EXHIBIT 10.1

 

 

FINANCING AGREEMENT

Dated as of January 31, 2018

by and among

HARVARD BIOSCIENCE, INC.,
as Parent and as Borrowing Agent,

 

PLYMOUTH Sub, Inc.

(to be merged with and into Data Sciences International, Inc.)

AND EACH OTHER SUBSIDIARY OF PARENT

LISTED AS A BORROWER ON THE SIGNATURE PAGES HERETO,
as Borrowers,

 

 

EACH SUBSIDIARY OF PARENT
LISTED AS A GUARANTOR ON THE SIGNATURE PAGES HERETO,
as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders

and

CERBERUS BUSINESS FINANCE, LLC,
as Administrative Agent and Collateral Agent

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

Article I DEFINITIONS; CERTAIN TERMS 1 Section 1.01   Definitions 1 Section
1.02   Terms Generally 61 Section 1.03   Certain Matters of Construction 61
Section 1.04   Accounting and Other Terms 62 Section 1.05   Time References 63
Article II THE LOANS 64 Section 2.01   Commitments 64 Section 2.02   Making the
Loans 65 Section 2.03   Repayment of Loans; Evidence of Debt 68 Section
2.04   Interest 69 Section 2.05   Reduction of Commitment; Prepayment of Loans
71 Section 2.06   Fees 76 Section 2.07   LIBOR Option 78 Section
2.08   [Reserved] 81 Section 2.09   Taxes 81 Section 2.10   Increased Costs and
Reduced Return 84 Section 2.11   Changes in Law; Impracticability or Illegality
86 Section 2.12   Mitigation Obligations; Replacement of Lenders 87 Article III
LETTERS OF CREDIT 88 Section 3.01   Letters of Credit 88 Section 3.02   Issuance
of Letters of Credit 88 Section 3.03   Requirements For Issuance of Letters of
Credit 89 Section 3.04   Disbursements, Reimbursement 89 Section
3.05   Repayment of Participation Revolving Loans 90 Section
3.06   Documentation 91 Section 3.07   Determination to Honor Drawing Request 91
Section 3.08   Nature of Participation and Reimbursement Obligations 91 Section
3.09   [Intentionally Omitted] 93 Section 3.10   Liability for Acts and
Omissions 93 Article IV APPLICATION OF PAYMENTS; DEFAULTING LENDERS; JOINT AND
SEVERAL LIABILITY OF BORROWERS 94 Section 4.01   Payments; Computations and
Statements 94 Section 4.02   Sharing of Payments, Etc 95 Section
4.03   Apportionment of Payments 96 Section 4.04   Defaulting Lenders 98 Section
4.05   Borrowing Agent; Joint and Several Liability of the Borrowers 99 Article
V CONDITIONS TO LOANS 101 Section 5.01   Conditions Precedent to Effectiveness
101 Section 5.02   Conditions Precedent to All Loans and Letters of Credit 107

 

- i -

 

Section 5.03   Conditions Subsequent to Effectiveness 108 Article VI
REPRESENTATIONS AND WARRANTIES 109 Section 6.01   Representations and Warranties
109 Article VII COVENANTS OF THE LOAN PARTIES 121 Section 7.01   Affirmative
Covenants 121 Section 7.02   Negative Covenants 131 Section 7.03   Financial
Covenants 138 Article VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS
RECEIVABLE AND OTHER COLLATERAL 140 Section 8.01   Collection of Accounts
Receivable; Management of Collateral 140 Section 8.02   Accounts Receivable
Documentation 143 Section 8.03   Status of Accounts Receivable and Other
Collateral 143 Section 8.04   Collateral Custodian 144 Article IX EVENTS OF
DEFAULT 144 Section 9.01   Events of Default 144 Article X AGENTS 149 Section
10.01   Appointment 149 Section 10.02   Nature of Duties; Delegation 150 Section
10.03   Rights, Exculpation, Etc 151 Section 10.04   Reliance 152 Section
10.05   Indemnification 152 Section 10.06   Agents Individually 152 Section
10.07   Successor Agent 153 Section 10.08   Collateral Matters 153 Section
10.09   Agency for Perfection 155 Section 10.10   No Reliance on any Agent's
Customer Identification Program Certifications From Banks and Participants; USA
PATRIOT Act 156 Section 10.11   No Third Party Beneficiaries 157 Section
10.12   No Fiduciary Relationship 157 Section 10.13   Reports; Confidentiality;
Disclaimers 157 Section 10.14   [Intentionally Omitted] 158 Section
10.15   Collateral Agent May File Proofs of Claim 158 Article XI GUARANTY 159
Section 11.01   Guaranty 159 Section 11.02   Guaranty Absolute 159 Section
11.03   Waiver 160 Section 11.04   Continuing Guaranty; Assignments 161 Section
11.05   Subrogation 161 Section 11.06   Release of Guarantors 161 Article XII
MISCELLANEOUS 162 Section 12.01   Notices, Etc. 162

 

- ii -

 

Section 12.02   Amendments, Etc 163 Section 12.03   No Waiver; Remedies, Etc 165
Section 12.04   Expenses; Attorneys' Fees 165 Section 12.05   Right of Set-off
166 Section 12.06   Severability 167 Section 12.07   Assignments and
Participations 167 Section 12.08   Counterparts 170 Section 12.09   GOVERNING
LAW 171 Section 12.10   CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE
171 Section 12.11   WAIVER OF JURY TRIAL, ETC 172 Section 12.12   Consent by the
Agents and Lenders 173 Section 12.13   No Party Deemed Drafter 173 Section
12.14   Reinstatement; Certain Payments 173 Section 12.15   Indemnification;
Limitation of Liability for Certain Damages 173 Section 12.16   Records 175
Section 12.17   Binding Effect 175 Section 12.18   Highest Lawful Rate 175
Section 12.19   Confidentiality 176 Section 12.20   Public Disclosure 177
Section 12.21   Integration 177 Section 12.22   USA PATRIOT Act 177 Section
12.23   Keepwell 177 Section 12.24   Section Headings 178

 

 

 

 

- iii -

 

SCHEDULE AND EXHIBITS

 

Schedule 1.01(A)  Lenders and Lenders' Commitments Schedule 1.01(B)  Facilities
Schedule 1.01(C)  Foreign Security Documents Schedule 1.01(D)  Immaterial
Subsidiaries Schedule 1.01(E)  Adjustments to Consolidated EBITDA Schedule
6.01(e)  Capitalization; Subsidiaries Schedule 6.01(f)  Litigation; Commercial
Tort Claims Schedule 6.01(i)(ii)  Canadian Pension Plans Schedule 6.01(l) 
Nature of Business Schedule 6.01(o)  Real Property Schedule 6.01(r) 
Environmental Matters Schedule 6.01(s)  Insurance Schedule 6.01(v)  Bank
Accounts Schedule 6.01(w)  Intellectual Property Schedule 6.01(x)  Material
Contracts Schedule 6.01(dd)  Name; Jurisdiction of Organization; Organizational
ID Number;
Chief Place of Business; Chief Executive Office; FEIN Schedule 6.01(ee) 
Collateral Locations Schedule 6.01(jj)  Credit Card Processors Schedule 7.02(a) 
Existing Liens Schedule 7.02(b)  Existing Indebtedness Schedule 7.02(e) 
Existing Investments Schedule 7.02(k)  Limitations on Dividends and Other
Payment Restrictions Schedule 8.01  Cash Management Accounts

 

Exhibit A  Form of Joinder Agreement Exhibit B  Form of Notice of Borrowing
Exhibit C  [Reserved] Exhibit D  Form of Borrowing Base Certificate Exhibit E 
Form of Assignment and Acceptance Exhibit F  Form of Compliance Certificate
Exhibit G  Form of Note Exhibit H  Form of Processor Letter

 

 

 

- iv -

 

FINANCING AGREEMENT

 

Financing Agreement, dated as of January 31, 2018, by and among Harvard
Bioscience, Inc., a Delaware corporation, a borrower (the "Parent" or the
"Borrowing Agent"), Plymouth Sub, Inc., a Delaware corporation and directly
wholly-owned subsidiary of the Parent, a borrower ("Merger Sub" or, prior to the
consummation of the Acquisition (as defined herein), the "Initial Borrower"),
which shall be merged with and into Data Sciences International, Inc., a
Delaware corporation (the "Target" or, immediately upon consummation of the
Acquisition, the "Surviving Borrower"), each of the other Borrowers (as defined
herein) and Guarantors (as defined herein) from time to time party hereto, the
lenders from time to time party hereto (each a "Lender" and collectively,
the "Lenders"), Cerberus Business Finance, LLC, a Delaware limited liability
company ("CBF"), as collateral agent and hypothecary representative for the
Secured Parties (in such capacity, together with its successors and assigns in
such capacity, the "Collateral Agent"), and CBF, as administrative agent for the
Lenders (in such capacity, together with its successors and assigns in such
capacity, the "Administrative Agent" and together with the Collateral Agent,
each an "Agent" and collectively, the "Agents").

 

RECITALS

 

The Borrowers (such term and all other capitalized terms used but not defined in
these Recitals have the meanings assigned to them in Section 1.01 below) have
asked the Lenders to extend credit to the Borrowers consisting of (a) a term
loan in the aggregate principal amount of $64,000,000 and (b) a revolving credit
facility in an aggregate principal amount not to exceed $25,000,000 at any time
outstanding, which will, on and after the ABL Commitment Date (as hereinafter
defined), include a subfacility for the issuance of letters of credit in an
aggregate amount not to exceed $5,000,000. The proceeds of the Term Loans and
the Revolving Loans made on the Effective Date shall be used (i) to repay
existing indebtedness of the Borrowers, (ii) to fund a portion of the
Acquisition pursuant to the terms of the Acquisition Agreement and (iii) to pay
fees and expenses related to the foregoing and to this Agreement and the
transactions contemplated hereby. The proceeds of the Revolving Loans made after
the Effective Date shall be used for general working capital purposes of the
Borrowers. The Letters of Credit will be used for general working capital
purposes of the Borrowers. The Lenders are severally, and not jointly, willing
to extend such credit to the Borrowers subject to the terms and conditions
hereinafter set forth in this Agreement.

 

In consideration of the premises and the covenants and agreements contained
herein, the parties hereto agree as follows:

 

Article I

DEFINITIONS; CERTAIN TERMS

 

Section 1.01        Definitions. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:

 

 

“ABL Commitment Date” means the date on which the Total Revolving Credit
Commitment is assigned to PNC or such other revolving lender (other than CBF or
any of its affiliates) reasonably acceptable to CBF and, to the extent required
under Section 12.07(a), the Borrowers.

 

"Account Debtor" means each debtor, customer or obligor in any way obligated on
or in connection with any Account Receivable (including, without limitation, any
applicable Credit Card Issuer or Credit Card Processor).

 

"Account Receivable" means, with respect to any Person, any and all accounts (as
that term is defined in the Uniform Commercial Code or the PPSA, as applicable)
and any and all rights of such Person to payment for goods sold or leased and/or
services rendered, including rights to receive payment in respect of accounts,
claims (within the meaning of the Civil Code of Québec), general intangibles (as
defined in the Uniform Commercial Code), intangibles (as defined in the PPSA),
bank and non-bank credit cards, and any and all such rights evidenced by chattel
paper, instruments or documents, whether due or to become due and whether or not
earned by performance, and whether now or hereafter acquired or arising in the
future, and any proceeds arising therefrom or relating thereto.

 

"Acquisition" means the Merger Sub’s merger with and into the Target, with the
result of the Target as the surviving entity and wholly owned subsidiary of the
Parent occurring on the Effective Date, pursuant to the Acquisition Agreement.

 

"Acquisition Agreement" means that certain Agreement and Plan of Merger, dated
as of January 22, 2018, by and among the Parent, Merger Sub, the Target and the
Stockholder Representative (as defined therein).

 

"Acquisition Documents" means the Acquisition Agreement and all other
agreements, instruments and other documents related thereto or executed in
connection therewith.

 

"Action" has the meaning specified therefor in Section 12.12.

 

"Administrative Agent" has the meaning specified therefor in the preamble
hereto.

 

"Administrative Agent's Account" means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Loan
Parties shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.

 

"Affiliate" means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition only,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the Equity Interests having ordinary voting power for the
election of members of the Board of Directors of such Person or (b) direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise. Notwithstanding anything herein to the contrary, in no
event shall any Agent or any Lender be considered an "Affiliate" of any Loan
Party.

 

- 2 -

 

"Agent" and "Agents" have the respective meanings specified therefor in the
preamble hereto.

 

"Agent Advances" has the meaning specified therefor in Section 10.08(a).

 

"Aggregate Line Cap" means at any time the lesser of (i) the Total Revolving
Credit Commitment and (ii) the Borrowing Base.

 

"Agreement" means this Financing Agreement, including all amendments,
restatements, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.

 

"Anti-Terrorism Laws" means any Requirement of Law applicable to any Covered
Entity relating to terrorism, economic or financial sanctions, trade embargoes
or money laundering, including, without limitation, to the extent applicable,
(a) the Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957),
(b) the Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330
and 12 U.S.C. §§ 1818(S), 1820(B) AND 1951 – 1959) (the "Bank Secrecy Act"), (c)
the USA Patriot Act, (d) Part II.1 of the Criminal Code, R.S.C. 1985 c.C-46, the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c.
17 and regulations promulgated pursuant to the Special Economic Measures Act,
S.C. 1992, c. 17 and the United Nations Act, R. S. C. 1985, c. U-2, (e) the
laws, regulations and Executive Orders administered by the United States
Department of the Treasury's Office of Foreign Assets Control or Her Majesty’s
Treasury of the United Kingdom ("HMT"), (f) the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 and implementing regulations by the
United States Department of the Treasury, (g) any law prohibiting or directed
against terrorist activities or the financing of terrorist activities (e.g., 18
U.S.C. §§ 2339A and 2339B), (h) United Nations sanctions imposed pursuant to any
United Nations Security Council Resolution, (i) the SECO Consolidated List of
Sanctioned Individuals, Entities and Organisations, (j) European Union
restrictive measures implemented pursuant to any EU Council or Commission
Regulation or Decision adopted pursuant to a Common Position in furtherance of
the EU's Common Foreign and Security Policy, (k) UK sanctions enacted by
statutory instrument pursuant to the United Nations Act 1946 or the European
Communities Act 1972, or (l) any similar laws enacted in the United States or
any other jurisdiction in which the parties to this Agreement operate, as any of
the foregoing laws may from time to time be amended, renewed, extended, or
replaced and all other present and future legal requirements of any Governmental
Authority governing, addressing, relating to, or attempting to eliminate,
terrorist acts and acts of war and any regulations promulgated pursuant thereto.

 

"Applicable Margin" means, as of any date of determination, with respect to any
Loan that is (i) a Reference Rate Loan, 4.75% or (ii) a LIBOR Rate Loan, 6.25%.

 

"Applicable Prepayment Premium" means, as of any date of determination,

 

(a)        with respect to prepayments of the Term Loans, an amount equal to (i)
during the period of time from and after the Effective Date up to and including
the date that is the first anniversary of the Effective Date (the "First
Period"), an amount equal to 3.00% times the principal amount of any prepayment
of the Term Loan on such date, (ii) after the First Period up to and including
the date that is the second anniversary of the Effective Date (the "Second
Period"), an amount equal to 2.00% times the principal amount of any prepayment
of the Term Loan on such date, (iii) after the Second Period up to and including
the date that is the third anniversary of the Effective Date (the "Third
Period"), an amount equal to 1.00% times the principal amount of any prepayment
of the Term Loan on such date and (iv) thereafter, zero; and

 

- 3 -

 

(b)        with respect to any termination or reduction of the Total Revolving
Credit Commitment, an amount equal to (i) during the First Period, an amount
equal to 2.50% times the amount of such termination or reduction of the Total
Revolving Credit Commitment on such date, (ii) during the Second Period, an
amount equal to 1.50% times the amount of such termination or reduction of the
Total Revolving Credit Commitment on such date, (iii) during the Third Period,
an amount equal to 0.50% times the amount of such termination or reduction of
the Total Revolving Credit Commitment on such date and (iv) thereafter, zero.

 

Notwithstanding the foregoing, no Applicable Prepayment Premium shall be due and
owing in connection with (i) any voluntary or mandatory prepayment of the
Revolving Loans (except as provided in Section 2.06(b)(i)), (ii)(x) any Term
Loan prepayment resulting from the events described in Section 2.05(c)(iv), (y)
Extraordinary Receipts referred to in clauses (a), (c) or (e) of the definition
thereof, or (z) Extraordinary Receipts referred to in clauses (b), (d) or (f) of
the definition thereof in an aggregate principal amount not exceeding $1,000,000
during the term of this Agreement and (iii) voluntary prepayments of the Term
Loan paid by the Borrowers to the extent necessary for the Loan Parties to
remain in compliance with the covenant set forth in clause (i) of Section
7.02(o); provided that, in the case of this clause (iii), (x) no Default or
Event of Default has occurred and is continuing either immediately before or
after giving effect to such prepayment, (y) there are no Revolving Loans
outstanding and accounts payable of the Loan Parties and their Subsidiaries are
not aged in excess of historical practices at the time of such prepayment and
(z) the aggregate principal amount of the Term Loan voluntarily prepaid pursuant
to this clause (iii) shall not exceed $5,000,000 during the term of this
Agreement.

 

"Application Date" has the meaning specified therefor in Section 8.01(g).

 

"Assignment and Acceptance" means an assignment and acceptance entered into by
an assigning Lender and an assignee, and accepted by the Collateral Agent, in
accordance with Section 12.07 hereof and substantially in the form of Exhibit E
hereto or such other form acceptable to the Collateral Agent.

 

"Authorized Officer" means, with respect to any Person, the chief executive
officer, chief operating officer, chief financial officer, treasurer or other
financial officer performing similar functions, president, executive vice
president, vice president (and additionally in the case of a UK Loan Party, a
director), secretary or assistant secretary of such Person or any other officer
of such Person designated as an "Authorized Officer" by any of the foregoing
officers in a writing delivered to the Agents.

 

"Availability" means, at any time, the difference between (a) the lesser of
(i) the Borrowing Base and (ii) the Total Revolving Credit Commitment and
(b) the sum of (i) the aggregate outstanding principal amount of all Revolving
Loans and (ii) all Letter of Credit Obligations.

 

- 4 -

 

"Bank" means PNC, its successors or any other bank designated by the
Administrative Agent to the Borrowers from time to time.

 

"Bank of America Facility" means that certain Third Amended and Restated Credit
Agreement, dated as of May 1, 2017, by and among the Parent, as the borrower,
Bank of America, N.A., as administrative agent, and the lenders party from time
to time thereto.

 

"Bank Product Agreements" means those certain cash management service agreements
entered into from time to time among any of the Borrowers, on the one hand, and
a Bank Product Provider, on the other hand, in connection with any of the Bank
Products, including, without limitation, any Lender-Provided Hedge Agreement
with respect to the Borrowers' interest rate exposure.

 

"Bank Product Obligations" means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Borrowers to any Bank
Product Provider pursuant to or evidenced by the Bank Product Agreements 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 such amounts that the Borrowers is obligated to reimburse to
Administrative Agent or any Lender as a result of Administrative Agent or such
Lender purchasing participations or executing indemnities or reimbursement
obligations with respect to the Bank Products provided to the Borrowers pursuant
to the Bank Product Agreements. Notwithstanding any of the foregoing, Bank
Product Obligations shall not include any Excluded Hedge Liabilities.

 

"Bank Product Provider" means Administrative Agent or Lender or Affiliate
thereof that provides Bank Products to the Borrowers.

 

"Bank Product Reserve" means, as of any date of determination, the lesser of (a)
$2,000,000 and (b) the amount of reserves that the Administrative Agent has
established (based upon the Administrative Agent's reasonable determination in
its Permitted Discretion of the credit exposure in respect of the then extant
Bank Products) in respect of Bank Products then provided or outstanding;
provided that, in order to qualify as a Bank Product Reserve, such reserve must
be established on or substantially contemporaneous with the date that the
applicable Bank Product is provided.

 

"Bank Products" means any service or facility extended to the Borrowers by any
Lender or its Affiliates including: (a) credit cards, (b) credit card processing
services, (c) debit cards and stored value cards, (d) purchase cards and
commercial cards, (e) ACH transactions, (f) cash management and treasury
management services and products, including without limitation controlled
disbursement, accounts or services, lockboxes, automated clearinghouse
transactions, overdrafts, interstate depository network services, or
(g) Lender-Provided Hedge Agreements and other foreign exchange or "FX" cash
management products.

 

- 5 -

 

"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. § 101, et
seq.), as amended from time to time, and any successor statute or any similar
federal or state laws for relief of debtors.

 

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

 

"Board of Directors" means, (a) with respect to any corporation or English
limited company, the board of directors of the corporation (or company) or any
committee thereof duly authorized to act on behalf of such board, (b) with
respect to a partnership, the board of directors or equivalent governing body of
the general partner of the partnership, (c) with respect to a limited liability
company, the managing member or members or any controlling committee or board of
managers of such company or the sole member or the managing member thereof, and
(d) with respect to any other Person, the entity, individual, board or committee
of such Person serving a similar function.

 

"Borrowers" means, collectively, (a) the Borrowing Agent, (b) prior to the
consummation of the Acquisition, the Initial Borrower, (c) immediately upon the
consummation of the Acquisition and thereafter, the Surviving Borrower, (d) each
subsidiary of the Parent listed as a "Borrower" on the signature pages hereto
and (e) each other Person that executes a joinder agreement and becomes a
"Borrower" hereunder.

 

"Borrowing Agent" has the meaning assigned to such term in Section 4.05.

 

"Borrowing Base" means, at any time, an amount equal to the difference between:

 

(a)       the sum of:

 

(i)       eighty-five percent (85%) of Eligible Accounts (or, with respect to
Eligible Insured Foreign Receivables, 90%), plus

 

(ii)       the lower of (A) $7,000,000 and (B) the sum of:

 

(1) the lower of (x) sixty-five percent (65%) of the value of Eligible Inventory
(excluding Eligible Work-in-Process), valued at the lower of cost and market and
(y) eighty-five percent (85%) of the most recently determined Net Liquidation
Percentage of the value of Eligible Inventory (excluding Eligible
Work-in-Process) at such time calculated separately for raw materials and
finished goods, plus

 

(2) the lowest of (x) sixty percent (60%) of the value of the Eligible
Work-in-Process, valued at the lower of cost (on a first in first out basis) and
market, (y) eighty percent (80%) of the most recently determined Net Liquidation
Percentage of the value of the Eligible Work-in-Process at such time and (z)
$1,000,000; and

 

(b)       the aggregate amount of Reserves established by the Administrative
Agent in its Permitted Discretion at such time. The Borrowers acknowledge that
imposing Reserves may limit or restrict Revolving Loans requested by the
Borrowers.

 

- 6 -

 

Notwithstanding anything to the contrary in the defined term “Borrowing Base”,
none of the Eligible Inventory located at the Foreign Loan Parties' locations in
Canada or the United Kingdom shall be included in the Borrowing Base until the
Administrative Agent shall have received field examinations and/or appraisals of
such Eligible Inventory, in each case in form and substance reasonably
acceptable to Administrative Agent in its Permitted Discretion.

 

The foregoing advance rates may be increased or decreased by the Administrative
Agent at any time and from time to time in its Permitted Discretion; provided
that the Administrative Agent shall, where commercially practicable, endeavor to
provide the Borrowing Agent with five (5) Business Days' prior notice of its
decision to decrease the advance rates during which period the Administrative
Agent and Borrowing Agent may discuss such proposed decrease. Subject to the
foregoing, the Borrowers consent to any such increases or decreases and
acknowledge that decreasing the advance rates or increasing or imposing Reserves
may limit or restrict Revolving Loans requested by the Borrowing Agent on behalf
of Borrowers.

 

"Borrowing Base Assets" means Eligible Accounts and Eligible Inventory included
within the calculation of the Borrowing Base as set forth in the most recent
Borrowing Base Certificate then delivered to any Agent.

 

"Borrowing Base Certificate" means a certificate signed by an Authorized Officer
of the Borrowing Agent and setting forth the calculation of the Borrowing Base
in compliance with Section 7.01(a)(vi), substantially in the form of Exhibit D.

 

"Business Day" means (a) for all purposes other than as described in clauses (b)
and (c) below, any day other than a Saturday, Sunday or a legal holiday on which
commercial banks are authorized or required by law to be closed for business in
East Brunswick, New Jersey or New York City, (b) with respect to the borrowing,
payment or continuation of, or determination of interest rate on, LIBOR Rate
Loans, any day that is a Business Day described in clause (a) above and on which
dealings in Dollars may be carried on in the interbank eurodollar markets in New
York City and London, and (c) with respect to any matter relating to the
Canadian Loan Parties, any day that is a Business Day described in clause (a)
above and which is not a legal holiday on which commercial banks are authorized
or required by law to be closed for business in Toronto, Ontario.

 

"Capital Expenditures" means, with respect to any Person for any period, the sum
of (a) the aggregate of all expenditures by such Person and its Subsidiaries
during such period that in accordance with GAAP are or should be included in
"property, plant and equipment" or in a similar fixed asset account on its
balance sheet, whether such expenditures are paid in cash or financed (including
all Capitalized Lease Obligations that are paid or due and payable during such
period), and (b) to the extent not covered by clause (a) above, the aggregate of
all expenditures by such Person and its Subsidiaries during such period to
acquire by purchase or otherwise the business or fixed assets of, or the Equity
Interests of, any other Person; provided that the term Capital Expenditures
shall not include (i) expenditures to the extent that they are made with the
proceeds of Reinvestment Eligible Funds, (ii) expenditures to the extent that
they are made by the Parent or any of its Subsidiaries to effect leasehold
improvements to any property leased by such Person as lessee, to the extent that
such expenses have been reimbursed in cash by the landlord that is not a Loan
Party, (iii) a Permitted Acquisition, and (iv) expenditures to the extent that
they are actually paid for by a third party (excluding any Loan Party) and for
which no Loan Party has provided or is required to provide or incur, directly or
indirectly, any consideration or monetary obligation to such third party or any
other person (whether before, during or after such period).

 

- 7 -

 

"Capitalized Lease" means, with respect to any Person, any lease of or other
arrangement conveying the right to use real or personal property by such Person
as lessee which is (a) required under GAAP to be capitalized on the balance
sheet of such Person or (b) a transaction of a type commonly known as a
"synthetic lease" (i.e., a lease transaction that is treated as an operating
lease for accounting purposes but with respect to which payments of rent are
intended to be treated as payments of principal and interest on a loan for
Federal income tax purposes); provided that with respect to leases that are
accounted for by any Person as operating leases as of the Effective Date or are
entered into after the Effective Date, and would have been accounted for as
operating leases if such lease had been in effect on the Effective Date such
leases may, in the sole discretion of the Borrowers, be accounted for as
operating leases and not as Capitalized Leases.

 

"Canadian Benefit Plan" means any plan, fund, program or policy, whether oral or
written, formal or informal, funded or unfunded, insured or uninsured, providing
material employee benefits, including medical, hospital care, dental, sickness,
accident, disability, life insurance, pension, retirement or savings benefits,
under which any Loan Party has any liability with respect to any employee or
former employee of a Canadian Loan Party, but shall exclude Canadian Pension
Plans and Statutory Plans.

 

"Canadian Defined Benefit Pension Plan" means any Canadian Pension Plan which
contains a “defined benefit provision”, as defined in Section 147.1(1) of the
Income Tax Act (Canada).

 

"Capitalized Lease Obligations" means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Leases, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

 

"Canadian Loan Parties" means Ealing Scientific Ltd., which is party hereto as a
Guarantor.

 

“Canadian Pension Plan” means each pension plan required to be registered under
Canadian federal or provincial law that is maintained or contributed to by a
Loan Party for employees or former employees of a Canadian Loan Party, but shall
exclude Statutory Plans.

 

“Canadian Pension Termination Event” means (a) the voluntary full or partial
wind up or a Canadian Pension Plan that is a registered pension plan by a
Canadian Loan Party or the taking of any action for the purpose of effecting the
foregoing; (b) the institution of proceedings by any Governmental Authority to
terminate in whole or in part or have a trustee appointed to administer such a
plan; (c) any other event or condition which might constitute grounds for the
termination of, winding up or partial termination of, winding up or the
appointment of trustee to administer, any such plan.

 

- 8 -

 

“Canadian Priority Payables Reserves” shall mean with respect to any Collateral
of a Canadian Loan Party or other Collateral located in, or subject to the laws
of, Canada (a) the full amount of all obligations, liabilities or indebtedness
of any Loan Party that (i) have a trust, deemed trust or statutory lien imposed
to provide for payment or a Lien, choate or inchoate, ranking or capable or
ranking senior to or pari passu with Liens securing the Obligations on any
Collateral under any Applicable Law of Canada or any province or territory
thereof, or (ii) have a right imposed to provide for payment ranking or capable
or ranking senior or pari passu with the Obligations under any Applicable Law of
Canada or any province or territory thereof, including claims for unremitted
and/or accelerated rents, utilities, taxes (including sales taxes and goods and
services taxes and harmonized sales taxes and withholding taxes), amounts
payable to an insolvency administrator, wages (including wages under the Wage
Earner Protection Program Act), employee withholdings and deductions (including
amount payable with respect to Statutory Plans) and vacation pay, severance and
termination pay, government royalties and pension fund obligations (including,
without duplication, normal cost contributions and any special payments required
to be made) and any amounts, whether or not due, representing wind-up deficiency
or position with respect to Canadian Pension Plans), and (b) the amount equal to
the aggregate value of the Inventory in Canada which the Administrative Agent,
in good faith, and on a reasonable basis, considers is or may be subject to
retention of title by a supplier or a right of a supplier to recover possession
thereof, where such supplier’s rights has priority over the Liens securing the
Obligation, including, without limitation, Inventory subject to a right of a
supplier to repossess goods pursuant to Section 81.1 of the Bankruptcy and
Insolvency Act (Canada) or any other Applicable Laws granting revendication or
similar rights to unpaid suppliers.

 

"Canadian Security Documents" means those documents listed on Schedule 1.01(C)
hereto and any other agreement governed by the laws of Canada or any province or
territory thereof which are required by the Collateral Agent and which are
entered into at any time by any Loan Party in connection with this Agreement.

 

"Cash Collateralize" means to deliver to the Administrative Agent an amount
(whether in cash or in the form of a backstop letter of credit in form and
substance reasonably satisfactory to, and issued by a U.S. commercial bank
reasonably acceptable to, the Administrative Agent in its commercially
reasonable discretion) equal to 105% of the sum of (a) the maximum aggregate
amount available for drawing under any outstanding Letter of Credit plus the
aggregate amount of all unreimbursed payments and disbursements under such
Letter of Credit which have not been converted to Revolving Loans plus (b) the
amount of unpaid letter of credit fees then accrued. Derivatives of the term
"Cash Collateralize" shall have corresponding meanings. Without limiting the
generality of any other grant of Liens in any Loan Documents, each Loan Party
hereby grants to the Administrative Agent a continuing and first priority
security interest in all Cash Collateral delivered to the Administrative Agent
to secure all Letter of Credit Obligations.

 

"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof;
(b) commercial paper, maturing not more than 270 days after the date of issue
rated P-1 by Moody's or A-1 by Standard & Poor's; (c) certificates of deposit
maturing not more than six months after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (d) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (c) above and which are secured by marketable direct obligations of the
United States Government or any agency thereof; (e) money market accounts
maintained with mutual funds having assets in excess of $2,500,000,000, which
assets are primarily comprised of Cash Equivalents described in another clause
of this definition; (f) marketable tax exempt securities rated A or higher by
Moody's or A+ or higher by Standard & Poor's, in each case, maturing within six
months from the date of acquisition thereof; and (g) in the case of Investments
by a Foreign Subsidiary, investments/instruments corresponding to and with
equivalent quality to investments/instruments described in the foregoing clauses
(a) through (f) available in and/or guaranteed by the equivalent Governmental
Authorities in the country in which such Foreign Subsidiary is located.

 

- 9 -

 

"Cash Management Accounts" means the bank accounts of each Loan Party (other
than Excluded Accounts) maintained at one or more Cash Management Banks listed
on Schedule 8.01.

 

"Cash Management Agreement" means, with respect to any deposit account, any
securities account, commodity account, futures account, securities entitlement,
commodity contract or futures contract (other than Excluded Accounts), an
agreement, in form and substance reasonably satisfactory to the Agents, among
the Collateral Agent, the financial institution or other Person at which such
account is maintained or with which such entitlement or contract is carried and
the Loan Party maintaining such account, effective to grant "control" (as
defined under the applicable UCC, the PPSA or the Civil Code of Québec, as
applicable) over such account to the Collateral Agent, and otherwise to grant
the Collateral Agent with customary blocked account arrangements (including an
agreement in the form of an executed acknowledgement by the relevant financial
institution or other Person where envisaged by a UK Security Document, in form
and substance satisfactory to the Collateral Agent).

 

"Cash Management Bank" has the meaning specified therefor in Section 8.01(a).

 

"Cash Sweep Triggering Event" means either (a) each period beginning upon the
occurrence of an Event of Default until no Event of Default is continuing or (b)
each period beginning on the date that the sum of Availability of the Parent and
its Subsidiaries is less than the greater of (A) 10% of the Aggregate Line Cap
and (B) $2,500,000 for five (5) consecutive Business Days and ending on the date
that the Availability of the Parent and its Subsidiaries is equal to or greater
than the greater of (A) 10% of the Aggregate Line Cap and (B) $2,500,000 for
thirty (30) consecutive days.

 

"CBF" has the meaning specified therefor in the preamble hereto.

 

"CFC" means a “controlled foreign corporation” as that term is defined in
Section 957(a) of the Internal Revenue Code.

 

- 10 -

 

"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule,
regulation, judicial ruling, judgment or treaty, (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith (whether or not having
the force of law) and (ii) all requests, rules, regulations, guidelines,
interpretations 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 (whether or not having the force of law), in each case,
pursuant to Basel III, shall, in each case, be deemed to be a "Change in Law,"
regardless of the date enacted, adopted or issued, promulgated or implemented.

 

"Change of Control" means each occurrence of any of the following:

 

(a)       the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial
ownership of more than 35%

 

of the aggregate outstanding voting or economic power of the Equity Interests of
the Parent;

 

(b)       during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Parent
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Parent was approved by
a vote of at least a majority of the directors of the Parent then still in
office who were either directors at the beginning of such period, or whose
election or nomination for election was previously approved) cease for any
reason to constitute a majority of the Board of Directors of the Parent; or

 

(c)       Parent fails at any time to own, directly or indirectly, free and
clear of all Liens (other than Permitted Liens), 100% of the Equity Interests of
each other Loan Party, other than pursuant to a disposition or other transaction
permitted hereunder.

 

"Collateral" means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien
is granted or purported to be granted pursuant to the applicable Security
Documents by such Person in favor of the Collateral Agent, for the benefit of
Secured Parties, as security for all or any part of the Obligations.

 

"Collateral Agent" has the meaning specified therefor in the preamble hereto.

 

"Collateral Assignment" means the Collateral Assignment of Rights, dated as of
the date hereof, reasonably satisfactory to the Collateral Agent, made by the
Parent and Merger Sub in favor of the Collateral Agent for the benefit of the
Secured Parties in respect of the Acquisition Documents.

 

- 11 -

 

"Collateral Records" means, to the extent relating to Accounts Receivable,
Inventory, the other Revolver Priority Collateral or any Account Debtor or other
Person obligated on or in connection with any of the Accounts Receivable, all of
the Borrowers' and all of the other Loan Parties' present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data, together with the tapes, disks,
diskettes and other data and software storage media and devices, file cabinets
or containers in or on which the foregoing are stored (including any rights of
the Borrowers and the other Loan Parties with respect to the foregoing
maintained with or by any other person).

 

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

 

"Commitments" means, with respect to each Lender, such Lender's Revolving Credit
Commitment and Term Loan Commitment.

 

"Compliance Certificate" has the meaning assigned to such term in
Section 7.01(a)(iv).

 

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

 

"Consolidated EBITDA" means, with respect to any Person for any period,

 

(a)                the Consolidated Net Income of such Person for such period,

 

plus

 

(b)               without duplication, the sum of the following amounts for such
period to the extent deducted in the calculation of Consolidated Net Income
(other than with respect to clause (b)(viii) below) for such period:

 

(i)                 Consolidated Net Interest Expense,

 

(ii)               any provision for income taxes or other taxes measured by net
income,

 

(iii)             any depreciation and amortization expense (including
amortization of intangible assets (including goodwill)),

 

(iv)             all non-cash charges, expenses, items and losses (excluding any
such non-cash charge, expense, item or loss to the extent that it represents an
accrual or reserve for a cash expense in any future period that will occur prior
to the Final Maturity Date or amortization of a prepaid cash expense that was
paid in a prior period that occurred after the Effective Date) related to (A)
non-cash items for any management equity plan, or stock option plan or other
type of compensatory plan for the benefit of officers, directors or employees,
(B) non-cash charges attributable to any post-employment benefits offered to
former employees, and (C) non-cash asset impairments,

 

- 12 -

 

(v)               all fees, costs and expenses incurred within one-hundred and
eighty (180) days of the Effective Date in connection with the Transactions and
Denville Sale,

 

(vi)             extraordinary or non-recurring charges, expenses or losses;
reasonably identifiable and factually supportable restructuring charges, costs
and expenses (as set forth in a certificate of an Authorized Officer of the
Parent); severance costs; non-cash reserves in connection with the Transactions;
provided, that the aggregate amount added back pursuant to this clause (vi) for
any measurement period shall not exceed 15.0% of Consolidated EBITDA of the
Parent and its Subsidiaries for such period (calculated before giving effect to
any adjustment pursuant to this clause (vi)),

 

(vii)           (A) any net loss from disposed operations (and any costs and
expenses related to such disposal) and (B) losses, charges and expenses
attributable to any Disposition of property (other than Accounts Receivable and
Inventory) out of the ordinary course of business by such Person,

 

(viii)         cost savings, operating expense reductions and/or synergies set
forth on Schedule 1.01(E) (collectively, the "DSI Adjustments"); provided, that
(A) in each case, such DSI Adjustments are calculated on a pro forma basis as
though such DSI Adjustments had been realized on the first day of such period
and (B) the aggregate amount of DSI Adjustments added back pursuant to this
clause (viii) shall not exceed: (w) $374,625 for the Fiscal Quarter ending March
31, 2018, (x) $249,750 for the Fiscal Quarter ending June 30, 2018, (y) $124,875
for the Fiscal Quarter ending September 30, 2018 and (z) thereafter, zero,

 

(ix)             cost savings, operating expense reductions or synergies
(collectively, "Pro Forma Adjustments") related to mergers and other business
combinations or acquisitions; provided, that (A) in each case, such Pro Forma
Adjustments are calculated on a pro forma basis as though such Pro Forma
Adjustments had been realized on the first day of such period, (B) such Pro
Forma Adjustments are reasonable and validated by a quality of earnings
diligence report provided by a third party that is reasonably acceptable to the
Agents (the "Quality of Earnings Report") and (C) the aggregate amount of Pro
Forma Adjustments added back pursuant to this clause (ix) for any period shall
not exceed the lesser of (x) 5.0% of Consolidated EBITDA of the Parent and its
Subsidiaries for such period (calculated before giving effect to any adjustment
pursuant to this clause (ix)) and (y) 20% of the EBITDA of the target entity as
set forth in the relevant Quality of Earnings Report,

 

(x)               any net realized or unrealized loss during such period
resulting from currency transaction or translation losses, including those
related to currency remeasurements of Indebtedness (including any losses
resulting from Swaps and intercompany Indebtedness),

 

- 13 -

 

(xi)             any non-cash impairment losses resulting from any reappraisal,
revaluation or write-up or write-down of assets,

 

(xii)           any unrealized hedging losses pursuant to Hedging Agreements,

 

(xiii)         any other non-cash expenditure, charge or loss for such period
(other than any non-cash expenditure, charge or loss relating to write-offs,
write-downs or reserves with respect to Accounts Receivable and Inventory), and

 

(xiv)         to the extent not already included in clauses (i) through (xiii)
above, such other addbacks and adjustments that have been agreed to between the
Parent and the Agents prior to the Effective Date and are contained in (i) the
quality of earnings report, dated January 17, 2018, in respect of the Parent
that was previously delivered to the Agents or (ii) the quality of earnings
report, dated November 15, 2017, in respect of the Target that was previously
delivered to the Agents,

 

minus

 

(c)                without duplication, the sum of the following amounts for
such period to the extent included in the calculation of such Consolidated Net
Income for such period:

 

(i)                 any credit for income taxes or other taxes measured by net
income,

(ii)               any gain from extraordinary or non-recurring items,

 

(iii)             (A) any aggregate net gain from disposed operations (and any
aggregate net gains related to such disposal) and (B) any aggregate net gain
from the Disposition of property (other than Accounts Receivable and Inventory)
out of the ordinary course of business by such Person,

 

(iv)             any net realized or unrealized gain during such period
resulting from currency transaction or translation gains, including those
related to currency remeasurements of Indebtedness (including any gains
resulting from Swaps and intercompany Indebtedness),

 

(v)               any non-cash impairment gains resulting from any reappraisal,
revaluation or write-up or write-down of assets,

 

(vi)             any unrealized hedging gains pursuant to Hedging Agreements,
and

 

(vii)           any other non-cash gain, including any reversal of a charge
referred to in clause (b)(xiii) above by reason of a decrease in the value of
any Equity Interest,

 

in each case for the components of clauses (a), (b) and (c), determined on a
consolidated basis in accordance with GAAP.

 

- 14 -

 

Notwithstanding anything to the contrary contained herein, for each of the
periods set forth in the table below, Consolidated EBITDA of the Parent and its
Subsidiaries shall be deemed to be the applicable amounts corresponding to such
fiscal periods set forth below (provided, however, that to the extent the
amounts set forth below deviate from the amounts for the applicable fiscal
periods set forth below by greater than 5% pursuant to the audited financial
statements for Fiscal Year 2017 as required to be delivered pursuant to Section
7.01(a)(iii), the amounts set forth below shall be adjusted to match the amount
set forth in such audited financial statements):

 

Fiscal Period Consolidated EBITDA Fiscal Quarter ended March 31, 2017 $3,822,887
Fiscal Quarter ended June 30, 2017 $4,653,485 Fiscal Quarter ended September 30,
2017 $2,741,084 Fiscal Quarter ended December 31, 2017 $4,749,461

 

 

"Consolidated Net Income" means, with respect to any Person, for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period; provided, however, that the following shall be excluded: (a) the net
income of any other Person in which such Person or one of its Subsidiaries has a
joint interest with a third-party (which interest does not cause the net income
of such other Person to be consolidated into the net income of such Person),
except to the extent of the amount of dividends or distributions paid to such
Person or Subsidiary, (b) the net income of any Subsidiary of such Person that
is, on the last day of such period, subject to any restriction or limitation on
the payment of dividends or the making of other distributions, to the extent of
such restriction or limitation, (c) the net income of any other Person arising
prior to such other Person becoming a Subsidiary of such Person or merging or
consolidating into such Person or its Subsidiaries, and (d) any tax refunds, net
operating losses or other net tax benefits received during such period on
account of any prior period.

 

"Consolidated Net Interest Expense" means, with respect to any Person for any
period, (a) the sum of (i) gross interest expense of such Person and its
Subsidiaries payable in cash for such period determined on a consolidated basis
and in accordance with GAAP (including, without limitation, interest expense
paid to Affiliates (other than Loan Parties) of such Person) and (ii) loan
servicing fees and other similar fees (including letter of credit fees) payable
in cash during such period, less (a) the sum of (i) interest income (including
interest paid-in-kind) for such period and (ii) gains for such period on Hedging
Agreements (to the extent not included in interest income above and to the
extent not deducted in the calculation of gross interest expense), plus (b) the
sum of (i) losses for such period on Hedging Agreements (to the extent not
included in such gross interest expense) and (ii) the upfront costs or fees for
such period associated with Hedging Agreements (to the extent not included in
such gross interest expense), in each case, determined on a consolidated basis
and in accordance with GAAP.

 

- 15 -

 

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

 

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

 

"Contribution Notice" means a contribution notice issued by the Pensions
Regulator under section 38 or section 47 of the Pensions Act 2004.

 

"Controlled Deposit Account" means each deposit account (including all funds on
deposit therein) that is the subject of an effective Cash Management Agreement
and that is maintained by any Loan Party with a financial institution approved
by the Collateral Agent.

 

"Controlled Investment Affiliate" means, as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition only, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

 

"Controlled Securities Account" means each securities account or commodity
account or futures account (including all financial assets held therein and all
certificates and instruments, if any, representing or evidencing such financial
assets) that is the subject of an effective Cash Management Agreement and that
is maintained by any Loan Party with a securities intermediary or commodity
intermediary approved by the Collateral Agent.

 

- 16 -

 

"Covered Entity" means (a) Parent, each of the Borrowers, Parent's Subsidiaries,
all Guarantors and all pledgors of Collateral and (b) each Person that, directly
or indirectly, is in control of a Person described in clause (a) above. For
purposes of this definition only, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 25% or more of the issued and
outstanding Equity Interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

 

"Credit Card Agreements" means all agreements now or hereafter entered into by
any Loan Party with any Credit Card Issuer or any Credit Card Processor (in each
case, in such capacity), or with any other Person for the processing and/or
payment of the proceeds of any Credit Card Receivables, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

 

"Credit Card Issuer" means any Person (other than a Borrower) who issues or
whose members issue credit cards or debit cards, including without limitation,
MasterCard or VISA bank credit or debit cards or other bank credit or debit
cards issued through MasterCard International, Inc., Visa, U.S.A., Inc., or Visa
International and American Express, Discover, Diners Club, Carte Blanche and
other non-bank credit or debit cards, including without limitation, credit or
debit cards issued by or through American Express Travel Related Services
Company, Inc. or Discover Financial Services, Inc.

 

"Credit Card Processor" means any servicing or processing agent or any factor or
financial intermediary who facilitates, services, processes or manages the
credit authorization, billing transfer and/or payment procedures with respect to
any Loan Party's sales transactions involving credit card or debt card purchases
by Customers using credit cards or debit cards issued by any Credit Card Issuer.

 

"Credit Card Receivables" means each "account", "payment intangible", "general
intangible" (each, as defined in the UCC) or “intangible” (as defined in the
PPSA) together with all income, payments and proceeds thereof, owed by a Credit
Card Issuer or Credit Card Processor to a Loan Party resulting from charges by a
Customer of a Loan Party on credit or debit cards issued by a Credit Card Issuer
in connection with the sale of goods or the performance of services by a Loan
Party in the ordinary course of business.

 

"Current Value" has the meaning specified therefor in Section 7.01(o).

 

"Customer" means and includes the account debtor with respect to any Account
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Loan Party,
pursuant to which such Loan Party is to deliver any personal property or perform
any services.

 

"Daily LIBOR Rate" means, for any day, the Published Rate.

 

- 17 -

 

"Debtor Relief Law" means the Bankruptcy Code, the Bankruptcy and Insolvency Act
(Canada), the Companies’ Creditors Arrangement Act (Canada), the Wind-Up and
Restructuring Act (Canada) and any other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, administration, insolvency, reorganization, or similar debtor
relief law (including, without limitation, any proceeding under applicable
corporate law seeking a compromise or arrangement of any debts of the
corporation or a stay of proceedings to enforce any of the claims of the
corporation's creditors against it) of the United States, Canada or other
applicable jurisdiction from time to time in effect.

 

"Default" means an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

 

"Defaulting Lender" means any Revolving Loan Lender that (a) has failed to (i)
fund all or any portion of its Loans within 2 Business Days of the date such
Loans were required to be funded hereunder unless such Lender notifies the
Administrative Agent and the Borrowing Agent 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, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer 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 2 Business Days of the
date when due, (b) has notified the Borrowing Agent or the Administrative Agent
(or any L/C Issuer) 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, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within 3
Business Days after written request by the Administrative Agent or the Borrowing
Agent to confirm in writing to the Administrative Agent and the Borrowing Agent
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 the Administrative Agent and
the Borrowing Agent), or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any Debtor Relief Law, or
(ii) had appointed for it a receiver, receiver and manager, custodian,
conservator, trustee, administrator, liquidator, monitor, 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, federal, provincial, territorial or foreign
regulatory authority acting in such a capacity. Notwithstanding anything herein
to the contrary, a Lender shall not be a Defaulting Lender solely by virtue of
the ownership or acquisition of any Equity Interest in that Lender or any direct
or indirect parent company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such Lender with immunity from
the jurisdiction of courts within the United States or Canada or from the
enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender. Any determination
by the Administrative Agent that a Lender is a Defaulting Lender under 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 the Borrowing Agent, each L/C Issuer and each
Lender.

 

- 18 -

 

"Denville" means Denville Scientific, Inc.

 

"Denville Earn-out" means any earn-out payments and other contingent
consideration paid to any Loan Party in connection with the Denville Sale.

 

"Denville Sale" means the sale by the Parent of substantially all of the assets
of Denville pursuant to that certain Purchase Agreement, dated as of January 22,
2018, by and among Thomas Scientific, LLC, a Delaware limited liability company,
as buyer, Denville, as seller, and the Parent, as stockholder.

 

"Deposit Accounts" means "deposit accounts" (as that term is defined in the
Uniform Commercial Code), and also includes any bank account, deposit account or
other account maintained with a bank, credit union or other financial
institution.

 

"Dilution" means, as of any date of determination on a consolidated basis for
all Loan Parties, a percentage, based upon the experience of the immediately
prior 365 consecutive days, 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 Loan Parties' Accounts during such period, by (b)
invoices for services rendered by the Loan Parties during such period (but in no
event shall the Dilution Reserve be less than zero).

 

"Dilution Reserve" means, as of any date of determination, an amount equal to
Dilution in excess of five percent (5%) for any period.

 

"Disposition" means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells (including, without
limitation, any sale and leaseback transaction), assigns, transfers, leases,
licenses (as licensor) or otherwise disposes of any property or assets (whether
now owned or hereafter acquired) to any other Person, in each case, whether or
not the consideration therefor consists of cash, securities or other assets
owned by the acquiring Person. For purposes of clarification, "Disposition"
shall include (a) the sale or other disposition for value of any contracts, (b)
the early termination or modification of any contract resulting in the receipt
by any Loan Party of a cash payment or other consideration in exchange for such
event (other than payments in the ordinary course for accrued and unpaid amounts
due through the date of termination or modification) or (c) any sale of merchant
accounts (or any rights thereto (including, without limitation, any rights to
any residual payment stream with respect thereto)) by any Loan Party.

 

"Disqualified Equity Interests" means any Equity Interest that, by its terms (or
by the terms of any security or other Equity Interest into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition, (a) matures or is mandatorily redeemable, 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 and the termination of the
Commitments), (b) is redeemable at the option of the holder thereof, in whole or
in part, (c) provides for the scheduled payments of dividends or distributions
in cash, or (d) is convertible into or exchangeable for (i) Indebtedness or (ii)
any other Equity Interests that would constitute Disqualified Equity Interests,
in each case of clauses (a) through (d), prior to the date that is six months
after the Final Maturity Date.

 

- 19 -

 

"Disregarded Domestic Person" means any direct or indirect domestic Subsidiary
of the Parent that is treated as a disregarded entity for U.S. federal income
tax purposes, if substantially all of its assets constitutes the equity of one
or more direct or indirect Foreign Subsidiaries that are CFCs or other
Disregarded Domestic Persons except to the extent such entities are Foreign Loan
Parties.

 

"Document" shall have the meaning given to the term "document" in the Uniform
Commercial Code.

 

"Dollar," "Dollars" and the symbol "$" each means lawful money of the United
States of America.

 

"Domestic Subsidiary" means any Subsidiary of any Person that is organized under
the laws of the United States of America or any state or commonwealth thereof or
under the laws of the District of Columbia.

 

"Drawing Date" has the meaning specified therefor in Section 3.04(b).

 

"Effective Date" has the meaning specified therefor in Section 5.01.

 

"Eligibility Date" means, with respect to each Borrower and each Guarantor and
each Swap, the date on which this Agreement or any other Loan Document becomes
effective with respect to such Swap (for the avoidance of doubt, the Eligibility
Date shall be the effectiveness date of such Swap if this Agreement or any other
Loan Document is then in effect with respect to such Borrower or such Guarantor,
and otherwise it shall be the Effective Date and/or such other Loan Document(s)
to which such Borrower or such Guarantor is a party).

