Portions of Schedule 3.14 to this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act. Omitted information, marked
“[***]” in Schedule 3.14 to this Exhibit, has been filed separately with the
Securities and Exchange Commission together with such request for confidential
treatment.

Exhibit 10.1

 

 

 

Execution Version

 

LOGO [g428566g09a36.jpg]

CREDIT AGREEMENT

dated as of

July 27, 2017

among

HESKA CORPORATION,

DIAMOND ANIMAL HEALTH, INC.,

HESKA IMAGING, LLC

The other Loan Parties party hereto,

The Lenders party hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

JPMORGAN CHASE BANK, N.A.,

as Sole Bookrunner and Sole Lead Arranger

 

 

 

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TABLE OF CONTENTS

 

     Page  

ARTICLE I. Definitions

     1  

SECTION 1.01. Defined Terms

     1  

SECTION 1.02. Classification of Loans and Borrowings

     24  

SECTION 1.03. Terms Generally

     24  

SECTION 1.04. Accounting Terms; GAAP

     24  

SECTION 1.05. Pro Forma Adjustments for Acquisitions and Dispositions

     25  

SECTION 1.06. Status of Obligations

     25  

ARTICLE II. The Credits

     25  

SECTION 2.01. Revolving Commitments

     25  

SECTION 2.02. Loans and Borrowings

     26  

SECTION 2.03. Requests for Borrowings

     26  

SECTION 2.04. [Section Intentionally Omitted]

     27  

SECTION 2.05. Swingline Loans

     27  

SECTION 2.06. Letters of Credit

     28  

SECTION 2.07. Funding of Borrowings

     33  

SECTION 2.08. Interest Elections

     34  

SECTION 2.09. Termination and Reduction of Revolving Commitments; Increase in
Revolving Commitments

     35  

SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt

     36  

SECTION 2.11. Prepayment of Loans

     37  

SECTION 2.12. Fees

     38  

SECTION 2.13. Interest

     39  

SECTION 2.14. Alternate Rate of Interest

     39  

SECTION 2.15. Increased Costs

     40  

SECTION 2.16. Break Funding Payments

     41  

SECTION 2.17. Taxes

     41  

SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs

     45  

SECTION 2.19. Mitigation Obligations; Replacement of Lenders

     47  

SECTION 2.20. Defaulting Lenders

     48  

SECTION 2.21. Returned Payments

     49  

SECTION 2.22. Banking Services and Swap Agreements

     49  

ARTICLE III. Representations and Warranties

     50  

SECTION 3.01. Organization; Powers

     50  

SECTION 3.02. Authorization; Enforceability

     50  

SECTION 3.03. Governmental Approvals; No Conflicts

     50  

SECTION 3.04. Financial Condition; No Material Adverse Change

     50  

SECTION 3.05. Properties

     51  

SECTION 3.06. Litigation and Environmental Matters

     51  

SECTION 3.07. Compliance with Laws and Agreements; No Default

     52  

SECTION 3.08. Investment Company Status

     52  

SECTION 3.09. Taxes

     52  

SECTION 3.10. ERISA

     52  

SECTION 3.11. Disclosure

     52  

SECTION 3.12. Material Agreements

     52  

SECTION 3.13. Solvency

     53  

 

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SECTION 3.14. Insurance

     53  

SECTION 3.15. Capitalization and Subsidiaries

     53  

SECTION 3.16. Security Interest in Collateral

     53  

SECTION 3.17. Employment Matters

     54  

SECTION 3.18. Federal Reserve Regulations

     54  

SECTION 3.19. Use of Proceeds

     54  

SECTION 3.20. No Burdensome Restrictions

     54  

SECTION 3.21. Anti-Corruption Laws and Sanctions

     54  

SECTION 3.22. Common Enterprise

     54  

SECTION 3.23. EEA Financial Institutions

     54  

ARTICLE IV. Conditions

     55  

SECTION 4.01. Effective Date

     55  

SECTION 4.02. Each Credit Event

     57  

ARTICLE V. Affirmative Covenants

     58  

SECTION 5.01. Financial Statements and Other Information

     58  

SECTION 5.02. Notices of Material Events

     60  

SECTION 5.03. Existence; Conduct of Business

     60  

SECTION 5.04. Payment of Obligations

     60  

SECTION 5.05. Maintenance of Properties

     61  

SECTION 5.06. Books and Records; Inspection Rights

     61  

SECTION 5.07. Compliance with Laws and Material Contractual Obligations

     61  

SECTION 5.08. Use of Proceeds

     61  

SECTION 5.09. Accuracy of Information

     62  

SECTION 5.10. Insurance

     62  

SECTION 5.11. Appraisals

     62  

SECTION 5.12. Casualty and Condemnation

     62  

SECTION 5.13. Depository Banks

     62  

SECTION 5.14. Additional Collateral; Further Assurances

     62  

ARTICLE VI. Negative Covenants

     63  

SECTION 6.01. Indebtedness

     64  

SECTION 6.02. Liens

     66  

SECTION 6.03. Fundamental Changes

     67  

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions

     67  

SECTION 6.05. Asset Sales

     69  

SECTION 6.06. Sale and Leaseback Transactions

     70  

SECTION 6.07. Swap Agreements

     70  

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness

     70  

SECTION 6.09. Transactions with Affiliates

     71  

SECTION 6.10. Restrictive Agreements

     71  

SECTION 6.11. Amendment of Material Documents

     72  

SECTION 6.12. Financial Covenants

     72  

ARTICLE VII. Events of Default

     72  

ARTICLE VIII. The Administrative Agent

     75  

SECTION 8.01. Appointment

     75  

SECTION 8.02. Rights as a Lender

     75  

SECTION 8.03. Duties and Obligations

     75  

SECTION 8.04. Reliance

     76  

SECTION 8.05. Actions through Sub-Agents

     76  

SECTION 8.06. Resignation

     76  

SECTION 8.07. Non-Reliance

     77  

SECTION 8.08. Other Agency Titles

     78  

 

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SECTION 8.09. Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties

     78  

SECTION 8.10. Credit Bidding

     78  

ARTICLE IX. Miscellaneous

     79  

SECTION 9.01. Notices

     79  

SECTION 9.02. Waivers; Amendments

     81  

SECTION 9.03. Expenses; Indemnity; Damage Waiver

     83  

SECTION 9.04. Successors and Assigns

     85  

SECTION 9.05. Survival

     88  

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution

     89  

SECTION 9.07. Severability

     89  

SECTION 9.08. Right of Setoff

     89  

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process

     90  

SECTION 9.10. WAIVER OF JURY TRIAL

     90  

SECTION 9.11. Headings

     91  

SECTION 9.12. Confidentiality

     91  

SECTION 9.13. Several Obligations; Nonreliance; Violation of Law

     92  

SECTION 9.14. USA PATRIOT Act

     92  

SECTION 9.15. Disclosure

     92  

SECTION 9.16. Appointment for Perfection

     92  

SECTION 9.17. Interest Rate Limitation

     92  

SECTION 9.18. Marketing Consent

     92  

SECTION 9.19. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions

     93  

ARTICLE X. Loan Guaranty

     93  

SECTION 10.01. Guaranty

     93  

SECTION 10.02. Guaranty of Payment

     93  

SECTION 10.03. No Discharge or Diminishment of Loan Guaranty

     94  

SECTION 10.04. Defenses Waived

     94  

SECTION 10.05. Rights of Subrogation

     95  

SECTION 10.06. Reinstatement; Stay of Acceleration

     95  

SECTION 10.07. Information

     95  

SECTION 10.08. Termination

     95  

SECTION 10.09. Taxes

     95  

SECTION 10.10. Maximum Liability

     96  

SECTION 10.11. Contribution

     96  

SECTION 10.12. Liability Cumulative

     97  

SECTION 10.13. Keepwell

     97  

ARTICLE XI. The Borrower Representative

     97  

SECTION 11.01. Appointment; Nature of Relationship

     97  

SECTION 11.02. Powers

     97  

SECTION 11.03. Employment of Agents

     97  

SECTION 11.04. Notices

     97  

SECTION 11.05. Successor Borrower Representative

     98  

SECTION 11.06. Execution of Loan Documents

     98  

SECTION 11.07. Reporting

     98  

 

iii

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SCHEDULES:

Commitment Schedule

Schedule 3.05 – Properties, etc.

Schedule 3.14 – Insurance

Schedule 3.15 – Capitalization and Subsidiaries

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions

EXHIBITS:

Exhibit A – Assignment and Assumption

Exhibit B – Opinion of Counsel for the Loan Parties

Exhibit C-1 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit C-2 – U.S. Tax Compliance Certificate (For Foreign Participants That Are
Not Partnerships For U.S. Federal Income Tax

Purposes)

Exhibit C-3 – U.S. Tax Compliance Certificate (For Foreign Participants That Are
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit C-4 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D – Compliance Certificate

Exhibit E – Joinder Agreement

 

iv

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CREDIT AGREEMENT dated as of July 27, 2017 (as it may be amended or modified
from time to time, this “Agreement”), among HESKA CORPORATION, DIAMOND ANIMAL
HEALTH, INC. and HESKA IMAGING, LLC, as Borrowers, the other Loan Parties party
hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“Account” has the meaning assigned to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Loan Party or any
Subsidiary (a) acquires any going business or all or substantially all of the
assets of any Person, whether through purchase of assets, merger or otherwise or
(b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the Equity Interests of a Person which has ordinary voting power for
the election of directors or other similar management personnel of a Person
(other than Equity Interests having such power only by reason of the happening
of a contingency).

