide a revolving
credit facility, and the Lenders have indicated their willingness to lend, in
each case on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

1.

DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

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

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

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

“Account Party” has the meaning specified therefor in Section 2.11(h) of this
Agreement.

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

“Acquired Indebtedness” means Indebtedness of a Person the assets or Equity
Interests of which are acquired by a Loan Party or any of its Subsidiaries in a
Permitted Acquisition; provided, that such Indebtedness (a) is not secured by
Collateral, (b) was in existence prior to the date of such Permitted Acquisition
and (c) was not incurred in connection with, or in contemplation of, such
Permitted Acquisition.

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

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

“Administrative Questionnaire” has the meaning specified therefor in
Section 13.1 of this Agreement.

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

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

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

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

“Agent’s Account” means the Deposit Account of Agent identified as “Agent’s
Accounts” on Schedule A-1.

“Agent’s Liens” means the Liens granted by each Loan Party to Agent under the
Loan Documents and securing the Obligations.

“Agreement” means this Credit Agreement, as amended, restated, amended and
restated, supplemented or otherwise modified from time to time.

“Agreement Currency” has the meaning specified therefor in Section 17.15 of this
Agreement.

“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended,
and all other applicable laws and regulations or ordinances concerning or
relating to bribery, money laundering or corruption in any jurisdiction in which
any Loan Party or any of its Subsidiaries or Affiliates is located or is doing
business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any
jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is
located or is doing business that relates to money laundering, any predicate
crime to money laundering, or any financial record keeping and reporting
requirements related thereto.

“Applicable Margin” means (a) as to Revolving Loans for which interest is
calculated based on the Base Rate, the Applicable Base Rate Margin set forth
below, and (b) as to Revolving Loans for which interest is calculated based on
LIBOR, the Applicable LIBOR Margin set forth below,

 

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Tier

  

Quarterly Average Excess

Availability

   Applicable Base
Rate Margin     Applicable
LIBOR Margin   1    Greater than $26,666,666      1.00 %      2.00 %  2   
Greater than $13,333,333 but less than or equal to $26,666,666      1.25 %     
2.25 %  3    Less than or equal to $13,333,333      1.50 %      2.50 % 

provided, that, (i) the Applicable Margin shall be calculated and established
once each calendar quarter and shall remain in effect until adjusted for the
next calendar quarter, (ii) each adjustment of the Applicable Margin shall be
effective as of the first day of each such calendar quarter based on the
Quarterly Average Excess Availability for the immediately preceding calendar
quarter, (iii) notwithstanding anything to the contrary contained herein, for
the period from the Closing Date until the last day of the first full calendar
quarter immediately following the Closing Date, the Applicable Margin shall be
based on the applicable percentage set forth in Tier 2, and (iv) in the event
that the Lead Borrower fails to provide any Borrowing Base Certificate or other
information with respect thereto for any period on the date required hereunder,
effective as of the date on which such Borrowing Base Certificate or other
information was otherwise required, at Agent’s option, the Applicable Margin
shall be based on the highest rate above until the next Business Day after a
Borrowing Base Certificate or other information is provided for the applicable
period at which time the Applicable Margin shall be adjusted as otherwise
provided herein. In the event that at any time after the end of any calendar
quarter the Quarterly Average Excess Availability for such calendar quarter used
for the determination of the Applicable Margin was greater than the actual
amount of the Quarterly Average Excess Availability for such period as a result
of the inaccuracy of information provided by or on behalf of any Borrower to
Agent for the calculation of Excess Availability, the Applicable Margin for such
period shall be adjusted to the applicable percentage based on such actual
Quarterly Average Excess Availability and any additional interest for the
applicable period as a result of such recalculation shall be promptly paid to
Agent. The foregoing shall not be construed to limit the rights of Agent or
Lenders with respect to the amount of interest payable after a Default or Event
of Default whether based on such recalculated percentage or otherwise.

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

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

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

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

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

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“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-in Legislation Schedule.

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

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

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

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by any Loan Party to any Bank Product
Provider pursuant to or evidenced by a Bank Product Agreement and irrespective
of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, (b) all
Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to
pay to a Bank Product Provider as a result of Agent or such Lender purchasing
participations from, or executing guarantees or indemnities or reimbursement
obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to any Loan Party. Anything to the
contrary contained in the foregoing notwithstanding, the Bank Product
Obligations shall exclude any Excluded Swap Obligation.

“Bank Product Provider” means Wells Fargo or any of its Affiliates.

“Bank Product Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate to establish (based upon the Bank
Product Providers’ determination of the liabilities and obligations of each Loan
Party and its Subsidiaries in respect of Bank Product Obligations) in respect of
Bank Products then provided or outstanding.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

“Base Rate” means the greatest of (a) the Federal Funds Rate plus one-half
percent ( 1⁄2%), (b) the LIBOR Rate (which rate shall be calculated based upon
an Interest Period of one month and shall be determined on a daily basis), plus
one percentage point, and (c) the rate of interest announced, from time to time,
within Wells Fargo at its principal office in San Francisco as its “prime rate”,
with the understanding that the “prime rate” is one of Wells Fargo’s base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate (and, if any such announced
rate is below zero, then the rate determined pursuant to this clause (c) shall
be deemed to be zero).

 

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“Base Rate Loan” means a Revolving Loan that bears interest at a rate determined
by reference to the Base Rate.

“Base Rate Margin” means the Applicable Base Rate Margin as set forth in the
definition of the term Applicable Margin.

“Board of Directors” means, as to any Person, the board of directors (or
comparable managers) of such Person, or any committee thereof duly authorized to
act on behalf of the board of directors (or comparable managers).

“Board of Governors” means the Board of Governors of the Federal Reserve System
of the United States (or any successor).

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to this Agreement.

“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of
this Agreement.

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Agent on behalf thereof), or by Agent in the case of a
Special Advance.

“Borrowing Base” means, as of any date of determination, the result of:

(a) 85% of the amount of Eligible Accounts, minus

(b) the aggregate amount of Reserves, if any, established by Agent from time to
time under Section 2.1(c) of this Agreement.

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

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1 to
this Agreement.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of New York, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term “Business Day” also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period, the
amount of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed, but excluding, without
duplication (a) with respect to the purchase price of assets that are purchased
substantially contemporaneously with the trade-in of existing assets during such
period, the amount that the gross amount of such purchase price is reduced by
the credit granted by the seller of such assets for the assets being traded in
at such time, (b) expenditures made during such period to consummate one or more
Permitted Acquisitions, (c) expenditures made during such period to the extent
made with the identifiable proceeds of an equity investment in a Loan Party or
any of its Subsidiaries which equity investment is made substantially
contemporaneously with the making of the expenditure, and (d) expenditures
during such period that, pursuant to a written agreement, are reimbursed by a
third Person (excluding any Loan Party or any of its Affiliates) within one
hundred eighty (180) days of the date such expenditures are made.

 

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“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

“Cash Dominion Event” means at any time (a) Excess Availability is less than
12.5% of the Maximum Credit at any time, or (b) a Specified Event of Default has
occurred and is continuing; provided, that, to the extent that the Cash Dominion
Event has occurred due to (i) clause (a) of this definition, if Excess
Availability shall be equal to or greater than the applicable amount provided
for in clause (a) of this definition for at least thirty (30) consecutive days
thereafter, the Cash Dominion Event shall no longer be deemed to exist or be
continuing until such time as Excess Availability may again be less than the
applicable amount provided for in clause (a) of this definition and (ii) clause
(b) of this definition, if such Specified Event of Default has been cured or
waived, the Cash Dominion Event shall no longer be deemed to exist or be
continuing.

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one (1) year from the date of acquisition thereof,
(b) marketable direct obligations issued or fully guaranteed by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof maturing within one (1) year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or
Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no
more than two hundred seventy (270) days from the date of creation thereof and,
at the time of acquisition, having a rating of at least A-1 from S&P or at least
P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank
deposits or bankers’ acceptances maturing within one (1) year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States or any state thereof or the District of Columbia or any United States
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $1,000,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in clause
(d) above, or (ii) any other bank organized under the laws of the United States
or any state thereof so long as the full amount maintained with any such other
bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase
obligations of any commercial bank satisfying the requirements of clause (d) of
this definition or of any recognized securities dealer having combined capital
and surplus of not less than $1,000,000,000, having a term of not more than
seven days, with respect to securities satisfying the criteria in clauses (a) or
(d) above, (g) debt securities with maturities of six (6) months or less from
the date of acquisition backed by standby letters of credit issued by any
commercial bank satisfying the criteria described in clause (d) above, and
(h) Investments in money market funds substantially all of whose assets are
invested in the types of assets described in clauses (a) through (g) above.

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

“Certain Funds Provision” has the meaning specified therefor on Schedule 3.1.

“CFC” means (a) a controlled foreign corporation (as that term is defined in the
IRC) in which any Loan Party is a “United States shareholder” within the meaning
of Section 951(b) of the IRC or (b) any Subsidiary all or substantially all of
the assets of which consist, directly or indirectly, of Equity Interests of
Subsidiaries described in clause (a) of this definition.

 

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“Change of Control” means that:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such
plan), other than the Permitted Holders, becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of more than a majority of the
equity securities of Parent entitled to vote for members of the board of
directors or equivalent governing body of Parent on a fully-diluted basis (and
taking into account all such securities that such person or group has the right
to acquire pursuant to any option right);

(b) the passage of thirty (30) days from the date upon which any Person or two
or more Persons acting in concert, other than the Permitted Holders, shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of Parent, or control over the equity
securities of Parent entitled to vote for members of the board of directors or
equivalent governing body of Parent on a fully-diluted basis (and taking into
account all such securities that such Person or group has the right to acquire
pursuant to any option right) representing more than a majority of the combined
voting power of such securities;

(c) during any period of twelve (12) consecutive months, a majority of the
members of the board of directors or other equivalent governing body of Parent
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body

(d) Parent fails to own and control, directly or indirectly, 100% of the Equity
Interests of any other Loan Party, other than pursuant to transactions permitted
under Section 6.3, or

(e) the occurrence of any “Change of Control” as defined in the Term Loan
Agreement.

“Change in Law” means the occurrence after the date of this Agreement of:
(a) the adoption or effectiveness of any law, rule, regulation, judicial ruling,
judgment or treaty, (b) any change in any law, rule, regulation, judicial
ruling, judgment or treaty or in the administration, interpretation,
implementation or application by any Governmental Authority of any law, rule,
regulation, guideline or treaty, or (c) the making or issuance by any
Governmental Authority of any request, rule, guideline or directive, whether or
not having the force of law; provided, that notwithstanding anything in this
Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith, and (ii) all requests, rules, guidelines or
directives concerning capital adequacy promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities shall,
in each case, be deemed to be a “Change in Law,” regardless of the date enacted,
adopted or issued.

 

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“Closing Date” means the date of the making of the initial Revolving Loan (or
other extension of credit) under this Agreement.

“Closing Date Merger” means the merger of Merger Sub with and into Target with
Target as the surviving entity so that, immediately after giving effect thereto,
Target will be a wholly-owned Subsidiary of Parent.

“Closing Date Merger Agreement” means the Agreement and Plan of Merger, dated as
of July 18, 2018, by and among Parent, Merger Sub, Target and the Members’
Representative party thereto.

“Closing Date Merger Agreement Representations” means those representations and
warranties made by or on behalf of Target, its Subsidiaries or their respective
businesses in the Closing Date Merger Agreement as are material to the interests
of Lenders, but only to the extent that Merger Sub (or any of its applicable
Affiliates) has the right to terminate its (or their) obligations under the
Closing Date Merger Agreement or decline to consummate the Closing Date Merger
as a result of the breach of such representations and warranties.

“Closing Date Merger Documents” means the Closing Date Merger Agreement and all
other documents related thereto and executed in connection therewith.

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by any Loan Party in or upon which a Lien is granted
by such Person in favor of Agent or Lenders under any of the Loan Documents;
provided, that the definition of “Collateral” shall not include any Excluded
Collateral.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Loan Party’s books and records or Equipment, in each case, in form and
substance reasonably satisfactory to Agent.

“Collateral Documents” means, collectively, each of the security agreements or
other similar agreements delivered to Agent pursuant to the terms of this
Agreement, and each of the other agreements, instruments or documents that
creates or purports to create a Lien in favor of Agent, including the Guaranty
and Security Agreement.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds and tax refunds).

“Commitment” means, with respect to each Lender, its Commitment, and with
respect to all Lenders, their Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 or in the Assignment and Acceptance pursuant to which such Lender became a
Lender under this Agreement, as such amounts may be reduced or increased from
time to time in accordance with the terms of this Agreement.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

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“Company Material Adverse Effect” has the meaning specified therefor in the
Closing Date Merger Agreement (as in effect on July 18, 2018).

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Lead Borrower to Agent.

“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of such Person and its
Subsidiaries; provided, that when the term “Consolidated” is used herein in
reference to the Borrowers and their Subsidiaries, the term “Consolidated” shall
mean Parent and its Subsidiaries on a consolidated basis, with such consolidated
numbers then determined on a combined basis, all in accordance with GAAP.

“Consolidated Interest Charges” means, for any period, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Hedge Agreements
or agreements governing hedging obligations, but excluding any non-cash or
deferred interest plus (b) the portion of rent expense with respect to such
period under Capitalized Lease Obligations that is treated as interest in
accordance with GAAP, in each case of or by the Borrowers and their
Subsidiaries, all as determined on a Consolidated basis in accordance with GAAP.

“Copyright Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

“Confidential Information” has the meaning specified therefor in Section17.9(a)
of this Agreement.

“Consolidated Net Income” means, for any period, the aggregate of the net income
(or loss) of the Borrowers and their Subsidiaries for such period, determined on
a Consolidated basis in accordance with GAAP; provided, however, that:

(a) any net after-tax extraordinary, nonrecurring or unusual gains or non-cash
losses shall be excluded;

(b) the Consolidated Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period;

(c) any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
ICD) shall be excluded;

(d) any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness shall
be excluded;

(e) the Consolidated Net Income for such period of any Person that is not a
Subsidiary of such Person or that is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of dividends or
distributions or other payments paid in cash (or to the extent converted into
cash) to the referent Person or a Subsidiary thereof in respect of such period;

 

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(f) (1) the non-cash portion of “straight-line” rent expense shall be excluded
and (2) the cash portion of “straight-line” rent expense which exceeds the
amount expensed in respect of such rent expense shall be included;

(g) unrealized gains and losses relating to hedging transactions and
mark-to-market of Indebtedness denominated in foreign currencies resulting from
the application of ASC 830 shall be excluded;

(h) the income (or loss) of any non-consolidated entity during such period in
which any other Person has a joint interest shall be excluded, except to the
extent of the amount of cash dividends or other distributions actually paid in
cash to any of ICD or its Subsidiaries during such period; and

(i) the income (or loss) of a Subsidiary (or any asset given pro forma
treatment) during such period and accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with ICD or any of its Subsidiaries
or that Person’s assets are acquired by ICD or any of its Subsidiaries shall be
excluded.

“Consolidated Non-cash Charges” means, with respect to the Parent and its
Subsidiaries for any period, the aggregate depreciation, amortization,
impairment, compensation, rent and other non-cash expenses of the Parent and its
Subsidiaries reducing Consolidated Net Income of such Person for such period on
a Consolidated basis and otherwise determined in accordance with GAAP (including
non-cash charges resulting from purchase accounting in connection with any
Acquisition or Disposition that is consummated after the Closing Date), but
excluding (a) any such charge which consists of or requires an accrual of, or
cash reserve for, anticipated cash charges for any future period and (b) the
non-cash impact of recording the change in fair value of any embedded
derivatives under ASC 815 and related interpretations as a result of the terms
of any agreement or instrument to which such Consolidated Non-cash Charges
relate.

“Consolidated Taxes” means, with respect to the Parent and its Subsidiaries on a
Consolidated basis for any period, provision for taxes based on income, profits
or capital, including, without limitation, state franchise and similar taxes.

“Contribution and Exchange Agreement” has the meaning specified in the
definition of Conversion and Release.

“Control Agreement” means any control agreement, in form and substance
reasonably satisfactory to Agent, executed and delivered by any Loan Party,
Agent, and the applicable securities intermediary (with respect to a Securities
Account) or bank (with respect to a Deposit Account) or its equivalent in any
jurisdiction.

“Conversion and Release” means that the Parent, the Target, the holders of
indebtedness under the Existing First Lien Note Purchase Agreement, the holder
of indebtedness under the Existing Second Lien Note Purchase Agreement and
others will enter into a Contribution and Exchange Agreement on terms reasonably
acceptable to Agent (the “Contribution and Exchange Agreement”), pursuant to
which all such indebtedness will be satisfied and discharged, the Existing First
Lien Note Purchase Agreement and the Existing Second Lien Note Purchase
Agreement will be terminated, and all liens securing obligations under or in
connection with the Existing First Lien Note Purchase Agreement and the Existing
Second Lien Note Purchase Agreement will be terminated and released.

 

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“Covenant Testing Period” means a period (a) commencing on the last day of the
fiscal month of Loan Parties most recently ended prior to a Covenant Trigger
Event for which Loan Parties are required to deliver to Agent monthly financial
statements pursuant to Schedule 5.1 to this Agreement, and (b) continuing
through and including the first day after such Covenant Trigger Event that
Excess Availability has equaled or exceeded 10% of the Maximum Credit for 30
consecutive calendar days.

“Covenant Trigger Event” means if at any time Excess Availability is less than
10% of the Maximum Credit.

“Cure Amount” has the meaning specified therefor in Section 7.2(a) of the
Agreement.

“Cure Right” has the meaning specified therefor in Section 7.2(a) of the
Agreement.

“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.

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

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two (2) Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies Agent and Lead
Borrower in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable Default or Event of Default,
shall be specifically identified in such writing) has not been satisfied, or
(ii) pay to Agent, Issuing Bank, or any other Lender any other amount required
to be paid by it hereunder (including in respect of its participation in Letters
of Credit) within two (2) Business Days of the date when due, (b) has notified
any Borrower, Agent or Issuing Bank in writing that it does not intend to comply
with its funding obligations hereunder, or has made a public statement to that
effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable Default or Event of Default,
shall be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three (3) Business Days after written request
by Agent or Lead Borrower, to confirm in writing to Agent and Lead Borrower that
it will comply with its prospective funding obligations hereunder (provided,
that, such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by Agent and Lead Borrower), or
(d) has, or has a direct or indirect parent company that has, (i) become the
subject of any Insolvency Proceeding, (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity, or
(iii) become the subject of a Bail-in Action; provided, that, a Lender shall not
be a Defaulting Lender solely by virtue of the ownership or acquisition of any
equity interest in that Lender or any direct or indirect parent company thereof
by a Governmental Authority so long as such ownership interest does not result
in or provide such Lender with immunity from the jurisdiction of courts within
the United States or from the enforcement of judgments or writs of attachment on
its assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by Agent that a Lender is a Defaulting Lender under
any one or more of clauses (a) through (d) above shall be conclusive and binding
absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
upon delivery of written notice of such determination to Lead Borrower, Issuing
Bank, and each Lender.

 

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“Defaulting Lender Rate” means (a) for the first three (3) days from and after
the date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Revolving Loans that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).

“Deposit Account” means (a) any deposit account (as that term is defined in the
UCC), and (b) with respect to any Deposit Account located outside of the United
States, any bank account with a deposit function.

“Designated Account” means the Deposit Account of Lead Borrower identified on
Schedule D-1 to this Agreement (or such other Deposit Account of Lead Borrower
located at Designated Account Bank that has been designated as such, in writing,
by Lead Borrower to Agent).

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 to
this Agreement (or such other bank that is located within the United States that
has been designated as such, in writing, by Lead Borrower to Agent).

“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior three (3) months, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to Borrowers’ Accounts
during such period, by (b) Borrowers’ billings with respect to Accounts during
such period.

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by the extent to which
Dilution is in excess of 5%.

“Disposition” or “Dispose” means the sale, transfer, assignment, exclusive
license, lease or other disposition (including any sale and leaseback
transaction) (whether in one transaction or in a series of transactions) of any
property by any Person, including (a) any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith and (b) any sale, transfer, assignment,
or other disposition of any Equity Interests of another Person, but, for the
avoidance of doubt, not the issuance by such Person of its Equity Interests.

“Disqualified Equity Interests” means any Equity Interests that, by their terms
(or by the terms of any security or other Equity Interests into which they are
convertible or for which they are exchangeable), or upon the happening of any
event or condition (a) matures or are mandatorily redeemable (other than solely
for Qualified Equity Interests), pursuant to a sinking fund obligation or
otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations that are accrued and payable and the termination of
the Commitments), (b) are redeemable at the option of the holder thereof (other
than solely for Qualified Equity Interests), in whole or in part, (c) provide
for the scheduled payments of dividends in cash, or (d) are or become
convertible into or exchangeable for Indebtedness or any other Equity Interests
that would constitute Disqualified Equity Interests, in each case, prior to the
date that is 180 days after the Maturity Date.

“Disqualified Lender” means (a) those banks, financial institutions and other
institutional lenders and investors that have been separately identified in
writing by Parent to Agent by email transmission on September 24, 2018,
(b) those companies that are competitors of a Loan Party that are separately
identified in writing by Administrative Borrower to Agent by email transmission
on September 24, 2018 and, with the reasonable consent of Agent, from time to
time, after the Closing Date, and (c) in the case of

 

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each of clauses (a) and (b), any of their Affiliates that are identified in
writing by Administrative Borrower to Agent by email transmission on
September 24, 2018 and, with the reasonable consent of Agent, from time to time,
after the Closing Date. The identification of any Person as a Disqualified
Lender after the date hereof shall be effective only as of the time of such
identification and any such identification shall have no retroactive effect of
any kind, including to disqualify any Person that theretofore shall have become
a Lender. Notwithstanding the foregoing, each Loan Party and the Lenders
acknowledge and agree that Agent will not have any responsibility or obligation
of any kind to determine whether any Lender or potential Lender is a
Disqualified Lender and Agent will have no liability with respect to any
assignment made to a Disqualified Lender. Parent shall confirm, upon the written
request of Agent or any Lender, whether a particular Person is a Disqualified
Lender.

“Dollars” or “$” means United States dollars.

“Document” means a document (as that term is defined in the UCC).

“Domestic Subsidiary” means any Subsidiary of Parent that is organized under the
laws of any political subdivision of the United States.

“DQ List” has the meaning specified therefor in Section 13.1(i).

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit, including by electronic
transmission such as SWIFT, electronic mail, facsimile or computer-generated
communication.

“Earn-Outs” means unsecured liabilities of a Loan Party arising under an
agreement to make any deferred payment as a part of the Purchase Price for a
Permitted Acquisition, including performance bonuses or consulting payments in
any related services, employment or similar agreement, in an amount that is
subject to or contingent upon the revenues, income, cash flow or profits (or the
like) of the target of such Permitted Acquisition.

“EBITDA” means, with respect to any fiscal period and with respect to Parent and
its Subsidiaries determined, in each case, on a consolidated basis in accordance
with GAAP:

(a) Consolidated Net Income, plus

(b) without duplication and to the extent deducted in determining such
Consolidated Net Income for such period (other than with respect to clause
(ix) below), each of the following items:

(i) income tax expense, net of tax refunds,

(ii) Consolidated Interest Charges,

(iii) Consolidated Non-cash Charges,

(iv) the amount of costs, expenses and fees paid to third parties during such
period in connection with the transactions contemplated hereby to occur on the
Closing Date and post-closing matters related thereto in an aggregate amount,
during the term of this Agreement, not to exceed $13,500,000,

 

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(v) any premiums, expenses or charges (other than Consolidated Non-cash Charges)
related to any issuance or sale of Equity Interests, Investment, Acquisition,
Disposition or recapitalization permitted to be made hereunder (whether
consummated or not),

(vi) any non-cash costs or expense incurred pursuant to any management equity
plan or stock option plan or other management or employee benefit plan or
agreement or any stock subscription or shareholder agreement,

(vii) the amount of any minority interest expense consisting of income of a
Subsidiary attributable to minority equity interests of third parties in any
non-wholly owned Subsidiary, net of any cash distributions made to such third
parties in such period,

(viii) any net after-tax extraordinary, nonrecurring or unusual losses
(including cash severance costs); provided that, solely with respect to cash
losses added back pursuant to this clause (viii), Borrowers shall deliver to the
Lenders supporting documentation reasonably satisfactory to the Required Lenders
in respect of such cash losses,

(ix) proceeds of business interruption insurance received in cash during such
period, to the extent not already included in Consolidated Net Income, and

(x) charges, losses or expenses to the extent indemnified, insured or reimbursed
by a third party not an affiliate of a Loan Party to the extent such
indemnification, insurance or reimbursement is actually received in cash for
such period, minus

(c) without duplication, (i) any net after-tax extraordinary, non-recurring or
unusual gains and any non-cash income or gain increasing Consolidated Net Income
for such period, excluding any such items to the extent they represent (1) the
reversal in such period of an accrual of, or reserve for, potential cash expense
in a prior period, (2) any non-cash gains with respect to cash actually received
in a prior period to the extent such cash did not increase Consolidated Net
Income in a prior period or (3) items representing ordinary course accruals of
cash to be received in future periods; plus (ii) any net gain from discontinued
operations or net gains from the disposal of discontinued operations to the
extent increasing Consolidated Net Income.