 

"Eligible Accounts" means and includes with respect to each Account Receivable
(other than Credit Card Receivables) of any Loan Party that arises in the
ordinary course of business from the sale, delivery or lease of goods or
rendition of services and is payable in Dollars or, in the case of Canadian Loan
Parties, Canadian Dollars, or, in the case of UK Loan Parties, GBP, and in each
case, which (a) is genuine and in all respects what it purports to be, and it is
not evidenced by a judgment, (b) to the best of the Loan Parties' knowledge,
there are no facts, events or occurrences which in any way impair the validity
or enforceability of any Account Receivable or tend to reduce the amount payable
thereunder from the face amount of the invoice and statements delivered or made
available to the Administrative Agent with respect thereto, and (c) to the best
of the Loan Parties' knowledge, there are no proceedings or actions which are
pending against the Account Debtor which would be reasonably likely to result in
any material adverse change in such Account Debtor's financial condition or the
collectability of such Account Receivable. An Account Receivable shall not be
deemed eligible absent a reasonably satisfactory field exam. Without limiting
the generality of the foregoing, no Account Receivable shall be an Eligible
Account if:

 

- 20 -

 

(i)       it arises out of a sale made or services rendered by such Loan Party
to an Affiliate of such Loan Party or to a Person controlled by an Affiliate of
such Loan Party;

 

(ii)       it remains unpaid (x) more than ninety (90) days (or such longer
period as agreed by the Administrative Agent in its sole discretion) after its
original invoice date shown on the invoice or (y) sixty (60) days after its due
date;

 

(iii)       the total unpaid Accounts Receivable of the Account Debtor exceed
20% of the net amount of all Eligible Accounts, but only to the extent of such
excess; provided that the provisions of this clause (iii) shall not apply to (A)
Account Debtors in the United States or Canada that have a rating of at least
Baa3 (stable outlook) from Moody's or BBB- (stable outlook) from S&P or (B) the
United States government or any agency or department thereof;

 

(iv)       the Account Debtor is also a creditor or supplier of a Loan Party or
any Subsidiary of a Loan Party, or the Account Debtor has disputed liability
with respect to such Accounts Receivable, or the Account Debtor has made any
claim with respect to any other Accounts Receivable due from such Account Debtor
to a Loan Party or any Subsidiary of a Loan Party, or the Account otherwise is
subject to right of setoff by the Account Debtor; provided that any such
Accounts Receivable shall be eligible to the extent such amount thereof exceeds
such contract, dispute, claim, setoff or similar right;

 

(v)       the Account Debtor has commenced a voluntary case under the Debtor
Relief Laws, as now constituted or hereafter amended, or made an assignment for
the benefit of creditors, or a decree or order for relief has been entered by a
court having jurisdiction in the premises in respect of the Account Debtor in an
involuntary case under the Debtor Relief Laws, as now constituted or hereafter
amended, or any other petition or other application for relief under Debtor
Relief Laws, as now constituted or hereafter amended, has been filed against the
Account Debtor, or if the Account Debtor has failed, suspended business, ceased
to be Solvent, or consented to or suffered a receiver, receiver and manager,
custodian, conservator, trustee, administrator, liquidator, monitor, assignee
for the benefit of creditors, sequestrator or other similar officeal to be
appointed for it or for all or a significant portion of its assets or affairs;

 

(vi)       (x) in the case of US Loan Parties, it arises from a sale made or
services rendered to an Account Debtor that is not domiciled in the United
States, any state thereof or the District of Columbia, unless the sale is backed
by a letter of credit from an issuer acceptable to the Administrative Agent or
constitutes Eligible Insured Foreign Receivables, (y) in the case of Canadian
Loan Parties, it arises from a sale made or services rendered to an Account
Debtor that is not domiciled in Canada or any province or territory thereof, and
(z) in the case of UK Loan Parties, it arises from a sale made or services
rendered to an Account Debtor that is not domiciled in the United Kingdom;

 

(vii)       the case of any Account Receivable owed by a Governmental Authority,
any such Account Receivable that arises from the delivery of goods or the
rendition of services by the applicable Loan Party payment for which has not yet
been properly appropriated, provided that, in the case of any Account Receivable
owing by Her Majesty in right of Canada or any provincial or local Governmental
Authority in Canada, the Borrower has assigned its rights to payment in such
Account Receivable in compliance with the Financial Administration Act (Canada)
or similar Applicable Law of such Governmental Authority;

 

- 21 -

 

(viii)       it is not at all times subject to Administrative Agent's duly
perfected, first priority security interest and Lien or is subject to a Lien
that is not a Permitted Lien;

 

(ix)       the goods giving rise to such Account Receivable have not been
delivered to and accepted by the Account Debtor or the services giving rise to
such Accounts Receivable have not been performed by the applicable Loan Party
and accepted by the Account Debtor or the Accounts Receivable otherwise does not
represent a final sale;

 

(x)       the Loan Parties have not sent a bill or invoice for the goods or
services giving rise to such Accounts Receivable to the applicable Account
Debtor;

 

(xi)       the Accounts Receivable is evidenced by chattel paper or an
instrument of any kind, or has been reduced to judgment;

 

(xii)       any Loan Party or a Subsidiary of any Loan Party has made any
agreement with the Account Debtor for any extension, compromise, settlement or
modification of the Accounts Receivable or deduction therefrom, except for
discounts or allowances which are made in the ordinary course of business for
prompt payment and which discounts or allowances are reflected in the
calculation of the face value of each invoice related to such Accounts
Receivable;

 

(xiii)       50% or more of the Accounts Receivable owing from the Account
Debtor are not Eligible Accounts hereunder;

 

(xiv)       any Loan Party has made an agreement with the Account Debtor to
extend the time of payment thereof beyond the period set forth in clause (ii)
above; or

 

(xv)       it represents service charges, late fees or similar charges.

 

"Eligible Contract Participant" shall mean an "eligible contract participant" as
defined in the Commodity Exchange Act and regulations thereunder.

 

"Eligible Insured Foreign Receivables" means Accounts Receivable of a Loan Party
that meet the requirements of Eligible Accounts, except: (x)  clauses (ii), (v)
and (vi) (without giving effect to the phrase “or constitutes Eligible Insured
Foreign Receivables,” set forth therein) of such definition, provided that (i)
no more than 90 days (or such longer period as the Administrative Agent may
determine in its Permitted Discretion), or such other period set forth in the
credit insurance relating to such Account Receivable, have elapsed from the
invoice date with respect to such Account Receivable, (ii) such Account
Receivable is not due or unpaid more than 60 days past the due date therefor,
(iii) on and after the date that is 60 days following the Effective Date, such
Account Receivable is credit insured (the insurance carrier, amount and terms of
such insurance shall be reasonably acceptable to Administrative Agent and shall
name Administrative Agent as beneficiary or loss payee, as applicable) and the
amount of any such Account Receivable which may be applied in calculating the
Borrowing Base shall be reduced to the extent the amount of such Account
Receivable is not covered by credit insurance due such Account Receivable's
failure to meet the requirements of clauses (ii), (v), and (vi) of the
definition of Eligible Accounts Receivable, and (iv) the Account Debtor with
respect to such Account Receivable is not located in a Sanctioned Country.

 

- 22 -

 

"Eligible Inventory" means Inventory of any Loan Party consisting of finished
goods and raw materials and work-in-process ("Eligible Work-In-Process") which
is not, in the Administrative Agent's Permitted Discretion, obsolete or
unmerchantable. Such Inventory shall not be Eligible Inventory if it:

 

(a)                      does not conform in all material respects to all
standards imposed by any Governmental Authority which has regulatory authority
over such goods or the use or sale thereof;

 

(b)               (x) in the case of US Loan Parties, is not located in the
United States of America, (y) in the case of Canadian Loan Parties, is not
located in Canada or any province or territory thereof, and (z) in the case of
UK Loan Parties, is not located in the United Kingdom;

 

(c)                is held by such Loan Party on consignment or consigned by
such Borrower to any Person, and may not be lawfully sold by Collateral Agent;

 

(d)               is the subject of a written assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that
by such Loan Party's ownership, use, sale or distribution of such Inventory is
violative in any material respect of any ownership of or right to use any
intellectual property of such Person;

 

(e)                is subject to an intellectual property license agreement or
other agreement that limits, conditions or restricts any Loan Party's or
Collateral Agent's right to sell or otherwise dispose of such Inventory, unless
Collateral Agent is a party to an agreement, in form and substance reasonably
satisfactory to the Agents in their Permitted Discretion, with the licensor
under such license agreement which permits the Collateral Agent to sell or
otherwise dispose of such Inventory or Administrative Agent is otherwise
satisfied, in its Permitted Discretion, that Collateral Agent has the right to
sell or dispose of such Inventory on the same terms as would have applied had a
license agreement been delivered to Collateral Agent with respect thereto;

 

(f)                other than Inventory in-transit between locations of the Loan
Parties, is situated at a location not owned or leased by such Loan Party, or
which such Loan Party otherwise does not have the right to use or occupy;
provided that with respect to locations leased by any Loan Party or which the
Loan Parties otherwise have the right to use or occupy: (i) in jurisdictions in
which it is mandated under applicable law to obtain such an agreement or in
which the owner or occupier has rights of distraint, the owner or occupier of
such location has executed in favor of Collateral Agent a commercially
reasonable lien waiver and access agreement, in form and substance reasonably
satisfactory to the Agents in their Permitted Discretion as provided in this
Agreement or (ii) the Loan Parties are otherwise in compliance with
Section 7.01(m), provided that Administrative Agent shall have the right to
establish a Reserve against the Borrowing Base (in accordance with the
definition of "Reserves" but not to exceed the Borrowing Base value of the
Inventory located at the relevant location) with respect thereto in an amount
not to exceed three months' base rent or other similar warehousing or bailee
monthly charge for such location in the event the access agreement is not
delivered within 45 days after the Effective Date; or

 

- 23 -

 

(g)               is not subject to the perfected, first priority security
interest and Lien of Collateral Agent or is subject to any Lien other than a
Permitted Lien; provided that, if such Inventory is subject to a Permitted Lien
(other than liens described in clause (h) of the definition of Permitted Liens)
that may have priority over the Collateral Agent's Liens under applicable law,
such Inventory shall be Eligible Inventory and the Administrative Agent may in
its Permitted Discretion impose a Reserve against the Borrowing Base in an
amount equal to the amount secured by such Permitted Lien provided, further,
that no such Reserve shall be imposed to the extent the Loan Parties obtain an
agreement of the type described in clause (f)(i) above from the holder of such
Lien.

 

In the event that a new Loan Party is added as a party to this Agreement under
any circumstance, no such Inventory belonging to such new Loan Party shall,
unless otherwise approved by the Administrative Agent, be deemed Eligible
Inventory until the Administrative Agent shall have completed a Field Survey and
Audit with respect to such assets/new Loan Party, such Field Survey and Audit to
be completed as promptly as is commercially reasonable.

 

"Employee Plan" means an "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) (other than a Multiemployer Plan) covered by Title IV of
ERISA and maintained (or that was maintained at any time during the six (6)
calendar years preceding the date of any borrowing hereunder) for employees of
any Loan Party or to which any Loan Party has any liability (including any
contingent liability with respect to any of its ERISA Affiliates).

 

"Environmental Actions" means any action, complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, consent decree, settlement or other written
communication from any Person or Governmental Authority alleging violations of
any Environmental Law or any Release of Hazardous Materials (a) from any assets,
properties or businesses owned or operated by any Loan Party or any of its
Subsidiaries; or (b) onto any facilities which received Hazardous Materials
generated, transported, treated, stored, used or disposed of by any Loan Party
or any of its Subsidiaries.

 

"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Solid Waste
Disposal Act, the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et
seq.), the Federal Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act
(42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601
et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the
Resource Conservation and Recovery Act (Canada), the Comprehensive
Environmental, Compensation and Liability Act (Canada), the Canadian
Environmental Protection Act (Canada), the Environmental Protection Act
(Ontario) and the Environmental Quality Act (Quebec), as such laws may be
amended or otherwise modified from time to time, and any other Requirement of
Law, permit, license or other legally binding determination of any Governmental
Authority imposing liability or establishing standards of conduct for protection
of the environment or human health and safety (as it relates to exposure to
Hazardous Materials) or Releases of any Hazardous Materials.

 

- 24 -

 

"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, natural resource damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigations and feasibility studies), fines,
penalties, sanctions and interest (i) incurred as a result of any Environmental
Action or in connection with any adverse environmental condition at, on, under
or migrating from or to any assets, facilities or properties owned or operated
by any Loan Party or any of its Subsidiaries or any of their respective
predecessors in interest or any Release of Hazardous Materials resulting from
the ownership, lease, sublease or other occupation of property or the operation
of any Loan Party or any of its Subsidiaries or any of their respective
predecessors in interest, or (ii) consisting of or relating to clean-up costs or
corrective action, including any investigation, clean-up, removal, containment,
monitoring or other remediation or response required of any Loan Party or any of
its Subsidiaries or any of their respective predecessors in interest by
Environmental Laws (whether or not such has been required or requested by any
Governmental Authority or any other Person).

 

"Environmental Lien" means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

 

"Equity Interests" means (a) all shares of capital stock (whether denominated as
common stock or preferred stock), equity interests, beneficial, partnership or
membership interests, joint venture interests, participations or other ownership
or profit interests in or equivalents (regardless of how designated) of or in a
Person (other than an individual), whether voting or non-voting and (b) all
securities convertible into or exchangeable for any of the foregoing and all
warrants, options or other rights to purchase, subscribe for or otherwise
acquire any of the foregoing, whether or not presently convertible, exchangeable
or exercisable.

 

"Equity Issuance" means either (a) the sale or issuance by any Loan Party or any
of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by
the Parent of any cash capital contributions.

 

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.

 

"ERISA Affiliate" means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

 

"Event of Default" means any of the events set forth in Section 9.01.

 

"Excess Cash Flow" means, with respect to any Person for any period, an amount
equal to (a) Consolidated EBITDA of such Person and its Subsidiaries for such
period, less (b) the sum of (without duplication) (i) all cash principal
payments (excluding, for the avoidance of doubt, any principal payments made
pursuant to Section 2.05(c)(iv)) on the Loans made during such period (but, in
the case of the Revolving Loans, only to the extent that the Total Revolving
Credit Commitment is permanently reduced by the amount of such payments), and
all cash principal payments made on other Indebtedness (other than Indebtedness
incurred under this Agreement) of such Person or any of its Subsidiaries during
such period to the extent such other Indebtedness is permitted to be incurred,
and such payments are permitted to be made, under this Agreement (but, in the
case of revolving loans, only to the extent that the revolving credit commitment
in respect thereof is permanently reduced by the amount of such payments),
(ii) all Consolidated Net Interest Expense to the extent paid or payable in cash
by such Person or its Subsidiaries during such period, (iii) the cash portion of
Capital Expenditures made by such Person and its Subsidiaries during such period
to the extent permitted to be made under this Agreement (excluding Capital
Expenditures to the extent financed through the incurrence of Indebtedness or
through an Equity Issuance), (iv) all scheduled loan servicing fees and other
similar fees in respect of Indebtedness of such Person or any of its
Subsidiaries paid in cash during such period, to the extent such Indebtedness is
permitted to be incurred, and such payments are permitted to be made, under this
Agreement, (v) income taxes paid in cash by such Person and its Subsidiaries for
such period, and (vi) the excess, if any, of Working Investment at the end of
such period over Working Investment at the beginning of such period (or minus
the excess, if any, of Working Investment at the beginning of such period over
Working Investment at the end of such period).

 

- 25 -

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"Excluded Accounts" means deposit accounts (i) specifically and exclusively used
for payroll, payroll taxes and other employee wage and benefit payments to or
for the benefit of any Loan Party's employees, (ii) trust accounts, (iii)
accounts used exclusively for withholding tax, goods and services tax, sales tax
or payroll tax, and (iv) the Petty Cash Accounts.

 

"Excluded Equity Issuance" means the issuance of Equity Interests (other than
Disqualified Equity Interests) of the Parent to directors, officers, employees
and consultants of the Parent and its Subsidiaries pursuant to stock purchase
plans, stock option plans, other employee incentive plans or other compensation
arrangements, approved by the Board of Directors of the Parent.

 

"Excluded Foreign Subsidiary" means (a) any Subsidiary of the Parent that is a
CFC and has not guaranteed or pledged any of its assets or suffered a pledge of
more than 65% of its voting stock, to secure, directly or indirectly, any
indebtedness of any Borrower or any Guarantor that is a "United States Person"
within the meaning of Section 7701(a)(30) of the Code, (b) any Subsidiary of a
Subsidiary described in clause (a) above, and (c) any Disregarded Domestic
Person (in each case of the foregoing clauses (a) through (c), except to the
extent such subsidiary is a Foreign Loan Party).

 

"Excluded Hedge Liabilities or Liability" means, with respect to each Loan
Party, each Swap Obligation if, and only to the extent that, all or any portion
of this Agreement or any other Loan Document that relates to such Swap
Obligation is or becomes illegal or unlawful under the Commodity Exchange Act,
or any rule, regulation or order of the Commodity Futures Trading Commission,
solely by virtue of such Loan Party's failure to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap. Notwithstanding anything to
the contrary contained in the foregoing or in any other provision of this
Agreement or any other Loan Document, the foregoing is subject to the following
provisos: (a) if a Swap Obligation arises under a master agreement governing
more than one Swap, only the portion of such Swap Obligation that is
attributable to Swaps for which such guaranty or security interest is or becomes
illegal or unlawful under the Commodity Exchange Act, or any rule, regulations
or order of the Commodity Futures Trading Commission, solely as a result of the
failure by such Loan Party for any reason to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap shall be an Excluded Hedge
Liability; (b) if a guarantee of a Swap Obligation would cause such obligation
to be an Excluded Hedge Liability but the grant of a security interest would not
cause such obligation to be an Excluded Hedge Liability, such Swap Obligation
shall constitute an Excluded Hedge Liability for purposes of the guaranty but
not for purposes of the grant of the security interest; and (c) if there is more
than one Loan Party executing this Agreement or the other Loan Documents and a
Swap Obligation would be an Excluded Hedge Liability with respect to one or more
of such Persons, but not all of them, the definition of Excluded Hedge Liability
or Liabilities with respect to each such Person shall only be deemed applicable
to (i) the particular Swap Obligations that constitute Excluded Hedge
Liabilities with respect to such Person, and (ii) the particular Person with
respect to which such Swap Obligations constitute Excluded Hedge Liabilities.

 

- 26 -

 

"Excluded Subsidiary" means:

 

(a)       any Immaterial Subsidiary;

 

(b)       any Subsidiary that is prohibited by applicable Requirements of Law or
third party Contractual Obligation (which Contractual Obligation exists on the
Effective Date or at the time of acquisition of such Subsidiary and is not
entered into in contemplation of the Effective Date or such acquisition) from
providing a Guaranty or that would require a governmental (including regulatory)
consent, approval, license or authorization in order to provide a Guaranty that
has not been obtained, in each case, as reasonably determined by the Agents and
the Borrowing Agent;

 

(c)       any Subsidiary to the extent it is not within the legal capacity of
such Person to provide a Guaranty or the provision of a Guaranty would conflict
with the fiduciary duties of such Person's directors or result in a material
risk of personal or criminal liability for any officer or director of such
Person, in each case, as reasonably determined by the Agents and the Borrowing
Agent;

 

(d)       Excluded Foreign Subsidiaries; and

 

(e)       any other Subsidiary to the extent that the cost, burden, difficulty
or consequence of providing a Guaranty and/or granting or perfecting a security
interest in its assets outweighs the benefit afforded thereby as reasonably
determined by the Borrowing Agent and the Agents.

 

- 27 -

 

"Excluded Taxes" means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrowers under Section 2.12(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.09, amounts with
respect to such Taxes were payable either to such Lender's assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient's failure
to comply with Section 2.09 and (d) any U.S. federal withholding Taxes imposed
under FATCA.

 

"Executive Order" means the Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

 

"Existing Credit Facilities" means, collectively, the Bank of America Facility
and the SVB Facility.

 

"Existing Lenders" means the financial institutions from time to time party to
the Existing Credit Facilities.

 

"Extraordinary Receipts" means any cash received by the Parent or any of its
Subsidiaries not in the ordinary course of business (and not consisting of
proceeds of Dispositions or Indebtedness or Equity Issuances), including,
without limitation, (a) foreign, Canadian, United States, state, provincial,
territorial or local tax refunds, (b) pension plan reversions, (c) proceeds of
any insurance (other than to the extent such insurance proceeds are (i)
immediately payable to a Person that is not the Parent or any of its
Subsidiaries in accordance with applicable Requirements of Law or with
Contractual Obligations entered into in the ordinary course of business or (ii)
received by the Parent or any of its Subsidiaries as reimbursement for any
out-of-pocket costs incurred or made by such Person prior to the receipt thereof
directly related to the event resulting from the payment of such proceeds), (d)
judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (e) condemnation awards (and payments in
lieu thereof), (f) indemnity payments (other than to the extent such indemnity
payments are (i) immediately payable to a Person that is not an Affiliate of the
Parent or any of its Subsidiaries or (ii) received by the Parent or any of its
Subsidiaries as reimbursement for any costs previously incurred or any payment
previously made by such Person) and (g) any purchase price adjustment, including
any earn-out, received in connection with any purchase agreement including,
without limitation, the Acquisition Agreement (but not including the Denville
Earn-out).

 

- 28 -

 

"Facility" means the real property identified on Schedule 1.01(B) and any New
Facility hereafter acquired by the Parent or any of its Subsidiaries, including,
without limitation, the land on which each such facility is located, all
buildings and other improvements thereon, and all fixtures located thereat or
used in connection therewith.

 

"FASB ASC" means the Accounting Standards Codification of the Financial
Accounting Standards Board.

 

"FATCA" means Sections 1471 through 1474 of the Internal Revenue Code, as of the
date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with) and any
current or future regulations or official interpretations thereof, any
agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue
Code and any intergovernmental agreements entered into in connection therewith.

 

"Federal Funds Effective Rate" means, for any day, the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided that if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.

 

"Federal Funds Open Rate" means, for any day, the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption "OPEN" (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent (an "Alternate Source") (or if such
rate for such day does not appear on the Bloomberg Screen BTMM (or any
substitute screen) or on any Alternate Source, or if there shall at any time,
for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate determined by the
Administrative Agent at such time (which determination shall be conclusive
absent manifest error)); provided, however, that if such day is not a Business
Day, the Federal Funds Open Rate for such day shall be the "open" rate on the
immediately preceding Business Day. If and when the Federal Funds Open Rate
changes, the rate of interest hereunder will change automatically without notice
to the Borrowing Agent, effective on the date of any such change.

 

"Fee Letter" means the fee letter, dated as of the date hereof, among the
Borrowers and the Agents.

 

- 29 -

 

"Field Survey and Audit" means a field survey and audit of the Loan Parties and
an appraisal of the Collateral performed by auditors, examiners and/or
appraisers selected by the Agents.

 

"Final Maturity Date" means the earliest of (a) January 31, 2023, (b) the date
of the acceleration of the Loans in accordance with the terms of this Agreement,
and (c) the date of the Payment In Full of all Obligations and the termination
of all Commitments.

 

"Financial Statements" means (a) the audited consolidated and consolidating
balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended
December 31, 2016, and the related consolidated and consolidating statement of
operations, shareholders' equity and cash flows for the Fiscal Year then ended,
and (b) the unaudited consolidated and consolidating balance sheet of the Parent
and its Subsidiaries for the twelve months ended December 31, 2017, and the
related consolidated and consolidating statement of operations, shareholder's
equity and cash flows for the twelve months then ended.

 

"Financial Support Direction" means a financial support direction issued by the
Pensions Regulator under section 43 of the Pensions Act 2004.

 

"Fiscal Quarter" means any fiscal quarter of any Fiscal Year determined in
accordance with the fiscal accounting calendar of the Parent and its
Subsidiaries.

 

"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries ending on
December 31 of each calendar year.

 

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period,
the ratio of (a) the difference of (i) Consolidated EBITDA of such Person and
its Subsidiaries for such period, minus (ii) Capital Expenditures made in cash
by such Person and its Subsidiaries during such period, except to the extent
funded with the proceeds of the incurrence of Indebtedness (other than Revolving
Loans), minus (iii) income taxes paid or payable by such Person and its
Subsidiaries during such period, to (b) the sum of (i) all scheduled permanent
principal repayments of Indebtedness of such Person and its Subsidiaries during
such period, plus (ii) Consolidated Net Interest Expense of such Person and its
Subsidiaries in such period), plus (iii) cash dividends or distributions paid,
or the purchase, redemption or other acquisition or retirement for value
(including in connection with any merger or consolidation), by such Person or
any of its Subsidiaries, in respect of the Equity Interests of such Person or
any of its Subsidiaries (other than dividends or distributions paid by a Loan
Party to any other Loan Party) during such period, plus (iv) any broker's,
banker's or finder's fee payable in connection with the Acquisition.

 

"Flood Laws" means all Requirements of Law relating to policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 and other Requirements of Law
related thereto.

 

"Flow of Funds Agreement" means a Flow of Funds Agreement, in form and substance
reasonably satisfactory to the Agents, by and among the Loan Parties, the
Agents, the Lenders and the other Persons party thereto, and the related funds
flow memorandum describing the sources and uses of all cash payments in
connection with the Transactions.

 

- 30 -

 

"Foreign Lender" means a Lender that is not a U.S. Person.

 

"Foreign Loan Parties" means, collectively, the Canadian Loan Parties and the UK
Loan Parties.

 

"Foreign Security Documents" means, collectively, the Canadian Security
Documents and the UK Security Documents.

 

"Foreign Sovereign Immunities Act" means the US Foreign Sovereign Immunities Act
of 1976 (28 U.S.C. Sections 1602-1611), as amended.

 

"Foreign Subsidiary" means any Subsidiary of the Parent that is not a Domestic
Subsidiary.

 

"Funding Losses" has the meaning specified therefor in Section 2.07(e).

 

"GAAP" means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis, provided that for the
purpose of Section 7.03 hereof and the definitions used therein, "GAAP" shall
mean generally accepted accounting principles in effect on the date hereof and
consistent with those used in the preparation of the Financial Statements,
provided further that, if there occurs after the date of this Agreement any
change in GAAP that affects in any respect any of the covenants contained in
Section 7.02 or the calculation of any covenant contained in Section 7.03
hereof, the Agents and the Borrowing Agent shall negotiate in good faith
amendments to the provisions of this Agreement that relate to the calculation of
such covenant with the intent of having the respective positions of the Lenders
and the Borrowing Agent after such change in GAAP conform as nearly as possible
to their respective positions as of the date of this Agreement and, until any
such amendments have been agreed upon, the covenants in Section 7.02 and
Section 7.03 hereof shall be calculated as if no such change in GAAP has
occurred.

 

"GBP" means the lawful money of the United Kingdom.

 

"Governing Documents" means, (a) with respect to any corporation or company, the
memorandum, certificate or articles of incorporation and the bylaws (or
equivalent or comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization, and the operating
agreement; (c) with respect to any partnership, joint venture, trust or other
form of business entity, the partnership, joint venture, declaration or other
applicable agreement or documentation evidencing or otherwise relating to its
formation or organization, governance and capitalization; and (d) with respect
to any of the entities described above, any other agreement, instrument, filing
or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization.

 

"Governmental Authority" means any nation or government, any foreign, Federal,
state, province, territory, city, town, municipality, county, local or other
governmental, public, quasi-governmental, political subdivision thereof or
thereto and any department, commission, board, bureau, instrumentality, agency,
authority, division 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) and any group or body charged with setting financial
accounting or regulatory capital rules or standards (including, without
limitation, the Financial Accounting Standards Board, the Bank for International
Settlements or the Basel Committee on Banking Supervision or any successor or
similar authority to any of the foregoing).

 

- 31 -

 

"Guaranteed Obligations" has the meaning specified therefor in Section 11.01.

 

"Guarantor" means (a) each Subsidiary of the Parent listed as a "Guarantor" on
the signature pages hereto, including the Foreign Loan Parties, and (b) each
other Person which guarantees in writing, pursuant to Section 7.01(b) or
otherwise, all or any part of the Obligations provided that no Excluded
Subsidiary shall be required to become (or be joined as) a Guarantor hereunder.

 

"Guaranty" means (a) the guaranty of each Guarantor party hereto contained in
Article XI hereof and (b) each other guaranty, in form and substance
satisfactory to the Collateral Agent, made by any other Guarantor in favor of
the Collateral Agent for the benefit of the Agents and the Lenders guaranteeing
all or part of the Obligations.

 

"Hazardous Material" means (a) any element, compound or chemical that is
defined, regulated or otherwise classified as a hazardous material, contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous
substance or chemical, hazardous waste, special waste, solid waste or dangerous
good under Environmental Laws, including, without limitation, any hazardous
material, contaminant, pollutant, toxic pollutant, toxic or hazardous substance,
extremely hazardous substance or chemical, hazardous waste, special waste, solid
waste, or dangerous good which is defined or identified in any Environmental Law
and which is present in the environment in such quantity or state that it
contravenes any Environmental Law; (b) petroleum and its refined products; (c)
polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste
characteristic, including, without limitation, corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials; and
(e) any manufactured products containing hazardous substances listed or
classified as such under Environmental Laws.

 

"Hedge Liabilities" means the liabilities of the Loan Parties under any Hedging
Agreements on a marked to market basis in accordance with GAAP.

 

"Hedging Agreement" means any interest rate, foreign currency, commodity or
equity exchange, swap, collar, cap, floor, adjustable strike cap, adjustable
strike corridor, cross-currency swap or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and (without limiting the generality of
any of the foregoing) specifically including any foreign exchange transaction,
including spot and forward foreign currency purchases and sales, listed or
over-the-counter options on foreign currencies, non-deliverable forwards and
options, foreign currency swap agreements, and currency exchange rate price
hedging arrangements, and any confirmation executed in connection with any such
agreement or arrangement.

 

- 32 -

 

"Highest Lawful Rate" means, with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.

 

"Immaterial Subsidiary" means (i) Subsidiaries of the Parent as of the Effective
Date set forth on Schedule 1.01(D) and (ii) any Subsidiary formed after the
Effective Date that is identified in writing to the Collateral Agent so long as
the aggregate value of each such Subsidiary's assets is less than $500,000;
provided, if at any time and from time to time after the Effective Date the
aggregate value of the assets of all Immaterial Subsidiaries is equal to or
greater than $2,000,000, then the Borrowing Agent shall promptly designate in
writing to the Collateral Agent that one or more of such Subsidiaries is no
longer an Immaterial Subsidiary for purposes of this Agreement to the extent
required such that the foregoing condition ceases to be true.

 

"Increased Reporting Event" means either of the (i) occurrence and continuation
of an Event of Default or (ii) the failure of the Loan Parties to maintain
Availability for five (5) consecutive Business Days (or such longer period as
the Administrative Agent may agree) of not less than the greater of (A) 10% of
the Aggregate Line Cap and (B) $2,500,000. An Increased Reporting Event shall
continue (i) so long as an Event of Default is continuing and has not been cured
or waived and (ii) until Availability is equal to or greater than the greater of
(A) 10% of the Aggregate Line Cap and (B) $2,500,000 for a period of thirty (30)
consecutive days.

 

"Indebtedness" means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables or other accounts payable incurred in the ordinary course of such
Person's business and not outstanding for more than 90 days after the date such
payable was created); (c) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest payments
are customarily made; (d) all reimbursement, payment or other obligations and
liabilities of such Person created or arising under any conditional sales or
other title retention agreement with respect to property used and/or acquired by
such Person, even though the rights and remedies of the lessor, seller and/or
lender thereunder may be limited to repossession or sale of such property; (e)
all Capitalized Lease Obligations of such Person; (f) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (g) all obligations and liabilities,
calculated on a basis reasonably satisfactory to the Collateral Agent and in
accordance with accepted practice, of such Person under Hedging Agreements;
(h) [reserved]; (i) all Contingent Obligations; (j) all Disqualified Equity
Interests; and (k) all obligations referred to in clauses (a) through (j) of
this definition of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
Lien upon property owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness. The Indebtedness of any
Person shall include the Indebtedness of any partnership of or joint venture in
which such Person is a general partner or a joint venture.

 

- 33 -

 

"Indemnified Matters" has the meaning specified therefor in Section 12.15.

 

"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
clause (a), Other Taxes.

 

"Indemnitees" has the meaning specified therefor in Section 12.15.

 

"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of any Debtor Relief Law.

 

"Intellectual Property" has the meaning specified therefor in the Security
Agreement (or, in the case of Foreign Loan Parties, the Foreign Security
Documents).

 

"Intercompany Subordination Agreement" means an Intercompany Subordination
Agreement made by the Parent and its Subsidiaries in favor of the Collateral
Agent for the benefit of the Agents and the Lenders, in form and substance
reasonably satisfactory to the Collateral Agent.

 

"Interest Period" means as to any LIBOR Rate Loan made to the Borrowers, the
period commencing on the date such Loan is borrowed or continued as, or
converted into, a LIBOR Rate Loan and ending on the date one, two or three
months thereafter as selected by the Borrowing Agent; provided that:

 

(a)       if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the following Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;

 

(b)       any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period;

 

(c)       the Borrowing Agent may not elect an Interest Period for any Loan
which would extend beyond the Final Maturity Date; and

 

(d)       at any time, there shall not be (i) more than three (3) Interest
Periods in effect for the Revolving Loans and (ii) more than three (3) Interest
Periods in effect for the Term Loans.

 

"Internal Revenue Code" or "Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto), and the regulations thereunder.

 

"Inventory" means, with respect to any Person, all inventory (as that term is
defined in the Uniform Commercial Code or the PPSA, as applicable) and all goods
and merchandise of such Person held for sale or lease by such Person, including,
without limitation, all raw materials, work-in-process, packaging, supplies,
materials and finished goods of every nature used or usable in connection with
the shipping, storing, advertising or sale of such goods and merchandise,
whether now owned or hereafter acquired, and all such other property the sale or
other disposition of which would give rise to an Account Receivable or cash, but
excluding equipment (as defined in the Uniform Commercial Code or the PPSA, as
applicable).

 

- 34 -

 

"Investment" means, with respect to any Person, (a) any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances or other extensions of credit (excluding Accounts
Receivable arising in the ordinary course of business), capital contributions or
acquisitions of Indebtedness (including, any bonds, notes, debentures or other
debt securities), 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),
(b) the purchase or ownership of any futures contract or liability for the
purchase or sale of currency or other commodities at a future date in the nature
of a futures contract, or (c) any investment in any other items that are or
would be classified as investments on a balance sheet of such Person prepared in
accordance with GAAP with the value of each Investment measured at the time made
and without giving effect to subsequent changes in value or any write-ups,
write-downs or write-offs thereof but giving effect to any return or
distributions received by Parent and its Subsidiaries with respect thereto.

 

"IP Security Agreements" has the meaning specified therefor in Section 6.01(ff).

 

"ISP98 Rules" has the meaning specified therefor in Section 3.02(b) hereof.

 

"Joinder Agreement" means a joinder agreement, substantially in the form of
Exhibit A hereto, duly executed by a Subsidiary of a Loan Party made a party
hereto pursuant to Section 7.01(b).

 

"L/C Fee Rate" means 2.0%.

 

"L/C Issuer" means, commencing on and after the ABL Commitment Date, PNC or such
other bank as the Administrative Agent may select in its Permitted Discretion.

 

"Lease" means any lease of Real Property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.

 

"Lender" and "Lenders" have the meanings specified therefor in the preamble
hereto.

 

"Lender-Provided Hedge Agreement" means a Hedging Agreement which is provided by
any Lender, Agent or any affiliate thereof. Except to the extent of any Excluded
Hedge Liabilities, the Hedge Liabilities of the Borrowers to the provider of any
Lender-Provided Hedge Agreement shall be "Obligations" hereunder, guaranteed
obligations under any Guaranty and secured obligations under any Security
Document and otherwise treated as Obligations for purposes of each of the Loan
Documents. The Liens securing the Hedge Liabilities shall be pari passu with the
Liens securing all other Obligations under this Agreement and the Loan
Documents.

 

- 35 -

 

"Letter of Credit" has the meaning specified therefor in Section 3.01.

 

"Letter of Credit Application" has the meaning specified therefor in
Section 3.02(a).

 

"Letter of Credit Borrowing" has the meaning specified therefor in Section
3.04(d).

 

"Letter of Credit Fees" has the meaning specified therefor in Section 2.06(e).

 

"Letter of Credit Guaranty" means one or more guaranties by the Administrative
Agent in favor of the L/C Issuer guaranteeing or relating to the Borrowers'
obligations to the L/C Issuer under a reimbursement agreement, Letter of Credit
Application or other like document in respect of any Letter of Credit.

 

"Letter of Credit Obligations" means, at any time and without duplication, the
sum of (a) the Reimbursement Obligations with respect to all Letters of Credit
at such time, plus (b) the Maximum Undrawn Amount with respect to all Letters of
Credit, plus (c) all amounts for which the Administrative Agent may be liable to
the L/C Issuer pursuant to any Letter of Credit Guaranty with respect to any
Letter of Credit.

 

"Letter of Credit Sublimit" means (a) before the ABL Commitment Date, zero and
(b) at any time thereafter, $5,000,000.

 

"Leverage Ratio" means, with respect to any Person and its Subsidiaries on a
consolidated basis for any period, the ratio of (a)  all Indebtedness described
in clauses (a), (b), (c), (d), (e), (f) and (i) in the definition thereof or
otherwise for borrowed money, including the Loans and any Capitalized Lease
Obligations, as of the end of such period to (b) Consolidated EBITDA of such
Person and its Subsidiaries for such period.

 

"LIBOR" means for any LIBOR Rate Loan for the then current Interest Period
relating thereto, the interest rate per annum determined by Administrative Agent
as the rate which appears on the Bloomberg Page BBAM1 (or on such other
substitute Bloomberg page that displays rates at which U.S. dollar deposits are
offered by leading banks in the London interbank deposit market), or the rate
which is quoted by another source selected by Administrative Agent as an
authorized information vendor for the purpose of displaying rates at which U.S.
dollar deposits are offered by leading banks in the London interbank deposit
market (a "LIBOR Alternate Source"), at approximately 11:00 a.m., London time,
two (2) Business Days prior to the commencement of such Interest Period as the
London interbank offered rate for U.S. Dollars for an amount comparable to such
LIBOR Rate Loan and having a borrowing date and a maturity comparable to such
Interest Period (or if there shall at any time, for any reason, no longer exist
a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a
comparable replacement rate determined by the Administrative Agent and the
Collateral Agent at such time (which determination shall be conclusive absent
manifest error)); provided, that at no time shall LIBOR be less than 1.25% per
annum. Administrative Agent shall give reasonably prompt notice to the Borrowing
Agent of LIBOR as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.

 

- 36 -

 

"LIBOR Option" has the meaning specified therefor in Section 2.07(b).

 

"LIBOR Rate" means, (x) for each Interest Period for each LIBOR Rate Loan that
is a Term Loan, the greater of (a) the rate per annum determined by the
Administrative Agent (rounded upwards if necessary, to the next 1/100% of 1%) by
dividing (i) LIBOR for such Interest Period by (ii) 100% minus the Reserve
Percentage and (b) 1.25% and (y) for each Interest Period for each LIBOR Rate
Loan that is a Revolving Loan, the rate per annum determined by the
Administrative Agent (rounded upwards if necessary, to the next 1/100% of 1%) by
dividing (i) LIBOR for such Interest Period by (ii) 100% minus the Reserve
Percentage and. The LIBOR Rate shall be adjusted on and as of the effective day
of any change in the Reserve Percentage; provided, however, that if the LIBOR
Rate determined as provided above would be less than zero, such rate shall be
deemed to be zero for purposes of this Agreement.

 

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

 

"Lien" means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, hypothec, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.

 

"Loan" means the Term Loan or any Revolving Loan made by an Agent or a Lender to
the Borrowers pursuant to Article II hereof.

 

"Loan Account" means the account maintained hereunder by the Administrative
Agent on its books of account at the Payment Office, and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers.

 

"Loan Document" means this Agreement, any Cash Management Agreement, the Flow of
Funds Agreement any Guaranty, the Intercompany Subordination Agreement, the
Collateral Assignment, any Joinder Agreement, any Mortgage, any landlord waiver,
any Processor Letter, the Fee Letter, any Perfection Certificate, any Security
Document, any IP Security Agreement, the Foreign Security Documents and any
other agreement, instrument, certificate, report and other document executed and
delivered pursuant hereto or thereto or otherwise evidencing or securing any
Loan, any Letter of Credit Obligation or any other Obligation.

 

"Loan Party" means any Borrower and any Guarantor.

 

"Losses" has the meaning specified therefor in Section 12.15.

 

"Material Adverse Effect" means a material adverse effect on any of (a) the
operations, business, assets, properties, financial condition or operating
results of the Loan Parties taken as a whole, (b) the ability of the Loan
Parties taken as a whole to perform any of their obligations under any Loan
Document, (c) the legality, validity or enforceability of this Agreement or any
other Loan Document, (d) the rights and remedies of any Agent or any Lender
under any Loan Document, or (e) the validity, perfection or priority of a Lien
in favor of the Collateral Agent for the benefit of the Agents and the Lenders
on the Collateral taken as a whole.

 

- 37 -

 

"Material Contract" means, individually and collectively, (a) with respect to
any Person, each contract or agreement to which such Person or any of its
Subsidiaries is a party involving aggregate consideration payable to or by such
Person or such Subsidiary of $1,000,000 or more in any Fiscal Year (other than
purchase orders in the ordinary course of the business of such Person or such
Subsidiary and other than contracts that by their terms may be terminated by
such Person or Subsidiary in the ordinary course of its business upon less than
60 days' notice without penalty or premium), (b) the Acquisition Agreement and
(c) any other contract or agreement the loss of which could reasonably be
expected to result in a Material Adverse Effect on such Person (viewed on a
consolidated basis with its parent and subsidiary companies).

 

"Maximum Face Amount" means, with respect to any outstanding Letter of Credit,
the face amount of such Letter of Credit including all automatic increases
provided for in such Letter of Credit, whether or not any such automatic
increase has become effective, as such face amount or increases are amended from
time to time.

 

"Maximum Revolving Loan Amount" means $25,000,000.

 

"Maximum Undrawn Amount" means, with respect to any outstanding Letter of
Credit, the amount of such Letter of Credit that is or may become available to
be drawn, including all automatic increases provided for in such Letter of
Credit, whether or not any such automatic increase has become effective.

 

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

 

"Mortgage" means a mortgage, deed of trust, deed of immovable hypothec or deed
to secure debt, in form and substance reasonably satisfactory to the Collateral
Agent, made by a Loan Party in favor of the Collateral Agent for the benefit of
the Agents and the Lenders, securing the Obligations and delivered to the
Collateral Agent.

 

"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding 6 years.

 

"Net Cash Proceeds" means, with respect to, any issuance or incurrence of any
Indebtedness, any Equity Issuance, any Disposition or the receipt of any
Extraordinary Receipts by any Person or any of its Subsidiaries, the aggregate
amount of cash received (directly or indirectly) from time to time (whether as
initial consideration or through the payment or disposition of deferred
consideration) by or on behalf of such Person or such Subsidiary, in connection
therewith after deducting therefrom only (a) in the case of any Disposition or
the receipt of any Extraordinary Receipts consisting of insurance proceeds or
condemnation awards, the amount of any Indebtedness secured by any Permitted
Lien on any asset (other than Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection therewith (other
than Indebtedness under this Agreement), (b) all reasonable fees, reasonable
costs, and out-of-pocket expenses (including appraisals, and brokerage, legal,
advisory, banking, title and recording tax expenses and commissions) paid such
Person or such Subsidiary to third parties (other than Affiliates) in connection
with such event (including in connection with the collection of such proceeds,
award, or other payments, as applicable), (c) transfer taxes paid to any taxing
authorities by such Person or such Subsidiary in connection therewith, and
(d) net income taxes to be paid in connection therewith (after taking into
account any tax credits or deductions and any tax sharing arrangements), in each
case, to the extent, but only to the extent, that the amounts so deducted are
(i) actually paid to a Person that, except in the case of reasonable
out-of-pocket expenses, is not an Affiliate of such Person or any of its
Subsidiaries and (ii) properly attributable to such transaction or to the asset
that is the subject thereof.

 

- 38 -

 

"Net Liquidation Percentage" means, as of any date of determination, the
percentage of the value of the Borrowers' Inventory that is estimated to be
recoverable in an orderly liquidation of such Inventory net of all associated
costs and expenses of such liquidation, such percentage to be as reasonably
determined from time to time by an appraisal company selected by the Agents.

 

"New Facility" has the meaning specified therefor in Section 7.01(o).

 

"New Subsidiary" has the meaning specified thereof in Section 7.01(b)(i).

 

"Non-Qualifying Party" means any Borrower or any Guarantor that on the
Eligibility Date fails for any reason to qualify as an Eligible Contract
Participant.

 

"Note" means a promissory note of the Borrowers, substantially in the form of
Exhibit G hereto, evidencing the Indebtedness resulting from the making of the
Loans and delivered to any Lender that requests such Note pursuant to
Section 2.03(f) hereof, as such promissory note may be modified or extended from
time to time, and any promissory note or notes issued in exchange or replacement
therefor.

 

"Notice of Borrowing" has the meaning specified therefor in Section 2.02(a).

 

"Obligations" means all present and future indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders, the L/C Issuer and
the Bank Product Providers arising under or in connection with this Agreement or
any other Loan Document, whether or not the right of payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation (irrespective of whether a claim therefor is allowed in an Insolvency
Proceeding) to pay principal, interest, charges, expenses, fees, premiums
(including the Applicable Prepayment Premium), attorneys' fees and
disbursements, indemnities and other amounts payable by such Person under the
Loan Documents, (b) the obligation of such Person to reimburse any amount in
respect of any of the foregoing that any Agent or any Lender (in its sole
discretion) may elect to pay or advance on behalf of such Person and (c) all
Bank Products Obligations. Notwithstanding any of the foregoing, Obligations
shall not include any Excluded Hedge Liabilities.

 

"Order" has the meaning specified therefor in Section 3.10.

 

- 39 -

 

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

 

"Other Taxes" means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to an assignment request by the Borrowers under Section 2.12(b)).

 

"Paid In Full," "Pay In Full," "Paying In Full" or "Payment In Full" means, with
respect to the Obligations or the Guaranteed Obligations, the payment in full,
in cash, of all such Obligations or Guaranteed Obligations, as the case may be
(other than (a) obligations under Hedging Agreements not yet due and payable,
(b) Bank Product Obligations have been cash collateralized in a manner
reasonably satisfactory to the applicable Bank Product Provider, (c) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (d) Letter of Credit Obligations that have been Cash Collateralized
or made subject to a backstop letter of credit reasonably satisfactory to the
applicable L/C Issuer), and the termination of all Commitments relating to the
Obligations.

 

"Parent" has the meaning specified therefor in the preamble hereto.

 

"Participant Register" has the meaning specified therefor in Section 12.07(g).

 

"Participation Commitment" means each Revolving Loan Lender's obligation to buy
a participation of the Letters of Credit issued hereunder.

 

"Participation Revolving Loan" has the meaning specified therefor in
Section 3.04(c) hereof.

 

"Payment Office" means the Administrative Agent's office located at 875 Third
Avenue, New York, New York 10022, or at such other office or offices of the
Administrative Agent as may be designated in writing from time to time by the
Administrative Agent to the Collateral Agent and the Borrowing Agent.

 

"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.

 

"Pensions Regulator" means the body corporate called the Pensions Regulator
established under Part I of the Pensions Act 2004.

 

"Perfection Certificate" means a certificate in form and substance satisfactory
to the Collateral Agent providing information with respect to the property of
each Loan Party.

 

- 40 -

 

"Permitted Acquisition" means any Specified Acquisition by a US Loan Party to
the extent that each of the following conditions shall have been satisfied:

 

(a)                no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the proposed Specified
Acquisition;

 

(b)               to the extent the Specified Acquisition will be financed in
whole or in part with the proceeds of any Loan, the conditions set forth in
Section 5.02 shall have been satisfied;

 

(c)                the Borrowers shall have furnished to the Agents at least 10
Business Days prior to the consummation of such Specified Acquisition (i) an
executed term sheet and/or commitment letter (setting forth in reasonable detail
the terms and conditions of such Specified Acquisition) and, at the request of
any Agent, such other information and documents that any Agent may request,
including, without limitation, executed counterparts of the respective
agreements, instruments or other documents pursuant to which such Specified
Acquisition is to be consummated (including, without limitation, any related
management, non-compete, employment, option or other material agreements), any
schedules to such agreements, instruments or other documents and all other
material ancillary agreements, instruments or other documents to be executed or
delivered in connection therewith, (ii) pro forma financial statements of the
Parent and its Subsidiaries after giving effect to the consummation of such
Specified Acquisition, (iii) a certificate of the chief financial officer of the
Parent, demonstrating on a pro forma basis compliance, as at the end of the most
recently ended fiscal quarter for which internally prepared financial statements
are available, with all covenants set forth in Section 7.03 hereof after the
consummation of such Specified Acquisition, and (iv) copies of such other
agreements, instruments or other documents as any Agent shall reasonably
request;

 

(d)               the agreements, instruments and other documents referred to in
paragraph (c) above shall provide that (i) neither the Loan Parties nor any of
their Subsidiaries shall, in connection with such Specified Acquisition, assume
or remain liable in respect of any Indebtedness of the Seller or Sellers, or
other obligation of the Seller or Sellers (except for obligations incurred in
the ordinary course of business in operating the property so acquired and
necessary or desirable to the continued operation of such property and except
for Permitted Indebtedness), and (ii) all property to be so acquired in
connection with such Specified Acquisition shall be free and clear of any and
all Liens, except for Permitted Liens (and if any such property is subject to
any Lien not permitted by this clause (ii) then concurrently with such Specified
Acquisition such Lien shall be released);

 

(e)                such Specified Acquisition shall be effected in such a manner
so that the acquired assets or Equity Interests are owned by a US Loan Party
and, if effected by merger or consolidation involving a US Loan Party, such US
Loan Party shall be the continuing or surviving Person;

 

(f)                the Borrowers shall have Availability plus Qualified Cash in
an aggregate amount equal to or greater than $5,000,000 immediately after giving
effect to the consummation of the proposed Specified Acquisition;

 

- 41 -

 

(g)               the assets being acquired or the Person whose Equity Interests
are being acquired did not have negative Consolidated EBITDA during the 12
consecutive month period most recently concluded prior to the date of the
proposed Specified Acquisition;

 

(h)               the assets being acquired (other than a de minimis amount of
assets in relation to the Loan Parties' and their Subsidiaries' total assets),
or the Person whose Equity Interests are being acquired, are useful in or
engaged in, as applicable, the business of the Loan Parties and their
Subsidiaries or a business reasonably related thereto;

 

(i)                 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 the Person whose Equity Interests are being acquired is organized in a
jurisdiction located within the United States;

 

(j)                 such Specified Acquisition shall be consensual and shall
have been approved by the board of directors of the Person whose Equity
Interests or assets are proposed to be acquired and shall not have been preceded
by an unsolicited tender offer for such Equity Interests by, or proxy contest
initiated by, Parent or any of its Subsidiaries or an Affiliate thereof;

 

(k)               any such Subsidiary (and its equityholders) shall execute and
deliver the agreements, instruments and other documents required by Section
7.01(b) on or prior to the date of the consummation of such Specified
Acquisition; and

 

(l)                 the Purchase Price payable in respect of (i) any single
Specified Acquisition or series of related Specified Acquisitions shall not
exceed $500,000 in the aggregate and (ii) all Specified Acquisitions (including
the proposed Specified Acquisition) shall not exceed $500,000 in the aggregate
during the term of this Agreement.

 

"Permitted Cure Equity" means Qualified Equity Interests of the Parent.

 

"Permitted Discretion" means (a) with respect to the Administrative Agent, a
determination made in good faith and in the exercise of commercially reasonable
(from the perspective of a secured asset-based lender) business judgment and (b)
with respect to the Collateral Agent, a determination made in good faith and in
the exercise of its reasonable business judgment.

 

"Permitted Disposition" means:

 

(a)       sales and other dispositions of Inventory in the ordinary course of
business;

 

(b)       licensing, on a non-exclusive basis, Intellectual Property rights in
the ordinary course of business and the transfer, assignment, cancellation,
abandonment or other disposition of patents, trademarks, copyrights or other
Intellectual Property rights which are, in the judgment of a Loan Party, no
longer economically practicable to maintain, no longer used or no longer useful
in the business of any Loan Party;

 

(c)       leasing or subleasing assets in the ordinary course of business;

 

- 42 -

 

(d)       [reserved];

 

(e)       dispositions of Cash Equivalents in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents;

 

(f)       dispositions of Accounts Receivable in connection with the collection
or compromise thereof in the ordinary course of business;

 

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

 

(h)       Permitted Intercompany Dispositions;

 

(i)       disposition of obsolete, surplus or worn-out property in the ordinary
course of business;

 

(j)       to the extent deemed a Disposition and without any duplication, the
granting of a Permitted Lien;

 

(k)       to the extent deemed a Disposition and without any duplication, the
making of a Permitted Investment;

 

(l)       any involuntary loss, damage or destruction of property; and

 

(m)       Dispositions not otherwise permitted hereunder which are made for fair
market value; provided that (i) at the time of any Disposition, no Event of
Default shall exist or shall result from such disposition and (ii) the aggregate
fair market value of all assets so sold by the Loan Parties and their
Subsidiaries, together, shall not exceed (x) in any Fiscal Year, $250,000 or (y)
in an aggregate amount during the term of this Agreement, $500,000;

 

provided that the Net Cash Proceeds of such Dispositions (1) in the case of
clauses (i) and (m) above, do not exceed $250,000 in the aggregate in any Fiscal
Year and (2) in all cases, are paid to the Administrative Agent for the benefit
of the Agents and the Lenders pursuant to the terms of Section 2.05(c)(v) or
applied as provided in Section 2.05(c)(viii). Notwithstanding the foregoing, no
Borrower may sell or otherwise dispose of Borrowing Base Assets except for
Eligible Inventory in the ordinary course of business.

