Exhibit 10.1

EXECUTION VERSION

 

 

 

TERM LOAN CREDIT AGREEMENT

by and among

WILMINGTON SAVINGS FUND SOCIETY, FSB,

as Administrative Agent,

THE LENDERS THAT ARE PARTIES HERETO

as the Lenders,

and

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

as Borrower

Dated as of April 15, 2016

 

 

 

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TABLE OF CONTENTS

 

              Page  

1.

 

DEFINITIONS AND CONSTRUCTION.

     1     

1.1.

  

Definitions

     1     

1.2.

  

Accounting Terms

     1     

1.3.

  

Code

     2     

1.4.

  

Construction

     2     

1.5.

  

Time References

     2     

1.6.

  

Schedules and Exhibits

     2   

2.

 

LOANS AND TERMS OF PAYMENT.

     3     

2.1.

  

Term Loan

     3     

2.2.

  

[Intentionally Omitted]

     3     

2.3.

  

Borrowing Procedures

     3     

2.4.

  

Payments; Reductions of Commitments; Prepayments

     6     

2.5.

  

Promise to Pay

     10     

2.6.

  

Interest Rate: Rates, Payments, and Calculations

     11     

2.7.

  

Crediting Payments

     12     

2.8.

  

Designated Account

     12     

2.9.

  

Maintenance of Loan Account; Statements of Obligations

     12     

2.10.

  

Fees

     13     

2.11.

  

[Intentionally Omitted]

     13     

2.12.

  

[Intentionally Omitted]

     13     

2.13.

  

Capital Requirements

     13   

3.

 

CONDITIONS; TERM OF AGREEMENT.

     14     

3.1.

  

Conditions Precedent to the Effectiveness of this Agreement

     14     

3.2.

  

Conditions Precedent to all Extensions of Credit

     14     

3.3.

  

Maturity

     14     

3.4.

  

Effect of Maturity

     14     

3.5.

  

Early Termination by Borrower

     15     

3.6.

  

Conditions Subsequent

     15   

4.

 

REPRESENTATIONS AND WARRANTIES.

     15     

4.1.

  

Due Organization and Qualification; Subsidiaries

     15     

4.2.

  

Due Authorization; No Conflict

     16   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

4.3.

  

Governmental Consents

     16     

4.4.

  

Binding Obligations; Perfected Liens

     17     

4.5.

  

Title to Assets; No Encumbrances

     17     

4.6.

  

Litigation

     17     

4.7.

  

Compliance with Laws

     17     

4.8.

  

No Material Adverse Effect

     18     

4.9.

  

Solvency

     18     

4.10.

  

Employee Benefits

     18     

4.11.

  

Environmental Condition

     18     

4.12.

  

Complete Disclosure

     18     

4.13.

  

Patriot Act

     19     

4.14.

  

Indebtedness

     19     

4.15.

  

Payment of Taxes

     19     

4.16.

  

Margin Stock

     19     

4.17.

  

Governmental Regulation

     20     

4.18.

  

OFAC

     20     

4.19.

  

Employee and Labor Matters

     20     

4.20.

  

Material Contracts

     20     

4.21.

  

Leases

     20     

4.22.

  

[Intentionally Omitted]

     20     

4.23.

  

[Intentionally Omitted]

     21     

4.24.

  

Location of Equipment

     21     

4.25.

  

[Intentionally Omitted]

     21     

4.26.

  

Immaterial Subsidiaries

     21     

4.27.

  

Other Documents

     21   

5.

 

AFFIRMATIVE COVENANTS.

     21     

5.1.

  

Financial Statements, Reports, Certificates

     21     

5.2.

  

[Intentionally Omitted]

     21     

5.3.

  

Existence

     21     

5.4.

  

Maintenance of Properties

     21     

5.5.

  

Taxes

     22   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

5.6.

  

Insurance

     22     

5.7.

  

Inspection

     23     

5.8.

  

Compliance with Laws

     23     

5.9.

  

Environmental

     23     

5.10.

  

Disclosure Updates

     23     

5.11.

  

Formation of Subsidiaries

     23     

5.12.

  

Further Assurances

     24     

5.13.

  

Lender Meetings

     25     

5.14.

  

Location of Equipment

     25     

5.15.

  

[Intentionally Omitted]

     25     

5.16.

  

Material Contracts

     25     

5.17.

  

Excess Proceeds Under Indenture

     25   

6.

 

NEGATIVE COVENANTS.

     26     

6.1.

  

Indebtedness

     26     

6.2.

  

Liens

     26     

6.3.

  

Restrictions on Fundamental Changes

     26     

6.4.

  

Disposal of Assets

     26     

6.5.

  

Nature of Business

     26     

6.6.

  

Prepayments and Amendments

     27     

6.7.

  

Restricted Payments

     27     

6.8.

  

Accounting Methods

     27     

6.9.

  

Investments

     28     

6.10.

  

Transactions with Affiliates

     28     

6.11.

  

Use of Proceeds

     28     

6.12.

  

Limitation on Issuance of Equity Interests

     28     

6.13.

  

Immaterial Subsidiaries

     29     

6.14.

  

Capital Expenditures

     29     

6.15.

  

Compensation

     29     

6.16.

  

MIP Term Sheet

     29   

 

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TABLE OF CONTENTS

(continued)

 

              Page  

7.

 

FINANCIAL COVENANTS.

     29   

8.

 

EVENTS OF DEFAULT.

     30     

8.1.

  

Payments

     30     

8.2.

  

Covenants

     30     

8.3.

  

Judgments

     31     

8.4.

  

Voluntary Bankruptcy, etc.

     31     

8.5.

  

Involuntary Bankruptcy, etc.

     31     

8.6.

  

Default Under Other Agreements

     31     

8.7.

  

Representations, etc.

     31     

8.8.

  

Guaranty

     32     

8.9.

  

Security Documents

     32     

8.10.

  

Loan Documents

     32     

8.11.

  

Change of Control

     32   

9.

 

RIGHTS AND REMEDIES.

     32     

9.1.

  

Rights and Remedies

     32     

9.2.

  

Remedies Cumulative

     33   

10.

 

WAIVERS; INDEMNIFICATION.

     33     

10.1.

  

Demand; Protest; etc.

     33     

10.2.

  

The Lender Group’s Liability for Collateral

     33     

10.3.

  

Indemnification

     33   

11.

 

NOTICES.

     34   

12.

 

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

     35   

13.

 

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

     37     

13.1.

  

Assignments and Participations

     37     

13.2.

  

Successors

     41   

14.

 

AMENDMENTS; WAIVERS.

     41     

14.1.

  

Amendments and Waivers

     41     

14.2.

  

Replacement of Certain Lenders

     43     

14.3.

  

No Waivers; Cumulative Remedies

     43   

 

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TABLE OF CONTENTS

(continued)

 

              Page  

15.

 

AGENT; THE LENDER GROUP.

     43     

15.1.

  

Appointment and Authorization of Agents

     43     

15.2.

  

Delegation of Duties

     45     

15.3.

  

Liability of Agent

     45     

15.4.

  

Reliance by Agent

     45     

15.5.

  

Notice of Default or Event of Default

     46     

15.6.

  

Credit Decision

     46     

15.7.

  

Costs and Expenses; Indemnification

     46     

15.8.

  

Agents in Individual Capacity

     47     

15.9.

  

Successor Agent

     47     

15.10.

  

Lender in Individual Capacity

     48     

15.11.

  

Collateral Matters

     48     

15.12.

  

Restrictions on Actions by Lenders; Sharing of Payments

     49     

15.13.

  

Agency for Perfection

     50     

15.14.

  

Payments by Agents to the Lenders

     50     

15.15.

  

Concerning the Collateral and Related Loan Documents

     50     

15.16.

  

[Intentionally Omitted]

     50     

15.17.

  

Several Obligations; No Liability

     50   

16.

 

WITHHOLDING TAXES.

     51     

16.1.

  

Payments

     51     

16.2.

  

Exemptions

     51     

16.3.

  

Reductions

     53     

16.4.

  

Refunds

     53   

17.

 

GENERAL PROVISIONS.

     54     

17.1.

  

Effectiveness

     54     

17.2.

  

Section Headings

     54     

17.3.

  

Interpretation

     54     

17.4.

  

Severability of Provisions

     54     

17.5.

  

[Intentionally Omitted]

     54     

17.6.

  

Debtor-Creditor Relationship

     54     

17.7.

  

Counterparts; Electronic Execution

     54   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

17.8.

  

Revival and Reinstatement of Obligations; Certain Waivers

     55     

17.9.

  

Confidentiality

     55     

17.10.

  

Survival

     56     

17.11.

  

Patriot Act

     57     

17.12.

  

Integration

     57     

17.13.

  

No Setoff

     57     

17.14.

  

Intercreditor Agreements

     57   

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

  

Form of Assignment and Acceptance

Exhibit C-1

  

Form of Compliance Certificate

Exhibit P-1

  

Form of Perfection Certificate

Schedule A-1

  

Administrative Agent’s Account

Schedule A-2

  

Authorized Persons

Schedule C-1

  

Commitments

Schedule D-1

  

Designated Account

Schedule E-1

  

List of Certificated Equipment Unperfected on the Closing Date

Schedule P-1

  

Permitted Investments

Schedule P-2

  

Permitted Liens

Schedule R-1

  

Real Property Collateral

Schedule 1.1

  

Definitions

Schedule 3.1

  

Conditions Precedent

Schedule 3.6

  

Post-Closing Items

Schedule 4.1(b)

  

Capitalization of Borrower

Schedule 4.1(c)

  

Capitalization of Borrower’s Subsidiaries

Schedule 4.1(d)

  

Subscriptions, Options, Warrants, Calls

Schedule 4.6

  

Litigation

Schedule 4.11

  

Environmental Matters

Schedule 4.14

  

Permitted Indebtedness

Schedule 4.20

  

Material Contracts

Schedule 4.24

  

Location of Equipment

Schedule 5.14

  

List of Chief Executive Offices

Schedule 5.1

  

Financial Statements, Reports, Certificates

Schedule 6.5

  

Nature of Business

 

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TERM LOAN CREDIT AGREEMENT

THIS TERM LOAN CREDIT AGREEMENT (this “Agreement”), is entered into as of April
15, 2016, by and among the lenders identified on the signature pages hereof
(each of such lenders, together with its successors and permitted assigns, is
referred to hereinafter as a “Lender”, as that term is hereinafter further
defined), WILMINGTON SAVINGS FUND SOCIETY, FSB, as administrative agent for each
member of the Lender Group (in such capacity, together with its successors and
assigns in such capacity, “Administrative Agent”), and NUVERRA ENVIRONMENTAL
SOLUTIONS, INC., a Delaware corporation (“Borrower”).

WHEREAS, Borrower has requested that the Lenders provide a term loan credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

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

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

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

1.4. Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties. Any reference herein or in
any other Loan Document to the satisfaction, repayment, or payment in full of
the Obligations shall mean (a) the payment or repayment in full in immediately
available funds of (i) the principal amount of, and interest accrued and unpaid
with respect to, all outstanding Loans, together with the payment of any premium
applicable to the repayment of the Loans, (ii) all Lender Group Expenses that
have accrued and are unpaid regardless of whether demand has been made therefor,
(iii) all fees or charges that have accrued hereunder or under any other Loan
Document and are unpaid, (b) the payment or repayment in full in immediately
available funds of all other outstanding Obligations other than unasserted
contingent indemnification Obligations, and (c) the termination of all of the
Commitments of the Lenders. Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in any other Loan Document shall be satisfied by the
transmission of a Record.

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

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

 

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2. LOANS AND TERMS OF PAYMENT.

2.1. Term Loan.

(a) Subject to the terms and conditions of this Agreement, each Term Lender
agrees (severally, not jointly or jointly and severally) to make a simultaneous
loan or loans (“Term Loans”) to Borrower on the Closing Date in an amount not to
exceed such Lender’s Term Commitment.

(b) Amounts borrowed pursuant to this Section 2.1 may be repaid subject to the
terms and conditions of this Agreement, but once repaid may not be reborrowed at
any time during the term of this Agreement. The outstanding principal amount of
the Term Loans, together with interest accrued and unpaid thereon, shall
constitute Obligations and shall be due and payable on the Maturity Date or, if
earlier, on the date on which they are declared due and payable pursuant to the
terms of this Agreement.

2.2. [Intentionally Omitted].

2.3. Borrowing Procedures.

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

(b) [Intentionally Omitted].

(c) Making of Term Loans.

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

 

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satisfied on the requested Funding Date for the applicable Borrowing unless such
condition has been waived.

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

(d) [Intentionally Omitted].

(e) [Intentionally Omitted].

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

(g) Defaulting Lenders.