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum
equal to the sum of (i) 2.50% plus (ii) the Adjusted LIBO Rate for a one-month
interest period on such day (or if such day is not a Business Day, the
immediately preceding Business Day); provided that, for the avoidance of doubt,
the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at
approximately 11:00 a.m. London time on such day; provided further, that, if the
LIBO Screen Rate at such time shall be less than zero, such rate shall be deemed
to be zero for purposes of this Agreement.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.

“Affiliate Contracts” is defined in Section 6.09.

“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving
Exposure of all the Lenders at such time (with the Swingline Exposure of each
Lender calculated assuming that that all of the Lenders have funded their
participations in all Swingline Loans outstanding at such time).

 

1

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“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any Borrower or any Affiliate of any Borrower from
time to time concerning or relating to bribery or corruption.

“Applicable Percentage” means, at any time with respect to any Lender, a
percentage equal to a fraction the numerator of which is such Lender’s Revolving
Commitment at such time and the denominator of which is the aggregate Revolving
Commitments at such time (provided that, if the Revolving Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon
such Lender’s share of the Aggregate Revolving Exposure at such time); provided
that, in accordance with Section 2.20, so long as any Lender shall be a
Defaulting Lender, such Defaulting Lender’s Commitment shall be disregarded in
the calculations above.

“Approved Fund” has the meaning assigned to the term in Section 9.04(b).

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.

“Availability” means, at any time, an amount equal to (a) the aggregate
Revolving Commitments minus (b) the Aggregate Revolving Exposure (calculated,
with respect to any Defaulting Lender, as if such Defaulting Lender had funded
its Applicable Percentage of all outstanding Borrowings).

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Revolving Credit Maturity Date and the date of
termination of the Revolving Commitments.

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

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

“Banking Services” means each and any of the following bank services provided to
any Loan Party or any Subsidiary by any Lender or any of its Affiliates:
(a) credit cards for commercial customers (including, without limitation,
“commercial credit cards” and purchasing cards), (b) stored value cards,
(c) merchant processing services, and (d) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, any direct debit scheme or arrangement, overdrafts
and interstate depository network services).

“Banking Services Obligations” means any and all obligations of the Loan Parties
or their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or

 

2

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liquidation of its business, appointed for it, or, in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment, provided that a Bankruptcy Event shall not result
solely by virtue of any ownership interest, or the acquisition of any ownership
interest, in such Person by a Governmental Authority or instrumentality thereof,
unless such ownership interest results in or provides such Person with immunity
from the jurisdiction of courts within the U.S. or from the enforcement of
judgments or writs of attachment on its assets or permits such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Beneficial Owner” means, with respect to any U.S. federal withholding Tax, the
beneficial owner, for U.S. federal income tax purposes, to whom such Tax
relates.

“Board” means the Board of Governors of the Federal Reserve System of the U.S.

“Borrower Representative” has the meaning assigned to such term in
Section 11.01.

“Borrower” or “Borrowers” means, individually or collectively, the Company,
Diamond Animal Health, Inc., an Iowa corporation, and Heska Imaging, LLC, a
Delaware limited liability company.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, and (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower Representative for a
Borrowing in accordance with Section 2.03.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the
type described in clause (a) or (b) of Section 6.10.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for general business in London.

“Capital Expenditures” means, without duplication, any expenditure for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP, but excluding in each case any
such expenditures that (i) are made to restore, repair, replace or rebuild
property to the condition of such property immediately prior to any casualty
event, to the extent such expenditure is made with actual, identifiable
insurance proceeds, condemnation awards or damage recovery proceeds relating to
any such casualty event, (ii) are financed with the proceeds of any disposition
of fixed or capital assets permitted by this Agreement to the extent such
expenditure is made within twelve (12) months of such disposition, or (iii) are
made pursuant to a Permitted Acquisition.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP;
provided, that Capital Lease Obligations shall not include the obligation of any
Person to pay rent or other amounts under any lease of

 

3

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(or other arrangement conveying the right to use) real or personal property, or
a combination thereof that was not required to be classified and accounted for
as a capital lease on a balance sheet of such Person under GAAP as of the
Effective Date.

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate on such day (or if
such day is not a Business Day, the immediately preceding Business Day). Any
change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted
One Month LIBOR Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Adjusted One Month LIBOR Rate,
respectively.

“CBFR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, bear interest at a rate determined
by reference to the CB Floating Rate.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), of Equity Interests representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Company; or (b) occupation at any time
of a majority of the seats (other than vacant seats) on the board of directors
of the Company by Persons who were neither (i) directors of the Company on the
date of this Agreement nor (ii) nominated, appointed or approved by the board of
directors of the Company.

“Change in Law” means the occurrence after the date of this Agreement (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of any of the following: (a) the adoption of or taking effect of
any law, rule, regulation or treaty, (b) any change in any law, rule, regulation
or treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline, requirement or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided that, notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith or in the implementation thereof, and (y) all requests, rules,
guidelines, requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the U.S. or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or
Swingline Loans, and (b) any Lender, refers to whether such Lender has a Loan or
Commitment of a particular Class.

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

“Collateral” means any and all property owned, leased or operated by a Loan
Party covered by the Collateral Documents and any and all other property of any
Loan Party, now existing or hereafter

 

4

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acquired, that may at any time be, become, or intended to be, subject to a
security interest or Lien in favor of the Administrative Agent, on behalf of
itself and the Lenders and other Secured Parties, to secure the Secured
Obligations. For the avoidance of doubt, the Collateral does not include the
Excluded Collateral.

“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreement.

“Collateral Documents” means, collectively, the Security Agreement and any other
agreements, instruments and documents executed in connection with this Agreement
that are intended to create, perfect or evidence Liens to secure the Secured
Obligations, including, without limitation, all other security agreements,
pledge agreements, mortgages, deeds of trust, loan agreements, notes,
guarantees, subordination agreements, pledges, powers of attorney, consents,
assignments, contracts, fee letters, notices, leases, financing statements and
all other written matter whether theretofore, now or hereafter executed by any
Loan Party and delivered to the Administrative Agent.

“Commitment Schedule” means the Schedule attached hereto identified as such.

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

“Communications” has the meaning assigned to such term in Section 9.01(d).

“Company” means Heska Corporation, a Delaware corporation.

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

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Credit Party any other amount required
to be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified any Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of

 

5

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Credit and Swingline Loans under this Agreement, provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit
Party’s receipt of such certification in form and substance satisfactory to it
and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy
Event or (ii) a Bail-In Action.

“Document” has the meaning assigned to such term in the Security Agreement.

“dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the U.S.,
any State thereof, or the District of Columbia.

“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period net of tax refunds, (iii) all amounts attributable to
depreciation and amortization expense for such period, (iv) any extraordinary
non-cash charges for such period and (v) any other non-cash charges for such
period (but excluding any non-cash charge in respect of an item that was
included in Net Income in a prior period and any non-cash charge that relates to
the write-down or write-off of inventory), minus (b) without duplication and to
the extent included in Net Income, (i) any cash payments made during such period
in respect of non-cash charges described in clause (a)(v) taken in a prior
period and (ii) any extraordinary gains and any non-cash items of income for
such period, all calculated for the Company and its Subsidiaries on a
consolidated basis in accordance with GAAP.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of
the Commodity Exchange Act or any regulations promulgated thereunder and the
applicable rules issued by the Commodity Futures Trading Commission and/or the
SEC.

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

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

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

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax,
Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent and the Issuing Bank and any of its respective
Related Parties or any other Person, providing for access to data protected by
passcodes or other security system.

 

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“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters related to Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed upon the Company or any
Subsidiary with respect to any of the foregoing.

“Equipment” has the meaning assigned to such term in the Security Agreement.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any Borrower or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by any Borrower or any
ERISA Affiliate of any liability with respect to the withdrawal or partial
withdrawal of any Borrower or any ERISA Affiliate from any Plan or Multiemployer
Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from any Borrower or any ERISA
Affiliate of any notice, concerning the imposition upon any Borrower or any
ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.

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

 

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bear interest at a rate
determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Collateral” has the meaning assigned to such term in the Security
Agreement.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Revolving Commitment pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Loan, Letter of Credit or Revolving
Commitment (other than pursuant to an assignment request by any Borrower under
Section 2.19(b)) or (ii) such Lender changes its lending office, except in each
case to the extent that, pursuant to Section 2.17, amounts with respect to such
Taxes were payable either to such Lender’s assignor immediately before such
Lender acquired the applicable interest in a Loan, Letter of Credit or Revolving
Commitment or to such Lender immediately before it changed its lending office,
(c) Taxes attributable to such Recipient’s failure to comply with
Section 2.17(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

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

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions
(as determined in such manner as the NYFRB shall set forth on its public website
from time to time) and published on the next succeeding Business Day by the
NYFRB as the federal funds effective rate.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of a Borrower.

“Financial Statements” has the meaning assigned to such term in Section 5.01.

 

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“Fixed Charge Coverage Ratio” means, as of the end of any fiscal quarter, the
ratio of (a) EBITDA minus Unfinanced Capital Expenditures to (b) Fixed Charges,
all calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP for the period of four consecutive fiscal quarters then
ending.

“Fixed Charges” means, for any period, without duplication, cash Interest
Expense, plus scheduled principal payments on Indebtedness actually made in
cash, plus expense for taxes paid in cash, plus Restricted Payments paid in cash
(excluding Restricted Payments by any Subsidiary to a Loan Party), plus Capital
Lease Obligation payments paid in cash, plus cash contributions to any Plan, all
calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.

“Fixtures” has the meaning assigned to such term in the Security Agreement.

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

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

“GAAP” means generally accepted accounting principles in the U.S.