 

"Permitted Indebtedness" means:

 

(a)                any Indebtedness owing to any Secured Party under this
Agreement and the other Loan Documents;

 

(b)               any other Indebtedness listed on Schedule 7.02(b), and the
Permitted Refinancing thereof;

 

(c)                Indebtedness evidenced by Capitalized Lease Obligations,
which Indebtedness, when aggregated with the principal amount of all
Indebtedness incurred under this clause (c) and clause (d) of this definition,
does not exceed $1,000,000 at any time outstanding;

 

- 43 -

 

(d)               Indebtedness permitted by clause (e) of the definition of
"Permitted Liens";

 

(e)                Permitted Intercompany Advances;

 

(f)                Indebtedness incurred in the ordinary course of business
under performance, surety, statutory and appeal bonds and similar obligations;

 

(g)               Indebtedness (i) owed to any Person providing property,
casualty, liability, or other insurance to the Loan Parties, 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 or (ii) in respect of workers' compensation claims,
self-insurance obligations and bankers' acceptances;

 

(h)               the incurrence by any Loan Party of Indebtedness under Hedging
Agreements that are incurred for the bona fide purpose of hedging the interest
rate, commodity, or foreign currency risks associated with such Loan Party's
operations and not for speculative purposes;

 

(i)                 Indebtedness incurred by Parent or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price, earn-out or similar obligations, or from guaranties or letters of credit,
surety bonds or performance bonds securing the performance of the Borrowers or
any such Subsidiary pursuant to such agreements (including for avoidance of
doubt, agreements made in connection with the Denville Sale and the Acquisition
Agreement), in connection with permitted dispositions of any business, assets or
Subsidiary of Parent or any of its Subsidiaries;

 

(j)                 Indebtedness of any Loan Party incurred in connection with
the purchase of Equity Interests from employees who have ceased their employment
with such Loan Party so long as such Indebtedness has been expressly
subordinated in right of payment to all Indebtedness of such Loan Party under
the Loan Documents by documentation that is in form and substance satisfactory
to the Agents;

 

(k)               Indebtedness of either Parent or any of their Subsidiaries
under Hedging Agreements that are incurred for the bona fide purpose of hedging
the foreign currency and interest rate risks associated with such Loan Party's
operations and not for speculative purposes;

 

(l)                 Indebtedness due to any landlord in connection with the
financing by such landlord of leasehold improvements;

 

(m)             Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;

 

(n)               guaranties in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Parent and its
Subsidiaries;

 

- 44 -

 

(o)               Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds, so long as such Indebtedness is covered within
five (5) business days;

 

(p)               Guaranties by any Loan Party of the Indebtedness of another
Loan Party, to the extent such guarantied Indebtedness is otherwise Permitted
Indebtedness; and

 

(q)               other Indebtedness of the Loan Parties and their Subsidiaries
which is unsecured in an aggregate amount not to exceed at any time $1,000,000.

 

"Permitted Intercompany Advances" means loans made by (a) a Loan Party to a US
Loan Party, (b) a non-Loan Party Subsidiary of Parent to another non-Loan Party
Subsidiary of Parent, (c) a non-Loan Party Subsidiary of Parent to a Loan Party,
so long as the parties thereto are party to the Intercompany Subordination
Agreement and (d) a Loan Party to a non-Loan Party Subsidiary or a Foreign Loan
Party so long as (with respect to this clause (d)) (i) the aggregate amount of
all such loans made by the Loan Parties does not exceed $750,000 at any time
outstanding, (ii) no Default or Event of Default has occurred and is continuing
before or after giving effect to such loan, and (iii) the sum of Availability
plus Qualified Cash is not less than $10,000,000 after giving effect to such
loan.

 

"Permitted Intercompany Dispositions" means Dispositions of assets from (a) a
non-Loan Party to another non-Loan Party, (b) any Loan Party to a US Loan Party,
(c) the Loan Parties to non-Loan Parties and the Foreign Loan Parties to the
extent not exceeding $250,000 in the aggregate in any Fiscal Year so long as
such transactions are permitted by Section 7.02(j), and (d) non-Loan Parties to
Loan Parties to the extent not exceeding $250,000 in the aggregate in any Fiscal
Year and so long as such transactions are permitted by Section 7.02(j).

 

"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 of goods or
services 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 existing on the date hereof, as set forth on
Schedule 7.02(e) hereto, but not any increase in the amount thereof as set forth
in such Schedule or any other modification of the terms thereof;

 

(f)                Permitted Intercompany Advances;

 

- 45 -

 

(g)               the Acquisition;

 

(h)               loans and advances to employees and to sales representatives
of Parent and its Subsidiaries in each case made in the ordinary course of
business, provided that the aggregate principal amount of all such loans and
other advances shall not exceed $100,000 in the aggregate at any one time
outstanding (it being understood that monthly prepaid commissions to independent
sales representatives are not considered loans or advances for purposes hereof);

 

(i)                 Investments received as the non-cash portion of
consideration received in connection with a Permitted Disposition described in
clause (j) of such definition;

 

(j)                 Investments consisting of non-cash loans made by Parent to
officers, directors and employees of a Loan Party which are used by such Persons
to purchase simultaneously Equity Interests of Parent;

 

(k)               payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business in an
amount not to exceed $100,000 at any time outstanding;

 

(l)                 Investments held by a Subsidiary acquired after the
Effective Date or of a Person merged or amalgamated with or into a Borrower or
another Loan Party in accordance with Section 7.02(c)(i) after the Effective
Date to the extent that such Investments were not made in contemplation of or in
connection with such acquisition, merger, amalgamation or consolidation and were
in existence on the date of such acquisition, merger, amalgamation or
consolidation;

 

(m)             other Investments in an aggregate amount not to exceed at any
time $500,000;

 

(n)               to the extent not exceeding $250,000 in the aggregate at any
time, Investments (i) acquired in connection with the good faith settlement of
delinquent Accounts Receivable in the ordinary course of business and consistent
with past practices, (ii) in the form of deposits, prepayments and other credits
to suppliers made in the ordinary course of business or (iii) received in
compromise or resolution of litigation, arbitration or other disputers with
Persons who are not Affiliates;

 

(o)               to the extent deemed an investment and without any
duplication, any guaranty that qualifies as a Permitted Indebtedness;

 

(p)               Investments to the extent that payment for such Investments is
made solely with Qualified Equity Interests of Parent (or any direct or indirect
parent of the Borrowing Agent);

 

(q)               security deposits provided to landlords, utility companies and
governmental authorities in the ordinary course of business;

 

- 46 -

 

(r)               loans to the Parent in lieu of any payment permitted to be
made to the Parent pursuant to Section 7.02(h);

 

(s)                loans to employees of the Loan Parties to enable them to
purchase Equity Interests of the Parent or one of its Subsidiaries, so long as
the transaction is consummated on a non-cash basis; and

 

(t)                 Permitted Acquisitions.

 

"Permitted Liens" means:

 

(a)                Liens securing the Obligations;

 

(b)               Liens for taxes, assessments, levies and governmental charges
the payment of which is not required under Section 7.01(c);

 

(c)                Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other similar Liens arising in the ordinary course
of business and securing obligations (other than Indebtedness for borrowed
money) that are not overdue by more than 45 days or are being contested in good
faith and by appropriate proceedings promptly initiated and diligently
conducted, and a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;

 

(d)               Liens described on Schedule 7.02(a), provided that (i) no such
Lien shall at any time be extended to cover any additional property not subject
thereto on the Effective Date and (ii) the principal amount of the Indebtedness
secured by such Liens shall not be extended, renewed, refunded or refinanced
other than pursuant to a Permitted Refinancing;

 

(e)                (i) purchase money Liens on equipment acquired or held by any
Loan Party or any of its Subsidiaries in the ordinary course of its business to
secure the purchase price of such equipment or Indebtedness incurred solely for
the purpose of financing the acquisition of such equipment or (ii) Liens
existing on such equipment at the time of its acquisition; provided, however,
that (A) no such Lien shall extend to or cover any other property of any Loan
Party or any of its Subsidiaries and (B) the aggregate principal amount of
Indebtedness secured by any or all such Liens shall not exceed at any one time
outstanding $1,000,000;

 

(f)                deposits and pledges of cash securing (i) obligations
incurred in respect of workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, (ii) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations in respect of customs, stay, performance,
utility, bid, appeal and surety bonds and completion guarantees and other
obligations of a like nature, but only to the extent such deposits or pledges
are made or otherwise arise in the ordinary course of business and secure
obligations not past due or are being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted, and a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;

 

(g)               encroachments, easements, servitudes, covenants, conditions,
restrictions, zoning restrictions and similar encumbrances on Real Property and
irregularities in the title thereto that do not (i) secure obligations for the
payment of money (other than with respect to real estate taxes or mechanics'
liens with respect to amounts not yet due and payable); (ii) materially impair
the value of such property or its use by any Loan Party or any of its
Subsidiaries in the normal conduct of such Person's business; or (iii) are
disclosed in any applicable title insurance policy provided to and accepted by
the Collateral Agent;

 

- 47 -

 

(h)               Liens of landlords and mortgagees of landlords (i) arising by
statute, common law or under any lease or related Contractual Obligation entered
into in the ordinary course of business, (ii) on fixtures and movable tangible
property located on the Real Property leased or subleased from such landlord,
(iii) for amounts not yet due or that are being contested in good faith by
appropriate proceedings and (iv) for which adequate reserves or other
appropriate provisions are maintained on the books of such Person in accordance
with GAAP;

 

(i)                 Liens on Real Property or equipment securing Indebtedness
permitted by clause (c) of the definition of Permitted Indebtedness;

 

(j)                 any interest or title of a licensor, sublicensor, lessor or
sublessor under any license or lease agreement entered into in the ordinary
course of a Loan Party's business;

 

(k)               licenses, sublicenses, leases and subleases granted to third
Persons in the ordinary course of a Loan Party's business not interfering in any
material respect with the business of any Loan Party;

 

(l)                 judgment liens (other than for the payment of taxes,
assessments or other governmental charges) securing judgments and other
proceedings not constituting an Event of Default under Section 9.01(k);

 

(m)             right of setoff or bankers' liens upon deposits of cash 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;

 

(n)               Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into in the
ordinary course of business;

 

(o)               Liens granted in the ordinary course of business on the
unearned portion of insurance premiums securing the financing of insurance
premiums to the extent such financing is permitted under the definition of
Permitted Indebtedness;

 

(p)               other Liens as to which the aggregate amount of the
obligations secured thereby does not exceed $100,000;

 

(q)               Liens arising from precautionary uniform commercial code or
PPSA financing statements filed under any operating lease permitted by this
Agreement;

 

(r)                 Liens in favor of collecting banks arising under Section
4-210 of the Uniform Commercial Code or, with respect to collecting banks
located in the State of New York, under Section 4-208 of the Uniform Commercial
Code;

 

- 48 -

 

(s)                Liens in favor of customs and revenue authorities arising as
a matter of law which secure payment of customs duties in connection with the
importation of goods in the ordinary course of business; and

 

(t)                 Liens in favor of insurers (or other Persons financing the
payment of insurance premiums) securing Indebtedness of the type described in
clause (g) of the definition of "Permitted Indebtedness" financing the premiums
payable in respect of insurance policies issued by such insurers; provided that
such Liens attach solely to returned premiums in respect of such policies.

 

"Permitted Refinancing" means the extension of maturity, refinancing or
modification of the terms of Indebtedness so long as:

 

(a)                after giving effect to such extension, refinancing or
modification, the amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;

 

(b)               such extension, refinancing or modification does not result in
a shortening of the average weighted maturity (measured as of the extension,
refinancing or modification) of the Indebtedness so extended, refinanced or
modified;

 

(c)                such extension, refinancing or modification is pursuant to
terms that are not less favorable to the Loan Parties and the Lenders than the
terms of the Indebtedness (including, without limitation, terms relating to the
collateral (if any) and subordination (if any)) being extended, refinanced or
modified; and

 

(d)               the Indebtedness that is extended, refinanced or modified is
not recourse to any Loan Party or any of its Subsidiaries 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.

 

"Person" means an individual, corporation, limited liability company, unlimited
liability company, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture or other enterprise or entity or
Governmental Authority.

 

"Petty Cash Accounts" shall mean deposit accounts that do not contain amounts at
any time in an aggregate amount in excess of $10,000 for any one account and
$75,000 in the aggregate for all such accounts.

 

"PNC" means PNC Bank, National Association.

 

"PNC Base Rate" means the base commercial lending rate of PNC as publicly
announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by PNC as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.

 

- 49 -

 

"Post-Default Rate" means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect,
interest at the highest rate specified herein for any Loan then outstanding
prior to an Event of Default plus 2.00%.

 

"PPSA" means the Personal Property Security Act (Ontario) and the Regulations
thereunder, as from time to time in effect, provided, however, if attachment,
perfection or priority of the Collateral Agent’s Liens in any Collateral are
governed by the personal property security laws of any jurisdiction other than
Ontario, "PPSA" shall mean those personal property security laws in such other
jurisdiction (including, as applicable, the Civil Code of Québec) for the
purposes of the provisions hereof relating to such attachment, perfection or
priority and for the definitions related to such provisions.

 

"Pro Rata Share" means:

 

(a)                with respect to a Lender's (x) obligation to make Revolving
Loans and receive payments of interest, fees, and principal with respect thereto
and (y) obligations to participate in Letters of Credit and Reimbursement
Obligations with respect to Letters of Credit, to reimburse the L/C Issuer with
respect to Letters of Credit, and right to receive payments of fees with respect
thereto, the percentage obtained by dividing (i) such Lender's Revolving Credit
Commitment, by (ii) the Total Revolving Credit Commitment, provided that, if the
Total Revolving Credit Commitment has been reduced to zero, the numerator shall
be the aggregate unpaid principal amount of such Lender's Revolving Loans
(including Agent Advances) and its interest in the Letter of Credit Obligations
and the denominator shall be the aggregate unpaid principal amount of all
Revolving Loans (including Agent Advances) and Letter of Credit Obligations;
provided further, however, that if all of the Revolving Loans have been paid in
full and Letters of Credit remain outstanding, Pro Rata Share for purposes of
clause (y) above shall be determined as if the Revolving Credit Commitments had
not been terminated or reduced to zero and based upon the Revolving Credit
Commitments as they existed immediately prior to their termination or reduction
to zero;

 

(b)               with respect to a Lender's obligation to make the Term Loans
on the Effective Date and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's Term Loan
Commitment, by (ii) the Total Term Loan Commitment, provided that if Total Term
Loan Commitment has been reduced to zero, the numerator shall be the aggregate
unpaid principal amount of such Lender's Term Loans made pursuant to such
Lender's Total Term Loan Commitment and the denominator shall be the unpaid
principal amount of all Term Loans made pursuant to the Lenders' Total Term Loan
Commitment; and

 

(c)                with respect to all other matters (including, without
limitation, the indemnification obligations arising under Section 10.05), the
percentage obtained by dividing (i) the sum of such Lender's Revolving Credit
Commitment and the unpaid principal amount of such Lender's portion of the Term
Loans, by (ii) the sum of the Total Revolving Credit Commitment and the
aggregate unpaid principal amount of the Term Loans, provided that, if such
Lender's Revolving Credit Commitment shall have been reduced to zero, such
Lender's Revolving Credit Commitment shall be deemed to be the aggregate unpaid
principal amount of such Lender's Revolving Loans (including Agent Advances) and
its interest in the Letter of Credit Obligations and if the Total Revolving
Credit Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment shall be deemed to be the aggregate unpaid principal amount of all
Revolving Loans (including Agent Advances) and Letter of Credit Obligations.

 

- 50 -

 

"Proceeds" means (a) all "proceeds" (as defined in Article 9 of the Uniform
Commercial Code or the PPSA, as applicable) with respect to the Collateral and
(b) whatever is recoverable or recovered when any Collateral is sold, exchanged,
collected, or disposed of, whether voluntarily or involuntarily.

 

"Processor Letter" means any letter agreement substantially in the form attached
hereto as Exhibit H between any Loan Party and any Credit Card Issuer or Credit
Card Processor in favor of the Collateral Agent acknowledging the Collateral
Agent's first priority security interest in the monies due and to become due to
such Loan Party (including, without limitation, credits and reserves) under the
applicable Credit Card Agreement between such Loan Party and such Credit Card
Issuer or Credit Card Processor, and agreeing to transfer all such amounts to a
Cash Management Account subject to a Control Agreement, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

 

"Projections" means financial projections of the Parent and its Subsidiaries
delivered pursuant to Section 6.01(g)(ii), as updated from time to time pursuant
to Section 7.01(a)(vii).

 

"Published Rate" means the rate of interest published each Business Day in the
Wall Street Journal "Money Rates" listing under the caption "London Interbank
Offered Rates" for a one month period (or, if no such rate is published therein
for any reason, then the Published Rate shall be the LIBOR Rate for a one month
period as published in another publication selected by the Administrative
Agent).

 

“Purchase Price” means, with respect to any Specified Acquisition, an amount
equal to the sum of (a) the aggregate consideration, whether cash, property or
securities (including, without limitation, the fair market value of any Equity
Interests of any Loan Party or any of its Subsidiaries issued in connection with
such Specified Acquisition), paid or delivered by a Loan Party or any of its
Subsidiaries (whether as initial consideration or through the payment or
disposition of deferred consideration, including, without limitation, in the
form of seller financing, royalty or licensing payments, payments allocated
towards non-compete covenants, payments to principals for consulting services or
other similar payments) in connection with such Specified Acquisition, plus
(b) the aggregate amount of liabilities of the acquired business (net of current
assets of the acquired business) that would be reflected on a balance sheet (if
such were to be prepared) of the Parent and its Subsidiaries after giving effect
to such Specified Acquisition.

 

"Qualified Cash" means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the US Loan Parties that is subject to
a Cash Management Agreement in an aggregate amount not exceeding $1,000,000.

 

- 51 -

 

"Qualified ECP Loan Party" means each Borrower or Guarantor that on the
Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a "commodity pool" as defined in
Section 1a(10) of the Commodity Exchange Act and Commodity Futures Trading
Commission regulations thereunder that has total assets exceeding $10,000,000 or
(b) an Eligible Contract Participant that can cause another person to qualify as
an Eligible Contract Participant on the Eligibility Date under Section
1a(18)(A)(v)(II) of the Commodity Exchange Act by entering into or otherwise
providing a "letter of credit or keepwell, support, or other agreement" for
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

"Qualified Equity Interests" means, with respect to any Person, all Equity
Interests of such Person that are not Disqualified Equity Interests.

 

"Real Property" means all real (immovable) property owned or leased by any
Borrower or any Guarantor.

 

"Real Property Deliverables" means each of the following agreements, instruments
and other documents in respect of each Facility:

 

(a)                a Mortgage duly executed by the applicable Loan Party,

 

(b)               evidence of the recording of each Mortgage in such office or
offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the Lien purported to be created thereby or to otherwise
protect the rights of the Collateral Agent and the Lenders thereunder;

 

(c)                a Title Insurance Policy or bring-down of any existing Title
Insurance Policy (as applicable) with respect to each Mortgage, dated as of the
date such Title Insurance Policy is required to be delivered to the Collateral
Agent;

 

(d)               a current ALTA survey and a surveyor's certificate (or
certificate of location, as applicable), in form and substance reasonably
satisfactory to the Collateral Agent, certified to the Collateral Agent and to
the issuer of the Title Insurance Policy with respect thereto by a licensed
professional surveyor reasonably satisfactory to the Collateral Agent;

 

(e)                a copy of each letter issued by the applicable Governmental
Authority, evidencing each Facility's compliance with all applicable building
codes, fire codes, other health and safety rules and regulations, parking,
density and height requirements and other building and zoning laws;

 

(f)                a customary opinion of counsel, reasonably satisfactory to
the Collateral Agent, in the state where such Facility is located with respect
to the enforceability of the Mortgage to be recorded and such other matters as
the Collateral Agent may reasonably request;

 

(g)               a Phase I Environmental Site Assessment and reliance letter
with respect to such Real Property, prepared by a company reasonably
satisfactory to the Collateral Agent;

 

- 52 -

 

(h)               such documentation and information reasonably requested by
either Agent to ensure that each Lender is in compliance with the Flood Laws
applicable to any real property that is subject to a Mortgage, including, but
not limited to, providing the Agents with the address and/or GPS coordinates of
each structure on any real property that is or will be subject to a Mortgage in
favor of Collateral Agent, for the benefit of the Lenders, and, to the extent
required, obtaining flood insurance for such property, structures and contents
prior to or upon such property, structures and contents becoming Collateral, and
thereafter maintaining such flood insurance in full force and effect for so long
as required by the Flood Laws; and

 

(i)                 such other agreements, instruments and other documents
(including guarantees and opinions of counsel) as the Collateral Agent may
reasonably require.

 

"Recipient" means the Administrative Agent and any Lender or L/C Issuer.

 

"Reference Bank" means the Bank, its successors or any other commercial bank
designated by the Administrative Agent to the Borrowing Agent from time to time.

 

"Reference Rate" means, for any day, a rate per annum equal to the highest of
(a) 4.25% per annum with respect to solely the Revolving Loans, (b) the PNC Base
Rate in effect on such day, (c) the sum of the Federal Funds Open Rate in effect
on such day plus one half of one percent (0.5%) per annum, and (d) the sum of
the Daily LIBOR Rate in effect on such day plus one percent (1.0%) per annum, so
long as a Daily LIBOR Rate is offered, ascertainable and not unlawful.

 

"Reference Rate Loan" means each portion of a Loan that bears interest at a rate
determined by reference to the Reference Rate.

 

"Register" has the meaning specified therefor in Section 12.07(d).

 

"Registered Intellectual Property" means Intellectual Property that is issued,
registered, renewed or the subject of a pending application.

 

"Regulation T, U or X" means Regulation T, Regulation U and Regulation X, in
each case, of the Board or any successor, individually or collectively, as the
context requires, as the same may be amended or supplemented from time to time.

 

"Reimbursement Obligations" has the meaning specified therefor in Section
3.04(b).

 

"Reinvestment Eligible Funds" means (a) the Net Cash Proceeds which, but for the
application of Section 2.05(c)(viii), would be required to be used to prepay the
Term Loan pursuant to Section 2.05(c)(v), or (b) Extraordinary Receipts
consisting of insurance or condemnation proceeds paid as the result of loss,
destruction, casualty, condemnation or expropriation which, but for the
application of Section 2.05(c)(viii), would be required to be used to prepay the
Term Loan pursuant to Section 2.05(c)(vii); provided that the amounts referred
to in clause (a) above shall not exceed $100,000 in the aggregate in any Fiscal
Year.

 

"Reinvestment Notice" has the meaning specified therefor in Section
2.05(c)(viii).

 

- 53 -

 

"Reinvestment Period" has the meaning specified therefor in Section
2.05(c)(viii).

 

"Related Fund" means, with respect to any Person, an Affiliate of such Person,
or a fund or account managed by such Person or an Affiliate of such Person.

 

"Related Party Assignment" has the meaning specified therefor in Section
12.07(b).

 

"Related Party Register" has the meaning specified therefor in Section 12.07(d).

 

"Release" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing of any
Hazardous Material (including the abandonment or discarding of barrels,
containers and other closed receptacles containing any Hazardous Material) into
the environment.

 

"Remedial Action" means all actions required by Environmental Laws taken to
(a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate,
investigate or in any other way address Hazardous Materials in the 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 environment; or (c) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities.

 

"Report" has the meaning specified therefor in Section 10.13(a).

 

"Reportable Compliance Event" means that any Covered Entity becomes a Sanctioned
Person, or is indicted, arraigned or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or
self-discovers facts or circumstances implicating any aspect of its operations
that leads the Covered Entity to conclude that there is an actual violation of
any applicable Anti-Terrorism Law.

 

"Reportable Event" means an event described in Section 4043 of ERISA (other than
an event not subject to the provision for 30-day notice to the PBGC under the
regulations promulgated under such Section).

 

"Required Lenders" means Lenders whose Pro Rata Shares (calculated in accordance
with clause (d) of the definition thereof) aggregate more than 50%.

 

"Requirements of Law" means, with respect to any Person, collectively, the
common law and all federal, state, provincial, territorial, local, municipal,
foreign, multinational or international laws, statutes, codes, treaties,
standards, rules and regulations, guidelines, ordinances, orders, judgments,
writs, injunctions, decrees (including administrative or judicial precedents or
authorities) and the interpretation or administration thereof by, and other
determinations, directives, requirements or requests of, any Governmental
Authority, in each case that are applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject.

 

"Reserve Percentage" means as of any day the maximum percentage (expressed as a
decimal) in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities").

 

- 54 -

 

"Reserves" means, on any day, the sum (without duplication of any other reserve
or eligibility criteria) of the following, in each case as determined by the
Administrative Agent in its Permitted Discretion (a) the aggregate amount of
liabilities secured by Liens (other than Permitted Liens) upon Collateral that
are senior to the Administrative Agent's Liens (but imposition of any such
reserve shall not waive an Event of Default arising therefrom); (b) amounts to
reflect events, conditions, contingencies or risks which, as determined by the
Administrative Agent in its Permitted Discretion, adversely affect, or would
have a reasonable likelihood of adversely affecting, the ability of
Administrative Agent to realize upon the Collateral of the type that is included
in the Borrowing Base; (c) amounts to reflect the Administrative Agent's good
faith belief that any collateral report or financial information furnished by or
on behalf of any Borrower or Loan Party to any Agent is or may have been
incomplete, inaccurate or misleading in any material respect (to the extent
thereof); or (d) amounts in respect of any state of facts which the
Administrative Agent determines in its Permitted Discretion constitutes an Event
of Default. The amount of any Reserve established by the Administrative Agent
shall have a reasonable relationship to the event, condition or other matter
which is the basis for such reserve as determined by the Administrative Agent in
its Permitted Discretion, it being understood and agreed that such Reserves may
include (i) Dilution Reserves; (ii) payroll reserves (provided that, other than
during the continuance of an Event of Default, payroll reserves shall not exceed
at any time the accrued and unpaid payroll amount (including payroll taxes and
other withholdings)), (iii) Bank Product Reserves and (iv) Canadian Priority
Payables Reserves; provided, that, for the avoidance of doubt, the
Administrative Agent shall not establish any Reserves in respect of any matters
relating to any items of Collateral that have been taken into account in
determining Eligible Accounts.

 

"Restricted Payments" has the meaning specified therefor in Section 7.02(h).

 

"Revolver Priority Collateral" means Collateral constituting (a) Inventory
(including rights in all returned or repossessed Inventory of the Loan Parties),
(b) Accounts Receivable that arise from the sale, leasing, assignment or other
disposition of Inventory or the rendition of services, or from the licensing of,
or similar arrangements relating to, patents, trademarks, copyrights and other
intellectual property in the ordinary course of business, (c) Collateral
Records, (d) Deposit Accounts (other than amounts therein constituting (A)
amounts from Foreign Subsidiaries, but in the case of Collateral of any Foreign
Loan Party, such Collateral will be determined pursuant to the other provisions
of this definition or (B) identifiable Proceeds of Term Priority Collateral),
(e) to the extent evidencing or relating to any of the foregoing, supporting
obligations, letter of credit rights, payment intangibles and documents (as each
such term is defined in the Uniform Commercial Code) and documents of title (as
defined in the PPSA), and (f) all Proceeds and products (whether tangible or
intangible) of the foregoing, including Proceeds of insurance covering any or
all of the foregoing, in each case to the extent they relate to clauses (a)
through (e) above. For the avoidance of doubt, Revolver Priority Collateral
shall not include (i) patents, trademarks, copyrights, other intellectual
property or any other asset acquired with cash proceeds thereof except to the
extent such asset acquired is described in clauses (a) through (e) above,
(ii) during the continuance of an Event of Default, proceeds of business
interruption insurance and (iii) Proceeds of Revolving Loans.

 

- 55 -

 

"Revolver Priority Collateral Proceeds" means the Proceeds of Revolver Priority
Collateral.

 

"Revolving Credit Commitment" means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrowers in the amount set forth
opposite such Lender's name in Schedule 1.01(A) hereto or in the Assignment and
Acceptance pursuant to which such Lender became a Lender under this Agreement,
as such amount may be terminated or reduced from time to time in accordance with
the terms of this Agreement.

 

"Revolving Loan" means a loan made by a Lender to the Borrowers pursuant to
Section 2.01(a)(i).

 

"Revolving Loan Lender" means a Lender with a Revolving Credit Commitment or a
Revolving Loan.

 

"Revolving Loan Obligations" means any Obligations with respect to the Revolving
Loans (including without limitation, the principal thereof, the interest
thereon, and the fees and expenses specifically related thereto).

 

"Sale and Leaseback Transaction" means, with respect to the Parent or any of its
Subsidiaries, any arrangement, directly or indirectly, with any Person whereby
the Parent or any of its Subsidiaries shall sell or transfer any property used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred.

 

"Sanctioned Country" mean a country subject to a sanctions program under any
Anti-Terrorism Law.

 

"Sanctioned Person" means any individual person, group, regime, entity or thing
listed or otherwise recognized as a specially designated, prohibited, sanctioned
or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.

 

"SEC" means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.

 

"Secured Party" means any Agent, any Lender, any Bank Product Provider and the
L/C Issuer.

 

"Securities Act" means the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.

 

- 56 -

 

"Security Agreement" means a Pledge and Security Agreement, in form and
substance reasonably satisfactory to the Collateral Agent, made by a Loan Party
in favor of the Collateral Agent for the benefit of the Secured Parties securing
the Obligations.

 

"Security Documents" means, collectively, any Security Agreement, the Foreign
Security Documents, any IP Security Agreement, any Mortgage, any Cash Management
Agreement, and any other agreement executed and delivered by a Loan Party which
purports to grant a Lien to any Collateral Agent for the benefit of the Secured
Parties, in each case, as amended, amended and restated, supplemented or
otherwise modified from time to time, securing all or any portion of the
Obligations as set forth therein.

 

"Securitization" has the meaning specified therefor in Section 12.07(j).

 

"Seller" means any Person that sells Equity Interests or other property or
assets to a Loan Party or a Subsidiary of a Loan Party in a Permitted
Acquisition.

 

"Senior Officer" means, with respect to any Person, such Person's chief
executive officer, chief financial officer, chief operating officer, secretary
or President (or any other officer of such Person acting in any capacity similar
to the foregoing).

 

"Settlement Period" has the meaning specified therefor in Section 2.02(d)(i)
hereof.

 

"Solvent" means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (c) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, (e) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's property
would constitute unreasonably small capital and (f) such Person is not an
“insolvent person” within the meaning of the Bankruptcy and Insolvency Act
(Canada).

 

"Specified Acquisition" means the acquisition (whether by means of a merger,
consolidation or otherwise) of all of the Equity Interests of any Person or all
or substantially all of the assets of (or any division or business line of) any
Person.

 

"Standard & Poor's" means S&P Global Ratings, a division of S&P Global Inc., and
any successor thereto.

 

"Statutory Plans" means any statutory benefit plans that any Canadian Loan Party
is required to participate in or comply with, including the Canada Pension Plan
or the Quebec Pension Plan as maintained by the Government of Canada or the
Province of Québec, respectively, and plans administered pursuant to applicable
workplace safety insurance workers’ compensation and employment insurance
legislation.

 

- 57 -

 

"Subordinated Indebtedness" means Indebtedness of any Loan Party the terms of
which (including, without limitation, payment terms, interest rates, covenants,
remedies, defaults and other material terms) are reasonably satisfactory to the
Agents and the Required Lenders which has been expressly subordinated in right
of payment to all Indebtedness of such Loan Party under the Loan Documents
(a) by the execution and delivery of a subordination agreement, in form and
substance satisfactory to the Agents and the Required Lenders, or (b) otherwise
on terms and conditions satisfactory to the Agents and the Required Lenders.

 

"Subsidiary" means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (a) the accounts of which
would be consolidated with those of such Person in such Person's consolidated
financial statements if such financial statements were prepared in accordance
with GAAP or (b) of which more than 50% of (i) the outstanding Equity Interests
having (in the absence of contingencies) ordinary voting power to elect a
majority of the Board of Directors of such Person, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such Person. References to a Subsidiary shall mean a
Subsidiary of the Parent unless the context expressly provides otherwise.

 

"SVB Facility" means that certain Amended and Restated Loan and Security
Agreement, dated as of April 26, 2016, by and between Silicon Valley Bank, a
California corporation, as bank, and Data Sciences International, Inc., as
borrower.

 

"Swap" means any "swap" as defined in Section 1a(47) of the Commodity Exchange
Act and regulations thereunder other than (a) a swap entered into on, or subject
to the rules of, a board of trade designated as a contract market under Section
5 of the Commodity Exchange Act, or (b) a commodity option entered into pursuant
to Commodity Futures Trading Commission Regulation 32.3(a).

 

"Swap Obligation" means any obligation to pay or perform under any agreement,
contract or transaction that constitutes a Swap which is also a Lender-Provided
Hedge Agreement.

 

"Target" has the meaning specified therefor in the preamble hereto.

 

"Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

"Term Loan" and "Term Loans" means, the Term Loans made on the Effective Date by
the Term Loan Lenders to the Borrowers pursuant to Section 2.01(a)(ii).

 

"Term Loan Lender" means a Lender with a Term Loan Commitment or a Term Loan.

 

- 58 -

 

"Term Loan Commitment" means, with respect to each Lender, the commitment of
such Lender to make the Term Loans to the Borrowers on the Effective Date in the
amount set forth in Schedule 1.01(A) hereto under the heading "Term Loan
Commitment" , as the same may be terminated or reduced from time to time in
accordance with the terms of this Agreement.

 

"Term Loan Obligations" means any Obligations with respect to the Term Loans
(including, without limitation, the principal thereof, the interest thereon, and
the fees and expenses specifically related thereto).

 

"Term Priority Collateral" means all Collateral other than Revolver Priority
Collateral.

 

"Term Priority Collateral Proceeds" means the Proceeds of the Term Priority
Collateral.

 

"Termination Event" means (a) a Reportable Event with respect to any Employee
Plan, (b) any event that causes any Loan Party or any of its ERISA Affiliates to
incur liability under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA, (c) the filing of a notice of intent to terminate an Employee Plan in a
non-standard termination or the treatment of an Employee Plan amendment as a
non-standard termination under Section 4041 of ERISA, (d) the institution of
proceedings by the PBGC to terminate an Employee Plan, or (e) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Employee Plan.

 

"Title Insurance Policy" means a mortgagee's loan policy, in form and substance
reasonably satisfactory to the Collateral Agent, together with all endorsements
made from time to time thereto, issued by or on behalf of a title insurance
company reasonably satisfactory to the Collateral Agent, insuring the Lien
created by a Mortgage in an amount and on terms reasonably satisfactory to the
Collateral Agent, delivered to the Collateral Agent.

 

"Total Commitment" means the sum of the Total Revolving Credit Commitment and
the Total Term Loan Commitment.

 

"Total Revolving Credit Commitment" means the sum of the amounts of the Lenders'
Revolving Credit Commitments.

 

"Total Term Loan Commitment" means the sum of the amounts of the Lenders' Term
Loan Commitments.

 

"Transaction Documents" means the Loan Documents and the Acquisition Documents.

 

"Transactions" means, collectively, the transactions to occur on or about the
Effective Date pursuant to the Transaction Documents, including (a) the
consummation of the Acquisition, (b) the execution, delivery and performance of
the Loan Documents and the making of the Loans hereunder, (c) the refinancing of
existing indebtedness of the Borrowers and (d) the payment of all fees and
expenses to be paid on or prior to the Effective Date and owing in connection
with the foregoing.

 

- 59 -

 

"Transferee" has the meaning specified therefor in Section 2.09(a).

 

"Treasury Regulations" means the United States Treasury regulations issued from
time to time.

 

"US Loan Parties" means the Loan Parties that are not the Canadian Loan Parties
or the UK Loan Parties.

 

"U.S. Person" means any Person that is a "United States Person" as defined in
Section 7701(a)(30) of the Code.

 

"U.S. Tax Compliance Certificate" has the meaning specified therefor in
Section 2.09(e)(ii)(B)(3).

 

"UCP 600" has the meaning specified therefor in Section 3.02(b).

 

"UK Loan Parties" means Biochrom Ltd. and Data Sciences UK (MN) Limited, each of
which is party hereto as a Guarantor.

 

"UK Security Documents" means those documents listed on Schedule 1.01(C) hereto
and any other agreement governed by the laws of England and Wales which are
required by the Collateral Agent and which are entered into at any time by any
Loan Party in connection with this Agreement.

 

"Uniform Commercial Code" or "UCC" has the meaning specified therefor in Section
1.04.

 

"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

 

"Unused Line Fee" has the meaning specified therefor in Section 2.06(a).

 

"USA PATRIOT Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of
2001 (Title III of Pub. L. 107-56, Oct. 26, 2001) as amended by the USA Patriot
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177, March 9, 2006).

 

"WARN" has the meaning specified therefor in Section 6.01(z).

 

"Withholding Agent" means any Loan Party and the Administrative Agent.

 

"Working Investment" means, at any date of determination thereof, (a) the sum,
for any Person and its Subsidiaries, of (i) the unpaid face amount of all
Accounts Receivable of such Person and its Subsidiaries as at such date of
determination, plus (ii) the aggregate amount of prepaid expenses and other
current assets of such Person and its Subsidiaries as at such date of
determination (other than cash, Cash Equivalents and any Indebtedness owing to
such Person or any of its Subsidiaries by Affiliates of such Person), minus
(b) the sum, for such Person and its Subsidiaries, of (i) the unpaid amount of
all accounts payable of such Person and its Subsidiaries as at such date of
determination, plus (ii) the aggregate amount of all accrued expenses of such
Person and its Subsidiaries as at such date of determination (other than the
current portion of long-term debt and all accrued interest and taxes).

 

- 60 -

 

Section 1.02        Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible
and (f) all references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations. References in
this Agreement to "determination" by any Agent include good faith estimates by
such Agent (in the case of quantitative determinations) and good faith beliefs
by such Agent (in the case of qualitative determinations). Any reference to cash
and Cash Equivalents with respect to which the Collateral Agent is the
depositary or securities intermediary, or any combination thereof shall be
construed to mean cash and Cash Equivalents on deposit with or in securities
accounts with Collateral Agent only to the extent the Collateral Agent is a
depositary bank or registered securities intermediary.

 

Section 1.03        Certain Matters of Construction. A Default or Event of
Default shall be deemed to exist at all times during the period commencing on
the date that such Default or Event of Default occurs to the date on which such
Default or Event of Default is waived in writing pursuant to this Agreement or,
in the case of a Default, is cured within any period of cure expressly provided
for in this Agreement; and an Event of Default shall "continue" or be
"continuing" until such Event of Default has been waived in writing by the
Required Lenders or by each Lender affected thereby, or by all Lenders, as
applicable. Any Lien referred to in this Agreement or any other Loan Document as
having been created in favor of any Agent (or any subagent or designee or
delegee of any Agent), any agreement entered into by any Agent (or any subagent
or designee or delegee of any Agent) pursuant to this Agreement or any other
Loan Document, any payment made by or to or funds received by any Agent (or any
subagent or designee or delegee of any Agent) pursuant to or as contemplated by
this Agreement or any other Loan Document, or any act taken or omitted to be
taken by any Agent (or any subagent or designee or delegee of any Agent), shall,
unless otherwise expressly provided, be created, entered into, made or received,
or taken or omitted, for the benefit or account of (and in the case of the UK
Security Documents, in trust for) the Agents, the L/C Issuer and the Lenders
(including each Bank Product Provider). Wherever the phrase "to the knowledge of
any Loan Party" or words of similar import relating to the knowledge or the
awareness of any Loan Party are used in this Agreement or any other Loan
Document, unless otherwise indicated, such phrase shall mean and refer to (i)
the actual knowledge of a Senior Officer of any Loan Party or (ii) the knowledge
that a Senior Officer would have obtained if such officer had engaged in good
faith and diligent performance of such officer's duties, including the making of
such reasonably specific inquiries as may be necessary of the employees or
agents of such Loan Party and a good faith attempt to ascertain the existence or
accuracy of the matter to which such phrase relates. All covenants hereunder
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or otherwise within the limitations of, another covenant shall
not avoid the occurrence of a default if such action is taken or condition
exists. Unless otherwise provided, all financial calculations shall be performed
with Inventory valued on a first-in, first-out basis. In addition, all
representations and warranties hereunder shall be given independent effect so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of a breach of a representation or warranty hereunder.

 

- 61 -

 

Section 1.04        Accounting and Other Terms.

 

(a)                Unless otherwise expressly provided herein, each accounting
term used herein shall have the meaning given it under GAAP applied on a basis
consistent with those used in preparing the Financial Statements except as noted
in the definition of GAAP. For purposes of determining compliance with any
incurrence or expenditure tests set forth in Section 7.01, Section 7.02 and
Section 7.03, any amounts so incurred or expended (to the extent incurred or
expended in a currency other than Dollars) shall be converted into Dollars on
the basis of the exchange rates (as shown on the Bloomberg currency page for
such currency or, if the same does not provide such exchange rate, by reference
to such other publicly available service for displaying exchange rates as may be
reasonably selected by the Agents or, in the event no such service is selected,
on such other basis as is reasonably satisfactory to the Agents) as in effect on
the date of such incurrence or expenditure under any provision of any such
Section that has an aggregate Dollar limitation provided for therein (and to the
extent the respective incurrence or expenditure test regulates the aggregate
amount outstanding at any time and it is expressed in terms of Dollars, all
outstanding amounts originally incurred or spent in currencies other than
Dollars shall be converted into Dollars on the basis of the exchange rates (as
shown on the Bloomberg currency page for such currency or, if the same does not
provide such exchange rate, by reference to such other publicly available
service for displaying exchange rates as may be reasonably selected by the
Agents or, in the event no such service is selected, on such other basis as is
reasonably satisfactory to the Agents) as in effect on the date of any new
incurrence or expenditures made under any provision of any such Section that
regulates the Dollar amount outstanding at any time). Notwithstanding the
foregoing, (i) with respect to the accounting for leases as either operating
leases or capital leases and the impact of such accounting in accordance with
FASB ASC 840 on the definitions and covenants herein, GAAP as in effect on the
Effective Date shall be applied and (ii) for purposes of determining compliance
with any covenant (including the computation of any financial covenant)
contained herein, Indebtedness of the Parent and its Subsidiaries shall be
deemed to be carried at 100% of the outstanding principal amount thereof, and
the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall
be disregarded.

 

- 62 -

 

(b)               All terms used in this Agreement which are defined in Article
8 or Article 9 of the Uniform Commercial Code as in effect from time to time in
the State of New York (the "Uniform Commercial Code" or the "UCC") and which are
not otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as any Agent may otherwise determine, and provided
further that terms defined in the PPSA and which are not otherwise defined
herein shall, to the extent the PPSA applies, have the meanings given in the
PPSA.

 

(c)                Notwithstanding anything in the Agreement to the contrary,
(A) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection
therewith and (B) 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 enacted, adopted, issued, phased in or effective after the date of
this Agreement regardless of the date enacted, adopted, issued, phased in or
effective.

 

Section 1.05        Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York 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 but excluding"; provided, however, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day.

 

Section 1.06        Obligation to Make Payments in Dollars. All payments to be
made by any Loan Party of principal, interest, fees and other Obligations under
any Loan Document shall be made in Dollars in same day funds, and no obligation
of any Loan Party to make any such payment shall be discharged or satisfied by
any payment other than payments made in Dollars in same day funds. Unless
otherwise stated, all calculations, comparisons, measurements and determinations
under the Loan Documents shall be made in Dollars. For the purpose of such
calculations, comparisons, measurements and determinations, amounts denominated
in currencies other than Dollars shall be converted to Dollars on the date of
such calculation, comparison, measurement or determination by the Agents in
accordance with their normal practices.

 

Section 1.07        Québec Interpretation. For purposes of any assets,
liabilities or entities located in the Province of Québec and for all other
purposes pursuant to which the interpretation or construction of this Agreement
may be subject to the laws of the Province of Québec or a court or tribunal
exercising jurisdiction in the Province of Québec, (a) "personal property" shall
be deemed to include "movable property", (b) "real property" shall be deemed to
include "immovable property", (c) "tangible property" shall be deemed to include
"corporeal property", (d) "intangible property" shall be deemed to include
"incorporeal property", (e) "security interest", "mortgage" and "lien" shall be
deemed to include a "hypothec" (either legal or conventional), "prior claim" and
a resolutory clause, (f) all references to filing, registering or recording
under the PPSA shall be deemed to include publication under the Civil Code of
Québec, (g) all references to "perfection" of or "perfected" liens or security
interest shall be deemed to include a reference to an "opposable" or "set up"
lien or security interest as against third parties, (h) any "right of offset",
"right of setoff" or similar expression shall be deemed to include a "right of
compensation", (i) "goods" shall be deemed to include "corporeal movable
property" other than chattel paper, documents of title, instruments, money and
securities, (j) an "agent" shall be deemed to include a "mandatary", (k)
"construction liens" shall be deemed to include "legal hypothecs"; (l) "joint
and several" shall be deemed to include "solidary"; (m) "gross negligence or
willful misconduct" shall be deemed to be "intentional or gross fault"; (n)
"beneficial ownership" shall be deemed to include "ownership on behalf of
another as mandatary"; (o) "easement" shall be deemed to include a "servitude";
(p) "priority" shall be deemed to include "rank"; (q) "survey" shall be deemed
to include "certificate of location and plan"; (r) "fee simple title" shall be
deemed to include "absolute ownership". The parties hereto confirm that it is
their wish that this Agreement and any other document executed in connection
with the transactions contemplated herein be drawn up in the English language
only and that all other documents contemplated thereunder or relating thereto,
including notices, may also be drawn up in the English language only. Les
parties aux présentes confirment que c'est leur volonté que cette convention et
les autres documents de crédit soient rédigés en langue anglaise seulement et
que tous les documents, y compris tous avis, envisages par cette convention et
les autres documents peuvent être rédigés en la langue anglaise seulement.

 

- 63 -

 

Article II

THE LOANS

 

Section 2.01        Commitments. (a) Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:

 

(i)                 each Revolving Loan Lender severally agrees to make
Revolving Loans to the Borrowers at any time and from time to time from the
Effective Date to the Final Maturity Date, or until the earlier reduction of its
Revolving Credit Commitment to zero in accordance with the terms hereof, in an
aggregate principal amount of Revolving Loans at any time outstanding not to
exceed the lesser of (x) the amount of such Lender's Pro Rata Share of the
Maximum Revolving Loan Amount, and (y) the amount of such Lender's Pro Rata
Share of the then current Borrowing Base; and

 

(ii)               each Term Loan Lender agrees, severally and not jointly, to
make or cause to be made on the Effective Date, a Term Loan to the Borrowers in
an aggregate principal amount not to exceed its Term Loan Commitment and the
Term Loans of all Lenders made on the Effective Date shall be in an aggregate
principal amount not to exceed the Total Term Loan Commitment.

 

(b)               Notwithstanding the foregoing:

 

(i)                 The aggregate principal amount of Revolving Loans
outstanding at any time to the Borrowers shall not exceed the lower of (A) the
difference between (x) the Total Revolving Credit Commitment and (y) the
aggregate Letter of Credit Obligations and (B) the difference between (x) the
then current Borrowing Base and (y) the aggregate Letter of Credit Obligations.
The Revolving Credit Commitment of each Lender shall automatically and
permanently be reduced to zero on the Final Maturity Date. Within the foregoing
limits, the Borrowers may borrow, repay and reborrow, the applicable Revolving
Loans on or after the Effective Date and prior to the Final Maturity Date,
subject to the terms, provisions and limitations set forth herein.

 

- 64 -

 

(ii)               The aggregate principal amount of all Term Loans made on the
Effective Date pursuant to this Agreement shall not exceed the Total Term Loan
Commitment. Any principal amount of the Term Loans which is repaid or prepaid
may not be reborrowed.

 

(iii)             The aggregate principal amount of all Loans outstanding at any
time to the Borrowers shall not exceed the Total Commitment.

 

Section 2.02        Making the Loans. (a) The Borrowing Agent shall give the
Administrative Agent prior telephonic notice (immediately confirmed in writing,
in substantially the form of Exhibit B hereto (a "Notice of Borrowing")), not
later than 12:00 noon (New York City time) on the date which is 3 Business Days
prior to the date of the proposed Loan (or such shorter period as the
Administrative Agent is willing, in its sole discretion, to accommodate from
time to time, but in no event later than 12:00 noon (New York City time) on the
borrowing date of the proposed Loan), it being understood and agreed that with
respect to the Term Loan to be funded on the Effective Date, the Borrowing Agent
shall be permitted to deliver, and the Administrative Agent shall accept, a
Notice of Borrowing dated one (1) Business Day prior to the Effective Date. Such
Notice of Borrowing shall be irrevocable and shall specify (i) the principal
amount and type of the proposed Loan, (ii) in the case of Loans requested on the
Effective Date, whether such Loan is requested to be a Revolving Loan or the
Term Loan, (iii) whether the Loan is requested to be a Reference Rate Loan or a
LIBOR Rate Loan and, in the case of a LIBOR Rate Loan, the initial Interest
Period with respect thereto, (iv) the use of the proceeds of such proposed Loan
and (v) the proposed borrowing date, which must be a Business Day, and, with
respect to the Term Loans, must be the Effective Date. If no election as to the
type of Loan is specified, then the requested Loan shall be a Reference Rate
Loan. If no Interest Period is specified with respect to any requested LIBOR
Rate Loan, then the Borrowing Agent shall be deemed to have selected an Interest
Period of one month's duration. Each Loan shall be made in Dollars. The
Administrative Agent and the Lenders may act without liability upon the basis of
written, telecopied or telephonic notice believed by the Administrative Agent in
good faith to be from the Borrowing Agent (or from any Authorized Officer
thereof designated in writing purportedly from the Borrowing Agent to the
Administrative Agent). The Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of any such telephonic Notice of
Borrowing. The Administrative Agent and each Lender shall be entitled to rely
conclusively on the authority of any Authorized Officer of the Borrowing Agent
to request a Loan on behalf of the Borrowers until the Administrative Agent
receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing.

 

(b)               Each Notice of Borrowing pursuant to this Section 2.02 shall
be irrevocable and the Borrowers shall be bound to make a borrowing in
accordance therewith. Each Revolving Loan shall be made in a minimum amount of
$500,000 and shall be in an integral multiple of $250,000.

 

- 65 -

 

(c)                (i) Except as otherwise provided in this Section 2.02(c), all
Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment and the Total Term Loan Commitment, as the case may be, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligations to make a Loan requested hereunder,
nor shall the Commitment of any Lender be increased or decreased as a result of
the default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder, and each Lender shall be obligated to make the Loans
required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.

 

(ii)               Notwithstanding any other provision of this Agreement, and in
order to reduce the number of fund transfers among the Borrowers, the Agents and
the Lenders, the Borrowers, the Agents and the Lenders agree that the
Administrative Agent may (but shall not be obligated to), and the Borrowers and
the Lenders hereby irrevocably authorize the Administrative Agent to, fund, on
behalf of the Revolving Loan Lenders, Revolving Loans pursuant to Section 2.01,
subject to the procedures for settlement set forth in Section 2.02(d); provided,
however, that (A) the Administrative Agent shall in no event fund any such
Revolving Loans if the Administrative Agent shall have received written notice
from the Collateral Agent or the Required Lenders on the Business Day prior to
the date of the proposed Revolving Loan that one or more of the conditions
precedent contained in Section 5.02 will not be satisfied at the time of the
proposed Revolving Loan (so long as such written notice has been received in
sufficient time to permit the Administrative Agent to avoid completing such
funding), and (B) the Administrative Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 5.02
have been satisfied. If the Borrowing Agent gives a Notice of Borrowing
requesting a Revolving Loan and the Administrative Agent elects not to fund such
Revolving Loan on behalf of the Revolving Loan Lenders, then promptly after
receipt of the Notice of Borrowing requesting such Revolving Loan, the
Administrative Agent shall notify each Revolving Loan Lender of the specifics of
the requested Revolving Loan and that it will not fund the requested Revolving
Loan on behalf of the Revolving Loan Lenders. If the Administrative Agent
notifies the Revolving Loan Lenders that it will not fund a requested Revolving
Loan on behalf of the Revolving Loan Lenders, each Revolving Loan Lender shall
make its Pro Rata Share of the Revolving Loan available to the Administrative
Agent, in immediately available funds, in the Administrative Agent's Account no
later than 3:00 p.m. (New York City time) (provided that the Administrative
Agent requests payment from such Revolving Loan Lender not later than 1:00 p.m.
(New York City time)) on the date of the proposed Revolving Loan. The
Administrative Agent will make the proceeds of such Revolving Loans available to
the Borrowers on the day of the proposed Revolving Loan by causing an amount, in
immediately available funds, equal to the proceeds of all such Revolving Loans
received by the Administrative Agent in the Administrative Agent's Account or
the amount funded by the Administrative Agent on behalf of the Revolving Loan
Lenders to be deposited in an account designated by the Borrowing Agent.

 

- 66 -

 

(iii)             If the Administrative Agent has notified the Revolving Loan
Lenders that the Administrative Agent, on behalf of such Revolving Loan Lenders,
will not fund a particular Revolving Loan pursuant to Section 2.02(c)(ii), the
Administrative Agent may assume that each such Revolving Loan Lender has made
such amount available to the Administrative Agent on such day and the
Administrative Agent, in its sole discretion, may, but shall not be obligated
to, cause a corresponding amount to be made available to the Borrowers on such
day. If the Administrative Agent makes such corresponding amount available to
the Borrowers and such corresponding amount is not in fact made available to the
Administrative Agent by any such Revolving Loan Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Effective Rate for 3 Business Days and thereafter at
the Reference Rate. During the period in which such Revolving Loan Lender has
not paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrowers shall, for
all purposes hereof, be a Revolving Loan made by the Administrative Agent for
its own account. Upon any such failure by a Revolving Loan Lender to pay the
Administrative Agent, the Administrative Agent shall promptly thereafter notify
the Borrowing Agent of such failure and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent for its own account.

 

(iv)             Nothing in this Section 2.02(c) shall be deemed to relieve any
Revolving Loan Lender from its obligations to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Administrative Agent or
the Borrowers may have against any Revolving Loan Lender as a result of any
default by such Revolving Loan Lender hereunder.