(i) Notwithstanding the provisions of Section 2.4(b)(ii), Administrative Agent
shall not be obligated to transfer to a Defaulting Lender any payments made by
Borrower to Administrative Agent for the Defaulting Lender’s benefit or any
proceeds of Collateral that would

 

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otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of
such transfer to the Defaulting Lender, Administrative Agent shall transfer any
such payments (A) first, to each Non-Defaulting Lender ratably in accordance
with their Commitments (but, in each case, only to the extent that such
Defaulting Lender’s portion of a Term Loan (or other funding obligation) was
funded by such other Non-Defaulting Lender), (B) second, in Administrative
Agent’s sole discretion, to a suspense account maintained by Administrative
Agent, the proceeds of which shall be retained by Administrative Agent and may
be made available to be re-advanced to or for the benefit of Borrower (upon the
request of Borrower and subject to the conditions set forth in Section 3.2) as
if such Defaulting Lender had made its portion of Term Loans (or other funding
obligations) hereunder, and (C) third, from and after the date on which all
other Obligations have been paid in full, to such Defaulting Lender in
accordance with tier (G) of Section 2.4(b)(ii). Subject to the foregoing,
Administrative Agent may hold and, in its discretion, re-lend to Borrower for
the account of such Defaulting Lender the amount of all such payments received
and retained by Administrative Agent for the account of such Defaulting
Lender. Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents (including the calculation of Pro Rata Share in connection
therewith) and for the purpose of calculating the fee payable under Section
2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such
Lender’s Commitment shall be deemed to be zero; provided, that the foregoing
shall not apply to any of the matters governed by Section 14.1(a)(i) through
(iii). The provisions of this Section 2.3(g) shall remain effective with respect
to such Defaulting Lender until the earlier of (y) the date on which all of the
Non-Defaulting Lenders, Administrative Agent and Borrower shall have waived, in
writing, the application of this Section 2.3(g) to such Defaulting Lender, or
(z) the date on which such Defaulting Lender makes payment of all amounts that
it was obligated to fund hereunder, pays to Administrative Agent all amounts
owing by Defaulting Lender in respect of the amounts that it was obligated to
fund hereunder, and, if requested by Administrative Agent, provides adequate
assurance of its ability to perform its future obligations hereunder. The
operation of this Section 2.3(g) shall not be construed to increase or otherwise
affect the Commitment of any Lender, to relieve or excuse the performance by
such Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by Borrower of its duties and
obligations hereunder to Administrative Agent or to the Lenders other than such
Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it
was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrower, at its option,
upon written notice to Administrative Agent, to arrange for a substitute Lender
to assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Administrative Agent. In connection with the
arrangement of such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to execute and deliver a
completed form of Assignment and Acceptance in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such document
if it fails to do so) subject only to being paid its share of the outstanding
Obligations; provided, that any such assumption of the Commitment of such
Defaulting Lender shall not be deemed to constitute a waiver of any of the
Lender Groups’ or Borrower’s rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund. In the event of a
direct conflict between the priority provisions of this Section 2.3(g) and any
other provision contained in this Agreement or any other Loan Document, it is
the intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.3(g) shall control and
govern.

(h) Independent Obligations. The Term Loans shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Term Loan (or

 

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other extension of credit) hereunder, nor shall any Commitment of any Lender be
increased or decreased as a result of any failure by any other Lender to perform
its obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations
hereunder.

2.4. Payments; Reductions of Commitments; Prepayments.

(a) Payments by Borrower.

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

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

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as
otherwise provided herein with respect to Defaulting Lenders, all principal and
interest payments received by Administrative Agent shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and
expenses received by Administrative Agent shall be apportioned ratably among the
Lenders having a Pro Rata Share of the type of Commitment or Obligation to which
a particular fee or expense relates. Subject to Section 2.4(b)(iv) and Section
2.4(e), all payments to be made hereunder by Borrower shall be remitted to
Administrative Agent and all such payments, and all proceeds of Collateral
received by Administrative Agent (unless required to be applied to the Revolving
Credit Agreement Obligations pursuant to the Pari Passu Intercreditor
Agreement), shall be applied, so long as no Application Event has occurred and
is continuing and except as otherwise provided herein with respect to Defaulting
Lenders, to reduce the balance of the Term Loans outstanding and, thereafter, to
Borrower (to be wired to the Designated Account) or such other Person entitled
thereto under applicable law.

(ii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to

 

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Administrative Agent and all proceeds of Collateral received by Administrative
Agent or Collateral Agent shall be applied as follows:

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

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

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

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

(E) fifth, ratably, to pay interest accrued in respect of the Term Loans until
paid in full,

(F) sixth, ratably, to pay the principal of all Term Loans until paid in full,

(G) seventh, to pay any other Obligations other than Obligations owed to
Defaulting Lenders,

(H) eighth, ratably to pay any Obligations owed to Defaulting Lenders; and

(I) ninth, to Borrower (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.

(iii) Administrative Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive.

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

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

 

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

(c) Termination of Term Commitments. The Term Commitments shall be automatically
and permanently terminated on the date of the Borrowing of Term Loans under
Section 2.1(a).

(d) Optional Prepayments. After January 1, 2018 (or earlier, if the Discharge of
Revolving Credit Agreement Obligations has occurred), Borrower may prepay the
principal of any Term Loan at any time in whole or in part, without premium or
penalty, if the Availability Conditions have been satisfied.

(e) Mandatory Prepayments.

(i) [Intentionally Omitted].

(ii) Dispositions. Subject to Section 2.4(f)(ii), within 3 Business Days of the
date of receipt (or if an Activation Instruction (as defined in the Guaranty and
Security Agreement) is in effect concurrently with receipt) by Borrower or any
of its Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary
sale or disposition by Borrower or any of its Subsidiaries of assets (including
casualty losses or condemnations but excluding sales or dispositions which
qualify as Permitted Dispositions under clauses (b), (c), (d), (e), (j), (k),
(l), (m), or (n) of the definition of Permitted Dispositions), Borrower shall
prepay the outstanding principal amount of the Obligations in accordance with
Section 2.4(f)(i) in an amount equal to 100% of such Net Cash Proceeds
(including condemnation awards and payments in lieu thereof) received by such
Person in connection with such sales or dispositions; provided that, except with
respect to a sale or disposition permitted under clause (p) of the definition of
Permitted Dispositions, so long as (A) no Default or Event of Default shall have
occurred and is continuing or would result therefrom, (B) Borrower shall have
given Administrative Agent prior written notice of Borrower’s intention to apply
such monies to the costs of replacement of the properties or assets that are the
subject of such sale or disposition or the cost of purchase or construction of
other assets useful in the business of Borrower or its Subsidiaries, (C) the
monies are held in a Deposit Account in which Collateral Agent has a perfected
first-priority security interest, and (D) Borrower or its Subsidiaries, as
applicable, complete such replacement, purchase, or construction within 180 days
after the initial receipt of such monies, then the Loan Party whose assets were
the subject of such disposition shall have the option to apply such monies to
the costs of replacement of the assets that are the subject of such sale or
disposition or the costs of purchase or construction of other assets useful in
the business of such Loan Party unless and to the extent that such applicable
period shall have expired without such replacement, purchase, or construction
being made or completed, in which case, any amounts remaining in the Deposit
Account referred to in clause (C) above shall be paid to Administrative Agent
and applied in accordance with Section 2.4(f)(i). Nothing contained in this
Section 2.4(e)(ii) shall permit Borrower or any of its Subsidiaries to sell or
otherwise dispose of any assets other than in accordance with Section 6.4.

 

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(iii) Extraordinary Receipts. Subject to Section 2.4(f)(ii), within 3 Business
Days of the date of receipt (or if an Activation Instruction (as defined in the
Guaranty and Security Agreement) is in effect concurrently with receipt) by
Borrower or any of its Subsidiaries of any Extraordinary Receipts, Borrower
shall prepay the outstanding principal amount of the Obligations in accordance
with Section 2.4(f)(i) in an amount equal to 100% of such Extraordinary
Receipts, net of any reasonable expenses incurred in collecting such
Extraordinary Receipts.

(iv) Indebtedness. Subject to Section 2.4(f)(ii), within 3 Business Days of the
date of incurrence (or if an Activation Instruction (as defined in the Guaranty
and Security Agreement) is in effect concurrently with incurrence) by Borrower
or any of its Subsidiaries of any Indebtedness (other than Permitted
Indebtedness), Borrower shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(f)(i) in an amount equal to 100% of
the Net Cash Proceeds received by such Person in connection with such
incurrence. The provisions of this Section 2.4(e)(iv) shall not be deemed to be
implied consent to any such incurrence otherwise prohibited by the terms of this
Agreement.

(v) Equity. Subject to Section 2.4(f)(ii), within 3 Business Days of the date of
the issuance (or if an Activation Instruction (as defined in the Guaranty and
Security Agreement) is in effect concurrently with issuance) by Borrower or any
of its Subsidiaries of any Equity Interests (other than (A) in the event that
Borrower or any of its Subsidiaries forms any Subsidiary in accordance with the
terms hereof, the issuance by such Subsidiary of Equity Interests to Borrower or
such Subsidiary, as applicable, (B) the issuance of Equity Interests by Borrower
to any Person that is an equity holder of Borrower prior to such issuance (a
“Subject Holder”) so long as such Subject Holder did not acquire any Equity
Interest of Borrower so as to become a Subject Holder concurrently with, or in
contemplation of, the issuance of such Equity Interests to such Subject Holder,
(C) the issuance of Equity Interests of Borrower to directors, officers,
employees and consultants of Borrower and its Subsidiaries pursuant to stock
option plans (or other incentive plans or other compensation arrangements)
approved by the Board of Directors, (D) the issuance of Equity Interests of
Borrower in order to finance the purchase consideration (or a portion thereof)
in connection with a Permitted Acquisition, Acquisition consummated prior to the
Closing Date or Capital Expenditures, (E) the issuance of Equity Interests in
connection with the Rights Offering and (F) the issuance of Equity Interests by
a Subsidiary of Borrower to its parent or member in connection with the
contribution by such parent or member to such Subsidiary of the proceeds of an
issuance described in clauses (A) – (E) above), Borrower shall prepay the
outstanding principal amount of the Obligations in accordance with Section
2.4(f)(i) in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such issuance.

(vi) Excess Cash Flow.

(A) Prior to the Discharge of the Revolving Credit Obligations. If, prior to the
Discharge of the Revolving Credit Obligations, there shall be Excess Cash Flow
for any fiscal year of Borrower commencing with the fiscal year ending on or
about December 31, 2017, then (x) on the tenth Business Day after financial
statements have been (or, if earlier, were required to be) delivered for such
fiscal year of Borrower pursuant to Section 6.1 (such Business Day, the “Initial
ECF Application Date”), Borrower shall prepay the outstanding principal amount
of the Obligations in accordance with Section 2.4(f)(i) in an amount equal to
the lesser of (such lesser amount, a “Permissible ECF Application Amount”) (I)
such amount of Excess Cash Flow that both before and immediately after the
application thereof to the Obligations, the Availability Conditions are
satisfied and (II) 100% of the Excess Cash

 

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Flow for such prior fiscal year and (y) to the extent the Permissible ECF
Application Amount paid on the Initial ECF Application Date is less than 100% of
the Excess Cash Flow for such prior year, on the tenth Business Day after
financial statements have been (or, if earlier, were required to be) delivered
pursuant to Section 6.1 for each fiscal quarter of Borrower following the
Initial ECF Application Date, Borrower shall prepay the outstanding principal
amount of the Obligations in accordance with Section 2.4(f)(i) in an amount
equal to then Permissible ECF Application Amount until such time as the
aggregate of all Permissible ECF Application Amounts paid by Borrower pursuant
to this Section 2.4(e)(vi)(A) reaches 100% of the Excess Cash Flow for such
prior fiscal year.

(B) After the Discharge of the Revolving Credit Obligations. If there shall be
Excess Cash Flow for any fiscal year of Borrower ending immediately after the
Discharge of the Revolving Credit Obligations, then on the tenth Business Day
after financial statements have been (or, if earlier, were required to be)
delivered for such fiscal year of Borrower pursuant to Section 6.1, Borrower
shall prepay the outstanding principal amount of the Obligations in accordance
with Section 2.4(f)(i) in an amount equal to 100% of the Excess Cash Flow for
such prior fiscal year.

(f) Application of Payments.

(i) Each prepayment pursuant to Section 2.4(e) shall (A) so long as no
Application Event shall have occurred and be continuing, be applied, first to
the outstanding principal amount of the Term Loans until paid in full, and
(B) if an Application Event shall have occurred and be continuing, be applied in
the manner set forth in Section 2.4(b)(ii).

(ii) Notwithstanding anything to the contrary herein, Borrower shall have no
obligations under, and no payments shall be required or made pursuant to,
Section 2.4(e) (other than Section 2.4(e)(vi)) except to the extent that either
(A) as of the due date of such prepayment (x) the Discharge of Revolving Credit
Agreement Obligations shall have occurred or (y) no Loans are outstanding under
the Revolving Credit Agreement and a Prepayment Block (as defined in the
Revolving Credit Agreement as in effect on the date hereof or as amended,
supplemented or modified from time to time so long as such amendment, supplement
or modification does not result in the reduction of the payments or prepayments
of the Term Loans permitted hereunder) with respect to such prepayment is
established pursuant to the Revolving Credit Agreement, (B) no mandatory
prepayment is required under the Revolving Credit Agreement in connection with
the event giving rise to such prepayment or (C) a mandatory prepayment has been
waived by the “Lenders” under and as defined in the Revolving Credit Agreement.

2.5. Promise to Pay.

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

 

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

2.6. Interest Rate: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.6(c), all Loans, and
Obligations that have been charged to the Loan Account pursuant to the terms
hereof, shall bear interest at a per annum rate equal to 13.00%.

(b) [Intentionally Omitted].

(c) Default Rate. Upon the occurrence and during the continuation of a Default
arising under Section 8.1 or any Event of Default and at the election of
Administrative Agent or the Required Lenders, all Loans, and Obligations that
have been charged to the Loan Account pursuant to the terms hereof, shall bear
interest at a per annum rate equal to 4 percentage points above the per annum
rate otherwise applicable thereunder.