“Governmental Authority” means the government of the U.S., any other nation or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business; provided further, that
the term Guarantee shall not include (i) warranties or indemnities made in trade
contracts, asset sale agreements, acquisition agreements, commitment letters,
engagement letters and brokerage and deposit agreements in the ordinary course
of business and consistent with such Person’s past practices and not otherwise
prohibited hereunder, (ii) any indemnities made in connection with liability of
a Person’s directors, officers and employees in their capacities as such as
permitted by applicable law so long as the same is in the ordinary course of
business and consistent with such Person’s past practices, and (iii) any
contingent liability arising from the endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.

 

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“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.

“Heska Imaging US” means Heska Imaging US, LLC, a Delaware Limited Liability
Company.

“Heska Imaging US Minority Position Purchase” is defined in Section 3.15.

“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services, (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances,
(k) obligations under any earn-out to the extent such obligations are accounted
for as liabilities on a balance sheet of such Person under GAAP, (l) any other
Off-Balance Sheet Liability and (m) net obligations, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all Swap Agreements, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Swap
Agreement transaction; provided, however, that the term “Indebtedness” does not
include trade accounts or accounts payable, accrued expenses and liabilities
incurred and customer deposits received in each instance, in the ordinary course
of business and not constituting indebtedness for borrowed money or evidenced by
notes or other instruments. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

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

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

“Ineligible Institution” has the meaning assigned to such term in
Section 9.04(b).

 

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“Information” has the meaning assigned to such term in Section 9.12.

“Interest Election Request” means a request by the Borrower Representative to
convert or continue a Revolving Borrowing in accordance with Section 2.08.

“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Company and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Company and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptances
and net costs under Swap Agreements in respect of interest rates, to the extent
such net costs are allocable to such period in accordance with GAAP), calculated
for the Company and its Subsidiaries on a consolidated basis for such period in
accordance with GAAP.

“Interest Payment Date” means (a) with respect to any CBFR Loan (other than a
Swingline Loan) the first Business Day of each calendar month and the Revolving
Credit Maturity Date, (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such
Interest Period and the Revolving Credit Maturity Date, and (c) with respect to
any Swingline Loan, the day that such Loan is required to be repaid and the
Revolving Credit Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, three or
six months thereafter, as the Borrower Representative may elect; provided that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter, in the case of a Revolving Borrowing, shall be the effective
date of the most recent conversion or continuation of such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest
period (for which the LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.

“Inventory” has the meaning assigned to such term in the Security Agreement.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means, individually and collectively, each of Chase, in its
capacity as the issuer of Letters of Credit hereunder, and any other Revolving
Lender from time to time designated by the Borrower Representative as an Issuing
Bank, with the consent of such Revolving Lender and the

 

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Administrative Agent, and their respective successors in such capacity as
provided in Section 2.06(i). Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by its Affiliates, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate (it being agreed that such Issuing Bank
shall, or shall cause such Affiliate to, comply with the requirements of
Section 2.06 with respect to such Letters of Credit). At any time there is more
than one Issuing Bank, all singular references to the Issuing Bank shall mean
any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that
has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as
the context may require.

“Issuing Bank Sublimits” means, as of the Effective Date, (i) $2,000,000, in the
case of Chase, and (ii) such amount as shall be designated to the Administrative
Agent and the Borrower Representative in writing by an Issuing Bank; provided
that any Issuing Bank shall be permitted at any time to increase or reduce its
Issuing Bank Sublimit upon providing five (5) days’ prior written notice thereof
to the Administrative Agent and the Borrowers.

“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit E.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).

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

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all standby Letters of Credit outstanding at such time plus (b) the aggregate
amount of all LC Disbursements relating to standby Letters of Credit that have
not yet been reimbursed by or on behalf of the Borrowers at such time. The LC
Exposure of any Revolving Lender at any time shall be its Applicable Percentage
of the aggregate LC Exposure at such time

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a Lender hereunder pursuant to Section 2.09 or an
Assignment and Assumption, other than any such Person that ceases to be a Lender
hereunder pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letters of Credit” means the standby letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require.

“Leverage Ratio” means, as of the end of any fiscal quarter, the ratio of
(a) Total Indebtedness on such date to (b) EBITDA for the period of four
consecutive fiscal quarters ended on such date.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any CBFR Borrowing, the London interbank offered rate as
administered by ICE Benchmark Administration (or any other Person that takes
over the administration of such rate for Dollars) for a period equal in length
to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters
screen that displays such rate or, in the event such rate does not appear on a
Reuters page or screen, on any successor or substitute page on such screen that
displays such rate, or on the appropriate page of such other information service
that publishes such rate from time to time as shall be selected by the
Administrative Agent in its reasonable discretion (in each case, the “LIBO
Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period; provided that, (x) if the
LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero
for the purposes of this Agreement and (y) if the LIBO Screen Rate shall not be
available at such time for a period equal in length to such Interest Period (an
“Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate
at such time, subject to Section 2.14 in the event that

 

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the Administrative Agent shall conclude that it shall not be possible to
determine such Interpolated Rate (which conclusion shall be conclusive and
binding absent manifest error); provided further, that, if any Interpolated Rate
shall be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement. Notwithstanding the above, to the extent that “LIBO Rate” or
“Adjusted LIBO Rate” is used in connection with an CBFR Borrowing, such rate
shall be determined as modified by the definition of CB Floating Rate.

“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” means, collectively, this Agreement, each promissory note
issued pursuant to this Agreement, any Letter of Credit applications, each
Collateral Document, the Loan Guaranty, and each other agreement, instrument,
document and certificate identified in Section 4.01 executed and delivered to,
or in favor of, the Administrative Agent or any Lender and including each other
pledge, power of attorney, consent, assignment, contract, notice, letter of
credit agreement, letter of credit applications and any agreements between the
Borrower Representative and the Issuing Bank regarding the Issuing Bank’s
Issuing Bank Sublimit or the respective rights and obligations between the
Borrower and the Issuing Bank in connection with the issuance of Letters of
Credit, and each other written matter whether heretofore, now or hereafter
executed by or on behalf of any Loan Party, or any employee of any Loan Party,
and delivered to the Administrative Agent or any Lender in connection with this
Agreement or the transactions contemplated hereby. Any reference in this
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

“Loan Guarantor” or “Guarantor” means each Loan Party.

“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means, collectively, the Borrowers, the Borrowers’ Domestic
Subsidiaries (subject to Section 5.14(a)) and any other Person who becomes a
party to this Agreement pursuant to a Joinder Agreement and their successors and
assigns, and the term “Loan Party” shall mean any one of them or all of them
individually, as the context may require.

“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or financial condition of the Company and its Subsidiaries
taken as a whole, (b) the ability of (i) any Borrower, or (ii) the Loan Parties
taken as a whole to perform any of its or their obligations under the Loan
Documents to which it or they are a party, (c) the Collateral, or the
Administrative Agent’s Liens (on behalf of itself and the other Secured Parties)
on the Collateral or the priority of such Liens, or (d) the rights or remedies
available to the Administrative Agent, the Issuing Bank or the Lenders under any
of the Loan Documents.

 

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“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Company and its Subsidiaries in an aggregate principal amount
exceeding $500,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Net Income” means, for any period, the consolidated net income (or loss)
determined for the Company and its Subsidiaries, on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any Subsidiary, (b) the income
(or deficit) of any Person (other than a Subsidiary) in which the Company or any
Subsidiary has an ownership interest, except to the extent that any such income
is actually received by the Company or such Subsidiary in the form of dividends
or similar distributions and (c) the undistributed earnings of any Subsidiary
(other than a Borrower or Loan Party), to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary.

“Net Proceeds” means, with respect to any event relating to Collateral, (a) the
cash proceeds received in respect of such event including (i) any cash received
in respect of any non-cash proceeds (including any cash payments received by way
of deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but excluding any interest
payments), but only as and when received, (ii) in the case of a casualty,
insurance proceeds and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, minus (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or a condemnation or similar proceeding), the amount
of all payments required to be made as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event and (iii) the amount of all taxes
paid (or reasonably estimated to be payable) and the amount of any reserves
established to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer).

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day(or for any day that is not a Banking Day, for the immediately preceding
Banking Day); provided that if none of such rates are published for any day that
is a Business Day, the term “NYFRB Rate” means the rate for a federal funds
transaction quoted at 11:00 a.m. on such day received to the Administrative
Agent from a Federal funds broker of recognized standing selected by it;
provided, further, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to be zero for purposes of this Agreement.

 

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“Obligated Party” has the meaning assigned to such term in Section 10.02.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), obligations and liabilities of any of the Loan
Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any
indemnified party, individually or collectively, existing on the Effective Date
or arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any of the other Loan Documents or in respect
of any of the Loans made or reimbursement or other obligations incurred or any
of the Letters of Credit or other instruments at any time evidencing any
thereof.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions (as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time)
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).

“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

“Participant” has the meaning assigned to such term in Section 9.04(c).

 

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“Participant Register” has the meaning assigned to such term in Section 9.04(c).