 

(d)               (i) With respect to all periods for which the Administrative
Agent has funded Revolving Loans pursuant to Section 2.02(c), on Friday of each
week, or if the applicable Friday is not a Business Day, then on the following
Business Day, or such shorter period as the Administrative Agent may from time
to time select (any such week or shorter period being herein called a
"Settlement Period"), the Administrative Agent shall notify each Revolving Loan
Lender of the unpaid principal amount of the Revolving Loans outstanding as of
the last day of each such Settlement Period. In the event that such amount is
greater than the unpaid principal amount of the Revolving Loans outstanding on
the last day of the Settlement Period immediately preceding such Settlement
Period (or, if there has been no preceding Settlement Period, the amount of the
Revolving Loans made on the date of such Revolving Loan Lender's initial
funding), each Revolving Loan Lender shall promptly (and in any event not later
than 2:00 p.m. (New York City time) if the Administrative Agent requests payment
from such Lender not later than 12:00 noon (New York City time) on such day)
make available to the Administrative Agent its Pro Rata Share of the Total
Revolving Credit Commitment of the difference in immediately available funds. In
the event that such amount is less than the unpaid principal amount of the
Revolving Loans outstanding on the last day of the Settlement Period immediately
preceding such Settlement Period, the Administrative Agent shall promptly pay
over to each Revolving Loan Lender its Pro Rata Share of the Total Revolving
Credit Commitment of the difference in immediately available funds. In addition,
if the Administrative Agent shall so request at any time when a Default or an
Event of Default shall have occurred and be continuing, or any other event shall
have occurred as a result of which the Administrative Agent shall determine that
it is desirable to present claims against the Borrowers for repayment, each
Revolving Loan Lender shall promptly remit to the Administrative Agent or, as
the case may be, the Administrative Agent shall promptly remit to each Revolving
Loan Lender, sufficient funds to adjust the interests of the Revolving Loan
Lenders in the then outstanding Revolving Loans to such an extent that, after
giving effect to such adjustment, each such Revolving Loan Lender's interest in
the then outstanding Revolving Loans will be equal to its Pro Rata Share
thereof. The obligations of the Administrative Agent and each Revolving Loan
Lender under this Section 2.02(d) shall be absolute and unconditional. Each
Revolving Loan Lender shall only be entitled to receive interest on its Pro Rata
Share of the Revolving Loans which have been funded by such Revolving Loan
Lender.

 

- 67 -

 

(ii)               In the event that any Revolving Loan Lender fails to make any
payment required to be made by it pursuant to Section 2.02(d)(i), the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Revolving Loan Lender together with interest thereon, for each
day from the date such payment was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Effective Rate for 3 Business Days
and thereafter at the Reference Rate. During the period in which such Revolving
Loan Lender has not paid such corresponding amount to the Administrative Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Administrative Agent to the
Borrowers shall, for all purposes hereof, be a Revolving Loan made by the
Administrative Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Administrative Agent, the Administrative Agent shall
promptly thereafter notify the Borrowing Agent of such failure and the Borrowers
shall immediately pay such corresponding amount to the Administrative Agent for
its own account. Nothing in this Section 2.02(d)(ii) shall be deemed to relieve
any Revolving Loan Lender from its obligation to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Administrative Agent or
the Borrowers may have against any Revolving Loan Lender as a result of any
default by such Revolving Loan Lender hereunder.

 

Section 2.03        Repayment of Loans; Evidence of Debt. (a) The outstanding
principal of all Revolving Loans shall be due and payable on the Final Maturity
Date.

 

(b)               The Term Loan shall be repayable in consecutive quarterly
installments, each of which shall be in an amount equal to (i) during the period
from and after the Effective Date up to and including the date that is the first
anniversary of the Effective Date, $400,000 per quarter, (ii) during the period
from and after the first anniversary of the Effective Date up to and including
the date that is the second anniversary of the Effective Date, $600,000 per
quarter and (iii) thereafter, $800,000 per quarter, each such installment to be
due and payable, in arrears, on the first day of each quarter and applied
ratably to the Term Loans, commencing on March 31, 2018, and ending on the Final
Maturity Date. The remaining outstanding unpaid principal amount of the Term
Loan and all accrued and unpaid interest thereon, shall be due and payable on
the earliest of (i) the termination of the Total Revolving Credit Commitment,
(ii) the date of the acceleration of the Term Loan in accordance with the terms
hereof and (iii) the Final Maturity Date.

 

(c)                Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

 

- 68 -

 

(d)               The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.

 

(e)                The entries made in the accounts maintained pursuant to
Section 2.03(c) or Section 2.03(d) shall be prima facie evidence of the
existence and amounts of the obligations recorded therein (absent manifest
error); provided that (i) the failure of any Lender or the Administrative Agent
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrowers to repay the Loans in accordance with the terms
of this Agreement and (ii) in the event of any conflict between the entries made
in the accounts maintained pursuant to Section 2.03(c) and the accounts
maintained pursuant to Section 2.03(d), the accounts maintained pursuant to
Section 2.03(d) shall govern and control.

 

(f)                Any Lender may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrowers shall execute and deliver to
such Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) in a form furnished by the
Collateral Agent and reasonably acceptable to the Borrowing Agent. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 12.07) be represented by
one or more promissory notes in such form payable to the payee named therein and
its registered assigns.

 

Section 2.04        Interest.

 

(a)                Revolving Loans. Subject to the terms of this Agreement, at
the option of the Borrowing Agent, each Revolving Loan shall be either a
Reference Rate Loan or a LIBOR Rate Loan. Each Revolving Loan that is a
Reference Rate Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date such Loan is made until repaid, at a
rate per annum equal to the Reference Rate plus the Applicable Margin. Each
Revolving Loan that is a LIBOR Rate Loan shall bear interest on the principal
amount thereof from time to time outstanding, from the date such Loan is made
until repaid, at a rate per annum equal to the LIBOR Rate for the Interest
Period in effect for such Loan plus the Applicable Margin.

 

(b)               Term Loan. Subject to the terms of this Agreement, at the
option of the Borrowing Agent, the Term Loan or any portion thereof shall be
either a Reference Rate Loan or a LIBOR Rate Loan. Each portion of the Term Loan
that is a Reference Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date such Term Loan is made
until repaid, at a rate per annum equal to the Reference Rate plus the
Applicable Margin. Each portion of the Term Loan that is a LIBOR Rate Loan shall
bear interest on the principal amount thereof from time to time outstanding,
from the date of the Term Loan until repaid, at a rate per annum equal to the
LIBOR Rate for the Interest Period in effect for the Term Loan (or such portion
thereof) plus the Applicable Margin.

 

- 69 -

 

(c)                Default Interest. To the extent permitted by law and
notwithstanding anything to the contrary in this Section, upon the occurrence
and during the continuance of an Event of Default and so long as written notice
is provided by an Agent to the Borrowing Agent, at the election of any Agent or
the Required Lenders, the principal of, and all accrued and unpaid interest on,
all Loans, fees, indemnities or any other Obligations (in each case other than
outstanding Letter of Credit Obligations) of the Loan Parties under this
Agreement and the other Loan Documents, shall bear interest, from the date such
Event of Default occurred until the date such Event of Default is waived in
writing in accordance herewith, at a rate per annum equal at all times to the
Post-Default Rate. All interest and other amounts payable pursuant to this
Section 2.04(c) shall be payable on demand.

 

(d)               Interest Payment. Interest on each Loan shall be payable
monthly, in arrears, on the first day of each month, commencing on the first day
of the month following the month in which such Loan is made and at maturity
(whether upon demand, by acceleration or otherwise). Interest at the
Post-Default Rate shall be payable on demand. The Borrowers hereby authorize the
Administrative Agent to, and the Administrative Agent may, from time to time,
charge the Loan Account pursuant to Section 4.01 with the amount of any interest
payment due hereunder.

 

(e)                General. All interest shall be computed on the basis of a
year of 360 days for the actual number of days, including the first day but
excluding the last day, elapsed.

 

(f)                Canadian Interest Provisions. Notwithstanding anything to the
contrary contained in this Agreement or any other Loan Document:

 

(i)                 whenever interest payable by any Loan Party is calculated on
the basis of a period which is less than the actual number of days in a calendar
year, each rate of interest determined pursuant to such calculation is, for
purposes of the Interest Act (Canada), equivalent to such rate multiplied by the
actual number of days in the calendar year in which such rate is to be
ascertained and divided by the number of days used as the basis of such
calculation;

 

(ii)               in no event shall the aggregate “interest” (as defined in
Section 347 of the Criminal Code (Canada), as the same shall be amended,
replaced or re-enacted from time to time (the “Criminal Code Section”)) payable
(whether by way of payment, collection or demand) by any Canadian Loan Party to
Agents or any Lender under this Agreement or any other Loan Document exceed the
effective annual rate of interest on the “credit advanced” (as defined in that
section) under this Agreement or such other Loan Document lawfully permitted
under that section and, if any payment, collection or demand pursuant to this
Agreement or any other Loan Document in respect of “interest” (as defined in
that section) is determined to be contrary to the provisions of that section and
the amount of such payment or collection shall be refunded by Agents and Lenders
to the Loan Parties with such “interest” deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by the Criminal Code Section to result in a
receipt by Agents or such Lender of interest at a rate not in contravention of
the Criminal Code Section, such adjustment to be effected, to the extent
necessary, as follows: firstly, by reducing the amounts or rates of interest
required to be paid to Agents or that Lender; and then, by reducing any fees,
charges, expenses and other amounts required to be paid to the affected Agent or
Lender which would constitute “interest”. Notwithstanding the foregoing, and
after giving effect to all such adjustments, if Agents or any Lender shall have
received an amount in excess of the maximum permitted by the Criminal Code
Section, then Loan Parties shall be entitled, by notice in writing to the Agent
or affected Lender, to obtain reimbursement from Agent or that Lender in an
amount equal to such excess. For the purposes of this Agreement and each other
Loan Document to which Loan Parties are a party, the effective annual rate of
interest payable by Loan Parties shall be determined in accordance with
generally accepted actuarial practices and principles over the term of the loans
on the basis of annual compounding for the lawfully permitted rate of interest
and, in the event of dispute, a certificate of a Fellow of the Institute of
Actuaries appointed by Agents for the account of Loan Parties will be conclusive
for the purpose of such determination in the absence of evidence to the
contrary,

 

- 70 -

 

(iii)             all calculations of interest payable under this Agreement or
any other Loan Document are to be made on the basis of the nominal interest rate
described herein and therein and not on the basis of effective yearly rates or
on any other basis which gives effect to the principle of deemed reinvestment of
interest. The parties acknowledge that there is a material difference between
the stated nominal interest rates and the effective yearly rates of interest and
that they are capable of making the calculations required to determine such
effective yearly rates of interest, and

 

(iv)             any provision of this Agreement that would oblige Loan Parties
to pay any fine, penalty or rate of interest on any arrears of principal or
interest secured by a mortgage on real property or hypothec on immovables
located in Canada that has the effect of increasing the charge on arrears beyond
the rate of interest payable on principal money not in arrears shall not apply
to Loan Parties, which shall be required to pay interest on money in arrears at
the same rate of interest payable on principal money not in arrears.

 

Section 2.05        Reduction of Commitment; Prepayment of Loans.

 

(a)                Reduction of Commitments.

 

(i)                 Revolving Credit Commitments. The Total Revolving Credit
Commitment shall terminate on the Final Maturity Date. The Borrowers may reduce
the Total Revolving Credit Commitment to an amount (which may be zero) not less
than the sum of (A) the aggregate unpaid principal amount of all Revolving Loans
then outstanding, (B) the aggregate principal amount of all Revolving Loans not
yet made as to which a Notice of Borrowing has been given by the Borrowing Agent
under Section 2.02, (C) the Letter of Credit Obligations at such time and (D)
the stated amount of all Letters of Credit not yet issued as to which a request
has been made and not withdrawn; provided that in no event may the Total
Revolving Credit Commitment be reduced to less than $10,000,000 unless it is
reduced to zero. Each such reduction shall be (1) in an amount which is an
integral multiple of $1,000,000 (or by the full amount of the Total Revolving
Credit Commitment in effect immediately prior to such reduction if such amount
at that time is less than $1,000,000), (2) made by providing not less than 5
Business Days' prior written notice to the Administrative Agent and (3)
irrevocable unless such notice expressly conditions such reduction on the
consummation of a transaction which is contemplated to result in a reduction of
the Total Revolving Credit Commitment, in which event, such notice may be
revocable or conditioned upon the consummation of such transaction. Once
reduced, the Total Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving Credit Commitment shall reduce the Revolving
Credit Commitment of each Lender proportionately in accordance with its Pro Rata
Share thereof.

 

- 71 -

 

(ii)               Term Loan. The Total Term Loan Commitment shall terminate on
the earlier of (i) the making of the Term Loan on the Effective Date and (ii)
5:00 p.m. on the Effective Date.

 

(b)               Optional Prepayment.

 

(i)                 Revolving Loans. The Borrowers may, at any time and from
time to time, prepay the principal of any Revolving Loan, in whole or in part.

 

(ii)               Term Loan. The Borrowers may, at any time and from time to
time, upon at least 5 Business Days' prior written notice to the Administrative
Agent, prepay the principal of the Term Loan, in whole or in part; provided
that, immediately after giving effect to such prepayment, Availability shall not
be less than $3,750,000. Each prepayment made pursuant to this clause (b)(ii)
shall be accompanied by the payment of (A) accrued interest to the date of such
payment on the amount prepaid and (B) the Applicable Prepayment Premium, if any,
payable in connection with such prepayment of the Term Loan. Each such
prepayment shall be applied against the remaining installments of principal due
on such Term Loan in the inverse order of maturity.

 

(iii)             Termination of Agreement. The Borrowers may, upon at least 5
Business Days' prior written notice to the Agents, terminate this Agreement by
Paying in Full to the Administrative Agent, in cash, the Obligations, plus the
Applicable Prepayment Premium, if any, payable in connection with such
termination of this Agreement; provided that such notice of termination may
provide that is conditioned upon the consummation of a transaction which is
contemplated to result in a termination of this Agreement, in which event, such
notice may be revoked or conditioned upon the consummation of such transaction.
When all Obligations hereunder which are accrued and payable have been Paid In
Full or satisfied, this Agreement and the Guarantees made herein shall terminate
with respect to all Obligations, except with respect to Obligations that
expressly survive such repayment pursuant to the terms of this Agreement.

 

(c)                Mandatory Prepayment.

 

(i)                 The Borrowers will immediately prepay the Revolving Loans at
any time when the aggregate principal amount of all Revolving Loans plus the
outstanding amount of all Letter of Credit Obligations exceeds any of the limits
set forth in Section 2.01(b)(i) to the full extent of such excess. On each day
that any Revolving Loans or Letters of Credit are requested by the Borrowers,
the Borrowers shall hereby be deemed to represent and warrant to the Agents and
the Lenders that the Borrowing Base calculated as set forth in the Borrowing
Base Certificate most recently delivered to the Agents equals or exceeds the
aggregate principal amount of all Revolving Loans and Letter of Credit
Obligations outstanding on such day. If at any time after the Borrowers have
complied with the first sentence of this Section 2.05(c)(i), the aggregate
Letter of Credit Obligations are greater than the then current Borrowing Base,
the Borrowers shall provide Cash Collateral equal to such excess to the
Administrative Agent, which Cash Collateral shall be, returned to the Borrowers,
at such time as the aggregate Letter of Credit Obligations plus the aggregate
principal amount of all outstanding Revolving Loans no longer exceeds the then
current Borrowing Base.

 

- 72 -

 

(ii)               The Borrowers will immediately prepay the outstanding
principal amount of the Term Loan, accompanied by the payment of the Applicable
Prepayment Premium, if any, in the event that the Total Revolving Credit
Commitment is terminated for any reason.

 

(iii)             The Administrative Agent shall on each Business Day apply all
funds transferred to or deposited in the Administrative Agent's Account, to the
payment, in whole or in part, of the outstanding principal amount of the Loans
in accordance with the terms of this Agreement.

 

(iv)             Within ten days of the delivery to the Agents and the Lenders
of audited annual financial statements pursuant to Section 7.01(a)(iii),
commencing with the delivery to the Agents and the Lenders of the financial
statements for the Fiscal Year ended December 31, 2018 or, if such financial
statements are not delivered to the Agents and the Lenders on the date such
statements are required to be delivered pursuant to Section 7.01(a)(iii), on the
date such statements are required to be delivered to the Agents and the Lenders
pursuant to Section 7.01(a)(iii), the Borrowers shall, prepay the outstanding
principal amount of the Loans in accordance with clause (d) below in an amount
equal to the result of (to the extent positive) (1) 50% of the Excess Cash Flow
of the Parent and its Subsidiaries for such Fiscal Year, minus (2) the aggregate
principal amount of all payments made by the Borrowers pursuant to Section
2.05(b) for such Fiscal Year (in the case of payments made by the Borrowers
pursuant to Section 2.05(b)(i), only to the extent that the Total Revolving
Credit Commitment is permanently reduced by the amount of such payments).

 

(v)               Subject to clause (viii) below, within three (3) Business Days
after (x) any Disposition (excluding Dispositions permitted under clauses (a),
(b), (c), (e), (f), (g), (h), (j) and (k) of the definition of Permitted
Dispositions) by any Loan Party or its Subsidiaries or (y) the receipt of any
proceeds in respect of the Denville Earn-out by any Loan Party or its
Subsidiaries, the Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with clause (d) below in an amount equal to 100% of
the Net Cash Proceeds received by such Person in connection with such
Disposition or the Denville Earn-out, as applicable, in the case of such
Dispositions to the extent that the aggregate amount of Net Cash Proceeds
received by the Loan Parties (and not paid to the Administrative Agent as a
prepayment of the applicable Loans) shall exceed $500,000 in any Fiscal Year.
Nothing contained in this Section 2.05(c)(v) shall permit any Loan Party or any
of its Subsidiaries to make a Disposition of any property other than in
accordance with Section 7.02(c)(iii).

 

- 73 -

 

(vi)             Within one (1) Business Day of any Loan Party or any of its
Subsidiaries' receipt of the Net Cash Proceeds from any issued or incurred
Indebtedness (other than Permitted Indebtedness), or upon an Equity Issuance
including any issuance of Permitted Cure Equity (other than any Excluded Equity
Issuances), the Borrowers shall prepay the outstanding amount of the Obligations
in accordance with clause (d) below in an amount equal to 100% of the Net Cash
Proceeds received by such Person in connection therewith. The provisions of this
Section 2.05(c)(vi) shall not be deemed to be implied consent to any such
issuance, incurrence or sale otherwise prohibited by the terms and conditions of
this Agreement.

 

(vii)           Subject to clause (viii) below, within three (3) Business Days
of the receipt by any Loan Party or any of its Subsidiaries of any Extraordinary
Receipts in an amount exceeding $250,000 in any Fiscal Year, the Borrowers shall
prepay the outstanding principal of the Obligations in accordance with clause
(d) below an amount equal to 100% of the Net Cash Proceeds in excess of $250,000
received by such Person in connection therewith.

 

(viii)         Notwithstanding the foregoing, the Borrowers shall not be
required to make a prepayment otherwise required pursuant to Section 2.05(c)(v)
or Section 2.05(c)(vii) with Reinvestment Eligible Funds so long as: (I) if the
receipt of Reinvestment Eligible Funds did not arise from a disposition of or a
casualty or condemnation of any property or assets, such Reinvestment Eligible
Funds shall be used to replace, repair or restore properties or assets
constituting property, plant or equipment, (II) no Default or Event of Default
has occurred and is continuing on the date such Person receives such
Reinvestment Eligible Funds, (III) the Borrowing Agent notifies the
Administrative Agent (the "Reinvestment Notice") within 10 days after such
Disposition or loss (the "Reinvestment Period") of the intent of the applicable
Person to use such Reinvestment Eligible Funds to purchase, replace, repair or
restore properties or assets used in such Person's business within a period
specified in such certificate not to exceed 180 days after the date of receipt
of such Reinvestment Eligible Funds and (IV) such Reinvestment Eligible Funds
are deposited in a Controlled Deposit Account; provided that, if all or any
portion of such Reinvestment Eligible Funds are not used in accordance with this
Section 2.05(c)(viii) within the period specified in the Reinvestment Notice,
the remaining portion shall be applied to the prepay the Obligations in
accordance with Section 2.05(c)(v) or Section 2.05(c)(vii) as applicable.

 

(d)               Application of Payments. Each prepayment pursuant to
subsections (c)(iv), (c)(v), (c)(vi) and (c)(vii) above shall be applied as
follows:

 

(i)                 the proceeds from any prepayment event set forth in Section
2.05(c)(v) pursuant to (x) any Disposition of any Revolver Priority Collateral
or (y) any Extraordinary Receipts consisting of an insurance policy or
condemnation award with respect to Revolver Priority Collateral (including,
without limitation, proceeds of business interruption insurance, but only to the
extent no Event of Default shall have occurred and be continuing) shall be
applied (A) first, to the Revolving Loans until paid in full, without a
corresponding permanent reduction in the Total Revolving Credit Commitment and
(B) second, ratably to the Term Loans against the remaining installments of
principal of the Term Loans in the inverse order of maturity;

 

- 74 -

 

(ii)               the proceeds from any prepayment pursuant to (x) any
Disposition of any Term Priority Collateral or (y) any Extraordinary Receipts
consisting of insurance policy or condemnation award with respect to Term
Priority Collateral (including, without limitation, proceeds of business
interruption insurance, but only to the extent that an Event of Default has
occurred and is continuing) shall be applied (A) first, ratably to the Term
Loans against the remaining installments of principal of the Term Loans in the
inverse order of maturity until paid in full, and (B) second, to the Revolving
Loans until paid in full;

 

(iii)             the proceeds from any prepayment pursuant to a Disposition of
all or substantially all of the assets or Equity Interests of any Person or any
insurance which Disposition or proceeds of insurance includes both (x) Revolver
Priority Collateral and (y) Term Priority Collateral, shall be applied in a
manner mutually determined by the Agents acting reasonably and in good faith;

 

(iv)             the proceeds from any prepayment event set forth in Section
2.05(c)(iv), Section 2.05(c)(vi) (other than any proceeds applied pursuant to
clause (d)(i) above) or Section 2.05(c)(vii) (other than proceeds from any
Extraordinary Receipts consisting of insurance policy or condemnation award with
respect to Revolver Priority Collateral) shall be applied, (A) first, ratably to
the Term Loans against the remaining installments of principal of the Term Loans
in the inverse order of maturity until paid in full, and (B) second, to the
Revolving Loans until paid in full.

 

(v)               Notwithstanding the foregoing, (i) after the occurrence and
during the continuance of an Event of Default, if the Administrative Agent has
elected, or has been directed by the Collateral Agent or the Required Lenders,
to apply payments and other Proceeds of Collateral in accordance with Section
4.03(b), prepayments required under Section 2.05(c) shall be applied in the
manner set forth in Section 4.03(b) and (ii) any Lender may decline to accept
any mandatory prepayment described above, in which case, the declined amount of
such prepayment shall be distributed, (a) with respect to any mandatory
prepayment that is declined by a Term Loan Lender, first, to the prepayment of
the Term Loans held by the Lenders that have elected to accept such declined
amount based on their respective Pro Rata Shares, and second, to the repayment
of the Revolving Loans then outstanding (without a corresponding permanent
reduction of the Revolving Credit Commitment) and (b) with respect to any
mandatory prepayment that is declined by a Revolving Loan Lender, first, to the
repayment of the Revolving Loans then outstanding (without a corresponding
permanent reduction of the Revolving Credit Commitment) held by the Lenders that
have elected to accept such declined amount based on their respective Pro Rata
Shares, and second, to the prepayment of the Term Loans held by the Lenders that
have elected to accept such declined amount based on their respective Pro Rata
Shares.

 

(e)                Interest and Fees. Any prepayment made pursuant to this
Section 2.05 (other than prepayments made pursuant to subsections (c)(i) and
(c)(iii) of this Section 2.05) shall be accompanied by (i) accrued interest on
the principal amount being prepaid to the date of prepayment, (ii) any Funding
Losses payable pursuant to Section 2.07(e), (iii) the Applicable Prepayment
Premium, if any, payable in connection with such prepayment of the Loans and
(iv) if such prepayment would reduce the amount of the outstanding Loans to zero
at a time when the Total Revolving Credit Commitment has been terminated, such
prepayment shall be accompanied by the payment of all other fees accrued to such
date pursuant to Section 2.06.

 

- 75 -

 

(f)                Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to payments made or required to be made under any
other subsection of this Section 2.05.

 

Section 2.06        Fees.

 

(a)                Unused Line Fee. From and after the Effective Date and until
the Final Maturity Date, the Borrowers shall pay to the Administrative Agent for
the account of the Revolving Loan Lenders, in accordance with their Pro Rata
Shares (calculated in accordance with clause (a) of the definition thereof),
monthly in arrears on the first day of each month commencing March 1, 2018, an
unused line fee (the "Unused Line Fee"), which shall accrue at the rate per
annum of 0.50% on the excess, if any, of the Total Revolving Credit Commitment
over the sum of the average principal amount of all Revolving Loans and Letter
of Credit Obligations outstanding from time to time during the preceding month.

 

(b)               Applicable Prepayment Premium.

 

(i)                 In the event of (i) any reduction of the Total Revolving
Credit Commitment pursuant to Section 2.05(a)(i), (ii) an optional prepayment of
the Term Loans pursuant to Section 2.05(b)(ii), (iii) a mandatory prepayment of
the Loans pursuant to Section 2.05(c)(v) or Section 2.05(c)(vi) or Section
2.05(c)(vii) (in connection with an Extraordinary Receipt described in clause
(a), (c) or (e) of the definition thereof) or (iv) the termination of this
Agreement at any time prior to the Final Maturity Date, for any reason,
including (A) termination of this Agreement upon the election of the Required
Lenders after the occurrence of any an Event of Default (or, in the case of the
occurrence of any Event of Default described in Section 9.01(f) or Section
9.01(g), automatically upon the occurrence thereof), (B) foreclosure and sale of
Collateral, (C) sale of Collateral in any Insolvency Proceeding, or (D)
restructure, reorganization, or compromise of the Obligations by the
confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Agents and the Lenders or profits lost by the Agents and the
Lenders as a result of such prepayments or such early termination, and by mutual
agreement of the parties as to a reasonable estimation and calculation of the
lost profits or damages of the Agents and the Lenders, the Borrowers shall pay
to the Administrative Agent, for the account of the Lenders in accordance with
their respective Pro Rata Shares, the Applicable Prepayment Premium, measured as
of the date of any such prepayment or termination, as applicable.

 

(ii)               Any Applicable Prepayment Premium payable in accordance with
this Section 2.06(b) shall be presumed to be equal to the liquidated damages
sustained by the Lenders as the result of the occurrence of an Applicable
Prepayment Premium Trigger Event and the Loan Parties agree that it is
reasonable under the circumstances currently existing. THE LOAN PARTIES
EXPRESSLY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT
PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING APPLICABLE PREPAYMENT
PREMIUM IN CONNECTION WITH ANY ACCELERATION.

 

- 76 -

 

(iii)             The Loan Parties expressly agree that: (A) the Applicable
Prepayment Premium is reasonable and is the product of an arm's length
transaction between sophisticated business people, ably represented by counsel;
(B) the Applicable Prepayment Premium shall be payable notwithstanding the then
prevailing market rates at the time payment is made; (C) there has been a course
of conduct between the Lenders and the Loan Parties giving specific
consideration in this transaction for such agreement to pay the Applicable
Prepayment Premium; (D) the Loan Parties shall be estopped hereafter from
claiming differently than as agreed to in this paragraph; (E) their agreement to
pay the Applicable Prepayment Premium is a material inducement to Lenders to
provide the Commitments and make the Loans, and (F) the Applicable Prepayment
Premium represents a good faith, reasonable estimate and calculation of the lost
profits or damages of the Agents and the Lenders and that it would be
impractical and extremely difficult to ascertain the actual amount of damages to
the Agents and the Lenders or profits lost by the Agents and the Lenders as a
result of such Applicable Prepayment Premium Trigger Event.

 

(iv)             Nothing contained in this Section 2.06(b) shall permit any
prepayment of the Loans or reduction of the Commitments not otherwise permitted
by the terms of this Agreement or any other Loan Document.

 

(c)                Audit and Collateral Monitoring Fees. Each Loan Party
acknowledges that pursuant to Section 7.01(f), representatives of the Agents may
visit any Loan Party or conduct audits, inspections or field examinations of any
Loan Party and valuations or appraisals of any or all of the Collateral or
business or enterprise valuations of the Loan Parties at any time and from time
to time during normal business hours and so long as no Event of Default has
occurred and is continuing, upon reasonable prior notice, in a manner so as to
not unduly disrupt the business of such Loan Party. The Borrowers agree to pay
(i) $1,300 per day per examiner plus the examiner's reasonable and documented
out-of-pocket costs and reasonable expenses incurred in connection with all such
visits, inspections, audits, valuations, appraisals and/or examinations and
(ii) the reasonable cost of any Field Survey and Audit and any other visits,
inspections, audits, valuations, appraisals and/or examinations conducted by a
third party on behalf of the Agents. The foregoing notwithstanding, so long as
no Event of Default shall have occurred and be continuing, the Borrowers shall
not be obligated to reimburse the Agents or Lenders for more than two Field
Survey and Audits and one inventory appraisal in any twelve month period.

 

(d)               Fee Letter. As and when due and payable under the terms of the
Fee Letter, the Borrowers shall pay the fees set forth in the Fee Letter.

 

(e)                Letter of Credit Fees. The Borrowers shall pay (i) to the
Administrative Agent, for the ratable benefit of the Revolving Loan Lenders, a
Letter of Credit fee (in addition to the charges, commissions, fees, and costs
set forth in clause (ii) below) which shall accrue at a rate per annum equal to
the L/C Fee Rate in effect at such time, times the average daily balance of the
Maximum Undrawn Amount of all outstanding Letters of Credit, for the period from
and excluding the date of issuance of same to and including the date of
expiration or termination, such fees to be calculated on the basis of a 360-day
year for the actual number of days elapsed and to be payable quarterly in
arrears on the first day of each quarter and on the Final Maturity Date, and
(ii) to the L/C Issuer, a fronting fee of one quarter of one percent (0.250%)
per annum, times the daily balance of the Maximum Undrawn Amount of all
outstanding Letters of Credit, for the period from and excluding the date of
issuance of same to and including the date of expiration or termination, such
fees to be calculated on the basis of a 360-day year for the actual number of
days elapsed and to be payable quarterly in arrears on the first day of each
calendar quarter and on the Final Maturity Date, together with any and all
customary administrative, issuance, amendment, payment and negotiation charges
(as per the L/C Issuer's standard fee schedule) with respect to any Letters of
Credit and all fees and expenses as agreed upon by the L/C Issuer and the
Borrowers in connection with any Letter of Credit, including in connection with
the opening, amendment or renewal of any such Letter of Credit and any
acceptances created thereunder and shall reimburse Administrative Agent for any
and all fees and expenses, if any, paid by the Administrative Agent to the L/C
Issuer, which charges and fees shall be payable on demand or as otherwise
mutually agreed upon by the Administrative Agent and the Borrowing Agent. All
such charges shall be deemed earned in full on the date when the same are due
and payable hereunder and shall not be subject to rebate or pro-ration upon the
termination of this Agreement for any reason. Any such charge in effect at the
time of a particular transaction shall be the charge for that transaction,
notwithstanding any subsequent change in the L/C Issuer's prevailing charges for
that type of transaction (all of the foregoing fees and charges in paragraphs
collectively, the "Letter of Credit Fees"). Upon the occurrence and during the
continuance of an Event of Default, the Letter of Credit Fees shall be increased
by two (2.0) percentage points above the per annum rate otherwise applicable
hereunder from the date such Event of Default occurred until the date such Event
of Default is cured or waived in writing in accordance herewith. All such Letter
of Credit Fees shall be deemed earned in full on the date when the same are due
and payable hereunder and shall not be subject to rebate or proration upon the
termination of this Agreement for any reason.

 

- 77 -

 

Section 2.07        LIBOR Option.

 

(a)                In lieu of having interest charged at the rate based upon the
Reference Rate, the Borrowers shall have the option (the "LIBOR Option") to have
interest on all or a portion of the Loans be charged at a rate of interest based
upon the LIBOR Rate. Each Interest Period of a LIBOR Rate Loan made to the
Borrowers shall commence on the date such LIBOR Rate Loan is made and shall end
on such date as the Borrowing Agent may elect as set forth in subsection 2.02(a)
above; provided that no Interest Period shall end after the last day of the
Final Maturity Date.

 

(b)               The Borrowing Agent shall elect the initial Interest Period
applicable to a LIBOR Rate Loan made to the Borrowers by its Notice of Borrowing
given to the Administrative Agent pursuant to Section 2.02(a) or by its notice
of conversion given to the Administrative Agent pursuant to Section 2.07(c), as
the case may be. The Borrowing Agent shall elect the duration of each succeeding
Interest Period by giving irrevocable written notice to the Administrative Agent
of such duration not later than 11:00 a.m. (New York City time) on the day which
is not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such LIBOR Rate Loan. If the
Administrative Agent does not receive timely notice of the Interest Period
elected by the Borrowing Agent, the Borrowers shall be deemed to have elected to
convert such LIBOR Rate Loan to a Reference Rate Loan, subject to Section
2.07(c) herein below.

 

- 78 -

 

(c)                The Borrowing Agent may, on the last Business Day of the then
current Interest Period applicable to any outstanding LIBOR Rate Loan made to
the Borrowers, or on any Business Day with respect to Reference Rate Loans,
convert any such loan into a loan of another type (i.e., a Reference Rate Loan
or a LIBOR Rate Loan) in the same aggregate principal amount, provided that any
conversion of a LIBOR Rate Loan made to the Borrowers not made on the last
Business Day of the then current Interest Period applicable to such LIBOR Rate
Loan shall be subject to Section 2.07(e). If the Borrowers desire to convert a
Loan, the Borrowing Agent shall give the Administrative Agent a Notice of
Borrowing by no later than 11:00 a.m. (New York City time) (i) on the day which
is three (3) Business Days' prior to the date on which such conversion is to
occur with respect to a conversion from a Reference Rate Loan to a LIBOR Rate
Loan, or (ii) on the day which is one (1) Business Day prior to the date on
which such conversion is to occur with respect to a conversion from a LIBOR Rate
Loan to a Reference Rate Loan, specifying, in each case, the date of such
conversion, the Loans to be converted and if the conversion is from a Reference
Rate Loan to a LIBOR Rate Loan, the duration of the first Interest Period
therefor.

 

(d)               Subject to Section 2.05(b), the Borrowers may prepay the LIBOR
Rate Loans in whole at any time or in part from time to time, together with
accrued interest on the principal being prepaid to the date of such repayment in
the case of any LIBOR Rate Loan made to the Borrowers, and the Borrowing Agent
shall specify the date of prepayment of Loans which are LIBOR Rate Loans, the
Loan to which such prepayment is to be applied and the amount of such
prepayment. In the event that any prepayment of a LIBOR Rate Loan is required or
permitted on a date other than the last Business Day of the then-current
Interest Period with respect thereto, the Borrowers shall indemnify the
Administrative Agent and Lenders therefor in accordance with Section 2.07(e)
hereof.

 

(e)                The Borrowers shall indemnify the Agents and Lenders and hold
the Agents and Lenders harmless from and against any and all losses, costs or
expenses, excluding the loss of any margin above the LIBOR Rates (such losses,
costs and expenses, collectively, "Funding Losses") that the Agents and Lenders
may sustain or incur as a consequence of any mandatory or voluntary prepayment,
conversion of or any default by the Borrowers in the payment of the principal of
or interest on any LIBOR Rate Loan or failure by the Borrowers to complete a
borrowing of, a prepayment of or conversion of or to a LIBOR Rate Loan after
notice thereof has been given, including, but not limited to, any interest
payable by the Agents or Lenders to lenders of funds obtained by it in order to
make or maintain its LIBOR Rate Loans hereunder (it being agreed that the Agents
and Lenders shall be entitled to such indemnification on such basis whether or
not they have obtained such funds to make or maintain its LIBOR Rate Loans
hereunder, to be calculated in accordance with customary banking practices). A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by any Agent or any Lender to the Borrowing Agent shall be
conclusive absent manifest error.

 

(f)                Notwithstanding any other provision hereof, if any
Requirement of Law, or any Change in Law, shall make it unlawful for any Lender
(for purposes of this subsection (f), the term "Lender" shall include any Lender
and the office or branch where any Lender or any corporation or bank controlling
such Lender makes or maintains any LIBOR Rate Loans) to make or maintain its
LIBOR Rate Loans, the obligation of Lenders to make LIBOR Rate Loans hereunder
shall forthwith be cancelled and the Borrowing Agent shall, if any affected
LIBOR Rate Loans are then outstanding, promptly upon request from the
Administrative Agent, either pay all such affected LIBOR Rate Loans or convert
such affected LIBOR Rate Loans into loans of another type. If any such payment
or conversion of any LIBOR Rate Loan is made on a day that is not the last day
of the Interest Period applicable to such LIBOR Rate Loan, the Borrowers shall
pay the Administrative Agent, upon the Administrative Agent's request, such
amount or amounts as may be necessary to compensate Lenders for any Funding
Losses sustained or incurred by Lenders in respect of such LIBOR Rate Loan as a
result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by
Lenders in order to make or maintain such LIBOR Rate Loan. A certificate as to
any additional amounts payable pursuant to the foregoing sentence submitted by
any Agent or any Lender to the Borrowing Agent shall be conclusive absent
manifest error.

 

- 79 -

 

(g)               In the event that any Agent or any Lender shall have
determined that:

 

(i)                 reasonable means do not exist for ascertaining the LIBOR
Rate applicable pursuant to Section 2.02(a) hereof for any Interest Period; or

 

(ii)               dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank LIBOR market, with respect to
an outstanding LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed
conversion of a Reference Rate Loan into a LIBOR Rate Loan, or

 

(iii)             at any time that a Default or an Event of Default has occurred
and is continuing,

 

then upon notice of the same being given to the Administrative Agent, the
Administrative Agent shall give the Borrowing Agent prompt written, telephonic
or facsimile notice of such determination. If such notice is given, (i) any such
requested LIBOR Rate Loan shall be made as a Reference Rate Loan, unless the
Borrowing Agent shall notify the Administrative Agent no later than 1:00 p.m.
(New York City time) two (2) Business Days prior to the date of such proposed
borrowing, that its request for such borrowing shall be cancelled or made as an
unaffected type of LIBOR Rate Loan, (ii) any Reference Rate Loan or LIBOR Rate
Loan which was to have been converted to an affected type of LIBOR Rate Loan
shall be continued as or converted into a Reference Rate Loan, or, if the
Borrowing Agent shall notify the Administrative Agent, no later than 11:00 a.m.
(New York time) two (2) Business Days prior to the proposed conversion, shall be
maintained as an unaffected type of LIBOR Rate Loan, and (iii) any outstanding
affected LIBOR Rate Loans shall be converted into a Reference Rate Loan at the
end of the applicable Interest Period. Until such notice has been withdrawn,
Lenders shall have no obligation to make an affected type of LIBOR Rate Loan or
maintain outstanding affected LIBOR Rate Loans and the Borrowers shall not have
the right to convert a Reference Rate Loan or an unaffected type of LIBOR Rate
Loan into an affected type of LIBOR Rate Loan.

 

- 80 -

 

(h)               Anything to the contrary contained herein notwithstanding,
neither any 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. The provisions of
this Article II shall apply as if each Lender or its participants had match
funded any Obligation as to which interest is accruing at the LIBOR Rate by
acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.

 

Section 2.08        [Reserved].

 

Section 2.09        Taxes. (a) Any and all payments by or on account of any
obligation of any Loan Party hereunder or under any other Loan Document shall be
made free and clear of and without deduction or withholding for any and all
Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions or
withholdings applicable to additional sums payable under this Section 2.09(a))
the applicable Recipient receives an amount equal to the sum it would have
received had no such deduction or withholding been made.

 

(b)               In addition, each Loan Party shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law (or, at
the option of the Administrative Agent, timely reimburse it for any Other
Taxes).

 

(c)                Without duplication of any obligation under Section 2.09(a),
the Loan Parties shall jointly and severally indemnify each Recipient, within 30
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 2.09) payable or paid by such Recipient or required
to be withheld or deducted from a payment to such Recipient and any reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. If the Borrowing Agent reasonably believes that any such
Indemnified Taxes were not correctly or legally asserted, then at the Borrowing
Agent’s request the Administrative Agent and/or each affected Lender will use
reasonable efforts to cooperate with the applicable Loan Party in pursuing a
refund of such Indemnified Taxes so long as such efforts would not, in the sole
determination exercised in good faith of the Administrative Agent or affected
Lender, result in any material additional costs, expenses or risks or be
otherwise disadvantageous to it. A certificate as to the amount of such payment
or liability delivered to the Borrowing Agent by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

(d)               As soon as practicable after the payment of Taxes by any Loan
Party to a Governmental Authority pursuant to this Section 2.09, such Loan Party
or the Borrowing Agent shall deliver to the Administrative Agent the original or
a copy of a receipt, if any, issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

- 81 -

 

(e)                (1) Any Lender that is entitled to an exemption from or a
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Administrative Agent, at the time or times
reasonably requested by the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Administrative Agent as will
permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Administrative Agent as will
enable the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.09(e)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender's reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

 

(i)                 Without limiting the generality of the foregoing,

 

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

 

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

 

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

 

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

 

(3)               in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 871(h) or Section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent
shareholder" of any Loan Party within the meaning of Section 881(c)(3)(B) of the
Code, or a "controlled foreign corporation" described in Section 881(c)(3)(C) of
the Code (a "U.S. Tax Compliance Certificate") and (y) executed originals of IRS
Form W-8BEN-E; or

 

- 82 -

 

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

 

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

 

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

 

(f)                Any Secured Party or assignee thereof, including a holder of
a participation (a "Transferee") claiming any indemnity payment or additional
payment amounts payable pursuant to this Section 2.09 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrowing Agent
or to change the jurisdiction of its applicable lending office or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if the making of such a filing, change or assignment would avoid the
need for or reduce the amount of any such indemnity payment or additional amount
that may thereafter accrue, would not require such Secured Party (or Transferee)
to disclose any information such Secured Party (or Transferee) deems
confidential and would not, in the sole determination of such Secured Party (or
Transferee), be otherwise disadvantageous to such Secured Party (or Transferee).

 

(g)               If any Secured Party determines, in its sole discretion
exercised in good faith, that it has received a refund of, or credit with
respect to, any Taxes as to which it has been indemnified pursuant to this
Section 2.09 including by the payment of additional amounts pursuant to this
Section 2.09), it shall pay to the indemnifying party an amount equal to such
refund or credit (but only to the extent of indemnity payments made under this
Section 2.09 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this Section 2.09(g) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 2.09(g), in
no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 2.09(g) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This Section 2.09(g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

 

- 83 -

 

(h)               If a payment made to a Lender (or Transferee) or any Agent
under any Loan Document would be subject to U.S. withholding tax imposed by
FATCA if such Lender (or Transferee) or Agent were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender (or
Transferee) or Agent shall deliver to the Borrowing Agent and the Agents at the
time or times prescribed by law and at such time or times reasonably requested
by the Borrowing Agent or the Agents such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue
Code) and such additional documentation reasonably requested by the Borrowing
Agent or the Agents as may be necessary for the Borrowing Agent and the Agents
to comply with their obligations under FATCA and to determine that such Lender
(or Transferee) or Agent has complied with its obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (h), "FATCA" shall include any amendments made to FATCA
after the date of this Agreement. Any forms, certifications or other
documentation under this clause (h) shall be delivered by each Lender (or
Transferee) and each Agent.

 

(i)                 The obligations of the Parties under this Section 2.09 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder until a date that is 30 days following the
survival of the statute of limitations applicable to the relevant Tax. To the
extent that the Borrowing Agent shall reasonably so request, the Administrative
Agent shall deliver copies of any tax forms received by it from any Lender
pursuant to this Section 2.09.

 

Section 2.10        Increased Costs and Reduced Return. (a) If any Secured Party
shall have determined that any Change in Law shall (i) subject such Secured
Party, or any Person controlling such Secured Party to any Tax, duty or other
charge with respect to this Agreement or any Loan made by such Agent or such
Lender or any Letter of Credit issued by the L/C Issuer (other than Taxes,
duties or other charges that are (A) Indemnified Taxes, (B) Taxes described in
any of clauses (b) through (d) of the definition of Excluded Taxes or (C)
Connection Income Taxes), (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any Loan, any Letter of Credit or
against assets of or held by, or deposits with or for the account of, or credit
extended by, such Secured Party or any Person controlling such Secured Party or
(iii) impose on such Secured Party or any Person controlling such Secured Party
any other condition regarding this Agreement or any Loan or Letter of Credit,
and the result of any event referred to in clauses (i), (ii) or (iii) above
shall be to increase the cost to such Secured Party of making any Loan, issuing,
guaranteeing or participating in any Letter of Credit, or agreeing to make any
Loan or issue, guaranty or participate in any Letter of Credit, or to reduce any
amount received or receivable by such Secured Party hereunder, then, upon demand
by such Secured Party, the Borrowers shall pay to such Secured Party such
additional amounts as will compensate such Secured Party for such increased
costs or reductions in amount.

 

- 84 -

 

(b)               If any Secured Party shall have determined that any Change in
Law either (i) affects or would affect the amount of capital required or
expected to be maintained by such Secured Party or any Person controlling such
Secured Party, and such Secured Party determines that the amount of such capital
is increased as a direct or indirect consequence of any Loans made or
maintained, Letters of Credit issued or any guaranty or participation with
respect thereto, such Secured Party's or such other controlling Person's other
obligations hereunder, or (ii) has or would have the effect of reducing the rate
of return on such Secured Party's such other controlling Person's capital to a
level below that which such Secured Party or such controlling Person could have
achieved but for such circumstances as a consequence of any Loans made or
maintained, Letters of Credit issued, or any guaranty or participation with
respect thereto or any agreement to make Loans, to issue Letters of Credit or
such Secured Party's or such other controlling Person's other obligations
hereunder (in each case, taking into consideration, such Secured Party's or such
other controlling Person's policies with respect to capital adequacy), then,
upon demand by such Secured Party, the Borrowers shall pay to such Secured Party
from time to time such additional amounts as will compensate such Secured Party
for such cost of maintaining such increased capital or such reduction in the
rate of return on such Secured Party's or such other controlling Person's
capital.

 

(c)                All amounts payable under this Section 2.10 shall bear
interest from the date that is 10 days after the date of demand by any Secured
Party until payment in full to such Secured Party at the Reference Rate. A
certificate of such Secured Party claiming compensation under this Section 2.10,
specifying the event herein above described and the nature of such event shall
be submitted by such Secured Party to the Borrowing Agent, setting forth the
additional amount due and an explanation of the calculation thereof, and such
Secured Party's reasons for invoking the provisions of this Section 2.10, and
shall be final and conclusive absent manifest error.

 

(d)               Failure or delay on the part of any Secured Party to demand
compensation pursuant to the foregoing provisions of this Section 2.10 shall not
constitute a waiver of such Secured Party's right to demand such compensation;
provided that the Borrowers shall not be required to compensate a Secured Party
pursuant to the foregoing provisions of this Section 2.10 for any increased
costs incurred or reductions suffered more than nine months prior to the date
that such Secured Party notifies the Borrowing Agent of the Change in Law giving
rise to such increased costs or reductions and of such Secured Party's intention
to claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

- 85 -

 

(e)                The obligations of the Loan Parties under this Section 2.10
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.

 

Section 2.11        Changes in Law; Impracticability or Illegality.

 

(a)                The LIBOR Rate may be adjusted by the Administrative 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 due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period
and changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding loans
bearing interest at the LIBOR Rate. In any such event, the affected Lender shall
give the Borrowing Agent and the Administrative Agent notice of such a
determination and adjustment and the Administrative Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, the Borrowing Agent may, by notice to such affected
Lender (i) require such Lender to furnish to the Borrowing Agent a statement
setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (ii) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under Section 2.09).

 

(b)               In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
of application thereof, 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 the Borrowing Agent
and the Administrative Agent, and the Administrative Agent promptly shall
transmit the notice to each other Lender and (i) 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 Reference Rate Loans of the
same type hereunder, and (ii) the Borrowing Agent shall not be entitled to elect
the LIBOR Option (including in any borrowing, conversion or continuation then
being requested) until such Lender determines that it would no longer be
unlawful or impractical to do so.

 

(c)                The obligations of the Loan Parties under this Section 2.11
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.

 

- 86 -

 

Section 2.12        Mitigation Obligations; Replacement of Lenders.

 

(a)                If any Lender requires the Borrowers to pay any additional
amounts under Section 2.09 or requests compensation under Section 2.10, then
such Lender shall (at the request of the Borrowing Agent) use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to such Section in the future, and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)               If any Lender (other than CBF and its Related Funds) requires
the Borrowers to pay any additional amounts under Section 2.09 or requests
compensation under Section 2.10 and, in each case, such Lender has declined or
is unable to designate a different lending office in accordance with clause (a)
above, or if any Lender (other than CBF and its Related Funds) is a Defaulting
Lender, then the Borrowing Agent may, at its sole expense and effort, upon
notice to such Lender and the Agents, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 12.07), all of its interests,
rights and obligations under this Agreement and the other Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:

 

(i)                 the Borrowers shall have paid to the Agents any assignment
fees specified in Section 12.07;

 

(ii)               such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and participations in Letters of Credit,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 2.08 and Section 2.09) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts);

 

(iii)             in the case of any such assignment resulting from payments
required to be made pursuant to Section 2.09 or a claim for compensation under
Section 2.10, such assignment will result in a reduction in such compensation or
payments thereafter; and

 

(iv)             such assignment does not conflict with applicable law.

 

Prior to the effective date of such assignment, the assigning Lender shall
execute and deliver an Assignment and Acceptance, subject only to the conditions
set forth above. If the assigning Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such
assignment, the assigning Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. Any such assignment shall be made in accordance
with the terms of Section 12.07. A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.

 

- 87 -

 

Article III

LETTERS OF CREDIT

 

Section 3.01        Letters of Credit. Subject to the terms and conditions
hereof (including Section 2.01(b) hereof) and commencing on and after the ABL
Commitment Date, the L/C Issuer shall issue or cause the issuance of standby
and/or trade letters of credit for the account of any of the Borrowers or any of
their Subsidiaries upon the request of the Borrowing Agent (each such letter of
credit, a "Letter of Credit"), which such Letters of Credit shall be denominated
in Dollars. The Maximum Undrawn Amount of all outstanding Letters of Credit
shall not exceed in the aggregate at any time the lower of (i) (A) the Borrowing
Base minus (B) the aggregate principal amount of all Revolving Loans then
outstanding, or (ii) the Letter of Credit Sublimit; provided that,
notwithstanding anything to the contrary contained in the foregoing or in any
other provision hereof, no Letter of Credit shall be issued if after giving
effect thereto, any of the credit limits set forth in Section 2.01(b) would be
violated. All disbursements or payments related to Letters of Credit shall be
deemed to be Revolving Loans and shall bear interest at the rate applicable to
Revolving Loans that are Reference Rate Loans in accordance with Section 2.04.
Letters of Credit that have not been drawn upon shall not bear interest.

 

Section 3.02        Issuance of Letters of Credit.

 

(a)                Subject to the terms hereof, the Borrowers may request the
L/C Issuer to issue or cause the issuance of a Letter of Credit by delivering to
the Administrative Agent, at the Payment Office, prior to 10:00 a.m. (New York
City time), at least five (5) Business Days prior to the proposed date of
issuance, the L/C Issuer's form of letter of credit application (the "Letter of
Credit Application") completed to the reasonable satisfaction of the L/C Issuer,
and such other certificates, documents and other papers and information as the
L/C Issuer may reasonably request. The Borrowing Agent also has the right to
give instructions and make agreements with the L/C Issuer with respect to any
application, any applicable letter of credit and related security agreement, any
applicable letter of credit reimbursement agreement and/or any other applicable
agreement, and the disposition of applicable documents, and to agree with the
L/C Issuer upon any amendment, extension or renewal of any Letter of Credit.

 

(b)               Each Letter of Credit shall, among other things, (i) provide
for the payment of sight drafts, other written demands for payment, or
acceptances of drafts when presented for honor thereunder in accordance with the
terms thereof and when accompanied by the documents described therein and (ii)
have an expiry date not later than twelve (12) months after such Letter of
Credit's date of issuance (or, in the case of any renewal or extension thereof,
twelve (12) months after such renewal or extension) and in no event later than
the date that is 15 days prior to the Final Maturity Date. Each standby Letter
of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 600, and any amendments or revision thereof adhered to by the
Issuer ("UCP 600") or the International Standby Practices (ISP98-International
Chamber of Commerce Publication Number 590) ("ISP98 Rules"), as determined by
the L/C Issuer, and each trade Letter of Credit shall be subject to UCP 600.

 

- 88 -

 

(c)                The Administrative Agent shall use its reasonable efforts to
notify the Lenders of the request by the Borrowing Agent for a Letter of Credit
hereunder.

 

Section 3.03        Requirements For Issuance of Letters of Credit. The
Borrowing Agent shall authorize and direct the L/C Issuer to name any applicable
Borrower or any of their Subsidiaries as the "Applicant" or "Account Party" of
each Letter of Credit. If the Administrative Agent is not the L/C Issuer of any
Letter of Credit, the Borrowing Agent shall authorize and direct the L/C Issuer
to deliver to the Administrative Agent all instruments, documents, and other
writings and property received by the L/C Issuer pursuant to the Letter of
Credit and to accept and rely upon the Administrative Agent's instructions and
agreements with respect to all matters arising in connection with the Letter of
Credit or the application therefor.

 

Section 3.04        Disbursements, Reimbursement.

 

(a)                Immediately upon the issuance of each Letter of Credit, each
Revolving Loan Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Lender's
applicable Pro Rata Share (determined in accordance with paragraph (a) of the
definition of "Pro Rata Share") of the Maximum Face Amount of such Letter of
Credit and the amount of such drawing, respectively.