(d) Payment. Except to the extent provided to the contrary in Section 2.10,
(i) all interest shall be capitalized and added to the principal amount of the
Term Loans monthly, in arrears, and shall be charged to the Loan Account on the
first day of each month, (ii) all fees payable hereunder or under any of the
other Loan Documents shall be due and payable, in arrears, on the first day of
each month and (iii) all costs and expenses payable hereunder or under any of
the other Loan Documents, and all Lender Group Expenses shall be due and payable
on the earlier of (x) the first day of the month following the date on which the
applicable costs, expenses, or Lender Group Expenses were first incurred or
(y) the date on which demand therefor is made by Administrative Agent (it being
acknowledged and agreed that any charging of such costs, expenses or Lender
Group Expenses to the Loan Account pursuant to the provisions of the following
sentence shall be deemed to constitute a demand for payment thereof for the
purposes of this subclause (y)). Borrower hereby authorizes Administrative
Agent, from time to time without prior notice to Borrower, to charge to the Loan
Account (A) on the first day of each month, all interest accrued during the
prior month on the Term Loans hereunder, (B) as and when incurred or accrued,
all fees and costs provided for in Section 2.10(a), (C) as and when due and
payable, all other fees payable hereunder or under any of the other Loan
Documents, (D) as and when incurred or accrued, all other Lender Group Expenses,
and (E) as and when due and payable, all other payment obligations payable under
any Loan Document. All amounts (including interest, fees, costs, expenses,
Lender Group Expenses, or other amounts payable hereunder or under any other
Loan Document) charged to the Loan Account shall thereupon constitute
Obligations hereunder, and shall accrue interest at the rate applicable to Term
Loans.

(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year, in each case, for the actual number
of days elapsed in the period during which the interest or fees accrue.

 

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

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

2.8. Designated Account. Administrative Agent is authorized to make the Term
Loans based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if pursuant to
Section 2.6(d). Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Term Loans requested by Borrower and made by Administrative Agent or the
Lenders hereunder. Unless otherwise agreed by Administrative Agent and Borrower,
any Term Loan requested by Borrower and made by Administrative Agent or the
Lenders hereunder shall be made to the Designated Account.

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

 

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2.10. Fees. Borrower shall pay to Administrative Agent, for the account of
Administrative Agent, as and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter.

2.11. [Intentionally Omitted].

2.12. [Intentionally Omitted].

2.13. Capital Requirements.

(a) If, after the date hereof, any Lender determines that (i) any Change in Law
regarding capital or reserve requirements for banks or bank holding companies,
(ii) any Change in Law relating to Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes
and (C) Connection Income Taxes) on its Loans, commitments or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto or
(iii) compliance by such Lender, or their respective parent bank holding
companies, with any guideline, request or directive of any Governmental
Authority regarding capital adequacy (whether or not having the force of law),
has the effect of reducing the return on such Lender’s, or such holding
companies’ capital as a consequence of such Lender’s commitments, Loans,
participations or other obligations hereunder to a level below that which such
Lender, or such holding companies could have achieved but for such Change in Law
or compliance (taking into consideration such Lender’s, or such holding
companies’ then existing policies with respect to capital adequacy and assuming
the full utilization of such entity’s capital) by any amount deemed by such
Lender to be material, then such Lender may notify Borrower and Administrative
Agent thereof. Following receipt of such notice, Borrower agrees to pay such
Lender on demand the amount of such reduction of return of capital as and when
such reduction is determined, payable within 30 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender’s calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest
error). In determining such amount, such Lender may use any reasonable averaging
and attribution methods. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that Borrower shall not be
required to compensate a Lender pursuant to this Section for any reductions in
return incurred more than 180 days prior to the date that such Lender notifies
Borrower of such Change in Law giving rise to such reductions and of such
Lender’s intention to claim compensation therefor; provided further that if such
claim arises by reason of the Change in Law that is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

(b) If any Lender requests additional or increased costs referred to in Section
2.13(a) (such Lender, an “Affected Lender”), then such Affected Lender shall use
reasonable efforts to promptly designate a different one of its lending offices
or to assign its rights and obligations hereunder to another of its offices or
branches, if (i) in the reasonable judgment of such Affected Lender, such
designation or assignment would eliminate or reduce amounts payable pursuant to
Section 2.13(a) and (ii) in the reasonable judgment of such Affected Lender,
such designation or assignment would not subject it to any material unreimbursed
cost or expense and would not otherwise be materially disadvantageous to
it. Borrower agrees to pay all reasonable out-of-pocket costs and expenses
incurred by such Affected Lender in connection with any such designation or
assignment. If, after such reasonable efforts, such Affected Lender does not so
designate a different one of its lending offices or assign its rights to another
of its offices or branches so as to eliminate Borrower’s obligation to pay any
future amounts to such Affected Lender pursuant to Section 2.13(a), then
Borrower (without prejudice to any amounts then due to such

 

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Affected Lender under Section 2.13(a)) may, unless prior to the effective date
of any such assignment the Affected Lender withdraws its request for such
additional amounts under Section 2.13(a), may substitute a Lender, in each
case, reasonably acceptable to Administrative Agent to purchase the Obligations
owed to such Affected Lender and such Affected Lender’s commitments hereunder (a
“Replacement Lender”), and if such Replacement Lender agrees to such purchase,
such Affected Lender shall assign to the Replacement Lender its Obligations and
commitments, and upon such purchase by the Replacement Lender, which such
Replacement Lender shall be deemed to be a “Lender” for purposes of this
Agreement and such Affected Lender shall cease to be a “Lender” for purposes of
this Agreement.

(c) Notwithstanding anything herein to the contrary, the protection of Section
2.13 shall be available to each Lender regardless of any possible contention of
the invalidity or inapplicability of the law, rule, regulation, judicial ruling,
judgment, guideline, treaty or other change or condition which shall have
occurred or been imposed, so long as it shall be customary for issuing banks or
lenders affected thereby to comply therewith. Notwithstanding any other
provision herein, no Lender shall demand compensation pursuant to this Section
2.13 if it shall not at the time be the general policy or practice of such
Lender to demand such compensation in similar circumstances under comparable
provisions of other credit agreements, if any.

 

3. CONDITIONS; TERM OF AGREEMENT.

3.1. Conditions Precedent to the Effectiveness of this Agreement. The
effectiveness is subject to the fulfillment, to the satisfaction of
Administrative Agent and each Lender, of each of the conditions precedent set
forth on Schedule 3.1.

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

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

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

3.3. Maturity. This Agreement shall continue in full force and effect for a term
ending on the Maturity Date.

3.4. Effect of Maturity. On the Maturity Date, all of the Obligations
immediately shall become due and payable without notice or demand and Borrower
shall be required to repay all of the Obligations in full. No termination of the
obligations of the Lender Group (other than payment in full of the Obligations
and termination of the Commitments) shall relieve or discharge any Loan Party of
its

 

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duties, obligations, or covenants hereunder or under any other Loan Document and
Collateral Agent’s Liens in the Collateral shall continue to secure the
Obligations and shall remain in effect until all Obligations have been paid in
full and the Commitments have been terminated. When all of the Obligations have
been paid in full and the Lender Group’s obligations to provide additional
credit under the Loan Documents have been terminated irrevocably, each Agent
will, at Borrower’s sole expense, execute and deliver any termination
statements, lien releases, discharges of security interests, and other similar
discharge or release documents (and, if applicable, in recordable form) as are
reasonably necessary to release, as of record, Collateral Agent’s Liens and all
notices of security interests and liens previously filed by Collateral Agent.

3.5. Early Termination by Borrower. Subject to any prepayment or other fees
payable by Borrower or any Loan Party in any Loan Document, on or after January
1, 2018 (or earlier, if the Discharge of Revolving Credit Agreement Obligations
has occurred), Borrower has the option, at any time upon no less than 10
Business Days prior written notice to Administrative Agent, to terminate this
Agreement by repaying to Administrative Agent all of the Obligations in full if
the Availability Conditions have been satisfied. The foregoing notwithstanding,
(a) Borrower may rescind termination notices relative to proposed payments in
full of the Obligations with the proceeds of third party Indebtedness if the
closing for such issuance or incurrence does not happen on or before the date of
the proposed termination (in which case, a new notice shall be required to be
sent in connection with any subsequent termination), and (b) Borrower may extend
the date of termination at any time with the consent of Administrative Agent
(which consent shall not be unreasonably withheld or delayed).

3.6. Conditions Subsequent. The failure by Borrower to so perform or cause to be
performed the conditions subsequent set forth on Schedule 3.6 as and when
required by the terms thereof shall constitute an Event of Default.

 

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, Borrower makes
the following representations and warranties to the Lender Group which shall be
true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
the Term Loans made thereafter, as though made on and as of the date of such
Term Loans (except to the extent that such representations and warranties relate
solely to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) as of such
earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:

4.1. Due Organization and Qualification; Subsidiaries.

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

 

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and as proposed to be conducted, to enter into the Loan Documents to which it is
a party and to carry out the transactions contemplated thereby.

(b) Set forth on Schedule 4.1(b) (as such Schedule may be updated from time to
time to reflect changes resulting from transactions permitted under this
Agreement) is a complete and accurate description of the authorized Equity
Interests of Borrower, by class, and, as of the Closing Date, a description of
the number of shares of each such class that are issued and outstanding. Except
as may be required under Borrower’s equity incentive and compensation plans or
agreements (which plans and agreements are subject to the restrictions set forth
in Section 6.7), Borrower is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its Equity
Interests or any security convertible into or exchangeable for any of its Equity
Interests.

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

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

4.2. Due Authorization; No Conflict.

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

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

4.3. Governmental Consents. The execution, delivery, and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with,

 

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consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than registrations, consents, approvals, notices,
or other actions that have been obtained and that are still in force and effect
and except for filings and recordings with respect to the Collateral to be made,
or otherwise delivered to an Agent for filing or recordation, as of the Closing
Date.

4.4. Binding Obligations; Perfected Liens.

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

(b) Collateral Agent’s Liens are validly created, perfected (other than
(i) money, (ii) letter-of-credit rights (other than supporting obligations),
(iii) commercial tort claims (other than those that, by the terms of the
Guaranty and Security Agreement, are required to be perfected), and (iv) any
Deposit Accounts and Securities Accounts not subject to a Control Agreement as
permitted by Section 7(k)(iv) of the Guaranty and Security Agreement), and first
priority Liens, subject only to Permitted Liens which are non-consensual
Permitted Liens, permitted purchase money Liens, or the interests of lessors
under Capital Leases.

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

4.6. Litigation.

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

(b) Schedule 4.6(b) sets forth a complete and accurate description, with respect
to each of the actions, suits, or proceedings with asserted liabilities in
excess of, or that could reasonably be expected to result in liabilities in
excess of, $3,500,000 that, as of the Closing Date, is pending or, to the
knowledge of Borrower, after due inquiry, threatened against a Loan Party or any
of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings,
(ii) the nature of the dispute that is the subject of such actions, suits, or
proceedings, (iii) the procedural status, as of the Closing Date, with respect
to such actions, suits, or proceedings, and (iv) whether any liability of the
Loan Parties’ and their Subsidiaries in connection with such actions, suits, or
proceedings is covered by insurance.

4.7. Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in
violation of any applicable laws, rules, regulations, executive orders, or codes
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or (b) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or

 

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regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.

4.8. No Material Adverse Effect. All historical financial statements relating to
the Loan Parties and their Subsidiaries that have been delivered by Borrower to
Administrative Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Subsidiaries’ consolidated financial
condition as of the date thereof and results of operations for the period then
ended. Since December 31, 2015, no event, circumstance, or change has occurred
that has or could reasonably be expected to result in a Material Adverse Effect
with respect to the Loan Parties and their Subsidiaries.

4.9. Solvency.

(a) Each Loan Party is Solvent.

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

4.10. Employee Benefits. No Loan Party, none of its Subsidiaries, nor any of
their respective ERISA Affiliates maintains or contributes to any Benefit Plan.

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

4.12. Complete Disclosure. All factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about Borrower’s industry) furnished by
or on behalf of a Loan Party or its Subsidiaries in writing to any Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement or
the other Loan Documents, and all other such factual information taken as a
whole (other than forward-looking information and projections and information of
a general economic nature and general information about Borrower’s industry)
hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in
writing to

 

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any Agent or any Lender will be, true and accurate, in all material respects, on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided. The liquidity forecast
delivered to Administrative Agent on March 7, 2016 represents, and as of the
date on which any Projections are delivered to Administrative Agent, such
Projections represent, Borrower’s good faith estimate, on the date of delivery
thereof, of the Loan Parties’ and their Subsidiaries’ future performance for the
periods covered thereby based upon assumptions believed by Borrower to be
reasonable at the time of the delivery thereof to Administrative Agent (it being
understood that such Projections are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Loan Parties and
their Subsidiaries, and no assurances can be given that such Projections will be
realized, and although reflecting Borrower’s good faith estimate, projections or
forecasts based on methods and assumptions which Borrower believed to be
reasonable at the time such Projections were prepared, are not to be viewed as
facts, and that actual results during the period or periods covered by the
Projections may differ materially from projected or estimated results).

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

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

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

4.16. Margin Stock. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the loans made to Borrower will be used to

 

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purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock or for any purpose that violates the
provisions of Regulation T, U or X of the Board of Governors.