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

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction
that satisfies each of the following requirements:

(a) such Acquisition is not a hostile acquisition;

(b) the business acquired in connection with such Acquisition is not engaged,
directly or indirectly, in any line of business other than the businesses in
which the Loan Parties are permitted to be engaged on the Effective Date and any
business activities that are reasonably similar, related, ancillary,
complementary, synergistic or incidental thereto;

(c) both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct in all material
respects (except any such representation or warranty which relates to a
specified prior date) and no Event of Default exists, will exist, or would
result therefrom;

(d) as soon as available, but not less than ten (10) days (or such shorter
period agreed to by the Administrative Agent) prior to such Acquisition, if such
Acquisition involves consideration in excess of $5,000,000, the Company has
provided the Administrative Agent (i) notice of such Acquisition and (ii) a copy
of all business, financial and other information reasonably requested by the
Administrative Agent in connection therewith;

(e) the aggregate consideration paid or payable (including the cash price, all
Indebtedness assumed, all deferred payments and earnouts and all other
consideration paid or payable) (i) in connection with any single Acquisition
shall not exceed $7,500,000, (ii) in connection with Acquisitions of businesses
located outside of the U.S. or not organized under applicable U.S. and state
laws shall not exceed $5,000,000 in the aggregate during the term of this
Agreement; and (iii) for all Acquisitions made during the term of this Agreement
shall not exceed $15,000,000;

(f) if such Acquisition is an acquisition of the Equity Interests of a Person,
such Acquisition is structured so that the acquired Person shall become a
wholly-owned direct or indirect Subsidiary of the Company and a Loan Party
pursuant to the terms of this Agreement;

(g) if such Acquisition is an acquisition of assets, such Acquisition is
structured so that a Borrower or another Loan Party shall acquire such assets;

(h) if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;

(i) if such Acquisition involves a merger or a consolidation involving a
Borrower or any other Loan Party, such Borrower or such Loan Party, as
applicable, shall be the surviving entity;

(j) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could have a
Material Adverse Effect;

(k) the Leverage Ratio shall be less than 2.25 to 1.00 for the most recently
completed four fiscal quarter period prior to such Acquisition;

 

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(l) the Company shall certify to the Administrative Agent and the Lenders (and
provide the Administrative Agent and the Lenders with a pro forma calculation in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders) that, after giving effect to the completion of such Acquisition, on a
pro forma basis and at all times during the 90-day period prior to the
consummation of such Acquisition (i) Availability will not be less than
$5,000,000 which includes all consideration given in connection with such
Acquisition, other than Equity Interests of the Borrower delivered to the
seller(s) in such Acquisition, as having been paid in cash at the time of making
such Acquisition and (ii) the Borrower will be in compliance with the covenants
contained in Section 6.12;

(m) all actions required to be taken with respect to any newly acquired or
formed wholly-owned Subsidiary of the Company or a Loan Party, as applicable,
required under Section 5.14 shall have been taken; and

(n) the Company shall have delivered to the Administrative Agent the final
executed material documentation relating to such Acquisition within five days
following the consummation thereof.

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured lender) business
judgment.

“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlords’, customs brokers’, custom and forwarding agents’ and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than thirty (30) days or are being
contested in compliance with Section 5.04;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment Liens in respect of judgments and similar orders that do not
constitute an Event of Default under clause (k) of Article VII;

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of any Borrower or any Subsidiary;

(g) Liens arising from precautionary UCC financing statement filings (or similar
filings under applicable law) regarding leases;

(h) the interests of lessors or sublessors under leases and licensors or
sublicensors under license agreements;

 

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(i) Liens or rights of setoff against credit balances of the Company or any
Subsidiary with credit card issuers or credit card processors to secure
obligations of the Company or such Subsidiary, as the case may be, to any such
credit card issuer or credit card processor incurred in the ordinary course of
business as a result of fees and chargebacks;

(j) Bankers’ liens, rights of setoff and other similar Liens in the ordinary
course of business in favor of a bank or institution with which accounts or
deposits are maintained in the ordinary course of business;

(k) Liens in the nature of the right of setoff in favor of counterparties to
contractual agreements with the Loan Parties or their Subsidiaries in the
ordinary course of business;

(l) possessory Liens in favor of brokers and dealers arising in connection with
the acquisition or disposition of Investments and cash equivalents, provided
that such liens (i) attach only to such Investments and (ii) secure any
obligations incurred in the ordinary course and arising in connection with the
acquisition or disposition of such Investments and not any obligation in
connection with margin financing; and

(m) customary restrictions on subletting and assignments thereof contained in
leases not otherwise prohibited hereunder;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above, and, with
respect to Capital Leases included in Indebtedness, clauses (g), (h), and
(m) above.

“Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the U.S. (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the U.S.), in
each case maturing within one year from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

(c) investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the U.S. or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii)
are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at
least $5,000,000,000.

 

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar
electronic transmission system.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate in effect at its principal offices in New
York City. Each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.

“Projections” has the meaning assigned to such term in Section 5.01(e).

“Public-Sider” means a Lender whose representatives may trade in securities of
the Company or its controlling person or any of its Subsidiaries while in
possession of the financial statements provided by the Company under the terms
of this Agreement.

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

“Real Property” means all real property that was, is now or may hereafter be
owned, occupied or otherwise controlled by any Loan Party pursuant to any
contract of sale, lease or other conveyance of any legal interest in any real
property to any Loan Party.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Refinance Indebtedness” has the meaning assigned to such term in
Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, partners, members, trustees,
employees, agents, administrators, managers, representatives and advisors of
such Person and such Person’s Affiliates.

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing, or
dumping of any substance into the environment.

“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the Loan Parties’ assets from information furnished by or on behalf of the Loan
Parties, after the Administrative Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.

 

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“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Revolving Credit Exposure and unused Revolving Commitments representing
more than 50% of the sum of the Aggregate Revolving Credit Exposure and unused
Revolving Commitments at such time; provided that, as long as there are only two
Lenders, Required Lenders shall mean both Lenders; provided further that, for
purposes of declaring the Loans to be due and payable pursuant to Article VII,
and for all purposes after the Loans become due and payable pursuant to
Article VII or the Revolving Commitments expire or terminate, then, as to each
Lender, clause (a) of the definition of Swingline Exposure shall only be
applicable for purposes of determining its Revolving Exposure to the extent such
Lender shall have funded its participation in the outstanding Swingline Loans.

“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or
operating, management or partnership agreement, or other organizational or
governing documents of such Person and (b) any statute, law (including common
law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment,
injunction or determination of any arbitrator or court or other Governmental
Authority (including Environmental Laws), in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests or any option, warrant or other right to acquire any
such Equity Interests. Notwithstanding the foregoing, the Heska Imaging US
Minority Position Purchase is not a Restricted Payment.

“Revolving Commitment” or “Commitment” means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate permitted amount of such Lender’s
Revolving Exposure hereunder, as such commitment may be reduced or increased
from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving
Commitment is set forth on the Commitment Schedule, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Revolving
Commitment, as applicable. The initial aggregate amount of the Lenders’
Revolving Commitments is $30,000,000.

“Revolving Credit Maturity Date” means the date three years after the Effective
Date (if the same is a Business Day, or if not then the immediately next
succeeding Business Day), or any earlier date on which the Revolving Commitments
are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Revolving Exposure” means, with respect to any Lender, at any time, the sum of
the aggregate outstanding principal amount of such Lender’s Revolving Loans and
its LC Exposure and its Swingline Exposure at such time.

“Revolving Lender” or “Lender” means, as of any date of determination, a Lender
with a Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Exposure.

 

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“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.06.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State or by the United Nations Security Council, the European Union, any
European Union member state, Her Majesty’s Treasury of the United Kingdom or
other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country or (c) any Person owned or controlled by any
such Person or Persons described in the foregoing clauses (a) or (b).

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, any European Union member state or
Her Majesty’s Treasury of the United Kingdom or other relevant sanctions
authority.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Agreement Obligations owing to one or more
Lenders or their respective Affiliates; provided, however, that the definition
of “Secured Obligations” shall not create any guarantee by any Guarantor of (or
grant of security interest by any Guarantor to support, as applicable) any
Excluded Swap Obligations of such Guarantor for purposes of determining any
obligations of any Guarantor.

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) each
Issuing Bank, (d) each provider of Banking Services, to the extent the Banking
Services Obligations in respect thereof constitute Secured Obligations, (e) each
counterparty to any Swap Agreement, to the extent the obligations thereunder
constitute Secured Obligations, (f) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document and (g) the
successors and assigns of each of the foregoing.

“Security Agreement” means that certain Pledge and Security Agreement (including
any and all supplements thereto), dated as of the date hereof, among the Loan
Parties and the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, and any other pledge or security agreement
entered into, after the date of this Agreement by any other Loan Party (as
required by this Agreement or any other Loan Document) or any other Person for
the benefit of the Administrative Agent and the other Secured Parties, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

“Statement” has the meaning assigned to such term in Section 2.18(g).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum

 

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reserve percentage (including any marginal, special, emergency or supplemental
reserves) established by the Board to which the Administrative Agent is
subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D of the Board. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D of the Board or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person,
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Company, a Borrower
or of any other Loan Party, as applicable.

“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers or their Subsidiaries shall be a Swap Agreement.

“Swap Agreement Obligations” means any and all obligations of the Loan Parties
and their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
Swap Agreement permitted hereunder with a Lender or an Affiliate of a Lender,
and (b) any cancellations, buy backs, reversals, terminations or assignments of
any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate
of a Lender.

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

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any
Revolving Lender at any time shall be the sum of (a) its Applicable Percentage
of the total Swingline Exposure at such time other than with respect to any
Swingline Loans made by such Revolving Lender in its capacity as the Swingline
Lender and (b) the principal amount of all Swingline Loans made by such
Revolving Lender in its capacity as the Swingline Lender outstanding at such
time (less the amount of participations funded by the other Lenders in such
Swingline Loans).

 

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“Swingline Lender” means Chase, in its capacity as lender of Swingline Loans
hereunder. Any consent required of the Administrative Agent or the Issuing Bank
shall be deemed to be required of the Swingline Lender and any consent given by
Chase in its capacity as Administrative Agent or Issuing Bank shall be deemed
given by Chase in its capacity as Swingline Lender as well.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), value added taxes, or
any other goods and services, use or sales taxes, assessments, fees or other
charges imposed by any Governmental Authority, including any interest, additions
to tax or penalties applicable thereto.