 

(b)               In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the L/C Issuer will promptly
notify the Borrowing Agent. Provided that it shall have received such notice by
12:00 noon (New York City time) with respect to any Letter of Credit, the
Borrowers shall reimburse (such obligation to reimburse the L/C Issuer together
with any interest thereon pursuant to Section 2.04 shall be referred to as a
"Reimbursement Obligations") the L/C Issuer prior to 1:00 p.m. (New York City
time) on such date that an amount is paid by the L/C Issuer under any Letter of
Credit (each such date, a "Drawing Date") in an amount in Dollars. In the event
the Borrowers fail to reimburse the L/C Issuer for the full amount of any
drawing under any Letter of Credit by 1:00 p.m. (New York City time) with
respect to any Letter of Credit on the Drawing Date, the Administrative Agent
will promptly notify each Revolving Loan Lender thereof, and the Borrowers shall
be deemed to have requested that a Revolving Loan that is a Reference Rate Loan
be made by the Revolving Loan Lenders to be disbursed on the Drawing Date under
such Letter of Credit, pursuant to Section 2.01(a)(i). Any notice given by the
Administrative Agent pursuant to this Section 3.04(b) may be oral if immediately
confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.

 

(c)                Each Revolving Loan Lender shall upon any notice pursuant to
Section 3.04(b) make available to the L/C Issuer an amount in immediately
available funds equal to its applicable Pro Rata Share (determined in accordance
with paragraph (a) of the definition of "Pro Rata Share") of the amount of the
drawing, whereupon the participating Lenders shall (subject to Section 3.04(d))
each be deemed to have made a Revolving Loan that is a Reference Rate Loan to
the Borrowers in that amount. If any Revolving Loan Lender so notified fails to
make available to the L/C Issuer the amount of such Lender's applicable Pro Rata
Share of such amount by no later than 2:00 p.m. (New York City time) with
respect to any Letter of Credit on the Drawing Date, then (unless L/C Issuer and
such Lender shall agree otherwise, each in their sole and absolute discretion)
interest shall accrue on such Lender's obligation to make such payment, from the
Drawing Date to the date on which such Lender makes such payment (i) at a rate
per annum equal to the Federal Funds Effective Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the interest
rate on Revolving Loans that are Reference Rate Loans on and after the fourth
day following the Drawing Date. The Administrative Agent will promptly give
notice of the occurrence of the Drawing Date, but failure of the Administrative
Agent to give any such notice on the Drawing Date or in sufficient time to
enable any Revolving Loan Lender to effect such payment on such date shall not
relieve such Lender from its obligation under this Section 3.04(c), provided
that such Lender shall not be obligated to pay interest as provided in Section
3.04(c) (i) and (ii) until and commencing from the date of receipt of notice
from the Administrative Agent of a drawing. Each Revolving Loan Lender's payment
to the L/C Issuer pursuant to this Section 3.04(c) shall be deemed to be a
payment in respect of its participation in such Letter of Credit Borrowing and
shall constitute a "Participation Revolving Loan" from such Lender in
satisfaction of its Participation Commitment under this Section 3.04.

 

- 89 -

 

(d)               With respect to any unreimbursed drawing that is not converted
into a Revolving Loan to the Borrowers in whole or in part as contemplated by
Section 3.04(b), because of the failure of Borrowers to satisfy the conditions
set forth in Section 5.02 (other than any notice requirements) or for any other
reason, the Borrowers shall be deemed to have incurred from the L/C Issuer a
borrowing (each a "Letter of Credit Borrowing") in Dollars in the amount of such
drawing. Such Letter of Credit Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the rate per annum equal to
the interest rate on Revolving Loans that are Reference Rate Loans.

 

(e)                Each Lender's Participation Commitment shall continue until
the last to occur of any of the following events: (x) the L/C Issuer ceases to
be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no
Letter of Credit issued or created hereunder remains outstanding and uncanceled
and (z) all Persons (other than the Borrowers) have been fully reimbursed for
all payments made under or relating to Letters of Credit.

 

Section 3.05        Repayment of Participation Revolving Loans.

 

(a)                Upon (and only upon) receipt by the L/C Issuer for its
account of immediately available funds from the Borrowers (i) in reimbursement
of any payment made by the L/C Issuer under any Letter of Credit with respect to
which any Lender has made a Participation Revolving Loan to the L/C Issuer or
(ii) in payment of interest on such a payment made by the L/C Issuer under such
a Letter of Credit, the L/C Issuer will pay to each Revolving Loan Lender in the
same funds and currencies as those received by the L/C Issuer, the amount of
such Lender's applicable Pro Rata Share of such funds, except the L/C Issuer
shall retain the amount of the applicable Pro Rata Share of such funds of any
Revolving Loan Lender that did not make a Participation Revolving Loan in
respect of such payment by the L/C Issuer.

 

- 90 -

 

(b)               If the L/C Issuer is required at any time to return to the
Borrowers or to a receiver, receiver and manager, custodian, conservator,
trustee, administrator, liquidator, monitor, assignee for the benefit of
creditors, sequestrator or any other official in any Insolvency Proceeding, any
portion of the payments made by the Borrowers to the L/C Issuer pursuant to
Section 3.05(a) in reimbursement of a payment made under any Letter of Credit or
interest or fee thereon, each Revolving Loan Lender shall, on demand of the L/C
Issuer, forthwith return to the L/C Issuer the amount of its applicable Pro Rata
Share of any amounts so returned by the L/C Issuer plus interest at the Federal
Funds Effective Rate.

 

Section 3.06        Documentation. The Borrowers agree to be bound by the terms
of the Letter of Credit Application and by the L/C Issuer's interpretation of
any of Letter of Credit issued for the Loan Account of the Borrowers and by the
L/C Issuer's written regulations and customary practices relating to letters of
credit though the L/C Issuer's interpretations may be different from the
interpretations of the Borrowers. In the event of a conflict between the Letter
of Credit Application and this Agreement, this Agreement shall govern. It is
understood and agreed that, except in the case of gross negligence, bad faith or
willful misconduct (as determined by a court of competent jurisdiction in a
final judgment which is no longer appealable), neither the L/C Issuer nor the
Administrative Agent shall be liable for any error, negligence and/or mistakes,
whether of omission or commission, in following any instructions of the
Borrowing Agent or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.

 

Section 3.07        Determination to Honor Drawing Request. In determining
whether to honor any request for drawing under any Letter of Credit by the
beneficiary thereof, the L/C Issuer shall be responsible only to determine that
the documents and certificates required to be delivered under such Letter of
Credit have been delivered and that they comply on their face with the
requirements of such Letter of Credit and that any other drawing condition
appearing on the face of such Letter of Credit has been satisfied in the manner
so set forth.

 

Section 3.08        Nature of Participation and Reimbursement Obligations. Each
applicable Revolving Loan Lender's obligation in accordance with this Agreement
to make the Revolving Loans or Participation Revolving Loans as a result of a
drawing under a Letter of Credit, and the obligations of the Borrowers to
reimburse the L/C Issuer upon a draw under a Letter of Credit, shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Article III under all circumstances, including
the following circumstances:

 

(a)                any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, the Administrative Agent, the
Borrowers or any other Person for any reason whatsoever;

 

(b)               the failure of the Borrowers or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set forth in
this Agreement for the making of a Revolving Loan, it being acknowledged that
such conditions are not required for the making of a Letter of Credit Borrowing
and the obligation of the Lenders to make Participation Revolving Loans under
Section 3.04;

 

- 91 -

 

(c)                any lack of validity or enforceability of any Letter of
Credit, this Agreement or any other Loan Documents;

 

(d)               any claim of breach of warranty that might be made by the
Borrowers or any Lender against the beneficiary of a Letter of Credit, or the
existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense
or other right which the Borrowers or any Lender may have at any time against a
beneficiary, any successor beneficiary or any transferee of any Letter of Credit
or the proceeds thereof (or any Persons for whom any such transferee may be
acting), the L/C Issuer, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement, such Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrowers or any Subsidiaries of the
Borrowers and the beneficiary for which any Letter of Credit was procured);

 

(e)                the lack of power or authority of any signer of (or any
defect in or forgery of any signature or endorsement on) or the form of or lack
of validity, sufficiency, accuracy, enforceability or genuineness of any draft,
demand, instrument, certificate or other document presented under or in
connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or
provisions of services relating to a Letter of Credit, in each case, even if the
Administrative Agent or any of the Administrative Agent's Affiliates has been
notified thereof;

 

(f)                except as provided in Section 3.07, any payment by the L/C
Issuer under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit;

 

(g)               the solvency of, or any acts or omissions by, any beneficiary
of any Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;

 

(h)               any failure by the Administrative Agent or the L/C Issuer to
issue any Letter of Credit in the form requested by the Borrowing Agent, unless
the Administrative Agent has received written notice from the Borrowing Agent of
such failure within three (3) Business Days after the Administrative Agent shall
have furnished the Borrowing Agent a copy of such Letter of Credit and such
error is material and no drawing has been made thereon prior to receipt of such
notice;

 

(i)                 any Material Adverse Effect on any Borrower or any
Guarantor;

 

(j)                 any breach of this Agreement or any Loan Document by any
party thereto;

 

(k)               the occurrence or continuance of an Insolvency Proceeding with
respect to any Borrower or any Guarantor;

 

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

 

- 92 -

 

(m)             the fact that the Final Maturity Date shall have occurred or
this Agreement or the Obligations hereunder shall have been terminated; and

 

(n)               any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.

 

Section 3.09        [Intentionally Omitted].

 

Section 3.10        Liability for Acts and Omissions. As between the Borrowers,
the L/C Issuer and the Administrative Agent and Lenders, the Borrowers assume
all risks of the acts and omissions of, or misuse of the Letters of Credit by,
the respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the L/C Issuer and the Administrative Agent
shall not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for an issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged (even if the L/C Issuer or the Administrative
Agent shall have been notified thereof); (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) the failure of the beneficiary of any such Letter of Credit, or
any other party to which such Letter of Credit may be transferred, to comply
fully with any conditions required in order to draw upon such Letter of Credit
or any other claim of the Borrowers against any beneficiary of such Letter of
Credit, or any such transferee, or any dispute between or among the Borrowers
and any beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the L/C Issuer, including any governmental
acts, and none of the above shall affect or impair, or prevent the vesting of,
any of the L/C Issuer's rights or powers hereunder. Nothing in the preceding
sentence shall relieve the L/C Issuer from liability for the L/C Issuer's gross
negligence, bad faith or willful misconduct (as determined by a court of
competent jurisdiction in a final judgment which is no longer appealable) in
connection with actions or omissions described in such clauses (i) through
(viii) of such sentence. In no event shall the L/C Issuer or the L/C Issuer's
Affiliates be liable to the Borrowers for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys' fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.

 

Without limiting the generality of the foregoing, the L/C Issuer and each of its
Affiliates (i) may rely on any oral or other communication believed in good
faith by the L/C Issuer or such Affiliate to have been authorized or given by or
on behalf of the applicant for a Letter of Credit, (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the L/C Issuer or its Affiliates; (iv) may honor any
drawing that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the L/C Issuer or its Affiliate in any way related to any
order issued at the applicant's request to an air carrier, a letter of guarantee
or of indemnity issued to a carrier or any similar document (each an "Order")
and honor any drawing in connection with any Letter of Credit that is the
subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.

 

- 93 -

 

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the L/C Issuer under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final judgment which is no longer appealable), shall not put
the L/C Issuer under any resulting liability to the Borrowers or any Revolving
Loan Lender.

 

Article IV

APPLICATION OF PAYMENTS; DEFAULTING LENDERS;
JOINT AND SEVERAL LIABILITY OF BORROWERS

 

Section 4.01        Payments; Computations and Statements. (a) The Borrowing
Agent will make each payment under this Agreement not later than 12:00 noon (New
York City time) on the day when due, in lawful money of the United States of
America and in immediately available funds, to the Administrative Agent's
Account. All payments received by the Administrative Agent after 12:00 noon (New
York City time) on any Business Day will be credited to the Loan Account on the
next succeeding Business Day. All payments shall be made by the Borrowing Agent
without set-off, counterclaim, recoupment, deduction or other defense to the
Agents and the Lenders. Except as provided in Section 2.02, after receipt, the
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal ratably to the applicable Lenders in
accordance with their applicable Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement, provided that the
Administrative Agent will cause to be distributed all interest and fees received
from or for the account of the Borrowers not less than once each month and in
any event promptly after receipt thereof. The Lenders and the Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent may, from
time to time, charge the Loan Account of the Borrowing Agent with any amount due
and payable by the Borrowers under any Loan Document. Each of the Lenders and
the Borrowers agree that the Administrative Agent shall have the right to make
such charges whether or not any Default or Event of Default shall have occurred
and be continuing or whether any of the conditions precedent in Section 5.02
have been satisfied. Any amount charged to the Loan Account of the Borrowing
Agent shall be deemed a Revolving Loan hereunder made by the Revolving Loan
Lenders to the Borrowers, funded by the Administrative Agent on behalf of the
Revolving Loan Lenders and subject to Section 2.02 of this Agreement. The
Lenders and the Borrowers confirm that any charges which the Administrative
Agent may so make to the Loan Account of the Borrowing Agent as herein provided
will be made as an accommodation to the Borrowers and solely at the
Administrative Agent's discretion, provided that the Administrative Agent shall
from time to time upon the request of the Collateral Agent, charge the Loan
Account of the Borrowing Agent with any amount due and payable under any Loan
Document. Whenever any payment to be made under any such Loan Document shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall in such
case be included in the computation of interest or fees, as the case may be. All
computations of fees shall be made by the Administrative Agent on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such fees are payable.
Each determination by the Administrative Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.

 

- 94 -

 

(b)               The Administrative Agent shall provide the Borrowing Agent,
promptly after the end of each calendar month, a summary statement (in the form
from time to time used by the Administrative Agent) of the opening and closing
daily balances in the Loan Account of the Borrowing Agent during such month, the
amounts and dates of all Loans made to the Borrowers during such month, the
amounts and dates of all payments on account of the Loans to the Borrowers
during such month and the Loans to which such payments were applied, the amount
of interest accrued on the Loans to the Borrowers during such month, any Letters
of Credit issued by the L/C Issuer for the account of the Borrowers during such
month, specifying the face amount thereof, the amount of charges to the Loan
Account and/or Loans made to the Borrowers during such month to reimburse the
Revolving Loan Lenders for drawings made under Letters of Credit, and the amount
and nature of any charges to the Loan Account made during such month on account
of fees, commissions, expenses and other Obligations. All entries on any such
statement shall be presumed to be correct and, 30 days after the same is sent,
shall be final and conclusive absent manifest error.

 

Section 4.02        Sharing of Payments, Etc. Except as provided in Section 2.02
hereof, if any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith (a) turn
the same over to Administrative Agent, in kind, and with such endorsements as
may be required to negotiate the same to Administrative Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (b) purchase from the other Lenders such participations in
such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them in
accordance with the applicable provisions of this Agreement; provided, however,
that (a) if all or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender of
any interest or other amount paid by the purchasing Lender in respect of the
total amount so recovered) and (b) the provisions of this Section shall not be
construed to apply to (i) any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender), or (ii) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in Letters of Credit to any
assignee or participant, other than to any Loan Party or any Subsidiary thereof
(as to which the provisions of this Section shall apply). The Borrowers agree
that any Lender so purchasing a participation from another Lender pursuant to
this Section 4.02 may, to the fullest extent permitted by law, exercise all of
its rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.

 

- 95 -

 

Section 4.03        Apportionment of Payments.  Subject to Section 2.02 hereof
and to any written agreement among the Agents and/or the Lenders:

 

(a)                All payments of principal and interest in respect of
outstanding Loans, all payments in respect of the Letter of Credit Obligations,
all payments of fees (other than the fees set forth in Section 2.06 hereof) and
all other payments in respect of any other Obligations, shall be allocated by
the Administrative Agent among such of the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein
or, in respect of payments not made on account of Loans or Letter of Credit
Obligations, as designated by the Person making payment when the payment is
made.

 

(b)               After the occurrence and during the continuance of an Event of
Default, the Administrative Agent may, and upon the direction of the Collateral
Agent or the Required Lenders shall, apply all payments in respect of any
Obligations and proceeds of the Collateral, subject to the provisions of this
Agreement, as follows:

 

(i)                 except to the extent provided in clause (iii) below, with
respect to Revolver Priority Collateral Proceeds and payments made using
Revolver Priority Collateral Proceeds, (A) first, ratably to pay the Obligations
in respect of any fees, expense reimbursements, indemnities and other amounts
(other than interest or principal of the Loans) then due and payable to the
Agents or the L/C Issuer (in each case, solely with respect to the Revolving
Loan Obligations as reasonably determined by the Administrative Agent) until
paid in full; (B) second, ratably to pay the Obligations in respect of any fees
(excluding any Applicable Prepayment Premium), expense reimbursements and
indemnities then due and payable to the Revolving Loan Lenders until paid in
full; (C) third, ratably to pay interest then due and payable in respect of the
Agent Advances until paid in full; (D) fourth, ratably to pay principal of the
Agent Advances until paid in full; (E) fifth, ratably to pay interest then due
and payable in respect of the Revolving Loans and Reimbursement Obligations
until paid in full; (F) sixth, ratably to pay principal of the Revolving Loans
and Letter of Credit Obligations (or, to the extent such Obligations are
contingent, to provide Cash Collateral in respect of such Obligations) until
paid in full; (G) seventh, ratably to pay the Bank Product Obligations in an
amount not to exceed the amount of the Bank Product Reserve; (H) eighth, ratably
to pay the Obligations in respect of any fees (excluding any Applicable
Prepayment Premium), expense reimbursements and indemnities then due and payable
to the Term Loan Lenders until paid in full; (I) ninth, ratably to pay interest
then due and payable in respect of the Term Loan until paid in full; (J) tenth,
ratably to pay principal of the Term Loan until paid in full; (N) eleventh,
ratably to pay any Applicable Prepayment Premium then due and payable until paid
in full to the Lenders; (O) twelfth, ratably to pay Bank Product Obligations to
the extent not paid under clause (G) above; and (P) thirteenth, to the ratable
payment of all other Obligations then due and payable until paid in full;

 

- 96 -

 

(ii)               except to the extent provided in clause (iv) below, with
respect to Term Priority Collateral Proceeds and payments made using Term
Priority Collateral Proceeds, (A) first, ratably to pay the Obligations in
respect of any fees, expense reimbursements, indemnities and other amounts
(other than interest or principal of the Loans) then due and payable to the
Agents (in each case, solely with respect to the Term Loan Obligations as
reasonably determined by the Collateral Agent) until paid in full; (B) second,
ratably to pay the Obligations in respect of any fees (excluding any Applicable
Prepayment Premiums), expense reimbursements and indemnities then due and
payable to the Term Loan Lenders until paid in full; (C) third, ratably to pay
interest then due and payable in respect of the Agent Advances until paid in
full; (D) fourth, ratably to pay principal of the Agent Advances until paid in
full; (E) fifth, ratably to pay interest then due and payable in respect of the
Term Loan until paid in full; (F) sixth, ratably to pay principal of the Term
Loan until paid in full; (G) seventh, ratably to pay the Obligations in respect
of any fees (other than any Applicable Prepayment Premium), expense
reimbursements and indemnities then due and payable to the Revolving Loan
Lenders until paid in full; (H) eighth, ratably to pay interest then due and
payable in respect of the Revolving Loans and Reimbursement Obligations until
paid in full; (I) ninth, ratably to pay principal of the Revolving Loans and
Letter of Credit Obligations (or, to the extent such Obligations are contingent,
to provide Cash Collateral in respect of such Obligations) until paid in full;
(L) tenth, ratably to pay any Applicable Prepayment Premium then due and payable
until paid in full; (M) eleventh, ratably to pay Bank Product Obligations; and
(N) twelfth, to the ratable payment of all other Obligations then due and
payable until paid in full; and

 

(iii)             with respect to the Proceeds of any Disposition of all or
substantially all of the assets or Equity Interests of any Person or any
insurance which Disposition or proceeds of insurance includes both (x) Revolver
Priority Collateral and (y) Term Priority Collateral, such Proceeds and payments
using such Proceeds shall be applied in a manner mutually determined by the
Agents acting reasonably and in good faith.

 

(c)                In each instance, so long as no Event of Default has occurred
and is continuing and except as otherwise expressly provided herein, Section
4.03(b) shall not be deemed to apply to any payment by the Borrowers specified
by the Borrowers to the Administrative Agent to be for the payment of Term Loan
Obligations then due and payable under any provision of this Agreement or the
prepayment of all or part of the principal of the Term Loans in accordance with
the terms and conditions of Section 2.05.

 

(d)               For purposes of Section 4.03(b) (other than clause (P) of
Section 4.03(b)(i) and clause (N) of Section 4.03(b)(ii)), "paid in full" means,
with respect to any Obligations, payment in cash or Cash Collateralization (as
applicable) of all amounts owing under the Loan Documents in respect of such
Obligations, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, expense reimbursements and
indemnities Proceeding, except to the extent that default or overdue interest
(but not any other interest) and fees, each arising from or related to a
default, are disallowed in any Insolvency Proceeding; provided, however, that
for the purposes of clause (F) of Section 4.03(b)(i) and clause (I) of Section
4.03(b)(ii), "paid in full" means payment in cash or Cash Collateralization (as
applicable) of all amounts owing under the Loan Documents in respect of such
Obligations according to the terms thereof, including loan fees, service fees,
professional fees, interest (and specifically including interest accrued after
the commencement of any Insolvency Proceeding), default interest, interest on
interest, expense reimbursements and indemnities (specifically including in each
case of the foregoing which would accrue after the commencement of any
Insolvency Proceeding), whether or not the same would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.

 

- 97 -

 

(e)                In the event of a direct conflict between the priority
provisions of this Section 4.03 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall 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 4.03 shall control and govern.

 

Section 4.04        Defaulting Lenders. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

 

(a)                The Administrative Agent shall not be obligated to transfer
to such Defaulting Lender any payments made by the Borrowers to the
Administrative Agent for such Defaulting Lender's benefit, and, in the absence
of such transfer to such Defaulting Lender, the Administrative Agent shall
transfer any such payments to each other non-Defaulting Lender ratably in
accordance with their Pro Rata Shares (without giving effect to the Pro Rata
Shares of such Defaulting Lender) (but only to the extent that such Defaulting
Lender's Loans were funded by the other Lenders) or, if so directed by the
Borrowing Agent and if no Default or Event of Default has occurred and is
continuing (and to the extent such Defaulting Lender's Loans were not funded by
the other Lenders), retain the same to be re-advanced to the Borrowers as if
such Defaulting Lender had made such Loans to the Borrowers. Subject to the
foregoing, the Administrative Agent may hold and, in its discretion, re-lend to
the Borrowers for the account of such Defaulting Lender the amount of all such
payments received and retained by the Administrative Agent for the account of
such Defaulting Lender. No Defaulting Lender shall be entitled to receive any
Unused Line Fee for any period during which that Lender is a Defaulting Lender
(and the Borrowers shall not be required to pay any such fees that otherwise
would have been required to have been paid to that Defaulting Lender).

 

(b)               Any such failure to fund by any Defaulting Lender shall
constitute a material breach by such Defaulting Lender of this Agreement and
shall entitle the Borrowers to replace the Defaulting Lender with one or more
substitute Lenders, and the Defaulting Lender shall have no right to refuse to
be replaced hereunder. Such notice to replace the Defaulting Lender shall
specify an effective date for such replacement, which date shall not be later
than 15 Business Days after the date such notice is given. Prior to the
effective date of such replacement, the Defaulting Lender shall execute and
deliver an Assignment and Acceptance, subject only to the Defaulting Lender
being repaid its share of the outstanding Obligations without any premium or
penalty of any kind whatsoever. If the Defaulting Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance prior to the effective
date of such replacement, the Defaulting Lender shall be deemed to have executed
and delivered such Assignment and Acceptance. The replacement of any Defaulting
Lender shall be made in accordance with the terms of Section 12.07.

 

- 98 -

 

(c)                The operation of this Section shall not be construed to
increase or otherwise affect the Commitments of any Lender, to relieve or excuse
the performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by the Borrowers
of their duties and obligations hereunder to the Administrative Agent or to the
Lenders other than such Defaulting Lender.

 

(d)               This Section shall remain effective with respect to such
Lender until either (i) the Obligations under this Agreement shall have been
declared or shall have become immediately due and payable or (ii) the
non-Defaulting Lenders, the L/C Issuer, the Agents, and the Borrowing Agent
shall have waived such Defaulting Lender's default in writing, and the
Defaulting Lender makes its Pro Rata Share of the applicable defaulted Loans and
pays to the Agents all amounts owing by such Defaulting Lender in respect
thereof; provided that no adjustments will be made retroactively with respect to
fees accrued or payments made by or on behalf of the Borrowers while such Lender
was a Defaulting Lender; provided further that, except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from such Lender's having been a Defaulting Lender.

 

Section 4.05        Borrowing Agent; Joint and Several Liability of the
Borrowers.

 

(a)                Each Borrower hereby irrevocably appoints the Parent as the
borrowing agent and attorney-in-fact for the Borrowers (the "Borrowing Agent")
which appointment shall remain in full force and effect unless and until the
Agents shall have received prior written notice signed by all of the Borrowers
that such appointment has been revoked and that another Borrower has been
appointed Borrowing Agent. Each Borrower hereby irrevocably appoints and
authorizes the Borrowing Agent (i) to provide to the Agents and receive from the
Agents all notices with respect to Loans obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and (ii) to
take such action as the Borrowing Agent deems appropriate on its behalf to
obtain Loans 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 of the Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
the Borrowers in order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner and at their request, and
that neither the Agents nor the Lenders shall incur liability to the Borrowers
as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group.

 

- 99 -

 

(b)               Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, each Borrower hereby accepts joint and several
liability hereunder and under the other Loan Documents for the Obligations in
consideration of the financial accommodations to be provided by the Agents and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations. Each of the Borrowers, 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, without
limitation, any Obligations arising under this Section 4.05), it being the
intention of the parties hereto that all of the Obligations shall be the joint
and several obligations of each of the Borrowers without preferences or
distinction among them. If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event, the other Borrowers will make such payment with respect to,
or perform, such Obligation. Subject to the terms and conditions hereof, the
Obligations of each of the Borrowers under the provisions of this Section 4.05
constitute the absolute and unconditional, full recourse Obligations of each of
the Borrowers, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.

 

(c)                The provisions of this Section 4.05 are made for the benefit
of the Agents, the Lenders and their successors and assigns, and may be enforced
by them from time to time against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part of the Agents,
the Lenders or such successors or assigns first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.05 shall remain in effect until all of the Obligations shall
have been Paid In Full or otherwise fully satisfied.

 

(d)               Each of the Borrowers hereby agrees that it will not enforce
any of its rights of contribution or subrogation against the other Borrowers
with respect to any liability incurred by it hereunder or under any of the other
Loan Documents, any payments made by it to the Agents or the Lenders with
respect to any of the Obligations or any Collateral, until such time as all of
the Obligations have been Paid In Full. Any claim which any Borrower may have
against any other Borrower with respect to any payments to the Agents or the
Lenders hereunder or under any other Loan Documents 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.

 

- 100 -

 

Article V

CONDITIONS TO LOANS

 

Section 5.01        Conditions Precedent to Effectiveness. This Agreement shall
become effective as of the Business Day (the "Effective Date") when each of the
following conditions precedent shall have been satisfied or waived in a manner
reasonably satisfactory to the Agents, except to the extent such conditions are
subject to Section 5.03:

 

(a)                Payment of Fees, Etc. The Borrowers shall have paid on or
before the Effective Date all fees, costs and expenses then payable pursuant to
Section 2.06 and Section 12.04, to the extent included in the Flow of Funds
Agreement.

 

(b)               Representations and Warranties; No Event of Default. The
following statements shall be true and correct: (a) subject to Certain Funds
Provision (as defined at the end of Section 5.01), the only representations and
warranties the making and accuracy of which shall be a condition to the
availability of the Loans on the Effective Date, shall be (A) the
representations and warranties contained in Section 6.01(a), (b), (c), (d), (h),
(k), (t), (u), (y), (bb), (ff), (gg), (hh) and (ii) and, subject to the Certain
Funds Provision and Permitted Liens, any representation and warranty with
respect to the creation and perfection of the Collateral Agent's security
interest in the Collateral (the foregoing being the "Specified
Representations"), in each case, as they relate to the entering into or
performance of the Loan Documents by the Loan Parties on the Effective Date, and
(B) the representations and warranties made by the Company (as defined in the
Acquisition Agreement) with respect to the Company and its subsidiaries in the
Acquisition Agreement that are material to the Agents and the Lenders, but only
to the extent that the Parent and/or Merger Sub has the right under the
Acquisition Agreement to terminate (without any fee or penalty) its obligations
under the Acquisition Agreement or not to consummate the transactions
contemplated by the Acquisition Agreement as a result of a breach of such
representations and warranties in the Acquisition Agreement (the "Specified
Acquisition Representations") without regard to the Parent's (and/or Merger
Sub’s) waiver of such breach and after giving effect to all applicable cure and
grace periods; provided that the representations and warranties specified in
clauses (A) and (B) above are true and correct in all material respects (except
to the extent qualified by materiality or "Material Adverse Effect", in which
case such representations and warranties shall be true and correct in all
respects) on and as of the Effective Date as though made on and as of such date,
except to the extent that any such representation or warranty expressly relates
solely to an earlier date (in which case such representation or warranty shall
be true and correct in all material respects (except to the extent qualified by
materiality or "Material Adverse Effect", in which case such representations and
warranties shall be true and correct in all respects) on and as of such earlier
date), and (b) no Default or Event of Default shall have occurred and be
continuing on the Effective Date or would result from this Agreement or the
other Loan Documents becoming effective in accordance with its or their
respective terms.

 

(c)                Legality. The making of the initial Loans or the issuance of
any Letters of Credit shall not contravene any law, rule or regulation
applicable to any Secured Party.

 

(d)               Delivery of Documents. The Agents shall have received on or
before the Effective Date the following, each in form and substance satisfactory
to the Agents and, unless indicated otherwise, dated the Effective Date and, if
applicable, duly executed by the Persons party thereto:

 

- 101 -

 

(i)                 this Agreement, duly executed by each of the parties
thereto;

 

(ii)               a Security Agreement, together with, if any, copies of any
certificates representing all of the Equity Interests and all promissory notes
required to be pledged thereunder, accompanied by undated stock powers executed
in blank and other proper instruments of transfer (with originals of such items
to be delivered as provided in Section 5.03);

 

(iii)             the Foreign Security Documents, duly executed by each party
thereto (and all notices and other deliverables required to be provided upon
execution and in accordance with the terms thereof, including, without
limitation, the copies of the stock or share certificates representing all of
the Equity Interests and all promissory notes required to be pledged thereunder,
accompanied by undated stock powers or stock transfer forms executed in blank
and other proper instruments of transfer and notice to each bank operating an
account subject to a UK Security Document and such an executed acknowledgments
as have been received by the relevant Loan Parties prior to the Effective Date
from each such bank, each substantially in the form set out in the relevant UK
Security Document) (where appropriate), (with originals of such items to be
delivered as provided in Section 5.03);

 

(iv)             filing of appropriate financing statements on Form UCC-1 or in
the applicable form under the PPSA or the Civil Code of Québec in such office or
offices as may be necessary of the Collateral Agent, desirable to perfect the
security interests and Liens purported to be created by each Security Document
and each Mortgage;

 

(v)               the results of searches for any effective UCC financing
statements, PPSA financing statement, publication under the Civil Code of
Québec, tax Liens, judgment Liens, Bank Act (Canada), insolvency or as the
Agents shall have reasonably requested, filed against any Loan Party or its
property, which results shall not show any such Liens (other than Permitted
Liens acceptable to the Collateral Agent);

 

(vi)             a Perfection Certificate;

 

(vii)           a Notice of Borrowing, duly executed by the Borrowing Agent,
requesting Revolving Loans in an aggregate principal amount not greater than
$7,000,000;

 

(viii)         the Intercompany Subordination Agreement, duly executed by the
Parent and its Subsidiaries;

 

(ix)             the Collateral Assignment of Rights in respect of the
Acquisition Documents, duly executed by the Parent and Merger Sub;

 

(x)               the Flow of Funds Agreement;

 

- 102 -

 

(xi)             a copy of the resolutions of each Loan Party (in the case of a
UK Loan Party, a resolution of the shareholders of such Loan Party and a written
resolution of the Board of Directors of such Loan Party), certified as of the
Effective Date by an Authorized Officer thereof, authorizing (A) the borrowings
hereunder and the transactions contemplated by the Loan Documents and the other
Transactions to which such Loan Party is or will be a party and (B) the
execution, delivery and performance by such Loan Party of each Loan Document to
which such Loan Party is or will be a party and the execution and delivery of
the other documents to be delivered by such Person in connection herewith and
therewith;

 

(xii)           a certificate of an Authorized Officer of each Loan Party,
certifying the names and true signatures of the representatives of such Loan
Party authorized to sign each Loan Document to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such Loan
Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;

 

(xiii)         a certificate of the appropriate official(s) of the jurisdiction
of organization and, except to the extent such failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect, each jurisdiction
of foreign qualification of each Loan Party certifying as of a recent date not
more than 30 days prior to the Effective Date as to the subsistence in good
standing of such Loan Party in such jurisdictions;

 

(xiv)         a true and complete copy of the charter, certificate of formation
or incorporation, certificate of limited partnership or other publicly filed
organizational document of each Loan Party certified, in the case of the U.S.
Loan Parties, as of a recent date not more than 30 days prior to the Effective
Date by an appropriate official of the jurisdiction of organization of such Loan
Party which shall set forth the same complete name of such Loan Party as is set
forth herein and the organizational number of such Loan Party, if an
organizational number is issued in such jurisdiction and it is common practice
in such jurisdiction for such document to contain the organizational number;

 

(xv)           a copy of the Governing Documents of each Loan Party, together
with all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;

 

(xvi)         an opinion of (A) Burns & Levinson, LLP, counsel to the Loan
Parties, (B) Hewitsons, UK counsel to the Loan Parties, and (C) Me Jean-Paul
Robitaille, Quebec counsel to the Loan Parties, each as to such matters as the
Collateral Agent may reasonably request;

 

(xvii)       a certificate of an Authorized Officer of each Loan Party,
certifying as to the matters set forth in Section 5.01(a);

 

(xviii)     a copy of (A) the Financial Statements and (B) the financial
projections described in Section 6.01(g)(ii) hereof, certified as of the
Effective Date as complying with the representations and warranties set forth in
Section 6.01(g)(ii) by an Authorized Officer of the Parent;

 

- 103 -

 

(xix) a certificate of the chief financial officer of the Parent, certifying as
to the solvency of the Loan Parties taken as a whole after giving effect to the
Transactions, which certificate shall be satisfactory in form and substance to
the Agents;

 

(xx)           evidence of the insurance coverage required by Section 7.01(h)
and the terms of each Security Document and each Mortgage and such other
insurance coverage with respect to the business and operations of the Loan
Parties as the Collateral Agent may reasonably request, in each case, where
requested by the Collateral Agent, with such endorsements as to the named
insureds or loss payees thereunder as the Collateral Agent may request and
providing that such policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days’ (or 10 days in the case of non-payment of
premiums) prior written notice to the Collateral Agent and each such named
insured or loss payee, together with evidence that such insurance policies are
in full force and effect;

 

(xxi)         a certificate of an Authorized Officer of the Borrowing Agent,
certifying the names and true signatures of the persons that are authorized to
provide Notices of Borrowing, LIBOR Notices and all other notices under this
Agreement and the other Loan Documents;

 

(xxii)       copies of the material Acquisition Documents and the other Material
Contracts as in effect on the Effective Date, certified as true and correct
copies thereof by an Authorized Officer of the Borrowers, together with a
certificate of an Authorized Officer of the Borrowers stating that such
agreements remain in full force and effect and that none of the Loan Parties (or
with respect to the Target, to such Authorized Officer’s knowledge) has breached
or defaulted in any of its obligations under such agreements (and with respect
to the Target, only to the extent such breach or default would have the right to
terminate the Parent and/or Merger Sub obligations under the Acquisition
Documents);

 

(xxiii)     evidence of the payment in full of all Indebtedness owed by the Loan
Parties under the Existing Credit Facilities, together with (A) a termination
and release agreement with respect to the Existing Credit Facilities and all
related documents, duly executed by (or on behalf of) the Loan Parties and the
Existing Lenders, (B) a satisfaction of mortgage for each mortgage filed with
respect thereto on each Facility, (C) a termination of security interest and
Liens in Intellectual Property for each assignment for security recorded with
respect thereto, if any, at the United States Patent and Trademark Office or the
United States Copyright Office or the Canadian Intellectual Property Office and
covering any intellectual property of the Loan Parties, and (D) UCC 3
termination statements for all UCC-1 financing statements, PPSA termination
statements for all PPSA financing statements, RDPRM discharges for all
publications made, and other termination statements filed by or on behalf of the
Existing Lenders and covering any portion of the Collateral;

 

(xxiv)     a Borrowing Base Certificate evidencing that (A) the aggregate amount
of Eligible Accounts and Eligible Inventory is sufficient in value and amount to
support Revolving Loans in the amount requested by Borrowing Agent as of the
Effective Date, and (B) after giving effect to the initial Revolving Loans
hereunder, the Borrowers shall have Availability of at least $6,500,000;

 

- 104 -

 

(xxv)       the Fee Letter, duly executed by the Borrowers; and

 

(xxvi)     In respect of each UK Loan Party, either:

 

(A)             a certificate of an Authorized Officer of such Loan Party
certifying that: each member of the group has complied within the relevant
timeframe with any notice it has received pursuant to Part 21A of the Companies
Act 2006 from that Loan Party; and no "warning notice" or "restrictions notice"
(in each case as defined in Schedule 1B of the Companies Act 2006) has been
issued in respect of its shares which are the subject of the Liens created or
expressed to be created pursuant to the Security Documents, together with a copy
of the "PSC register" (within the meaning of section 790C(10) of the Companies
Act 2006) of that Loan Party, which is certified by an Authorized Officer of
that Loan Party to be correct, complete and not amended or superseded as at a
date no earlier than the date of this Agreement; or

 

(B)              a certificate of an Authorized Officer of such Loan Party
certifying that such Loan Party is not required to comply with Part 21A of the
Companies Act 2006; and

 

(xxvii)   such other agreements, instruments, approvals, opinions and other
documents, each reasonably satisfactory to the Agents in form and substance, as
any Agent may reasonably request.

 

(e)                Material Adverse Effect. No Material Adverse Effect shall
have occurred since December 31, 2016. Solely for the purpose of this Section
5.01(e), "Material Adverse Effect" means (i) on the Effective Date, with respect
to the Target, a Material Adverse Effect as defined in the Acquisition
Agreement, but only to the extent that the Parent or its Affiliates (including
Merger Sub) have the right to terminate its or their obligations under the
Acquisition Agreement due to such Material Adverse Effect, without regard to the
Parent's or Merger Sub's waiver of such right and (ii) with respect to the other
Loan Parties and their Subsidiaries, a "Material Adverse Effect" as defined in
Section 1.01.

 

(f)                Consummation of Acquisition. Concurrently, or substantially
concurrently, with the funding of the initial Loans on the Effective Date, (A)
the Acquisition shall have been consummated in accordance in all material
respects with the terms of the Acquisition Documents (no provision of which
shall have been amended or otherwise modified or waived in any manner materially
adverse to the Lenders without the prior written consent of the Agents) and (B)
the file-stamped merger certificate in respect of the Acquisition (which shall
have been pre-cleared by the Secretary of State of the State of Delaware) shall
have been issued by the Secretary of State of the State of Delaware and
effective. For the avoidance of doubt, the Loan Parties shall not amend, without
the consent of the Agents, the definition of "Material Adverse Effect" (as
defined in the Acquisition Agreement) or waive non-compliance with any of the
applicable Specified Acquisition Representations to the extent such amendment or
waiver would be adverse to the Lenders.

 

(g)               Other Proceeds. The Collateral Agent shall have received
evidence that the Parent shall have at least $2,000,000 of unrestricted cash in
the United States on its balance sheet that will be funded concurrently with the
initial Loans on the Effective Date, to be combined with proceeds of the initial
Loans on the Effective Date to consummate Acquisition and the purchase price
paid in respect of the Acquisition shall not be in excess of $70,000,000 and
shall not be reduced by more than 5.0%; provided, that any reduction shall
reduce the principal amount of the Loans, in amounts to be allocated between the
Total Revolving Credit Commitment and the Total Term Loan Commitment as the
Lenders may determine in their sole discretion.

 

- 105 -

 

(h)               Approvals. All consents, authorizations and approvals of, and
filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the
Transactions or the conduct of the Loan Parties' business shall have been
obtained and shall be in full force and effect. There shall exist no claim,
action, suit, investigation, litigation or proceeding (including, without
limitation, shareholder or derivative litigation), threatened in writing or
pending in any court or before any arbitrator or Governmental Authority which
could reasonably be expected to have a Material Adverse Effect on (A) the
condition, financial or otherwise, business, operations, assets or liabilities
of the Loan Parties, taken as a whole, (B) the ability of the Loan Parties to
perform their material obligations under the Loan Documents or (C) the ability
of the Agents or the Lenders to enforce the Loan Documents.

 

(i)                 Proceedings; Receipt of Documents. All proceedings in
connection with the making of the initial Loans or the issuance of the initial
Letters of Credit in accordance with the Loan Documents and the other
Transactions, and all documents incidental hereto and thereto, shall be
satisfactory to the Collateral Agent and its counsel, and the Collateral Agent
and such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Collateral Agent
or such counsel may reasonably request.

 

(j)                 Availability. After giving effect to all Loans to be made on
the Effective Date and the other Transactions, (i) the aggregate amount of
Revolving Loans outstanding shall not be greater than $7,000,000 and (ii) the
Borrowers shall have Availability plus Qualified Cash (which, for the purpose of
this clause (j), is not required to be subject to a Cash Management Agreement)
of at least $6,500,000. The Borrowers shall deliver to the Collateral Agent a
certificate of the chief financial officer of the Borrowers certifying as to the
matters set forth in clauses (i) and (ii) above and containing the calculation
of Availability.

 

(k)               Leverage Ratio. The Leverage Ratio of the Parent and its
Subsidiaries for the trailing twelve month period ended December 31, 2017,
calculated on a pro forma basis after giving effect to the Loans, shall not be
greater than 4.31:1.00. The Parent shall deliver to the Collateral Agent a
certificate of the chief financial officer of the Parent certifying as to the
matters set forth in this Section 5.01(k) and containing the calculation of the
Leverage Ratio.

 

Notwithstanding anything to the contrary in this Agreement or in any other Loan
Document, (x) the only representations and warranties the accuracy of which will
be a condition to the availability of the initial funding of the Loans on the
Effective Date will be (A) the Specified Acquisition Representations and (B) the
Specified Representations and (y) to the extent a perfected security interest or
Liens in any Collateral (the security interest or Liens in respect of which
cannot be perfected by means of (i) the filing of a UCC financing statement,
PPSA financing statement or publication under the Civil Code of Québec (ii) the
making of a United States Federal intellectual property filing or a Canadian
Intellectual Property filing, or (iii) delivery of possession of Equity
Interests in respect of a certificated security, provided, that such delivery of
certificated securities on the Effective Date shall only be required to the
extent such certificated securities are already in existence and in the actual
possession of the Loan Parties on the Effective Date after the Loan Parties' use
of commercially reasonable efforts without undue burden or expense to procure
such certificates from the sellers under the Acquisition Agreement or the
Existing Lenders) is not able to be provided on the Effective Date after the
Borrowers' use of commercially reasonable efforts to do so (without the
imposition of undue burden or expense), the perfection of such security interest
or Lien in such Collateral will not constitute a condition precedent to the
availability of the applicable Loans on such date, but a security interest in
such Collateral will be required to be perfected within 15 Business Days (unless
otherwise provided for in this Agreement or any other Loan Document) after the
Effective Date pursuant to arrangements to be mutually agreed between the
Borrowers and the Agents. For the avoidance of doubt, the foregoing provisions
of this paragraph are referred to as the "Certain Funds Provision".

 

- 106 -

 

Section 5.02        Conditions Precedent to All Loans and Letters of Credit. The
obligation of any Agent or any Lender to make any Loan or of the Administrative
Agent to assist the Borrowers in establishing or opening any Letter of Credit
after the Effective Date is subject to the fulfillment, in a manner satisfactory
to the Administrative Agent, of each of the following conditions precedent:

 

(a)                Payment of Fees, Etc. The Borrowers shall have paid all fees,
costs and expenses then payable by the Borrowers pursuant to this Agreement and
the other Loan Documents, including, without limitation, Section 2.06 and
Section 12.04 hereof.

 

(b)               Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Borrowing Agent to the Administrative Agent of a Notice of Borrowing with
respect to each such Loan, and the Borrowers' acceptance of the proceeds of such
Loan, or the submission by Borrowing Agent of a Letter of Credit Application
with respect to a Letter of Credit, and the issuance of such Letter of Credit,
shall each be deemed to be a representation and warranty by each Loan Party on
the date of such Loan or the date of issuance of such Letter of Credit that: (i)
the representations and warranties contained in Article VI and in each other
Loan Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan or such Letter
of Credit are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations or
warranties that already are qualified or modified as to "materiality" or
"Material Adverse Effect" in the text thereof, which representations and
warranties shall be true and correct in all respects subject to such
qualification) on and as of such date as though made on and as of such date,
except to the extent that any such representation or warranty expressly relates
solely to an earlier date (in which case such representation or warranty shall
be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to "materiality" or "Material Adverse
Effect" in the text thereof, which representations and warranties shall be true
and correct in all respects subject to such qualification) on and as of such
earlier date), (ii) at the time of and after giving effect to the making of such
Loan and the application of the proceeds thereof or at the time of issuance of
such Letter of Credit, no Default or Event of Default has occurred and is
continuing or would result from the making of the Loan to be made, or the
issuance of such Letter of Credit to be issued, on such date, and (iii) the
conditions set forth in this Section 5.02 have been satisfied as of the date of
such request.

 

- 107 -

 

(c)                Legality. The making of such Loan or the issuance of such
Letter of Credit shall not contravene any law, rule or regulation applicable to
any Secured Party.

 

(d)               Notices. The Administrative Agent shall have received, as the
case may be, (i) a Notice of Borrowing pursuant to Section 2.02 hereof and (ii)
a Letter of Credit Application pursuant to Section 3.03 hereof, if applicable.

 

(e)                Proceedings; Receipt of Documents. All proceedings in
connection with the making of such Loan or the issuance of such Letter of Credit
and the other transactions contemplated by this Agreement and the other Loan
Documents, and all documents incidental hereto and thereto, shall be
satisfactory to the Administrative Agent and its counsel, and the Administrative
Agent and such counsel shall have received all such information and such
counterpart originals or certified or other copies of such documents, in form
and substance satisfactory to the Administrative Agent, as the Administrative
Agent or such counsel may reasonably request.

 

Section 5.03        Conditions Subsequent to Effectiveness. As an accommodation
to the Loan Parties, the Agents and the Lenders have agreed to execute this
Agreement and to make the Loans on the Effective Date notwithstanding the
failure by the Loan Parties to satisfy the conditions set forth below on or
before the Effective Date. In consideration of such accommodation, the Loan
Parties agree that, in addition to all other terms, conditions and provisions
set forth in this Agreement and the other Loan Documents, including, without
limitation, those conditions set forth in Section 5.01, the Loan Parties shall
satisfy each of the conditions subsequent set forth below on or before the date
applicable thereto (it being understood that (i) the failure by the Loan Parties
to perform or cause to be performed any such condition subsequent on or before
the date applicable thereto shall constitute an Event of Default and (ii) to the
extent that the existence of any such condition subsequent would otherwise cause
any representation, warranty or covenant in this Agreement or any other Loan
Document to be breached, the Required Lenders hereby waive such breach for the
period from the Effective Date until the date on which such condition subsequent
is required to be fulfilled pursuant to this Section 5.03):

 

(a)                Within ninety (90) days after the Effective Date (or such
later date as determined by the Agents in their sole discretion), the Collateral
Agent shall have received (i) all Cash Management Agreements that, in the
reasonable judgment of the Agents, are required for the Loan Parties to comply
with the Loan Documents as of the Effective Date, each duly executed by, in
addition to the applicable Loan Party, the applicable financial institution and
(ii) Processor Letters, each in form and substance reasonably satisfactory to
the Agents, from each of the Credit Card Processors set forth on Schedule
6.01(jj).

 

- 108 -

 

(b)               Use commercially reasonable efforts to provide, within sixty
(60) days after the Effective Date (or such later date as determined by the
Agents in their sole discretion), the Agents with evidence that the Borrowers
have received satisfactory credit insurance in respect of Eligible Insured
Foreign Receivables.

 

(c)                Within the period prescribed pursuant to the last paragraph
of Section 5.01, perfection of all other security interests or Liens on all such
Collateral described therein; provided, that such date with respect to the
delivery of possession of Equity Interests in respect of a certificated security
of a Foreign Subsidiary shall be within ten (10) Business Days after the
Effective Date (or such later date as determined by the Agents in their sole
discretion).

 

(d)               Within ten (10) days after the Effective Date, the Agents
shall have received endorsements as to the named insureds or lender loss payees
under the insurance policies set forth on Schedule 6.01(s) as required under
Section 7.01(h) and providing that such policy may be terminated or canceled (by
the insurer or the insured thereunder) only upon 30 days' prior written notice
to the Collateral Agent and each such named insured or lender loss payee.

 

Article VI

REPRESENTATIONS AND WARRANTIES

 

Section 6.01        Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents, the Lenders and the L/C Issuer as
follows:

 

(a)                Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited company, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of the
state or jurisdiction of its organization, (ii) has all requisite power and
authority to conduct its business as now conducted and as presently contemplated
and, in the case of the Borrowers, to make the borrowings hereunder, and to
execute and deliver each Loan Document to which it is a party, and to consummate
the transactions contemplated thereby and the other Transactions, and (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except (solely
for the purposes of this subclause (iii)) where the failure to be so qualified
or in good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)               Authorization, Etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene any of its Governing Documents or any applicable material Requirement
of Law or any material Contractual Obligation binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (iv) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties, except where any such default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
could not reasonably be expected to result in a Material Adverse Effect.

 

- 109 -

 

(c)                Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of any Loan Document to which it is or will be a party other than
filings and recordings with respect to Collateral to be made, or otherwise
delivered to the Collateral Agent for filing or recordation, on the Effective
Date.

 

(d)               Enforceability of Loan Documents. This Agreement is, and each
other Loan Document to which any Loan Party is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.

 

(e)                Capitalization. On the Effective Date, after giving effect to
the Transactions to occur on the Effective Date, the authorized Equity Interests
of the Parent and each of its Subsidiaries and the issued and outstanding Equity
Interests of the Parent and each of its Subsidiaries are as set forth on
Schedule 6.01(e). All of the issued and outstanding shares of Equity Interests
of the Parent and each of its Subsidiaries have been validly issued and are
fully paid and nonassessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. All Equity Interests of such
Subsidiaries of the Parent are owned by the Parent free and clear of all Liens
(other than Permitted Liens). Except as described on Schedule 6.01(e), there are
no outstanding debt or equity securities of the Parent or any of its
Subsidiaries and no outstanding obligations of the Parent or any of its
Subsidiaries convertible into or exchangeable for, or warrants, options or other
rights for the purchase or acquisition from the Parent or any of its
Subsidiaries, or other obligations of the Parent or any of its Subsidiaries to
issue, directly or indirectly, any shares of Equity Interests of the Parent or
any of its Subsidiaries.

 

(f)                Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the actual knowledge of any
Loan Party, threatened action, suit or proceeding affecting any Loan Party or
any of its properties before any court or other Governmental Authority or any
arbitrator that could reasonably be expected to be adversely determined, and if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect and (ii) as of the Effective Date, none of the Loan Parties holds
any commercial tort claims in respect of which a claim has been filed in a court
of law or a written notice by an attorney has been given to a potential
defendant.

 

(g)               Financial Statements.

 

(i)                 The Financial Statements, copies of which have been
delivered to each Agent and each Lender, fairly present in all material respects
the consolidated financial condition of the Parent and its Subsidiaries as at
the respective dates thereof and the consolidated results of operations of the
Parent and its Subsidiaries for the fiscal periods ended on such respective
dates, have been prepared in accordance with GAAP (provided that with respect to
interim Financial Statements, such Financial Statements shall be subject to the
absence of footnotes and audit adjustments). Since December 31, 2016, no event
or development has occurred that has had or could reasonably be expected to have
a Material Adverse Effect.

 

- 110 -

 

(ii)               The Parent has heretofore furnished to each Agent and each
Lender (A) projected monthly balance sheets, income statements and statements of
cash flows of the Parent and its Subsidiaries for the period from January 1,
2018, through December 31, 2018, (B) projected quarterly balance sheets, income
statements and statements of cash flows of the Parent and its Subsidiaries for
the period from January 1, 2019, through December 31, 2022 and (C) projected
annual balance sheets, income statements and statements of cash flows of the
Parent and its Subsidiaries for the Fiscal Years ending in December 31, 2018
through December 31, 2023, which projected financial statements shall be updated
from time to time pursuant to Section 7.01(a)(vii). Such projections, as so
updated, shall be believed by the Parent at the time furnished to be reasonable,
shall have been prepared on a reasonable basis and in good faith by the Parent,
and shall have been based on assumptions believed by the Parent to be reasonable
at the time made and upon the best information then reasonably available to the
Parent, and the Parent shall not be aware of any facts or information that would
lead it to believe that such projections, as so updated, are incorrect or
misleading in any material respect.

 

(h)               Compliance with Law, Etc. The Transactions will not violate
(i) the Governing Documents of any Loan Party, (ii) any material Requirement of
Law, or (iii) any material term of any Contractual Obligation (including,
without limitation, any Material Contract) binding on or otherwise affecting it
or any of its properties, except in the case of clauses (ii) through (iii) to
the extent such violations could not reasonably be expected to have a Material
Adverse Effect and no default or event of default has occurred and is continuing
thereunder.

 

(i)                 Pension Plans.