For the purposes of calculating EBITDA for any period of twelve consecutive
months (each, a “Reference Period”), if at any time during such Reference Period
(and on or after the Closing Date), any Loan Party or any of its Subsidiaries
shall have made a Permitted Acquisition or a Disposition permitted hereunder,
EBITDA for such Reference Period shall be calculated after giving pro forma
effect thereto as if any such Permitted Acquisition or Disposition (and any
increase or decrease in the component financial definitions used in the
calculation of EBITDA attributable to any Permitted Acquisition or Disposition)
occurred on the first day of such Reference Period.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein and Norway.

 

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“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Accounts” means those Accounts created by a Borrower in the ordinary
course of its business, that arise out of such Borrower’s rendition of services,
that comply with each of the representations and warranties respecting Eligible
Accounts made in the Loan Documents, and that are not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; provided, that
such criteria may be revised from time to time by Agent in Agent’s Permitted
Discretion to address the results of any information with respect to the
Borrowers’ business or assets of which Agent becomes aware after the Closing
Date, including any field examination performed by or received by Agent from
time to time after the Closing Date. In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits, unapplied cash,
taxes, finance charges, service charges, discounts, credits, allowances, and
rebates. Eligible Accounts shall not include the following:

(a) (i) Accounts that the Account Debtor has failed to pay within 60 days of due
date not to exceed 90 days of invoice date and (ii) up to $500,000 of Accounts
that the Account Debtor has failed to pay within 60 days of the due date not to
exceed 120 days of invoice date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of
all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,

(c) Accounts with selling terms of more than 90 days,

(d) Accounts with respect to which the Account Debtor is an Affiliate of any
Borrower or an employee or agent of any Borrower or any Affiliate of any
Borrower,

(e) Accounts (i) arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional, or (ii) with respect to which the
payment terms are “C.O.D.”, cash on delivery or other similar terms,

(f) Accounts that are not payable in Dollars,

(g) Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States or Canada, or (ii) is
not organized under the laws of the United States or Canada or any state or
province thereof, or (iii) is the government of any foreign country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof, unless (A) the Account is supported by an irrevocable
letter of credit reasonably satisfactory to Agent (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Agent and, if
requested by Agent, is directly drawable by Agent, or (B) the Account is covered
by credit insurance in form, substance, and amount, and by an insurer,
reasonably satisfactory to Agent,

(h) Accounts with respect to which the Account Debtor is either (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Borrowers have complied,
to the reasonable satisfaction of Lender, with the Assignment of Claims Act, 31
USC §3727), or (ii) any state of the United States or any other Governmental
Authority,

 

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(i) Accounts with respect to which the Account Debtor is a creditor of a
Borrower, has or has asserted a right of recoupment or setoff, or has disputed
its obligation to pay all or any portion of the Account, solely to the extent of
such claim, right of recoupment or setoff, or dispute,

(j) (1) Accounts with respect to an Account Debtor (other than as set forth in
clause (j)(2) below) whose Eligible Accounts owing to Borrowers exceed 15% (such
percentage, as applied to a particular Account Debtor, being subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates) of all Eligible Accounts, solely to the extent of
the obligations owing by such Account Debtor in excess of such percentage and
(2) Accounts with respect to Concho Resources Inc. and its subsidiaries, BP
America Production Company, Jagged Peak Energy Inc. and any other Account Debtor
approved by Agent in writing, whose Eligible Accounts owing to Borrowers exceed
25% (such percentage, as applied to such Account Debtor, being subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates) of all Eligible Accounts, solely to the extent of
the obligations owing by such Account Debtor in excess of such percentage;
provided, that in each case, the amount of Eligible Accounts that are excluded
because they exceed the foregoing percentage shall be determined by Agent based
on all of the otherwise Eligible Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limit,

(k) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
any Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,

(l) Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful, including by reason of the Account Debtor’s financial
condition,

(m) Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,

(n) Accounts (i) with respect to unearned or deferred revenue for which services
have not yet been completed or (ii) with respect to which the services giving
rise to such Account have not been performed and billed to the Account Debtor,

(o) Accounts with respect to which the Account Debtor is a Sanctioned Person or
Sanctioned Entity,

(p) Accounts (i) that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by the
applicable Borrower of the subject contract for goods or services, or (ii) that
represent credit card sales,

(q) Accounts owned by a target acquired in connection with a Permitted
Acquisition, or a Person that is joined to this Agreement as a Borrower pursuant
to the provisions of this Agreement or Accounts owned by Parent, in each case,
until the completion of a field examination with respect to such Accounts, the
results of which are, in each case, satisfactory to Agent in its Permitted
Discretion; or

(r) Accounts arising out of the sale of any Goods.

“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$1,000,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the

 

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United States, (c) a finance company, insurance company, or other financial
institution or fund that is engaged in making, purchasing, or otherwise
investing in commercial loans in the ordinary course of its business and having
(together with its Affiliates) total assets in excess of $1,000,000,000, (d) any
Affiliate (other than individuals) of a pre-existing Lender, (e) so long as no
Event of Default has occurred and is continuing, any other Person approved by
Agent and Borrower (such approval by Borrower not to be unreasonably withheld,
conditioned or delayed), and (f) during the continuation of an Event of Default,
any other Person approved by Agent; provided, that, no Disqualified Lender shall
qualify as an Eligible Transferee.

“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Loan Party, or any of their predecessors in interest, (b) from
adjoining properties or businesses, or (c) from or onto any facilities which
received Hazardous Materials generated by any Loan Party, or any of their
predecessors in interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Loan Party, relating to the environment, the effect of the environment on
employee health, or Hazardous Materials, in each case as amended from time to
time.

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

“Equipment” means equipment (as that term is defined in the UCC).

“Equity Interests” means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA that is treated as a
single employer with any Loan Party or its Subsidiaries under IRC
Section 414(b), (b) any trade or business subject to ERISA that is treated as a
single employer with any Loan Party or its Subsidiaries under IRC
Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which any Loan Party or any of its Subsidiaries is a member
under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is treated as a single
employer with any Loan Party or its Subsidiaries under IRC Section 414(o).

 

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“ERISA Event” means (a) any Reportable Event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder with respect to a Pension Plan, other
than those events as to which the 30-day notice period has been waived; (b) a
withdrawal by a 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 by any
Loan Party or any ERISA Affiliate that is treated as such a withdrawal from a
Pension Plan under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by a Loan Party or any ERISA Affiliate from a Multiemployer Plan;
(d) the filing of a notice of intent to terminate any Pension Plan, other than
in a standard termination pursuant to Section 4041(b) of ERISA, or the treatment
of a Multiemployer Plan amendment as a termination under Section 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) with respect to a
Pension Plan, the failure to satisfy the minimum funding standard of IRC
Section 412 or Section 302 of ERISA, whether or not waived; (g) the failure of
any Loan Party or any ERISA Affiliate to make any required contribution to a
Multiemployer Plan; (h) 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 a Loan Party or any ERISA Affiliate; or (i) the imposition of a Lien upon
the property or any Loan Party or any ERISA Affiliate pursuant to the IRC or
ERISA with respect to any Pension Plan, including pursuant to Section 430(k) of
the IRC.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Event of Default” has the meaning specified therefor in Article 8 of this
Agreement.

“Excess Availability” means at any time, the amount equal to (a) the lesser of
the Borrowing Base or the Maximum Credit minus (b) the Revolver Usage.

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

“Existing Credit Facilities” means the credit facilities pursuant to (a) the
Credit Agreement, dated as of November 15, 2017, as amended, by and between the
Target and Wells Fargo, and (b) the Second Amended and Restated Credit
Agreement, dated as of July 14, 2017, as amended, by and among Parent, CIT
Finance LLC as agent, and others.

“Existing First Lien Note Purchase Agreement” means the First Lien Note Purchase
Agreement dated as of February 15, 2017, by and among the Target and the
purchasers party thereto, as amended.

“Existing Letters of Credit” means, collectively, the letters of credit set
forth on Schedule 2.11.

“Existing Second Lien Note Purchase Agreement” means the Amended and Restated
Second Lien Note Purchase Agreement, dated as of February 15, 2017, by and among
the Target and the purchasers party thereto, as amended.

“Excluded Accounts” has the meaning specified thereafter in the Guaranty and
Security Agreement.

 

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“Excluded Collateral” means the following, except to the extent that any of the
following may be collateral for obligations under the Term Loan Documents:
(a) shares of any Subsidiary that is a “CFC” in excess of sixty-five percent of
all of the issued and outstanding shares of Equity Interests of such Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section 1.956-2) to
secure the Obligations if a pledge of a greater percentage would result in
material adverse tax consequences to Parent or any other Loan Party, (b) motor
vehicles or other assets subject to a certificate of title statute, letter of
credit rights (other than to the extent such rights can be perfected by filing a
UCC-1 and commercial tort claims with a value less than $150,000), (c) leasehold
interests in Real Property, (d) Excluded Accounts, (e) any rights or interests
in any contract, agreement, lease, permit, license, charter or license
agreement, as such, if under the terms of such contract, agreement, lease,
permit, license, charter or license agreement covering real or personal
property, or applicable law with respect thereto, the valid grant of a Lien
thereon to Agent would constitute or result in a breach, termination or default
under such contract, agreement, lease, permit, license, charter or license
agreement and such breach, termination or default has not been or is not waived
or the consent of the other party to such contract, agreement, lease, permit,
license, charter or license agreement has not been or is not otherwise obtained
or under applicable law such prohibition cannot be waived; provided, that, the
foregoing exclusion shall in no way be construed (i) to apply if any such
prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the Uniform
Commercial Code or other applicable law or (ii) so as to limit, impair or
otherwise affect Agent’s unconditional continuing liens on any rights or
interests of a Loan Party in or to monies due or to become due under any such
contract, lease, permit, license, charter or license agreement, (f) any United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a lien thereon would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable federal law; provided, that, upon submission and acceptance by the
U.S. Patent and Trademark Office of an amendment to allege use pursuant to 15
U.S.C. Section 1060(a), such intent-to-use trademark application shall be
considered Collateral. Proceeds of Excluded Collateral shall be deemed
Collateral, and (g) any property as to which Agent agrees (in consultation with
the Borrowers) that the costs of obtaining a security interest in, or Lien on,
such property, or perfection thereof, are excessive in relation to the value to
the Lender Group and the Bank Product Providers of the security interest to be
afforded thereby. Notwithstanding the foregoing, any and all proceeds of
Excluded Collateral, to the extent that the proceeds are not themselves Excluded
Collateral, shall be Collateral.

“Excluded Domestic Holdco”: a Domestic Subsidiary substantially all of the
assets of which (whether held directly or indirectly) consist of Equity
Interests of one or more Foreign Subsidiaries.

“Excluded Subsidiary” means any Subsidiary that is (a) a Foreign Subsidiary,
(b) a direct or indirect Subsidiary of a Foreign Subsidiary or an Excluded
Domestic Holdco; (c) an Excluded Domestic Holdco, (d) a captive insurance
company; (e) a not-for-profit Subsidiary; (f) a Domestic Subsidiary that is a
disregarded entity for U.S. federal income tax purposes and that owns Equity
Interests of a Foreign Subsidiary; (g) prohibited or restricted by
organizational documents or any contract existing on (but not incurred in
anticipation of) the Closing Date (or if such Subsidiary is acquired after the
Closing Date, on the date of such acquisition (so long as such prohibition did
not arise as part of, or in anticipation of, such acquisition)) or applicable
law (including any requirement to obtain the consent of a Governmental
Authority) or third party consent that has not been obtained) from guaranteeing
or granting Liens to secure the Obligations; (h) a Subsidiary of any of the
foregoing Subsidiaries (to the extent such Subsidiary satisfies the exceptions
described in any of the foregoing clauses (a) through (h)); and (i) any other
Subsidiary if a guaranty by such Subsidiary would (in the reasonable good faith
judgment of the Parent in consultation with the Agent) result in material
adverse tax consequences to the Borrowers. Notwithstanding the foregoing, any
Subsidiary that is a borrower or guarantor under the Term Loan Documents shall
not be an Excluded Subsidiary.

 

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“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the guaranty of such
Loan Party of, or the grant by such Loan Party of a security interest to secure,
such Swap Obligation (or any guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guaranty of such Loan Party or the grant
of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guaranty or security
interest is or becomes illegal.

“Excluded Taxes” means (a) any Tax imposed on the net income or net profits of
any Lender, any Participant or any Recipient Agent (including any franchise
Taxes and branch profits Taxes), in each case (i) imposed as a result of such
Lender, Participant or Recipient Agent 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) Taxes that
would not have been imposed but for a Lender’s, Participant’s or Recipient
Agent’s failure to comply with the requirements of Section 16.2 of this
Agreement, (c) any United States federal withholding Taxes that would be imposed
on amounts payable to a Lender based upon the applicable withholding rate in
effect at the time such Lender becomes a party to this Agreement (or designates
a new lending office, other than a designation made at the request of a Loan
Party), except that Excluded Taxes shall not include (i) any amount that such
Lender (or its assignor, if any) was previously entitled to receive pursuant to
Section 16.1 of this Agreement, if any, with respect to such withholding Tax at
the time such Lender becomes a party to this Agreement (or designates a new
lending office), and (ii) additional United States federal withholding taxes
that may be imposed after the time such Lender becomes a party to this Agreement
(or designates a new lending office), as a result of a change in law, rule,
regulation, treaty, order or other decision or other Change in Law with respect
to any of the foregoing by any Governmental Authority, and (d) any withholding
Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and (a) any current or future
regulations or official interpretations thereof, (b) any agreements entered into
pursuant to Section 1471(b)(1) of the IRC (or any amended or successor version
described above), and (c) any intergovernmental agreement entered into by the
United States (or any fiscal or regulatory legislation, rules, or practices
adopted pursuant to any such intergovernmental agreement entered into in
connection therewith) and a foreign government or one or more agencies thereof
to implement the foregoing and any fiscal or regulatory legislation, rules or
official practices adopted pursuant to such published intergovernmental
agreement, treaty or convention.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it (and, if any such rate is below zero, then the rate
determined pursuant to this definition shall be deemed to be zero).

 

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“Fee Letter” means the fee letter, dated July 18, 2018, between Parent and Wells
Fargo.

“Fixed Charges” means, with respect to any fiscal period and with respect to
Parent and its Subsidiaries determined on a Consolidated basis in accordance
with GAAP, the sum, without duplication, of (a) Consolidated Interest Charges
required to be paid (other than interest paid-in-kind, amortization of financing
fees, and other non-cash Consolidated Interest Charges) during such period, plus
(b) scheduled principal payments in respect of Indebtedness that are required to
be paid during such period, plus (c) all amounts paid with respect to Earn-Outs
during such period, plus (d) solely for purposes of calculating the Fixed Charge
Coverage Ratio as used in clause (b) of the definition of Payment Conditions,
all Restricted Payments (whether in cash or other property, other than common
Equity Interests) during such period.

“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with
respect to Parent and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, the ratio of (a) EBITDA for the twelve month period ending
on such date, minus Unfinanced Capital Expenditures made (to the extent not
already incurred in a prior period) or incurred during the twelve month period
ending on such date, minus Consolidated Taxes paid in cash during the twelve
(12) month period ending on such date, to (b) Fixed Charges for the twelve
(12) month period ending on such date.

“Flow of Funds Agreement” means a pay proceeds letter, dated as of even date
with this Agreement, in form and substance reasonably satisfactory to Agent,
executed and delivered by Borrowers and Agent.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“Fronting Fee” has the meaning specified therefor in Section 2.11(k) of this
Agreement.

“Funding Date” means the date on which a Borrowing occurs.

“Funding Losses” has the meaning specified therefor in Section 2.12(c)(iii) of
this Agreement.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“General Intangible” means a general intangible (as that term is defined in the
UCC).

“Goods” means goods (as that term is defined in the UCC).

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation or association, memorandum of association, by-laws, or
other organizational documents of such Person.

“Governmental Authority” means the government of any nation or any political
subdivision thereof, whether at the national, state, territorial, provincial,
county, municipal or any other level, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of, or pertaining to, government (including any supra-national bodies
such as the European Union or the European Central Bank).

“Guarantor” means (a) each Person that guaranties all or a portion of the
Obligations, including any Person that is a “Guarantor” under the Guaranty and
Security Agreement, and (b) each other Person that becomes a guarantor after the
Closing Date pursuant to Section 5.11 of this Agreement, provided, that,
“Guarantor” shall not include any Excluded Subsidiary.

 

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“Guaranty and Security Agreement” means a guaranty and security agreement, dated
as of even date with this Agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by each of the Loan Parties to
Agent.

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code.

“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Loan Parties arising under, owing pursuant to, or existing in respect of
Hedge Agreements entered into with one or more of the Hedge Providers; provided
that, anything to the contrary contained in the foregoing notwithstanding, the
Hedge Obligations shall exclude any Excluded Swap Obligation.

“Hedge Provider” means Wells Fargo or any of its Affiliates.

“Increased Reporting Event” means if at any time Excess Availability is less
than 12.5% of the Maximum Credit.

“Increased Reporting Period” means the period commencing upon the occurrence of
an Increased Reporting Event and continuing until the first day after such
Increased Reporting Event that Excess Availability equals or exceeds 12.5% of
the Maximum Credit; provided that, if Excess Availability is equal to or greater
than 12.5% of the Maximum Credit for at least thirty (30) consecutive days after
such Increased Reporting Event, the Increased Reporting Event shall no longer be
deemed to exist or be continuing until such time as Excess Availability may
again be less than 12.5% of the Maximum Credit.

“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, (e) all obligations of such Person to pay the deferred purchase price
of assets (other than trade payables incurred in the ordinary course of business
and repayable in accordance with customary trade practices and, for the
avoidance of doubt, other than royalty payments payable in the ordinary course
of business in respect of non-exclusive licenses) and any Earn-Out or similar
obligations to the extent required to be recognized as a liability on the
balance sheet of such Person under GAAP, (f) all monetary obligations of such
Person owing under Hedge Agreements (which amount shall be calculated based on
the amount that would be payable by such Person if the Hedge Agreement were

 

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terminated on the date of determination), (g) any Disqualified Equity Interests
of such Person, and (h) any obligation of such Person guaranteeing or intended
to guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (g) above. For
purposes of this definition, (i) the amount of any Indebtedness represented by a
guaranty or other similar instrument shall be the lesser of the principal amount
of the obligations guaranteed and still outstanding and the maximum amount for
which the guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
which is limited or is non-recourse to a Person or for which recourse is limited
to an identified asset shall be valued at the lesser of (A) if applicable, the
limited amount of such obligations, and (B) if applicable, the fair market value
of such assets securing such obligation.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
this Agreement.

“Indemnified Person” has the meaning specified therefor in Section 10.3 of this
Agreement.

“Insolvency Laws” means, collectively, the Bankruptcy Code, and any other
applicable state, provincial, territorial or federal bankruptcy or insolvency
laws, each as now and hereafter in effect, any successors to such statutes and
any other applicable insolvency or other similar law of any jurisdiction,
including any law of any jurisdiction permitting a debtor to obtain a stay or a
compromise of the claims of its creditors against it and including any rules and
regulations pursuant thereto.

“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 the foregoing clause (a), Other Taxes.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the
Closing Date, among Agent and Term Loan Agent, as amended, restated or modified
from time to time in accordance with its terms.

“Interest Expense” means, for any period, the aggregate of the interest expense
of Parent and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending one (1), two (2), three (3) or six (6) months
thereafter; provided, that, (a) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (b) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (c) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is one (1), two (2), three (3) or six (6) months after the date on
which the Interest Period began, as applicable, and (d) Borrowers may not elect
an Interest Period which will end after the Maturity Date.

 

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“Inventory” means inventory (as that term is defined in the UCC).

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide accounts receivable arising in the ordinary course
of business), or acquisitions of Indebtedness, Equity Interests, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustment for increases or
decreases in value, or write-ups, write-downs, or write-offs with respect to
such Investment.

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
version or revision thereof accepted by the Issuing Bank for use.

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by a Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

“Issuing Bank” means Wells Fargo.

“Joinder” means a joinder agreement substantially in the form of Exhibit J-1 to
this Agreement.

“Judgment Currency” has the meaning specified therefor in Section 17.15 of the
Agreement.

“Landlord Reserve” means, as to each location at which a Borrower has books and
records located and as to which a Collateral Access Agreement has not been
received by Agent, a reserve in an amount equal to 3 months’ rent, storage
charges, fees or other amounts under the lease or other applicable agreement
relative to such location or, if greater and Agent so elects in its Permitted
Discretion, the number of months’ rent, storage charges, fees or other amounts
for which the landlord or other property owner will have, under applicable law,
a Lien to secure the payment of such amounts under the lease or other applicable
agreement relative to such location.

“Lender” has the meaning set forth in the preamble to this Agreement, shall
include Issuing Bank, and shall also include any other Person made a party to
this Agreement pursuant to the provisions of Section 13.1 of this Agreement and
“Lenders” means each of Lenders or any one or more of them.

“Lender Group” means each of the Lenders (including Issuing Bank) and Agent or
any one or more of them (as the context requires).

“Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by any Loan Party under any of the Loan
Documents that are paid, advanced, or incurred by the Lender Group,
(b) documented out-of-pocket fees or charges paid or incurred by Agent in
connection with the Lender Group’s transactions with any Loan Party under any of
the Loan Documents, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, corporate, bankruptcy, litigation, UCC searches and including searches
with the patent and trademark office, the copyright office, or the

 

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department of motor vehicles), filing, recording, publication, real estate
surveys, real estate title policies and endorsements, and environmental audits,
(c) Agent’s customary fees and charges imposed or incurred in connection with
any background checks or OFAC/PEP searches related to any Loan Party or its
Affiliates, (d) Agent’s customary fees and charges (as adjusted from time to
time) with respect to the disbursement of funds (or the receipt of funds) to or
for the account of any Borrower (whether by wire transfer or otherwise),
together with any documented out-of-pocket costs and expenses incurred in
connection therewith, (e) customary charges imposed or incurred by Agent
resulting from the dishonor of checks payable by or to any Loan Party,
(f) reasonable and documented out-of-pocket costs and expenses paid or incurred
by the Lender Group to correct any default or enforce any provision of the Loan
Documents, or during the continuance of an Event of Default, in gaining
possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, or any portion
thereof, irrespective of whether a sale is consummated, (g) subject to
Section 5.7(c), field examination fees and expenses (including travel, meals,
and lodging) of Agent related to any field examinations or inspections to the
extent of the fees and charges (and up to the amount of any limitation)
contained in this Agreement or the Fee Letter, (h) reasonable documented costs
and out-of-pocket expenses (including reasonable and documented attorneys’ fees
and expenses) related to third party claims or any other suit or adverse
proceeding paid or incurred by the Lender Group in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with any Loan Party, (i) Agent’s
reasonable and documented costs and out-of-pocket expenses (including reasonable
and documented attorneys’ fees limited to a single counsel in the United States
and any other jurisdiction of a Loan Party or where its assets are located)
incurred in advising, structuring, drafting, reviewing, administering (including
travel, meals, and lodging), syndicating (including SyndTrak, Intralinks or
other communications costs incurred in connection with a syndication of the loan
facilities), or amending, waiving or modifying the Loan Documents, and
(j) Agent’s and each Lender’s reasonable and documented costs and out-of-pocket
expenses (including reasonable and documented outside attorneys, accountants,
consultants, and other advisors fees and expenses) incurred in terminating,
enforcing (including reasonable outside attorneys, accountants, consultants, and
other advisors fees and expenses incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning any Loan Party or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether suit or other adverse proceeding is brought,
or in taking any enforcement action or any Remedial Action concerning the
Collateral.

“Lender Group Representatives” has the meaning specified therefor in
Section 17.9 of this Agreement.

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

“Letter of Credit” means a letter of credit (as that term is defined in the UCC)
issued by Issuing Bank for the account of any Borrower, including the Existing
Letters of Credit.

“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent (including that
Agent has a first priority perfected Lien in such cash collateral), including
provisions that specify that the Letter of Credit Fees and all commissions,
fees, charges and expenses provided for in Section 2.11(k) of this Agreement
(including any fronting fees) will continue to accrue while the Letters of
Credit are outstanding) to be held by Agent for the benefit of the Revolving
Lenders in an amount equal to one hundred five percent (105%) of the then
existing Letter of Credit Usage, (b) delivering to Agent documentation executed
by all beneficiaries under the Letters of Credit, in form and substance
reasonably satisfactory to Agent and Issuing Bank, terminating all of such
beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a

 

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standby letter of credit, in form and substance reasonably satisfactory to
Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an
amount equal to one hundred five percent (105%) of the then existing Letter of
Credit Usage (it being understood that the Letter of Credit Fee and all fronting
fees set forth in this Agreement will continue to accrue while the Letters of
Credit are outstanding and that any such fees that accrue must be an amount that
can be drawn under any such standby letter of credit).