“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness determined for the Company and its Subsidiaries on a consolidated
basis at such date, in accordance with GAAP.

“Transactions” means the execution, delivery and performance by the Borrowers of
this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the CB Floating Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or in any other state, the laws of which are required to be
applied in connection with the issue of perfection of security interests.

“Unfinanced Capital Expenditures” means, for any period, Capital Expenditures
made during such period which are not financed from the proceeds of any
Indebtedness.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

“U.S.” means the United States of America.

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

 

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

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

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws), (c)
any reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to any restrictions on assignments set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all functions thereof, (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (f) any reference in any definition to the
phrase “at any time” or “for any period” shall refer to the same time or period
for all calculations or determinations within such definition, and (g) 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,
including cash, securities, accounts and contract rights.

SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof there occurs any change in GAAP or in the application thereof on
the operation of any provision hereof and the Borrower Representative notifies
the Administrative Agent that the Borrowers request an amendment to any
provision hereof to eliminate the effect of such change in GAAP or in the
application thereof (or if the Administrative Agent notifies the Borrower
Representative 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 change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been

 

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withdrawn or such provision amended in accordance herewith. Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made (i) without giving effect to any election under
Financial Accounting Standards Board Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of the Company or any Subsidiary at “fair value”, as defined therein
and (ii) without giving effect to any treatment of Indebtedness in respect of
convertible debt instruments under Financial Accounting Standards Board
Accounting Standards Codification 470-20 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any such Indebtedness in a reduced or bifurcated manner as described
therein, and such Indebtedness shall at all times be valued at the full stated
principal amount thereof.

SECTION 1.05. Pro Forma Adjustments for Acquisitions and Dispositions. To the
extent the Company or any Subsidiary makes any acquisition permitted pursuant to
Section 6.04 or disposition of assets outside the ordinary course of business
permitted by Section 6.05 during the period of four fiscal quarters of the
Company most recently ended, the Leverage Ratio shall be calculated, for all
purposes under this Agreement, after giving pro forma effect thereto (including
pro forma adjustments arising out of events which are directly attributable to
the acquisition or the disposition of assets, are factually supportable and are
expected to have a continuing impact, in each case as determined on a basis
consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as
amended, as interpreted by the SEC, and as certified by a Financial Officer), as
if such acquisition or such disposition (and any related incurrence, repayment
or assumption of Indebtedness) had occurred on the first day of such
four-quarter period.

SECTION 1.06. Status of Obligations. In the event that any Borrower or any other
Loan Party shall at any time issue or have outstanding any Subordinated
Indebtedness, such Borrower shall take or cause such other Loan Party to take
all such actions as shall be necessary to cause the Secured Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness and to enable the Administrative Agent and the Lenders
to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such
Subordinated Indebtedness. Without limiting the foregoing, the Secured
Obligations are hereby designated as “senior indebtedness” and as “designated
senior indebtedness” and words of similar import under and in respect of any
indenture or other agreement or instrument under which such Subordinated
Indebtedness is outstanding and are further given all such other designations as
shall be required under the terms of any such Subordinated Indebtedness in order
that the Lenders may have and exercise any payment blockage or other remedies
available or potentially available to holders of senior indebtedness under the
terms of such Subordinated Indebtedness.

ARTICLE II

The Credits

SECTION 2.01. Revolving Commitments. Subject to the terms and conditions set
forth herein, each Lender severally (and not jointly) agrees to make Revolving
Loans in dollars to the Borrowers from time to time during the Availability
Period in an aggregate principal amount that will not result (after giving
effect to any application of proceeds of such Borrowing pursuant to
Section 2.10(a)) in (i) such Lender’s Revolving Exposure exceeding such Lender’s
Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the
aggregate Revolving Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrowers may borrow, prepay and
reborrow Revolving Loans.

 

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SECTION 2.02. Loans and Borrowings.

(a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing
consisting of Loans of the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments of the applicable Class. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required. Any Swingline Loan shall
be made in accordance with the procedures set forth in Section 2.05.

(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of CBFR Loans or Eurodollar Loans as the Borrower Representative may
request in accordance herewith, provided that all Revolving Borrowings made on
the Effective Date must be made as CBFR Borrowings but may be converted into
Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan shall
be an CBFR Loan. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15,
2.16 and 2.17 shall apply to such Affiliate to the same extent as to such
Lender); provided that any exercise of such option shall not affect the
obligation of the Borrowers to repay such Loan in accordance with the terms of
this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$50,000 and not less than $250,000 or such other amount agreed to by the
Administrative Agent. At the time that each CBFR Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$10,000 and not less than $50,000 or such other amount agreed to by the
Administrative Agent; provided that an CBFR Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Revolving Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in
an amount acceptable to the Swingline Lender. Borrowings of more than one Type
and Class may be outstanding at the same time; provided that there shall not at
any time be more than a total of five Eurodollar Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrowers shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.

SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
Representative shall notify the Administrative Agent of such request either in
writing (delivered by hand or fax) in a form approved by the Administrative
Agent and signed by the Borrower Representative or by telephone or through
Electronic System, if arrangements for doing so have been approved by the
Administrative Agent, such approval not to be unreasonably withheld (a) in the
case of a Eurodollar Borrowing, not later than 10:00 a.m., Denver time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
CBFR Borrowing, not later than noon, Denver time, on the date of the proposed
Borrowing; provided that any such notice of an CBFR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e) may be given not later than 9:00 a.m., Denver time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery, fax or a
communication through Electronic System to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower Representative. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.01:

 

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  (i) the Class of Borrowing, the aggregate amount of the requested Borrowing,
and a breakdown of the separate wires comprising such Borrowing;

 

  (ii) name of the applicable Borrower(s):

 

  (iii) the date of such Borrowing, which shall be a Business Day;

 

  (iv) whether such Borrowing is to be an CBFR Borrowing or a Eurodollar
Borrowing; and

 

  (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an CBFR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the applicable Borrower(s) shall be deemed to have selected an Interest Period
of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender’s Loan to be made as
part of the requested Borrowing.

SECTION 2.04. [Section Intentionally Omitted]

SECTION 2.05. Swingline Loans.

(a) Subject to the terms and conditions set forth herein, from time to time
during the Availability Period, the Swingline Lender may agree in its sole
discretion, but shall have no obligation, to make Swingline Loans to the
Borrowers, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $2,000,000, (ii) the Swingline Lender’s Revolving Exposures exceeding
its Revolving Commitment, or (iii) the Aggregate Revolving Exposure exceeding
the aggregate Revolving Commitments; provided that the Swingline Lender shall
not be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans. To
request a Swingline Loan, the Borrower Representative shall notify the
Administrative Agent of such request by telephone (confirmed by fax) or through
Electronic System, if arrangements for doing so have been approved by the
Administrative Agent, such approval not to be unreasonably withheld, not later
than noon, Denver time, on the day of a proposed Swingline Loan. Each such
notice shall be irrevocable and shall specify the requested date (which shall be
a Business Day) and amount of the requested Swingline Loan. The Administrative
Agent will promptly advise the Swingline Lender of any such notice received from
the Borrower Representative. The Swingline Lender shall make each Swingline Loan
available to the Borrowers, to the extent the Swingline Lender elects to make
such Swingline Loan in its sole discretion, by means of a credit to the Funding
Account(s) (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the Issuing Bank, and in the case of repayment of another Loan or
fees or expenses as provided by Section 2.18(c), by remittance to the
Administrative Agent to be distributed to the Lenders) by 2:00 p.m., Denver
time, on the requested date of such Swingline Loan.

(b) The Swingline Lender may by written notice given to the Administrative Agent
require the Revolving Lenders to acquire participations on such Business Day in
all or a portion of the Swingline Loans outstanding. Such notice shall specify
the aggregate amount of Swingline Loans in

 

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which the Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each Revolving
Lender, specifying in such notice such Lender’s Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, promptly upon receipt of such notice from the
Administrative Agent (and in any event, if such notice is received by 11:00
a.m., Denver time, on a Business Day no later than 4:00 p.m., Denver time on
such Business Day and if received after 11:00 a.m., Denver time, “on a Business
Day” shall mean no later than 9:00 a.m. Denver time on the immediately
succeeding Business Day), to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower Representative of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrowers (or other party
on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrowers for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrowers of any default in the payment thereof.