 

(i)                 ERISA. Except as could not reasonably be expected to have a
Material Adverse Effect: (i) each Employee Plan is in compliance with ERISA and
the IRC, (ii) no Termination Event has occurred or is reasonably expected to
occur with respect to any Employee Plan, (iii)  no Employee Plan had an
accumulated or waived funding deficiency or permitted decrease which would
create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
IRC at any time during the previous 60 months, and (iv) no Lien imposed under
the IRC or ERISA exists or is likely to arise on account of any Employee Plan
within the meaning of Section 412 of the IRC. No Loan Party or any of its ERISA
Affiliates has incurred any withdrawal liability under ERISA with respect to any
Multiemployer Plan, or is aware of any facts indicating that it or any of its
ERISA Affiliates will in the future incur any such withdrawal liability, except
as could not reasonably be expected to result in a Material Adverse Effect.
Except as could not reasonably be expected to result in a Material Adverse
Effect: no Loan Party or any of its ERISA Affiliates has (A) failed to pay any
required installment or other payment required under Section 412 of the IRC on
or before the due date for such required installment or payment, (B) engaged in
a transaction within the meaning of Section 4069 of ERISA or (C) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Except as could not reasonably be expected to result in a Material
Adverse Effect, there are no pending or, to the knowledge of any Loan Party,
threatened claims, actions, proceedings or lawsuits (other than claims for
benefits in the normal course) asserted or instituted against (1) any Employee
Plan or its assets, (2) any fiduciary with respect to any Employee Plan, or (3)
any Loan Party or any of its ERISA Affiliates with respect to any Employee Plan.

 

- 111 -

 

(ii)               Canadian Pension Plans. No Loan Party maintains or is
required to contribute to any Canadian Pension Plan or Canadian Benefit Plan
other than those listed in Schedule 6.01(i)(ii). There are no Canadian Defined
Benefit Pension Plans. None of the Loan Parties have any liabilities or
obligations in respect of a Canadian Defined Benefit Pension Plan that has been
terminated or wound up. Each Loan Party has complied with and performed all of
its obligations in all material respects under the terms of any Canadian Pension
Plans and Canadian Benefit Plans and all Applicable Laws (including any
fiduciary, funding, investment and administration obligations) relating thereto.
All employer and employee payments, contributions, withholdings or premiums to
be remitted, paid to or in respect to each Canadian Pension Plan, Canadian
Benefit Plan and Statutory Plans have been paid in a timely fashion in
accordance with the terms hereof and all Applicable Laws. There have been no
improper withdrawals or applications of the assets of the Canadian Pension
Plans. As of the Closing Date, there are no outstanding material disputes
concerning assets of the Canadian Pension Plans.

 

(j)                 Taxes, Etc. All foreign, Federal and material state,
provincial, territorial and local income tax returns required by applicable
Requirements of Law to be filed by any Loan Party have been filed, or extensions
have been obtained, and all taxes, assessments and other governmental charges as
shown as due therein have been paid (other than taxes, assessments, or
governmental charges in an aggregate amount at any one time not to exceed
$25,000), except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof in accordance with GAAP.

 

(k)               Regulations T, U and X. No Loan Party is or will be engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation T, U or X), and no proceeds of
any Loan 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, or is inconsistent with, the provisions of Regulations T,
U and X.

 

(l)                 Nature of Business. No Loan Party is engaged in any business
other than as set forth on Schedule 6.01(l) and business activities reasonably
related, incidental or ancillary thereto.

 

(m)             Adverse Agreements, Etc. No Loan Party or any of its
Subsidiaries is a party to any Contractual Obligation or subject to any
restriction or limitation in any Governing Document or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental
Authority, which (either individually or in the aggregate) has, or in the future
could reasonably be expected (either individually or in the aggregate) to have,
a Material Adverse Effect.

 

- 112 -

 

(n)               Permits, Etc. Each Loan Party has, and is in compliance with,
all permits, licenses, authorizations, approvals, entitlements and
accreditations required for such Person lawfully to own, lease, manage or
operate, or to acquire, each business currently owned, leased, managed or
operated, or to be acquired, by such Person, except to the extent such failure
to have or be in compliance therewith could not reasonably be expected to have a
Material Adverse Effect. No condition exists or event has occurred which, in
itself or with the giving of notice or lapse of time or both, would result in
the suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization, approval, entitlement or accreditation, and
there is no claim that any thereof is not in full force and effect, except to
the extent such suspension, revocation, impairment, forfeiture or non-renewal
could not reasonably be expected to result in a Material Adverse Effect and
there is no claim (excluding claims that could not reasonably be expected to
have a Material Adverse Effect) that any thereof is not in full force and
effect.

 

(o)               Properties.  (i)  Each Loan Party has good and marketable
title to, valid leasehold interests in, or valid licenses to use, all tangible
property and assets material to its business, free and clear of all Liens,
except Permitted Liens and, solely as to leasehold interests, except to the
extent the failure to have such valid leasehold interests could not reasonably
be expected to have a Material Adverse Effect. All such properties and assets
are in good working order and condition, ordinary wear and tear and casualty (to
the extent fully covered by insurance subject to a deductible) and condemnation
excepted.

 

(ii)               Schedule 6.01(o) sets forth a complete and accurate list, as
of the Effective Date, of the location, by state, province, territory or other
jurisdictions and street address, of all Real Property owned or leased by each
Loan Party and identifies the interest (fee or leasehold) of such Loan Party
therein. As of the Effective Date, each Loan Party has valid leasehold interests
in the Leases described on Schedule 6.01(o) to which it is a party, except to
the extent the failure to have such valid leasehold interests could not
reasonably be expected to have a Material Adverse Effect. Each such Lease is
valid and enforceable in accordance with its terms in all material respects and
is in full force and effect, except to the extent that the failure of such Lease
to be valid and enforceable or in full force and effect could not reasonably be
expected to result in a Material Adverse Effect and except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws. To the knowledge of any Loan Party, as of the Effective Date, no other
party to any such Lease is in default in any material respect of its obligations
thereunder, and as of the Effective Date, no Loan Party (or any other party to
any such Lease) has at any time delivered or received any notice of default
which remains uncured under any such Lease and, as of the Effective Date, no
event has occurred which, with the giving of notice or the passage of time or
both, would constitute a default under any such Lease, except to the extent such
event could not reasonably be expected to result in a Material Adverse Effect.

 

(p)               Full Disclosure.

 

- 113 -

 

(i)                 Each Loan Party has disclosed to the Agents all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the other
reports, financial statements, certificates or other written information
furnished by or on behalf of any Loan Party to the Agents in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other written information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which it was made,
not materially misleading; provided that, with respect to projected financial
information, each Loan Party represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.

 

(ii)               Projections have been prepared on a reasonable basis and in
good faith based on assumptions, estimates, methods and tests that are believed
by the Loan Parties to be reasonable at the time such Projections were prepared
and information believed by the Loan Parties to have been accurate based upon
the information available to the Loan Parties at the time such Projections were
furnished to the Lenders, and Parent is not aware of any facts or information
that would lead it to believe that such Projections are incorrect or misleading
in any material respect; it being understood that projections by their nature
are inherently uncertain, that actual results may differ significantly from the
projected results and that such differences may be material and no assurances
are being given that the results reflected in the Projections will be achieved.

 

(q)               [Reserved].

 

(r)                 Environmental Matters. Except as set forth on Schedule
6.01(r), (i) the operations of each Loan Party are in compliance with all
Environmental Laws; except for any non-compliance that could not reasonably be
expected to result in a Material Adverse Effect; (ii) there has been no Release
at any of the properties owned or operated by any Loan Party or at any disposal
or treatment facility which received Hazardous Materials generated by any Loan
Party which, in each case, could reasonably be expected to result in a Material
Adverse Effect; (iii) no Environmental Action has been asserted against any Loan
Party nor does any Loan Party have actual knowledge or notice of any threatened
or pending Environmental Action against any Loan Party in each case which could
reasonably be expected to result in a Material Adverse Effect; (iv) to the
knowledge of any Loan Party, no Environmental Actions have been asserted against
any facilities that may have received Hazardous Materials generated by any Loan
Party which could reasonably be expected to result in a Material Adverse Effect;
(v) no property now or formerly owned or operated by a Loan Party has been used
as a disposal site for any Hazardous Material, except to the extent that any
such use could not reasonably be expected to result in a Material Adverse
Effect; (vi) no Loan Party has failed to report to the proper Governmental
Authority the occurrence of any Release which is required to be so reported by
any Environmental Laws which could reasonably be expected to result in a
Material Adverse Effect; and (vii) no Loan Party has received any notification
pursuant to any Environmental Laws that any work, repairs or construction are
required to be made by a Loan Party in respect of any of its properties as a
condition of continued compliance with any Environmental Laws, or any license,
permit or approval issued pursuant thereto, except in each case as could not
reasonably be expected to result in a Material Adverse Effect.

 

- 114 -

 

(s)                Insurance. Each Loan Party maintains the insurance and
required services and financial assurance as required by Section 7.01(h).
Schedule 6.01(s) sets forth a list of all insurance maintained by each Loan
Party on the Effective Date. Each Loan Party shall take all actions required
under the Flood Laws and/or reasonably requested by the Collateral Agent to
assist in ensuring that each Lender is in compliance with the Flood Laws
applicable to any real property that is subject to a Mortgage, including, but
not limited to, providing Collateral Agent with the address and/or GPS
coordinates of each structure on any real property that is or will be subject to
a Mortgage in favor of Collateral Agent, for the benefit of the Lenders, and, to
the extent required, obtaining flood insurance for such property, structures and
contents prior to or upon such property, structures and contents becoming
Collateral, and thereafter maintaining such flood insurance in full force and
effect for so long as required by the Flood Laws.

 

(t)                 Use of Proceeds. The proceeds of the Term Loan and the
Revolving Loans made on the Effective Date, shall be used (i) to repay existing
indebtedness of the Borrowers, (ii) to fund a portion of the Acquisition
pursuant to the terms of the Acquisition Agreement and (iii) to pay fees and
expenses related to the foregoing and to this Agreement and the transactions
contemplated hereby. The proceeds of the Revolving Loans made after the
Effective Date shall be used for working capital and general corporate purposes
of the Borrowers.

 

(u)               Solvency. After giving effect to the transactions contemplated
by this Agreement and the other Transactions and before and immediately after
giving effect to each Loan to be made and Letter of Credit issued hereunder, the
Loan Parties on a consolidated basis are Solvent.

 

(v)               Location of Bank Accounts. Schedule 6.01(v) sets forth a
complete and accurate list as of the Effective Date of all deposit, checking and
other bank accounts, all securities and other accounts maintained with any
broker dealer and all other similar accounts maintained by each Loan Party,
together with a description thereof (i.e., the bank or broker dealer at which
such deposit or other account is maintained and the account number and the
purpose thereof).

 

(w)             Intellectual Property. Except as set forth on Schedule 6.01(w),
each Loan Party owns or licenses or otherwise has the right to use all
Intellectual Property rights that are necessary for the operation of its
business, without infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Set forth on Schedule 6.01(w) is a complete and
accurate list as of the Effective Date of each item of Registered Intellectual
Property owned by each Loan Party (other than, for clarity, domain name
registrations). No trademark or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by any Loan Party infringes upon or conflicts with any rights owned
by any other Person, and no claim or litigation regarding any of the foregoing
is pending or threatened, except for such infringements and conflicts which
could not reasonably be expected to result in, individually or in the aggregate,
a Material Adverse Effect.

 

- 115 -

 

(x)               Material Contracts. Set forth on Schedule 6.01(x) is a
complete and accurate list as of the Effective Date of all Material Contracts of
each Loan Party, showing the parties and subject matter thereof and amendments
and modifications thereto. Each such Material Contract (i) is in full force and
effect and is binding upon and enforceable against each Loan Party that is a
party thereto and (ii) is not in default due to the action of any Loan Party or,
to the knowledge of any Loan Party, any other party thereto, except to the
extent that any such default could not reasonably be expected to result in a
Material Adverse Effect.

 

(y)               Investment Company Act. None of the Loan Parties is (i) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended, or (ii) subject to regulation
under any Requirement of Law that limits in any respect its ability to incur
Indebtedness or which may otherwise render all or a portion of the Obligations
unenforceable.

 

(z)                Employee and Labor Matters. There is (i) no unfair labor
practice complaint pending or, to the knowledge of any Loan Party, threatened
against any Loan Party before any Governmental Authority and no grievance or
arbitration proceeding pending or, to the knowledge of any Loan Party,
threatened against any Loan Party which arises out of or under any collective
bargaining agreement, in each case that could reasonably be expected to result
in a Material Adverse Effect, (ii) no strike, labor dispute, slowdown, stoppage
or similar action against any Loan Party that could reasonably be expected to
result in a Material Adverse Effect or (iii) to the knowledge of any Loan Party,
no union representation question existing with respect to the employees of any
Loan Party and no union organizing activity taking place with respect to any of
the employees of any Loan Party. No Loan Party has incurred any material
liability or obligation under the Worker Adjustment and Retraining Notification
Act ("WARN") or similar law or any other jurisdiction, which remains unpaid or
unsatisfied. The hours worked and payments made to employees of any Loan Party
have not been in violation of the Fair Labor Standards Act or any other
applicable legal requirements, except to the extent such violations could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. All material payments due from any Loan Party 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 such Loan Party, except where the
failure to do so could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

(aa)            Customers and Suppliers. Except as could not reasonably be
expected to result in a Material Adverse Effect, there exists no actual or, to
the knowledge of any Loan Party, threatened termination, cancellation or
limitation of, or modification to or change in, the business relationship
between (i) any Loan Party, on the one hand, and any customer or any group
thereof, on the other hand, or (ii) any Loan Party, on the one hand, and any
supplier or any group thereof, on the other hand; and there exists no present
state of facts or circumstances that could reasonably be expected to give rise
to or result in any such termination, cancellation, limitation, modification or
change.

 

(bb)           Parent Specified Representations. As of the date hereof,
immediately prior to the consummation of the Transactions:

 

- 116 -

 

(i)                 the Parent and its Subsidiaries have no outstanding
indebtedness for borrowed money other than as permitted under Section 7.02 of
the Bank of America Facility;

 

(ii)               the Parent and its Subsidiaries do not have any Liens (as
defined in the Bank of America Facility) currently outstanding upon or with
respect to any part of their property other than as permitted under Section 7.01
of the Bank of America Facility and Permitted Liens; and

 

(iii)             all federal, state, provincial, territorial, local and foreign
income and franchise and other material tax returns, reports and statements
(collectively, the "Tax Returns") required by law to be filed by any of the
Parent or its Subsidiaries have been filed with the appropriate governmental
authorities in all jurisdictions in which such Tax Returns are required to be
filed, all such Tax Returns are true and correct in all material respects, and
all Taxes reflected therein or otherwise due and payable have been paid prior to
the date on which any liability may be added thereto for non-payment thereof
except for (i) those contested or about to be contested (to the extent agreed
upon by the Lenders) in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
Company or such subsidiary in accordance with GAAP, and/or (ii) those that are
in an aggregate amount not in excess of $25,000.

 

(cc)            Exchange Controls. Each Loan Party has the ability to lawfully
pay solely and exclusively in Dollars the total amount which is, or may become,
payable by it to the Agents or the Lenders under the Loan Documents.

 

(dd)          Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(dd) sets
forth a complete and accurate list as of the Effective Date of (i) the exact
legal name of each Loan Party, (ii) the jurisdiction of organization of each
Loan Party, (iii) the organizational identification number of each Loan Party
(or indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office
registered head office and principal place of business of each Loan Party and
(vi) the federal employer identification number of each Loan Party (or indicates
that such Loan Party has no federal employer identification number).

 

(ee)            Locations of Collateral. There is no location at which any Loan
Party has any Collateral (except for Inventory in transit and assets having a
value not exceeding $100,000 in the aggregate) other than (i) those locations
listed on Schedule 6.01(ee), (ii) any other locations in the continental United
States for which such Loan Party has provided notice to the Collateral Agent in
accordance with Section 7.01(l) and, if necessary, a written subordination or
waiver in accordance with Section 7.01(m) and (iii) with respect to the Canadian
Loan Parties, any other locations in Canada for which such Loan Party has
provided notice to the Collateral Agent in accordance with Section 7.01(l) and,
if necessary, a written subordination or waiver in accordance with Section
7.01(m). Schedule 6.01(ee) hereto contains a true, correct and complete list, as
of the Effective Date, of the legal names and addresses of each warehouse at
which Collateral of each Loan Party is stored. None of the receipts received by
any Loan Party from any warehouse states that the goods covered thereby are to
be delivered to bearer or to the order of a named Person or to a named Person
and such named Person's assigns.

 

- 117 -

 

(ff)             Security Interests.

 

(i)                 Each Security Document creates in favor of the Collateral
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral secured thereby except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity. Upon the filing of the UCC-1 financing statements
described in Section 5.01(d), the delivery of appropriate Cash Management
Agreements, and the recording of the Assignments for Security referred to in the
Security Agreement (the "IP Security Agreements") in the United States Patent
and Trademark Office and the United States Copyright Office, as applicable, such
security interests in and Liens on the Collateral granted thereby shall be
perfected, to the extent perfection can be accomplished through such filings,
agreements or recordings, first priority security interests (subject to
Permitted Liens), and, except as contemplated by the Security Documents or the
Mortgages, no further recordings, notices or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens.

 

(ii)               Each Canadian Security Document creates in favor of the
Collateral Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest and Lien in the Collateral secured thereby except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity. As of the Effective Date, such
security interests in and Liens on the Collateral granted thereby are perfected,
to the extent perfection can be accomplished through such filings, agreements or
recordings, first priority security interests and Liens (subject to Permitted
Liens), and, except as contemplated by the Canadian Security Documents or the
Mortgages, no further recordings, notices or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens.

 

(iii)             Each UK Security Document creates in favor of the Collateral
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral secured thereby, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and by general
principles of equity. The Liens created or expressed to be created in favor of
the Collateral Agent pursuant to the UK Security Documents have first ranking
priority.

 

(gg)           Consummation of Acquisition. The Parent has delivered to the
Agents complete and correct copies of the Acquisition Documents, including all
schedules and exhibits thereto. The Acquisition Documents set forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby to
which any Loan Party is party or of which any Loan Party has knowledge. The
execution, delivery and performance of the Acquisition Documents has been duly
authorized by all necessary action (including, without limitation, the obtaining
of any consent of stockholders or other holders of Equity Interests required by
law or by any applicable corporate or other organizational documents) on the
part of each such Person. No authorization or approval or other action by, and
no notice to filing with or license from, any Governmental Authority is required
for such sale other than such as have been obtained on or prior to the Effective
Date. Each Acquisition Document is the legal, valid and binding obligation of
the parties thereto, enforceable against such parties in accordance with its
terms. All conditions precedent to the Acquisition Agreement have been fulfilled
or (with the prior written consent of the Agents to the extent such waiver would
be materially adverse to the Agents or the Lenders) waived, no Acquisition
Document has been amended or otherwise modified, and there has been no breach of
any material term or condition of any Acquisition Document.

 

- 118 -

 

(hh)           Anti-Terrorism Law. As of the date of this Agreement, the date
each Loan is made, the date of any renewal, extension or modification of this
Agreement, and at all times until this Agreement has been terminated and all
Obligations have been Paid In Full, that to each Loan Party's knowledge: (i) no
Covered Entity (A) is a Sanctioned Person; (B) either in its own right or
through any third party has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person; or (C) either in its own
right or through any third party does business in or with, or derives any of its
operating income from investments in or transactions with, any Sanctioned
Country or Sanctioned Person in violation of any Anti-Terrorism Laws, (ii) no
Loans are used to fund any operations in, finance any investments or activities
in, or, make any payments to, a Sanctioned Country or Sanctioned Person in
violation of any Anti-Terrorism Laws; (iii) the funds used to repay the
Obligations are not derived from any unlawful activity; and (iv) each Covered
Entity is in material compliance with, and no Covered Entity either in its own
right or through any third party engages in any dealings or transactions
prohibited by, any Requirement of Law, including but not limited to any
Anti-Terrorism Laws.

 

(ii)               Anti-Bribery and Anti-Corruption Laws.

 

(i)                 The Loan Parties are in compliance with the U.S. Foreign
Corrupt Practices Act of 1977, as amended (the "FCPA"), the Bribery Act 2010
(the "UK Act")"), the Corruption of Foreign Public Officials Act (Canada), and
the anti-bribery and anti-corruption laws of those jurisdictions in which they
do business (collectively, the "Anti-Corruption Laws").

 

(ii)               None of the Loan Parties has at any time:

 

(A)             offered, promised, paid, given, or authorized the payment or
giving of any money, gift or other thing of value, directly or indirectly, to or
for the benefit of any employee, official, representative, or other person
acting on behalf of any foreign (i.e., non-U.S.) Governmental Authority thereof,
or of any public international organization, or any foreign political party or
official thereof, or candidate for foreign political office (collectively,
"Foreign Official"), for the purpose of: (1) influencing any act or decision of
such Foreign Official in his, her, or its official capacity; or (2) inducing
such Foreign Official to do, or omit to do, an act in violation of the lawful
duty of such Foreign Official, or (3) securing any improper advantage, in order
to obtain or retain business for, or with, or to direct business to, any Person;

 

- 119 -

 

(B)              otherwise violated, attempted to violate or engaged in or
conspired to engage in any transaction that would evade or avoid, or have the
purpose of evading or avoiding, any Anti-Corruption Law; or

 

(C)              acted or attempted to act in any manner which would subject any
of the Loan Parties to liability under any Anti-Corruption Law.

 

(iii)             There are, and have been, no allegations, investigations or
inquiries with regard to a potential violation of any Anti-Corruption Law by any
of the Loan Parties or any of their respective current or former directors,
officers, employees, stockholders or agents, or other persons acting or
purporting to act on their behalf.

 

(iv)             The Loan Parties have adopted, implemented and maintain
anti-bribery and anti-corruption policies and procedures that are reasonably
designed to ensure compliance with the Anti-Corruption Laws.

 

(jj)               Credit Card Agreements. As of the Effective Date, Schedule
6.01(jj) sets forth all Credit Card Agreements of the Loan Parties. Such Credit
Card Agreements constitute all agreements necessary for each Loan Party to
operate its business as presently conducted with respect to credit cards and
debit cards and no Credit Card Receivables of any Loan Party arise from
purchases by Customers of Inventory with credit cards or debit cards, other than
those which are issued by Credit Card Issuers or Credit Card Processors to whom
such Loan Party has delivered a Processor Letter, and a copy of which Processor
Letter such Loan Party has delivered to the Agents. No default or event of
default, or act, condition or event which after notice or passage of time or
both, would constitute a default or event of default under any of the Credit
Card Agreements has occurred and is continuing, in any case, that could
reasonably be expected to result in a Material Adverse Effect. Each Loan Party
has complied in all material respects with all of the terms and conditions of
the Credit Card Agreements to the extent necessary for such Loan Party to be
entitled to receive all payments thereunder. The Loan Parties have delivered, or
caused to be delivered to the Agents, true, correct and complete copies of all
of the Credit Card Agreements in effect as of the Effective Date.

 

(kk)           Centre of main interests and establishments. For the purposes of
Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the
“Regulation”), each UK Loan Party’s centre of main interest (as that term is
used in Article 3(1) of the Regulation) is situated in the United Kingdom and it
has no “establishment” (as that term is used in Article 2(10) of the Regulation)
in any other jurisdiction.

 

(ll)               Pensions. Except for the Harvard Apparatus Limited Retirement
Benefits Scheme and the Biochrom Defined Benefit Pension Scheme:

 

(i)                 no Loan Party nor any Subsidiary of a Loan Party is or has
at any time been an employer (for the purposes of sections 38 to 51 of the
Pensions Act 2004) of an occupational pension scheme which is not a money
purchase scheme (both terms as defined in the Pensions Schemes Act 1993); and

 

- 120 -

 

(ii)               no Loan Party nor any Subsidiary of a Loan Party is or has at
any time been “connected” with or an “associate” of (as those terms are used in
sections 38 and 43 of the Pensions Act 2004) such an employer.

 

Article VII

COVENANTS OF THE LOAN PARTIES

 

Section 7.01        Affirmative Covenants. Until the Obligations are Paid In
Full and all Commitments are terminated, each Loan Party will, unless the
Required Lenders shall otherwise consent in writing:

 

(a)                Reporting Requirements. Furnish to each Agent and each
Lender:

 

(i)                 within 30 days after the end of each fiscal month of the
Parent and its Subsidiaries commencing with the first fiscal month of the Parent
and its Subsidiaries ending after the Effective Date, internally prepared
consolidated and consolidating balance sheets, statements of operations and
retained earnings and statements of cash flows as at the end of such fiscal
month, and for the period commencing at the end of the immediately preceding
Fiscal Year and ending with the end of such fiscal month, setting forth in each
case in comparative form the figures for the corresponding date or period set
forth in (A) the financial statements for the immediately preceding Fiscal Year,
and (B) the Projections, all in reasonable detail and certified by an Authorized
Officer of the Parent as fairly presenting, in all material respects, the
financial position of the Parent and its Subsidiaries as at the end of such
fiscal month and the results of operations, retained earnings and cash flows of
the Parent and its Subsidiaries for such fiscal month and for such year-to-date
period, in accordance with GAAP applied in a manner consistent with that of the
most recent audited financial statements furnished to the Agents and the
Lenders, subject to the absence of footnotes and normal year-end adjustments;

 

(ii)               within 45 days after the end of each Fiscal Quarter (or 60
days with respect to the first Fiscal Quarter ending after the Effective Date)
of the Parent and its Subsidiaries commencing with the first fiscal quarter of
the Parent and its Subsidiaries ending after the Effective Date, consolidated
and consolidating balance sheets, statements of operations and retained earnings
and statements of cash flows of the Parent and its Subsidiaries as at the end of
such quarter, and for the period commencing at the end of the immediately
preceding Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding date or period
set forth in (A) the financial statements for the immediately preceding Fiscal
Year and (B) the Projections, all in reasonable detail and certified by an
Authorized Officer of the Parent as fairly presenting, in all material respects,
the financial position of the Parent and its Subsidiaries as of the end of such
quarter and the results of operations and cash flows of the Parent and its
Subsidiaries for such quarter and for such year-to-date period, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to the Agents
and the Lenders, subject to the absence of footnotes and normal year-end
adjustments;

 

- 121 -

 

(iii)             within 90 days after the end of each Fiscal Year of the Parent
and its Subsidiaries, consolidated and consolidating balance sheets, statements
of operations and retained earnings and statements of cash flows of the Parent
and its Subsidiaries as at the end of such Fiscal Year, setting forth in each
case in comparative form the figures for the corresponding date or period set
forth in (A) the financial statements for the immediately preceding Fiscal Year,
and (B) the Projections, all in reasonable detail and prepared in accordance
with GAAP by, and accompanied by a report and an opinion of, independent
certified public accountants of recognized standing selected by the Parent and
satisfactory to the Agents (which opinion shall be without (1) a "going concern"
or like qualification or exception, (2) any qualification or exception as to the
scope of such audit, or (3) any qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7.03),
together with a written statement of such accountants (x) to the effect that, in
making the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of an Event of
Default or a Default under Section 7.03 and (y) if such accountants shall have
obtained any knowledge of the existence of an Event of Default or such Default
under Section 7.03, describing the nature thereof;

 

(iv)             simultaneously with the delivery of the financial statements of
the Parent and its Subsidiaries required by clauses (ii) and (iii) of this
Section 7.01(a), a certificate of an Authorized Officer of the Parent
substantially in the form of Exhibit F hereto (the "Compliance Certificate") (A)
stating that during the period covered by such financial statements no Event of
Default or Default has occurred or is continuing as of the date of such
delivery, or, if an Event of Default or Default existed, describing the nature
and period of existence thereof and the action which the Parent and its
Subsidiaries propose to take or have taken with respect thereto, (B) (1)
attaching a schedule showing the calculation of the financial covenants
specified in Section 7.03 and (2) including a discussion and analysis of the
financial condition and results of operations of the Parent and its Subsidiaries
for the portion of the Fiscal Year then elapsed and discussing the reasons for
any significant variations from the Projections for such period and the figures
for the corresponding period in the previous Fiscal Year (or referring the
Agents and the Lenders to the Parent's relevant periodic filings with the SEC to
the extent such discussion and analysis is already available in the Parent’s
periodic filings with the SEC on or prior to the date it is required to be
delivered hereunder) and (C) in the case of the delivery of the financial
statements of the Parent and its Subsidiaries required by clause (iii) of this
Section 7.01(a), (1) a summary of all material insurance coverage maintained as
of the date thereof by any Loan Party and all material insurance coverage
planned to be maintained by any Loan Party, together with such other related
documents and information as the Administrative Agent may reasonably require and
(2) the calculation of the Excess Cash Flow in accordance with the terms of
Section 2.05(c)(iv);

 

(v)               within 20 days after the end of each month commencing with the
first fiscal month ending after the Effective Date, reports in form and detail
reasonably satisfactory to the Agents and certified by an Authorized Officer of
the Borrowing Agent as being accurate and complete (A) listing all Accounts
Receivable of the Loan Parties as of such day, which shall include the amount
and age of each such Account Receivable, showing separately those which are more
than 30, 60, 90 and 120 days old and a description of all set-offs, defenses and
counterclaims with respect thereto, together with a reconciliation of such
schedule with the schedule delivered to the Agents pursuant to this
clause (v)(A) for the immediately preceding month, and such other information as
any Agent may request, (B) listing all accounts payable of the Loan Parties as
of each such day which shall include the amount and age of each such account
payable, and such other information as any Agent may reasonably request and
(C) listing all Inventory of the Loan Parties as of the end of such period, and
containing a breakdown of such Inventory by type and amount, the cost and the
current market value thereof (by location), the date of acquisition, the
warehouse and production facility location and such other information as any
Agent or the Required Lenders may reasonably request, all in detail and in form
reasonably satisfactory to the Agents or the Required Lenders, as applicable;

 

- 122 -

 

(vi)             within 20 days after the end of each month commencing with the
first fiscal month ending after the Effective Date, the Loan Parties shall
deliver to the Agents, in form reasonably acceptable to the Agents, a Borrowing
Base Certificate as of the last day of the immediately preceding month, with
such supporting materials as the Agents shall reasonably request. If the Agents
shall request at any time when an Increased Reporting Event has occurred and is
continuing, the Loan Parties shall execute and deliver to the Agents Borrowing
Base Certificates weekly on the third Business Day of each week as of the last
day of the immediately preceding week. On or before the fifteenth (15th) day
after the end of each fiscal month of the Borrowers, the Loan Parties shall
deliver to the Agents, in the form reasonably acceptable to the Agents,
reconciliations of the Account Receivable as shown on the month-end Borrowing
Base Certificate for the immediately preceding month to the Loan Parties'
accounts receivable agings, to the Loan Parties' general ledger and to the Loan
Parties' most recent financial statements. All amounts in the Borrowing Base
Certificate (to the extent referenced in a currency other than Dollars) shall be
converted into Dollars in accordance with Section 1.04;

 

(vii)           as soon as available and in any event not later than sixty (60)
days after the end of each Fiscal Year, Projections for the Parent and its
Subsidiaries, supplementing and superseding the Projections previously required
to be delivered pursuant to this Agreement, prepared on a monthly basis and
otherwise reasonably satisfactory to the Agents, for the immediately succeeding
Fiscal Year for the Parent and its Subsidiaries and consistent with the
representations and warranties set forth in Section 6.01(g)(ii);

 

(viii)         promptly after any Loan Party knows that any Governmental
Authority is commencing a material non-routine investigation against it, notice
of such investigation and, thereafter, prompt reporting of any information
relative to such investigation requested by either of the Agents;

 

(ix)             within 3 Business Days after actual knowledge of an Authorized
Officer of the Loan Parties of an Event of Default or Default or the occurrence
of any event or development that could reasonably be expected to result in a
Material Adverse Effect, the written statement of an Authorized Officer of the
Borrowing Agent setting forth the details of such Event of Default or Default or
other event or development that could reasonably be expected to result in a
Material Adverse Effect and the action which the affected Loan Party proposes to
take with respect thereto;

 

- 123 -

 

(x)               to the extent a Material Adverse Effect could reasonably be
expected to result: (A) as soon as possible and in any event within 10 days
after any Loan Party knows that (1) any Reportable Event with respect to any
Employee Plan has occurred, (2) any other Termination Event with respect to any
Employee Plan has occurred, or (3) an accumulated funding deficiency has been
incurred or an application has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including installment
payments) or an extension of any amortization period under Section 412 of the
IRC with respect to an Employee Plan, a statement of an Authorized Officer of
the Borrowing Agent setting forth the details of such occurrence and the action,
if any, which such Loan Party proposes to take with respect thereto, (B)
promptly and in any event within 10 days after receipt thereof by any Loan Party
from the PBGC, copies of each notice received by any Loan Party of the PBGC's
intention to terminate any Employee Plan or to have a trustee appointed to
administer any Employee Plan, (C) promptly and in any event within 10 days after
any Loan Party knows that a required installment within the meaning of Section
412 of the IRC has not been made when due with respect to an Employee Plan, (D)
promptly and in any event within 10 days after receipt thereof by any Loan Party
from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice
received by any Loan Party concerning the imposition or amount of withdrawal
liability under Section 4202 of ERISA, (E) promptly and in any event within 10
days after any Loan Party sends notice of a plant closing or mass layoff (as
defined in WARN) to employees, copies of each such notice sent by such Loan
Party or (F) promptly and in any event within 10 days after any Loan Party knows
or has reason to know of the occurrence of (i) any violation or asserted
violation of any Applicable Law (including any applicable pension benefits
legislation) in any material respect with respect to any Canadian Pension Plan,
or (ii) the occurrence of any Canadian Pension Termination Event, the applicable
Loan Party will deliver to the Agents a certificate of the Senior Officer of the
applicable Loan Party setting forth the details as to such occurrence and the
action, if any, that such Canadian Loan Party, or its Affiliates, are required
or proposes to take, together with any notices (required, proposed or otherwise)
given to or filed with or by such Person, The Financial Services Commission of
Ontario or like body, a Canadian Pension plan participant (other than notices
relating to an individual participant’s benefits) or the Canadian Pension Plan
administrator with respect thereto;

 

(xi)             promptly after the commencement thereof but in any event not
later than 5 Business Days after service of process with respect thereto on, or
the obtaining of knowledge thereof by, any Loan Party, notice of each action,
suit or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

 

(xii)           within 5 Business Days after execution, receipt or delivery
thereof, copies of any material notices that any Loan Party executes or receives
in connection with (A) any Acquisition Document or (B) any Material Contract if
the notice concerns a development regarding such Material Contract that is
materially adverse to any Loan Party;

 

(xiii)         within 5 Business Days after execution, receipt or delivery
thereof, copies of any material notices that any Loan Party executes or receives
in connection with the sale or other Disposition of the Equity Interests (other
than Excluded Equity Issuances) of, or all or substantially all of the assets
of, any Loan Party;

 

- 124 -

 

(xiv)         promptly after (A) the sending or filing thereof, (i) copies of
all statements, reports and other information any Loan Party sends to any
holders of its Indebtedness or (ii) notice of any statements, reports and other
filings of any Loan Party that have been filed with the SEC or any material
statements, reports and other filings of any Loan Party that have been filed
with any national (domestic or foreign) securities exchange and (B) the receipt
thereof, a copy of any material notice received from any holder of its
Indebtedness;

 

(xv)           promptly upon receipt thereof, copies of all financial reports
(including, without limitation, management letters), if any, submitted to any
Loan Party by its auditors in connection with any annual or interim audit of the
books thereof;

 

(xvi)         promptly after the date on which a Loan Party commences any
proceeding alleging any commercial tort claim alleging damages in excess of
$250,000, a brief description of such commercial tort claim and grant of a
security interest therein to the Collateral Agent in accordance with the
applicable Security Document;

 

(xvii)       as soon as available, but in any event not later than 5 Business
Days after receipt by any Loan Party, the monthly statements received by any
Loan Party from any Credit Card Issuers or Credit Card Processors, together with
such additional information with respect thereto as shall be reasonably
sufficient to enable the Agents to monitor the transactions pursuant to the
Credit Card Agreements; and

 

(xviii)     promptly upon request, such other information concerning the
condition or operations, financial or otherwise, of any Loan Party as any Agent
may from time to time may reasonably request.

 

(b)               Additional Borrowers, Guarantors and Collateral Security.
Cause:

 

(i)                 each Subsidiary of any Loan Party (other than an Excluded
Subsidiary) not in existence on the Effective Date (each a "New Subsidiary"),
and each Excluded Subsidiary of any Loan Party which is an Excluded Subsidiary
on the Effective Date or upon formation or acquisition thereof but later ceases
to be an Excluded Subsidiary, subject to clause (b)(iii) below, to execute and
deliver to the Collateral Agent promptly and in any event within 10 Business
Days after the formation, acquisition or change in status thereof, (A) a Joinder
Agreement, pursuant to which such New Subsidiary shall be made a party to this
Agreement as a Borrower or a Guarantor, (B) a supplement or other comparable
document to the applicable Security Document (or a substantially similar
Security Document), together with (1) certificates (if any) evidencing all of
the Equity Interests of any Person owned by such New Subsidiary required to be
pledged under the terms of the Security Document, (2) undated stock powers or
stock transfer forms for such Equity Interests executed in blank with signature
guaranteed, and (3) such opinions of counsel as the Collateral Agent may
reasonably request, (C) to the extent required under the terms of this
Agreement, one or more Mortgages creating on the real property owned by New
Subsidiary a perfected, first priority Lien (subject to Permitted Liens) on such
real property and such other Real Property Deliverables as may be required by
the Collateral Agent with respect to each such Real Property, and (D) such other
agreements, instruments, approvals or other documents reasonably requested by
the Collateral Agent in order to create, perfect, establish the first priority
(subject to Permitted Liens) of or otherwise protect any Lien purported to be
covered by any such Security Document or Mortgage or otherwise to effect the
intent that such Subsidiary shall become bound by all of the terms, covenants
and agreements contained in the Loan Documents and that all property and assets
of such New Subsidiary shall become Collateral for the Obligations, other than
exclusions expressly set forth in the any Security Document; and

 

- 125 -

 

(ii)               each owner of the Equity Interests of any such Subsidiary to
execute and deliver promptly and in any event within 10 Business Days after the
formation or acquisition of such Subsidiary a Pledge Amendment (as defined in
each applicable Security Document, or comparable document) or other local law
security document (to the extent the Equity Interests of any such Subsidiary are
not already effectively pledged or charged to the satisfaction of the Collateral
Agent under the existing Security Documents), together with (A) certificates
evidencing all of the Equity Interests of such Subsidiary required to be pledged
under the terms of the applicable Security Document, (B) undated stock powers or
other appropriate instruments of assignment for such Equity Interests executed
in blank with signature guaranteed, (C) such opinions of counsel as the
Collateral Agent may reasonably request and (D) such other agreements,
instruments, approvals or other documents reasonably requested by the Collateral
Agent.

 

(iii)             Notwithstanding the foregoing, no Excluded Foreign Subsidiary
shall be required to become a Loan Party hereunder (and, as such, shall not be
required to deliver the documents required by clause (i) above) and, except as
provided in the proviso to this clause (b)(iii), no Equity Interests of an
Excluded Foreign Subsidiary shall be required to be pledged or otherwise subject
to a Lien under the Loan Documents as security for the Obligations; provided,
however, that if the Equity Interests of an Excluded Foreign Subsidiary are
directly owned by a Loan Party, such Loan Party shall deliver all such
documents, instruments, agreements (including, without limitation, at the
reasonable request of the Collateral Agent, a pledge agreement governed by the
laws of the jurisdiction of the organization of such Excluded Foreign
Subsidiary), and certificates described in clause (ii) above to the Collateral
Agent, and take all actions reasonably requested by the Collateral Agent or
otherwise necessary to grant and to perfect a first-priority Lien (subject to
Permitted Liens) in favor of the Collateral Agent, as security for the
Obligations, for the benefit of the Secured Parties, in sixty-five percent (65%)
of the voting Equity Interests of such Excluded Foreign Subsidiary.

 

(c)                Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all Requirements of Law
(excluding, without limitation, all Environmental Laws, which are the subject of
Section 7.01(j), below), judgments and awards (including any settlement of any
claim that, if breached, could give rise to any of the foregoing), such
compliance to include, without limitation, (i) paying, and cause each of its
Subsidiaries to pay, before the same become delinquent all taxes, assessments
and governmental charges shown as due in all U.S. Federal, Canadian federal,
provincial or territorial and material state and local income tax returns
required by applicable Requirements of Law (other than taxes, assessments and
governmental charges or levies or any other such lawful claims of a Governmental
Authority in an aggregate amount at any one time not to exceed $25,000), except
to the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with GAAP, and (ii) paying all other lawful claims which
if unpaid might become a Lien or charge upon any of its properties, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with GAAP.

 

- 126 -

 

(d)               Preservation of Existence, Etc. Except as expressly permitted
by Section 7.02(c), maintain and preserve, and cause each of its Subsidiaries to
maintain and preserve, its good standing in the jurisdiction of its
organization, rights and privileges, and become or remain, and cause each of its
Subsidiaries to become or remain, duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
except where the failure to maintain and preserve such rights and privileges or
to become or remain duly qualified and in good standing in a foreign
jurisdiction could not reasonably be expected to have a Material Adverse Effect.

 

(e)                Keeping of Records and Books of Account. Keep, and cause each
of its Subsidiaries to keep, adequate records and books of account, with
complete entries made to permit the preparation of financial statements in
accordance with GAAP.

 

(f)                Inspection Rights. Subject to the limitations set forth in
Section 2.06(c), permit, and cause each of its Subsidiaries to permit, the
Agents and representatives of any Agent, upon reasonable advance notice (which
notice shall not be required during the continuance of an Event of Default) at
any time and from time to time during normal business hours, at the expense of
the Borrowers, to examine and make copies of and abstracts from its records and
books of account, to visit and inspect its properties, to verify materials,
leases, notes, accounts receivable, deposit accounts and its other assets, to
conduct audits, physical counts, valuations, appraisals, or examinations and to
discuss its affairs, finances and accounts with any of its directors, officers,
managerial employees, independent accountants or any of its other
representatives. In furtherance of the foregoing, each Loan Party hereby
authorizes its independent accountants, and the independent accountants of each
of its Subsidiaries, to discuss the affairs, finances and accounts of such
Person (provided that representatives of such Person shall be given a reasonable
opportunity to be present) with the agents and representatives of any Agent in
accordance with this Section 7.01(f).

 

(g)               Maintenance of Properties, Etc. (i) Maintain and preserve all
of its tangible properties which are necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear and
casualty and condemnation excepted, except to the extent any such failure to
preserve could not reasonably be expected to result in a Material Adverse
Effect, and (ii) comply at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies real property, so as to
prevent any loss or forfeiture thereof or thereunder, except to the extent any
such noncompliance could not reasonably be expected to result in a Material
Adverse Effect

 

- 127 -

 

(h)               Maintenance of Insurance. Maintain insurance with responsible
and reputable insurance companies or associations (including, without
limitation, commercial general liability, rent and business interruption
insurance) with respect to its properties (including all real properties leased
or owned by it) and business, in such amounts and covering such risks as is
required by any Governmental Authority having jurisdiction with respect thereto
or 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 the Agents. All
policies covering the Collateral are to be made payable to the Collateral Agent
for the benefit of the Agents and the Lenders, as its interests may appear, in
case of loss, under a standard non-contributory "lender" or "secured party"
clause and are to contain such other provisions as the Agents may reasonably
require to fully protect the Collateral Agent's interest in the Collateral and
to any payments to be made under such policies. All certificates of insurance
are to be delivered to the Collateral Agent for the benefit of the Secured
Parties and the policies are to be premium prepaid, with the loss payable and
additional insured endorsement in favor of the Collateral Agent and such other
Persons as the Collateral Agent may designate from time to time, and the Loan
Parties shall obtain endorsements that provide for not less than 30 days (10
days in the case of non-payment) prior written notice to the Collateral Agent of
the exercise of any right of cancellation in respect of liability, casualty and
property insurance policies. If any Loan Party fails to maintain such insurance,
the any Agent may arrange for such insurance, but at the Borrowers' expense and
without any responsibility on either Agent's part for obtaining the insurance,
the solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. Upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall have the sole right, in the name of the
Lenders and any Loan Party, to file claims under any insurance policies, 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.

 

(i)                 Obtaining of Permits, Etc. Obtain, maintain and preserve,
and cause each of its Subsidiaries to obtain, maintain and preserve, and take
all necessary action to timely renew, all permits, licenses, authorizations,
approvals, entitlements and accreditations that are necessary or useful in the
proper conduct of its business except where the failure to obtain, maintain and
preserve could not reasonably be expected to have a Material Adverse Effect.

 

(j)                 Environmental. (i)  Keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens,
except for deed restrictions and other institutional controls that are utilized
in connection with any Remedial Action at such property and except for any other
Environmental Liens that could not reasonably be expected to result in a
Material Adverse Effect; (ii) comply, and cause each of its Subsidiaries to
comply, with all Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect; (iii) provide the
Agents written notice within 10 days of any Release of a Hazardous Material in
excess of any reportable quantity from or onto property owned or operated by it
or any of its Subsidiaries and take any Remedial Actions required to abate said
Release, except, in each case, for such Releases or Remedial Actions that could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect; and (iv) provide the Agents with written notice within
10 days of the receipt of any of the following: (A) notice that an Environmental
Lien has been filed against any property of any Loan Party or any of its
Subsidiaries, except for deed restrictions and other institutional control that
are utilized in connection with any Remedial Action at such property;
(B) commencement of any Environmental Action or notice that an Environmental
Action will be filed against any Loan Party or any of its Subsidiaries, except
for Environmental Actions that could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; and (C) notice of
a violation, citation or other administrative order, except for violations,
citations, or other administrative orders that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

 

- 128 -

 

(k)               Further Assurances. Take such action and execute, acknowledge
and deliver, at its sole cost and expense, such agreements, instruments, or
other documents as any Agent may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement and the other
Loan Documents, (ii) to subject to valid and perfected first priority Liens
(subject to Permitted Liens described in clauses (b) and (e) of the definition
of Permitted Liens) any of the Collateral or any other property of any Loan
Party (including commercial tort claims, deposit accounts, securities accounts,
and commodities accounts, but excluding Excluded Property (as defined in each
applicable Security Document)), (iii) to establish and maintain the validity and
effectiveness of any of the Loan Documents and the validity, perfection and
priority of the Liens intended to be created thereby (including making all
filings and registrations), (iv) to better assure, convey, grant, collaterally
assign and confirm unto each Agent, each Lender and each L/C Issuer the rights
now or hereafter intended to be granted to it under this Agreement or any other
Loan Document. In furtherance of the foregoing, to the maximum extent permitted
by applicable law, each Loan Party (A) if a Loan Party has failed to comply with
its undertakings in this Section after a written request therefor, authorizes
each Agent to execute any such agreements, instruments, or other documents in
such Loan Party's name and to file such agreements, instruments or other
documents in any appropriate filing office, (B) authorizes each Agent to file
any financing statement required hereunder or under any other Loan Document, and
any continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Loan Party, and (C) ratifies the
filing of any financing statement, and any continuation statement or amendment
with respect thereto, filed without the signature of such Loan Party prior to
the date hereof.

 

(l)                 Change in Collateral; Collateral Records. (i) Give the
Agents not less than 30 days' prior written notice of any change in the location
of any Collateral (except for Inventory in transit and immaterial assets having
value not exceeding $100,000 in the aggregate), other than to locations set
forth on Schedule 6.01(ee) and with respect to which the Collateral Agent has
filed financing statements and otherwise fully perfected its Liens thereon,
(ii) advise the Agents promptly, in sufficient detail, of any material adverse
change relating to the type, quantity or quality of the Collateral or the Lien
granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the any Agent for the benefit of the
Agents and the Lenders from time to time, solely for such Agent's convenience in
maintaining a record of Collateral, such written statements and schedules as
such Agent may reasonably require, designating, identifying or describing the
Collateral.

 

(m)             Landlord Waivers. Use its commercially reasonable efforts to
obtain, with respect to any real property leased by a Loan Party where
Collateral with a book value in excess of $100,000 is located, a landlord’s
waiver from the landlord of such real property (which waiver may be contained in
such lease) reasonably satisfactory to the Agents.

 

- 129 -

 

(n)               Subordination. Cause all Indebtedness and other obligations
now or hereafter owed by it to any of its Affiliates, to be subordinated in
right of payment and security to the Indebtedness and other Obligations owing to
the Agents and the Lenders in accordance with a subordination agreement in form
and substance reasonably satisfactory to the Agents.

 

(o)               After Acquired Real Property. Upon the acquisition by it or
any of its Subsidiaries after the Effective Date of any fee interest in any real
property (wherever located) or any freehold or long leasehold interest in any
real property in the UK (each such interest being a "New Facility") with a
Current Value (as defined below) in excess of $500,000, immediately so notify
the Collateral Agent, setting forth the location of the real property, any
structures or improvements thereon and such Loan Party's good-faith estimate of
the current estimated fair market value of such real property (for purposes of
this Section, the "Current Value"). The Collateral Agent shall notify such Loan
Party within ten (10) Business Days of receipt of notice from the Borrowing
Agent whether it intends to require a Mortgage (and any other Real Property
Deliverables) with respect to such New Facility. Upon receipt of such notice
requesting a Mortgage and any other Real Property Deliverables, the Loan Party
that has acquired such New Facility shall furnish the same to the Collateral
Agent within sixty (60) days (or such later date as may be permitted by the
Agents in their sole discretion) after such Loan Party's receipt of the
Collateral Agent's notice. The Borrowers shall pay all fees and expenses,
including reasonable and documented out-of-pocket attorneys' fees and expenses,
and all title insurance charges and premiums, in connection with each Loan
Party's obligations under this Section 7.01(o).

 

(p)               Fiscal Year. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on the day described in the definition of "Fiscal Year"
unless the Agents consent to a change in such Fiscal Year (and appropriate
related changes to this Agreement).

 

(q)               Borrowing Base. Maintain all Revolving Loans in compliance
with the then current Borrowing Base.

 

(r)                 Lender Meetings. Upon the reasonable request of any Agent or
the Required Lenders, participate in an in-person meeting (with reasonable
advance notice, in the absence of a Default or Event of Default) at the
Borrowers' corporate offices (or at such other location as may be agreed to by
the Borrowing Agent and such Agent or the Required Lenders) or, to the extent
approved by the Agents in their sole discretion, a telephonic meeting with the
Agents and the Lenders, in each case, at such time as may be reasonably agreed
to by the Borrowing Agent and such Agent or the Required Lenders.

 

(s)                UK Pensions.

 

(i)                 Ensure, that no action or omission is taken by the Parent or
any Subsidiary in relation to a pension scheme which is not solely a money
purchase scheme (as defined in section 181(1) of the Pension Schemes Act 1993)
which has or is reasonably likely to have a Material Adverse Effect (including,
without limitation, the termination or commencement of winding-up proceedings of
any such pension scheme);

 

- 130 -

 

(ii)               deliver to the Agents at such times as those reports are
prepared in order to comply with the then current statutory or auditing
requirements (as applicable either to the trustees of any relevant schemes or to
any UK Subsidiary of the Parent) , actuarial reports in relation to all pension
schemes mentioned in paragraph (l)(i) above;

 

(iii)             notify the Agents of any material change in the rate of
contributions to any pension schemes mentioned in (l)(i) above paid or
recommended to be paid (whether by the scheme actuary or otherwise) or required
(by law or otherwise);

 

(iv)             promptly notify the Agents of any investigation or proposed
investigation by the Pensions Regulator which may lead to the issue of a
Financial Support Direction or a Contribution Notice to a Loan Party or any
Subsidiary of a Loan Party; and

 

(v)               promptly notify the Agents if it, the Parent, any Loan Party
or any Subsidiary of the Parent receives a Financial Support Direction or a
Contribution Notice from the Pensions Regulator.

 

(t)                 Financial Assistance. Comply in all respects with sections
678 and 679 of the Companies Act 2006 (to the extent applicable) in relation to
the execution of the UK Security Documents and payment of amounts due under the
Loan Documents.

 

(u)               People with Significant Control Regime. Comply within the
relevant timeframe, with any notice it receives pursuant to Part 21A of the
Companies Act 2006 from any company incorporated in the United Kingdom whose
shares are the subject of the Liens created or expressed to be created in favor
of the Collateral Agent pursuant to the Security Documents and promptly provide
the Collateral Agent with a copy of that notice.

 

Section 7.02        Negative Covenants. Until the Obligations are Paid In Full
and all Commitments are terminated, each Loan Party shall not and shall not
permit any of its Subsidiaries to:

 

(a)                Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired; file or suffer to exist under the Uniform Commercial Code,
the PPSA or any Requirement of Law of any jurisdiction, a financing statement
(or the equivalent thereof) that names it or any of its Subsidiaries as debtor;
sign or suffer to exist any security agreement authorizing any secured party
thereunder to file such financing statement (or the equivalent thereof); sell
any of its property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable) with recourse to it or any of its Subsidiaries or assign
or otherwise transfer, or permit any of its Subsidiaries to assign or otherwise
transfer, any account or other right to receive income; other than, as to all of
the above, Permitted Liens.

 

(b)               Indebtedness. Create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.