“Letter of Credit Disbursement” means a payment made by Issuing Bank pursuant to
a Letter of Credit.

“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s participation in the Letter of Credit Usage
pursuant to Section 2.11(e) on such date.

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of
this Agreement.

“Letter of Credit Indemnified Costs” has the meaning specified therefor in
Section 2.11(f) of this Agreement.

“Letter of Credit Related Person” has the meaning specified therefor in
Section 2.11(f) of this Agreement.

“Letter of Credit Sublimit” means $7,500,000.

“Letter of Credit Usage” means, as of any date of determination, the sum of
(a) the aggregate undrawn amount of all outstanding Letters of Credit, plus
(b) the aggregate amount of outstanding reimbursement obligations with respect
to Letters of Credit which remain unreimbursed or which have not been paid
through a Revolving Loan.

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of
this Agreement.

“LIBOR Notice” means a written notice in the form of Exhibit L-1 to this
Agreement.

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of this
Agreement.

“LIBOR Rate” means, in relation to any LIBOR Rate Loan, the rate per annum
published by ICE Benchmark Administration Limited (or any successor page or
other commercially available source as Agent may designate from time to time) as
of 11:00 a.m., London time, two (2) Business Days prior to the commencement of
the requested Interest Period, for a term, and in an amount, comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance
with this Agreement (and, if any such published rate is below zero, then the
rate determined pursuant to this clause (b) shall be deemed to be zero). Each
determination of the LIBOR Rate shall be made by the Agent and shall be
conclusive in the absence of manifest error.

“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at
a rate determined by reference to the LIBOR Rate.

“LIBOR Rate Margin” means the Applicable LIBOR Rate Margin as set forth in the
definition of the term Applicable Margin.

 

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“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.

“Loan Account” has the meaning specified therefor in Section 2.9(b) of this
Agreement.

“Loan” means any Revolving Loan or Special Advance made (or to be made)
hereunder.

“Loan Documents” means this Agreement, the Guaranty and Security Agreement and
the other Collateral Documents, the Control Agreements, any Borrowing Base
Certificate, the Fee Letter, any Issuer Documents, the Intercreditor Agreement,
the Letters of Credit, the Loan Managers Side Letter, the Patent Security
Agreement, the Trademark Security Agreement, any note or notes executed by
Borrowers in connection with this Agreement and payable to any member of the
Lender Group, and any other instrument or agreement entered into, now or in the
future, by any Loan Party and any member of the Lender Group in connection with
this Agreement (but specifically excluding Bank Product Agreements).

“Loan Party” means any Borrower or any Guarantor.

“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the financial condition, results of operations, properties,
assets or liabilities of the Loan Parties and their Subsidiaries, taken as a
whole, (b) a material impairment of the rights and remedies of the Agent or any
Lender under the Loan Documents (including, without limitation, the Lender
Group’s ability to enforce the Obligations or realize upon the Collateral), or
of the ability of the Loan Parties, taken as a whole, to perform their
obligations under the Loan Documents, (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Loan Parties,
taken as a whole, of the Loan Documents, or (d) a material adverse change in, or
a material adverse effect upon, the enforceability or priority of Agent’s Liens
with respect to all or a material portion of the Collateral.

“Material Contract” means, with respect to any Loan Party, (i) the Closing Date
Merger Documents, and (ii) all other contracts or agreements, the loss of which
could reasonably be expected to result in a Material Adverse Effect.

“Maturity Date” means the earlier of (a) the maturity date under the Term Loan
Agreement or (b) October 1, 2023.

“Maximum Credit” means $40,000,000, decreased by the amount of reductions in the
Commitments made in accordance with Section 2.4(c) of this Agreement.

“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
makes or is obligated to make contributions, during the preceding five plan
years has made or been obligated to make contributions, or with respect to which
any Loan Party has any liability.

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of
this Agreement.

 

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“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

“Obligations” means (a) all loans (including the Revolving Loans (including
Special Advances)), debts, principal, interest (including any interest that
accrues after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Letters of Credit (irrespective of whether contingent), premiums,
liabilities (including all amounts charged to the Loan Account pursuant to this
Agreement), obligations (including indemnification obligations), fees (including
the fees provided for in the Fee Letter), Lender Group Expenses (including any
fees or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), guaranties, and all covenants and duties of any
other kind and description owing by any Loan Party arising out of, under,
pursuant to, in connection with, or evidenced by this Agreement or any of the
other Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all other expenses or other amounts that any Loan Party is required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents, and (b) all Bank Product Obligations; provided, that, anything
to the contrary contained in the foregoing notwithstanding, the Obligations
shall exclude any Excluded Swap Obligation. Without limiting the generality of
the foregoing, the Obligations of Borrowers under the Loan Documents include the
obligation to pay (i) the principal of the Revolving Loans, (ii) interest
accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing
Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of
Credit commissions, fees (including fronting fees) and charges, (v) Lender Group
Expenses, (vi) fees payable under this Agreement or any of the other Loan
Documents, and (vii) indemnities and other amounts payable by any Loan Party
under any Loan Document. Any reference in this Agreement or in the Loan
Documents to the Obligations shall include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
this Agreement.

“Other Connection Taxes” means, with respect to any Lender, Participant or
Recipient Agent, Taxes imposed as a result of a present or former connection
between such Lender, Participant or Recipient Agent and the jurisdiction or
taxing authority imposing the Tax (other than any such connection arising solely
from such Lender or such Participant having executed, delivered or performed its
obligations, received payments under, received or perfected a security interest
under, engaged in any other transaction pursuant to or enforced its rights or
remedies under this Agreement or any other Loan Document).

“Other Taxes” means all present or future stamp, court, or documentary,
intangible, recording, filing, excise, or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 14.2).

“Overadvance” means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11.

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

 

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“Participant” has the meaning specified therefor in Section 13.1(e) of this
Agreement.

“Pass-Through Tax Liabilities” means the amount of state and federal income tax
paid or to be paid by any direct or indirect owner of any Equity Interest in
Administrative Borrower on taxable income earned by Administrative Borrower and
attributable to such owner of such Equity Interest as a result of the
“pass-through” tax status of the Administrative Borrower (and, as applicable,
any direct or indirect owner thereof), assuming the highest marginal income tax
rate for federal and state income tax purposes of an individual residing in New
York County, New York, after taking into account any deduction for state income
taxes in calculating the federal income tax liability and all other deductions,
credits, deferrals and other reductions (including unused, unexpired prior year
loss carry-forwards) available to such owner of such Equity Interest from or
through Administrative Borrower.

“Patent Security Agreement” has the meaning specified therefor in the Guaranty
and Security Agreement.

“Patriot Act” has the meaning specified therefor in Section 4.13 of this
Agreement.

“Payment Conditions” means, at the time of determination with respect to any
specified transaction or payment the following:

(a) as of the date of any such transaction or payment, and after giving effect
thereto, no Event of Default shall exist or have occurred and be continuing;

(b) as of the date of any such transaction or payment, and after giving effect
thereto, either:

(i) the Excess Availability for the immediately preceding thirty
(30) consecutive day period shall be not less twenty-five percent (25%) of the
Maximum Credit and after giving effect to the transaction or payment, on a pro
forma basis using the most recent calculation of the Borrowing Base immediately
prior to any such payment or transaction, the Excess Availability shall be not
less than such amount; or

(ii) both (A) the Excess Availability for the immediately preceding thirty
(30) consecutive day period shall be not less than twenty percent (20%) of the
Maximum Credit and after giving effect to the transaction or payment, on a pro
forma basis using the most recent calculation of the Borrowing Base immediately
prior to any such payment or transaction, the Excess Availability shall be not
less than such amount, and (B) as of the date of any such transaction or
payment, and after giving effect thereto, on a pro forma basis, the Fixed Charge
Coverage Ratio of Parent and its Subsidiaries for the immediately preceding
twelve (12) consecutive fiscal months ending on the last day of the applicable
fiscal period prior to the date of such payment or transaction for which Agent
has received financial statements shall be at least 1.00 to 1.00; and

(c) Agent shall have received a certificate of an Authorized Officer of Lead
Borrower certifying as to compliance with the preceding clauses and
demonstrating (in reasonable detail) the calculations required thereby.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity thereto performing similar functions.

“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 during the immediately preceding five (5) plan years.

 

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“Perfection Certificate” means a certificate in the form of Exhibit P-1 to this
Agreement.

“Permitted Acquisition” means any Acquisition so long as:

(a) each of the Payment Conditions shall be satisfied,

(b) Lead Borrower has provided Agent with its due diligence package relative to
the proposed Acquisition, including forecasted balance sheets, profit and loss
statements, and cash flow statements of the Person or assets to be acquired, all
prepared on a basis consistent with such Person’s (or assets’) historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the one (1) year period following the
date of the proposed Acquisition, on a quarter by quarter basis), in form and
substance (including as to scope and underlying assumptions) reasonably
satisfactory to Agent; provided that such diligence package shall only be
required to be delivered by Borrowers for Acquisitions with a Purchase Price in
excess of $5,000,000 and for any Acquisitions funded in whole or in part with
proceeds of Revolving Loans,

(c) Lead Borrower has provided Agent with written notice of the proposed
Acquisition at least fifteen (15) Business Days prior to the anticipated closing
date of the proposed Acquisition and, not later than five (5) Business Days
prior to the anticipated closing date of the proposed Acquisition, copies of the
acquisition agreement and other material documents relative to the proposed
Acquisition, which agreement and documents must be reasonably acceptable to
Agent,

(d) the assets being acquired (other than a de minimis amount of assets in
relation to Loan Parties’ total assets), or the Person whose Equity Interests
are being acquired, are substantially similar to the business of Loan Parties or
a business reasonably related or incidental thereto,

(e) the subject assets or Equity Interests, as applicable, are being acquired
directly by a Loan Party, and, in connection therewith, the applicable Loan
Party shall have complied with Section 5.11 or 5.12, as applicable, of this
Agreement,

(f) the assets being acquired (other than a de minimis amount of assets in
relation to the assets being acquired) are located within the United States or
Canada or the Person whose Equity Interests are being acquired is organized in a
jurisdiction located within the United States or Canada, and

(g) such Acquisition shall not be hostile and shall have been approved by the
board of directors (or other similar body) or the requisite number of
stockholders or other equityholders, as applicable, of the target as required by
the governing documents of such target.

“Permitted Discretion” means, with reference to Agent, a determination made in
good faith in the exercise of its reasonable business judgment based on how an
asset-based lender with similar rights providing a credit facility of the type
set forth in this Agreement would act in similar circumstances at the time with
the information then available to it.

“Permitted Dispositions” means:

(a) sales, abandonment, or other Dispositions of Equipment (excluding Rig Fleet
Equipment) that is substantially worn, damaged, or obsolete or no longer used or
useful in the ordinary course of business and leases or subleases of Real
Property not useful in the conduct of the business of the Loan Parties and their
Subsidiaries,

 

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(b) sales of Inventory to buyers in the ordinary course of business,

(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents,

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,

(e) the granting of Permitted Liens,

(f) the sale or discount, in each case without recourse, of accounts receivable
(other than Eligible Accounts) arising in the ordinary course of business, but
only in connection with the compromise or collection thereof,

(g) any involuntary loss, damage or destruction of property,

(h) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,

(i) the leasing or subleasing of assets of any Loan Party or its Subsidiaries in
the ordinary course of business,

(j) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Borrowers,

(k) (i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of any Loan Party or any of its Subsidiaries to the extent
not economically desirable in the conduct of its business, or (ii) the
abandonment of patents, trademarks, copyrights, or other intellectual property
rights in the ordinary course of business so long as (in each case under clauses
(i) and (ii)), (A) with respect to copyrights, such copyrights are not material
revenue generating copyrights, and (B) such lapse is not materially adverse to
the interests of the Lender Group,

(l) the making of Restricted Payments that are expressly permitted to be made
pursuant to this Agreement,

(m) the making of Permitted Investments,

(n) so long as no Event of Default has occurred and is continuing or would
immediately result therefrom, transfers of assets (i) from any Loan Party or any
of its Subsidiaries to a Loan Party, and (ii) from any Subsidiary of any Loan
Party that is not a Loan Party to any other Subsidiary of any Loan Party,

(o) dispositions of Equipment (excluding Rig Fleet Equipment) to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property, or (ii) the net cash proceeds of such disposition are
applied within 365 days following the applicable Loan Party’s or Subsidiary’s
receipt of such net cash proceeds to the purchase price of Equipment useful in
the Loan Parties’ business (or are otherwise applied in accordance with the

 

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Term Loan Agreement); provided, that (A) to the extent the property being
transferred constitutes Collateral, such replacement property shall constitute
Collateral, (B) the applicable Loan Party or its Subsidiary receives at least
the fair market value of the assets so disposed, and (C) such net cash proceeds
will not be used to prepay any Revolving Loans (except as otherwise permitted by
the Intercreditor Agreement),

(p) sales or other dispositions of Rig Fleet Equipment not to exceed $25,000,000
in the aggregate in any fiscal year, so long as (i) no Default or Event of
Default has occurred and is continuing or would immediately result therefrom,
and (ii) each such sale or disposition is in an arm’s-length transaction with a
third party and the applicable Loan Party or its Subsidiary receives at least
the fair market value of the assets so disposed,

(q) sales or other dispositions of assets (excluding Rig Fleet Equipment, other
Equipment and, except as permitted by clause (f) above, the sale or discount of
accounts receivable) not otherwise permitted in clauses (a) through (q) above so
long as (i) no Default or Event of Default has occurred and is continuing or
would immediately result therefrom, (ii) each such sale or disposition is in an
arm’s-length transaction and the applicable Loan Party or its Subsidiary
receives at least the fair market value of the assets so disposed, and (iii) the
consideration received by the applicable Loan Party or its Subsidiary consists
of at least 75% cash and Cash Equivalents and is paid at the time of the closing
of such sale or disposition, and

(r) sales or other dispositions of assets (excluding Rig Fleet Equipment and,
except as permitted by clause (f) above, the sale or discount of accounts
receivable) not otherwise permitted in clauses (a) through (q) above not
exceeding $5,000,000 during the term of this Agreement.

“Permitted Holder” means MSD Partners, L.P., MSD Credit Opportunity Master Fund,
L.P., MSD Energy Investments, L.P., and their respective Affiliates so long as
Lenders shall have completed its Patriot Act searches, OFAC/PEP searches, and
customary individual background checks and searches, as required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, the results of which shall be reasonably
satisfactory to the Lenders.

“Permitted Indebtedness” means:

(a) Indebtedness in respect of the Obligations,

(b) Indebtedness as of the Closing Date set forth on Schedule 4.14 to this
Agreement and any Refinancing Indebtedness in respect of such Indebtedness,

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,

(d) Indebtedness arising in connection with the endorsement of instruments or
other payment items for deposit,

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary
course of business with respect to surety and appeal bonds, performance bonds,
bid bonds, appeal bonds, completion guarantee and similar obligations, and
(ii) unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions,

 

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(f) Indebtedness incurred in the ordinary course of business in respect of
credit cards, credit card processing services, debit cards, stored value cards,
commercial cards (including so-called “purchase cards”, “procurement cards” or
“p-cards”), or Cash Management Services,

(g) contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligation of any Loan
Party incurred in connection with the consummation of one or more Permitted
Acquisitions,

(h) to the extent constituting Indebtedness, Permitted Investments,

(i) unsecured Indebtedness incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business,

(j) unsecured Indebtedness of any Loan Party or its Subsidiaries, in an
aggregate outstanding amount not to exceed $10,000,000, in respect of Earn-Outs
owing to sellers of assets or Equity Interests to such Loan Party or its
Subsidiaries that is incurred in connection with the consummation of one or more
Permitted Acquisitions so long as such unsecured Indebtedness is on terms and
conditions reasonably acceptable to the Required Lenders,

(k) accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness,

(l) unsecured Indebtedness of any Loan Party owing to employees, former
employees, former officers, directors, or former directors (or any spouses,
ex-spouses, or estates of any of the foregoing) incurred in connection with the
repurchase or redemption by such Loan Party of the Equity Interests of ICD that
has been issued to such Persons permitted by Section 6.7,

(m) Indebtedness evidenced by the Term Loan Agreement in an aggregate principal
amount not to exceed the amount thereof permitted by the Intercreditor
Agreement,

(n) Indebtedness owed to any Person to finance property, casualty, liability or
other insurance to any Loan Party or any of its Subsidiaries, so long as the
amount of such Indebtedness is not in excess of the amount of the unpaid cost
of, and shall be incurred only to defer the cost of, such insurance for the year
in which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,

(o) the incurrence by any Loan Party or its Subsidiaries of Indebtedness under
Hedge Agreements that is incurred for the bona fide purpose of hedging the
interest rate, commodity, or foreign currency risks associated with such Loan
Party’s or such Subsidiary’s operations and not for speculative purposes,

(p) unsecured Acquired Indebtedness in an amount not to exceed $15,000,000
outstanding at any one time so long as (i) the aggregate annual amortization
with respect to such Acquired Indebtedness does not exceed 2.5% of the principal
amount of such Acquired Indebtedness and (ii) such Acquired Indebtedness does
not have any principal payments being made prior to the date that is six
(6) months after the Maturity Date,

(q) Subordinated Indebtedness, and

(r) any other unsecured Indebtedness of any Borrower or any Subsidiary not
covered by clauses (a) through (o) above in an aggregate principal amount not to
exceed $15,000,000.

 

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“Permitted Intercompany Advances” means loans made by (a) a Loan Party to
another Loan Party, (b) a Subsidiary of a Loan Party that is not a Loan Party to
another Subsidiary of a Loan Party that is not a Loan Party, and (c) a
Subsidiary of a Loan Party that is not a Loan Party to a Loan Party, so long as
the parties thereto are party to an intercompany subordination agreement in form
and substance reasonably satisfactory to Lender.

“Permitted Investments” means:

(a) Investments in cash and Cash Equivalents,

(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,

(c) advances made in connection with purchases and acquisitions of Inventory,
supplies, materials, equipment, goods, services, contract rights, or licenses or
leases of intellectual property, in each case, in the ordinary course of
business,

(d) Investments received in settlement of amounts due to any Loan Party or any
of its Subsidiaries effected in the ordinary course of business or owing to any
Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an account debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries,

(e) Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule P-1 to this Agreement,

(f) guarantees permitted under the definition of “Permitted Indebtedness”,

(g) Permitted Intercompany Advances,

(h) Equity Interests or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,

(i) deposits of cash made in the ordinary course of business to secure
performance of operating leases,

(j) (i) non-cash loans and advances to employees, officers, and directors of a
Loan Party or any of its Subsidiaries for the purpose of purchasing Equity
Interests in Parent so long as the proceeds of such loans are used in their
entirety to purchase such Equity Interests in Parent, and (ii) loans and
advances to employees and officers of a Loan Party or any of its Subsidiaries in
the ordinary course of business for any other business purpose and in an
aggregate amount not to exceed $1,000,000 at any one time,

(k) Permitted Acquisitions,

(l) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any Loan Party in any other Loan Party (other than
capital contributions to or the acquisition of Equity Interests of Parent),

 

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(m) Investments resulting from entering into (i) Bank Product Agreements or
(ii) Hedge Agreements permitted by clause (o) of the definition of “Permitted
Indebtedness”,

(n) equity Investments by any Loan Party in any Subsidiary of such Loan Party
which is required by law to maintain a minimum net capital requirement or as may
be otherwise required by applicable law,

(o) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition,

(p) Investments consisting of non-cash consideration received in connection with
Permitted Dispositions, so long as the non-cash consideration received in
connection with any Permitted Disposition does not exceed 25% of the total
consideration received in connection with such Permitted Disposition,

(q) Investments consisting of the licensing or contribution of intellectual
property, in each case, on a non-exclusive basis, pursuant to joint marketing
arrangements with other Persons,

(r) Investments consisting of earnest money deposits required in connection with
a purchase agreement, or letter of intent, or other acquisitions to the extent
not otherwise prohibited hereunder,

(s) contributions to a “rabbi” trust for the benefit of employees or other
grantor trust subject to claims of creditors in the case of a bankruptcy of any
Loan Party or any of its Subsidiaries,

(t) so long as no Event of Default has occurred and is continuing or would
result therefrom, any other Investments in an aggregate amount not to exceed
$5,000,000, and

(u) other Investments using cash or Cash Equivalents; provided, that, each of
the Payment Conditions shall be satisfied.

“Permitted Liens” means

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

(b) Liens for unpaid taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) do not have priority over
Agent’s Liens and the underlying taxes, assessments, or charges or levies are
the subject of Permitted Protests,

(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3
of this Agreement,

(d) Liens set forth on Schedule P-2 to this Agreement; provided, that to qualify
as a Permitted Lien, any such Lien described on Schedule P-2 to this Agreement
shall only secure the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,

(e) the interests of lessors under operating leases and non-exclusive licensors
under license agreements,

(f) Liens on fixed or capital assets or the interests of lessors under Capital
Leases permitted under clause (c) of the definition of “Permitted Indebtedness”
and so long as (i) such Lien attaches only to the fixed asset purchased or
acquired and the proceeds thereof, and (ii) such Lien only secures the
Indebtedness that was incurred to acquire the fixed asset purchased or acquired
or any Refinancing Indebtedness in respect thereof,

 

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(g) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business and not in connection with the borrowing of money,
and which Liens either (i) are for sums not yet delinquent, or (ii) are the
subject of Permitted Protests,

(h) Liens on amounts deposited to secure Parent’s and its Subsidiaries’
obligations in connection with worker’s compensation or other unemployment
insurance,

(i) Liens on amounts deposited to secure Parent’s and its Subsidiaries’
obligations in connection with the making or entering into of bids, tenders, or
leases in the ordinary course of business and not in connection with the
borrowing of money,

(j) Liens on amounts deposited to secure ICD’s and its Subsidiaries’
reimbursement obligations with respect to surety or appeal bonds obtained in the
ordinary course of business,

(k) with respect to any Real Property, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof,

(l) non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,

(m) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such Deposit Accounts in the ordinary course of
business,

(o) Liens solely on any cash earnest money deposits made by a Loan Party or any
of its Subsidiaries in connection with any letter of intent or purchase
agreement with respect to a Permitted Acquisition,

(p) Liens on Collateral securing the Indebtedness permitted under clause (m) of
the definition of “Permitted Indebtedness” to the extent such Liens are subject
to the Intercreditor Agreement, and

(q) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
(i) such financing is permitted under clause (n) the definition of “Permitted
Indebtedness” and (ii) the aggregate amount of Indebtedness secured by such
Liens does not exceed $5,000,000.

“Permitted Protest” means the right of any Loan Party or any of its Subsidiaries
to protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment; provided, that (a) a reserve with respect
to such obligation is established on such Loan Party’s or its Subsidiaries’
books and records in such amount as is required under GAAP, (b) any such protest
is instituted promptly and prosecuted diligently by such Loan Party or its
Subsidiary, as applicable, in good faith, and (c) Agent is reasonably satisfied
that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of Agent’s Liens.

 

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“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Indebtedness (other than the Obligations, but including Capitalized Lease
Obligations), at the time of, or within 60 days after, the acquisition of any
fixed assets (other than Rig Fleet Equipment) for the purpose of financing all
or any part of the acquisition cost thereof, in an aggregate principal amount
outstanding not in excess of $15,000,000 at any one time.

“Person” means natural persons, corporations, limited liability companies,
unlimited liability company, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.

“Projections” means the Loan Parties’ forecasted (a) balance sheets, (b) profit
and loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Lead Borrower’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

“Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make all or a portion of the
Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the Revolving Loans, and with
respect to all other computations and other matters related to the Commitments
or the Revolving Loans, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of
all Lenders,

(b) with respect to a Lender’s obligation to participate in the Letters of
Credit, with respect to such Lender’s obligation to reimburse Issuing Bank, and
with respect to such Lender’s right to receive payments of Letter of Credit
Fees, and with respect to all other computations and other matters related to
the Letters of Credit, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of
all Lenders; provided, that, if all of the Revolving Loans have been repaid in
full and all Commitments have been terminated, but Letters of Credit remain
outstanding, Pro Rata Share under this clause shall be the percentage obtained
by dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter
of Credit Exposure of all Lenders, and

(c) with respect to all other matters and for all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 15.7 of this Agreement), the percentage obtained by dividing (i) the
Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to Section 13.1; provided, that, if
all of the Loans have been repaid in full and all Commitments have been
terminated, Pro Rata Share under this clause shall be the percentage obtained by
dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of
Credit Exposure of all Lenders.

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of
this Agreement.

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
sixty (60) days after, the acquisition of any fixed assets for the purpose of
financing all or any part of the acquisition cost thereof.

 

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“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
maximum amount of Earn-Outs), paid or delivered by a Loan Party in connection
with such Acquisition (whether paid at the closing thereof or payable thereafter
and whether fixed or contingent), but excluding therefrom (a) any cash of the
seller and its Affiliates used to fund any portion of such consideration, and
(b) any cash or Cash Equivalents acquired in connection with such Acquisition.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
guaranty, keepwell, or grant of the relevant security interest becomes effective
with respect to such Swap Obligation or such other person as constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Equity Interests” means and refers to any Equity Interests issued by
Parent (and not by one or more of its Subsidiaries) that is not a Disqualified
Equity Interest.