SECTION 2.06. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
Representative, on behalf of a Borrower, may request the issuance of Letters of
Credit denominated in dollars as the applicant thereof for the support of the
obligations of any Borrower or any Subsidiary thereof, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrowers to, or entered into by the Borrowers with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. Each Borrower unconditionally and irrevocably agrees
that, in connection with any Letter of Credit issued for the support of any
Subsidiary’s obligations as provided in the first sentence of this paragraph,
such Borrower will be fully responsible for the reimbursement of LC
Disbursements in accordance with the terms hereof, the payment of interest
thereon and the payment of fees due under Section 2.12(b) to the same extent as
if it were the sole account party in respect of such Letter of Credit (each
Borrower hereby irrevocably waiving any defenses that might otherwise be
available to it as a guarantor or surety of the obligations of such Subsidiary
that is an account party in respect of any such Letter of Credit).
Notwithstanding anything herein to the contrary, the Issuing Bank shall have no
obligation hereunder to issue, and shall not issue, any Letter of Credit (i) the
proceeds of which would be made available to any Person (A) to fund any activity
or business of or with any Sanctioned Person, or in any country or territory
that, at the time of such funding, is the subject of any Sanctions or (B) in any
manner that would

 

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result in a violation of any Sanctions by any party to this Agreement, (ii) if
any order, judgment or decree of any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any Requirement of Law relating to the Issuing Bank or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall prohibit,
or request that the Issuing Bank refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall impose upon the Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Effective Date and which the Issuing Bank in good faith deems material to it, or
(iii) if the issuance of such Letter of Credit would violate one or more
policies of the Issuing Bank applicable to letters of credit generally; provided
that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
the implementation thereof, and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed not to be in
effect on the Effective Date for purposes of clause (ii) above, regardless of
the date enacted, adopted, issued or implemented.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower Representative shall
hand deliver or fax (or transmit through Electronic System, if arrangements for
doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension, but in any event no less than three Business
Days) a notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof, and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Issuing Bank, the applicable Borrower also shall submit a letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrowers shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension
(i) the aggregate LC Exposure shall not exceed $2,000,000, (ii) no Revolving
Lender’s Revolving Exposure shall exceed its Revolving Commitment and (iii) the
Aggregate Revolving Exposure shall not exceed the aggregate Revolving
Commitments. Notwithstanding the foregoing or anything to the contrary contained
herein, no Issuing Bank shall be obligated to issue or modify any Letter of
Credit if, immediately after giving effect thereto, the outstanding LC Exposure
in respect of all Letters of Credit issued by such Person and its Affiliates
would exceed such Issuing Bank’s Issuing Bank Sublimit. Without limiting the
foregoing and without affecting the limitations contained herein, it is
understood and agreed that the Borrower Representative may from time to time
request that an Issuing Bank issue Letters of Credit in excess of its individual
Issuing Bank Sublimit in effect at the time of such request, and each Issuing
Bank agrees to consider any such request in good faith. Any Letter of Credit so
issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then
in effect shall nonetheless constitute a Letter of Credit for all purposes of
the Credit Agreement, and shall not affect the Issuing Bank Sublimit of any
other Issuing Bank, subject to the limitations on the aggregate LC Exposure set
forth in clause (i) of this Section 2.06(b).

 

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(c) Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the Issuing Bank to the beneficiary
thereof) at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Letter of Credit (or, in the case of
any renewal or extension thereof, including, without limitation, any automatic
renewal provision, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Credit Maturity Date.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrowers on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
the Borrowers for any reason. Each Revolving Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 11:00 a.m., Denver time, on (i) the Business Day that the Borrower
Representative receives notice of such LC Disbursement, if such notice is
received prior to 9:00 a.m., Denver time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower Representative
receives such notice, if such notice is received after 9:00 a.m., Denver time,
on the day of receipt; provided that the Borrowers may, subject to the
conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.05 that such payment be financed with an CBFR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrowers’ obligation to make such payment shall be discharged and
replaced by the resulting CBFR Revolving Borrowing or Swingline Loan. If the
Borrowers fail to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrowers in respect thereof, and such Lender’s Applicable
Percentage thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrowers, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank, as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of CBFR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve the
Borrowers of their obligation to reimburse such LC Disbursement.

 

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(f) Obligations Absolute. The Borrowers’ joint and several obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under
a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrowers’ obligations
hereunder. None of the Administrative Agent, the Revolving Lenders or the
Issuing Bank, or any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit, or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrowers to
the extent of any direct damages (as opposed to special, indirect, consequential
or punitive damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by any Borrower
that are caused by the Issuing Bank’s failure to exercise due care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower Representative by telephone (confirmed by
fax) of such demand for payment and whether the Issuing Bank has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrowers of their obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrowers shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrowers reimburse such LC Disbursement, at the
rate per annum then applicable to CBFR Revolving Loans and such interest shall
be due and payable on the date when such reimbursement is due; provided that, if
the Borrowers fail to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.

 

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(i) Replacement of the Issuing Bank. (i) The Issuing Bank may be replaced at any
time by written agreement among the Borrower Representative, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Revolving Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective,
the Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit then outstanding and issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.

(ii) Subject to the appointment and acceptance of a successor Issuing Bank, the
Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior
written notice to the Administrative Agent, the Borrower Representative and the
Lenders, in which case, such Issuing Bank shall be replaced in accordance with
Section 2.06(i) above.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representatives receives
notice from the Administrative Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure
representing greater than 50% of the aggregate LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, the Borrowers shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Revolving Lenders (the “LC
Collateral Account”), an amount in cash equal to 105% of the amount of the LC
Exposure as of such date plus accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to any Borrower described in clause (h) or (i) of Article VII. The
Borrowers also shall deposit cash collateral in accordance with this paragraph
as and to the extent required by Section 2.11(b) or 2.20. Each such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the Secured Obligations. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over the LC Collateral Account and the Borrowers hereby grant the Administrative
Agent a security interest in the LC Collateral Account and all moneys or other
assets on deposit therein or credited thereto. Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Administrative Agent and at the Borrowers’ risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the aggregate LC Exposure), be applied
to satisfy other Secured Obligations. If the Borrowers are required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers within three (3) Business Days after all such Events
of Default have been cured or waived as confirmed in writing by the
Administrative Agent.

 

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(k) Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by
the Administrative Agent, each Issuing Bank shall, in addition to its
notification obligations set forth elsewhere in this Section, report in writing
to the Administrative Agent (i) periodic activity (for such period or recurrent
periods as shall be requested by the Administrative Agent) in respect of Letters
of Credit issued by such Issuing Bank, including all issuances, extensions,
amendments and renewals, all expirations and cancelations and all disbursements
and reimbursements, (ii) reasonably prior to the time that such Issuing Bank
issues, amends, renews or extends any Letter of Credit, the date of such
issuance, amendment, renewal or extension, and the stated amount of the Letters
of Credit issued, amended, renewed or extended by it and outstanding after
giving effect to such issuance, amendment, renewal or extension (and whether the
amounts thereof shall have changed), (iii) on each Business Day on which such
Issuing Bank makes any LC Disbursement, the date and amount of such LC
Disbursement, (iv) on any Business Day on which a Borrower fails to reimburse an
LC Disbursement required to be reimbursed to such Issuing Bank on such day, the
date of such failure and the amount of such LC Disbursement, and (v) on any
other Business Day, such other information as the Administrative Agent shall
reasonably request as to the Letters of Credit issued by such Issuing Bank.

(l) LC Exposure Determination. For all purposes of this Agreement, the amount of
a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at the time of determination.

SECTION 2.07. Funding of Borrowings.

(a) Each Lender shall make each Loan to be made by such Lender hereunder on the
proposed date thereof solely by wire transfer of immediately available funds by
1:00 p.m., Denver time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders in an amount equal to
such Lender’s Applicable Percentage; provided that Swingline Loans shall be made
as provided in Section 2.05. The Administrative Agent will make such Loans
available to the Borrower Representative by promptly crediting the funds so
received in the aforesaid account of the Administrative Agent to the Funding
Account(s); provided that CBFR Revolving Loans made to finance the reimbursement
of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrowers severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
applicable Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrowers, the interest rate applicable to CBFR Revolving Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

 

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SECTION 2.08. Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower Representative may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
Representative may elect different options with respect to different portions of
the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Swingline Borrowings, which may not be converted
or continued.

(b) To make an election pursuant to this Section, the Borrower Representative
shall notify the Administrative Agent of such election by telephone or through
Electronic System, if arrangements for doing so have been approved by the
Administrative Agent, by the time that a Borrowing Request would be required
under Section 2.03 if the Borrowers were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery, Electronic System or fax to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower Representative.

(c) Each telephonic and written Interest Election Request (including requests
submitted through Electronic System) shall specify the following information in
compliance with Section 2.02:

(i) the name of the applicable Borrower and the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an CBFR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the applicable Class of the
details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower Representative fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an CBFR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so

 

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notifies the Borrower Representative, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an CBFR Borrowing at the end of the Interest Period applicable
thereto.

SECTION 2.09. Termination and Reduction of Revolving Commitments; Increase in
Revolving Commitments.

(a) Unless previously terminated, all the Revolving Commitments shall terminate
on the Revolving Credit Maturity Date.

(b) The Borrowers may at any time terminate the Revolving Commitments upon
(i) the payment in full of all outstanding Revolving Loans and LC Disbursements,
together with accrued and unpaid interest thereon, (ii) the cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a backup standby
letter of credit satisfactory to the Administrative Agent and the Issuing Bank)
in an amount equal to 105% of the LC Exposure as of such date), (iii) the
payment in full of the accrued and unpaid fees, including applicable Prepayment
Fee (if any), and (iv) the payment in full of all reimbursable expenses and
other Obligations together with accrued and unpaid interest thereon.

(c) The Borrowers may from time to time reduce the Revolving Commitments;
provided that (i) each reduction of the Revolving Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Borrowers shall not terminate or reduce the Revolving Commitments
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, the Aggregate Revolving Exposure would exceed the
aggregate Revolving Commitments.

(d) The Borrower Representative shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under paragraph (b) or
(c) of this Section at least three (3) Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower Representative pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Revolving Commitments delivered by the
Borrower Representative may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower Representative (by notice to the Administrative Agent on
or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Revolving Commitments shall be permanent.
Each reduction of the Revolving Commitments shall be made ratably among the
Lenders in accordance with their respective Revolving Commitments.