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

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

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

4.20. Material Contracts. Set forth on Schedule 4.20 is a list of the Material
Contracts as of the Closing Date.

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

4.22. [Intentionally Omitted].

 

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4.23. [Intentionally Omitted].

4.24. Location of Equipment. The Equipment of Borrower and its Subsidiaries is
not stored with a bailee, warehouseman, or similar party and is located only at,
or in-transit between, the locations identified on Schedule 4.24 (as such
Schedule may be updated pursuant to Section 5.14).

4.25. [Intentionally Omitted].

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

4.27. Other Documents. Borrower has delivered to Administrative Agent complete
and correct copies of the Bond Documents, the 2016 Bond Documents and the
Revolving Credit Agreement Documents, in each case including all schedules and
exhibits thereto. The execution, delivery and performance of each of the Bond
Documents, the 2016 Bond Documents and the Revolving Credit Agreement Documents
has been duly authorized by all necessary action on the part of each Loan Party
who is a party thereto.

 

5. AFFIRMATIVE COVENANTS.

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

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

5.2. [Intentionally Omitted].

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

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

 

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

5.6. Insurance. Borrower will, and will cause each of its Subsidiaries to, at
Borrower’s expense, (a) maintain insurance respecting each of Borrower’s and its
Subsidiaries’ assets wherever located, covering liabilities, losses or damages
as are customarily are insured against by other Persons engaged in same or
similar businesses and similarly situated and located and (b) with respect to
all Real Property Collateral located in any area that has been designated by the
Federal Emergency Management Agency as a “Special Flood Hazard Area”, maintain
flood insurance with respect to such Real Property Collateral (including any
personal property which is located thereon) in an amount satisfactory to the
Required Lenders. All such policies of insurance shall be with financially sound
and reputable insurance companies acceptable to the Required Lenders (it being
agreed that, as of the Closing Date, each of Hartford Fire Insurance Company and
ACE American Insurance Company is acceptable to the Required Lenders) and in
such amounts as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and located and, in any
event, in amount, adequacy, and scope reasonably satisfactory to the Required
Lenders (it being agreed that the amount, adequacy, and scope of the policies of
insurance of Borrower in effect as of the Closing Date are acceptable to the
Required Lenders). All property insurance policies covering the Collateral are
to be made payable to Collateral Agent for the benefit of the Lender Group, as
their interests may appear, in case of loss, pursuant to a standard loss payable
endorsement with a standard non-contributory “lender” or “secured party” clause
and are to contain such other provisions as Collateral Agent may reasonably
require to fully protect the Lenders’ interest in the Collateral and to any
payments to be made under such policies. All certificates of property and
general liability insurance are to be delivered to Collateral Agent, with the
loss payable (but only in respect of Collateral) and additional insured
endorsements in favor of Collateral Agent and shall provide for not less than 30
days (10 days in the case of non-payment) prior written notice to Collateral
Agent of the exercise of any right of cancellation. If Borrower or its
Subsidiaries fail to maintain such insurance, the Required Lenders may arrange
for such insurance, but at Borrower’s expense and without any responsibility on
the Required Lenders’ part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of
claims. Borrower shall give Agents prompt notice of any loss exceeding $250,000
covered by its or its Subsidiaries’ casualty or business interruption
insurance. Upon the occurrence and the continuance of an Event of Default,
Collateral Agent shall have the sole right to file claims under any property and
general liability insurance policies in respect of the Collateral, to receive,
receipt and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies.

 

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

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

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

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

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

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

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

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

5.11. Formation of Subsidiaries. Borrower will, at the time that any Loan Party
forms any direct or indirect Subsidiary (other than an Immaterial Subsidiary) or
acquires any direct or indirect Subsidiary (other than an Immaterial Subsidiary)
after the Closing Date, within 10 Business Days of such

 

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formation or acquisition (or such later date as permitted by Administrative
Agent in its sole discretion) (a) cause such new Subsidiary to provide to
Administrative Agent a joinder to the Guaranty and Security Agreement, together
with such other security agreements (including mortgages with respect to any
Real Property owned in fee of such new Subsidiary), as well as appropriate
financing statements (and with respect to all property subject to a mortgage,
fixture filings), all in form and substance reasonably satisfactory to
Administrative Agent (including being sufficient to grant Collateral Agent a
first priority Lien (subject to Permitted Liens) in and to the assets of such
newly formed or acquired Subsidiary); provided, that the joinder to the Guaranty
and Security Agreement, and such other security agreements shall not be required
to be provided to Administrative Agent with respect to any Subsidiary of
Borrower that is a CFC if providing such agreements would result in adverse tax
consequences or the costs to the Loan Parties of providing such guaranty or such
security agreements are unreasonably excessive (as determined by Administrative
Agent in consultation with Borrower) in relation to the benefits to the Lender
Group of the security or guarantee afforded thereby, (b) provide, or cause the
applicable Loan Party to provide, to Collateral Agent a pledge agreement (or an
addendum to the Guaranty and Security Agreement) and appropriate certificates
and powers or financing statements, pledging all of the direct or beneficial
ownership interest in such new Subsidiary in form and substance reasonably
satisfactory to Administrative Agent; provided, that only 65% of the total
outstanding voting Equity Interests of any first tier Subsidiary of Borrower
that is a CFC (and none of the Equity Interests of any Subsidiary of such CFC)
shall be required to be pledged if pledging a greater amount would result in
adverse tax consequences or the costs to the Loan Parties of providing such
pledge are unreasonably excessive (as determined by Administrative Agent in
consultation with Borrower) in relation to the benefits to the Lender Group of
the security afforded thereby (which pledge, if reasonably requested by
Administrative Agent, shall be governed by the laws of the jurisdiction of such
Subsidiary), and (c) provide to Agents all other documentation, including one or
more opinions of counsel reasonably satisfactory to Administrative Agent, which,
in its opinion, is appropriate with respect to the execution and delivery of the
applicable documentation referred to above (including policies of title
insurance, flood certification documentation, or other documentation with
respect to all Real Property owned in fee and subject to a mortgage). Any
document, agreement, or instrument executed or issued pursuant to this Section
5.11 shall constitute a Loan Document.

5.12. Further Assurances. Borrower will, and will cause each of the other Loan
Parties to, at any time upon the reasonable request of any Agent, execute or
deliver to such Agent any and all financing statements, fixture filings,
security agreements, pledges, assignments, mortgages, deeds of trust, opinions
of counsel, and all other documents (the “Additional Documents”) that such Agent
may reasonably request in form and substance reasonably satisfactory to
Collateral Agent, to create, perfect, and continue perfected or to better
perfect Collateral Agent’s Liens in all of the assets of Borrower and its
Subsidiaries (whether now owned or hereafter arising or acquired, tangible or
intangible, real or personal), to create and perfect Liens in favor of
Collateral Agent in any Real Property acquired by Borrower or any other Loan
Party with a fair market value in excess of $2,500,000, and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents; provided that the foregoing shall not apply to any Subsidiary of
Borrower that is a CFC if providing such documents would result in adverse tax
consequences or the costs to the Loan Parties of providing such documents are
unreasonably excessive (as determined by Administrative Agent in consultation
with Borrower) in relation to the benefits to the Lender Group of the security
afforded thereby. To the maximum extent permitted by applicable law, if Borrower
or any other Loan Party refuses or fails to execute or deliver any reasonably
requested Additional Documents within a reasonable period of time following the
request to do so, Borrower and each other Loan Party hereby authorizes each
Agent to execute any such Additional Documents in the applicable Loan Party’s
name and authorizes each Agent to

 

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file such executed Additional Documents in any appropriate filing office. In
furtherance of, and not in limitation of, the foregoing, each Loan Party shall
take such actions as any Agent may reasonably request from time to time to
ensure that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of Borrower and its Subsidiaries, including all
of the outstanding capital Equity Interests of Borrower’s Subsidiaries (subject
to exceptions and limitations contained in the Loan Documents with respect to
CFCs).

5.13. Lender Meetings. Borrower will, no less frequently than monthly, upon
reasonable prior notice and subject to Section 17.9, hold a meeting (at a
mutually agreeable location and time or, at the option of Administrative Agent,
by conference call) with all Lenders who choose to attend such meeting at which
meeting shall be reviewed the financial results of the previous month and the
portion of the fiscal year then ended and the financial condition of Borrower
and its Subsidiaries and the projections presented for the then-current fiscal
month and such upcoming fiscal periods of Borrower as Administrative Agent may
request.

5.14. Location of Equipment. Borrower will, and will cause each of its
Subsidiaries to, keep its Equipment only at the locations identified on Schedule
4.24 and their chief executive offices only at the locations identified on
Schedule 5.14; provided, that (a) Borrower may amend Schedule 4.24 or Schedule
5.14 so long as such amendment occurs by written notice to Administrative Agent
not less than 10 days prior to the date on which such Equipment is moved to such
new location or such chief executive office is relocated and so long as such new
location is within the continental United States, and (b) Certificated Equipment
may be moved within the United States.

5.15. [Intentionally Omitted].

5.16. Material Contracts. Borrower shall, and shall cause each of its
Subsidiaries to maintain in full force and effect the Material Contracts and
Borrower shall provide notice to Administrative Agent promptly, but in any event
within 5 Business Days after the occurrence thereof, of any material amendments,
supplements or other modifications to any Material Contract.

5.17. Excess Proceeds Under Indenture. Subject in all respects to Section
2.4(f)(ii), no less than thirty (30) days prior to the date that Borrower and
its Subsidiaries shall have Excess Proceeds and/or Net Bond Proceeds that are
expected to become Excess Proceeds in the aggregate in excess of $25,000,000,
Borrower shall (A) either (i) repay Revolving Credit Agreement Obligations, as
required by the Revolving Credit Agreement, (ii) repay Term Loans in accordance
with Section 2.4(c) or (iii) apply such funds in accordance with clauses (2),
(3) or (4) of Section 4.10(b) of the Bond Indenture and 2016 Bond Indenture
(provided, that such application is not otherwise prohibited by this Agreement),
in either case such that the result is that no such Excess Proceeds shall be
used, and shall not be required to be used, to repurchase any of the Bonds or
2016 Bonds, and (B) deliver to Administrative Agent a certification by an
Authorized Person that no such Excess Proceeds have or will be, and are not
required to be, used to repurchase any of the Bonds or 2016 Bonds. Upon the
request of Administrative Agent, Borrower shall deliver a report to
Administrative Agent (i) describing each Asset Sale consummated since April 10,
2012 and the date of consummation thereof, (ii) setting forth the date of
receipt and amount of Net Bond Proceeds in connection with each such Asset Sale,
and (iii) setting forth the date and the application of the Net Bond Proceeds
from each such Asset Sale in accordance with clauses (2), (3) or (4) of Section
4.10(b) of the Bond Indenture and Section 4.10(b) of the 2016 Bond
Indenture. Not less than one hundred (120) days prior to the date that any Net
Bond Proceeds of Asset Sales would become Excess Proceeds, Borrower shall
provide written notification thereof to Administrative Agent, together with a

 

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certification by an Authorized Person certifying the amount of such Net Bond
Proceeds that shall become Excess Proceeds.

 

6. NEGATIVE COVENANTS.

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

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

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

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

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

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

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

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

6.5. Nature of Business. Borrower will not, and will not permit any of its
Subsidiaries to make any change in the nature of its or their business as
described in Schedule 6.5 or acquire any

 

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properties or assets that are not reasonably related to the conduct of such
business activities; provided, that the foregoing shall not prevent Borrower and
its Subsidiaries from engaging in any business that is reasonably related or
ancillary to its or their business.

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

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

(i) optionally prepay, redeem, defease, purchase or otherwise acquire any
Indebtedness of Borrower or its Subsidiaries, other than (A) the Obligations in
accordance with this Agreement, (B) Revolving Credit Agreement Obligations and
(C) Permitted Intercompany Advances,

(ii) optionally prepay, redeem, defease, purchase, or otherwise acquire any Bond
Debt or 2016 Bond Debt, or

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

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

(i) any agreement, instrument, document, indenture, or other writing evidencing
or concerning Permitted Indebtedness other than (A) the Obligations in
accordance with this Agreement, (B) Permitted Intercompany Advances,
(C) Indebtedness permitted under clauses (c), (h), (j) and (k) of the definition
of Permitted Indebtedness and (D) the Revolving Credit Agreement unless in the
case of this clause (D) such amendment, modification or change is in
contravention of the Intercreditor Agreements, or

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

6.7. Restricted Payments. Borrower will not, and will not permit any of its
Subsidiaries to make any Restricted Payment; provided, that, so long as it is
permitted by law, and so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, Borrower may make
distributions to former employees, officers, or directors of Borrower (or any
spouses, ex-spouses, or estates of any of the foregoing), solely in the form of
forgiveness of Indebtedness of such Persons owing to Borrower on account of
repurchases of the Equity Interests of Borrower held by such Persons; provided
that such Indebtedness was incurred by such Persons solely to acquire Equity
Interests of Borrower.