“Quarterly Average Excess Availability” means, at any time, the daily average of
the aggregate amount of the Excess Availability for the immediately preceding
calendar quarter, commencing on the first day of such calendar quarter.

“Real Property” means any estates or interests in real or immovable property now
owned or hereafter acquired by any Loan Party and the improvements thereto.

“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(c), to establish and maintain (including Landlord
Reserves for books and records locations and reserves for rebates, discounts,
warranty claims, and returns) with respect to the Eligible Accounts or the
Maximum Credit.

“Recipient Agent” means an agent that receives payments on behalf of the Lenders
and the Participants.

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

“Refinancing” means, collectively, substantially concurrently with the
consummation of the Closing Date Merger, the repayment in full of all
indebtedness under each of the Existing Credit Facilities, and the release of
any Liens securing such indebtedness; provided that the foregoing shall not be
construed to require the termination of any of the Existing Letters of Credit.

“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness (other than Indebtedness in respect of the Obligations) so long as:

(a) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and the fees and expenses
incurred in connection therewith and by the amount of unfunded commitments with
respect thereto,

(b) such refinancings, renewals, or extensions do not result in a shortening of
the final maturity date or the average weighted maturity (measured as of the
refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed,
or extended, nor (except in the case of Term Loan Indebtedness) are they on
terms or conditions that, taken as a whole, are or could reasonably be expected
to be materially adverse to the interests of the Lenders nor (in the case of
Term Loan Indebtedness) are they on terms and conditions which contravene the
Intercreditor Agreement,

 

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(c) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness,

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended,

(e) if the Indebtedness that is refinanced, renewed or extended was unsecured,
such refinancing, renewal or extension shall be unsecured, and

(f) if the Indebtedness (other than Term Loan Indebtedness) that is refinanced,
renewed, or extended was secured (i) such refinancing, renewal, or extension
shall be secured by substantially the same or less collateral as secured such
refinanced, renewed or extended Indebtedness on terms no less favorable to the
Agent or the Lender Group, and (ii) the Liens securing such refinancing, renewal
or extension shall not have a priority more senior than the Liens securing such
Indebtedness that is refinanced, renewed or extended;

(g) if the Indebtedness that is refinanced, renewed or extended was Term Loan
Indebtedness, any Liens securing such refinancing, renewal or extension shall be
subject to the Intercreditor Agreement (or another intercreditor agreement in
form and substance acceptable to Agent).

“Related Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course and that is administered, advised or managed by
(a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.

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

“Report” has the meaning specified therefor in Section 15.16(a) of this
Agreement.

“Required Lenders” means, at any time, Lenders having or holding more than fifty
percent (50%) of the aggregate Revolving Loan Exposure of all Lenders; provided,
that, (i) the Revolving Loan Exposure of any Defaulting Lender shall be
disregarded in the determination of the Required Lenders, and (ii) at any time
there are two or more Lenders (who are not Affiliates of one another or
Defaulting Lenders), “Required Lenders” must include at least two Lenders (who
are not Affiliates of one another).

 

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“Reserves” means, as of any date of determination, Bank Product Reserves,
Receivables Reserves, Dilution Reserve, and those other reserves that Agent
deems necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain (including reserves with respect to
(a) sums that any Loan Party or its Subsidiaries are required to pay under any
Section of this Agreement or any other Loan Document (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and has failed to pay, and (b) amounts
owing by any Loan Party or its Subsidiaries to any Person to the extent secured
by a Lien on, or trust over, any of the Collateral (other than a Permitted
Lien), which Lien or trust, in the Permitted Discretion of Agent likely would
have a priority superior to Agent’s Liens (such as Liens or trusts in favor of
landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral) with respect to the Borrowing Base or the Maximum Credit.

“Restricted Payment” means (a) any declaration or payment of any dividend or the
making of any other payment or distribution, directly or indirectly, on account
of Equity Interests issued by any Loan Party or any of its Subsidiaries
(including any payment in connection with any merger or consolidation involving
any Loan Party or any of its Subsidiaries) or to the direct or indirect holders
of Equity Interests issued by any Loan Party or any of its Subsidiaries in their
capacity as such (other than dividends or distributions payable in Qualified
Equity Interests issued by any Loan Party or any of its Subsidiaries), or
(b) any purchase, redemption, making of any sinking fund or similar payment, or
other acquisition or retirement for value (including in connection with any
merger or consolidation involving any Loan Party or any of its Subsidiaries) any
Equity Interests issued by any Loan Party or any of its Subsidiaries, or (c) any
making of any payment to retire, or to obtain the surrender of, any outstanding
warrants, options, or other rights to acquire Equity Interests of any Loan Party
now or hereafter outstanding.

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans (inclusive of Protective Advances), plus
(b) the amount of the Letter of Credit Usage.

“Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any
date of determination (a) prior to the termination of the Commitments, the
amount of such Lender’s Commitment, and (b) after the termination of the
Commitments, the aggregate outstanding principal amount of the Revolving Loans
of such Lender.

“Revolving Loans” has the meaning specified in Section 2.1(a) of this Agreement.

“Rig” means any land-based drilling and workover rig owned by any Loan Party,
together with all Rig Accessories that are installed on or affixed to such Rig.

“Rig Accessories” means pumps, drilling equipment, machinery, equipment,
forklifts, bulldozers and other parts necessary or useful for the drilling
operation of any Rig.

“Rig Fleet Equipment” means any Loan Party’s Rigs and partial Rigs and any Loan
Party’s Equipment related to such Rigs and partial Rigs.

“Sanctioned Entity” means (a) a country or territory or a government of a
country or territory, (b) an agency of the government of a country or territory,
(c) an organization directly or indirectly controlled by a country or territory
or its government, or (d) a Person resident in or determined to be resident in a
country or territory, in each case of clauses (a) through (d) that is a target
of Sanctions, including a target of any country sanctions program administered
and enforced by OFAC.

 

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“Sanctioned Person” means, at any time, (a) any a Person named on the list of
Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s
consolidated Non-SDN list or any other Sanctions-related list maintained by any
relevant Governmental Authority, (b) a Person or legal entity that is a target
of Sanctions, (c) any Person operating, organized or resident in a Sanctioned
Entity, or (d) any Person directly or indirectly owned or controlled
(individually or in the aggregate) by or acting on behalf of any such Person or
Persons described in clauses (a) through (c) above.

“Sanctions” means individually and collectively, respectively, any and all
economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions
laws, regulations or embargoes, including those imposed, administered or
enforced from time to time by: (a) the United States of America, including those
administered by OFAC, the U.S. Department of State, the U.S. Department of
Commerce, or through any existing or future executive order, (b) the United
Nations Security Council, (c) the European Union or any European Union member
state, (d) Her Majesty’s Treasury of the United Kingdom, or (e) any other
Governmental Authority with jurisdiction over any member of the Lender Group,
Bank Product Provider, Hedge Provider or any Loan Party or any of their
respective Subsidiaries.

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Securities Account” means a securities account (as that term is defined in the
UCC).

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

“Sellers” means the owners of the Equity Interests of the Target immediately
before giving effect to the Closing Date Merger.

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of this
Agreement.

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of
this Agreement.

“Solvent” means, with respect to any Person as of any date of determination,
that (a) at fair valuations, the sum of such Person’s debts (including
contingent liabilities) is less than all of such Person’s assets, (b) such
Person is not engaged or about to engage in a business or transaction for which
the remaining assets of such Person are unreasonably small in relation to the
business or transaction or for which the property remaining with such Person is
an unreasonably small capital, (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is “solvent” or not “insolvent”, as applicable within the
meaning given those terms and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).

“Special Advances” has the meaning specified therefor in Section 2.3(d)(iii) of
this Agreement.

 

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“Specified Equity Contribution” means cash equity contributions (which if in the
form of preferred equity shall be on terms and conditions reasonably acceptable
to Agent) made directly or indirectly by a Person (other than a Loan Party) to
Parent as a cash equity contribution in accordance with Section 7.2, which
equity contribution is added to EBITDA for the purposes of calculating
compliance with Section 7.1.

“Specified Event of Default” means (a) any Event of Default arising under
Section 8.1 of the Agreement, (b) any Event of Default arising under Section 8.4
of the Agreement, (c) any Event of Default arising under Section 8.5 of the
Agreement, (d) any Event of Default arising under Section 8.2(a) of the
Agreement resulting from the failure to comply with Section 5.2 of the Agreement
(with respect to delivery of each of the items set forth in clauses (a) through
(h) of Schedule 5.2 to the Agreement), (e) any Event of Default arising under
Section 8.2(a) of the Agreement resulting from the failure to comply with
Section 7(k) of the Guaranty and Security Agreement, (f) any Event of Default
arising under Section 8.2(a) arising from the failure to comply with Section 7
of the Agreement and (g) any Event of Default arising under Section 8.7 of the
Agreement resulting from any representation or warranty under Section 4.22 of
the Agreement being untrue.

“Specified Representations” means the representations and warranties made by the
Parent and its Subsidiaries in Section 4.1(a)(i), 4.2(a), 4.2(b)(i) (as it
relates to no conflict with the Governing Documents of any Loan Party and laws
or regulations applicable to any Loan Party), 4.2(b)(ii) (as it relates to no
conflict with Material Contracts that relate to Indebtedness), 4.4(a) (in each
case, as it relates to the due authorization, execution, delivery and
performance of the Loan Documents and enforceability thereof), 4.4(b), 4.9,
4.13, 4.16, 4.17 or 4.18 of this Agreement.

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or
foreign law or letter of credit practices applicable in the city in which
Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

“Subordinated Indebtedness” means any unsecured Indebtedness of Loan Parties
incurred from time to time (a) that is subordinated in right of payment (which,
for the avoidance of doubt, shall include a restriction on all cash payments
with respect to such Indebtedness) to the Obligations, (b) that is not
guaranteed by any Subsidiaries other than Loan Parties, (c) that is not subject
to scheduled amortization, redemption, sinking fund or similar payment and does
not have a final maturity, in each case, on or before the date that is six
months after the Maturity Date, (d) that does not include any financial
covenants or any covenant or agreement that is more restrictive or onerous on
any Loan Party in any material respect than any comparable covenant in the
Agreement and is otherwise on terms and conditions reasonably acceptable to
Agent, (e) limited to cross-payment default and cross-acceleration to designated
“senior debt” (including the Obligations), and (f) that is subject to a
subordination agreement, in form and substance reasonably acceptable to Agent.

“Subordination Provisions” has the meaning specified therefor in Section 8.13 of
this Agreement.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the Equity Interests having ordinary voting power to elect a majority
of the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

 

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“Supermajority Lenders” means, at any time, Revolving Lenders having or holding
more than sixty-six and two-thirds percent (66 2/3%) of the aggregate Revolving
Loan Exposure of all Lenders; provided, that, (i) the Revolving Loan Exposure of
any Defaulting Lender shall be disregarded in the determination of the
Supermajority Lenders, and (ii) at any time there are two or more Lenders (who
are not Affiliates of one another), “Supermajority Lenders” must include at
least two Lenders (who are not Affiliates of one another or Defaulting Lenders).

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Target” means Sidewinder Drilling LLC, a Delaware limited liability company.

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein, and all
interest, penalties or additions to tax with respect thereto.

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of this
Agreement.

“Term Loan Agent” means U.S. Bank National Association, in its capacity as agent
under the Term Loan Agreement and the other Term Loan Documents and its
successors and assigns, together with any replacement or successor agent
thereunder.

“Term Loan Agreement” means the Credit Agreement, dated of even date herewith,
by and among Term Loan Agent, Term Loan Lenders, Parent and certain of its
affiliates (as the same may be subsequently amended, restated, refinanced,
replaced, extended, renewed or restructured in accordance with the provisions
hereof and the terms of the Intercreditor Agreement).

“Term Loan Documents” means, collectively, the following; (a) the Term Loan
Agreement and (b) all agreements, documents and instruments at any time executed
and/or delivered in connection therewith.

“Term Loan Lenders” means those certain financial institutions from time to time
party to the Term Loan Agreement as lenders.

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

“Trademark Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

“Transactions” means, collectively, the Closing Date Merger, the Refinancing,
the credit facility under the Term Loan Agreement, the credit facility under
this Agreement, the Conversion and Release, and the other transactions related
to the foregoing.

“UCC” means the New York Uniform Commercial Code, as in effect from time to
time.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any version or revision thereof accepted by
Issuing Bank for use.

“Unfinanced Capital Expenditures” means Capital Expenditures (a) not financed
with the proceeds of any incurrence of Indebtedness (other than the incurrence
of any Revolving Loans), the proceeds of any sale or issuance of Equity
Interests or equity contributions, the proceeds of any asset sale, or any
insurance proceeds, and (b) that are not reimbursed by a third person (excluding
any Loan Party or any of its Affiliates) in the period such expenditures are
made pursuant to a written agreement.

 

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“United States” means the United States of America.

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of this
Agreement.

“US Dollars” or “$” means the lawful currency of the United States.

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of this
Agreement.

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP; provided, that, if Lead Borrower notifies
Agent that Borrowers request an amendment to any provision hereof to eliminate
the effect of any Accounting Change occurring after the Closing Date or in the
application thereof on the operation of such provision (or if Agent notifies
Lead Borrower that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such Accounting Change or in the application thereof, then Agent and
Borrowers agree that they will negotiate in good faith amendments to the
provisions of this Agreement that are directly affected by such Accounting
Change with the intent of having the respective positions of Lenders and
Borrowers after such Accounting Change conform as nearly as possible to their
respective positions immediately before such Accounting Change took effect and,
until any such amendments have been agreed upon and reasonably agreed to by
Agent, the provisions in this Agreement shall be calculated as if no such
Accounting Change had occurred. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Parent”, “Borrowers” is used in respect of a financial covenant or a related
definition, it shall be understood to mean the Loan Parties and their
Subsidiaries on a consolidated basis, unless the context clearly requires
otherwise. Notwithstanding anything to the contrary contained herein, all
financial statements delivered hereunder shall be prepared, and all financial
covenants contained herein shall be calculated, without giving effect to any
election under the Statement of Financial Accounting Standards Board’s
Accounting Standards Codification Topic 825 (or any similar accounting
principle) permitting a Person to value its financial liabilities or
Indebtedness at the fair value thereof.

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

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

 

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“herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in any other Loan Document to
(i) any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein), and (ii) any law, statute, rule or regulation
shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law (it being understood that
nothing in this clause shall give retroactive effect to such consolidation,
amendment, replacement, supplement or interpretation). The words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties. Any reference
herein or in any other Loan Document to the satisfaction, repayment, or payment
in full of the Obligations shall mean (a) the payment or repayment in full in
immediately available funds of (i) the principal amount of, and interest accrued
and unpaid with respect to, all outstanding Loans, together with the payment of
any premium applicable to the repayment of the Loans, (ii) all Lender Group
Expenses that have accrued and are unpaid regardless of whether demand has been
made therefor, and (iii) all fees or charges that have accrued hereunder or
under any other Loan Document (including the Letter of Credit Fee and the Unused
Line Fee) and are unpaid, (b) in the case of contingent reimbursement
obligations with respect to Letters of Credit, providing Letter of Credit
Collateralization, (c) in the case of obligations with respect to Bank Products
(other than Hedge Obligations), providing Bank Product Collateralization,
(d) the receipt by Agent of cash collateral in order to secure any other
contingent Obligations for which a claim or demand for payment has been made on
or prior to such time or in respect of matters or circumstances known to Agent
or a Lender at such time that are reasonably expected to result in any loss,
cost, damage, or expense (including attorneys’ fees and legal expenses), such
cash collateral to be in such amount as Agent reasonably determines is
appropriate to secure such contingent Obligations, (e) the payment or repayment
in full in immediately available funds of all other outstanding Obligations
(including the payment of any termination amount then applicable (or which would
or could become applicable as a result of the repayment of the other
Obligations) under Hedge Agreements provided by Hedge Providers) other than
(i) unasserted contingent indemnification Obligations, (ii) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (iii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid, and (f) the termination of all
of the Commitments of the Lenders. Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in any other Loan Document shall be satisfied by the
transmission of a Record.

1.5 Time References. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, all references to time of day refer to
Central standard time or Central daylight saving time, as in effect in Dallas,
Texas on such day. For purposes of the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to and including”;
provided, that, with respect to a computation of fees or interest payable to
Agent or any Lender, such period shall exclude the first day and include the
last day so long as payment is received on or before the time specified in
Section 2.4, but in any event consist of at least one (1) full day.

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

 

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2. LOANS AND TERMS OF PAYMENT.

2.1 Revolving Loans.

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

(i) such Lender’s Commitment, or

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

(A) the amount equal to (1) the Maximum Credit, less (2) the Letter of Credit
Usage at such time, and

(B) the amount equal to (1) the Borrowing Base as of such date, less (2) the
Letter of Credit Usage at such time.

(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Revolving Loans,
together with interest accrued and unpaid thereon, shall constitute Obligations
and shall be due and payable on the Maturity Date or, if earlier, on the date on
which they otherwise become due and payable pursuant to the terms of this
Agreement. Borrowers hereby jointly and severally promise to repay all amounts
due hereunder with respect to the Revolving Loans.

(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right (but not the obligation) at any time, in the exercise of its
Permitted Discretion, to establish and increase or decrease Reserves against the
Borrowing Base or the Maximum Credit. The amount of any Reserve established by
Agent, and any changes to the eligibility criteria set forth in the definitions
of Eligible Accounts shall have a reasonable relationship to the event,
condition, other circumstance, or fact that is the basis for such reserve or
change in eligibility and shall not be duplicative of any other reserve
established and currently maintained or eligibility criteria. To the extent that
an event, condition or matter as to any Eligible Accounts is addressed pursuant
to the treatment thereof within the applicable definition of such term, Agent
shall not also establish a Reserve to address the same event, condition or
matter.

2.2 Reserved.

2.3 Borrowing Procedures and Settlements.

(a) Procedure for Borrowing Revolving Loans. Each Borrowing shall be made by a
written request by an Authorized Person delivered to Agent (which may be
delivered through Agent’s electronic platform or portal) and received by Agent
no later than 11:00 a.m. (i) on the Business Day that is one (1) Business Day
prior to the requested Funding Date in the case of a request for a Base Rate
Loan, and (ii) on the Business Day that is three (3) Business Days prior to the
requested Funding Date in the case of all other requests, specifying (A) the
amount of such Borrowing, and (B) the requested Funding Date (which shall be a
Business Day); provided, that Agent may, in its sole discretion, elect to accept
as timely requests that are received later than 11:00 a.m. on the applicable
Business Day. All Borrowing requests which are not made on-line via Agent’s
electronic platform or portal shall be subject to (and unless Agent elects
otherwise in the exercise of its sole discretion, such Borrowings shall not be
made until the completion of) Agent’s authentication process (with results
satisfactory to Agent) prior to the funding of any such requested Revolving
Loan.

 

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(b) [Reserved].

(c) Making of Revolving Loans.

(i) After receipt of a request for a Borrowing pursuant to Section 2.3(a)(i),
Agent shall notify the Lenders by telecopy, telephone, email, or other
electronic form of transmission, of the requested Borrowing; such notification
to be sent on the Business Day that is (A) in the case of a Base Rate Loan, at
least one (1) Business Day prior to the requested Funding Date, or (B) in the
case of a LIBOR Rate Loan, prior to 11:00 a.m. at least three (3) Business Days
prior to the requested Funding Date. If Agent has notified the Lenders of a
requested Borrowing on the Business Day that is one (1) Business Day prior to
the Funding Date, then each Lender shall make the amount of such Lender’s Pro
Rata Share of the requested Borrowing available to Agent in immediately
available funds, to Agent’s Account, not later than 10:00 a.m. on the Business
Day that is the requested Funding Date. After Agent’s receipt of the proceeds of
such Revolving Loans from the Lenders, Agent shall make the proceeds thereof
available to Borrowers on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, that, subject to the provisions of
Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving
Loan, if (1) one or more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) as of the date of the
requested Borrowing and after giving effect thereto, the Revolver Usage would
exceed the lesser of the Borrowing Base or the Maximum Credit.

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

 

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(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), at any time (A) after the
occurrence and during the continuance of a Default or an Event of Default, or
(B) that any of the other applicable conditions precedent set forth in Section 3
are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from
time to time, in Agent’s sole discretion, to make Revolving Loans to, or for the
benefit of, Borrowers, on behalf of the Lenders, that Agent, in its Permitted
Discretion, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, or (2) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product Obligations) (the
Revolving Loans described in this Section 2.3(d)(i) shall be referred to as
“Protective Advances”). Notwithstanding the foregoing, the aggregate amount of
all Protective Advances outstanding at any one time shall not exceed ten percent
(10%) of the Maximum Credit.

(ii) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby authorize
Agent, and Agent may, but is not obligated to, knowingly and intentionally,
continue to make Revolving Loans to Borrowers notwithstanding that an
Overadvance exists or would be created thereby, so long as (A) after giving
effect to such Revolving Loans, the outstanding Revolver Usage does not exceed
the Borrowing Base by more than ten percent (10%) of the Maximum Credit, and
(B) after giving effect to such Revolving Loans, the outstanding Revolver Usage
(except for and excluding amounts charged to the Loan Account for interest,
fees, or Lender Group Expenses) does not exceed the Maximum Credit. In the event
Agent obtains actual knowledge that the Revolver Usage exceeds the amounts
permitted by the immediately foregoing provisions, regardless of the amount of,
or reason for, such excess, Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its value, in which
case Agent may make such Overadvances and provide notice as promptly as
practicable thereafter), and the Lenders thereupon shall, together with Agent,
jointly determine the terms of arrangements that shall be implemented with
Borrowers intended to reduce, within a reasonable time, the outstanding
principal amount of the Revolving Loans to Borrowers to an amount permitted by
the preceding sentence. In such circumstances, if any Lender with a Commitment
objects to the proposed terms of reduction or repayment of any Overadvance, the
terms of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. The foregoing provisions are meant for
the benefit of the Lenders and Agent and are not meant for the benefit of
Borrowers, which shall continue to be bound by the provisions of Section 2.4(e).
Each Lender shall be obligated to settle with Agent as provided in
Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such
Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to
such Lender, any intentional Overadvances made as permitted under this
Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan
Account of interest, fees, or Lender Group Expenses.

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

 

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(iv) Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary: (A) no Special Advance may be made by Agent if such
Special Advance would cause the aggregate principal amount of Special Advances
outstanding to exceed an amount equal to ten percent (10%) of the Maximum
Credit; and (B) to the extent that the making of any Special Advance causes the
aggregate Revolver Usage to exceed the Maximum Credit, such portion of such
Special Advance shall be for Agent’s sole and separate account and not for the
account of any Lender and shall be entitled to priority in repayment in
accordance with Section 2.4(b).

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

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

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

 

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(iii) Between Settlement Dates, Agent, to the extent Special Advances are
outstanding, may pay over to Agent, as applicable, any payments or other amounts
received by Agent, that in accordance with the terms of this Agreement would be
applied to the reduction of the Revolving Loans, for application to the Special
Advances. During the period between Settlement Dates, Agent with respect to
Special Advances, and each Lender with respect to the Revolving Loans, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Agent, or the Lenders, as
applicable.

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

(f) Notation. Consistent with Section 13.1, Agent, as a non-fiduciary agent for
Borrowers, shall maintain a register showing the principal amount and stated
interest of the Revolving Loans owing to each Lender, including Special Advances
owing to Agent, and the interests therein of each Lender, from time to time and
such register shall, absent manifest error, conclusively be presumed to be
correct and accurate.

(g) Defaulting Lenders.