(e) The Company shall have the right to increase the Revolving Commitments by
obtaining additional Revolving Commitments, either from one or more of the
Lenders or another lending institution, provided that (i) any such request for
an increase shall be in a minimum amount of $5,000,000, (ii) the Company may
make a maximum of two such requests, (iii) after giving effect thereto, the sum
of the total of the additional Revolving Commitments does not exceed
$20,000,000, (iv) the Administrative Agent , the Swingline Lender and the
Issuing Bank have approved the identity of any such new Lender, such approvals
not to be unreasonably withheld, (v) any such new Lender assumes all of the
rights and obligations of a “Lender” hereunder, and (vi) the procedures
described in Section 2.09(f) below have been satisfied. Nothing contained in
this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment
on the part of any Lender to increase its Revolving Commitment hereunder at any
time.

 

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(f) Any amendment hereto for such an increase or addition shall be in form and
substance satisfactory to the Administrative Agent and shall only require the
written signatures of the Administrative Agent, the Borrowers and each Lender
being added or increasing its Revolving Commitment, subject only to the approval
of all Lenders if any such increase or addition would cause the Revolving
Commitments to exceed $50,000,000. As a condition precedent to such an increase
or addition, the Borrowers shall deliver to the Administrative Agent (i) a
certificate of each Loan Party signed by an authorized officer of such Loan
Party (A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (B) in the case of the Borrowers,
certifying that, before and after giving effect to such increase or addition,
(1) the representations and warranties contained in Article III and the other
Loan Documents are true and correct, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, (2) no Default exists,
(3) the Borrowers are in compliance (on a pro forma basis) with the covenants
contained in Section 6.12 and (ii) legal opinions and documents consistent with
those delivered on the Effective Date, to the extent requested by the
Administrative Agent.

(g) On the effective date of any such increase or addition, (i) any Lender
increasing (or, in the case of any newly added Lender, extending) its Revolving
Commitment shall make available to the Administrative Agent such amounts in
immediately available funds as the Administrative Agent shall determine, for the
benefit of the other Lenders, as being required in order to cause, after giving
effect to such increase or addition and the use of such amounts to make payments
to such other Lenders, each Lender’s portion of the outstanding Revolving Loans
of all the Lenders to equal its revised Applicable Percentage of such
outstanding Revolving Loans, and the Administrative Agent shall make such other
adjustments among the Lenders with respect to the Revolving Loans then
outstanding and amounts of principal, interest, commitment fees and other
amounts paid or payable with respect thereto as shall be necessary, in the
opinion of the Administrative Agent, in order to effect such reallocation and
(ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding
Revolving Loans as of the date of any increase (or addition) in the Revolving
Commitments (with such reborrowing to consist of the Types of Revolving Loans,
with related Interest Periods if applicable, specified in a notice delivered by
the Borrower Representative, in accordance with the requirements of
Section 2.03). The deemed payments made pursuant to clause (ii) of the
immediately preceding sentence shall be accompanied by payment of all accrued
interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be
subject to indemnification by the Borrowers pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods. Within a reasonable time after the effective date of
any increase or addition, the Administrative Agent shall, and is hereby
authorized and directed to, revise the Commitment Schedule to reflect such
increase or addition and shall distribute such revised Commitment Schedule to
each of the Lenders and the Borrower Representative, whereupon such revised
Commitment Schedule shall replace the old Commitment Schedule and become part of
this Agreement.

SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt.

(a) The Borrowers hereby unconditionally promise to pay (i) to the
Administrative Agent for the account of each Revolving Lender the then unpaid
principal amount of each Revolving Loan on the Revolving Credit Maturity Date,
and (ii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Credit Maturity Date and the
fifth Business Day after such Swingline Loan is made; provided that on each date
that a Revolving Loan is made, the Borrowers shall repay all Swingline Loans
then outstanding and the proceeds of any such Revolving Loan shall be applied by
the Administrative Agent to repay any Swingline Loans outstanding.

 

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

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

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall prepare, execute and deliver to such
Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.11. Prepayment of Loans.

(a) The Borrowers shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with paragraph (e) of this Section and, if applicable, payment of any break
funding expenses under Section 2.16.

(b) In the event and on such occasion that the Aggregate Revolving Exposure
exceeds the aggregate Revolving Commitments, the Borrowers shall prepay the
Revolving Loans, and/or LC Exposure and/or Swingline Loans (or, if no such
Borrowings are outstanding, deposit cash collateral in the LC Collateral Account
in an aggregate amount equal to such excess, in accordance with
Section 2.06(j)).

(c) All prepayments required to be made pursuant to Section 2.11(b) shall be
applied, first to prepay the Revolving Loans (including Swingline Loans) without
a corresponding reduction in the Revolving Commitments and second, to cash
collateralize outstanding LC Exposure.

(d) The Borrower Representative shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by fax) or through Electronic System, if arrangements for doing so
have been approved by the Administrative Agent, of any prepayment under this
Section: (i) in the case of prepayment of a Eurodollar Borrowing, not later than
10:00 a.m., Denver time, three (3) Business Days before the date of prepayment,
(ii) in the case of prepayment of an CBFR Borrowing, not later than 10:00 a.m.,
Denver time, on the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 11:00 a.m., Denver time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that if a notice of prepayment is given in connection with
a conditional notice of termination of the Revolving

 

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Commitments as contemplated by Section 2.09, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with
Section 2.09. Promptly following receipt of any such notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in Section 2.02,
except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by
(i) accrued interest to the extent required by Section 2.13 and (ii) break
funding payments pursuant to Section 2.16.

SECTION 2.12. Fees.

(a) The Borrowers agree to pay to the Administrative Agent a commitment fee for
the account of each Revolving Lender, which shall accrue at 0.20% per annum on
the daily amount of the undrawn portion of the Revolving Commitment of such
Lender during the period from and including the Effective Date to but excluding
the date on which the Lenders’ Revolving Commitments terminate; it being
understood that the LC Exposure of a Lender shall be included and the Swingline
Exposure of a Lender shall be excluded in the drawn portion of the Revolving
Commitment of such Lender for purposes of calculating the commitment fee.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account
of each Revolving Lender a participation fee with respect to its participations
in Letters of Credit, which shall accrue at 1.10% on the daily amount of such
Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.25%
per annum on the daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank’s standard fees and commissions
with respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within ten (10) days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

(c) The Borrowers agree to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrowers and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.

 

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SECTION 2.13. Interest.

(a) The Loans comprising each CBFR Borrowing (including each Swingline Loan)
shall bear interest at the CB Floating Rate minus 1.65%.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
1.10%.

(c) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrower Representative (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 9.02
requiring the consent of “each Lender directly affected thereby” for reductions
in interest rates), declare that (i) all Loans shall bear interest at 2% plus
the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 2% plus the rate applicable to such fee
or other obligation as provided hereunder.

(d) Accrued interest on each Loan (for CBFR Loans, accrued through the last day
of the prior calendar month) shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an CBFR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the CB Floating Rate at times when
the CB Floating Rate is based on the Prime Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable CB Floating Rate, Adjusted LIBO Rate or
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
and binding absent manifest error) that adequate and reasonable means do not
exist for ascertaining (including, without limitation, by means of an
Interpolated Rate) the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for the applicable Interest
Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans included in such Borrowing for such
Interest Period;

 

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then the Administrative Agent shall give notice thereof to the Borrower
Representative and the Lenders through Electronic System as provided in
Section 9.01 as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower Representative and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and any such Eurodollar Borrowing shall be repaid on the last day of the then
current Interest Period applicable thereto, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an CBFR
Borrowing.

SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or

(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein; or

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting into or
maintaining any Loan (or of maintaining its obligation to make any such Loan) or
to increase the cost to such Lender, the Issuing Bank or such other Recipient of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then the Borrowers will pay to such Lender, the Issuing Bank or such other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the Issuing Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement, the Revolving Commitments of or the Loans made
by, or participations in Letters of Credit or Swingline Loans held by, such
Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy and liquidity), then from time to time the Borrowers will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower Representative and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

 

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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower Representative of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the Issuing
Bank’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked), or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower Representative pursuant to Section 2.19 or
9.02(d), then, in any such event, the Borrowers shall compensate each Lender for
the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such
Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Eurodollar Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Eurodollar Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower Representative and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

SECTION 2.17. Taxes.

(a) Withholding Taxes; Gross-Up; Payments Free of Taxes. Any and all payments by
or on account of any obligation of any Loan Party under any Loan Document shall
be made without deduction or withholding for any Taxes, except as required by
applicable law. If any applicable law (as determined in the good faith
discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 2.17), the applicable Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

 

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

(c) Evidence of Payment. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.17, such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment, or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(d) Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (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)
payable or paid by such Recipient or required to be withheld or deducted from a
payment to such Recipient and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to any Loan Party by a Lender
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower Representative and the Administrative Agent, at the time or times
reasonably requested by the Borrower Representative or the Administrative Agent,
such properly completed and executed documentation reasonably requested by the
Borrower Representative or the Administrative Agent as will permit such payments
to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower Representative or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower Representative or the
Administrative Agent as will enable the Borrower Representative or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

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

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

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

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

(2) in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, an executed IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit C-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as
applicable; or

(4) to the extent a Foreign Lender is not the Beneficial Owner, an executed IRS
Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the
form of Exhibit C-2 or Exhibit C-3, IRS Form W-9, and/or other certification
documents from each Beneficial Owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit C-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower Representative and the Administrative Agent (in such
number of copies as shall be requested by

 

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

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

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

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts
giving rise to such refund had never been paid. This paragraph (g) shall not be
construed to require any indemnified party to make available its Tax returns (or
any other information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(h) Survival. Each party’s obligations under this Section 2.17 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Revolving
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

(i) Defined Terms. For purposes of this Section 2.17, the term “Lender” includes
any Issuing Bank and the term “applicable law” includes FATCA.