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

 

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

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

(a) transactions (other than the payment of management, consulting, monitoring,
or advisory fees) between Borrower or its Subsidiaries, on the one hand, and any
Affiliate of Borrower or its Subsidiaries, on the other hand, so long as such
transactions (i) are fully disclosed to Administrative Agent prior to the
consummation thereof, (ii) do not involve one or more payments by Borrower or
its Subsidiaries in excess of $2,500,000 for any single transaction or series of
related transactions, and (iii) are no less favorable, taken as a whole, to
Borrower or its Subsidiaries, as applicable, than would be obtained in an arm’s
length transaction with a non-Affiliate,

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

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

(d) transactions permitted by clause (p) of the definition of “Permitted
Investment”, and transactions permitted by Section 6.3 or Section 6.7, or any
Permitted Intercompany Advance.

Notwithstanding anything contained in the Loan Documents to the contrary, no
Loan Party shall make an Investment in, sell, lease, license, assign, contribute
or otherwise transfer any assets to, make any distributions or payments to, or
otherwise engage in, or enter into, any transaction with, any Immaterial
Subsidiary, which involves in excess of $100,000 in any fiscal year for all such
Investments, transfers, distributions, payments and transactions with all
Immaterial Subsidiaries.

6.11. Use of Proceeds. Borrower will not, and will not permit any of its
Subsidiaries to use the proceeds of any loan made hereunder for any purpose
other than (a) on the Closing Date, to pay the fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for their lawful and permitted purposes
(including the repurchase, redemption, prepayment or other acquisition of any
Bond Debt; provided, however, that no part of the proceeds of the loans made to
Borrower will be used to purchase or carry any such Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any such Margin Stock
or for any purpose that violates the provisions of Regulation T, U or X of the
Board of Governors).

6.12. Limitation on Issuance of Equity Interests. Except for the issuance or
sale of Qualified Equity Interests by Borrower, Borrower will not, and will not
permit any of its Subsidiaries to

 

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issue or sell or enter into any agreement or arrangement for the issuance or
sale of any of its Equity Interests.

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

6.14. Capital Expenditures. Borrower will not, and will not permit any of its
Subsidiaries to make or become legally obligated to make any Capital
Expenditure, except for Capital Expenditures in the ordinary course of business
(x) for the fiscal years ending December 31, 2016 and December 31, 2017, in an
aggregate amount for Borrower and its subsidiaries not exceeding $7,500,000
during such fiscal year, and (y) for each fiscal year ending thereafter, in an
aggregate amount for Borrower and its subsidiaries not exceeding $10,000,000
during such fiscal year.

6.15. Compensation. Borrower will not, and will not permit any of its
Subsidiaries to pay or otherwise compensate Mark D. Johnsrud (including in the
form of a salary, or a bonus award or other incentive compensation, and
regardless of whether such compensation is paid in cash or in kind) in his
capacity as chief executive officer of the Borrower or otherwise, except that,
beginning with the fiscal year ending December 31, 2017, Borrower and its
Subsidiaries may, in the aggregate, award Mark D. Johnsrud an annual salary not
exceeding $700,000.

6.16. MIP Term Sheet. Borrower will not, and will not permit any of its
Subsidiaries or representatives to modify any terms of the MIP Program in a
manner materially more favorable to the participants therein or materially more
costly to Borrower than those set forth in the MIP Term Sheet; provided that the
common shares of Borrower available for issuance under the MIP Program shall not
in any event exceed 10% of the common shares of Borrower outstanding on a
fully-diluted basis.

 

7. FINANCIAL COVENANTS.

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

(a) Minimum EBITDA. Achieve EBITDA, measured on a month-end basis, of at least
the required amount set forth in the following table for the applicable period
set forth opposite thereto:

 

Applicable Amount

    

Applicable Period

$ 2,117,000       For the 4 month period ending April 30, 2016 $ 3,316,000      
For the 5 month period ending May 31, 2016 $ 4,858,000       For the 6 month
period ending June 30, 2016

 

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Applicable Amount

    

Applicable Period

$ 6,933,000       For the 7 month period ending July 31, 2016 $ 9,036,000      
For the 8 month period ending August 31, 2016 $ 11,171,000       For the 9 month
period ending September 30, 2016 $ 13,354,000       For the 10 month period
ending October 31, 2016 $ 15,565,000       For the 11 month period ending
November 30, 2016 $ 17,850,000       For the 12 month period ending December 31,
2016, and for each 12 month period ending each month thereafter

 

8. EVENTS OF DEFAULT.

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

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

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

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

 

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

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

8.3. Judgments. If one or more judgments, orders, or awards for the payment of
money involving an aggregate amount of $10,000,000, or more (except to the
extent covered (other than to the extent of customary deductibles) by insurance
pursuant to which the insurer has not denied coverage) is entered or filed
against a Loan Party or any of its Subsidiaries, or with respect to any of their
respective assets, and either (a) there is a period of 30 consecutive days at
any time after the entry of any such judgment, order, or award during which
(1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(2) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;

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

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

8.6. Default Under Other Agreements. If there is (a) a default under the Bond
Documents; (b) a default under the 2016 Bond Documents; (c) a default under the
Revolving Credit Agreement Documents; (d) a default in one or more agreements to
which a Loan Party or any of its Subsidiaries is a party with one or more third
Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness
involving an aggregate amount of $7,500,000 or more, and such default (i) occurs
at the final maturity of the obligations thereunder, or (ii) results in a right
by such third Person, irrespective of whether exercised, to accelerate the
maturity of such Loan Party’s or its Subsidiary’s obligations thereunder; or
(e) a default in or an involuntary early termination of one or more Hedge
Agreements to which a Loan Party or any of its Subsidiaries is a party involving
an aggregate amount of $7,500,000 or more;

8.7. Representations, etc. If any warranty, representation, certificate,
statement, or Record made herein or in any other Loan Document or delivered in
writing to Administrative Agent or any Lender in connection with this Agreement
or any other Loan Document proves to be untrue in any

 

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material respect (except that such materiality qualifier shall not be applicable
to any representations and warranties that already are qualified or modified by
materiality in the text thereof) as of the date of issuance or making or deemed
making thereof;

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

8.9. Security Documents. If Guaranty and Security Agreement or any other Loan
Document that purports to create a Lien, shall, for any reason, fail or cease to
create a valid and perfected and, except to the extent of Permitted Liens which
are non-consensual Permitted Liens, permitted purchase money Liens or the
interests of lessors under Capital Leases, first priority Lien on the Collateral
covered thereby, except (a) as a result of a disposition of the applicable
Collateral in a transaction permitted under this Agreement or (b) as the result
of an action or failure to act on the part of any Agent;

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

8.11. Change of Control. A Change of Control shall occur.

 

9. RIGHTS AND REMEDIES.

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

(a) declare the principal of, and any and all accrued and unpaid interest and
fees in respect of, the Loans and all other Obligations, whether evidenced by
this Agreement or by any of the other Loan Documents to be immediately due and
payable, whereupon the same shall become and be immediately due and payable and
Borrower shall be obligated to repay all of such Obligations in full, without
presentment, demand, protest, or further notice or other requirements of any
kind, all of which are hereby expressly waived by Borrower;

(b) declare the Commitments terminated, whereupon the Commitments shall
immediately be terminated together with any obligation of any Term Lender to
make Term Loans; and

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

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the

 

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Obligations, inclusive of the principal of, and any and all accrued and unpaid
interest and fees in respect of, the Loans and all other Obligations, whether
evidenced by this Agreement or by any of the other Loan Documents, shall
automatically become and be immediately due and payable and Borrower shall
automatically be obligated to repay all of such Obligations in full (including
Borrower being obligated to provide, without presentment, demand, protest, or
notice or other requirements of any kind, all of which are expressly waived by
Borrower).

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

 

10. WAIVERS; INDEMNIFICATION.

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

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

10.3. Indemnification. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an “Indemnified Person”) harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, fines, costs, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution and delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrower’s and its
Subsidiaries’ compliance with the terms of the Loan Documents (provided, that
the indemnification in this clause (a) shall not extend to (i) disputes solely
between or among the Lenders that do not involve any acts or omissions of any
Loan Party, or (ii) disputes solely between or among the Lenders and their
respective Affiliates that do not involve any acts or omissions of any Loan
Party; it being understood and agreed that the indemnification in this clause
(a) shall extend to Agents (but not the Lenders) relative to disputes between or
among Administrative Agent or Collateral Agent on the one hand, and one or more
Lenders, or one or more of their Affiliates, on the other hand, or (iii) any
Taxes or any costs attributable to Taxes, other than any Taxes that represent
liabilities, fines, costs, penalties or damages arising from any non-Tax claim),
(b) with respect to any actual or prospective investigation, litigation, or
proceeding related to this Agreement, any other Loan

 

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Document, the making of any Loans hereunder, or the use of the proceeds of the
Loans provided hereunder (irrespective of whether any Loan Party or Indemnified
Person is a party thereto), or any act, omission, event, or circumstance in any
manner related thereto, and (c) in connection with or arising out of any
presence or release of Hazardous Materials at, on, under, to or from any assets
or properties owned, leased or operated by Borrower or any of its Subsidiaries
or any Environmental Actions, Environmental Liabilities or Remedial Actions
related in any way to any such assets or properties of Borrower or any of its
Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The
foregoing to the contrary notwithstanding and subject to Section 15.2, Borrower
shall have no obligation to any Indemnified Person under this Section 10.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person or its officers, directors, employees,
attorneys, or agents. This provision shall survive the termination of this
Agreement and the repayment in full of the Obligations. If any Indemnified
Person makes any payment to any other Indemnified Person with respect to an
Indemnified Liability as to which Borrower was required to indemnify the
Indemnified Person receiving such payment, the Indemnified Person making such
payment is entitled to be indemnified and reimbursed by Borrower with respect
thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN
PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON. THE PROVISIONS OF THIS SECTION 10.3
SHALL SURVIVE THE RESIGNATION OR TERMINATION OF ANY AGENT AND TERMINATION OF
THIS AGREEMENT.

 

11. NOTICES.

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

 

If to Borrower:   

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

14624 North Scottsdale Road, Suite 300

Scottsdale, Arizona 85254

Attn: Chief Financial Officer

Fax No. (602) 903-7806

with copies to:   

SQUIRE PATTON BOGGS (US) LLP

1 E. Washington Street, Suite 2700

Phoenix, Arizona 85004

Attn: Matthew Holman, Esq.

Fax No. (602) 253-8129

 

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If to Administrative Agent:   

WILMINGTON SAVINGS FUND SOCIETY, FSB

500 Delaware Avenue

Wilmington, DE 19801

Attention: Corporate Trust

Reference: Nuverra Environmental Solutions, Inc. Term Loan Credit Agreement

Facsimile: 302-421-9137

with copies to:   

MORRISON & FOERSTER LLP

250 West 55th Street

New York, NY 10019-9601

Attn: Jon Levine, Esq.

Fax No. 212-468-7900

If to Collateral Agent:   

WELLS FARGO BANK, NATIONAL ASSOCIATION

1100 Abernathy Road, Suite 1600

Atlanta, Georgia 30328

Attn: Account Manager - Nuverra

Fax No. (866) 358-0879

with copies to:   

GOLDBERG KOHN LTD.

55 East Monroe Street, Suite 3300

Chicago, Illinois 60603

Attn: Gary Zussman, Esq.

Fax No. (312) 332-2196

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

 

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

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER

 

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OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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

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

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

(e) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST THE AGENT, THE SWING LENDER,
ANY OTHER LENDER, ISSUING BANK, OR ANY

 

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AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR
ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF
CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY
HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.

 

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1. Assignments and Participations.

(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender
may assign and delegate all or any portion of its rights and duties under the
Loan Documents (including the Obligations owed to it and its Commitments) to one
or more assignees so long as such prospective assignee is an Eligible Transferee
(each, an “Assignee”), with prior written notice to Administrative Agent.

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

(A) no assignment may be made to a natural person;

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

(C) the amount of the Term Loans, Commitments and the other rights and
obligations of the assigning Lender hereunder and under the other Loan Documents
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to Administrative Agent)
shall be in a minimum amount (unless waived by Administrative Agent) of $100,000
(except such minimum amount shall not apply to (I) an assignment or delegation
by any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund
of such Lender or (II) a group of new Lenders, each of which is an Affiliate of
each other or a Related Fund of such new Lender to the extent that the aggregate
amount to be assigned to all such new Lenders is at least $100,000);

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

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

 

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

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

(H) no Lender may assign or participate any portion of its Term Loans,
Commitments or other rights and obligations hereunder and under the other Loan
Documents to a Person that is not a Lender (a “Third Party Assignee”) unless
such assignment or participation is expressly permitted under this subsection
(H). If a Lender (the “Assigning Lender”) shall have made an offer (the “Offer”)
to all other Lenders (the “Non-Assigning Lenders”), offering such Non-Assigning
Lenders the opportunity to acquire or participate in a certain amount (the
“Offer Amount”) of such Lender’s Term Loans, Commitments and other rights and
obligations at a certain price specified in such Offer (the “Offer Price”) then,
except to the extent that prior to the fifth Business Day following such Offer
one or more of the Non-Assigning Lenders shall have agreed to acquire or
participate in, as applicable, the Offer Amount of the Term Loans, Commitments
or other rights and obligations hereunder and under the other Loan Documents at
the Offer Price, the Assigning Lender shall be permitted for a period of sixty
(60) days following delivery of the Offer to assign or participate an aggregate
amount of its Term Loans, Commitments or other rights and obligations hereunder
and under the other Loan Documents in an aggregate amount equal to the Offer
Amount at the Offer Price to any Third Party Assignee. If no assignment or
participation, as the case may be, occurs within such 60-day period, the
Assigning Lender shall comply with the provisions of this subsection (H) with
respect to such unassigned and unsold Obligations.