(i) Notwithstanding the provisions of Section 2.4(b)(iii), Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by Borrowers to
Agent for the Defaulting Lender’s benefit or any proceeds of Collateral that
would otherwise be remitted hereunder to the Defaulting Lender, and, in the
absence of such transfer to the Defaulting Lender, Agent shall transfer any such
payments (A) first, to Agent to the extent of any Special Advances that were
made by Agent and that were required to be, but were not, paid by Defaulting
Lender, (B) second, to Issuing Bank, to the extent of the portion of a Letter of
Credit Disbursement that was required to be, but was not, paid by the Defaulting
Lender, (C) third, to each Non-Defaulting Lender ratably in accordance with
their Commitments (but, in each case, only to the extent that such Defaulting
Lender’s portion of a Revolving Loan (or other funding obligation) was funded by
such other Non-Defaulting Lender), (D) fourth, in Agent’s sole discretion, to a
suspense account maintained by Agent, the proceeds of which shall be retained by
Agent and may be made available to be re-advanced to or for the benefit of
Borrowers (upon the request of Borrowers and subject to the conditions set forth
in Section 3.2) as if such Defaulting Lender had made its portion of Revolving
Loans (or other funding obligations) hereunder, and (E) fifth, from and after
the date on which all other Obligations have been paid in full, to such
Defaulting Lender in accordance with tier (M) of Section 2.4(b)(iii). Subject to
the foregoing, Agent may hold and, in its discretion, re-lend to Borrowers for
the account of such Defaulting Lender the amount of all such payments received
and retained by Agent for the account of such Defaulting Lender. Solely for the
purposes of voting or consenting to matters with respect to the Loan Documents
(including the calculation of Pro Rata Share in connection therewith) and for
the purpose of calculating the fee payable under Section 2.10(b), such
Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s
Commitment shall be deemed to be zero; provided, that, the foregoing shall not
apply to any of the matters governed by Section 14.1(a)(i) through (iii). The
provisions of this Section 2.3(g) shall remain effective with respect to such
Defaulting Lender until the earlier of (1) the date on which all of the
Non-Defaulting Lenders, Agent, Issuing Bank, and Borrowers shall have waived, in
writing, the application of this Section 2.3(g) to such Defaulting Lender, or
(2) the date on which such Defaulting Lender makes payment of all amounts that
it was obligated to fund hereunder, pays to Agent all amounts owing by
Defaulting Lender in respect of the amounts that it was obligated to fund
hereunder, and, if requested by Agent, provides adequate assurance of its
ability to perform its future obligations hereunder (on which earlier date, so
long as no Event of Default has occurred and is continuing, any remaining cash
collateral held by Agent pursuant to Section 2.3(g)(ii) shall be released to
Borrowers). The operation of this Section 2.3(g) shall not be construed to
increase or otherwise affect the Commitment of any Lender, to relieve or excuse
the performance by such Defaulting

 

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

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

(A) such Defaulting Lender’s Letter of Credit Exposure shall be reallocated
among the Non-Defaulting Lenders in accordance with their respective Pro Rata
Shares but only to the extent (1) the sum of all Non-Defaulting Lenders’ Pro
Rata Share of Revolver Usage plus such Defaulting Lender’s Letter of Credit
Exposure does not exceed the total of all Non-Defaulting Lenders’ Commitments
and (2) the conditions set forth in Section 3.2 are satisfied at such time;

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

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

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

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

 

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

(G) Agent may release any cash collateral provided by Borrowers pursuant to this
Section 2.3(g)(ii) to Issuing Bank and Issuing Bank may apply any such cash
collateral to the payment of such Defaulting Lender’s Pro Rata Share of any
Letter of Credit Disbursement that is not reimbursed by Borrowers pursuant to
Section 2.11(d). Subject to Section 17.14, no reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

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

(i) Loan Management Service. If Borrowers and Agent have separately agreed that
Borrowers may use the Loan Management Service (and such agreement is still in
effect), Borrowers shall not request and Agent shall no longer honor a request
for a Borrowing made in accordance with Section 2.3(a), and all Borrowings will
instead be initiated by Agent and credited to the applicable Designated Account
as Borrowings as of the end of each Business Day in an amount sufficient to
maintain an agreed upon ledger balance in the applicable Designated Account,
subject only to the limitations provided in Section 2.1. If Agent terminates
Borrowers’ access to the Loan Management Service, Borrowers may continue to
request Borrowings as provided in Section 2.3(a), subject to the other terms and
conditions of this Agreement. Agent shall have no obligation to make a Borrowing
through the Loan Management Service after the occurrence and during the
continuance of a Default or an Event of Default, or in an amount in excess of
the limitations provided in Section 2.1, and may terminate the Loan Management
Service at any time in its sole discretion.

 

  2.4

Payments; Reductions of Commitments; Prepayments.

 

  (a)

Payments by Borrowers.

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

 

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

 

  (b)

Apportionment and Application.

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

(ii) Subject to Section 2.4(b)(v) and Section 2.4(e), all payments to be made
hereunder by Borrowers shall be remitted to Agent and all such payments, and all
proceeds of Collateral received by Agent, shall be applied, so long as no
Application Event has occurred and is continuing and except as otherwise
provided herein with respect to Defaulting Lenders, to reduce the balance of the
Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

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

(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents and to
pay interest and principal on Special Advances that are held solely by Agent
pursuant to the terms of Section 2.3(d)(iv), until paid in full,

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

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

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

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

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

(G) [Reserved],

 

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(H) [Reserved],

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

(J) tenth, ratably

(1) ratably, to pay the principal of all Revolving Loans, until paid in full,

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

(3) up to the amount (after taking into account any amounts previously paid
pursuant to this clause (3) during the continuation of the applicable
Application Event) of the most recently established Bank Product Reserve to
(y) the Bank Product Providers based upon amounts then certified by the
applicable Bank Product Provider to Agent (in form and substance satisfactory to
Agent) to be due and payable to such Bank Product Providers on account of Bank
Product Obligations of Borrowers, and (z) with any balance to be paid to Agent,
to be held by Agent, for the ratable benefit of the Bank Product Providers, as
cash collateral, which cash collateral may be released by Agent to the
applicable Bank Product Provider and applied by such Bank Product Provider to
the payment or reimbursement of any amounts due and payable with respect to Bank
Product Obligations owed by any Loan Party to the applicable Bank Product
Provider as and when such amounts first become due and payable and, if and at
such time as all such Bank Product Obligations are paid or otherwise satisfied
in full, the cash collateral held by Agent in respect of such Bank Product
Obligations shall be reapplied pursuant to this Section 2.4(b)(iii), beginning
with tier (A) hereof,

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

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

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

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

 

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

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

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

(c) Reduction of Commitments. The Commitments shall terminate on the Maturity
Date or earlier termination thereof pursuant to the terms of this Agreement.
Borrowers may reduce the Commitments, without premium or penalty, to an amount
(which may be zero) not less than the sum of (i) the Revolver Usage as of such
date, plus (ii) the principal amount of all Revolving Loans not yet made as to
which a request has been given by Borrowers under Section 2.3(a), plus (iii) the
amount of all Letters of Credit not yet issued as to which a request has been
given by Borrowers pursuant to Section 2.11(a). Each such reduction shall be in
an amount which is not less than $5,000,000 (unless the Commitments are being
reduced to zero and the amount of the Commitments in effect immediately prior to
such reduction are less than $5,000,000), shall be made by providing not less
than ten (10) Business Days prior written notice to Agent, and shall be
irrevocable. The Commitments, once reduced, may not be increased. Each such
reduction of the Commitments shall reduce the Commitments of each Lender
proportionately in accordance with its ratable share thereof. In connection with
any reduction in the Commitments prior to the Maturity Date, if any Loan Party
or any of its Subsidiaries owns any Margin Stock, Borrowers shall deliver to
Agent an updated Form U-1 (with sufficient additional originals thereof for each
Lender), duly executed and delivered by the Borrowers, together with such other
documentation as Agent shall reasonably request, in order to enable Agent and
the Lenders to comply with any of the requirements under Regulations T, U or X
of the Federal Reserve Board.

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

 

  (e)

Mandatory Prepayments.

(i) Borrowing Base. If, at any time, (A) the Revolver Usage on such date exceeds
(B) the lesser of (1) the Borrowing Base as then in effect, or (2) the Maximum
Credit, then Borrowers shall promptly, but in any event within two (2) Business
Days of the earlier of (1) any Borrower having knowledge after due inquiry of
the existence thereof; or (2) receiving notice of the existence thereof, prepay
in accordance with Section 2.4(f)(i) an aggregate amount equal to the amount of
such excess, without premium or penalty.

(ii) Equity Cure. Within one (1) Business Day after the date of receipt by any
Loan Party of the proceeds of any Specified Equity Contribution pursuant to
Section 7.2, Borrowers shall prepay or repay the Obligations in accordance with
Section 2.4(f) in an amount equal to one hundred percent (100%) of such
proceeds.

 

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(iii) Collections. If a Cash Dominion Event has occurred and is continuing and
subject to the terms of the Intercreditor Agreement, all proceeds of Collateral
will be applied to prepay the Obligations in accordance with Section 2.4(f).

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

 

  2.5

Promise to Pay; Promissory Notes.

(a) Promise to Pay. Borrowers jointly and severally agree to pay Lender Group
Expenses incurred promptly and, in any event, within three (3) Business Days of
receipt of notice thereof by Agent (it being acknowledged and agreed that any
charging of such costs, expenses or Lender Group Expenses to any Loan Account
pursuant to the provisions of Section 2.6(d) shall be deemed to constitute
notice by Agent and prompt payment by Borrowers for the purposes of this
Section 2.5(a)). Borrowers jointly and severally promise to pay all of the
Obligations (including principal, interest, premiums, if any, fees, costs, and
expenses (including Lender Group Expenses)) in full on the Maturity Date or, if
earlier, on the date on which such Obligations (other than the Bank Product
Obligations) become due and payable pursuant to the terms of this Agreement.
Borrowers agree that their obligations contained in the first sentence of this
Section 2.5(a) shall survive payment or satisfaction in full of all other
Obligations.

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

 

  2.6

Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

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

(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal
to the LIBOR Rate plus the LIBOR Rate Margin, and

(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate
Margin.

(b) Letter of Credit Fee. Subject to Section 2.6(c), Borrowers shall pay Agent
(for the ratable benefit of the Revolving Lenders), a Letter of Credit fee (the
“Letter of Credit Fee”) (which fee shall be in addition to the fronting fees and
commissions, other fees, charges and expenses set forth in Section 2.11(k)) that
shall accrue at a per annum rate equal to the LIBOR Rate Margin times the times
the average amount of the Letter of Credit Usage during the immediately
preceding month.

 

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

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

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

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

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

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, that, anything contained herein to the
contrary notwithstanding, if such rate or rates of interest or manner of payment
exceeds the maximum allowable under applicable law, then, ipso facto, as

 

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of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum amount as is allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess.

2.7 Crediting Payments. The receipt of any payment item by Agent shall not be
required to be considered a payment on account unless such payment item is a
wire transfer of immediately available funds made to Agent’s Account or unless
and until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for payment, then Borrowers shall be
deemed not to have made such payment. Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by Agent only if it
is received into Agent’s Account on a Business Day on or before 1:30 p.m. If any
payment item is received into Agent’s Account on a non-Business Day or after
1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to
credit it on the date received), it shall be deemed to have been received by
Agent as of the opening of business on the immediately following Business Day.

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

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

2.10 Fees.

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

(b) Unused Line Fee. Borrowers shall, and hereby jointly and severally agree to,
pay to Agent, for the ratable account of Lenders, an unused line fee (the
“Unused Line Fee”) in an amount equal to the 0.375% (or 0.25% at any time when
Revolver Usage is greater fifty percent (50%) of the Maximum Credit) per annum
times the result of (i) the Maximum Credit, less (ii) the average daily amount
of the

 

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Revolver Usage during the immediately preceding month (or portion thereof),
which Unused Line Fee shall be due and payable in arrears on the first day of
each month from and after the Closing Date up to the first day of the month
prior to the date on which the Obligations are paid in full and on the date on
which the Obligations are paid in full.

(c) Field Examination and Other Fees. Borrowers shall pay to Agent, subject to
the limitations set forth in Section 5.7, field examination fees and charges, as
and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per
field examiner, plus documented out-of-pocket expenses (including travel, meals,
and lodging) for each field examination of Borrowers performed by personnel
employed by Agent and (ii) the documented fees or charges paid or incurred by
Agent if it elects to employ the services of one or more third Persons to
perform field examinations of Loan Parties, to establish electronic collateral
reporting systems, to appraise the Collateral, or any portion thereof, or to
assess Borrowers’ business valuation. All amounts due and owing under this
clause (c) shall constitute part of the Obligations.

 

  2.11

Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
Borrowers made in accordance herewith, and prior to the Maturity Date, Issuing
Bank agrees to issue requested standby Letters of Credit or sight commercial
Letters of Credit for the account of Borrowers. By submitting a request to
Issuing Bank for the issuance of a Letter of Credit, Borrowers shall be deemed
to have requested that Issuing Bank issue the requested Letter of Credit. Each
request for the issuance of a Letter of Credit, or the amendment, renewal, or
extension of any outstanding Letter of Credit, shall be (i) irrevocable and made
in writing by an Authorized Person, (ii) delivered to Agent and Issuing Bank via
telefacsimile or other electronic method of transmission reasonably acceptable
to Agent and Issuing Bank and reasonably in advance of the requested date of
issuance, amendment, renewal, or extension, and (iii) subject to Issuing Bank’s
authentication procedures with results satisfactory to Issuing Bank. Each such
request shall be in form and substance reasonably satisfactory to Agent and
Issuing Bank and (i) shall specify (A) the amount of such Letter of Credit,
(B) the date of issuance, amendment, renewal, or extension of such Letter of
Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name
and address of the beneficiary of the Letter of Credit, and (E) such other
information (including, the conditions to drawing, and, in the case of an
amendment, renewal, or extension, identification of the Letter of Credit to be
so amended, renewed, or extended) as shall be necessary to prepare, amend,
renew, or extend such Letter of Credit, and (ii) shall be accompanied by such
Issuer Documents as Agent or Issuing Bank may request or require, to the extent
that such requests or requirements are consistent with the Issuer Documents that
Issuing Bank generally requests for Letters of Credit in similar circumstances.
Issuing Bank’s records of the content of any such request will be conclusive.
Anything contained herein to the contrary notwithstanding, Issuing Bank may, but
shall not be obligated to, issue a Letter of Credit that supports the
obligations of a Loan Party or one of its Subsidiaries in respect of (x) a lease
of real property to the extent that the face amount of such Letter of Credit
exceeds the highest rent (including all rent-like charges) payable under such
lease for a period of one year, or (y) an employment contract to the extent that
the face amount of such Letter of Credit exceeds the highest compensation
payable under such contract for a period of one year.

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

(i) the Letter of Credit Usage would exceed the Letter of Credit Sublimit, or

(ii) the Letter of Credit Usage would exceed the Maximum Credit less the
outstanding amount of Revolving Loans, or

 

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

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

(d) Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall
notify Agent in writing no later than the Business Day prior to the Business Day
on which such Issuing Bank issues any Letter of Credit. In addition, each
Issuing Bank (other than Wells Fargo or any of its Affiliates) shall, on the
first Business Day of each week, submit to Agent a report detailing the daily
undrawn amount of each Letter of Credit issued by such Issuing Bank during the
prior calendar week. Each Letter of Credit shall be in form and substance
reasonably acceptable to Issuing Bank, including the requirement that the
amounts payable thereunder must be payable in Dollars. If Issuing Bank makes a
payment under a Letter of Credit, Borrowers shall pay to Agent an amount equal
to the applicable Letter of Credit Disbursement on the Business Day such Letter
of Credit Disbursement is made and, in the absence of such payment, the amount
of the Letter of Credit Disbursement immediately and automatically shall be
deemed to be a Revolving Loan hereunder (notwithstanding any failure to satisfy
any condition precedent set forth in Section 3) and, initially, shall bear
interest at the rate then applicable to Revolving Loans that are Base Rate
Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan
hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit
Disbursement to Issuing Bank shall be automatically converted into an obligation
to pay the resulting Revolving Loan. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to Issuing Bank or, to the extent that Lenders have made payments
pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Lenders and
Issuing Bank as their interests may appear.

(e) Promptly following receipt of a notice of a Letter of Credit Disbursement
pursuant to Section 2.11(d), each Lender agrees to fund its Pro Rata Share of
any Revolving Loan deemed made pursuant to Section 2.11(d) on the same terms and
conditions as if Borrowers had requested the amount thereof as a Revolving Loan
and Agent shall promptly pay to Issuing Bank the amounts so received by it from
the Revolving Lenders. By the issuance of a Letter of Credit (or an amendment,
renewal, or extension of a Letter of Credit) and without any further action on
the part of Issuing Bank or the Lenders, Issuing Bank shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have purchased, a
participation in each Letter of Credit issued by Issuing Bank, in an amount
equal to its Pro Rata Share of such Letter of Credit, and each such Revolving
Lender agrees to pay to Agent, for the account of Issuing Bank, such Lender’s
Pro Rata Share of any Letter of Credit Disbursement made by Issuing Bank under
the applicable Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
Agent, for the account of Issuing Bank, such Lender’s Pro Rata Share of each
Letter of Credit Disbursement made by Issuing Bank and not

 

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reimbursed by Borrowers on the date due as provided in Section 2.11(d), or of
any reimbursement payment that is required to be refunded (or that Agent or
Issuing Bank elects, based upon the advice of counsel, to refund) to Borrowers
for any reason. Each Lender acknowledges and agrees that its obligation to
deliver to Agent, for the account of Issuing Bank, an amount equal to its
respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this
Section 2.11(e) shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or
Default or the failure to satisfy any condition set forth in Section 3. If any
such Lender fails to make available to Agent the amount of such Lender’s Pro
Rata Share of a Letter of Credit Disbursement as provided in this Section, such
Lender shall be deemed to be a Defaulting Lender and Agent (for the account of
Issuing Bank) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.

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

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

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

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

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

(v) any unauthorized instruction or request made to Issuing Bank in connection
with any Letter of Credit or requested Letter of Credit, or any error, omission,
interruption or delay in such instruction or request, whether transmitted by
mail, courier, electronic transmission, SWIFT, or any other telecommunication
including communications through a correspondent;

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

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

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

 

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(ix) any prohibition on payment or delay in payment of any amount payable by
Issuing Bank to a beneficiary or transferee beneficiary of a Letter of Credit
arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

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

(xi) any foreign language translation provided to Issuing Bank in connection
with any Letter of Credit;

(xii) any foreign law or usage as it relates to Issuing Bank’s issuance of a
Letter of Credit in support of a foreign guaranty including without limitation
the expiration of such guaranty after the related Letter of Credit expiration
date and any resulting drawing paid by Issuing Bank in connection therewith; or

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

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

(g) The liability of Issuing Bank (or any other Letter of Credit Related Person)
under, in connection with or arising out of any Letter of Credit (or
pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by Borrowers that are
caused directly by Issuing Bank’s gross negligence or willful misconduct in
(i) honoring a presentation under a Letter of Credit that on its face does not
at least substantially comply with the terms and conditions of such Letter of
Credit, (ii) failing to honor a presentation under a Letter of Credit that
strictly complies with the terms and conditions of such Letter of Credit, or
(iii) retaining Drawing Documents presented under a Letter of Credit. Borrowers’
aggregate remedies against Issuing Bank and any Letter of Credit Related Person
for wrongfully honoring a presentation under any Letter of Credit or wrongfully
retaining honored Drawing Documents shall in no event exceed the aggregate
amount paid by Borrowers to Issuing Bank in respect of the honored presentation
in connection with such Letter of Credit under Section 2.11(d), plus interest at
the rate then applicable to Base Rate Loans hereunder. Borrowers shall take
action to avoid and mitigate the amount of any damages claimed against Issuing
Bank or any other Letter of Credit Related Person, including by enforcing its
rights against the beneficiaries of the Letters of Credit. Any claim by
Borrowers under or in connection with any Letter of Credit shall be reduced by
an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a
result of the breach or alleged wrongful conduct complained of, and (y) the
amount (if any) of the loss that would have been avoided had Borrowers taken all
reasonable steps to mitigate any loss, and in case of a claim of wrongful
dishonor, by specifically and timely authorizing Issuing Bank to effect a cure.

 

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(h) Borrowers are responsible for the final text of the Letter of Credit as
issued by Issuing Bank, irrespective of any assistance Issuing Bank may provide
such as drafting or recommending text or by Issuing Bank’s use or refusal to use
text submitted by Borrowers. Borrowers understand that the final form of any
Letter of Credit may be subject to such revisions and changes as are deemed
necessary or appropriate by Issuing Bank, and Borrowers hereby consent to such
revisions and changes not materially different from the application executed in
connection therewith. Borrowers are solely responsible for the suitability of
the Letter of Credit for Borrowers’ purposes. If Borrowers request Issuing Bank
to issue a Letter of Credit for an affiliated or unaffiliated third party (an
“Account Party”), (i) such Account Party shall have no rights against Issuing
Bank; (ii) Borrowers shall be responsible for the application and obligations
under this Agreement; and (iii) communications (including notices) related to
the respective Letter of Credit shall be among Issuing Bank and Borrowers.
Borrowers will examine the copy of the Letter of Credit and any other documents
sent by Issuing Bank in connection therewith and shall promptly notify Issuing
Bank (not later than three (3) Business Days following Borrowers’ receipt of
documents from Issuing Bank) of any non-compliance with Borrowers’ instructions
and of any discrepancy in any document under any presentment or other
irregularity. Borrowers understand and agree that Issuing Bank is not required
to extend the expiration date of any Letter of Credit for any reason. With
respect to any Letter of Credit containing an “automatic amendment” to extend
the expiration date of such Letter of Credit, Issuing Bank, in its sole and
absolute discretion, may give notice of nonrenewal of such Letter of Credit and,
if Borrowers do not at any time want the then current expiration date of such
Letter of Credit to be extended, Borrowers will so notify Agent and Issuing Bank
at least 30 calendar days before Issuing Bank is required to notify the
beneficiary of such Letter of Credit or any advising bank of such non-extension
pursuant to the terms of such Letter of Credit.

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

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

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

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

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

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

(vi) Issuing Bank or any correspondent honoring a drawing upon receipt of an
electronic presentation under a Letter of Credit requiring the same, regardless
of whether the original Drawing Documents arrive at Issuing Bank’s counters or
are different from the electronic presentation;

 

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

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

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

(j) Without limiting any other provision of this Agreement, Issuing Bank and
each other Letter of Credit Related Person (if applicable) shall not be
responsible to Borrowers for, and Issuing Bank’s rights and remedies against
Borrowers and the obligation of Borrowers to reimburse Issuing Bank for each
drawing under each Letter of Credit shall not be impaired by:

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

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

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

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

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

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

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

 

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

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

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

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

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

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

(k) Borrowers shall pay immediately upon demand to Agent for the account of
Issuing Bank as non-refundable fees, commissions, and charges (it being
acknowledged and agreed that any charging of such fees, commissions, and charges
to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed
to constitute a demand for payment thereof for the purposes of this
Section 2.11(k)): (i) a fronting fee (a “Fronting Fee”) payable to Issuing Bank
in accordance with Section 2.6(d) with respect all outstanding Letters of Credit
in the amount of .125% per annum on the average daily amount of the Letter of
Credit Exposure during the calculation period, plus (ii) any and all other
customary commissions, fees and charges then in effect imposed by, and any and
all expenses incurred by, Issuing Bank, or by any adviser, confirming
institution or entity or other nominated person, relating to Letters of Credit,
at the time of issuance of any Letter of Credit and upon the occurrence of any
other activity with respect to any Letter of Credit (including transfers,
assignments of proceeds, amendments, drawings, renewals or cancellations).

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

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

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

and the result of the foregoing is to increase, directly or indirectly, the cost
to Issuing Bank or any other member of the Lender Group of issuing, making,
participating in, or maintaining any Letter of Credit or

 

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

(m) Each standby Letter of Credit shall expire not later than the date that is
twelve (12) months after the date of the issuance of such Letter of Credit;
provided, that any standby Letter of Credit may provide for the automatic
extension thereof for any number of additional periods each of up to one year in
duration; provided, that, with respect to any Letter of Credit which extends
beyond the Maturity Date, Letter of Credit Collateralization shall be provided
therefor on or before the date that is five (5) Business Days prior to the
Maturity Date. Each commercial Letter of Credit shall expire on the earlier of
(i) one hundred twenty (120) days after the date of the issuance of such
commercial Letter of Credit and (ii) five Business Days prior to the Maturity
Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) Excess
Availability shall at any time be less than zero, then on the Business Day
following the date when the Lead Borrower receives notice from Agent or the
Required Lenders (or, if the maturity of the Obligations has been accelerated,
Revolving Lenders with Letter of Credit Exposure representing greater than fifty
percent (50%) of the total Letter Credit Exposure) demanding Letter of Credit
Collateralization pursuant to this Section 2.11(n) upon such demand, Borrowers
shall provide Letter of Credit Collateralization with respect to the then
existing Letter of Credit Usage. If Borrowers fail to provide Letter of Credit
Collateralization as required by this Section 2.11(n), the Revolving Lenders may
(and, upon direction of Agent, shall) advance, as Revolving Loans the amount of
the cash collateral required pursuant to the Letter of Credit Collateralization
provision so that the then existing Letter of Credit Usage is cash
collateralized in accordance with the Letter of Credit Collateralization
provision (whether or not the Revolver Commitments have terminated, an
Overadvance exists or the conditions in Section 3 are satisfied).

(o) Unless otherwise expressly agreed by Issuing Bank and Borrowers when a
Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), (i) the rules of the ISP or UCP shall apply to each
standby Letter of Credit, and (ii) the rules of the UCP shall apply to each
commercial Letter of Credit.

(p) Issuing Bank shall be deemed to have acted with due diligence and reasonable
care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit
Practice or in accordance with this Agreement.

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

 

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(r) The provisions of this Section 2.11 shall survive the termination of this
Agreement and the repayment in full of the Obligations with respect to any
Letters of Credit that remain outstanding.

(s) At Borrowers’ costs and expense, Borrowers shall execute and deliver to
Issuing Bank such additional certificates, instruments and/or documents and take
such additional action as may be reasonably requested by Issuing Bank to enable
Issuing Bank to issue any Letter of Credit pursuant to this Agreement and
related Issuer Document, to protect, exercise and/or enforce Issuing Banks’
rights and interests under this Agreement or to give effect to the terms and
provisions of this Agreement or any Issuer Document. Each Borrower irrevocably
appoints Issuing Bank as its attorney-in-fact and authorizes Issuing Bank,
without notice to Borrowers, to execute and deliver ancillary documents and
letters customary in the letter of credit business that may include but are not
limited to advisements, indemnities, checks, bills of exchange and issuance
documents. The power of attorney granted by the Borrowers is limited solely to
such actions related to the issuance, confirmation or amendment of any Letter of
Credit and to ancillary documents or letters customary in the letter of credit
business. This appointment is coupled with an interest.