 

- 131 -

 

(c)                Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or make any
Disposition, whether in one transaction or a series of related transactions, all
or any part of its business, property or assets, whether now owned or hereafter
acquired, or permit any of its Subsidiaries to do any of the foregoing; or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that:

 

(i)                 any wholly-owned Subsidiary of any Loan Party and any Loan
Party may be merged, consolidated, amalgamated or liquidated into such Loan
Party or another wholly-owned Subsidiary of a Loan Party, or may consolidate or
amalgamate with another wholly-owned Subsidiary of a Loan Party, provided that
(A) no other provision of this Agreement would be violated thereby, (B) such
Loan Party gives the Agents at least 5 Business Days' prior written notice of
such merger, amalgamation, liquidation, consolidation or amalgamation
accompanied by true, correct and complete copies of all material agreements,
documents and instruments relating to such merger, amalgamation, consolidation
or amalgamation, including, but not limited to, the certificate or certificates
of merger or amalgamation to be filed with each appropriate Secretary of State
(or other organizing body) (with a copy as filed promptly after such filing),
(C) no Default or Event of Default shall have occurred and be continuing either
before or immediately after giving effect to such transaction, (D) the Lenders'
rights in any Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by such
merger, amalgamation, liquidation, consolidation or amalgamation, (E) if such
merger, liquidation, consolidation or amalgamation is between a Domestic
Subsidiary and a Foreign Subsidiary, the surviving Subsidiary shall be a
Domestic Subsidiary, (F) the surviving Person, if any, if not already a Loan
Party, is joined as a Loan Party hereunder pursuant to a Joinder Agreement and
is a party to a Security Document and the Equity Interests of such Person is the
subject of a Security Document, in each case, which is in full force and effect
on the date of and immediately after giving effect to such merger, liquidation,
consolidation or amalgamation and (G) in the case of any such transaction
involving a Foreign Loan Party and (x) a non-Loan Party Subsidiary, the
surviving Person shall be such Foreign Loan Party and (y) a Loan Party that is
not a Foreign Loan Party, the surviving Person shall be such Loan Party that is
not a Foreign Subsidiary (for avoidance of doubt, the merger of the Merger Sub
with and into the Target pursuant to the terms of the Acquisition Documents is
expressly permitted, subject to requirements otherwise set forth herein);

 

(ii)               a Foreign Subsidiary (other than any Foreign Loan Party) may
be merged, consolidated, amalgamated or liquidated into another Foreign
Subsidiary so long as such Foreign Subsidiary is organized under the laws of the
same country and the Secured Parties' Collateral is not adversely affected by
such merger, consolidation, amalgamation or liquidation;

 

(iii)             any Loan Party and its Subsidiaries may make Permitted
Dispositions;

 

(iv)             any of Parent's Subsidiaries that are not Loan Parties may
wind-up, liquidate, or dissolve if the governing body of such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Parent and its Subsidiaries,; and

 

- 132 -

 

(v)               any non-Loan Party may be merged, consolidated or amalgamated
with any other non-Loan Party.

 

(d)               Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business other than as
described in Section 6.01(l), or acquire any material properties or assets that
are not reasonably related to the conduct of such business activities.

 

(e)                Loans, Advances, Investments, Etc. Make, or permit any of its
Subsidiaries to make, any Investment in any other Person except for Permitted
Investments.

 

(f)                Sale Leaseback Transactions. Enter into or permit any of its
Subsidiaries to enter into, any Sale and Leaseback Transaction; provided that
nothing herein shall restrict any Loan Party or any of its Subsidiaries' ability
to create, incur or suffer to exist, any obligations as lessee for the payment
of rent for any real property in the ordinary course of business.

 

(g)               [Intentionally Omitted].

 

(h)               Restricted Payments.  (i)  Declare or pay any dividend or
other distribution, direct or indirect, on account of any Equity Interests of
any Loan Party or any of its Subsidiaries, now or hereafter outstanding, (ii)
make any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity Interests of any Loan Party or any direct or indirect parent of any Loan
Party, now or hereafter outstanding, (iii) make any payment to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights for
the purchase or acquisition of shares of any class of Equity Interests of any
Loan Party, now or hereafter outstanding, (iv) return any Equity Interests to
any shareholders or other equity holders of any Loan Party or any of its
Subsidiaries, or make any other distribution of property, assets, shares of
Equity Interests, warrants, rights, options, obligations or securities thereto
as such or (v) pay any management, consulting, monitoring or advisory fees or
any other fees or expenses (including the reimbursement thereof by any Loan
Party or any of its Subsidiaries) pursuant to any management, consulting,
monitoring, advisory or other services agreement (in each case excluding
compensation, including bonuses, and expense reimbursement under customary
consultant and employment arrangements) to any of the shareholders or other
equityholders of any Loan Party or any of its Subsidiaries or other Affiliates,
or to any other Subsidiaries or Affiliates of any Loan Party (collectively,
"Restricted Payments"); provided, however,

 

(A)             [intentionally omitted];

 

(B)              any Subsidiary of a Borrower may pay dividends or, in the case
of a Subsidiary that is not a corporation, any similar distribution to a
Borrower that is not a Foreign Subsidiary;

 

- 133 -

 

(C)              the Parent may pay dividends in the form of Qualified Equity
Interests;

 

(D)             [intentionally omitted];

 

(E)              [intentionally omitted];

 

(F)               payments not to exceed $250,000 in the aggregate in any Fiscal
Year made pursuant to any employment agreement, employee benefit plan, officer
or director indemnification agreement or any similar arrangement entered into by
the Loan Parties in the ordinary course of business; and

 

(G)             payment of directors' and advisory board members' fees and
reimbursement of actual out-of-pocket expenses incurred in connection with
attending Board of Director or advisory board meetings not to exceed $75,000 per
each director or advisory board member (plus reimbursement of reasonable
out-of-pocket expenses), in each case, in any Fiscal Year of the Borrowers.

 

(i)                 Federal Reserve Regulations. Permit any Loan or the proceeds
of any Loan under this Agreement to be used for any purpose that would cause
such Loan to be a margin loan under the provisions of Regulation T, U or X of
the Board.

 

(j)                 Transactions with Affiliates. Enter into, renew, extend or
be a party to, or permit any of its Subsidiaries to enter into, renew, extend or
be a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) transactions consummated in the ordinary course of
business for fair consideration and on terms no less favorable to it or its
Subsidiaries than would be obtainable in a comparable arm's length transaction
with a Person that is not an Affiliate thereof, and that are fully disclosed to
the Agents prior to the consummation thereof, if they involve one or more
payments by the Parent or any of its Subsidiaries, (ii) transactions (A) among
US Loan Parties, (B) among Foreign Loan Parties or (C) among Subsidiaries that
are not Loan Parties, (iii) transactions permitted by Section 7.02(e) and
Section 7.02(f), (iv) the Loan Parties may pay customary fees to the members of,
and the reasonable out-of-pocket expenses of each of the members of Parent's
boards of directors and may provide customary indemnities for the benefit of
members of its and their boards of directors, (v) customary compensation paid
to, and indemnity provided on behalf of, officers, employees or consultants of
Parent, the Borrowers or any of their Subsidiaries and (vi) sales of Qualified
Equity Interests of the Parent to Affiliates of the Parent not otherwise
prohibited by the Loan Documents and the granting of registration and other
customary rights in connection therewith (vii) the Transactions and (viii)
Permitted Intercompany Dispositions.

 

(k)               Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Loan Party or any Subsidiary of any Loan Party
(i) to pay dividends or to make any other distribution on any shares of Equity
Interests of such Subsidiary owned by any Loan Party or any of its Subsidiaries,
(ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party
or any of its Subsidiaries, (iii) to make loans or advances to any Loan Party or
any of its Subsidiaries or (iv) to transfer any of its property or assets to any
Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do
any of the foregoing; provided, however, that nothing in any of clauses (i)
through (iv) of this Section 7.02(k) shall prohibit or restrict compliance with:

 

- 134 -

 

(A)             this Agreement, the other Loan Documents and any related
documents;

 

(B)              any agreements in effect on the date of this Agreement and
described on Schedule 7.02(k), or any extension, replacement or continuation of
any such agreement; provided, that, any such encumbrance or restriction
contained in such extended, replaced or continued agreement is no less favorable
to the Agents and the Lenders than the encumbrance or restriction under or
pursuant to the agreement so extended, replaced or continued;

 

(C)              any applicable law, rule or regulation (including, without
limitation, applicable currency control laws and applicable state corporate
statutes restricting the payment of dividends in certain circumstances);

 

(D)             in the case of clause (iv), customary restrictions on the
subletting, assignment or transfer of any specified property or asset set forth
in a lease, license, asset sale agreement or similar contract for the conveyance
of such property or asset;

 

(E)              in the case of clause (iv) any agreement, instrument or other
document evidencing a Permitted Lien (or the Indebtedness secured thereby) from
restricting on customary terms the transfer of any property or assets subject
thereto; or

 

(F)   in the case of clause (iv), customary provisions in joint venture
agreements and other similar agreements applicable to joint ventures.

 

(l)                 Limitation on Issuance of Equity Interests. Issue or sell or
enter into any agreement or arrangement for the issuance and sale of, or permit
any of its Subsidiaries to issue or sell or enter into any agreement or
arrangement for the issuance and sale of, any shares of its Equity Interests,
any securities convertible into or exchangeable for its Equity Interests or any
warrants; provided that the Parent may issue Qualified Equity Interests
(including Excluded Equity Issuances) so long as no Change of Control would
result therefrom.

 

(m)             Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements; Etc.

 

(i)                 Amend, modify or otherwise change (or permit the amendment,
modification or other change in any manner of) any of the provisions of any of
its or its Subsidiaries' Indebtedness or of any instrument or agreement relating
to any such Indebtedness if such amendment, modification or change would shorten
the final maturity or average life to maturity of, or require any payment to be
made earlier than the date originally scheduled on, such Indebtedness, would
increase the interest rate applicable to such Indebtedness, would add any
covenant or event of default, would change the subordination provision, if any,
of such Indebtedness, or would otherwise be materially adverse to the Lenders or
the issuer of such Indebtedness in any respect;

 

- 135 -

 

(ii)               except for the Obligations, (A) make any voluntary or
optional payment (including, without limitation, any payment of interest in cash
that, at the option of the issuer, may be paid in cash or in kind), prepayment,
redemption, defeasance, sinking fund payment or other acquisition for value of
any of its or its Subsidiaries' Indebtedness (including, without limitation, by
way of depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when due),
(B) refund, refinance, replace or exchange any other Indebtedness for any such
Indebtedness (except to the extent such Indebtedness is otherwise expressly
permitted by the definition of "Permitted Indebtedness"), (C) make any payment,
prepayment, redemption, defeasance, sinking fund payment or repurchase of any
Subordinated Indebtedness in violation of the subordination provisions thereof
or any subordination agreement with respect thereto, or (D) make any payment,
prepayment, redemption, defeasance, sinking fund payment or repurchase of any
Indebtedness as a result of any asset sale, change of control, issuance and sale
of debt or equity securities or similar event, or give any notice with respect
to any of the foregoing;

 

(iii)             amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN, except that a Loan
Party may (A) change its name, jurisdiction of organization, organizational
identification number or FEIN in connection with a transaction permitted by
Section 7.02(c) and (B) change its name upon at least 30 days' prior written
notice by the Borrowers to the Collateral Agent of such change and so long as,
at the time of such written notification, such Person provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Collateral Agent's Liens;

 

(iv)             amend, modify or otherwise change any of its Governing
Documents (including, without limitation, by the filing or modification of any
certificate of designation, or any agreement or arrangement entered into by it)
with respect to any of its Equity Interests (including any shareholders'
agreement), or enter into any new agreement with respect to any of its Equity
Interests, except any such amendments, modifications or changes or any such new
agreements or arrangements pursuant to this clause (iv) that either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; or

 

(v)               agree to any amendment, modification or other change to, or
waiver of any of its rights under any Material Contract (if such amendment,
modification, change or waiver would be adverse in any material respect to the
Agents and the Lenders).

 

(n)               Investment Company Act of 1940. Engage in any business, enter
into any transaction, use any securities or take any other action or permit any
of its Subsidiaries to do any of the foregoing, that would cause it or any of
its Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.

 

- 136 -

 

(o)               Compromise of Accounts Receivable. Compromise or adjust any
material amount of the Accounts Receivable (or extend the time of payment with
respect to any material amount of the Accounts Receivable), or permit any of its
Subsidiaries that are Loan Parties to do so other than as may be approved by the
Administrative Agent in its Permitted Discretion or, in the case of Accounts
Receivable that are not Eligible Accounts, in the ordinary course of business.

 

(p)               No Excess Cash. Maintain, or permit any of its Subsidiaries to
maintain, an average monthly balance of cash and Cash Equivalents in all of the
checking, savings and other accounts of (i) the Loan Parties and their
Subsidiaries in excess of $15,000,000 in the aggregate or (ii) Foreign
Subsidiaries (other than the Foreign Loan Parties) in excess of $10,000,000 in
the aggregate.

 

(q)               Pension Plans.

 

(i)                 ERISA. (i) Except where any failure to comply could not
reasonably be expected to result in a Material Adverse Effect: (i) engage, or
permit any ERISA Affiliate to engage, in any transaction described in Section
4069 of ERISA; (ii) fail to make any contribution or payment to any
Multiemployer Plan which it or any ERISA Affiliate is required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto; or
(iii) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the IRC on or
before the due date for such installment or other payment.

 

(ii)               Canadian Pension Plans. (i) Permit its unfunded pension fund
obligations and liabilities under any Canadian Pension Plan to remain unfunded
other than in accordance with Applicable Law, (ii) terminate or wind-up or cause
to be terminated or wound-up any Canadian Pension Plan or take any action for
the purpose of effecting the foregoing, if such plan would have a solvency or
wind-up deficient on termination or wind-up, or (iii) establish, maintain,
sponsor, administer, contribute to, participate in or assume or incur liability
in respect of any Canadian Defined Benefit Pension Plan, or (iv) acquire an
interest in or amalgamate with any Person if such Person maintains, sponsors,
administers, contributes to, participates in or has any liability or obligation
in respect of, any Canadian Defined Benefit Pension Plan

 

(r)                 Environmental. Use, handle, generate, store, treat, Release
or dispose of Hazardous Materials at any property owned or leased by it or any
of its Subsidiaries in violation of Environmental Laws, except as would not have
a Material Adverse Effect, and such violation remains unremedied for 30 days
after the date an Authorized Officer of any Loan Party becomes aware of such
violation.

 

(s)                Credit Card Arrangements. Enter into new agreements with
Credit Card Processors or Credit Card Issuers other than the ones set forth on
Schedule 6.01(jj) hereof unless the Borrowing Agent shall have delivered to the
Agents appropriate Processor Letters consistent with the provisions of Section
8.01(l).

 

- 137 -

 

(t)                 Anti-Terrorism Laws. Permit: (i) any Covered Entity to (A)
become a Sanctioned Person, (B) either in its own right or through any third
party have any of its assets in a Sanctioned Country or in the possession,
custody or control of a Sanctioned Person; or (C) either in its own right or
through any third party to do business in or with, or derive any of its
operating income from investments in or transactions with, any Sanctioned
Country or Sanctioned Person in violation of any Anti-Terrorism Laws; (ii) the
Loans to be used to fund any operations in, finance any investments or
activities in, or, make any payments to, a Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Laws; (iii) the funds used to repay
the Obligations to be derived from any unlawful activity; or (iv) any Covered
Entity either in its own right or through any third party fails to be in
material compliance with, or engage in any dealings or transactions prohibited
by, any applicable Requirements of Law, including but not limited to any
Anti-Terrorism Laws. The Loan Parties covenant and agree that they shall timely
notify the Agent in writing upon the occurrence of a Reportable Compliance
Event.

 

(u)               Foreign Exchange Availability. Fail to maintain in full force
and effect and comply with the terms of all Requirements of Law required to
enable it to pay solely and exclusively in Dollars all amounts which a Loan
Party is or may be required to pay under the Loan Documents.

 

(v)               Pari Passu. Fail to take all actions necessary to cause all
Obligations to rank at all times at least pari passu in priority in right of
payment and in all other respects with all other of unsecured and unsubordinated
Indebtedness of any Loan Party.

 

(w)             Pensions. Except for the Harvard Apparatus Limited Retirement
Benefits Scheme and the Biochrom Defined Benefit Pension Scheme ensure (and the
Parent shall procure each UK Subsidiary of the Parent will ensure), that no UK
Subsidiary of the Parent is or has been at any time an employer (for the
purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational
pension scheme which is not a money purchase scheme (both terms as defined in
the Pension Schemes Act 1993) or "connected" with or an "associate" of (as those
terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer.

 

Section 7.03        Financial Covenants. Until the Obligations are Paid In Full
and all Commitments are terminated, each Loan Party shall not, unless the
Required Lenders shall otherwise consent in writing:

 

(a)                Leverage Ratio. Permit the Leverage Ratio of the Parent and
its Subsidiaries for any period of four consecutive Fiscal Quarters of the
Parent and its Subsidiaries for which the last Fiscal Quarter ends on a date set
forth below to be greater than the ratio set forth opposite such date:

 

Fiscal Quarter End Leverage Ratio     March 31, 2018 4.50:1.00     June 30, 2018
4.50:1.00     September 30, 2018 4.25:1.00

 

- 138 -

 

December 31, 2018 4.00:1.00     March 31, 2019 3.75:1.00     June 30, 2019
3.75:1.00     September 30, 2019 3.50:1.00     December 31, 2019 3.25:1.00    
March 31, 2020, and every Fiscal Quarter thereafter 3.00:1.00

 

(b)               Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio of the Parent and its Subsidiaries for any period of four consecutive
Fiscal Quarters of the Parent and its Subsidiaries for which the last Fiscal
Quarter ends on a date set forth below to be less than the ratio set forth
opposite such date:

 

Fiscal Quarter End Fixed Charge Coverage Ratio     March 31, 2018 1.25:1.00    
June 30, 2018 1.25:1.00     September 30, 2018, and every Fiscal Quarter
thereafter 1.50:1.00

 

 

 

- 139 -

 

Article VIII

MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL

 

Section 8.01        Collection of Accounts Receivable; Management of Collateral.
(a) The Loan Parties shall (i) establish and maintain cash management services
of a type and on terms reasonably satisfactory to the Agents at one or more of
the banks set forth on Schedule 8.01 (each a "Cash Management Bank") and (ii)
except as otherwise provided under Section 8.01(b), deposit or cause to be
deposited promptly, and in any event no later than the next Business Day after
the date of receipt thereof, all proceeds in respect of any Collateral, all
Collections (of a nature susceptible to a deposit in a bank account) and all
other amounts received by (i) any Loan Party (including payments made by Account
Debtors directly to any Loan Party) into a Cash Management Account of the US
Loan Parties, (ii) any Canadian Loan Party (including payments made by Account
Debtors directly to any Canadian Loan Party) into a Cash Management Account of
the Canadian Loan Parties or (iii) any UK Loan Party (including payments made by
Account Debtors directly to any UK Loan Party) into a Cash Management Account of
the UK Loan Parties.

 

(b)               Within ninety (90) days after the Effective Date (or such
longer period as agreed to in writing by the Agents), the Loan Parties shall,
with respect to each Cash Management Account, deliver to the Collateral Agent a
Cash Management Agreement with respect to such Cash Management Account. From and
after ninety (90) days after the Effective Date (or such longer period as agreed
to in writing by the Agents), the Loan Parties shall not maintain, and shall not
permit any of their Subsidiaries to maintain, cash, Cash Equivalents or other
amounts in any Deposit Account or Securities Account, unless the Collateral
Agent shall have received a Cash Management Agreement in respect of each such
Deposit Account or Securities Account, provided that the Loan Parties and their
Subsidiaries shall be entitled to maintain (and deposit proceeds in respect of
Collateral into) Excluded Accounts.

 

(c)                Upon the terms and subject to the conditions set forth in a
Cash Management Agreement with respect to a Cash Management Account, upon the
occurrence and during the continuance of Cash Sweep Triggering Event, all
amounts received in such Cash Management Account shall at the Collateral Agent's
direction be wired each Business Day into the Administrative Agent's Account for
application to the outstanding Revolving Loans and any other Obligations then
due and payable (subject to Section 4.03(b)). The Borrowers further agree that,
when springing cash dominion is in effect pursuant to this Section 8.01, there
will be a monthly float charge payable to the Administrative Agent for the
Administrative Agent's benefit, in an amount equal to (A) the face amount of all
items of payment received during the prior month (including items of payment
received by the Administrative Agent as a wire transfer or electronic depository
check) multiplied by (B) the Reference Rate plus the Applicable Margin for
Revolving Loans for 1 Business Day.

 

(d)               So long as no Default or Event of Default has occurred and is
continuing, the Borrowers may amend Schedule 8.01 to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be reasonably satisfactory to the
Collateral Agent and the Collateral Agent shall have consented in writing (such
consent not to be unreasonably withheld, delayed or denied) in advance to the
opening of such Cash Management Account with the prospective Cash Management
Bank, and (ii) prior to the time of the opening of such Cash Management Account,
each Loan Party and such prospective Cash Management Bank shall have executed
and delivered to the Collateral Agent a Cash Management Agreement.

 

- 140 -

 

(e)                The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which the Loan Parties are hereby
deemed to have granted a Lien to Collateral Agent for the benefit of the Agents
and the Lenders. All checks, drafts, notes, money orders, acceptances, cash and
other evidences of Indebtedness received directly by any Loan Party from any of
its Account Debtors, as proceeds from Accounts Receivable of such Loan Party or
as proceeds of any other Collateral shall be held by such Loan Party in trust
for the Agents and the Lenders and if of a nature susceptible to a deposit in a
bank account, upon receipt be deposited by such Loan Party in original form and
no later than the next Business Day after receipt thereof into the applicable
Cash Management Account or other bank account referenced in the definition of
Cash Management Accounts as excluded from the scope thereof; provided, however,
all Net Cash Proceeds received directly by such Loan Party pursuant to an event
described in Section 2.05(c)(v) or (vii) that are required to be used to prepay
Loans under the terms of this Agreement shall be held by such Loan Party in
trust for the Agents and the Lenders and upon receipt be deposited by such Loan
Party in original form and no later than the next Business Day after receipt
thereof into the Administrative Agent's Account. Each Loan Party shall not
commingle such collections with the proceeds of any assets not included in the
Collateral. No checks, drafts or other instrument received by the Administrative
Agent shall constitute final payment to the Administrative Agent unless and
until such instruments have actually been collected.

 

(f)                So long as no Event of Default has occurred and is
continuing, the Loan Parties shall take all commercially reasonable steps to
enforce, collect and receive all amounts owing on the Accounts Receivable of the
Loan Parties or any of their Subsidiaries. After the occurrence and during the
continuance of an Event of Default, the Collateral Agent may send a notice of
assignment and/or notice of the Collateral Agent's security interest to any and
all Account Debtors or third parties holding or otherwise concerned with any of
the Collateral, and thereafter the Collateral Agent or its designee shall have
the sole right to collect the Accounts Receivable and payment intangibles of the
Loan Parties and/or may take possession of the Collateral and the books and
records relating thereto. After the occurrence and during the continuation of an
Event of Default, the Loan Parties shall not, without prior written consent of
the Administrative Agent, grant any extension of time of payment of any Account
Receivable or payment intangible, compromise or settle any Account Receivable or
payment intangible for less than the full amount thereof, release, in whole or
in part, any Person or property liable for the payment thereof, or allow any
credit or discount whatsoever thereon.

 

(g)               Each Loan Party recognizes that the amounts evidenced by
checks, notes, drafts or any other items of payment relating to and/or proceeds
of Collateral may not be collectible by Administrative Agent on the date
received by Administrative Agent. Administrative Agent shall conditionally
credit the Loan Account for each item of payment on the next Business Day after
the Business Day on which such item of payment is received by Administrative
Agent (and the Business Day on which each such item of payment is so credited
shall be referred to, with respect to such item, as the "Application Date").
Administrative Agent may charge the Loan Account for the amount of any item of
payment which is returned, for any reason whatsoever, to Administrative Agent
unpaid; provided that if the Administrative Agent subsequently received payment
of such amount, it will credit such amount to the Loan Account. Subject to the
foregoing, each Loan Party agrees that for purposes of computing the interest
charges under this Agreement, each item of payment received by Administrative
Agent shall be deemed applied by Administrative Agent on account of the
Obligations on its respective Application Date.

 

- 141 -

 

(h)               Each Loan Party hereby appoints each Agent or its designee on
behalf of such Agent as the Loan Parties' attorney-in-fact with power
exercisable during the continuance of an Event of Default to (i) endorse any
Loan Party's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Accounts Receivable, or payment
intangibles of such Loan Party, (ii) sign such Loan Party's name on any invoice
or bill of lading relating to any of the Accounts Receivable or payment
intangibles of such Loan Party, drafts against Account Debtors with respect to
Accounts Receivable or payment intangibles of such Loan Party, assignments and
verifications of Accounts Receivable or payment intangibles, and notices to
Account Debtors with respect to Accounts Receivable or payment intangibles of
such Loan Party, (iii) send verification of Accounts Receivable of such Loan
Party, and (iv) notify the U.S. Postal Service or Canada Post authorities or
other applicable postal authorities to change the address for delivery of mail
addressed to such Loan Party to such address as such Agent or its designee may
designate and to do all other acts and things necessary to carry out this
Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission (other than acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), or for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until
(i) all of the Loans, Letters of Credit Obligations and other Obligations under
the Loan Documents are Paid In Full and all of the Loan Documents are terminated
or (ii) the applicable Event of Default giving rise to such power is waived or
cured.

 

(i)                 Nothing herein contained shall be construed to constitute
any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents
shall not be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof (other than from acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction). The Agents shall not,
under any circumstance or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The
Agents, by anything herein or in any assignment or otherwise, do not assume any
of the obligations under any contract or agreement assigned to any Agent and
shall not be responsible in any way for the performance by any Loan Party of any
of the terms and conditions thereof.

 

- 142 -

 

(j)                 If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, each Agent is hereby authorized (but in
no event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Loan Parties' account and to charge the Loan Parties
therefor. The Loan Parties shall notify the Agents if any Account Receivable
includes any taxes due to any such Governmental Authority and, in the absence of
such notice, the Agents shall have the right to retain the full proceeds of such
Account Receivable received by any Agents and apply the same to the Revolving
Loans and shall not be liable for any taxes that may be due by reason of the
sale and delivery creating such Account Receivable.

 

(k)               Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Agents and the Lenders herein
provided, and the obligations of the Loan Parties set forth herein, are
cumulative of, may be exercised singly or concurrently with, and are not
exclusive of, any other rights, remedies or obligations set forth in any other
Loan Document or as provided by law.

 

(l)                 Subject to Section 5.03, the Borrowers shall deliver to the
Agent Processor Letters substantially in the form attached hereto as Exhibit H
which have been executed on behalf of such Borrower and delivered to such
Borrower's credit card clearinghouses and Credit Card Processors.

 

Section 8.02        Accounts Receivable Documentation. The Loan Parties will at
such intervals as the Agents may reasonably require, execute and deliver
confirmatory written assignments of the Accounts Receivable to the Agents and
furnish such further schedules and/or information as any Agent may require
relating to the Accounts Receivable, including, without limitation, sales
invoices or the equivalent, credit memos issued, remittance advices, reports and
copies of deposit slips and copies of original shipping or delivery receipts for
all merchandise sold. In addition, the Loan Parties shall notify the Agents of
any material non-compliance in respect of the representations, warranties and
covenants contained in Section 8.03. The items to be provided under this Section
8.02 are to be in form reasonably satisfactory to the Agents and are to be
executed and delivered to the Agents from time to time solely for their
convenience in maintaining records of the Collateral. If the Loan Parties become
aware of anything materially detrimental to any of the Loan Parties customers'
credit, the Loan Parties will promptly advise the Agents thereof.

 

Section 8.03        Status of Accounts Receivable and Other Collateral. Each of
the Accounts Receivable identified on a Borrowing Base Certificate as an
Eligible Account shall be a bona fide and valid account representing a bona fide
indebtedness incurred by the Account Debtor therein named, for the sum set forth
in the invoice relating thereto (provided such invoice may be subject to (i)
agreed upon returns, discounts, allowances or credits and (ii) immaterial or
unintentional invoice errors) with respect to an absolute sale or lease and
delivery of goods upon stated terms of the applicable Borrower, or work, labor
or services theretofore rendered by such Borrower as of the date each such
Account Receivable is created. Each of the Accounts Receivable identified on a
Borrowing Base Certificate as an Eligible Account shall be due and owing in
accordance with the applicable Borrower's standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by the applicable Borrower to the Administrative
Agent.

 

- 143 -

 

Section 8.04        Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent or its designee may at
any time and from time to time employ and maintain on the premises of any Loan
Party a custodian selected by the Collateral Agent or its designee who shall
have full authority to do all acts necessary to protect the Agents' and the
Lenders' interests. During the continuance of an Event of Default, each Loan
Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any
such custodian and to do whatever the Collateral Agent or its designee may
reasonably request to preserve the Collateral. All costs and expenses incurred
by the Collateral Agent or its designee by reason of the employment of the
custodian shall be the responsibility of the Borrowers and charged to the Loan
Account.

 

Article IX

EVENTS OF DEFAULT

 

Section 9.01        Events of Default. If any of the following Events of Default
shall occur and be continuing:

 

(a)                the Borrowers shall fail to pay when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) all
or any portion of the principal of the Loans, any Agent Advances or any
Reimbursement Obligation or any interest on any Loan or any fee, indemnity or
other amount payable under this Agreement or any other Loan Document;

 

(b)               any representation or warranty made or deemed made by or on
behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate or other document delivered to any Secured Party pursuant to any
Loan Document shall have been incorrect in any material respect when made or
deemed made;

 

(c)                any Loan Party shall fail to perform or comply with any
covenant or agreement contained in:

 

(i)                 Section 7.01(a), Section 7.01(d), Section 7.01(f), Section
7.01(h), Section 7.01(q), Section 7.02, Section 7.03 or Article VIII;

 

(ii)               Section 7.01(b) or Section 7.01(c), and such failure, if
capable of being remedied, shall remain unremedied for 5 days after the earlier
of the date a Senior Officer of any Loan Party has knowledge of such failure and
the date written notice of such default shall have been given by any Agent to
such Loan Party, or

 

(iii)             Section 7.01(e), Section 7.01(g), Section 7.01(i), Section
7.01(j), Section 7.01(k), Section 7.01(l), Section 7.01(m), Section 7.01(n),
Section 7.01(o), Section 7.01(p) or Section 7.01(r) and such failure, if capable
of being remedied, shall remain unremedied for 10 Business Days after the
earlier of the date a Senior Officer of any Loan Party has knowledge of such
failure and the date written notice of such default shall have been given by any
Agent to such Loan Party;

 

- 144 -

 

(d)               any Loan Party shall fail to perform or comply with any other
term, covenant or agreement contained in any Loan Document (including, without
limitation, any Security Document or Mortgage) to be performed or observed by it
and, except as set forth in subsections (a), (b) and (c) of this Section 9.01,
such failure, if capable of being remedied, shall remain unremedied for 30 days
after the earlier of the date a Senior Officer of any Loan Party has knowledge
of such failure and the date written notice of such default shall have been
given by any Agent to such Loan Party;

 

(e)                any Loan Party shall fail to pay any principal of or interest
or premium on any of its Indebtedness (excluding the Obligations) to the extent
that the aggregate principal amount of all such Indebtedness exceeds $500,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or any other default under any agreement or instrument relating to
any such Indebtedness, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;
provided, that with respect to an Event of Default arising under this Section
9.01(e) with respect to any post-closing adjustments under the terms of the
Acquisition Documents or documents relating to the Denville Sale, such event
shall not constitute an Event of Default to the extent the Borrowers have
determined, in good faith, that there is a bona fide dispute with respect to the
payment of such post-closing adjustment and the Parent or the relevant
Subsidiary, as applicable, is complying with the dispute resolution mechanics
set forth in the agreement(s) governing such Acquisition Documents or documents
relating to the Denville Sale, as applicable, and any amounts owing by the
Parent or any of its Subsidiaries following the resolution of such dispute in
accordance with the terms thereof are paid as set forth in the agreement
governing such resolution;

 

(f)                any Loan Party (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, receiver and
manager, custodian, conservator, trustee, administrator, liquidator, monitor,
assignee for the benefit of creditors, sequestrator or other similar official
for any such Person or for any substantial part of its property, (ii) shall be
generally not paying its debts as such debts become due or shall admit in
writing its inability to pay its debts generally, (iii) shall make a general
assignment for the benefit of creditors, or (iv) shall take any action to
authorize or effect any of the actions set forth above in this subsection (f);

 

(g)               any proceeding shall be instituted against any Loan Party
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, receiver and manager, custodian, conservator,
trustee, administrator, liquidator, monitor, assignee for the benefit of
creditors, sequestrator or other similar official for any such Person or for any
substantial part of its property, and either such proceeding shall remain
undismissed or unstayed for a period of 60 days (or 21 days in the case of a UK
Loan Party) or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against any such Person or the
appointment of a receiver, receiver and manager, custodian, conservator,
trustee, administrator, liquidator, monitor, assignee for the benefit of
creditors, sequestrator or other similar official for it or for any substantial
part of its property) shall occur;

 

- 145 -

 

(h)               any material provision of any Loan Document shall at any time
for any reason (other than pursuant to the express terms thereof) cease to be
valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any Loan Party that is a party thereto, or a proceeding shall be commenced by
any Loan Party or any Governmental Authority having jurisdiction over any of
them, seeking to establish the invalidity or unenforceability thereof, or any
Loan Party shall deny in writing that it has any liability or obligation
purported to be created under any Loan Document;

 

(i)                 any Security Document, any Mortgage or any other security
document, after delivery thereof pursuant hereto, shall for any reason fail or
cease to create a valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien in favor of the Collateral Agent
for the benefit of the Agents and the Lenders on any material portion of the
Collateral purported to be covered thereby;

 

(j)                 any Cash Management Bank at which any Cash Management
Account of any Loan Party is maintained shall fail to comply with any of the
terms of any Cash Management Agreement to which such Cash Management Bank is a
party or any securities intermediary, commodity intermediary, futures
intermediary or other financial institution at which any Controlled Deposit
Account or Controlled Securities Account of any Loan Party is maintained shall
fail to comply with any of the terms of any Cash Management Agreement to which
such Person is a party;

 

(k)               one or more judgments, awards, or orders (or any settlement of
any claim that, if breached, could result in a judgment, order, or award) for
the payment of money exceeding $500,000, individually, or $1,500,000 in the
aggregate (the "Maximum Judgment Amount") shall be rendered against the Parent
or any of its Subsidiaries and remain unsatisfied, or the Parent or any of its
Subsidiaries shall agree to the settlement of any one or more pending or
threatened claims, actions, suits, or proceedings affecting any Loan Party
before any court or other Governmental Authority or any arbitrator or mediator,
providing for the payment of money exceeding $500,000, individually, or
$1,500,000 in the aggregate, and in the case of any such judgment or order or
settlement either (i) enforcement proceedings shall have been commenced by any
creditor upon any such judgment, order, award or settlement, or (ii) there shall
be a period of 30 consecutive days after entry thereof during which such
judgment, order, award or settlement shall not have been satisfied or a stay of
enforcement of any such judgment, order, award or settlement, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment, order, award or settlement shall not give rise to an Event of
Default under this subsection if and for so long as (A) the amount of such
judgment, order, award or settlement in excess of the Maximum Judgment Amount is
covered by a valid and binding policy of insurance between the applicable Person
and the insurer covering full payment thereof (other than any deductible) or an
amount sufficient to lower the exposure below the Maximum Judgment Amount, and
(B) such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment, order, award or settlement;

 

- 146 -

 

(l)                 any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting, or otherwise ceases to conduct for any reason whatsoever, all or any
material part of its business for more than 20 days if such injunction,
restraint or other prevention could reasonably be expected to result in a
Material Adverse Effect;

 

(m)             any material damage to, or loss, theft or destruction of, any
material portion of the Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than 20 consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Loan Party, if any such event or circumstance could reasonably be expected to
have a Material Adverse Effect;

 

(n)               the loss, suspension or revocation of, or failure to renew or
termination of, any license or permit now held or hereafter acquired by any Loan
Party or any Material Contract, if such loss, suspension, revocation, failure to
renew or termination could reasonably be expected to have a Material Adverse
Effect;

 

(o)               the indictment of any Loan Party under any criminal statute,
or commencement of criminal or civil proceedings against any Loan Party,
pursuant to which statute or proceedings the penalties or remedies sought or
available include forfeiture to any Governmental Authority of any material
portion of the property of such Person;

 

(p)               (i) any Loan Party or any of its ERISA Affiliates shall have
made a complete or partial withdrawal from a Multiemployer Plan, and, as a
result of such complete or partial withdrawal, any Loan Party incurs a
withdrawal liability in an annual amount exceeding $500,000 or a Multiemployer
Plan enters reorganization status under Section 4241 of ERISA, and, as a result
thereof any Loan Party's annual contribution requirements with respect to such
Multiemployer Plan increases in an annual amount exceeding $500,000 or (ii) any
Canadian Pension Termination Event shall occur or a trust, deemed trust or Lien
has been, or may be imposed in the opinion of the Agents, on the assets of a
Loan Party, in connection with a Canadian Pension Plan, which, in either case,
in the reasonable judgment of the Agents, would be reasonably expected to have a
Material Adverse Effect;

 

(q)               the occurrence of any Reportable Compliance Event, or any Loan
Party's failure to timely report a Reportable Compliance Event in accordance
with Section 7.01(q) hereof;

 

(r)                 a Change of Control shall have occurred;

 

(s)                any Credit Card Issuer or Credit Card Processor withholds
payment of amounts otherwise payable to any Loan Party to fund a reserve account
or otherwise hold as collateral, or shall require any Loan Party to pay funds
into a reserve account or for such Credit Card Issuer or Credit Card Processor
to otherwise hold as collateral, or any Loan Party shall provide a letter of
credit, guarantee, indemnity or similar instrument to or in favor of such Credit
Card Issuer or Credit Card Processor such that in the aggregate all of such
funds in the reserve account, other amounts held as collateral and the amount of
such letters of credit, guarantees, indemnities or similar instruments shall
exceed $500,000; or

 

- 147 -

 

(t)                 the Pensions Regulator issues a Financial Support Direction
or a Contribution Notice to the Parent or any Subsidiary of the Parent unless
the aggregate liability of the Parent and such Subsidiaries under all Financial
Support Directions and Contributions Notices is less than $250,000;

 

then, and in any such event, any Agent may, and shall at the request of the
Required Lenders, by notice to the Borrowing Agent, (i) terminate or reduce all
Commitments, whereupon all Commitments shall immediately be so terminated or
reduced, (ii) declare all or any portion of the Loans and Letter of Credit
Obligations then outstanding to be due and payable, whereupon all or such
portion of the aggregate principal of all Loans and Letter of Credit
Obligations, all accrued and unpaid interest thereon, all fees and all other
amounts payable under this Agreement and the other Loan Documents shall become
due and payable immediately, together with the payment of the Applicable
Prepayment Premium (if any) with respect to the Commitments so terminated and
the Loans so repaid, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by each Loan Party and (iii)
exercise any and all of its other rights and remedies under applicable law,
hereunder and under the other Loan Documents; provided, however, that upon the
occurrence of any Event of Default described in subsection (f) or (g) of this
Section 9.01, without any notice to any Loan Party or any other Person or any
act by any Agent or any Lender, all Commitments shall automatically terminate
and all Loans and Letter of Credit Obligations then outstanding, together with
all accrued and unpaid interest thereon, all fees (including, without
limitation, the Applicable Prepayment Premium, if any) and all other amounts due
under this Agreement and the other Loan Documents shall become due and payable
automatically and immediately, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by each Loan Party. Subject to
Section 4.03(b), the Administrative Agent may, after the occurrence and during
the continuation of any Event of Default, require the Borrowers to Cash
Collateralize each Letter of Credit then outstanding.

 

Section 9.02        Cure Right. In the event that the Borrowers fail to comply
with the requirements of any financial covenant set forth in Section 7.03, until
the expiration of the fifth (5th) day after the date on which financial
statements are required to be delivered with respect to the applicable Fiscal
Quarter hereunder, the Parent shall have the right to issue Permitted Cure
Equity for cash or otherwise receive cash contributions to the capital of the
Parent, and, in each case, to contribute any such cash to the capital of the
Parent, and apply the amount of the proceeds thereof to increase Consolidated
EBITDA with respect to such applicable Fiscal Quarter (the "Cure Right");
provided that (a) such proceeds are actually received by the Parent no later
than 5 days after the date on which financial statements are required to be
delivered with respect to such fiscal quarter hereunder, (b) such proceeds do
not exceed the aggregate amount necessary to cure (by addition to Consolidated
EBITDA) such Event of Default under Section 7.03 for such period, (c) such
proceeds do not exceed 15% of Consolidated EBITDA of the Parent and its
Subsidiaries for the immediately preceding four (4) Fiscal Quarter period, (d)
the Cure Right shall not be exercised more than four (4) times during the term
of this Agreement, (e) in each period of four Fiscal Quarters, there shall be at
least 2 consecutive Fiscal Quarters during which the Cure Right is not
exercised, (f) the aggregate amount of all Cure Right proceeds during the term
of this Agreement shall not exceed $3,000,000, (g) all Cure Right contributions
shall be disregarded for purposes of determining any financial ratio-based
conditions, pricing or any baskets with respect to the covenants contained
herein, (h) there shall be no pro forma reduction in Indebtedness with the
proceeds of any Cure Right for determining compliance with the financial
covenants for such twelve month period (either through repayment or netting) and
(i) such proceeds shall be immediately applied to prepay the Term Loan and
applied to the inverse order of maturity and the Borrowers shall pay the
Applicable Prepayment Premium. If, after giving effect to the foregoing pro
forma adjustment (but not, for the avoidance of doubt, giving pro forma
adjustment to any repayment of Indebtedness in connection therewith), the
Borrowers are in compliance with the financial covenants set forth in Section
7.03, the Borrowers shall be deemed to have satisfied the requirements of such
Section as of the relevant date of determination with the same effect as though
there had been no failure to comply on such date, and the applicable breach or
default of such Section 7.03 that had occurred shall be deemed cured for
purposes of this Agreement. The parties hereby acknowledge that this Section may
not be relied on for purposes of calculating any financial ratios other than as
applicable to Section 7.03 and shall not result in any adjustment to any amounts
other than the amount of the Consolidated EBITDA referred to in the immediately
preceding sentence.

 

 

- 148 -

 

Article X

AGENTS

 

Section 10.01    Appointment.

 

(a)                Each Lender (and each subsequent maker of any Loan by its
making thereof) hereby irrevocably appoints, authorizes and empowers the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement and the other Loan Documents, together with
such actions and powers as are reasonably incidental thereto, including: (i) to
receive on behalf of each Lender any payment of principal of or interest on the
Loans outstanding hereunder and all other amounts accrued hereunder for the
account of the Lenders and paid to such Agent, and, subject to Section 2.02 of
this Agreement, to distribute promptly to each Lender its Pro Rata Share of all
payments so received; (ii) to distribute to each Lender copies of all material
notices and agreements received by such Agent and not required to be delivered
to each Lender pursuant to the terms of this Agreement, provided that the Agents
shall not have any liability to the Lenders for any Agent's inadvertent failure
to distribute any such notices or agreements to the Lenders; (iii) to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Obligations, the Loans, and related matters and to
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Collateral and related matters; (iv) to
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 this Agreement or any other
Loan Document; (v) to make the Loans and Agent Advances, for such Agent or on
behalf of the applicable Lenders as provided in this Agreement or any other Loan
Document; (vi) to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to the Loan Parties, the Obligations, or
otherwise related to any of same to the extent reasonably incidental to the
exercise by such Agent of the rights and remedies specifically authorized to be
exercised by such Agent by the terms of this Agreement or any other Loan
Document; (vii)  to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; (viii) subject to Section 10.03, to take
such action as such Agent deems appropriate on its behalf to administer the
Loans and the Loan Documents and to exercise such other powers delegated to such
Agent by the terms hereof or the other Loan Documents (including, without
limitation, the power to give or to refuse to give notices, waivers, consents,
approvals and instructions and the power to make or to refuse to make
determinations and calculations); and (ix) to act with respect to all Collateral
under the Loan Documents, including for purposes of acquiring, holding and
enforcing any and all Liens on Collateral granted by any of the Loan Parties to
secure any of the Obligations. As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Loans), the Agents shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), and such instructions of the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents) shall be binding upon all Lenders and all
makers of Loans; provided, however, that the Agents shall not be required to
take any action which, in the reasonable opinion of any Agent, exposes such
Agent to liability or which is contrary to this Agreement or any other Loan
Document or applicable law.

 

- 149 -

 

(b)               (b) Without limitation to the terms of Section 10.01(a), in
its capacity as Collateral Agent, for the purposes of holding any hypothec under
the laws of Quebec granted by any Loan Party, the Collateral Agent is hereby
appointed and shall serve as the hypothecary representative for all present and
future Secured Parties as contemplated by Article 2692 of the Civil Code of
Québec. Any person who becomes a Secured Party shall be deemed to have consented
to and confirmed the Collateral Agent as the person acting as hypothecary
representative holding the aforesaid hypothecs as hypothecary representative and
to have ratified, as of the date it becomes a Secured Party, as the case may be,
all actions taken by the Collateral Agent in such capacity. The substitution of
the Collateral Agent pursuant to the provisions of this Article 10 shall also
constitute the substitution of such Collateral Agent as the hypothecary
representative.

 

Section 10.02    Nature of Duties; Delegation. (a) The Agents shall have no
duties or responsibilities except those expressly set forth in this Agreement or
in the other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender
(other than the Collateral Agent as required in order to give effect to its
appointment as trustee under the UK Security Documents). Nothing in this
Agreement or any other Loan Document, express or implied, is intended to or
shall be construed to impose upon the Agents any obligations in respect of this
Agreement or any other Loan Document except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the
Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents) to the taking or refraining from taking any action
hereunder, such Agent shall send notice thereof to each Lender. Each Agent shall
promptly notify each Lender any time that the Required Lenders (or such other
number or percentage of the Lenders as shall be expressly provided for herein or
in the other Loan Documents) have instructed such Agent to act or refrain from
acting pursuant hereto.

 

- 150 -

 

(b)               Each Agent may, upon any term or condition it specifies,
delegate or exercise any of its rights, powers and remedies under, and delegate
or perform any of its duties or any other action with respect to, any Loan
Document by or through any trustee, co-agent, employee, attorney-in-fact and any
other Person (including any Lender). Any such Person shall benefit from this
Article X to the extent provided by the applicable Agent.

 

Section 10.03    Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Without limiting the generality of the foregoing, the
Agents (i) may treat the payee of any Loan as the owner thereof until the Agents
receive written notice of the assignment or transfer thereof, pursuant to
Section 12.07 hereof, signed by such payee and in form satisfactory to the
Agents; (ii) may consult with legal counsel (including, without limitation,
counsel to any Agent or counsel to the Loan Parties), independent public
accountants, and other experts selected by any of them and shall not be liable
for any action taken or omitted to be taken in good faith by any of them in
accordance with the advice of such counsel or experts; (iii) make no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, certificates, warranties or representations made in or in connection
with this Agreement or the other Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the other Loan Documents on the
part of any Person, the existence or possible existence of any Default or Event
of Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Collateral Agent's Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Agents be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to Section
4.03, and if any such apportionment or distribution is subsequently determined
to have been made in error, and the sole recourse of any Lender to whom payment
was due but not made shall be to recover from other Lenders any payment in
excess of the amount which they are determined to be entitled. The Agents may at
any time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders (or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents). Without limiting the
foregoing, no Lender shall have any right of action whatsoever against any Agent
as a result of such Agent acting or refraining from acting under this Agreement
or any of the other Loan Documents in accordance with the instructions of the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents).

 

- 151 -

 

Section 10.04    Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

 

Section 10.05    Indemnification. To the extent that any Agent or the L/C Issuer
is not reimbursed and indemnified by any Loan Party, and whether or not such
Agent or the L/C Issuer has made demand on any Loan Party for the same, the
Lenders will, within five days of written demand by such Agent or the L/C
Issuer, reimburse such Agent or the L/C Issuer for and indemnify such Agent or
the L/C Issuer from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, client charges and expenses of counsel or any other advisor
to such Agent or the L/C Issuer), advances or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against such
Agent or the L/C Issuer in any way relating to or arising out of this Agreement
or any of the other Loan Documents or any action taken or omitted by such Agent
or the L/C Issuer under this Agreement or any of the other Loan Documents, in
proportion to each Lender's Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 10.08; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final non-appealable judicial
determination that such liability resulted from such Agent's or the L/C Issuer's
gross negligence or willful misconduct. The obligations of the Lenders under
this Section 10.05 shall survive the Payment In Full of the Loans and the
termination of this Agreement.

 

Section 10.06    Agents Individually. With respect to its Pro Rata Share of the
Total Commitment hereunder and the Loans made by it, each Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms "Lenders" or "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with any
Borrower as if it were not acting as an Agent pursuant hereto without any duty
to account to the other Lenders.

 

- 152 -

 

Section 10.07    Successor Agent. (a) Any Agent may at any time give at least 30
days (or, in the event the Total Revolving Credit Commitment has been reduced to
zero, 10 days) prior written notice of its resignation to the Lenders and the
Borrowing Agent. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, with the consent of the Borrowing Agent (such
consent not to be unreasonably withheld or delayed and shall not be required
during the continuance of an Event of Default) to appoint a successor Agent. If
no such successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days (or 10 days, as the case may
be) after the retiring Agent gives notice of its resignation (or such earlier
day as shall be agreed by the Required Lenders) (the "Resignation Effective
Date"), then the retiring Agent may (but shall not be obligated to), on behalf
of the Lenders, appoint a successor Agent. Whether or not a successor Agent has
been appointed, such resignation shall become effective in accordance with such
notice on the Resignation Effective Date. Notwithstanding the foregoing, no
consent and no written notice shall be required to the extent CBF appoints PNC
as the administrative agent in connection with the ABL Commitment Date.

 

(b)               With effect from the Resignation Effective Date, (i) the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any Collateral held
by such Agent on behalf of a Secured Party under any of the Loan Documents, the
retiring Agent shall continue to hold such collateral security until the earlier
of (i) the date that is 60 days after such Agent resignation and (ii) the date
on which a successor Agent is appointed) and (ii) all payments, communications
and determinations provided to be made by, to or through such retiring Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until
such time, if any, as the Required Lenders appoint a successor Agent as provided
for in Section 10.07(a) above. Upon the acceptance of a successor's Agent's
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents. After the retiring
Agent's resignation hereunder and under the other Loan Documents, the provisions
of this Article, Section 12.04 and Section 12.15 shall continue in effect for
the benefit of such retiring Agent in respect of any actions taken or omitted to
be taken by it while the retiring Agent was acting as Agent.

 

Section 10.08    Collateral Matters.

 

(a)                The Agents may (but shall not be obligated) from time to time
make such disbursements and advances ("Agent Advances") which either Agent, in
its sole discretion, deems necessary or desirable to preserve, protect, prepare
for sale or lease or dispose of the Collateral or any portion thereof, to
enhance the likelihood or maximize the amount of repayment by the Borrowers of
the Loans, Letter of Credit Obligations and other Obligations or to pay any
other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as described
in Section 12.04. The Agent Advances shall be repayable on demand and be secured
by the Collateral and shall bear interest at a rate per annum equal to the rate
then applicable to Revolving Loans that are Reference Rate Loans. The Agent
Advances shall constitute Obligations hereunder which may be charged to the Loan
Account in accordance with Section 4.02. The Agent making such Agent Advance
shall notify each Lender and the Borrowing Agent in writing of each such Agent
Advance, which notice shall include a description of the purpose of such Agent
Advance. Without limitation to its obligations pursuant to Section 10.05, each
Lender agrees that it shall make available to the applicable Agent, upon such
Agent's demand, in Dollars in immediately available funds, the amount equal to
such Lender's Pro Rata Share of each such Agent Advance. If such funds are not
made available to the applicable Agent by such Lender, such Agent shall be
entitled to recover such funds on demand from such Lender, together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to such Agent, at the Federal Funds Effective Rate for 3
Business Days and thereafter at the Reference Rate.

 

- 153 -

 

(b)               The Lenders hereby irrevocably authorize the Collateral Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Collateral Agent upon any Collateral upon termination of the Total
Commitment and payment and satisfaction of all Loans and all other Obligations
in accordance with the terms hereof; or constituting property being sold or
disposed of in the ordinary course of any Loan Party's business or otherwise in
compliance with the terms of this Agreement and the other Loan Documents; or
constituting property in which the Loan Parties owned no interest at the time
the Lien was granted or at any time thereafter; or if approved, authorized or
ratified in writing by the Lenders in accordance with Section 12.02. Upon
request by the Collateral Agent at any time, the Lenders will confirm in writing
the Collateral Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).

 

(c)                Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in
writing, upon request by the Collateral Agent, the authority to release
Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon
receipt by the Collateral Agent of confirmation from the Lenders of its
authority to release any particular item or types of Collateral, and upon prior
written request by any Loan Party, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Agents and the Lenders upon such Collateral; provided,
however, that (i) the Collateral Agent shall not be required to execute any such
document on terms which, in the Collateral Agent's opinion, would expose the
Collateral Agent to liability or create any obligations or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Lien upon (or obligations of any Loan Party in respect of)
all interests in the Collateral retained by any Loan Party.

 

(d)               Anything contained in any of the Loan Documents to the
contrary notwithstanding, the Loan Parties, each Agent and each Lender hereby
agree that (i) no Lender shall have any right individually to realize upon any
of the Collateral under any Loan Document or to enforce any Guaranty, it being
understood and agreed that all powers, rights and remedies under the Loan
Documents may be exercised solely by the Collateral Agent for the benefit of the
Lenders in accordance with the terms thereof, (ii) in the event of a foreclosure
by the Collateral Agent on any of the Collateral pursuant to a public or private
sale, the Administrative Agent, the Collateral Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and (iii) the
Collateral Agent, as agent for and representative of the Agents and the Lenders
(but not any other Agent or any Lender or Lenders in its or their respective
individual capacities unless the Required Lenders shall otherwise agree in
writing) shall be entitled (either directly or through one or more acquisition
vehicles) for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral to be sold (A) at any
public or private sale, (B) at any sale conducted by the Collateral Agent under
the provisions of the Uniform Commercial Code (including pursuant to Sections
9-610 or 9-620 of the Uniform Commercial Code) or PPSA, (C) at any sale or
foreclosure conducted by the Collateral Agent (whether by judicial action or
otherwise) in accordance with applicable law or (D) any sale conducted pursuant
to the provisions of any Debtor Relief Law (including Section 363 of the
Bankruptcy Code), to use and apply all or any of the Obligations as a credit on
account of the purchase price for any Collateral payable by the Collateral Agent
at such sale.