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

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no

 

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responsibility with respect to the financial condition of any Loan Party 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, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Administrative
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement,
(v) such Assignee appoints and authorizes Administrative Agent to take such
actions and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Administrative Agent, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto, and
(vi) such Assignee agrees that it will perform all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.

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

(e) Any Lender may, subject in any event to compliance with the right of first
offer provisions of Section 13.1(a)(ii)(H), at any time sell to one or more
commercial banks, financial institutions, or other Persons (a “Participant”)
participating interests in all or any portion of its Obligations, its
Commitment, and the other rights and interests of that Lender (the “Originating
Lender”) hereunder and under the other Loan Documents; provided, that (i) the
Originating Lender shall remain a “Lender” for all purposes of this Agreement
and the other Loan Documents and the Participant receiving the participating
interest in the Obligations, the Commitments, and the other rights and interests
of the Originating Lender hereunder shall not constitute a “Lender” hereunder or
under the other Loan Documents and the Originating Lender’s obligations under
this Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Administrative Agent, and the Lenders shall continue to deal solely and directly
with the Originating Lender in connection with the Originating Lender’s rights
and obligations under this Agreement and the other Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, (v) no participation shall be sold to a
natural person, (vi) no participation shall be sold to a Loan Party or an
Affiliate of a Loan Party, and (vii) all amounts payable by Borrower hereunder
(other than amounts payable to a Participant pursuant to Section 16 of this
Agreement) shall be determined as if such Lender had not sold such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become

 

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due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Administrative Agent,
Borrower, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.

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

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

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

(i) In the event that a Lender sells participations in the Registered Loan, such
Lender, as a non-fiduciary agent on behalf of Borrower, shall maintain (or cause
to be maintained) a register on which it enters the name of all participants in
the Registered Loans held by it (and the principal amount (and stated interest
thereon) of the portion of such Registered Loans that is subject to

 

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such participations) (the “Participant Register”). A Registered Loan (and the
Registered Note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.

(j) Administrative Agent shall make a copy of the Register (and each Lender
shall make a copy of its Participant Register to the extent it has one)
available for review by Borrower from time to time as Borrower may reasonably
request.

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

 

14. AMENDMENTS; WAIVERS.

14.1. Amendments and Waivers.

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

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

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

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

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

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

 

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

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

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

(ix) contractually subordinate any of Collateral Agent’s Liens,

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

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

(xii) amend, modify, or eliminate any of the provisions of Section 13.1 with
respect to assignments to, or participations with, Persons who are Loan Parties
or Affiliates of Loan Parties.

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

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

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

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

 

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14.2. Replacement of Certain Lenders.

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

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

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

 

15. AGENT; THE LENDER GROUP.

15.1. Appointment and Authorization of Agents. Each Lender hereby designates and
appoints Wilmington as its administrative agent under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes
Administrative Agent, in such capacity, to execute and deliver each of the other
Loan Documents on its behalf and to take such other action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform

 

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such duties as are expressly delegated to Administrative Agent by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Each Lender hereby designates and appoints Wells
Fargo as its collateral agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes Collateral Agent, in such
capacity, to execute and deliver each of the other Loan Documents on its behalf
and to take such other action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to Collateral Agent by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Each Agent agrees to act as agent for and on
behalf of the Lenders on the conditions contained in this Section 15. The
provisions of this Section 15 are solely for the benefit of the Agents and the
Lenders, and neither the Borrower nor any other party shall have rights as a
third-party beneficiary of any of such provisions. Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, no Agent shall have any duties or responsibilities, except
those expressly set forth herein or in the other Loan Documents, nor shall any
Agent have or be deemed to have any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent. Without limiting the generality of the
foregoing, the use of the term “agent” in this Agreement or the other Loan
Documents with reference to any Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only a representative relationship between
independent contracting parties. Each Lender hereby further authorizes
Collateral Agent to act as the secured party under each of the Loan Documents
that create a Lien on any item of Collateral. Except as expressly otherwise
provided in this Agreement, Lenders agree that each Agent shall have and may use
its sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that each
Agent expressly is entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to any Agent, Lenders agree that Administrative Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
payments and proceeds of Collateral, and related matters, (b) execute or file
any and all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents to which it is a party, (c) make
Term Loans, for itself or on behalf of Lenders, as provided in the Loan
Documents, (d) receive, apply, and distribute payments and proceeds of the
Collateral as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Administrative Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes, (f) perform, exercise, and enforce any and all other rights
and remedies of the Lender Group with respect to Borrower or its Subsidiaries,
the Obligations, the Collateral, or otherwise related to any of same as provided
in the Loan Documents, and (g) incur and pay such Lender Group Expenses as
Administrative Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents. Without
limiting the generality of the foregoing, or of any other provision of the Loan
Documents that provides rights or powers to any Agent, Lenders agree that
Collateral Agent shall have the right to exercise the following powers as long
as this Agreement remains in effect: (a) maintain, in accordance with its
customary business practices, ledgers and records reflecting the status of the
Obligations, the Collateral, payments and proceeds of Collateral, and related
matters, (b) execute or file any and all financing or similar statements or
notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect

 

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to the Loan Documents to which it is a party, (d) receive, apply, and distribute
payments and proceeds of the Collateral as provided in the Loan Documents,
(e) open and maintain such bank accounts and cash management arrangements as
such Collateral Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce
any and all other rights and remedies of the Lender Group with respect to
Borrower or its Subsidiaries, the Obligations, the Collateral, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Collateral Agent may deem necessary or appropriate
for the performance and fulfillment of its functions and powers pursuant to the
Loan Documents.

15.2. Delegation of Duties. Any Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agent or attorney in fact except to the extent
that a court of competent jurisdiction determines in a final and nonappealable
order that the Agent, as applicable, acted with gross negligence or willful
misconduct in the selection of such agent(s) or attorney(s) in fact.

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

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

 

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15.5. Notice of Default or Event of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to such Agent for the account of the Lenders and,
except with respect to Events of Default of which such Agent has actual
knowledge, unless such Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.” Each Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which such Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and each Agent of such Event of Default. Each Lender shall be
solely responsible for giving any notices to its Participants, if any. Subject
to Section 15.4, each Agent shall take such action with respect to such Default
or Event of Default as may be requested by the Required Lenders in accordance
with Section 9; provided, that unless and until an Agent has received any such
request, each Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.

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

15.7. Costs and Expenses; Indemnification. Each Agent may incur and pay Lender
Group Expenses to the extent such Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys’
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not Borrower is

 

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obligated to reimburse an Agent or Lenders for such expenses pursuant to this
Agreement or otherwise. Each Agent is authorized and directed to deduct and
retain sufficient amounts from payments or proceeds of the Collateral received
by such Agent to reimburse such Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders. In the event any Agent is
not reimbursed for such costs and expenses by Borrower or its Subsidiaries, each
Lender hereby agrees that it is and shall be obligated to pay to such Agent such
Lender’s ratable thereof. Whether or not the transactions contemplated hereby
are consummated, each of the Lenders, on a ratable basis, shall indemnify and
defend the Agent-Related Persons (to the extent not reimbursed by or on behalf
of Borrower and without limiting the obligation of Borrower to do so) from and
against any and all Indemnified Liabilities; provided, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make a Term Loan or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse any
Agent upon demand for such Lender’s ratable share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
expenses) incurred by such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any other Loan
Document to the extent that such Agent is not reimbursed for such expenses by or
on behalf of Borrower. The undertaking in this Section shall survive the payment
of all Obligations hereunder and the resignation or replacement of any Agent.

15.8. Agents in Individual Capacity. Each of Wells Fargo, Wilmington and their
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire Equity Interests in, and generally engage in
any kind of banking, trust, financial advisory, underwriting, or other business
with Borrower and its Subsidiaries and Affiliates and any other Person party to
any Loan Document as though Wells Fargo and Wilmington were not Agents
hereunder, and, in each case, without notice to or consent of the other members
of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, Wells Fargo, Wilmington and their respective
Affiliates may receive information regarding Borrower or its Affiliates or any
other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver each Agent will use its reasonable best efforts to
obtain), no Agent shall be under any obligation to provide such information to
them.

15.9. Successor Agents. Each Agent may resign as an Agent upon 30 days (10 days
if an Event of Default has occurred and is continuing) prior written notice to
the Lenders (unless such notice is waived by the Required Lenders) and Borrower
(unless such notice is waived by Borrower or an Event of Default exists). In
addition, the Required Lenders may remove or terminate any Agent upon not less
than 10 days’ written notice to such Agent and Borrower (unless such notice is
waived by Borrower or an Event of Default exists). If any Agent resigns or is
terminated, as the case may be, under this Agreement, the Required Lenders shall
be entitled to appoint a successor Agent for the Lenders. If no successor Agent
is appointed prior to the effective date of the resignation or termination, as
the case may be, of Agent, the Required Lenders may appoint a successor Agent
from among the Lenders or such other Person as the Required Lenders shall
select. In any such event, upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers,
and duties of the retiring Agent and the term “Agent” shall mean such successor
Agent and the retiring Agent’s appointment, powers, and duties as an Agent shall
be terminated. After any retiring Agent’s resignation

 

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or termination, as the case may be, hereunder as an Agent, the provisions of
this Section 15 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent under this Agreement. If no successor Agent
has accepted appointment as Administrative Agent or Collateral Agent, as
applicable, by the date which is 30 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of such Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.

15.10. Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though such Lender were not a Lender hereunder without notice to or consent of
the other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Borrower or its Affiliates or any
other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances, such Lender shall not be under any obligation to provide
such information to them.

15.11. Collateral Matters.

(a) The Lenders hereby irrevocably authorize Collateral Agent to release any
Lien on any Collateral (i) upon the termination of the Commitments and payment
and satisfaction in full by Borrower of all of the Obligations,
(ii) constituting property being sold or disposed of if a release is required or
desirable in connection therewith and if Borrower certifies to Collateral Agent
that the sale or disposition is permitted under Section 6.4 (and Collateral
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which neither Borrower nor its Subsidiaries owned
any interest at the time Collateral Agent’s Lien was granted nor at any time
thereafter, (iv) constituting property leased or licensed to Borrower or its
Subsidiaries under a lease or license that has expired or is terminated in a
transaction permitted under this Agreement, or (v) in connection with a credit
bid or purchase authorized under this Section 15.11. The Loan Parties and the
Lenders hereby irrevocably authorize each Agent, based upon the instruction of
the Required Lenders, to (a) consent to, credit bid or purchase (either directly
or indirectly through one or more entities) all or any portion of the Collateral
at any sale thereof conducted under the provisions of the Bankruptcy Code,
including Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either
directly or indirectly through one or more entities) all or any portion of the
Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or indirectly through one
or more entities) all or any portion of the Collateral at any other sale or
foreclosure conducted or consented to by an Agent in accordance with applicable
law in any judicial action or proceeding or by the exercise of any legal or
equitable remedy. In connection with any such credit bid or purchase, (i) the
Obligations owed to the Lenders shall be entitled to be, and shall be, credit
bid on a ratable basis (with Obligations with respect to contingent or
unliquidated claims being estimated for such purpose if the fixing or
liquidation thereof would not impair or unduly delay the ability of an Agent to
credit bid or purchase at such sale or other disposition of the Collateral and,
if such contingent or unliquidated claims cannot be estimated without impairing
or unduly delaying the ability of an Agent to credit bid at such sale or other
disposition, then such claims shall be disregarded, not credit bid, and not
entitled to any interest in the Collateral that is the subject of such credit
bid or purchase) and

 

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the Lenders whose Obligations are credit bid shall be entitled to receive
interests (ratably based upon the proportion of their Obligations credit bid in
relation to the aggregate amount of Obligations so credit bid) in the Collateral
that is the subject of such credit bid or purchase (or in the Equity Interests
of the any entities that are used to consummate such credit bid or purchase),
and (ii) each Agent, based upon the instruction of the Required Lenders, may
accept non-cash consideration, including debt and equity securities issued by
any entities used to consummate such credit bid or purchase and in connection
therewith such Agent may reduce the Obligations owed to the Lenders (ratably
based upon the proportion of their Obligations credit bid in relation to the
aggregate amount of Obligations so credit bid) based upon the value of such
non-cash consideration. Except as provided above, no Agent will execute and
deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon
request by Collateral Agent or Borrower at any time, the Lenders will confirm in
writing Collateral Agent’s authority to release any such Liens on particular
types or items of Collateral pursuant to this Section 15.11; provided, that
(1) anything to the contrary contained in any of the Loan Documents
notwithstanding, Collateral Agent shall not be required to execute any document
or take any action necessary to evidence such release on terms that, in
Collateral Agent’s opinion, could expose Collateral Agent to liability or create
any obligation or entail any consequence other than the release of such Lien
without recourse, representation, or warranty, and (2) such release shall not in
any manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly released) upon (or obligations of Borrower in respect of) any
and all interests retained by Borrower, including, the proceeds of any sale, all
of which shall continue to constitute part of the Collateral. Each Lender
further hereby irrevocably authorize Collateral Agent, at its option and in its
sole discretion, to subordinate any Lien granted to or held by Collateral Agent
under any Loan Document to the holder of any Permitted Lien on such property if
such Permitted Lien secures Permitted Purchase Money Indebtedness.