(t) On the Closing Date, each of the Existing Letters of Credit shall be deemed
to have been issued as a Letter of Credit under this Agreement by the Issuing
Bank, and such Issuing Bank shall be deemed, without further action by any party
hereto, to have granted to each of the Lenders, and each Lender shall be deemed,
without further action by any party hereto, to have acquired from such Issuing
Bank, a participation (on the terms specified in this Section 2.11) in each
Existing Letter of Credit equal to such Lender’s Pro Rata Share thereof.
Concurrently with such sale of participations, the participations granted
pursuant to the terms of the Existing Credit Agreement to the lenders party
thereto shall be automatically cancelled without further action by any of the
parties hereto. Each Lender acknowledges and agrees that its obligation to
acquire participations in Existing Letters of Credit pursuant to this paragraph
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each payment by a Lender in respect
of such participations shall be made without any offset, abatement, withholding
or reduction whatsoever.

 

  2.12

LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option, subject to
Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a portion
of the Revolving Loans be charged (whether at the time when made (unless
otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR
Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a
rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period applicable
thereto; provided, that, subject to the following clauses (ii) and (iii), in the
case of any Interest Period greater than three (3) months in duration, interest
shall be payable at three (3) month intervals after the commencement of the
applicable Interest Period and on the last day of such Interest Period),
(ii) the date on which all or any portion of the Obligations are accelerated
pursuant to the terms hereof, or (iii) the date on which this Agreement is
terminated pursuant to the terms hereof. On the last day of each applicable
Interest Period, unless Borrowers have properly exercised the LIBOR Option with
respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the rate of interest then applicable to Base Rate
Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, at the written election of Agent or the Required
Lenders, Borrowers no longer shall have the option to request that Revolving
Loans or any portion of the Term Loan bear interest at a rate based upon the
LIBOR Rate.

 

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(b) LIBOR Election.

(i) Borrowers may, at any time and from time to time, so long as Borrowers have
not received a notice from Agent (which notice Agent may elect to give or not
give in its discretion unless Agent is directed to give such notice by the
Required Lenders, in which case, it shall give the notice to Borrowers), after
the occurrence and during the continuance of an Event of Default, to terminate
the right of Borrowers to exercise the LIBOR Option during the continuance of
such Event of Default, elect to exercise the LIBOR Option by notifying Agent
prior to 11:00 a.m. at least three (3) Business Days prior to the commencement
of the proposed Interest Period (the “LIBOR Deadline”). Notice of Borrowers’
election of the LIBOR Option for a permitted portion of the Revolving Loans and
an Interest Period pursuant to this Section shall be made by delivery to Agent
of a LIBOR Notice received by Agent before the LIBOR Deadline. Promptly upon its
receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of
the affected Lenders.

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

(iii) Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall
have not more than five (5) LIBOR Rate Loans in effect at any given time.
Borrowers may only exercise the LIBOR Option for proposed LIBOR Rate Loans of
not less than $1,000,000.

(c) Conversion; Prepayment. Borrowers may convert LIBOR Rate Loans to Base Rate
Loans or prepay LIBOR Rate Loans at any time; provided, that, in the event that
LIBOR Rate Loans are converted or prepaid on any date that is not the last day
of the Interest Period applicable thereto, including as a result of any
prepayment through the required application by Agent of any payments or proceeds
of Collateral in accordance with Section 2.4(b) or for any other reason,
including early termination of the term of this Agreement or acceleration of all
or any portion of the Obligations pursuant to the terms hereof, each Borrower
shall indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with Section 2.12
(b)(ii).

(d) Special Provisions Applicable to LIBOR Rate.

 

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(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs
(other than Taxes which shall be governed by Section 16), in each case, due to
changes in applicable law occurring subsequent to the commencement of the then
applicable Interest Period, including any Changes in Law and changes in the
reserve requirements imposed by the Board of Governors, which additional or
increased costs would increase the cost of funding or maintaining loans bearing
interest at the LIBOR Rate. In any such event, the affected Lender shall give
Lead Borrower and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Borrowers may, by notice to such affected
Lender (A) require such Lender to furnish to Borrowers a statement setting forth
in reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of
such Lender with respect to which such adjustment is made (together with any
amounts due under Section 2.12(b)(ii)).

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

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

 

  2.13

Capital Requirements.

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

 

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this Section shall not constitute a waiver of Issuing Bank’s or such Lender’s
right to demand such compensation; provided, that Borrowers shall not be
required to compensate Issuing Bank or a Lender pursuant to this Section for any
reductions in return incurred more than one hundred eighty (180) days prior to
the date that Issuing Bank or such Lender notifies Borrowers of such Change in
Law giving rise to such reductions and of such Lender’s intention to claim
compensation therefor; provided, that, if such claim arises by reason of the
Change in Law that is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.

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

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

 

  2.14

Reserved.

 

  2.15

Reserved.

 

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  2.16

Joint and Several Liabilities of Borrowers.

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

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including any Obligations arising under this
Section 2.16), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them. Accordingly, each Borrower hereby waives
any and all suretyship defenses that would otherwise be available to such
Borrower under applicable law.

(c) If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due, whether upon maturity,
acceleration, or otherwise, or to perform any of the Obligations in accordance
with the terms thereof, then in each such event the other Borrowers will make
such payment with respect to, or perform, such Obligations until such time as
all of the Obligations are paid in full and without the need for demand,
protest, or any other notice or formality.

(d) The Obligations of each Borrower under the provisions of this Section 2.16
constitute the absolute and unconditional, full recourse Obligations of each
Borrower enforceable against each Borrower to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of the
provisions of this Agreement (other than this Section 2.16(d)) or any other
circumstances whatsoever.

(e) Without limiting the generality of the foregoing and except as otherwise
expressly provided in this Agreement, each Borrower hereby waives presentments,
demands for performance, protests and notices, including notices of acceptance
of its joint and several liability, notice of any Revolving Loans or any Letters
of Credit issued under or pursuant to this Agreement, notice of the occurrence
of any Default, Event of Default, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Agreement, notices of the
existence, creation, or incurring of new or additional Obligations or other
financial accommodations or of any demand for any payment under this Agreement,
notice of any action at any time taken or omitted by Agent or Lenders under or
in respect of any of the Obligations, any right to proceed against any other
Borrower or any other Person, to proceed against or exhaust any security held
from any other Borrower or any other Person, to protect, secure, perfect, or
insure any security interest or Lien on any property subject thereto or exhaust
any right to take any action against any other Borrower, any other Person, or
any collateral, to pursue any other remedy in any member of the Lender Group’s
or any Bank Product Provider’s power whatsoever, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement), any right to assert
against any member of the Lender Group or any Bank Product Provider, any defense
(legal or equitable), set-off, counterclaim, or claim which each Borrower may
now or at any time hereafter have against any other Borrower or any other party
liable to any member of the Lender Group or any Bank Product Provider, any
defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Obligations or any security
therefor, and any right or defense arising by reason of any claim or defense
based upon an election of remedies by any member of the Lender Group or any Bank
Product Provider including any defense based upon an impairment or elimination
of such Borrower’s rights of subrogation, reimbursement, contribution, or
indemnity of such

 

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Borrower against any other Borrower. Without limiting the generality of the
foregoing, each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
any Agent or Lender with respect to the failure by any Borrower to comply with
any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.16 afford grounds for terminating, discharging or
relieving any Borrower, in whole or in part, from any of its Obligations under
this Section 2.16, it being the intention of each Borrower that, so long as any
of the Obligations hereunder remain unsatisfied, the Obligations of each
Borrower under this Section 2.16 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each
Borrower under this Section 2.16 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any other Borrower or any
Agent or Lender. Each of the Borrowers waives, to the fullest extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement hereof. Any payment by any Borrower or other
circumstance which operates to toll any statute of limitations as to any
Borrower shall operate to toll the statute of limitations as to each of the
Borrowers. Each of the Borrowers waives any defense based on or arising out of
any defense of any Borrower or any other Person, other than payment of the
Obligations to the extent of such payment, based on or arising out of the
disability of any Borrower or any other Person, or the validity, legality, or
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Borrower other than payment of
the Obligations to the extent of such payment. Agent may, at the election of the
Required Lenders, foreclose upon any Collateral held by Agent by one or more
judicial or nonjudicial sales or other dispositions, whether or not every aspect
of any such sale is commercially reasonable or otherwise fails to comply with
applicable law or may exercise any other right or remedy Agent, any other member
of the Lender Group, or any Bank Product Provider may have against any Borrower
or any other Person, or any security, in each case, without affecting or
impairing in any way the liability of any of the Borrowers hereunder except to
the extent the Obligations have been paid.

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

(g) The provisions of this Section 2.16 are made for the benefit of Agent, each
member of the Lender Group, each Bank Product Provider, and their respective
successors and assigns, and may be enforced by it or them from time to time
against any or all Borrowers as often as occasion therefor may arise and without
requirement on the part of Agent, any member of the Lender Group, any Bank
Product Provider, or any of their successors or assigns first to marshal any of
its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations

 

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hereunder or to elect any other remedy. The provisions of this Section 2.16
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this
Section 2.16 will forthwith be reinstated in effect, as though such payment had
not been made.

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

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

 

3.

CONDITIONS; TERM OF AGREEMENT.

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

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

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

 

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

(c) after giving effect to the requested Revolving Loan or other extension of
credit hereunder, the Revolver Usage shall not exceed the lesser of the Maximum
Credit or the Borrowing Base then in effect.

3.3 Maturity. The Commitments shall continue in full force and effect for a term
ending on the Maturity Date hereunder. The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.

3.4 Effect of Maturity. On the Maturity Date or, if earlier, the date that the
Commitments are terminated whether pursuant to Section 2.4(c) or otherwise, all
Commitments of the Lender Group to provide additional credit hereunder shall
automatically be terminated and all of the Obligations (other than (a) Bank
Product Obligations (other than Hedge Obligations) that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding without
being required to be repaid or cash collateralized, and (b) any Hedge
Obligations that, at such time, are allowed by the applicable hedging
counterparty to remain outstanding without being required to be repaid)
immediately shall become due and payable without notice or demand and Borrowers
shall be required to repay all of the Obligations (other than Hedge Obligations
and Bank Product Obligations as set forth in this Section 3.4) in full. No
termination of the obligations of the Lender Group (other than payment in full
of the Obligations and termination of the Commitments) shall relieve or
discharge any Loan Party of its duties, obligations, or covenants hereunder or
under any other Loan Document and Agent’s Liens in the Collateral shall continue
to secure the Obligations and shall remain in effect until all Obligations have
been paid in full and the Commitments have been terminated. When all of the
Obligations have been paid in full and the Lender Group’s obligations to provide
additional credit under the Loan Documents have been terminated irrevocably,
Agent will, at Borrowers’ sole expense, execute and deliver any termination
statements, lien releases, discharges of security interests, and other similar
discharge or release documents (and, if applicable, in recordable form) as are
reasonably necessary to release, as of record, Agent’s Liens and all notices of
security interests and liens previously filed by Agent.

3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon
ten (10) Business Days prior written notice to Agent (or such shorter period of
time as consented to by Agent), to terminate this Agreement and terminate the
Commitments hereunder by repaying to Agent all of the Obligations in full.

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

 

4.

REPRESENTATIONS AND WARRANTIES.

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

 

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

 

  4.1

Due Organization and Qualification; Subsidiaries.

(a) Each Loan Party and each of its Subsidiaries (i) is duly organized and
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is qualified to do business in any state where the failure to
be so qualified would reasonably be expected to result in a Material Adverse
Effect, and (iii) has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, except where failure to do so would not reasonably be expected to
result in a Material Adverse Effect. Each Loan Party has the requisite power and
authority to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.

(b) Set forth on Schedule 4.1(b) to this Agreement (as such Schedule may be
updated from time to time to reflect changes resulting from transactions
permitted under this Agreement) is a complete and accurate description of the
authorized Equity Interests of each Loan Party, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding.

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

(d) Except as set forth on Schedule 4.1(d) to this Agreement, there are no
subscriptions, options, warrants, or calls relating to any shares of any Loan
Party’s or any of its Subsidiaries’ Equity Interests, including any right of
conversion or exchange under any outstanding security or other instrument. No
Loan Party is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its Equity Interests or any
security convertible into or exchangeable for any of its Equity Interests.

 

  4.2

Due Authorization; No Conflict.

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

(b) As to each Loan Party, the execution, delivery, and performance by such Loan
Party of the Loan Documents to which it is a party do not and will not
(i) violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other

 

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Governmental Authority binding on any Loan Party or its Subsidiaries where any
such violation would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under the Term
Loan Agreement or any other Material Contract of any Loan Party or its
Subsidiaries where any such conflict, breach or default would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any assets of any Loan Party, other than Permitted Liens, or
(iv) require any approval of any holder of Equity Interests of a Loan Party or
any approval or consent of any Person under any material agreement of any Loan
Party, other than consents or approvals that have been obtained and that are
still in force and effect and except, in the case of material agreements, for
consents or approvals, the failure to obtain would not individually or in the
aggregate reasonably be expected to cause a Material Adverse Effect.

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

 

  4.4

Binding Obligations; Perfected Liens.

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

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

4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its
Subsidiaries has (a) good, sufficient and legal title to (in the case of fee
interests in Real Property), (b) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (c) good and marketable
title to (in the case of all other personal property), all of their respective
Accounts, Rig Fleet Equipment and other material assets reflected in their most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements to the
extent permitted hereby and, solely as to leasehold interests, except to the
extent the failure to have such valid leasehold interests would not reasonably
be expected to have a Material Adverse Effect. All of such assets are free and
clear of Liens except for Permitted Liens.

 

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  4.6

Litigation.

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

(b) Schedule 4.6(b) to this Agreement sets forth a complete and accurate
description of each of the actions, suits, or proceedings with asserted
liabilities in excess of, or that could reasonably be expected to result in
liabilities in excess of, $1,000,000 that, as of the Closing Date, is pending
or, to the knowledge of any Borrower threatened in writing against a Loan Party
or any of its Subsidiaries.

4.7 Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in
violation of any applicable laws, rules, regulations, executive orders, or codes
(including Environmental Laws) that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect, or (b) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.

4.8 No Material Adverse Effect. All historical financial statements relating to
the Loan Parties and their Subsidiaries that have been delivered by Borrowers to
Lender have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end audit adjustments) and present fairly in all material respects, the
Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the
date thereof and results of operations for the period then ended. Since June 18,
2018, no event, circumstance, or change has occurred that has or could
reasonably be expected to result in a Material Adverse Effect.

4.9 Solvency. As of the Closing Date, the Loan Parties and their Subsidiaries,
taken as a whole on a consolidated basis, are Solvent.

 

  4.10

Employee Benefits.

(a) Except as set forth on Schedule 4.10, no Loan Party, none of their
Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any
Pension Plan. No ERISA Event has occurred that, when taken together with all
other ERISA Events for which liability is reasonably expected to occur, would
reasonably be expected to result in a Material Adverse Effect.

(b) (i) No ERISA Event has occurred during the five year period prior to the
date on which this representation is made or deemed made or is reasonably
expected to occur; (ii) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA
Affiliate 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 of ERISA with respect to a
Multiemployer Plan; and (iv) neither any Loan Party nor any ERISA Affiliate has
engaged in a transaction that could reasonably be expected to be subject to
Sections 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing
clauses of this Section 4.10(b), as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

 

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(c) The Pension Plans of any Loan Party and any ERISA Affiliate are funded to
the extent required by the terms of each Pension Plan, if any, and by the
requirements of any material Law applicable in the jurisdiction in which the
relevant Pension Plan is maintained, and neither any Loan Party nor any ERISA
Affiliate maintains a Pension Plan that is, or is expected to be, in at-risk
status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the
Code) in each case, except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.

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

4.12 Complete Disclosure. All factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about Borrowers’ industry) furnished by
or on behalf of a Loan Party or its Subsidiaries in writing to Agent (including
all information contained in the Schedules hereto or in the other Loan
Documents) for purposes of or in connection with this Agreement or the other
Loan Documents, and all other such factual information taken as a whole (other
than forward-looking information and projections and information of a general
economic nature and general information about Loan Parties’ industry) hereafter
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent will be, true and accurate, in all material respects, on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided; provided that, in the case of
information with respect to Target, the foregoing representations are limited to
the knowledge of Parent. The Projections delivered to Agent on July 3, 2018
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent, Borrowers’ good faith estimate, on
the date such Projections are delivered, of the Loan Parties’ and their
Subsidiaries’ future performance for the periods covered thereby based upon
assumptions believed by Borrowers to be reasonable at the time of the delivery
thereof to Agent (it being understood that such Projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Loan Parties and their Subsidiaries, and no assurances can be
given that such Projections will be realized, and although reflecting Borrowers’
good faith estimate, projections or forecasts based on methods and assumptions
which Borrowers believed to be reasonable at the time such Projections were
prepared, are not to be viewed as facts, and that actual results during the
period or periods covered by the Projections may differ materially from
projected or estimated results).

4.13 Patriot Act. To the extent applicable, each Loan Party is in compliance, in
all material respects, with the (a) Trading with the Enemy Act, as amended, and
each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (b) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001, as amended) (the “Patriot Act”).

 

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

4.15 Payment of Taxes. Except as otherwise permitted under Section 5.5, all
federal Tax returns and reports and all material state and local Tax returns and
reports of each Loan Party and its Subsidiaries required to have been filed by
any of them have been timely filed, and all material Taxes shown on such Tax
returns to be due and payable and all other Taxes upon a Loan Party and its
Subsidiaries and upon their respective assets, income, businesses and franchises
that are due and payable have been paid when due and payable. Each Loan Party
and each of its Subsidiaries have made adequate provision in accordance with
GAAP for all Taxes not yet due and payable. No Borrower knows of any proposed
material Tax assessment against a Loan Party or any of its Subsidiaries that is
not being actively contested by such Loan Party or such Subsidiary diligently,
in good faith, and by appropriate proceedings; provided, that such reserves or
other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.

4.16 Margin Stock. Neither any Loan Party nor any of its Subsidiaries owns any
Margin Stock or is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock. No part of the proceeds of the loans made to Borrowers will be
used to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock or for any purpose that
violates the provisions of Regulation T, U or X of the Board of Governors.
Neither any Loan Party nor any of its Subsidiaries expects to acquire any Margin
Stock.

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

4.18 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. No Loan
Party or any of its Subsidiaries is in violation of any Sanctions. No Loan Party
or any of its Subsidiaries or, to the knowledge of such Loan Party, any
director, officer, employee or agent of such Loan Party or such Subsidiary
(a) is a Sanctioned Person or a Sanctioned Entity, (b) has any assets located in
Sanctioned Entities, or (c) derives revenues from investments in, or
transactions with Sanctioned Persons or Sanctioned Entities. Each of the Loan
Parties and its Subsidiaries has implemented and maintains in effect policies
and procedures designed to ensure compliance with all Sanctions, Anti-Corruption
Laws and Anti-Money Laundering Laws. Each of the Loan Parties and its
Subsidiaries, and to the knowledge of each such Loan Party, each director,
officer, employee and agent of each such Loan Party and each such Subsidiary, is
in compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering
Laws. No proceeds of any Loan made or Letter of Credit issued hereunder will be
used to fund any operations in, finance any investments or activities in, or
make any payments to, a Sanctioned Person or a Sanctioned Entity, or otherwise
used in any manner that would result in a violation of any Sanction,
Anti-Corruption Law or Anti-Money Laundering Law by any Person (including Agent,
any Lender, any Bank Product Provider, any Hedge Provider or any other
individual or entity participating in any transaction).

 

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

4.20 [Reserved].

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

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

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

4.24 Closing Date Merger Documents; Term Loan Documents.

(a) Borrowers have delivered to Agent a complete and correct copy of the Closing
Date Merger Documents, including all schedules and exhibits thereto. The
execution, delivery and performance of each of the Closing Date Merger Documents
has been duly authorized by all necessary action on the part of each Loan Party
who is a party thereto. Each Closing Date Merger Document is the legal, valid
and binding obligation of each Loan Party who is a party thereto, enforceable
against each such Loan Party in accordance with its terms, in each case, except
(i) as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting generally the
enforcement of creditors’ rights, and (ii) the availability of the remedy of
specific performance or injunctive or other equitable relief is subject to the
discretion of the court before which any proceeding

 

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therefor may be brought. No Loan Party is in default in the performance or
compliance with any provisions thereof. All representations and warranties made
by a Loan Party in the Closing Date Merger Documents and in the certificates
delivered in connection therewith are true and correct in all material respects.
To each Loan Party’s knowledge, none of the Sellers’ representations or
warranties in the Closing Date Merger Documents contain any untrue statement of
a material fact or omit any fact necessary to make the statements therein not
misleading, in any case that could reasonably be expected to result in a
Material Adverse Effect.

(b) As of the Closing Date, the Closing Date Merger has been consummated in all
material respects, in accordance with all applicable laws. As of the Closing
Date, all requisite approvals by Governmental Authorities having jurisdiction
over Loan Parties and, to each Loan Party’s knowledge, the Sellers, with respect
to the Closing Date Merger, have been obtained (including filings or approvals
required under the Hart-Scott-Rodino Antitrust Improvements Act), except for any
approval the failure to obtain could not reasonably be expected to be material
to the interests of the Lenders. As of the Closing Date, after giving effect to
the transactions contemplated by the Closing Date Merger Documents, Parent will
have good title to all of the Equity Interests issued by the Target, free and
clear of all Liens other than Permitted Liens.

(c) No court of competent jurisdiction has issued any injunction, restraining
order or other order which prohibits consummation of the transactions described
in the Closing Date Merger Documents and no governmental or other action or
proceeding has been threatened or commenced, seeking any injunction, restraining
order or other order which seeks to void or otherwise modify the transactions
described in the Closing Date Merger Documents.

(d) Borrowers have delivered to Agent a complete and correct copy of the Term
Loan Documents, including all schedules and exhibits thereto, executed on the
Closing Date. The execution, delivery and performance of each of the Term Loan
Documents has been duly authorized by all necessary action on the part of each
Loan Party who is a party thereto. Each Term Loan Document is the legal, valid
and binding obligation of each Loan Party who is a party thereto, enforceable
against each such Loan Party in accordance with its terms, in each case, except
(i) as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting generally the
enforcement of creditors’ rights, and (ii) the availability of the remedy of
specific performance or injunctive or other equitable relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

 

5.

AFFIRMATIVE COVENANTS.

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

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

 

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

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

5.4 Maintenance of Properties. Each Loan Party will, and will cause each of its
Subsidiaries to, maintain and preserve all of its assets that are necessary or
useful in the proper conduct of its business in good working order and
condition, ordinary wear, tear, casualty, and condemnation and Permitted
Dispositions excepted (and except where the failure to so maintain and preserve
assets could not reasonably be expected to result in a Material Adverse Effect).

5.5 Taxes. Each Loan Party will, and will cause each of its Subsidiaries to, pay
in full before delinquency or before the expiration of any extension period all
Taxes imposed, levied, or assessed against it, or any of its assets or in
respect of any of its income, businesses, or franchises, other than to the
extent that the validity of such Tax is the subject of a Permitted Protest.

5.6 Insurance. Each Loan Party will, and will cause each of its Subsidiaries to,
at the expense of such Loan Party or such Subsidiary, maintain insurance
respecting each of each Loan Party’s and its Subsidiaries’ assets wherever
located, covering liabilities, losses or damages as are customarily are insured
against by other Persons engaged in same or similar businesses and similarly
situated and located. Borrowers also shall maintain, or cause a Loan Party to
maintain, with respect to each Loan Party and each of its Subsidiaries, general
liability insurance, flood insurance for Collateral located in a flood plain,
product liability insurance, director’s and officer’s liability insurance,
fiduciary liability insurance, and employment practices liability insurance, as
well as insurance against larceny, embezzlement, and criminal misappropriation.
All such policies of insurance shall be with financially sound and reputable
insurance companies acceptable to Agent (it being agreed that, as of the Closing
Date, the insurance companies with which the Company maintains such insurance
policies are acceptable to Agent) and in such amounts as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and located and, in any event, in amount, adequacy, and scope
reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and
scope of the policies of insurance of Borrowers in effect as of the Closing Date
are acceptable to Agent). All property insurance policies are to be made payable
to Agent for the benefit of Agent and Lenders, as their interests may appear, in
case of loss, pursuant to a standard loss payable endorsement with a standard
non-contributory “lender” or “secured party” clause and are to contain such
other provisions as Agent may reasonably require to fully protect Agent’s and
Lenders’ interest in the Collateral and to any payments to be made under such
policies. All certificates of property and general liability insurance are to be
delivered to Agent, with the Agent’s loss payable and additional insured
endorsements in favor of Agent, and shall provide for not less than thirty days
(ten days in the case of non-payment) prior written notice to Agent of the
exercise of any right of cancellation. If any Loan Party or its Subsidiaries
fails to maintain such insurance, Agent may arrange for such insurance, but at
Borrowers’ expense and without any responsibility on Agent’s part for obtaining
the insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims. Borrowers shall give Agent prompt notice
of any loss exceeding $1,000,000 covered by the casualty or business
interruption insurance of any Loan Party or its Subsidiaries. Upon the
occurrence and during the continuance of an Event of Default, Agent shall have
the sole right to file

 

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claims under any property and general liability insurance policies in respect of
the Collateral, to receive, receipt and give acquittance for any payments that
may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any such
insurance policies.