 

- 154 -

 

(e)                The Collateral Agent shall have no obligation whatsoever to
any Lender to assure that the Collateral exists or is owned by the Loan Parties
or is cared for, protected or insured or has been encumbered or that the Lien
granted to the Collateral Agent pursuant to this Agreement or any other Loan
Document has been properly or sufficiently or lawfully created, perfected,
protected or enforced or is entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Collateral Agent in this Section 10.08 or in any
other Loan Document, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Collateral Agent
may act in any manner it may deem appropriate, in its sole discretion, given the
Collateral Agent's own interest in the Collateral as one of the Lenders and that
the Collateral Agent shall have no duty or liability whatsoever to any other
Lender, except as otherwise provided herein or in the other Loan Documents.

 

Section 10.09    Agency for Perfection. Each Agent and each Lender hereby
appoints each other Agent and each other Lender as agent and bailee for the
purpose of perfecting the security interests in and liens upon the Collateral in
assets which, in accordance with Article 9 of the Uniform Commercial Code, can
be perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and each Agent and each Lender hereby acknowledges
that it holds possession of or otherwise controls any such Collateral for the
benefit of the Agents and the Lenders as secured party. Should the
Administrative Agent or any Lender obtain possession or control of any such
Collateral, the Administrative Agent or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent's request therefor shall
deliver such Collateral to the Collateral Agent or in accordance with the
Collateral Agent's instructions. In addition, the Collateral Agent shall also
have the power and authority hereunder to appoint such other sub-agents as may
be necessary or required under applicable state law or otherwise to perform its
duties and enforce its rights with respect to the Collateral and under the Loan
Documents. Each Loan Party by its execution and delivery of this Agreement
hereby consents to the foregoing.

 

- 155 -

 

Section 10.10    No Reliance on any Agent's Customer Identification Program
Certifications From Banks and Participants; USA PATRIOT Act.

 

(a)                Each Lender acknowledges and agrees that neither such Lender,
nor any of its Affiliates, participants or assignees, may rely on any Agent to
carry out such Lender's, Affiliate's, participant's or assignee's customer
identification program, or other requirements imposed by the USA PATRIOT Act or
the regulations issued thereunder, including the regulations set forth in 31 CFR
§ 103.121, as hereafter amended or replaced ("CIP Regulations"), or any other
Anti-Terrorism Laws, including any programs involving any of the following items
relating to or in connection with any of the Loan Parties, their Affiliates or
their agents, the Loan Documents or the transactions hereunder or contemplated
hereby: (1) any identity verification procedures, (2) any recordkeeping, (3)
comparisons with government lists, (4) customer notices or (5) other procedures
required under the CIP Regulations or other regulations issued under the USA
PATRIOT Act. Each Lender, Affiliate, participant or assignee subject to
Section 326 of the USA PATRIOT Act will perform the measures necessary to
satisfy its own responsibilities under the CIP Regulations.

 

(b)               Each Lender or assignee or participant of a Lender that is not
incorporated under the laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA PATRIOT Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country, and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to each Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a "shell" and
certifying to other matters as required by Section 313 of the USA PATRIOT Act
and the applicable regulations: (1) within ten (10) days after the Effective
Date, and (2) as such other times as are required under the USA PATRIOT Act.

 

(c)                The USA PATRIOT Act requires all financial institutions to
obtain, verify and record certain information that identifies individuals or
business entities which open an "account" with such financial institution.
Consequently, any Agent or Lender may from time to time request, and each Loan
Party shall provide to such Agent or Lender, such Loan Party's name, address,
tax identification number and/or such other identifying information as shall be
necessary for such Agent or such Lender to comply with the USA PATRIOT Act and
any other Anti-Terrorism Law.

 

(d)               Each Loan Party acknowledges that, pursuant to the provisions
of Canadian Anti-Terrorism Laws, Agents and Lenders may be required to obtain,
verify and record information regarding each Loan Party, its respective
directors, authorized signing officers, direct or indirect shareholders or other
Persons in control of such Loan Party, and the transactions contemplated hereby.
If an Agent has ascertained the identity of any Loan Party or any authorized
signatories of any Loan Party for the purposes of applicable Canadian
Anti-Terrorism Laws, then such Agent:

 

(i)                 shall be deemed to have done so as an agent for each Lender,
and this Agreement shall constitute a “written agreement” in such regard between
each Lender and the Agent within the meaning of applicable Canadian
Anti-Terrorism Laws; and

 

- 156 -

 

(ii)               shall provide to each Lender copies of all information
obtained in such regard without any representation or warranty as to its
accuracy or completeness.

 

Notwithstanding the provisions of this Section and except as may otherwise be
agreed in writing, each Lender agrees no Agent has any obligation to ascertain
the identity of the Loan Parties or any authorized signatories of the Loan
Parties on behalf of any Lender, or to confirm the completeness or accuracy of
any information it obtains from the Loan Parties or any such authorized
signatory in doing so.

 

Section 10.11    No Third Party Beneficiaries. The provisions of this Article
are solely for the benefit of the Secured Parties (except with respect to (i)
the Borrowing Agent's consent right to the appointment of successor Agents under
Section 10.07, (ii) the retiring Agent's obligation to continue to hold
Collateral as set forth in Section 10.07(b) and (ii) the Collateral Agent's
obligation to release liens under Section 10.08(b)), and no Loan Party shall
have rights as a third-party beneficiary of any of such provisions.

 

Section 10.12    No Fiduciary Relationship. It is understood and agreed that the
use of the term "agent" herein or in any other Loan Document (or any other
similar term) with reference to any Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law (other than in the case of the Collateral Agent
as required in order to give effect to its appointment as trustee under the UK
Security Documents). Instead such term is used as a matter of market custom, and
is intended to create or reflect only an administrative relationship between
contracting parties.

 

Section 10.13    Reports; Confidentiality; Disclaimers. By becoming a party to
this Agreement, each Lender:

 

(a)                is deemed to have requested that each Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report and each appraisal and valuations report, if any, with
respect to the Parent or any of its Subsidiaries (each, a "Report") prepared by
or at the request of such Agent, and each Agent shall so furnish each Lender
with each such Report,

 

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

 

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

 

(d)               agrees to keep all Reports and other material, non-public
information regarding the Parent and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner in
accordance with Section 12.19, and

 

- 157 -

 

(e)                without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold any 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 the Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrowers (including Letters of Credit), and (ii) to
pay and protect, and indemnify, defend and hold any Agent and any 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 any such 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.

 

Section 10.14    [Intentionally Omitted].

 

Section 10.15    Collateral Agent May File Proofs of Claim TC " SECTION 9.    
Administrative Agent May File Proofs of Claim " \f C \l " 2 " . In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, the Collateral Agent (irrespective of
whether the principal of any Loan or Letter of Credit Obligation shall then be
due and payable as herein expressed or by declaration or otherwise and
irrespective of whether any Agent shall have made any demand on the Borrowers)
shall be entitled and empowered (but not obligated) by intervention in such
proceeding or otherwise:

 

(a)                to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, Letter of
Credit Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to have the
claims of the Secured Parties (including any claim for the compensation,
expenses, disbursements and advances of the Secured Parties and their respective
agents and counsel and all other amounts due the Secured Parties hereunder and
under the other Loan Documents) allowed in such judicial proceeding; and

 

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

 

and any receiver, receiver and manager, custodian, conservator, trustee,
administrator, liquidator, monitor, assignee for the benefit of creditors,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Secured Party to make such payments to the Collateral Agent
and, in the event that the Collateral Agent shall consent to the making of such
payments directly to the Secured Parties, to pay to the Collateral Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Collateral Agent and its agents and counsel, and any other amounts due
the Collateral Agent hereunder and under the other Loan Documents.

 

Section 10.16    Cerberus as Sub-Administrative Agent. As of the ABL Commitment
Date, the Administrative Agent hereby appoints CBF as sub-agent of the
Administrative Agent to receive principal and interest payments with respect to
the Term Loans and payments of other Term Loan Obligations. Each Loan Party by
its execution and delivery of this Agreement hereby consents to the foregoing
and agrees to make such payments to the Sub-Administrative Agent.

 

- 158 -

 

Article XI

GUARANTY

 

Section 11.01    Guaranty.

 

(a)                Each Guarantor hereby jointly and severally unconditionally
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of the Borrowers, now
or hereafter existing under any Loan Document, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding irrespective of whether a claim therefor is allowed
in such case or proceeding), Letter of Credit Obligations, fees, expenses or
otherwise and whether accruing before or after the commencement of any
Insolvency Proceeding (notwithstanding the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code), (such obligations, to the
extent not paid by the Borrowers, being the "Guaranteed Obligations"), and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agents, the Lenders, the Bank Product Provider and the
L/C Issuer (or any of them) in enforcing any rights under the guaranty set forth
in this Article XI.

 

(b)               Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
applicable Guaranteed Obligations and would be owed by the Borrowers to the
Agents, the Lenders, the Bank Product Providers and the L/C Issuer (as
applicable) under any Loan Document but for the fact that they are unenforceable
or not allowable due to the existence of an Insolvency Proceeding involving the
Borrowers. Notwithstanding any of the foregoing, Guaranteed Obligations shall
not include any Excluded Hedge Liabilities. In no event shall the obligation of
any Guarantor hereunder exceed the maximum amount such Guarantor could guarantee
under any Debtor Relief Law.

 

Section 11.02    Guaranty Absolute. Each Guarantor jointly and severally
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents or the Lenders with respect thereto. Each Guarantor
agrees that this Article XI constitutes a guaranty of payment when due and not
of collection and waives any right to require that any resort be made by any
Agent or any Lender to any Collateral. The obligations of each Guarantor under
this Article XI are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against each Guarantor to
enforce such obligations, irrespective of whether any action is brought against
any Loan Party or whether any Loan Party is joined in any such action or
actions. The liability of each Guarantor under this Article XI shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

 

- 159 -

 

(a)       any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

 

(b)       any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or otherwise;

 

(c)       any taking, exchange, release or non-perfection of any Collateral, or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;

 

(d)       the existence of any claim, set-off, defense or other right that any
Guarantor may have at any time against any Person, including, without
limitation, any Secured Party;

 

(e)       any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of any Loan Party; or

 

(f)       any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Secured Parties that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.

 

This Article XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Secured Parties or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrowers or otherwise, all
as though such payment had not been made.

 

Section 11.03    Waiver. Each Guarantor hereby waives (i) promptness and
diligence, (ii) notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this Article XI and any requirement that the
Secured Parties exhaust any right or take any action against any Loan Party or
any other Person or any Collateral, (iii) any right to compel or direct any
Agent, any Secured Party to seek payment or recovery of any amounts owed under
this Article XI from any one particular fund or source or to exhaust any right
or take any action against any other Loan Party, any other Person or any
Collateral, (iv) any requirement that any Secured Party 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 Loan Party, any other Person or
any Collateral, and (v) any other defense available to any Guarantor. Each
Guarantor agrees that the Agents, the Secured Parties shall have no obligation
to marshal any assets in favor of any Guarantor or against, or in payment of,
any or all of the Obligations. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 11.03 is knowingly made in
contemplation of such benefits. Each Guarantor hereby waives any right to revoke
this Article XI, and acknowledges that this Article XI is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.

 

- 160 -

 

Section 11.04    Continuing Guaranty; Assignments. This Article XI is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the Payment In Full of the Guaranteed Obligations and all other amounts
payable under this Article XI and the Final Maturity Date, (b) be binding upon
each Guarantor, its successors and assigns and (c) inure to the benefit of and
be enforceable by the Secured Parties and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or any portion of its Commitments. its Loans and the Letter of
Credit Obligations owing to it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted such
Lender herein or otherwise, in each case as provided in Section 12.07.

 

Section 11.05    Subrogation. Unless and until all of the Guaranteed Obligations
or and all other amounts payable under this Article shall have been Paid In Full
in cash and all of the Commitments have been terminated, no Guarantor shall
exercise any rights that it may now or hereafter acquire against any Loan Party
or any other guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this Article XI, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Secured Parties against any Loan Party or any other guarantor or
any Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from any Loan Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right. If any
amount shall be paid to any Guarantor in violation of the immediately preceding
sentence or Section 7.02(m)(ii), such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Secured
Parties to be credited and applied to the Guaranteed Obligations, and all other
amounts payable under this Article XI, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as Collateral for,
any Guaranteed Obligations, or other amounts payable under this Article XI
thereafter arising. If (i) any Guarantor shall make payment to the Secured
Parties of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Article XI shall
be Paid In Full and (iii) the Final Maturity Date shall have occurred, the
Secured Parties will, at such Guarantor's request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.

 

Section 11.06    Release of Guarantors If, in compliance with the terms and
provisions of the Loan Documents, (i) all or substantially all of the Equity
Interests of any Guarantor are sold or otherwise transferred to a Person or
Persons none of which is a Loan Party in a transaction permitted hereunder or
(ii) any Guarantor ceases to be a Subsidiary as a result of a transaction or
designation permitted hereunder (any such Guarantor, and any Guarantor referred
to in clause (i), a "Transferred Guarantor"), such Transferred Guarantor shall,
upon the consummation of such sale or transfer or other transaction (but subject
to the proviso below), be automatically released from its obligations under this
Agreement (including under Section 12.15 hereof) and the other Loan Documents,
including its obligations to pledge and grant any Collateral owned by it
pursuant to any Loan Document and, in the case of a sale of all or substantially
all of the Equity Interests of the Transferred Guarantor, the pledge of such
Equity Interests to the Collateral Agent pursuant to the Loan Documents shall be
automatically released, and, so long as the Borrowing Agent shall have provided
the Agents such certifications or documents as any Agent shall reasonably
request, the Collateral Agent shall take such actions as are necessary to effect
each release described in this Section 11.06 in accordance with the relevant
provisions of the Loan Documents.

 

- 161 -

 

Article XII

MISCELLANEOUS

 

Section 12.01    Notices, Etc.

 

(a)                Notices Generally. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (certified mail,
postage prepaid and return receipt requested), telecopied or delivered by hand,
Federal Express or other reputable overnight courier, if to any Loan Party, at
the following address:

 

 

Harvard Bioscience, Inc.

84 October Hill Road

Holliston, MA 01746
Attn: Mr. Robert Gagnon

 

with a copy to:

 

Burns & Levinson LLP 

125 Summer Street

Boston, MA 02110

Attention: Chad J. Porter

Telephone: 617-345-3686

Telecopier: 617-345-3299

 

if to the Collateral Agent, to it at the following address:

 

CERBERUS BUSINESS FINANCE, LLC
875 Third Avenue
New York, New York 10022
Attention: Timothy Fording
Telephone: 212.891.2147
Telecopier: 212.909.1489

 

with a copy (which shall not constitute notice) to:

 

SCHULTE ROTH & ZABEL LLP
919 Third Avenue
New York, New York 10022

- 162 -

 

Attention: Kirby Chin
Telephone: 212.756.2000
Telecopier: 212.593.5955

 

if to the Administrative Agent, at any time prior to the ABL Commitment Date, to
it at the Collateral Agent’s address above and, at any time after the ABL
Commitment Date, to it at the address specified by PNC.

 

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed (certified mail, postage prepaid and return receipt
requested), when received or 3 days after deposited in the mails, whichever
occurs first, (ii) if telecopied, when transmitted and confirmation received, or
(iii) if delivered by hand, Federal Express or other reputable overnight
courier, upon delivery, except that notices to any Agent pursuant to Article II
shall not be effective until received by such Agent.

 

(b)               Electronic Communications.

 

(i)                 Each Agent and each Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Agents, provided that the foregoing shall
not apply to notices to any Lender pursuant to Article II if such Lender has
notified the Agents that it is incapable of receiving notices under such Article
by electronic communication.

 

(ii)               Unless the Administrative Agent otherwise prescribes,
(A) notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), and (B) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (A), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (A) and (B) above, if such notice,
email or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day for the recipient.

 

Section 12.02    Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document (excluding the Fee Letter), and no
consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed (x) in the case of an
amendment, consent or waiver to cure any ambiguity, omission, defect or
inconsistency or granting a new Lien for the benefit of the Agents and the
Lenders or extending an existing Lien over additional property, by the Agents
and the Borrowers, (y) in the case of any other waiver or consent, by the
Required Lenders (or by the Collateral Agent with the consent of the Required
Lenders) and (z) in the case of any other amendment, by the Required Lenders (or
by the Collateral Agent with the consent of the Required Lenders) and the
Borrowers, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall:

 

- 163 -

 

(i)                 increase the Commitment of any Lender, reduce the principal
of, or interest on, the Loans payable to any Lender, reduce the amount of any
fee payable for the account of any Lender, or postpone or extend any scheduled
date fixed for any payment of principal of, or interest or fees on, the Loans
payable to any Lender, in each case, without the written consent of such Lender;

 

(ii)               increase the Total Commitment without the written consent of
each Lender;

 

(iii)             change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans that is required for the Lenders or any of
them to take any action hereunder without the written consent of each Lender;

 

(iv)             amend the definition of "Required Lenders" or "Pro Rata Share"
without the written consent of each Lender;

 

(v)               release all or a substantial portion of the Collateral (except
as otherwise provided in this Agreement and the other Loan Documents),
subordinate any Lien granted in favor of the Collateral Agent for the benefit of
the Agents and the Lenders, or release any Borrower or any Guarantor (except in
connection with a Disposition of the Equity Interests thereof permitted by
Section 7.02(c)(ii)), in each case, without the written consent of each Lender;

 

(vi)             amend, modify or waive Section 4.02, Section 4.03 or this
Section 12.02 of this Agreement without the written consent of each Lender;

 

(vii)           amend the definition of "Availability," "Bank Product Provider"
(or any provision expressly relating to Bank Product Obligations), "Bank Product
Obligations," "Bank Product Reserve," "Borrowing Base," "Borrowing Base Assets",
"Borrowing Base Certificate," "Cash Collateralize" (or any provision hereof
relating to the Cash Collateralization of Letter of Credit Obligations),
"Dilution Reserve," "Eligible Account", "Eligible Insured Foreign Receivables",
"Eligible Inventory", "Eligible Work-in-Process", "Excluded Hedge Liability" (or
any provision expressly relating to Excluded Hedge Liabilities, including
Section 12.23), "Lender-Provided Hedge Agreement," "Letter of Credit Sublimit,"
"Maximum Revolving Loan Amount," "Permitted Discretion" (as used with respect to
the Administrative Agent), "Pro Rata Share," "Required Lenders," or "Reserves,"
without the written consent of each Agent and each Revolving Lender, or

 

(viii)         amend, modify or waive Section 2.01(b)(i), Section 2.05(c),
Section 5.02 (it being understood, however, that this clause (viii) shall not
impact the effectiveness of any waiver of a Default or Event of Default,
including, but not limited to, for purposes of Section 5.02), Section 10.08 or
Section 12.07(b) (as it relates to the Revolving Lenders) without the consent of
the Revolving Loan Lenders.

 

- 164 -

 

Notwithstanding the foregoing, (A) no amendment, waiver or consent shall, unless
in writing and signed by an Agent, affect the rights or duties of such Agent
(but not in its capacity as a Lender) under this Agreement or the other Loan
Documents, (B) any amendment, waiver or consent to any provision of this
Agreement (including Sections 4.01 and 4.02) that permits any Loan Party or any
of their respective Affiliates to purchase Loans on a non-pro rata basis, become
an eligible assignee pursuant to Section 12.07 and/or make offers to make
optional prepayments on a non-pro rata basis shall require the prior written
consent of the Required Lenders rather than the prior written consent of each
Lender directly affected thereby and (C) the consent of the Borrowers shall not
be required to change any order of priority set forth in Section 2.05(d) and
Section 4.03. Notwithstanding anything to the contrary herein, no Defaulting
Lender, Loan Party or any of their respective Affiliates that is a Lender shall
have any right to approve or disapprove any amendment, waiver or consent under
the Loan Documents and any Loans held by such Person for purposes hereof shall
be automatically deemed to be voted pro rata according to the Loans of all other
Lenders in the aggregate (other than such Defaulting Lender or Loan Party).

 

Section 12.03    No Waiver; Remedies, Etc. No failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.

 

Section 12.04    Expenses; Attorneys' Fees. The Borrowers will pay on demand,
all reasonable and documented out-of-pocket costs and expenses incurred by or on
behalf of each Agent (and, in the case of clauses (b) through (k) below (except,
in the case of clause (k), with respect to clause (a)), each Lender, including,
without limitation, reasonable and documented out-of-pocket fees, costs, client
charges and expenses of one outside counsel for each Agent (and, in the case of
clauses (b) through (k) below (except, in the case of clause (k), with respect
to clause (a)), each Lender), accounting, due diligence, periodic field audits,
physical counts, valuations, investigations, searches and filings, monitoring of
assets, appraisals of Collateral, the rating of the Loans, title searches and
reviewing environmental assessments, miscellaneous disbursements, examination,
travel, lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including, without limitation, the
preparation of any additional Loan Documents pursuant to Section 7.01(b) or the
review of any of the agreements, instruments and documents referred to in
Section 7.01(f)), (b) any requested amendments, waivers or consents to this
Agreement or the other Loan Documents whether or not such documents become
effective or are given, (c) the preservation and protection of the Agents' or
any of the Lenders' rights under this Agreement or the other Loan Documents, (d)
the defense of any claim or action asserted or brought against any Agent or any
Lender by any Person that arises from or relates to this Agreement, any other
Loan Document, the Agents' or the Lenders' claims against any Loan Party, or any
and all matters in connection therewith, (e) the commencement or defense of, or
intervention in, any court proceeding arising from or related to this Agreement
or any other Loan Document, (f) the filing of any petition, complaint, answer,
motion or other pleading by any Agent or any Lender, or the taking of any action
in respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (g) the protection, collection, lease,
sale, taking possession of or liquidation of, any Collateral or other security
in connection with this Agreement or any other Loan Document, (h) any attempt to
enforce any Lien or security interest in any Collateral or other security in
connection with this Agreement or any other Loan Document, (i) any attempt to
collect from any Loan Party, (j) (m) the rating of the Loans by one or more
rating agencies in connection with any Lender's Securitization, (k) the receipt
by any Agent or any Lender of any advice from professionals with respect to any
of the foregoing. Without limitation of the foregoing or any other provision of
any Loan Document: (x) the Borrowers agree to pay all broker fees that may
become due in connection with the transactions contemplated by this Agreement
and the other Loan Documents and (y) if the Borrowers fail to perform any
covenant or agreement contained herein or in any other Loan Document, any Agent
may itself perform or cause performance of such covenant or agreement, and the
expenses of such Agent incurred in connection therewith shall be reimbursed on
demand by the Borrowing Agent. The obligations of the Borrowers under this
Section 12.04 shall survive the repayment of the Obligations and discharge of
any Liens granted under the Loan Documents.

 

- 165 -

 

Section 12.05    Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Agent or such Lender or any of their
respective Affiliates to or for the credit or the account of any Loan Party
against any and all obligations of the Loan Parties either now or hereafter
existing under any Loan Document, irrespective of whether or not such Agent or
such Lender shall have made any demand hereunder or thereunder and although such
obligations may be contingent or unmatured; provided that in the event that any
Defaulting Lender shall exercise any such right of setoff, (a) all amounts so
set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 4.03 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Agents and the Lenders, and (b) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. No Lender or L/C Issuer shall
exercise any such right of set-off without the prior consent of the Agents or
the Required Lenders. Each Agent and each Lender agrees to notify such Loan
Party promptly after any such set-off and application made by such Agent or such
Lender or any of their respective Affiliates provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Agents and the Lenders under this Section 12.05 are in addition to
the other rights and remedies (including other rights of set-off) which the
Agents and the Lenders may have under this Agreement or any other Loan Documents
of law or otherwise.

 

- 166 -

 

Section 12.06    Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 12.07    Assignments and Participations.

 

(a)                This Agreement and the other Loan Documents shall be binding
upon and inure to the benefit of each Loan Party and each Agent and each Lender
and their respective successors and assigns; provided, however, that none of the
Loan Parties may assign or transfer any of its rights hereunder or under the
other Loan Documents without the prior written consent of each Lender and any
such assignment without the Lenders' prior written consent shall be null and
void.

 

(b)               Each Lender may (x) with the written consent of the Collateral
Agent, assign to one or more other lenders or other entities all or a portion of
its rights and obligations under this Agreement with respect to all or a portion
of its Term Loan Commitment and any Term Loan made by it and (y) with the
written consent of each Agent, assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this Agreement
with respect to all or a portion of its Revolving Credit Commitment and the
Revolving Loans made by it; provided, however, that (i) such assignment is in an
amount which is at least $2,500,000 or a multiple of $1,000,000 in excess
thereof (or the remainder of such Lender's Commitment) (except such minimum
amount shall not apply to an assignment by a Lender to (x) a Lender, an
Affiliate of such Lender or a Related Fund of such Lender or (y) a group of new
Lenders, each of whom is an Affiliate or Related Fund of each other to the
extent the aggregate amount to be assigned to all such new Lenders is at least
$2,500,000 or a multiple of $1,000,000 in excess thereof), (ii) the parties to
each such assignment shall execute and deliver to the Collateral Agent and the
Administrative Agent, for its acceptance, an Assignment and Acceptance, together
with any promissory note subject to such assignment and such parties shall
deliver to the Collateral Agent, for the benefit of the Collateral Agent, a
processing and recordation fee of $5,000 (except the payment of such fee shall
not be required in connection with an assignment by a Lender to a Lender, an
Affiliate of such Lender or a Related Fund of such Lender or if otherwise waived
by the Collateral Agent), (iii) no written consent of the Collateral Agent or
the Administrative Agent shall be required if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of such Lender, and
(iv) no such assignment shall be made to (A) any Loan Party or any of their
respective Affiliates or (B) any Defaulting Lender or any of its Affiliates, or
any Person who, upon becoming a Lender hereunder, would constitute any of the
foregoing Persons described in this clause (B). Upon such execution, delivery
and acceptance, from and after the effective date specified in each Assignment
and Acceptance and recordation on the Register, which effective date shall be at
least 3 Business Days after the delivery thereof to the Agents (or such shorter
period as shall be agreed to by the Agents and the parties to such assignment),
(A) the assignee thereunder shall become a "Lender" hereunder and, in addition
to the rights and obligations hereunder held by it immediately prior to such
effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its 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, such
Lender shall cease to be a party hereto). Notwithstanding anything to the
contrary contained in this Section 12.07(b), a Lender may assign any or all of
its rights under the Loan Documents to an Affiliate of such Lender or a Related
Fund of such Lender without delivering an Assignment and Acceptance to the
Agents or to any other Person (a "Related Party Assignment"); provided, however,
that (I) the Borrowing Agent and the Administrative Agent may continue to deal
solely and directly with such assigning Lender until an Assignment and
Acceptance has been delivered to the Administrative Agent for recordation on the
Register, (II) the Collateral Agent may continue to deal solely and directly
with such assigning Lender until receipt by the Collateral Agent of a copy of
the fully executed Assignment and Acceptance pursuant to Section 12.07(e),
(III) the failure of such assigning Lender to deliver an Assignment and
Acceptance to the Agents shall not affect the legality, validity, or binding
effect of such assignment, and (IV) an Assignment and Acceptance between the
assigning Lender and an Affiliate of such Lender or a Related Fund of such
Lender shall be effective as of the date specified in such Assignment and
Acceptance and recordation on the Related Party Register referred to in the last
sentence of Section 12.07(d) below.

 

- 167 -

 

(c)                By executing and delivering an Assignment and Acceptance, the
assigning Lender 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, the 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
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) except as provided in the last sentence of this
Section 12.07(b), the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or any of its Subsidiaries or the performance or observance by any Loan
Party of any of its obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement and the other Loan Documents, together with such other
documents and information 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 the assigning Lender, any
Agent or any 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 and the other Loan Documents; (v) such
assignee appoints and authorizes the Agents to take such action as agents on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agents by the terms hereof and thereof,
together with such powers as are reasonably incidental hereto and thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement and the other Loan
Documents are required to be performed by it as a Lender.

 

- 168 -

 

(d)               The Administrative Agent shall, acting solely for this purpose
as a non-fiduciary agent of the Borrowers, maintain, or cause to be maintained
at the Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) and Letter of Credit Obligation owing to
each Lender from time to time. Subject to the last sentence of this Section
12.07(d), the entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowing Agent and any Lender at any reasonable time and
from time to time upon reasonable prior notice. This Section 12.07(d) shall be
construed so that the Loans and Commitments are at all times maintained in
"registered form" within the meaning of Sections 163(f), 871(h)(2), and
881(c)(2) of the Code. In the case of an assignment pursuant to the last
sentence of Section 12.07(b) as to which an Assignment and Acceptance is not
delivered to the Administrative Agent, (i) the assigning Lender shall, acting
solely for this purpose as a non-fiduciary agent of the Borrowers, maintain, or
cause to be maintained, a register (each, a "Related Party Register") comparable
to the Register on behalf of the Borrowers, (ii) the entries in each Related
Party Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agents and the Lenders shall treat each Person
whose name is recorded in such Related Party Register as a Lender hereunder for
all purposes of this Agreement and (iii) each Related Party Register shall be
available for inspection by the Borrowing Agent and any Lender at any reasonable
time and from time to time upon reasonable prior notice.

 

(e)                Upon receipt by the Administrative Agent of a completed
Assignment and Acceptance, and subject to any consent required from the
Administrative Agent or the Collateral Agent pursuant to Section 12.07(b) which
consent of the Collateral Agent must be evidenced by the Collateral Agent's
execution of an acceptance to such Assignment and Acceptance), the
Administrative Agent shall accept such assignment, record the information
contained therein in the Register and provide to the Collateral Agent a copy of
the fully executed Assignment and Acceptance.

 

(f)                [Intentionally Omitted].

 

(g)               In the event that any Lender sells participations in a Loan,
such Lender shall, acting for this purpose as a non-fiduciary agent on behalf of
the Borrowers, maintain, or cause to be maintained, a register, on which it
enters the name of all participants in the Loans held by it and the principal
amount (and stated interest thereon) of the portion of the Loan that is the
subject of the participation (the "Participant Register"). A Loan (and the
registered note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such Loan
(and the registered note, if any, evidencing the same) may be effected only by
the registration of such participation on the Participant Register, which shall
be conclusive absent manifest error. The Participant Register shall be available
for inspection by the Borrowing Agent and any Lender at any reasonable time and
from time to time upon reasonable prior notice. The Participant Register shall
be maintained in registered form within the meaning of Section 5f.103-1(c) of
the Treasury Regulations.

 

- 169 -

 

(h)               Any Foreign Lender who purchases or is assigned or
participates in any portion of a Loan shall comply with Sections 2.09(e) and
2.09(h).

 

(i)                 Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Commitments, the Loans made by it and its Pro Rata Share of
the Letter of Credit Obligations); provided that (i) such Lender's obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the Borrowers, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents; and (iii) a participant shall not be entitled to require such Lender
to take or omit to take any action hereunder except (A) action directly
effecting an extension of the maturity dates or decrease in the principal amount
of the Loans or Letter of Credit Obligations, (B) action directly effecting an
extension of the due dates or a decrease in the rate of interest payable on the
Loans or the fees payable under this Agreement, or (C) actions directly
effecting a release of all or a substantial portion of the Collateral or any
Loan Party (except as set forth in Section 10.08 of this Agreement or any other
Loan Document).

 

(j)                 Borrowers agree that each participant in a Loan and each
assignee in a Related Party Assignment that has not become a Lender with respect
to the assigned interest shall be entitled to the benefits of Section 2.09
(subject to the requirements and limitations therein, including the requirements
under Section 2.09(e) (it being understood that the documentation required from
the participant or assignee under Section 2.09(e) shall be provided in the first
instance to the Person through whom such participation or assigned interest is
held)) to the same extent as if it were a Lender and had acquired the relevant
interest in the Loan by assignment under Section 12.07(b) (other than a Related
Party Assignment); provided that such participant or assignee (i) agrees to be
subject to the provisions of Section 2.09 as if it were a Lender that was an
assignee under Section 12.07(b) and (ii) shall not be entitled to receive any
greater benefit than the applicable Lender would have received if such
participation or assignment had been effected as an assignment pursuant to
Section 12.07(b).

 

(k)               Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or loans made to such Lender pursuant to
securitization or similar credit facility (a "Securitization"); provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto. The Loan Parties shall cooperate with such Lender and its Affiliates to
effect the Securitization including, without limitation, by providing such
information as may be reasonably requested by such Lender in connection with the
rating of its Loans or the Securitization.

 

Section 12.08    Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile or electronic mail shall be equally as effective
as delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile or
electronic mail 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.

 

- 170 -

 

Section 12.09    GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF NEW YORK.

 

Section 12.10    CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.

 

(a)                ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS
PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
BORROWERS AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01, SUCH SERVICE
TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE LOAN PARTIES AGREE 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 HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE
LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY
OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

- 171 -

 

(b)               Each Foreign Loan Party hereby irrevocably appoints the Parent
(in such capacity, the "Process Agent"), with an office on the date hereof at 84
October Hill Road, Holliston, MA 01746, as its agent to receive on behalf of
each Foreign Loan Party service of the summons and complaint and any other
process which may be served in any action or proceeding described above. Such
service may be made by mailing or delivering a copy of such process to each
Foreign Loan Party, in care of the Process Agent at the address specified above
for such Process Agent, and such Foreign Loan Party hereby irrevocably
authorizes and directs the Process Agent to accept such service on its behalf.
Each Foreign Loan Party covenants and agrees that, for so long as it shall be
bound under this Agreement or any other Loan Document, it shall maintain a duly
appointed agent for the service of summons and other legal process in New York,
New York, United States of America, for the purposes of any legal action, suit
or proceeding brought by any party in respect of this Agreement or such other
Loan Document and shall keep the Agents advised of the identity and location of
such agent. If for any reason there is no authorized agent for service of
process in New York, each Foreign Loan Party irrevocably consents to the service
of process out of the said courts by mailing copies thereof by registered United
States air mail postage prepaid to it at its address specified in Section 12.01.
Nothing in this Section 12.10 shall affect the right of any Secured Party to (i)
commence legal proceedings or otherwise sue any Foreign Loan Party in the
country in which it is domiciled or in any other court having jurisdiction over
such Foreign Loan Party or (ii) serve process upon any Foreign Loan Party in any
manner authorized by the laws of any such jurisdiction.

 

(c)                Without limiting any other mode of service allowed under any
applicable law, each UK Loan Party hereby confirms that it has been appointed by
each other Loan Party to act as its agent for service of process in relation to
any proceedings before the English courts in connection with any UK Security
Document, and that UK Loan Party accepts such appointment. Any process should be
delivered to UK Loan Party at its registered office (Attn: Joe Eyles, Building
1020 Cambourne Business Park, Cambourne, Cambridge, England, CB23 6DW). UK Loan
Party undertakes to promptly notify the Administrative Agent and the Collateral
Agent if such appointment is terminated.

 

Section 12.11    WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY AND EACH SECURED
PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.

 

- 172 -

 

Section 12.12    Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein to the contrary or in any other Loan Document, if the
consent, approval, satisfaction, determination, judgment, acceptance or similar
action (an "Action") of any Agent or any Lender shall be permitted or required
pursuant to any provision hereof or any provision of any other agreement to
which any Loan Party is a party and to which any Agent or any Lender has
succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by such Agent or such Lender, in its sole discretion, with or
without any reason, and without being subject to question or challenge on the
grounds that such Action was not taken in good faith.

 

Section 12.13    No Party Deemed Drafter. Each of the parties hereto agrees that
no party hereto shall be deemed to be the drafter of this Agreement.

 

Section 12.14    Reinstatement; Certain Payments. If any claim is ever made upon
any Secured Party for repayment or recovery of any amount or amounts received by
such Agent, such Secured Party in payment or on account of any of the
Obligations, such Agent, such Secured Party shall give prompt notice of such
claim to each other Agent and Lender and the Borrowing Agent, and if such
Secured Party repays all or part of such amount by reason of (i) any judgment,
decree or order of any court or administrative body having jurisdiction over
such Agent, such Secured Party or any of its property, or (ii) any good faith
settlement or compromise of any such claim effected by such Secured Party with
any such claimant, then and in such event each Loan Party agrees that (A) any
such judgment, decree, order, settlement or compromise shall be binding upon it
notwithstanding the cancellation of any Indebtedness hereunder or under the
other Loan Documents or the termination of this Agreement or the other Loan
Documents, and (B) it shall be and remain liable to such Agent, such Secured
Party hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by such Secured Party.

 

Section 12.15    Indemnification; Limitation of Liability for Certain Damages.

 

(a)                In addition to each Loan Party's other Obligations under this
Agreement, each Loan Party agrees to, jointly and severally, defend, protect,
indemnify and hold harmless each Secured Party and all of their respective
Affiliates, officers, directors, employees, attorneys, consultants and agents
(collectively called the "Indemnitees") from and against any and all losses,
damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees, costs and
expenses) incurred by such Indemnitees, whether prior to or from and after the
Effective Date, whether direct, indirect or consequential, as a result of or
arising from or relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) any
Agent's or any Lender's furnishing of funds to the Borrowers or the L/C Issuer's
issuing Letters of Credit for the account of the Borrowers under this Agreement
or the other Loan Documents, including, without limitation, the management of
any such Loans or the Letter of Credit Obligations or the Borrowers' use of the
proceeds thereof, (iii) the Agents and the Lenders relying on any instructions
of the Borrowing Agent or the handling of the Loan Account and Collateral of the
Borrowers as herein provided, (iv) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, (v) all Environmental Liabilities and
Costs relating to: (A) the presence, disposal, Release or threatened Release of
any Hazardous Materials on any property owned or occupied by any Loan Party or
any of its Subsidiaries, (B) any investigation, lawsuit brought or threatened,
settlement reached or government order relating to such Hazardous Materials, (C)
any violation of Environmental Laws by any Loan Party or any of its
Subsidiaries, and (D) any Environmental Actions filed against any Loan Party or
its Subsidiaries, or (vi) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto (collectively, the "Indemnified Matters"); provided, however, that the
Loan Parties shall not have any obligation to any Indemnitee under this
subsection (a) for any Indemnified Matter caused by (x) the gross negligence or
willful misconduct of such Indemnitee or of any of its controlled Affiliates or
their respective directors, officers, employees, partners or other
representatives, as determined by a final non-appealable judgment of a court of
competent jurisdiction, (x) a material breach of any obligations under any Loan
Document by such Indemnitee or of any of its controlled Affiliates or their
respective directors, officers, employees, partners or other representatives, as
determined by a final non-appealable judgment of a court of competent
jurisdiction, (y) any dispute solely among Indemnitees other than any claims
against an Indemnitee in its capacity or in fulfilling its role as a swingline
lender, an Agent or an issuer of Letters of Credit and other than any claims
arising out of any act or omission of Parent, any Borrower or any of their
Affiliates.

 

- 173 -

 

(b)               The indemnification for all of the foregoing losses, damages,
fees, costs and expenses of the Indemnitees set forth in this Section 12.15 are
chargeable against the Loan Account. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 12.15 may be
unenforceable because it is violative of any law or public policy, each Loan
Party shall, jointly and severally, contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.

 

(c)                To the fullest extent permitted by applicable Requirements of
Law, no party hereto shall assert, and each party hereby waives, any claim
against any other party on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof.

 

(d)               The indemnities and waivers set forth in this Section 12.15
shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.

 

(e)                This Section 12.15 shall not apply with respect to Taxes,
other than Taxes that represent Losses arising from any non-Tax claim.

 

- 174 -

 

Section 12.16    Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06 hereof, including, without limitation, the fees
set forth in the Fee Letter, the Unused Line Fee, the Letter of Credit Fee and
the Applicable Prepayment Premium, shall at all times be ascertained from the
records of the Agents, which shall be conclusive and binding absent manifest
error.

 

Section 12.17    Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and when
the conditions precedent set forth in Section 5.01 hereof have been satisfied or
waived in writing by the Agents, and thereafter shall be binding upon and inure
to the benefit of each Loan Party, each Secured Party, and their respective
successors and assigns, except that the Loan Parties shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of each Agent and each Lender, and any assignment by any Lender shall be
governed by Section 12.07 hereof.

 

Section 12.18    Highest Lawful Rate. It is the intention of the parties hereto
that each Agent and each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be Paid In Full, refunded by such Agent or such Lender, as applicable,
to the Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall,
subject to the last sentence of this Section 12.18, be canceled automatically by
such Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be Paid In Full, refunded by such Agent or such Lender to the
Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
Payment In Full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.18 and
(y) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.18.

 

- 175 -

 

For purposes of this Section 12.18, the term "applicable law" shall mean that
law in effect from time to time and applicable to the loan transaction between
the Borrowers, on the one hand, and the Agents and the Lenders, on the other,
that lawfully permits the charging and collection of the highest permissible,
lawful non-usurious rate of interest on such loan transaction and this
Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.

 

The right to accelerate the maturity of the Obligations does not include the
right to accelerate any interest that has not accrued as of the date of
acceleration.

 

Section 12.19    Confidentiality. Each Secured Party agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of this nature and in
accordance with safe and sound practices of comparable commercial finance
companies, any non-public information supplied to it by the Loan Parties
pursuant to this Agreement or the other Loan Documents (and which at the time is
not, and does not thereafter become, publicly available or available to such
Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure by any Agent or any Lender of any such
information (i) to its Affiliates and to its and its Affiliates' respective
equity holders (including, without limitation, partners), directors, officers,
employees, agents, trustees, counsel, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential in accordance with this Section 12.19); (ii) to any
other party hereto; (iii) to parties involved in such Secured Party's
Securitization; or (iv) to any assignee or participant (or prospective assignee
or participant) or any party to a Securitization so long as such assignee or
participant (or prospective assignee or participant) or party to a
Securitization first agrees, in writing, to be bound by confidentiality
provisions similar in substance to this Section 12.19; (v) to the extent
required by any Requirement of Law or judicial process or as otherwise requested
by any Governmental Authority; (vi) to the National Association of Insurance
Commissioners or any similar organization, any examiner, auditor or accountant
or any nationally recognized rating agency or otherwise to the extent consisting
of general portfolio information that does not identify Loan Parties; (vii) in
connection with any litigation to which any Agent or any Lender is a party;
(vii) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder; or
(viii) with the consent of the Borrowing Agent. Each Secured Party agrees, prior
to any disclosure under clause (iv) or (vi) above to (A) any Governmental
Authority that does not have supervisory, regulatory or other similar authority
with respect to such Secured Party and that is seeking such disclosure solely in
connection with an investigation, action, suit or other proceeding that does not
otherwise involve such Secured Party or (B) any other Person that is not a
Governmental Authority, to use reasonable efforts to notify the Borrowing Agent
of any request for the disclosure of any such confidential information so as to
provide the Borrowing Agent with a reasonable opportunity to obtain a protective
order or other comparable relief, provided that the failure to so notify the
Borrowing Agent shall not expose any Secured Party to any liability.

 

- 176 -

 

Section 12.20    Public Disclosure. Each Loan Party agrees that neither it nor
any of its Affiliates will now or in the future issue any press release or other
public disclosure using the name of an Agent, any Lender or any of their
respective Affiliates or referring to this Agreement or any other Loan Document
without the prior written consent of such Agent or such Lender, except to the
extent that such Loan Party or such Affiliate is required to do so under
applicable law (in which event, such Loan Party or such Affiliate will consult
with such Agent or such Lender before issuing such press release or other public
disclosure). Each Loan Party hereby authorizes each Agent and each Lender, after
consultation with the Borrowers, to advertise the closing of the transactions
contemplated by this Agreement, and to make appropriate announcements of the
financial arrangements entered into among the parties hereto, as such Agent or
such Lender shall deem appropriate, including, without limitation, on a home
page or similar place for dissemination of information on the Internet or
worldwide web, or in announcements commonly known as tombstones, in such trade
publications, business journals, newspapers of general circulation and to such
selected parties as such Agent or such Lender shall deem appropriate.

 

Section 12.21    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.

 

Section 12.22    USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA PATRIOT Act hereby notifies the Borrowers that pursuant
to the requirements of the USA PATRIOT Act, it is required to obtain, verify and
record information that identifies the entities composing the Borrowers, which
information includes the name and address of each such entity and other
information that will allow such Lender to identify the entities composing the
Borrowers in accordance with the USA PATRIOT Act. Each Loan Party agrees to take
such action and execute, acknowledge and deliver at its sole cost and expense,
such instruments and documents as any Lender may reasonably require from time to
time in order to enable such Lender to comply with the USA PATRIOT Act.

 

Section 12.23    Keepwell. Each Loan Party, if it is a Qualified ECP Loan Party,
then jointly and severally, together with each other Qualified ECP Loan Party,
hereby absolutely unconditionally and irrevocably (a) guarantees the prompt
payment and performance of all Swap Obligations owing by each Non-Qualifying
Party (it being understood and agreed that this guarantee is a guaranty of
payment and not of collection), and (b) undertakes to provide such funds or
other support as may be needed from time to time by any Non-Qualifying Party to
honor all of such Non-Qualifying Party's obligations under this Agreement or any
other Loan Document in respect of Swap Obligations (provided, however, that each
Qualified ECP Loan Party shall only be liable under this Section 12.23 for the
maximum amount of such liability that can be hereby incurred without rendering
its obligations under this Section 12.23, or otherwise under this Agreement or
any other Loan Document, voidable under applicable law, including applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified ECP Loan Party under this
Section 12.23 shall remain in full force and effect until Payment In Full (or
written release and discharge) of the Obligations and termination of this
Agreement and the other Loan Documents. Each Qualified ECP Loan Party intends
that this Section 12.23 constitute, and this Section 12.23 shall be deemed to
constitute, a guarantee of the obligations of, and a "keepwell, support, or
other agreement" for the benefit of each other Borrower and Guarantor for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

- 177 -

 

Section 12.24    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.

 

Section 12.25          Judgment CurrencySection 12.26. This is an international
financial transaction in which the specification of a currency and payment in
New York is of the essence. Dollars shall be the currency of account in the case
of all payments pursuant to or arising under this Agreement or under any other
Loan Document, and all such payments shall be made to the Administrative Agent's
Account in New York in immediately available funds. To the fullest extent
permitted by applicable law, the obligations of each Loan Party to the Secured
Parties under this Agreement and under the other Loan Documents shall not be
discharged by any amount paid in any other currency or in a place other than to
the Administrative Agent's Account in New York to the extent that the amount so
paid after conversion under this Agreement and transfer to New York does not
yield the amount of Dollars in New York due under this Agreement and under the
other Loan Documents. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder in Dollars into another currency
(the "Other Currency"), to the fullest extent permitted by applicable law, the
rate of exchange used shall be that at which the Administrative Agent could, in
accordance with normal procedures, purchase Dollars with the Other Currency on
the Business Day preceding that on which final judgment is given. The obligation
of each Loan Party in respect of any such sum due from it to the Secured Parties
hereunder shall, notwithstanding any judgment in such Other Currency, be
discharged only to the extent that, on the Business Day immediately following
the date on which the Administrative Agent receives any sum adjudged to be so
due in the Other Currency, the Administrative Agent may, in accordance with
normal banking procedures, purchase Dollars with the Other Currency. If the
Dollars so purchased are less than the sum originally due to the Secured Parties
in Dollars, each Loan Party agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Secured Parties against such loss, and if
the Dollars so purchased exceed the sum originally due to the Secured Parties in
Dollars, the Secured Parties agrees to remit to the Loan Parties such excess.

 

- 178 -

 

Section 12.27          Waiver of ImmunitySection 12.28. To the extent that any
Loan Party has or hereafter may acquire (or may be attributed, whether or not
claimed) any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from set-off or any legal process
(whether service of process or notice, attachment prior to judgment, attachment
in aid of execution of judgment, execution of judgment or otherwise) with
respect to itself or any of its property, such Loan Party hereby irrevocably
waives and agrees not to plead or claim, to the fullest extent permitted by law,
such immunity in respect of (a) its obligations under the Loan Documents, (b)
any legal proceedings to enforce such obligations and (c) any legal proceedings
to enforce any judgment rendered in any proceedings to enforce such obligations.
Each Loan Party hereby agrees that the waivers set forth in this Section 12.27
shall be to the fullest extent permitted under the Foreign Sovereign Immunities
Act and are intended to be irrevocable for purposes of the Foreign Sovereign
Immunities Act.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

- 179 -

 

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

 

    BORROWERS:           HARVARD BIOSCIENCE, INC.           By:  /s/ Robert E.
Gagnon       Name: Robert E. Gagnon       Title: Chief Financial Officer        
        PLYMOUTH SUB, INC.
(prior to giving effect to the Acquisition)           By:  Harvard Bioscience,
Inc., its sole shareholder           By: /s/ Robert E. Gagnon       Name: Robert
E. Gagnon       Title: Chief Financial Officer                 DATA SCIENCES
INTERNATIONAL, INC.
(after giving effect to the Acquisition)           By: Harvard Bioscience, Inc.,
its sole shareholder           By: /s/ Robert E. Gagnon     Name:  Robert E.
Gagnon     Title: Chief Financial Officer      

 

 

[Signature Page to Financing Agreement]

 

    GUARANTORS:           HOEFER, INC.           By: Harvard Bioscience, Inc.,
its sole shareholder           By:  /s/ Robert E. Gagnon       Name: Robert E.
Gagnon       Title: Chief Financial Officer                 WARNER INSTRUMENTS
LLC           By:  Harvard Bioscience, Inc., its sole shareholder           By:
/s/ Robert E. Gagnon       Name: Robert E. Gagnon       Title: Chief Financial
Officer                 TRIANGLE BIOSYSTEMS, INC.           By: Harvard
Bioscience, Inc., its sole shareholder           By: /s/ Robert E. Gagnon      
Name: Robert E. Gagnon       Title: Chief Financial Officer                
DENVILLE SCIENTIFIC, INC.           By: Harvard Bioscience, Inc., its sole
shareholder           By: /s/ Robert E. Gagnon       Name: Robert E. Gagnon    
  Title: Chief Financial Officer      

 

 

[Signature Page to Financing Agreement]

 

    COULBOURN INSTRUMENTS, LLC           By: Denville Scientific, Inc., its sole
member     By: Harvard Bioscience, Inc., its sole shareholder           By:  /s/
Robert E. Gagnon       Name: Robert E. Gagnon       Title: Chief Financial
Officer                 BIOCHROM US, INC.           By: Harvard Bioscience,
Inc., its sole shareholder           By: /s/ Robert E. Gagnon       Name: Robert
E. Gagnon       Title: Chief Financial Officer                 BIOCHROM LIMITED
          By: /s/ Robert E. Gagnon       Name: Robert E. Gagnon       Title:
Director                 EALING SCIENTIFIC LIMITED /     LA COMPAGNIE
SCIENTIFIQUE EALING LIMITÉE           By: Harvard Bioscience, Inc., its sole
shareholder           By: /s/ Robert E. Gagnon       Name: Robert E. Gagnon    
  Title: Chief Financial Officer

 

 

[Signature Page to Financing Agreement]

 

    DATA SCIENCES UK (MN) LIMITED     By: Data Sciences International, Inc., its
sole shareholder           By:  /s/ Robert E. Gagnon       Name: Robert E.
Gagnon       Title: Director      

 

 

 

 

 

 

 

[Signature Page to Financing Agreement]

 

    ADMINISTRATIVE AGENT AND
COLLATERAL AGENT:           CERBERUS BUSINESS FINANCE, LLC           By:  /s/
Daniel E. Wolf       Name: Daniel E. Wolf       Title: Chief Executive Officer  
   

 

 

 

 

 

 

 

 

[Signature Page to Financing Agreement]

 

    LENDERS:           CERBERUS LEVERED LOAN OPPORTUNITIES
FUND III, L.P.     By: Cerberus Levered Opportunities III GP, LLC     Its:
General Partner           By:  /s/ Daniel E. Wolf     Name:  Daniel E. Wolf    
Title: Chief Executive Officer                 CERBERUS NJ CREDIT OPPORTUNITIES
FUND, L.P.     By: Cerberus NJ Credit Opportunities GP, LLC     Its: General
Partner           By: /s/ Daniel E. Wolf     Name: Daniel E. Wolf     Title:
Chief Executive Officer                 CERBERUS ASRS HOLDINGS LLC           By:
/s/ Daniel E. Wolf     Name: Daniel E. Wolf     Title: Chief Executive Officer  
              CERBERUS KRS LEVERED LOAN     OPPORTUNITIES FUND, L.P.          
By: Cerberus KRS Levered Opportunities GP, LLC     Its: General Partner        
  By: /s/ Daniel E. Wolf     Name: Daniel E. Wolf     Title: Chief Executive
Officer

 

  

[Signature Page to Financing Agreement]

 

    CERBERUS PSERS LEVERED     LOAN OPPORTUNITIES FUND, L.P.     By: Cerberus
PSERS Levered Opportunities GP, LLC     Its: General Partner           By:  /s/
Daniel E. Wolf     Name:  Daniel E. Wolf     Title: Chief Executive Officer    
            CERBERUS FSBA HOLDINGS LLC           By: /s/ Daniel E. Wolf    
Name:  Daniel E. Wolf     Title: Chief Executive Officer                
CERBERUS ND CREDIT HOLDINGS LLC           By: /s/ Daniel E. Wolf     Name:
Daniel E. Wolf     Title: Chief Executive Officer

 

 

 

 

 

 

 

[Signature Page to Financing Agreement]