(b) Collateral Agent shall have no obligation whatsoever to any of the Lenders
(i) to verify or assure that the Collateral exists or is owned by Borrower or
its Subsidiaries or is cared for, protected, or insured or has been encumbered,
(ii) to verify or assure that Collateral Agent’s Liens have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, (iii) to verify or assure that any
particular items of Collateral meet the eligibility criteria applicable in
respect thereof, (iv) to impose, maintain, increase, reduce, implement, or
eliminate any particular reserve hereunder or to determine whether the amount of
any reserve is appropriate or not, or (v) to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Collateral Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, subject to the terms and conditions contained herein,
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion given Collateral Agent’s own interest in the Collateral in its
capacity as one of the Lenders and that Collateral Agent shall have no other
duty or liability whatsoever to any Lender as to any of the foregoing, except as
otherwise expressly provided herein.

15.12. Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Administrative Agent, set off against the Obligations, any amounts
owing by such Lender to Borrower or its Subsidiaries or any deposit accounts of
Borrower or its Subsidiaries now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by Administrative Agent, take or cause to be taken any
action, including, the

 

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commencement of any legal or equitable proceedings to enforce any Loan Document
against Borrower or any Guarantor or to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral.

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

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

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

15.15. Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Administrative Agent and Collateral Agent to
enter into this Agreement and the other Loan Documents to which it is a
party. Each member of the Lender Group agrees that any action taken by an Agent
in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by any Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

15.16. [Intentionally Omitted].

15.17. Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Administrative Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Administrative Agent (if
any) to make any credit available hereunder shall constitute the several (and
not

 

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joint) obligations of the respective Lenders on a ratable basis, according to
their respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for such Lender or on its behalf, nor to take any other action on
behalf of such Lender hereunder or in connection with the financing contemplated
herein.

 

16. WITHHOLDING TAXES.

16.1. Payments. All payments by or on account of any obligation of any Loan
Party under any Loan Document will be made free and clear of, and without
deduction or withholding for, any present or future Indemnified Taxes, and in
the event any deduction or withholding of Indemnified Taxes is required,
Borrower shall comply with the next sentence of this Section 16.1. If any
Indemnified Taxes are so levied or imposed, Borrower agrees to pay the full
amount of such Indemnified Taxes and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement, any note, or Loan
Document, including any amount paid pursuant to this Section 16.1 after
withholding or deduction for or on account of any Indemnified Taxes, will not be
less than the amount provided for herein. The Borrower shall indemnify
Administrative Agent and each Lender and Participant, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section 16.1) payable or paid by such Agent, Lender or Participant or
required to be withheld or deducted from a payment to such Agent, Lender or
Participant 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. Borrower will furnish to
Administrative Agent as promptly as possible after the date the payment of any
Indemnified Tax is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by Borrower. Borrower agrees to pay any present
or future stamp, value added or documentary taxes or any other excise or
property taxes, charges, or similar levies that arise from any payment made
hereunder or from the execution, delivery, performance, recordation, or filing
of, or otherwise with respect to this Agreement or any other Loan Document.

16.2. Exemptions.

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

(i) if such Lender or Participant is entitled to claim an exemption from United
States withholding tax pursuant to the portfolio interest exception, (A) a
statement of the Lender or Participant, signed under penalty of perjury, that it
is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a
10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the
IRC), or (III) a controlled foreign corporation related to Borrower within the
meaning of Section

 

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864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form
W-8BEN-E or Form W-8IMY (with proper attachments);

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

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

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

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

(b) Each Lender and each Participant shall provide new forms (or successor
forms) upon the expiration or obsolescence of any previously delivered forms or
promptly notify Borrower and Administrative Agent in writing of its legal
inability to do so. Each Lender or Participant shall promptly notify
Administrative Agent (or, in the case of a Participant, to the Lender granting
the participation only) of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.

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

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

16.3. Reductions.

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

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

16.4. Refunds. If Administrative Agent or a Lender reasonably determines that it
has received a refund of any Indemnified Taxes to which Borrower has paid
additional amounts pursuant to this Section 16, so long as no Default or Event
of Default has occurred and is continuing, it shall pay over such refund to
Borrower (but only to the extent of payments made, or additional amounts paid,
by Borrower under this Section 16 with respect to Indemnified Taxes giving rise
to such a refund), net of all out-of-pocket expenses of Administrative Agent or
such Lender and without interest (other than any interest paid by the applicable
Governmental Authority with respect to such a refund); provided, that Borrower,
upon the request of Administrative Agent or such Lender, agrees to repay the
amount paid over to Borrower (plus any penalties, interest or other charges,
imposed by the applicable Governmental Authority, other than such penalties,
interest or other charges imposed as a result of the willful

 

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misconduct or gross negligence of Administrative Agent hereunder) to
Administrative Agent or such Lender in the event Administrative Agent or such
Lender is required to repay such refund to such Governmental
Authority. Notwithstanding anything in this Agreement to the contrary, this
Section 16 shall not be construed to require Administrative Agent or any Lender
to make available its tax returns (or any other information which it deems
confidential) to Borrower or any other Person.

 

17. GENERAL PROVISIONS.

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

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

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

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

17.5. [Intentionally Omitted].

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

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

 

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17.8. Revival and Reinstatement of Obligations; Certain Waivers. If any member
of the Lender Group repays, refunds, restores, or returns in whole or in part,
any payment or property (including any proceeds of Collateral) previously paid
or transferred to such member of the Lender Group in full or partial
satisfaction of any Obligation or on account of any other obligation of any Loan
Party under any Loan Document, because the payment, transfer, or the incurrence
of the obligation so satisfied is asserted or declared to be void, voidable, or
otherwise recoverable under any law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent transfers, preferences,
or other voidable or recoverable obligations or transfers (each, a “Voidable
Transfer”), or because such member of the Lender Group elects to do so on the
reasonable advice of its counsel in connection with a claim that the payment,
transfer, or incurrence is or may be a Voidable Transfer, then, as to any such
Voidable Transfer, or the amount thereof that such member of the Lender Group
elects to repay, restore, or return (including pursuant to a settlement of any
claim in respect thereof), and as to all reasonable costs, expenses, and
attorneys’ fees of such member of the Lender Group related thereto, (i) the
liability of the Loan Parties with respect to the amount or property paid,
refunded, restored, or returned will automatically and immediately be revived,
reinstated, and restored and will exist and (ii) Collateral Agent’s Liens
securing such liability shall be effective, revived, and remain in full force
and effect, in each case, as fully as if such Voidable Transfer had never been
made. If, prior to any of the foregoing, (A) Collateral Agent’s Liens shall have
been released or terminated or (B) any provision of this Agreement shall have
been terminated or cancelled, Collateral Agent’s Liens, or such provision of
this Agreement, shall be reinstated in full force and effect and such prior
release, termination, cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligation of any Loan Party in
respect of such liability or any Collateral securing such liability.

17.9. Confidentiality.

(a) Agents and Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Borrower and
its Subsidiaries, their operations, assets, and existing and contemplated
business plans (“Confidential Information”) shall be treated by Agents and the
Lenders in a confidential manner, and shall not be disclosed by Agents and the
Lenders to Persons who are not parties to this Agreement, except: (i) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group and to employees, directors and officers of any
member of the Lender Group (the Persons in this clause (i), “Lender Group
Representatives”) on a “need to know” basis in connection with this Agreement
and the transactions contemplated hereby and on a confidential basis, (ii) to
Subsidiaries and Affiliates of any member of the Lender Group, provided that any
such Subsidiary or Affiliate shall have agreed to receive such information
hereunder subject to the terms of this Section 17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Borrower with prior notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior notice to Borrower pursuant to the terms of the applicable
statute, decision, or judicial or administrative order, rule, or regulation and
(y) any disclosure under this clause (iv) shall be limited to the portion of the
Confidential Information as may be required by such statute, decision, or
judicial or administrative order, rule, or regulation, (v) as may be agreed to
in advance in writing by Borrower, (vi) as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process,
provided, that, (x) prior to any disclosure under this clause (vi) the
disclosing party agrees to provide Borrower with prior written notice thereof,
to the extent that it is practicable to do so and to the extent that the
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notice to Borrower pursuant to the terms of the subpoena or other legal process
and (y) any disclosure under this clause (vi) shall be limited to the portion of
the Confidential Information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agents or the Lenders or the Lender Group
Representatives), (viii) in connection with any assignment, participation or
pledge of any Lender’s interest under this Agreement, provided that prior to
receipt of Confidential Information any such assignee, participant, or pledgee
shall have agreed in writing to receive such Confidential Information either
subject to the terms of this Section 17.9 or pursuant to confidentiality
requirements substantially similar to those contained in this Section 17.9 (and
such Person may disclose such Confidential Information to Persons employed or
engaged by them as described in clause (i) above), (ix) in connection with any
litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or
duties of such parties under this Agreement or the other Loan Documents;
provided, that, prior to any disclosure to any Person (other than any Loan
Party, any Agent, any Lender, any of their respective Affiliates, or their
respective counsel) under this clause (ix) with respect to litigation involving
any Person (other than Borrower, any Agent, any Lender, any of their respective
Affiliates, or their respective counsel), the disclosing party agrees to provide
Borrower with prior written notice thereof, and (x) in connection with, and to
the extent reasonably necessary for, the exercise of any secured creditor remedy
under this Agreement or under any other Loan Document.

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

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

17.10. Survival. All representations and warranties made by the Loan Parties in
the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans,

 

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regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent or any Lender may have had notice or
knowledge of any Default or Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of, or any accrued interest on,
any Loan or any fee or any other amount payable under this Agreement is
outstanding or unpaid and so long as the Commitments have not expired or been
terminated.

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

17.12. Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

17.13. No Setoff. All payments made by Borrower hereunder or under any note or
other Loan Document will be made without setoff, counterclaim, or other defense.

17.14. Intercreditor Agreements. Each Agent and each Lender hereunder, by its
acceptance of the benefits provided hereunder, (a) agrees that it will be bound
by, and will take no actions contrary to, the provisions of the Pari Passu
Intercreditor Agreement, and (b) authorizes and instructs the Administrative
Agent and Collateral Agent to enter into the Pari Passu Intercreditor Agreement
as Administrative Agent and Collateral Agent, respectively, on behalf of each
Lender. Each Agent and each Lender hereby agrees that the terms, conditions and
provisions contained in this Agreement are subject to the Pari Passu
Intercreditor Agreement and, in the event of a conflict between the terms of the
Pari Passu Intercreditor Agreement and this Agreement, the terms of the Pari
Passu Intercreditor Agreement shall govern and control. Each Agent and each
Lender hereunder, by its acceptance of the benefits provided hereunder, (a)
agrees that it will be bound by, and will take no actions contrary to, the
provisions of the Second Lien Intercreditor Agreement, and (b) authorizes and
instructs the Collateral Agent to enter into the Second Lien Intercreditor
Agreement as Collateral Agent on behalf of each Lender. Each Agent and each
Lender hereby agrees that the terms, conditions and provisions contained in this
Agreement are subject to the Second Lien Intercreditor Agreement and, in the
event of a conflict between the terms of the Second Lien Intercreditor Agreement
and this Agreement, the terms of the Second Lien Intercreditor Agreement shall
govern and control.

[Signature pages to follow.]

 

-57-

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

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

 

BORROWER:     NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation    
By:  

/s/ Mark D. Johnsrud

    Name:   Mark D. Johnsrud     Title:   Chairman and Chief Executive Officer

 

Signature Page to Credit Agreement

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

WILMINGTON SAVINGS FUND SOCIETY, FSB as Administrative Agent By:  

/s/ Geoffrey J. Lewis

Name:   Geoffrey J. Lewis Title:   Vice President

 

Signature Page to Credit Agreement

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

ASCRIBE II INVESTMENTS LLC, as a Lender By:  

/s/ Lawrence First

Name:   Lawrence First Title:   Managing Director ASCRIBE III INVESTMENTS LLC,
as a Lender By:  

/s/ Lawrence First

Name:   Lawrence First Title:   Managing Director

 

Signature Page to Credit Agreement

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

ECF VALUE FUND, LP, as a Lender By:  

/s/ Jeff Gates

Name:   Jeff Gates Title:   Managing Partner of the General Partner

 

Signature Page to Credit Agreement

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

ECF VALUE FUND II, LP, as a Lender By:  

/s/ Jeff Gates

Name:   Jeff Gates Title:   Managing Partner of the General Partner

 

Signature Page to Credit Agreement

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

ECF VALUE FUND INTERNATIONAL MASTER, LP, as a Lender By:  

/s/ Jeff Gates

Name:   Jeff Gates Title:   President and Investment Manager

 

Signature Page to Credit Agreement

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

EXHIBIT A-1

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

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

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

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

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

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

from United States withholding taxes with respect to all payments to be made to
the Assignee under the Credit Agreement or such other documents as are necessary
to indicate that all such payments are subject to such rates at a rate reduced
by an applicable tax treaty.]

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

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

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

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

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

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

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

 

[NAME OF ASSIGNOR] as Assignor By  

 

  Name:   Title: [NAME OF ASSIGNEE] as Assignee By  

 

  Name:   Title:

Signature Page to assignment and Acceptance Agreement

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

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

ANNEX I

 

1. Borrower: Nuverra Environmental Solutions, Inc., a Delaware corporation

 

2. Name and Date of Credit Agreement:

Term Loan Credit Agreement dated as of April 15, 2016 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”)
by and among Borrower, the lenders party thereto as “Lenders”, and Wilmington
Savings Fund Society, FSB (“Wilmington”), as administrative agent for each
member of the Lender Group.