5.7 Inspection.

(a) Each Loan Party will, and will cause each of its Subsidiaries to, permit
Agent, any Lender and each of their respective duly authorized representatives
or agents to visit any of its properties and inspect any of its assets or books
and records, to examine and make copies of its books and records, and to discuss
its affairs, finances, and accounts with, and to be advised as to the same by,
its officers and employees (provided, that an authorized representative of a
Borrower shall be allowed to be present) at such reasonable times and intervals
as Agent may designate and, so long as no Default or Event of Default has
occurred and is continuing, with reasonable prior notice to Borrowers and during
regular business hours, at Borrowers’ expense and subject to the limitations set
forth below in Section 5.7(c).

(b) Each Loan Party will, and will cause each of its Subsidiaries to, permit
Agent and each of its duly authorized representatives or agents to conduct field
examinations at such reasonable times and intervals as Agent may designate and,
so long as no Default or Event of Default has occurred and is continuing, with
reasonable prior notice to Borrowers and during regular business hours, at
Borrowers’ expense, subject to the limitations set forth below in
Section 5.7(c).

(c) So long as no Event of Default shall have occurred and be continuing during
a calendar year, Borrowers shall not be obligated to reimburse Agent for more
than one (1) field examination in such calendar year (increasing to two
(2) field examinations if an Increased Reporting Event has occurred during such
calendar year).

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

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

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

(b) Comply with all Environmental Laws other than Environmental Laws the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect,

(c) Promptly notify Agent and Lenders of any release of which any Loan Party has
knowledge of a Hazardous Material in any reportable quantity from or onto
property owned or operated by any Loan Party or its Subsidiaries and take any
Remedial Actions required to abate said release or otherwise to come into
compliance with applicable Environmental Law, other than releases which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, and

 

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(d) Promptly, but in any event within ten Business Days of its receipt thereof,
provide Agent and Lenders with written notice of any of the following: to the
extent, in the case of clauses (ii) and (iii), any of the following could
reasonably be expected to have a Material Adverse Effect: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of a Loan Party or its Subsidiaries, (ii) commencement of any Environmental
Action or written notice that an Environmental Action will be filed against a
Loan Party or its Subsidiaries, and (iii) written notice of a violation,
citation, or other administrative order from a Governmental Authority.

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

5.11 Formation or Acquisition of Subsidiaries. If any Loan Party forms or
acquires any new Subsidiary (other than an Excluded Subsidiary), such Loan Party
shall, within fifteen (15) days of such event (or such later date as permitted
by Agent), (a) cause such new Subsidiary (i) to be joined as a Borrower
hereunder pursuant to a Joinder to this Agreement or to become a Guarantor of
the Obligations, as determined by Agent, and (ii) to provide to Agent a joinder
to the Guaranty and Security Agreement, in each case, together with such other
security agreements, as well as appropriate financing statements, all in form
and substance reasonably satisfactory to Agent (including being sufficient to
grant Agent a first priority Lien (subject to Permitted Liens) in and to the
assets of such newly formed or acquired Subsidiary), (b) provide, or cause the
applicable Loan Party to provide, to Agent a pledge agreement (or an addendum to
the Guaranty and Security Agreement) and appropriate certificates and powers or
financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary in form and substance reasonably satisfactory to
Agent; provided, that only 65% of the total outstanding voting Equity Interests
of any Excluded Subsidiary described in clause (a) or (c) of the definition or
Excluded Subsidiary, and (c) provide to Agent all other documentation, including
the Governing Documents of such Subsidiary and one or more opinions of counsel
reasonably satisfactory to Agent, which, in its opinion, is appropriate with
respect to the execution and delivery of the applicable documentation referred
to above. Any document, agreement, or instrument executed or issued pursuant to
this Section 5.11 shall constitute a Loan Document.

5.12 Further Assurances. Each Loan Party will, and will cause each of the other
Loan Parties to, at any time upon the reasonable request of Agent, in writing,
execute or deliver to Agent any and all financing statements, security
agreements, pledges, assignments, opinions of counsel, and all other documents
(the “Additional Documents”) that Agent may reasonably request in form and
substance reasonably satisfactory to Agent, to create, perfect, and continue
perfected or to better perfect Agent’s Liens in all of the assets of each of the
Loan Parties (whether now owned or hereafter arising or acquired, tangible or
intangible), and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, if any Borrower or any other Loan Party refuses or
fails to execute or deliver any reasonably requested Additional Documents within
a reasonable period of time not to exceed 10 days following the request to do
so, each Borrower and each other Loan Party hereby authorizes Agent to execute
any such Additional Documents in the applicable Loan Party’s name and authorizes
Agent to file such executed Additional Documents in any appropriate filing
office. In furtherance of, and not in limitation of, the foregoing, each Loan
Party shall take such actions as Agent may reasonably request, in writing, from
time to time to ensure that the Obligations are guaranteed by the Guarantors and
are secured by substantially all of the assets of the Loan Parties, including
all of the outstanding capital Equity Interests of each Borrower and its
Subsidiaries (in each case, other than with respect to any assets consisting of
Excluded Collateral) pursuant to Section 3 of the Guaranty and Security
Agreement).

 

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5.13 Location of Chief Executive Office. Each Loan Party will, and will cause
each of its Subsidiaries to, keep their respective chief executive offices only
at the locations identified on Schedule 7 to the Guaranty and Security
Agreement. Each Loan Party will, and will cause each of its Subsidiaries to, use
their commercially reasonable efforts to obtain Collateral Access Agreements for
each of the locations identified on Schedule 7 to the Guaranty and Security
Agreement.

5.14 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. Each
Loan Party will, and will cause each of its Subsidiaries to, comply with all
Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan
Parties and its Subsidiaries will implement and maintain in effect policies and
procedures designed to ensure compliance by the Loan Parties and their
Subsidiaries and their respective directors, officers, employees and agents
with, and each of the Loan Parties and their respective Subsidiaries will comply
with, all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.

 

6.

NEGATIVE COVENANTS.

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

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

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

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

(a) Other than the Closing Date Merger, enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its Equity Interests, except
for (i) any merger between Loan Parties; provided, that a Borrower must be the
surviving entity of any such merger to which it is a party, (ii) any merger
between a Loan Party and a Subsidiary of such Loan Party that is not a Loan
Party so long as such Loan Party is the surviving entity of any such merger, and
(iii) any merger between Subsidiaries of any Loan Party that are not Loan
Parties,

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

 

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

(d) change its classification/status for U.S. federal income tax purposes.

6.4 Disposal of Assets. Other than Permitted Dispositions or transactions
expressly permitted by Sections 6.3 or 6.9, each Loan Party will not, and will
not permit any of its Subsidiaries to, convey, sell, lease, license, assign,
transfer, or otherwise dispose of any of its or their assets.

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

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

(a) except in connection with Refinancing Indebtedness permitted by Section 6.1,

(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Loan Party or its Subsidiaries, other than (A) the
Obligations in accordance with this Agreement, (B) Hedge Obligations,
(C) Permitted Intercompany Advances or (D) Indebtedness under the Term Loan
Agreement and other Indebtedness so long as, in each case, each of the Payment
Conditions shall be satisfied, or

(ii) [Reserved], or

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

(i) any agreement, instrument, document, indenture, or other writing evidencing
or concerning Permitted Indebtedness other than (A) the Obligations in
accordance with this Agreement, (B) Hedge Obligations, (C) Permitted
Intercompany Advances, (D) Indebtedness in respect of the Term Loan Documents to
the extent expressly permitted pursuant to the Intercreditor Agreement, and
(E) Indebtedness permitted under clauses (c), (e) and (f) of the definition of
Permitted Indebtedness, or

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

6.7 Restricted Payments; Management Fees. Each Loan Party will not, and will not
permit any of its Subsidiaries to, make any Restricted Payment; provided, that
so long as it is permitted by law:

(a) So long as Parent is a “pass-through” tax entity for United States federal
income tax purposes, and after first providing such supporting documentation as
Agent may request, Parent may declare and pay distributions in the amount of the
Pass-Through Tax Liabilities.

(b) (i) Each Subsidiary of a Loan Party may make Restricted Payments to any Loan
Party and (ii) each Subsidiary of a Loan Party that is not a Loan Party may make
Restricted Payments to another Subsidiary that is not a Loan Party.

 

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(c) Parent may make other Restricted Payments; provided, that, each of the
Payment Conditions shall be satisfied.

(d) Parent may pay management fees to MSD Capital LP and its Affiliates in an
aggregate amount not to exceed $250,000 per calendar year, so long as no Default
or Event of Default shall have occurred and be continuing or would result
therefrom.

(e) The Loan Parties may consummate repurchases, redemptions or other
acquisitions or retirements for value of Equity Interests made or deemed to be
made in connection with any exercise, vesting, settlement or exchange, as
applicable, of stock options, warrants, restricted stock, restricted stock units
or other similar rights in an aggregate amount not to exceed $5,000,000 during
any calendar year and $15,000,000 during the term of this Agreement, provided,
that, each of the Payment Conditions shall be satisfied.

(f) So long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Parent may make other Restricted Payments
with proceeds received by Parent from the sale of Equity Interests of Parent
other than proceeds of Specified Equity Contributions; provided that any such
Restricted Payments are made no later than 30 days after such proceeds have been
received by Parent.

6.8 Accounting Methods. Each Loan Party will not, and will not permit any of its
Subsidiaries to, modify or change its fiscal year or its method of accounting
(other than as may be required to conform to GAAP).

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

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

(a) transactions (other than the payment of management, consulting, monitoring,
or advisory fees) between such Loan Party or its Subsidiaries, on the one hand,
and any Affiliate of such Loan Party or its Subsidiaries, on the other hand, so
long as such transactions are no less favorable, taken as a whole, to such Loan
Party or its Subsidiaries, as applicable, than would be obtained in an arm’s
length transaction with a non-Affiliate,

(b) any indemnity provided for the benefit of directors (or comparable managers)
of a Loan Party or one of its Subsidiaries so long as it has been approved by
such Loan Party’s or such Subsidiary’s board of directors (or comparable
governing body) in accordance with applicable law,

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

(d) (i) transactions solely among the Loan Parties, and (ii) transactions solely
among Subsidiaries of Loan Parties that are not Loan Parties,

(e) transactions permitted by Section 6.3, Section 6.7, or Section 6.9,

 

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(f) Permitted Indebtedness constituting Subordinated Indebtedness owing to
Affiliates,

(g) agreements for the non-exclusive licensing of intellectual property, or
distribution of products, in each case, among the Loan Parties and their
Subsidiaries for the purpose of the counterparty thereof operating its business,
and agreements for the assignment of intellectual property from any Loan Party
or any of its Subsidiaries to any Loan Party, or

(h) the Term Loan Agreement and the transactions contemplated thereby to the
extent any such Affiliate is an “Affiliated Lender” as defined in the Term Loan
Agreement.

6.11 Use of Proceeds. Each Loan Party will not, and will not permit any of its
Subsidiaries to, use the proceeds of any Loan made hereunder for any purpose
other than (a) on the Closing Date, (i) to pay the fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
other Transactions, in each case, as set forth in the Flow of Funds Agreement,
(ii) to consummate the Refinancing, and (iii) after application of the proceeds
of loans under the Term Loan Agreement, to pay a portion of the merger
consideration in respect of the Closing Date Merger, and (b) thereafter,
consistent with the terms and conditions hereof, for their lawful and permitted
purposes; provided that (x) no part of the proceeds of the loans made to
Borrowers will be used to purchase or carry any such Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any such Margin Stock
or for any purpose that violates the provisions of Regulation T, U or X of the
Board of Governors, (y) no part of the proceeds of any Loan or Letter of Credit
will be used, directly or indirectly, to make any payments to a Sanctioned
Entity or a Sanctioned Person, to fund any investments, loans or contributions
in, or otherwise make such proceeds available to, a Sanctioned Entity or a
Sanctioned Person, to fund any operations, activities or business of a
Sanctioned Entity or a Sanctioned Person), or in any other manner that would
result in a violation of Sanctions by any Person, and (z) no part of the
proceeds of any Loan or Letter of Credit will be used, directly or indirectly,
in furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Sanctions, Anti-Corruption Laws or Anti-Money Laundering Laws.

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

 

7.

FINANCIAL COVENANT.

7.1 Fixed Charge Coverage Ratio. Each Borrower covenants and agrees that, until
the termination of all of the Commitments and the payment in full of the
Obligations, Borrowers will maintain a Fixed Charge Coverage Ratio, calculated
on a trailing twelve month basis and measured as of the last day of each
calendar month during any Covenant Testing Period (including the last day
thereof), in each case of at least 1.00 to 1.00.

7.2 Right to Cure.

(a) Notwithstanding anything to the contrary contained in Section 7.1, subject
to Section 7.2(b), in the event that Borrowers fail to comply with the
requirements of Section 7.1 with respect to any fiscal period, after the end of
such fiscal period until the expiration of the tenth (10th) Business Day
subsequent to the date on which financial statements with respect to the fiscal
period for which such covenant is being measured are required to be delivered,
any Person (other than a Loan Party) shall have the right to make a Specified
Equity Contribution to Parent (collectively, the “Cure Right”), and so long as
Parent actually receives cash (the “Cure Amount”) pursuant to the exercise of
such Cure Right no later than ten (10) Business Days after the date on which
financial statements with respect to the fiscal period for which such covenant
is being measured are required to be delivered), then the amounts for purposes
of determining compliance with the covenant in Section 7.1 shall be recalculated
giving effect to the following pro forma adjustments:

 

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(i) EBITDA shall be increased, solely for the purpose of determining compliance
with the covenant in Section 7.1 and not for any other purpose under this
Agreement, by an amount equal to the Cure Amount; and

(ii) if, after giving effect to the foregoing recalculations, the Borrowers
shall then be in compliance with the requirements of Section 7.1, the Borrowers
shall be deemed to have satisfied the requirements of Section 7.1 as of the
relevant date of determination with the same effect as though there had been no
failure to comply therewith at such date, and any applicable breach or default
of Section 7.1 that had occurred shall be deemed cured for purposes of this
Agreement.

(b) Limitation on Exercise of Cure Right. Notwithstanding anything herein to the
contrary contained herein or in any Loan Document, (i) no Lender shall be
required to make any Loans and no Issuing Bank shall be required to issue or
amend any Letters of Credit, in each case, during the ten (10) Business Day
period referred to above, (ii) in each twelve (12) consecutive fiscal month
period there shall be a period of six (6) consecutive fiscal months in which the
Cure Right is not exercised, (iii) the Cure Amount shall be no greater than one
hundred (100%) percent of the amount required for purposes of compliance with
Section 7.1 as provided above, (iv) the Cure Right shall not be exercised more
than four (4) times during the term of this Agreement, (v) all Specified Equity
Contributions shall be disregarded for purposes of determining any pricing, any
financial ratio-based conditions or any baskets or threshold under this
Agreement, and (vi) no Specified Equity Contribution shall result in any
reduction of Indebtedness for purposes of calculating compliance with any
financial covenant under this Agreement.

 

8.

EVENTS OF DEFAULT.

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

8.1 Payments. If Borrowers fail to pay when due and payable, or when declared
due and payable, (a) all or any portion of the Obligations consisting of
interest, fees, or charges due to the Lender Group, reimbursement of Lender
Group Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of three Business Days,
(b) all or any portion of the principal of the Obligations, or (c) any amount
payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit
which have not been paid through a Revolving Loan;

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

(a) fails to perform or observe any covenant or other agreement contained in any
of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is not in existence
in its jurisdiction of organization), 5.5 (solely with respect to F.I.C.A.,
F.U.T.A., federal income taxes and any other taxes or assessments the
non-payment of which may result in a Lien having priority over Agent’s Liens),
5.6, 5.7, 5.11, 5.13 or 5.14 of this Agreement, (ii) Section 6 of this
Agreement, (iii) Section 7 of this Agreement (subject to the Cure Right), or
(iv) Section 7 of the Guaranty and Security Agreement;

 

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(b) fails to perform or observe any covenant or other agreement contained in any
of Sections 5.3 (other than if any Borrower is not in existence in its
jurisdiction of organization), 5.4, 5.5 (other than F.I.C.A., F.U.T.A., federal
income taxes and any other taxes or assessments the non-payment of which may
result in a Lien having priority over Agent’s Liens), 5.8, 5.10 and 5.12 of this
Agreement and such failure continues for a period of fifteen (15) days after the
earlier of (i) the date on which such failure shall first become known to any
officer of any Borrower, or (ii) the date on which written notice thereof is
given to Borrowers by Agent; or

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

8.3 Judgments. If one or more judgments, orders, or awards for the payment of
money involving an aggregate amount of $5,000,000, or more (except to the extent
fully covered (other than to the extent of customary deductibles) by insurance
pursuant to which the insurer has not denied coverage) is entered or filed
against a Loan Party or any of its Subsidiaries, or with respect to any of their
respective assets, and either (a) there is a period of thirty consecutive days
at any time after the entry of any such judgment, order, or award during which
(i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(ii) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;

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

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

8.6 Default under Other Agreements. If (a) an “event of default” occurs under
the Term Loan Documents or (b) there is a default in one or more other
agreements to which a Loan Party or any of its Subsidiaries is a party with one
or more third Persons relative to a Loan Party’s or any of its Subsidiaries’
Indebtedness involving an aggregate amount of $5,000,000 or more (other than
Indebtedness under the Term Loan Documents), and such default (i) occurs at the
final maturity of the obligations thereunder, or (ii) results in a right by such
third Person, irrespective of whether exercised, to accelerate the maturity of
such Loan Party’s or its Subsidiary’s obligations thereunder, or (c) a default
in or an involuntary early termination of one or more Hedge Agreements to which
a Loan Party or any of its Subsidiaries is a party and any Lender is a
counterparty, or (d) a default in or an involuntary early termination of one or
more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a
party and a Bank Product Provider is not a counterparty and, in either event
under this clause (d), the swap termination costs to be paid by such Loan Party
or Subsidiary to the counterparty in accordance with the terms of such Hedge
Agreement are $2,000,000 or more;

 

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

8.8 Guaranty. If the obligation of any Guarantor under the guaranty contained in
the Guaranty and Security Agreement or under any other guaranty in favor of
Agent is limited or terminated by operation of law or by such Guarantor (other
than in accordance with the terms of this Agreement) or if any Guarantor
repudiates or revokes or purports to repudiate or revoke any such guaranty;

8.9 Security Documents. If the Guaranty and Security Agreement or any other Loan
Document that purports to create a Lien, shall, for any reason, fail or cease to
create a valid and perfected and, (except to the extent of Permitted Liens which
are non-consensual Permitted Liens, Liens securing Permitted Purchase Money
Indebtedness or the interests of lessors under Capital Leases) first priority
Lien on the Collateral covered thereby, or such Lien shall for any reason cease
to be a perfected and first priority Lien (except to the extent of Permitted
Liens which are non-consensual Permitted Liens, Liens securing Permitted
Purchase Money Indebtedness or the interests of lessors under Capital Leases),
except (a) as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement, (b) with respect to Collateral the
aggregate value of which, for all such Collateral, does not exceed at any time,
$2,500,000 or (c) pursuant to the terms of the Intercreditor Agreement;

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

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

8.12 ERISA. (i) The occurrence of any of the following events: (a) any Loan
Party or ERISA Affiliate fails to make full payment when due of all amounts
which any Loan Party or ERISA Affiliate is required to pay as contributions,
installments, or otherwise to or with respect to a Pension Plan or Multiemployer
Plan, and such failure could reasonably be expected to result in liability to
any Loan Party in excess of $1,000,000, or (b) an ERISA Event, which could
reasonably be expected to result in liability to any Loan Party in excess of
$1,000,000, either individually or in the aggregate; or

8.13 Subordination; Intercreditor Agreement. (a) The provisions of the
Intercreditor Agreement shall, in whole or in part, terminate, cease to be
effective or cease to be legally valid, binding and enforceable against the Term
Loan Agent, or (b) the subordination provisions of the documents evidencing or
governing any Subordinated Indebtedness (together with similar provisions of the
Intercreditor Agreement, collectively, the “Subordination Provisions”) shall, in
whole or in part, terminate, cease to be effective or cease to be legally valid,
binding and enforceable against any holder of such Subordinated Indebtedness; or
(c) any Person shall, directly or indirectly, disavow or contest in any manner
(A) the effectiveness, validity or enforceability of any of the Subordination
Provisions, (B) that the Subordination Provisions exist for the benefit of the
Loan Parties, or (C) that all payments of principal of or premium and interest
on the applicable Subordinated Indebtedness, or realized from the liquidation of
any property of any Loan Party, shall be subject to any Subordination Provisions
applicable thereto.

 

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9. RIGHTS AND REMEDIES.

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

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

(b) by written notice to Lead Borrower, declare the Commitments terminated,
whereupon the Commitments shall immediately be terminated together with (i) any
obligation of any Lender hereunder to make Revolving Loans, and (ii) the
obligation of Issuing Bank to issue Letters of Credit; and

(c) exercise all other rights and remedies available to Agent or Lenders under
the Loan Documents or applicable law.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of all accrued
and unpaid interest thereon and all fees and all other amounts owing under this
Agreement or under any of the other Loan Documents, shall automatically and
immediately become due and payable and Borrower shall be obligated to repay all
of such Obligations in full, without presentment, demand, protest, or notice of
any kind, all of which are expressly waived by Borrower.

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

10. WAIVERS; INDEMNIFICATION.

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

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

 

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10.3 Indemnification. Each Loan Party shall pay, indemnify, defend, and hold the
Agent- Related Persons, the Lender-Related Persons, the Issuing Bank and each
Participant (each, an “Indemnified Person”) harmless (to the fullest extent
permitted by law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys (limited to a single
counsel for the Lender Group, one local counsel for the Lender Group in each
appropriate jurisdiction and, in the case of an actual or perceived conflict of
interest involving an Indemnified Person, one counsel for such Indemnified
Person), experts, or consultants and all other costs and expenses actually
incurred in connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution and
delivery (provided that Loan Parties shall not be liable for costs and expenses
(including attorneys’ fees) of any Lender (other than Wells Fargo) incurred in
advising, structuring, drafting, reviewing, administering or syndicating the
Loan Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Loan Parties’ compliance with the terms of the Loan Documents
(provided, that, the indemnification in this clause (a) shall not extend to
(i) disputes solely between or among Lenders, (ii) disputes solely between or
among Lenders and their respective Affiliates; it being understood and agreed
that the indemnification in this clause (a) shall extend to Agent (but not
Lenders unless the dispute involves an act or omission of a Loan Party) relative
to disputes between or among Agent on the one hand, and one or more Lenders, or
one or more of their Affiliates, on the other hand, or (iii) any Taxes or any
costs attributable to Taxes, which shall be governed by Section 16.1), (b) with
respect to any actual or prospective investigation, litigation, or proceeding
related to this Agreement, any other Loan Document, the making of any Loans or
issuance of any Letters of Credit, or the use of the proceeds of any Loans or
Letters of Credit provided hereunder (irrespective of whether any Indemnified
Person is a party thereto), or any act, omission, event, or circumstance in any
manner related thereto, and (c) in connection with or arising out of any
presence or release of Hazardous Materials at, on, under, to or from any assets
or properties owned, leased or operated by any Loan Party or any Environmental
Actions, Environmental Liabilities or Remedial Actions related in any way to any
such assets or properties of Loan Parties (each and all of the foregoing, the
“Indemnified Liabilities”). The foregoing to the contrary notwithstanding, Loan
Parties shall have no obligation to any Indemnified Person under this
Section 10.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence, bad
faith or willful misconduct of such Indemnified Person or its Affiliates, or its
or their respective officers, directors, employees, attorneys, or agents, or
from a material breach of the material obligations of such Indemnified Person
under the Loan Documents. This provision shall survive the termination of this
Agreement and the repayment of the Obligations. If any Indemnified Person makes
any payment to any other Indemnified Person with respect to an Indemnified
Liability as to which Loan Parties were required to indemnify the Indemnified
Person receiving such payment, the Indemnified Person making such payment is
entitled to be indemnified and reimbursed by Loan Parties with respect thereto.
WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE
CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED
PERSON OR OF ANY OTHER PERSON; PROVIDED, THAT, THE FOREGOING INDEMNITY SHALL NOT
APPLY IF A COURT OF COMPETENT JURISDICTION ENTERS A FINAL NON APPEALABLE
JUDGMENT THAT SUCH INDEMNIFIED LIABILITIES HAVE RESULTED PRIMARILY FROM THE
GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON OR
ITS OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, OR AGENTS.

 

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11. NOTICES.

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

If to any Loan Party:   c/o Independence Contract Drilling, Inc.

20475 State Highway 249

Suite 300

Houston, TX, 77070

Attn: Anthony Gallegos

Fax No. 713-800-7417

with copies to:             Sidley Austin LLP

1000 Louisiana Street

Suite 6000

Houston, TX 77002

Attn: David Buck

Fax No. 713-495-7799

If to Agent:                 Wells Fargo Bank, National

Association

14241 Dallas Parkway, 9th Floor

Dallas, Texas 75254-2936

Attn: Loan Portfolio Manager

Fax No.: 866-598-5212

with copies to:             OTTERBOURG P.C.

230 Park Avenue

New York, New York 10169

Attn: Thomas P. Duignan, Esq.

Fax No.: 212-682-6104

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or three
(3) Business Days after the deposit thereof in the mail; provided, that,
(a) notices sent by overnight courier service shall be deemed to have been given
when received, (b) notices by facsimile shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient), and (c) notices by electronic mail shall be
deemed received upon the sender’s receipt of an acknowledgment from the intended
recipient (such as by the “return receipt requested” function, as available,
return email or other written acknowledgment).

 

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12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION
OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PRIORITY, PERFECTION
OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING
ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS
SHALL CONTINUE TO APPLY TO THAT EXTENT.

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

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

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

 

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

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1 Assignments and Participations.

(a) Subject to the conditions set forth in Section 13.1(a)(ii) below, any Lender
may assign and delegate all or any portion of its rights and duties under the
Loan Documents (including the Obligations owed to it and its Commitments) to one
or more assignees so long as such prospective assignee is an Eligible Transferee
(each, an “Assignee”), with the prior written consent (such consent not be
unreasonably withheld or delayed) of:

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

(ii) Agent and Issuing Bank.

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

(i) no assignment may be made (i) as long as no Event of Default has occurred
and is continuing, any Disqualified Lender, or (ii) to a natural person,

(ii) no assignment may be made to a Loan Party, an Affiliate of a Loan Party,
any holder of Subordinated Indebtedness,

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

(iv) 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,

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

 

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

(vii) the assignee, if it is not a Lender, shall deliver to Agent an
Administrative Questionnaire in a form approved by Agent (the “Administrative
Questionnaire”); and

(c) From and after the date that Agent notifies the assigning Lender (with a
copy to Lead Borrower) that it has received an executed Assignment and
Acceptance and, if applicable, payment of the required processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall be a “Lender” and shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 10.3 and Section 16) and be released
from any future obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto); provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 17.9(a).

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

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

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

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

(h) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law; provided,
that, no such pledge shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

(i) Agent shall have the right, and each Loan Party hereby expressly authorizes
Agent, to provide the list of Disqualified Lenders provided by Borrowers and any
updates thereto from time to time (collectively, the “DQ List”) to each Lender
requesting the same and such Lender may so provide the DQ List to any potential
assignees or participants.

 

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13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, that,
Borrowers may not assign this Agreement or any rights or duties hereunder
without Lenders’ prior written consent and any prohibited assignment shall be
absolutely void ab initio. No consent to assignment by Lenders shall release
Borrowers from their obligations hereunder. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 and, except as expressly required pursuant to
Section 13.1, no consent or approval by any Loan Party is required in connection
with any such assignment.

14. AMENDMENTS; WAIVERS.

14.1 Amendments and Waivers.

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

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

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

(iii) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (A) in connection with the
waiver of applicability of Section 2.6(c) (which waiver shall be effective with
the written consent of the Required Lenders), and (B) that any amendment or
modification of defined terms used in the financial covenant in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii));

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

(v) amend, modify, or eliminate Section 15.11,

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

(vii) amend, modify, or eliminate the definition of “Required Lenders” ,
“Supermajority Lenders” or “Pro Rata Share”,

(viii) contractually subordinate any of Agent’s Liens (other than as expressly
permitted pursuant to the Intercreditor Agreement),

(ix) other than in connection with a merger, amalgamation, liquidation,
dissolution or sale of such Person expressly permitted by the terms hereof or
the other Loan Documents, release any Borrower or all or substantially all of
the Guarantors from any obligation for the payment of money or consent to the
assignment or transfer by any Borrower or any Guarantor of any of its rights or
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(x) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i),
(ii) or (iii).

(xi) amend, modify, or eliminate any of the provisions of Section 13.1(a) to
permit a Loan Party, an Affiliate of a Loan Party, Parent, or an Affiliate of
Parent to be permitted to become an Assignee.

(b) No amendment, waiver, modification, elimination, or consent shall, without
written consent of Agent, Borrowers and the Supermajority Lenders, amend,
modify, or eliminate the definition of Borrowing Base or any of the defined
terms (including the definitions of Eligible Accounts) that are used in such
definition to the extent that any such change results in more credit being made
available to Borrowers based upon the Borrowing Base, but not otherwise, or
change Section 2.1(c).

(c) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive (i) the definition of, or any of the terms or provisions of,
any Fee Letter, without the written consent of Agent and Lead Borrower (and
shall not require the written consent of any of Lenders), and (ii) any provision
of Section 15 pertaining to Agent, or any other rights or duties of Agent under
this Agreement or the other Loan Documents, without the written consent of
Agent, Lead Borrower, and the Required Lenders,

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

(e) [Reserved],

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

14.2 Replacement of Certain Lenders.

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

 

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(b) Prior to the effective date of such replacement, the Non-Consenting Lender
or Tax Lender, as applicable, and each Replacement Lender shall execute and
deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender
or Tax Lender, as applicable, being repaid in full its share of the outstanding
Obligations (without any premium or penalty of any kind whatsoever, but
including (i) all interest, fees and other amounts that may be due in payable in
respect thereof, (ii) an assumption of its Pro Rata Share of participations in
the Letters of Credit, and (iii) Funding Losses). If the Non-Consenting Lender
or Tax Lender, as applicable, shall refuse or fail to execute and deliver any
such Assignment and Acceptance prior to the effective date of such replacement,
Agent may, but shall not be required to, execute and deliver such Assignment and
Acceptance in the name or and on behalf of the Non-Consenting Lender or Tax
Lender, as applicable, and irrespective of whether Agent executes and delivers
such Assignment and Acceptance, the Non-Consenting Lender or Tax Lender, as
applicable, shall be deemed to have executed and delivered such Assignment and
Acceptance. The replacement of any Non-Consenting Lender or Tax Lender, as
applicable, shall be made in accordance with the terms of Section 13.1. Until
such time as one or more Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of the
Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the
other Loan Documents, the Non-Consenting Lender or Tax Lender, as applicable,
shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as
applicable, Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of such Letters of
Credit.

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

15. AGENT; THE LENDER GROUP.

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

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

15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of Lenders (or Bank Product
Providers) for any recital, statement, representation or warranty made by the
Loan Parties or Affiliates, or any officer or director thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Loan Parties or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lenders
(or Bank Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of the Loan Parties. No Agent-Related Person shall have any liability
to any Lender, any Loan Party or any of their respective Affiliates if any
request for a Loan, Letter of Credit or other extension of credit hereunder was
not authorized by the applicable Borrower. Agent shall not be required to take
any action that, in its opinion or in the opinion of its counsel, may expose it
to liability or that is contrary to any Loan Document or applicable law or
regulation.

 

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

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

15.6 Credit Decision. Each Lender (and Bank Product Provider) acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by Agent hereinafter taken, including any review of the affairs
of Loan Parties and their Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender (or Bank
Product Provider). Each Lender represents (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to represent) to Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such due diligence, documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of any Loan Party or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrowers or any other Person party
to a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to Lenders by Agent, Agent shall not have any
duty or responsibility to provide any Lender (or Bank Product Provider) with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Borrowers or any
other Person party to a Loan Document that may come into the possession of any
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Persons. Each Lender acknowledges (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent
does not have any duty or responsibility, either initially or on a continuing
basis (except to the extent, if any, that is expressly specified herein) to
provide such Lender (or Bank Product Provider) with any credit or other
information with respect to any Borrower, its Affiliates or any of their
respective business, legal, financial or other affairs, and irrespective of
whether such information came into Agent’s or its Affiliates’ or
representatives’ possession before or after the date on which such Lender became
a party to this Agreement (or such Bank Product Provider entered into a Bank
Product Agreement).

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

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

 

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15.9 Successor Agent. Agent may resign as Agent upon forty-five (45) days prior
written notice to Lenders (unless such notice is waived by the Required Lenders)
and Lead Borrower (unless such notice is waived by Lead Borrower or a Default or
Event of Default has occurred and is continuing) and without any notice to the
Bank Product Providers. If Agent resigns under this Agreement, the Required
Lenders shall be entitled, with (so long as no Event of Default has occurred and
is continuing) the consent of Lead Borrower (such consent not to be unreasonably
withheld, delayed, or conditioned), appoint a successor Agent from among Lenders
(and the Bank Product Providers). If, at the time that Agent’s resignation is
effective, it is acting as Issuing Bank, such resignation shall also operate to
effectuate its resignation as Issuing Bank, and it shall automatically be
relieved of any further obligation to issue Letters of Credit. If no successor
Agent is appointed prior to the effective date of the resignation of Agent,
Agent may appoint, after consulting with Lenders and Lead Borrower, a successor
Agent. If Agent has materially breached or failed to perform any material
provision of this Agreement or of applicable law, the Required Lenders
(excluding Agent) may agree in writing to remove and replace Agent with a
successor Agent from among Lenders with (so long as no Event of Default has
occurred and is continuing) the consent of Lead Borrower (such consent not to be
unreasonably withheld, delayed, or conditioned). In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is thirty (30) days following a retiring
Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as Lenders appoint a
successor Agent as provided for above.

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

15.11 Collateral Matters.

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

(b) Agent shall have no obligation whatsoever to any of Lenders (or the Bank
Product Providers) to assure that the Collateral exists or is owned any Loan
Party or is cared for, protected, or insured or has been encumbered, or that
Agent’s Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or that any
particular items of Collateral meet the eligibility criteria applicable in
respect thereof or whether to impose, maintain, reduce, or eliminate any
particular reserve hereunder or whether the amount of any such reserve is
appropriate or not, or to exercise at all or in any particular manner or under
any duty of care, disclosure

 

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or fidelity, or to continue exercising, any of the rights, authorities and
powers granted or available to Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent’s own interest in the Collateral in its capacity as
one of Lenders and that Agent shall have no other duty or liability whatsoever
to any Lender (or Bank Product Provider) as to any of the foregoing, except as
otherwise provided herein.

(c) Lenders hereby authorize Agent to enter into the Intercreditor Agreement or
other subordination or intercreditor agreement or arrangement permitted under
this Agreement and Lenders acknowledge that any such subordination or
intercreditor agreement is binding upon Lenders.

15.12 Restrictions on Actions by Lenders; Sharing of Payments.

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

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

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

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

 

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

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

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

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

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

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

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

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

 

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15.17 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of Lenders, any
and all obligations on the part of Agent (if any) to make any credit available
hereunder shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 15.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Loan Party or any other Person for any failure by any
other Lender (or Bank Product Provider) to fulfill its obligations to make
credit available hereunder, nor to advance for such Lender (or Bank Product
Provider) or on its behalf, nor to take any other action on behalf of such
Lender (or Bank Product Provider) hereunder or in connection with the financing
contemplated herein.

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

16. TAX MATTERS.

16.1 Payments. All payments made by any Loan Party under any Loan Document will
be made free and clear of, and without deduction or withholding for, any Taxes,
except as otherwise required by applicable law, and in the event any deduction
or withholding of Taxes is required, the applicable Loan Party shall make the
requisite withholding, promptly pay over to the applicable Governmental
Authority the withheld tax, and furnish to Agent as promptly as possible after
the date the payment of any such Tax is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Loan Parties.
Furthermore, if any such Tax is an Indemnified Tax, 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 16.1, the
applicable recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made. The Loan Parties will promptly
pay any Other Taxes or reimburse Agent for such Other Taxes upon Agent’s demand.
The Loan Parties shall jointly and severally indemnify each Indemnified Person
(as defined in Section 10.3) (collectively a “Tax Indemnitee”) for the full
amount of Indemnified Taxes arising in connection with this Agreement or any
other Loan Document or breach thereof by any Loan Party (including, without
limitation, any Indemnified Taxes imposed or asserted on, or attributable to,
amounts payable under this Section 16.1) imposed on, or paid by, such Tax
Indemnitee and all reasonable, documented out-of-pocket costs and expenses
related thereto (including reasonable fees and disbursements of attorneys and
other tax professionals), as and when they are incurred and irrespective of
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correctly or legally imposed or asserted by the relevant Governmental Authority
(other than Indemnified Taxes and additional amounts that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Tax Indemnitee). The obligations of the Parties under
this Section 16 shall survive the termination of this Agreement, the resignation
and replacement of the Agent, and the repayment of the Obligations.

16.2 Exemptions.

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

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

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

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

(iv) if such Lender or Participant is entitled to claim that interest paid under
this Agreement is exempt from United States withholding tax because such Lender
or Participant serves as an intermediary, a properly completed and executed copy
of IRS Form W-8IMY (including a withholding statement and copies of the tax
certification documentation for its beneficial owner(s) of the income paid to
the intermediary, if required based on its status provided on the Form W-8IMY);
or

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

(b) Each Lender or Participant shall provide new forms (or successor forms) upon
the expiration or obsolescence of any previously delivered forms and to promptly
notify Agent and Administrative Borrower (or, in the case of a Participant, to
the Lender granting the participation only) of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.

(c) If a Lender or Participant claims an exemption from withholding tax in a
jurisdiction other than the United States, such Lender or such Participant
agrees with and in favor of Agent and Borrowers, to deliver to Agent and
Administrative Borrower (or, in the case of a Participant, to the Lender
granting the participation only) any such form or forms, as may be required
under the laws of such

 

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jurisdiction as a condition to exemption from, or reduction of, foreign
withholding or backup withholding tax before receiving its first payment under
this Agreement, but only if such Lender or such Participant is legally able to
deliver such forms, or the providing of or delivery of such forms in the
Lender’s reasonable judgment would not subject such Lender to any material
unreimbursed cost or expense or materially prejudice the legal or commercial
position of such Lender (or its Affiliates); provided, further, that nothing in
this Section 16.2(c) shall require a Lender or Participant to disclose any
information that it deems to be confidential (including without limitation, its
tax returns). Each Lender and each Participant shall provide new forms (or
successor forms) upon the expiration or obsolescence of any previously delivered
forms and to promptly notify Agent and Administrative Borrower (or, in the case
of a Participant, to the Lender granting the participation only) of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.

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

(e) 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 due diligence and reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRC, as
applicable), such Lender shall deliver to Agent (or, in the case of a
Participant, to the Lender granting the participation only) at the time or times
prescribed by law and at such time or times reasonably requested by Agent (or,
in the case of a Participant, the Lender granting the participation) such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by Agent (or, in the case of a Participant, the Lender
granting the participation) as may be necessary for Agent or Borrowers 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
(e), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

16.3 Reductions.

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

 

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

16.4 Refunds. If Agent or a Lender determines, in its sole discretion exercised
in good faith, that it has received a refund of any Indemnified Taxes to which
the Loan Parties have paid additional amounts pursuant to this Section 16, so
long as no Default or Event of Default has occurred and is continuing, it shall
pay over such refund to the Administrative Borrower on behalf of the Loan
Parties (but only to the extent of payments made, or additional amounts paid, by
the Loan Parties under this Section 16 with respect to Indemnified Taxes giving
rise to such a refund), net of all out-of-pocket expenses of Agent or such
Lender and without interest (other than any interest paid by the applicable
Governmental Authority with respect to such a refund); provided, that, the Loan
Parties, upon the request of Agent or such Lender, agrees to repay the amount
paid over to the Loan Parties (plus any penalties, interest or other charges,
imposed by the applicable Governmental Authority, other than such penalties,
interest or other charges imposed as a result of the willful misconduct or gross
negligence of Agent or Lender hereunder as finally determined by a court of
competent jurisdiction) to Agent or such Lender in the event Agent or such
Lender is required to repay such refund to such Governmental Authority.
Notwithstanding anything in this Agreement to the contrary, this Section 16
shall not be construed to require Agent or any Lender to make available its tax
returns (or any other information which it deems confidential) to Loan Parties
or any other Person or require Agent or any Lender to pay any amount to an
indemnifying party pursuant to Section 16.4, the payment of which would place
Agent or such Lender (or their Affiliates) in a less favorable net after-Tax
position than such Person 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.

17. GENERAL PROVISIONS.

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

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

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

 

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

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

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

17.7 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed

 

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counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile or other electronic method of transmission also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement. The foregoing shall apply
to each other Loan Document mutatis mutandis.

17.8 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by any Borrower or Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be asserted, or declared, to
be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (each, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the advice of counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees
of the Lender Group related thereto, the liability of such Borrower or Guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made. This provision shall survive
the termination of this Agreement and the repayment in full of the Obligations.

17.9 Confidentiality.

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

 

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to receive such Confidential Information hereunder subject to the terms of this
Section, (ix) in connection with any litigation or other adversary proceeding
involving parties hereto which such litigation or adversary proceeding involves
claims related to the rights or duties of such parties under this Agreement or
the other Loan Documents; provided, that, prior to any disclosure to any Person
(other than any Loan Party, Agent, any Lender, any of their respective
Affiliates, or their respective counsel) under this clause (ix) with respect to
litigation involving any Person (other than Loan Parties, Agent, any Lender, any
of their respective Affiliates, or their respective counsel), the disclosing
party agrees to provide Lead Borrower with prior written notice thereof, and
(x) in connection with, and to the extent reasonably necessary for, the exercise
of any secured creditor remedy under this Agreement or under any other Loan
Document.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may
(i) only after consulting with the Lead Borrower, provide customary information
concerning the terms and conditions of this Agreement and the other Loan
Documents to loan syndication and pricing reporting services, and (ii) only
after consulting with the Lead Borrower, use the name, logos, and other insignia
of Borrowers and the Loan Parties and the Commitments provided hereunder in any
“tombstone” or comparable advertising, on its website or in other marketing
materials of Agent.

17.10 Lender Group Expenses. Borrowers agree to pay the Lender Group Expenses on
the earlier of (a) the first day of the month following the date on which such
Lender Group Expenses were first incurred, or (b) the date on which demand
therefor is made by Agent. Borrowers agree that its obligations contained in
this Section 17.10 shall survive payment or satisfaction in full of all other
Obligations.

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

17.12 Patriot Act. Each Lender that is subject to the requirements of the
Patriot Act hereby notifies the Loan Parties that pursuant to the requirements
of the Patriot Act, it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
each Loan Party and other information that will allow such Lender to identify
each Loan Party in accordance with the Patriot Act. In addition, Agent and each
Lender shall have the right to periodically conduct due diligence on all Loan
Parties, their senior management and key principals and legal and beneficial
owners. Each Loan Party agrees to cooperate in respect of the conduct of such
due diligence and further agrees that the reasonable costs and charges for any
such due diligence by Agent shall constitute Lender Group Expenses hereunder and
be for the account of Borrowers.

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

 

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17.14 Keepwell. Each Qualified ECP Guarantor party hereto hereby jointly and
severally (i) absolutely, unconditionally and irrevocably undertakes to provide
such funds or other support as may be needed from time to time by each other
Loan Party to guaranty and otherwise honor all Obligations in respect of Swap
Obligations (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Section 17.14 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 17.14, or otherwise under the Loan Documents, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified ECP Guarantor under this
Section 17.14 shall remain in full force and effect until payment in full of the
Obligations. Each Qualified ECP Guarantor intends that this Section 17.14
constitute, and this Section 17.14 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Loan Party for all
purposes of Section 1a(17)(A)(v)(II) of the Commodity Exchange Act.

17.15 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures Agent could purchase the
first currency with such other currency on the Business Day preceding that on
which final judgment is given. The obligation of each Borrower in respect of any
such sum due from it to Agent or any Lender hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by
Agent or such Lender, as the case may be, of any sum adjudged to be so due in
the Judgment Currency, Agent or such Lender, as the case may be, may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to Agent or any Lender from any Borrower in the
Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify Agent or such Lender, as the
case may be, against such loss. If the amount of the Agreement Currency so
purchased is greater than the sum originally due to Agent or any Lender in such
currency, Agent or such Lender, as the case may be, agrees to return the amount
of any excess to such Borrower (or to any other Person who may be entitled
thereto under applicable law).

17.16 Parent as Administrative Agent for Borrowers. Each Loan Party hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all
Loan Parties (“Administrative Borrower”) which appointment shall remain in full
force and effect unless and until Agent shall have received prior written notice
signed by each Loan Party that such appointment has been revoked and that
another Loan Party has been appointed Administrative Borrower (which appointment
is subject to the approval of Agent not to be unreasonably withheld). Each Loan
Party hereby irrevocably appoints and authorizes Administrative Borrower (a) to
provide Agent with all notices with respect to Loans and Letters of Credit
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and the other Loan Documents (and any notice or instruction
provided by Administrative Borrower shall be deemed to be given by the Loan
Parties hereunder and shall bind each Loan Party), (b) to receive notices and
instructions from members of the Lender Group (and any notice or instruction
provided by any member of the Lender Group to Administrative Borrower in
accordance with the terms hereof shall be deemed to have been given to each Loan
Party), and (c) to take such action as Administrative Borrower deems appropriate
on its behalf to obtain Loans and Letters of Credit and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. It is understood that the handling of the Loan Account and Collateral
in a combined fashion,

 

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as more fully set forth herein, is done solely as an accommodation to the Loan
Parties in order to utilize the collective borrowing powers of Borrowers in the
most efficient and economical manner and at their request, and that Lender Group
shall not incur liability to any Loan Party as a result hereof. Each Loan Party
expects to derive benefit, directly or indirectly, from the handling of the Loan
Accounts and the Collateral in a combined fashion since the successful operation
of each Loan Party is dependent on the continued successful performance of the
integrated group. To induce the Lender Group to do so, and in consideration
thereof, each Loan Party hereby jointly and severally agrees to indemnify each
member of the Lender Group and hold each member of the Lender Group harmless
against any and all liability, expense, loss or claim of damage or injury, made
against the Lender Group by any Loan Party or by any third party whosoever,
arising from or incurred by reason of (i) the handling of the Loan Accounts and
Collateral of Loan Parties as herein provided, or (ii) the Lender Group’s
relying on any instructions of Lead Borrower, except that Loan Parties will have
no liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 17.16 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence, bad faith or willful misconduct of such Agent-Related Person
or Lender-Related Person, as the case may be.

17.17 “Know Your Customer” Checks. Without limiting any other provision set
forth in this Agreement:

(a) If (i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of
this Agreement; (ii) any change in the status of any Loan Party after the date
of this Agreement; or (iii) a proposed assignment or transfer by a Lender of any
of its rights and obligations under this Agreement to a party that is not a
Lender prior to such assignment or transfer, obliges Agent or any Lender (or, in
the case of clause (iii) above, any prospective new Lender) to comply with “know
your customer” or similar identification procedures in circumstances where the
necessary information is not already available to it, each Loan Party shall
promptly upon the request of Agent or any Lender supply, or procure the supply
of, such documentation and other evidence as is reasonably requested by Agent
(for itself or on behalf of any Lender) or any Lender (for itself or, in the
case of the event described in clause (iii) above, on behalf of any prospective
new Lender) in order for Agent, such Lender or, in the case of the event
described in clause (iii) above, any prospective new Lender to carry out and be
satisfied it has complied with all necessary “know your customer” or other
similar checks under all applicable laws and regulations pursuant to the
transactions contemplated in the Loan Documents.

(b) Each Lender shall promptly upon the request of Agent supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
Agent (for itself) in order for Agent to carry out and be satisfied it has
complied with all necessary “know your customer” or other similar checks under
all applicable laws and regulations pursuant to the transactions contemplated in
the Loan Documents.

17.18 Acknowledgment and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

 

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(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

17.19 Conflicts with Intercreditor Agreement. In the event of any conflict
between the terms of the Intercreditor Agreement and the terms of any other Loan
Documents, the terms of the Intercreditor Agreement shall control.

[Signature pages to follow.]

 

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

 

INDEPENDENCE CONTRACT DRILLING, INC. By:  

/s/ Philip A. Choyce

Name: Philip A. Choyce Title: Executive Vice President, Chief     Financial
Officer, Treasurer and Secretary PATRIOT SARATOGA MERGER SUB, LLC, as effective
prior to the Merger By:  

/s/ Philip A. Choyce

Name: Philip A. Choyce Title: President and Secretary ICD OPERATING LLC, as
successor in interest to Patriot Saratoga Merger Sub, LLC and as effective
following consummation of the Merger By:  

/s/ Philip A. Choyce

Name: Philip A. Choyce Title: President and Secretary

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AGENT, LENDER,     AND ISSUING BANK:     WELLS FARGO BANK, NATIONAL ASSOCIATION
    By: /s/ Michael J. Matranga                                                 
Name: Michael J. Matranga     Title: Authorized Signatory