 

3.

  

Date of Assignment Agreement:

  

4.

  

Assigned Amount of Term Loans:

     $               

5.

  

Settlement Date:

  

6.

   Purchase Price:      $               

 

7. Notice and Payment Instructions, etc.:

 

Assignee:      Assignor:   

 

    

 

  

 

    

 

  

 

    

 

  

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

EXHIBIT C-1

FORM OF COMPLIANCE CERTIFICATE

[on Borrower’s letterhead]

 

To: WILMINGTON SAVINGS FUND SOCIETY, FSB, as Administrative Agent

500 Delaware Avenue

Wilmington, DE 19801

Attention: Corporate Trust

Reference: Nuverra Environmental Solutions, Inc. Term Loan Credit Agreement

Facsimile: 302-421-9137

 

  Re: Compliance Certificate dated             , 20    

Ladies and Gentlemen:

Reference is made to that certain Term Loan Credit Agreement dated as of April
15, 2016 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among Nuverra Environmental Solutions,
Inc., a Delaware corporation, as borrower (“Borrower”), the lenders party
thereto as “Lenders” (each of such Lenders, together with its successors and
permitted assigns, is referred to hereinafter as a “Lender”), and Wilmington
Savings Fund Society, FSB (“Wilmington”), as administrative agent for each
member of the Lender Group (in such capacity, together with its successors and
assigns in such capacity, the “Administrative Agent”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement.

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

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

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

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

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

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

5. As of the date hereof, Borrower and its Subsidiaries are in compliance with
the covenant contained in Section 7 of the Credit Agreement as demonstrated on
Schedule 4 hereof.

6. [Attached hereto as Schedule 5 is a calculation of Excess Cash Flow for the
fiscal year ending on the date of the audited financial statements attached to
Schedule I and a statement of the Permissible ECF Application Amount as of the
date hereof.]

 

- 2 -

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

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

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. a Delaware corporation, as Borrower By:  

 

Name:  

 

Title:  

 

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

SCHEDULE 1

Financial Information

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

SCHEDULE 2

Default or Event of Default

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

SCHEDULE 3

Representations and Warranties

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

SCHEDULE 4

Financial Covenant

Minimum EBITDA.

Borrower’s EBITDA, measured on a month-end basis, for the          month period
ending                  , 20    , is $        , which amount [is/is not] greater
than or equal to the amount set forth in Section 7(a) of the Credit Agreement
for the corresponding period.

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

SCHEDULE 5

Excess Cash Flow

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

EXHIBIT P-1

FORM OF PERFECTION CERTIFICATE

Reference is hereby made to (a) that certain Term Loan Credit Agreement dated as
of April 15, 2016 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”) by and among Nuverra Environmental
Solutions, Inc., a Delaware corporation (“Borrower”), the lenders party thereto
as “Lenders” (each of such Lenders, together with its successors and permitted
assigns, is referred to hereinafter as a “Lender”), and Wilmington Savings Fund
Society, FSB (“Wilmington”), in its capacity as administrative agent for each
member of the Lender Group (in such capacity, together with its successors and
assigns in such capacity, “Administrative Agent”), and (b) that certain Guaranty
and Security Agreement dated as of April 15, 2016 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Guaranty and
Security Agreement”) by and among Borrower, the Subsidiaries of Borrower parties
thereto as “Grantors”, Administrative Agent and Wells Fargo Bank, National
Association, as collateral agent for each member of the Lender Group (in such
capacity, together with its successors and assigns in such capacity, “Collateral
Agent” and, together with the Administrative Agent, the “Agents” and each, an
“Agent”).

All initially capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Credit Agreement (including Schedule 1.1
thereto). Any terms (whether capitalized or lower case) used in this Perfection
Certificate that are defined in the Code shall be construed and defined as set
forth in the Code unless otherwise defined herein or in the Credit Agreement;
provided that to the extent that the Code is used to define any term used herein
and if such term is defined differently in different Articles of the Code, the
definition of such term contained in Article 9 of the Code shall govern. As used
herein, the term “Loan Parties” shall mean the “Loan Parties” as that term is
defined in the Credit Agreement and “Code” shall mean the “Code” as that term is
defined in the Guaranty and Security Agreement.

The undersigned, the             1 of             , hereby certifies (in my
capacity as                      and not in my individual capacity) to each
Agent and each other member of the Lender Group as follows as of             
    , 2016:

1. Names.

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

 

1  Insert appropriate officer(s), as applicable.

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

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

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

2. Chief Executive Offices and Other Collateral Locations. The chief executive
office of each Loan Party is located at the address set forth in Schedule 2
hereto, and except as otherwise listed, such chief executive office has not been
located at any other address during the past five (5) years. Schedule 2 hereto
sets forth all of the locations where each Loan Party maintains (or within the
past four months has maintained) any equipment, inventory or other tangible
personal property.

3. Real Property.

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

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

(c) Schedule 3(c) sets forth a list of all water rights owned or used by the
Loan Parties in connection with the operation of any Mortgaged Property.

4. Extraordinary Transactions. Except for those purchases, mergers,
acquisitions, consolidations, and other transactions described on Schedule 4
attached hereto, during the preceding five (5) year period all of the Collateral
has been originated by each Loan Party in the ordinary course of business or
consists of goods which have been acquired by such Loan Party in the ordinary
course of business from a person in the business of selling goods of that kind.

5. File Search Reports. Attached hereto as Schedule 5 is a true and accurate
summary of certified file search reports from (a) the Uniform Commercial Code
filing offices (i)

 

- 2 -

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

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

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

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

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

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

10. Instruments and Chattel Paper. Attached hereto as Schedule 10 is a true and
correct list of all promissory notes, instruments (other than checks to be
deposited in the ordinary course of business), tangible chattel paper,
electronic chattel paper and other evidence of Indebtedness held by each Loan
Party as of                  , 2016 having an aggregate value or face amount in
excess of $250,000 including all intercompany notes between or among any two or
more Loan Parties or any of their Subsidiaries.

11. Intellectual Property.2

 

2  Include all US and non-US intellectual property owned by the Loan Parties.

 

- 3 -

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

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

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

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

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

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

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

15. Motor Vehicles. Attached hereto as Schedule 15 is a true and correct list of
all motor vehicles and other goods (covered by certificates of title or
ownership) having an aggregate fair market value in excess of $250,000 and owned
by any Loan Party, and the owner and approximate fair market value of such motor
vehicle.

 

- 4 -

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

 

Aircraft:    Yes        No     Vessels, boats or ships:    Yes        No    
Railroad rolling stock:    Yes        No    

If the answer is yes to any of these other types of assets, please describe on
Schedule 16.

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

 

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IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
this      day of             , 2016.

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. By:  

 

  Name:   Title: HECKMAN WATER RESOURCES CORPORATION By:  

 

  Name:   Title: HECKMAN WATER RESOURCES (CVR), INC. By:  

 

  Name:   Title: 1960 WELL SERVICES, LLC By:  

 

  Name:   Title: HECK WATER SOLUTIONS, LLC By:  

 

  Name:   Title: APPALACHIAN WATER SERVICES, LLC By:  

 

  Name:   Title:

 

Signature Page to Perfection Certificate

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

BADLANDS POWER FUELS, LLC, a Delaware limited liability company By:  

 

  Name:   Title: BADLANDS POWER FUELS, LLC, a North Dakota limited liability
company By:  

 

  Name:   Title: LANDTECH ENTERPRISES, L.L.C. By:  

 

  Name:   Title: BADLANDS LEASING, LLC By:  

 

  Name:   Title: IDEAL OILFIELD DISPOSAL, LLC By:  

 

  Name:   Title: NUVERRA TOTAL SOLUTIONS, LLC By:  

 

  Name:   Title: NES WATER SOLUTIONS, LLC By:  

 

  Name:   Title:

 

Signature Page to Perfection Certificate

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

HECKMANN WOODS CROSS, LLC By:  

 

  Name:   Title:

 

Signature Page to Perfection Certificate

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

Schedule 1(a)

Legal Names, Etc.

 

Legal Name

 

Type of

Entity

 

Registered

Organization

(Yes/No)

  

Organizational
Number1

  

Federal Taxpayer

Identification Number

  

Jurisdiction of Formation

                                      

 

1  If none, so state.

 

- 5 -

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Schedule 1(b)

Prior Names

 

Loan Party/Subsidiary

 

Prior Name

 

Date of Change

               

 

- 6 -

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Schedule 1(c)

Chances in Corporate Identity; Other Names

 

Loan

Party/Subsidiary

 

Name of Entity

 

Action

  

Date of

Action

  

State of

Formation

  

List of all Other

Names Used on Any

Filings with the

Internal Revenue

Service During Past

Five Years

                                                                               
                                    

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

 

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Schedule 2

Chief Executive Offices1 and Other Collateral Locations

 

Loan

Party/Subsidiary

 

Address

 

County

  

State

                                         

 

1  PLEASE INDICATE WHICH ADDRESS(ES) DENOTE(S) THE CHIEF EXECUTIVE OFFICE OF
EACH LOAN PARTY

 

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Schedule 3(a)

Real Property

 

Entity of

Record

 

Common
Name and
Address

 

Owned,
Leased or
Other
Interest

 

Landlord/
Owner if
Leased or
Other
Interest

 

Description
of Lease
or Other
Documents
Evidencing
Interest

 

Purpose/
Use

 

Improvements
Located on
Real Property

 

Legal
Description

 

Encumbered
or to be
Encumbered
by Mortgage

 

Filing
Office for
Mortgage

 

Option to,
Purchase/Right
of First Refusal

[            ]   [            ]   [            ]   [            ]  
[            ]   [            ]   [            ]   [SEE
EXHIBIT A-
[    ]
ATTACHE D
HERETO]   [YES/NO]   [            ]   [YES/NO]                    

 

- 9 -

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Schedule 3(a)

Real Property (cont.)

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

I. Landlord’s / Tenant’s Consent Required

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

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

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

 

- 10 -

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Schedule 3(b)

Bailees

 

- 11 -

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

Schedule 3(c)

Water Rights

 

- 12 -

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Schedule 4

Transactions Other Than in the Ordinary Course of Business

 

Loan Party/Subsidiary

 

Description of Transaction Including Parties

Thereto

 

Date of

Transaction

           

 

- 13 -

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Schedule 5

Certified File Search Reports

 

Loan Party/Subsidiary

  

Search Report dated

  

Prepared by

  

Jurisdiction

                          

See attached.

 

- 14 -

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Schedule 6

Copy of Financing Statements To Be Filed

See attached.

 

- 15 -

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Schedule 7

Filings/Filing Offices

 

Type of Filing1

  

Entity

  

Applicable Collateral

Document

[Mortgage, Security

Agreement or Other]

  

Jurisdictions

                                   

 

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

 

- 16 -

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Schedule 8

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

Termination Statement Filings

 

Debtor

  

Jurisdiction

  

Secured

Party

  

Type of

Collateral

  

UCC-1

File Date

  

UCC-1

File

Number

                                            

 

- 17 -

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Schedule 9(a)

(a) Equity Interests of Loan Parties and Subsidiaries

 

Current Legal Entities Owned

   Record Owner    Certificate No.    No.
Shares/Interest    Percent Pledged                                             
  

(b) Other Equity Interests

 

- 18 -

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Schedule 9(b)

Organizational Chart

 

- 19 -

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Schedule 10

Instruments and Chattel Paper

 

1. Promissory Notes:

 

Entity

   Principal
Amount    Date of Issuance    Interest Rate    Maturity Date                  
                             

 

2. Chattel Paper:

 

- 20 -

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Schedule 11(a)

Copyrights, Patents and Trademarks

UNITED STATES COPYRIGHTS

Registrations:

 

OWNER    TITLE    REGISTRATION NUMBER

Applications:

 

OWNER    APPLICATION NUMBER     

OTHER COPYRIGHTS

Registrations:

 

OWNER    COUNTRY/STATE    TITLE    REGISTRATION NUMBER

Applications:

 

OWNER    COUNTRY/STATE    APPLICATION NUMBER     

 

- 21 -

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Schedule 11(a)

Copyrights, Patents and Trademarks (cont.)

UNITED STATES PATENTS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

DESCRIPTION

    

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

DESCRIPTION

    

OTHER PATENTS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

COUNTRY/STATE

  

DESCRIPTION

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

COUNTRY/STATE

  

DESCRIPTION

 

- 22 -

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Schedule 11(a)

Copyrights, Patents and Trademarks (cont.)

UNITED STATES TRADEMARKS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

TRADEMARK

    

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

TRADEMARK

    

OTHER TRADEMARKS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

COUNTRY/STATE

  

TRADEMARK

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

COUNTRY/STATE

  

TRADEMARK

 

- 23 -

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Schedule 11(b)

Intellectual Property Licenses

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION

NUMBER, IF

ANY

  

DESCRIPTION

           

 

- 24 -

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

Schedule 11(c)

Intellectual Property Filings

 

- 25 -

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

Schedule 12

Commercial Tort Claims

 

- 26 -

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

Schedule 13

Deposit Accounts and Securities Accounts

 

OWNER    TYPE OF ACCOUNT   

BANK OR

INTERMEDIARY

  

ACCOUNT

NUMBERS

 

- 27 -

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Schedule 14

Letter of Credit Rights

 

- 28 -

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

Schedule 15

Motor Vehicles

 

- 29 -

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Schedule 16

Other Assets