 

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SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

(a) The Borrowers shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Sections 2.15, 2.16 or 2.17, or otherwise) prior to
2:00 p.m., Denver time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices designated by the Administrative Agent to the Borrower
Representative from time to time, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. Unless otherwise
provided for herein, if any payment hereunder shall be due on a day that is not
a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

(b) Any proceeds of Collateral received by the Administrative Agent (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
Borrowers), or (B) a mandatory prepayment (which shall be applied in accordance
with Section 2.11) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, shall be applied ratably first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Administrative Agent, the
Swingline Lender and the Issuing Bank from the Borrowers (other than in
connection with Banking Services Obligations or Swap Agreement Obligations),
second, to pay any fees or expense reimbursements then due to the Lenders from
the Borrowers (other than in connection with Banking Services Obligations or
Swap Agreement Obligations), third, to pay interest then due and payable on the
Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC
Disbursements and to pay any amounts owing with respect to Swap Agreement
Obligations up to and including the amount most recently provided to the
Administrative Agent pursuant to Section 2.22, ratably, fifth, to pay an amount
to the Administrative Agent equal to one hundred five percent (105%) of the
aggregate LC Exposure, to be held as cash collateral for such Obligations, and
sixth, to the payment of any amounts owing in respect of Banking Services
Obligations up to and including the amount most recently provided to the
Administrative Agent pursuant to Section 2.22, and seventh, to the payment of
any other Secured Obligation due to the Administrative Agent or any Lender from
the Borrowers or any other Loan Party. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower Representative,
or unless a Default is in existence, neither the Administrative Agent nor any
Lender shall apply any payment which it receives to any Eurodollar Loan of a
Class, except (i) on the expiration date of the Interest Period applicable
thereto, or (ii) in the event, and only to the extent, that there are no
outstanding CBFR Loans of the same Class and, in any such event, the Borrowers
shall pay the break funding payment required in accordance with Section 2.16.
The Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.

Notwithstanding the foregoing, Secured Obligations arising under Banking
Services Obligations or Swap Agreement Obligations shall be excluded from the
application described above and paid in clause seventh if the Administrative
Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may have reasonably requested from the
applicable provider of such Banking Services or Swap Agreements.

 

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(c) At the election of the Administrative Agent, all payments of principal,
interest, LC Disbursements, fees, premiums, reimbursable expenses (including,
without limitation, all reimbursement for fees, costs and expenses pursuant to
Section 9.03), and other sums payable under the Loan Documents, may be paid from
the proceeds of Borrowings made hereunder, whether made following a request by
the Borrower Representative pursuant to Section 2.03 or 2.05 or a deemed request
as provided in this Section or may be deducted from any deposit account of the
Borrowers maintained with the Administrative Agent. The Borrowers hereby
irrevocably authorize (i) the Administrative Agent to make a Borrowing for the
purpose of paying each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents and agree that all
such amounts charged shall constitute Loans (including Swingline Loans), and
that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03 or 2.05, as applicable, and (ii) the Administrative Agent to
charge any deposit account of any Borrower maintained with the Administrative
Agent for each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents.

(d) If, except as otherwise expressly provided herein, any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other similarly situated Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by all such Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements and Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by a Borrower pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the
assignment or sale of a participation in any of its Loans or participations in
LC Disbursements or Swingline Loans to any assignee or participant, other than
to the Borrowers or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against each Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.

(e) Unless the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

 

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(f) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such
Lender’s obligations hereunder until all such unsatisfied obligations are fully
paid and/or (ii) hold any such amounts in a segregated account as cash
collateral for, and application to, any future funding obligations of such
Lender hereunder. Application of amounts pursuant to (i) and (ii) above shall be
made in such order as may be determined by the Administrative Agent in its
discretion.

(g) The Administrative Agent may from time to time provide the Borrowers with
account statements or invoices with respect to any of the Secured Obligations
(the “Statements”). The Administrative Agent is under no duty or obligation to
provide Statements, which, if provided, will be solely for the Borrowers’
convenience. Statements may contain estimates of the amounts owed during the
relevant billing period, whether of principal, interest, fees or other Secured
Obligations. If the Borrowers pay the full amount indicated on a Statement on or
before the due date indicated on such Statement, the Borrowers shall not be in
default of payment with respect to the billing period indicated on such
Statement; provided, that acceptance by the Administrative Agent, on behalf of
the Lenders, of any payment that is less than the total amount actually due at
that time (including but not limited to any past due amounts) shall not
constitute a waiver of the Administrative Agent’s or the Lenders’ right to
receive payment in full at another time.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.15, or if the Borrowers
are required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Sections 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.15, or if the Borrowers
are required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights (other than its existing rights to
payments pursuant to Sections 2.15 or 2.17) and obligations under this Agreement
and other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrowers shall have received the prior written consent of
the Administrative Agent (and in circumstances where its consent would be
required under Section 9.04, the Issuing Bank and the Swingline Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and funded
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a

 

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reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.

SECTION 2.20. Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Revolving
Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b) such Defaulting Lender shall not have the right to vote on any issue on
which voting is required (other than to the extent expressly provided in
Section 9.02(b)) and the Revolving Commitment and Revolving Exposure of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder or under any other Loan
Document; provided that, except as otherwise provided in Section 9.02, this
clause (b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender directly affected thereby;

(c) if any Swingline Exposure or LC Exposure exists at the time such Lender
becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting
Lender (other than the portion of such Swingline Exposure referred to in clause
(b) of the definition of such term) shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only (x) to the extent that the conditions set forth in
Section 4.02 are satisfied at the time of such reallocation (and, unless any
Borrower shall have otherwise notified the Administrative Agent at such time,
such Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time) and (y) to the extent that such
reallocation does not, as to any non-Defaulting Lender, cause such
non-Defaulting Lender’s Revolving Exposure to exceed its Revolving Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall within one (1) Business Day
following notice by the Administrative Agent (x) first, prepay such Swingline
Exposure and (y) second, cash collateralize, for the benefit of the Issuing
Bank, the Borrowers’ obligations corresponding to such Defaulting Lender’s LC
Exposure (after giving effect to any partial reallocation pursuant to clause
(i) above) in accordance with the procedures set forth in Section 2.06(j) for so
long as such LC Exposure is outstanding;

(iii) if the Borrowers cash collateralize any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to Sections
2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; and

 

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(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any other
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing
Bank until and to the extent that such LC Exposure is reallocated and/or cash
collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall
not be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend, renew, extend or increase any Letter of Credit, unless
it is satisfied that the related exposure and such Defaulting Lender’s then
outstanding LC Exposure will be 100% covered by the Revolving Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers
in accordance with Section 2.20(c), and Swingline Exposure related to any such
newly made Swingline Loan or LC Exposure related to any newly issued or
increased Letter of Credit shall be allocated among non-Defaulting Lenders in a
manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not
participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any
Lender shall occur following the date hereof and for so long as such event shall
continue or (ii) the Swingline Lender or the Issuing Bank has a good faith
belief that any Lender has defaulted in fulfilling its obligations under one or
more other agreements in which such Lender commits to extend credit, the
Swingline Lender shall not be required to fund any Swingline Loan and the
Issuing Bank shall not be required to issue, amend or increase any Letter of
Credit, unless the Swingline Lender or the Issuing Bank, as the case may be,
shall have entered into arrangements with the Borrowers or such Lender,
satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to
defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrowers, the Swingline
Lender and the Issuing Bank agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Revolving Commitment and on the date of such
readjustment such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Applicable Percentage.

SECTION 2.21. Returned Payments. If, after receipt of any payment which is
applied to the payment of all or any part of the Obligations (including a
payment effected through exercise of a right of setoff), the Administrative
Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion), then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender. The provisions of this
Section 2.21 shall be and remain effective notwithstanding any contrary action
which may have been taken by the Administrative Agent or any Lender in reliance
upon such payment or application of proceeds. The provisions of this
Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22. Banking Services and Swap Agreements. Each Lender or Affiliate
thereof providing Banking Services for, or having Swap Agreements with, any Loan
Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the
Administrative Agent, promptly after entering into such Banking Services or Swap
Agreements, written notice setting forth the aggregate amount of all Banking
Services Obligations and Swap Agreement Obligations of such Loan Party or
Subsidiary or Affiliate

 

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thereof to such Lender or Affiliate (whether matured or unmatured, absolute or
contingent). In furtherance of that requirement, each such Lender or Affiliate
thereof shall furnish the Administrative Agent, from time to time after a
significant change therein or upon a request therefor, a summary of the amounts
due or to become due in respect of such Banking Services Obligations and Swap
Agreement Obligations. The most recent information provided to the
Administrative Agent shall be used in determining which tier of the waterfall,
contained in Section 2.18(b), such Banking Services Obligations and/or Swap
Agreement Obligations will be placed.

ARTICLE III

Representations and Warranties

Each Loan Party represents and warrants to the Lenders that (and where
applicable, agrees):

SECTION 3.01. Organization; Powers. Each Loan Party and each Subsidiary is duly
organized, validly existing and in good standing (to the extent the concept is
applicable in such jurisdiction and, in the case of any Subsidiary other than a
Borrower, except where the failure to do so, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect) under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
Each Loan Document to which each Loan Party is a party has been duly executed
and delivered by such Loan Party and constitutes a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any Subsidiary or the assets of any
Loan Party or any Subsidiary, or give rise to a right thereunder to require any
payment to be made by any Loan Party or any Subsidiary, and (d) will not result
in the creation or imposition of any Lien on any asset of any Loan Party or any
Subsidiary, except Liens created pursuant to the Loan Documents, except, with
respect to clauses (b) and (c) of this Section 3.03, to the extent that such
breach, contravention or violation would not reasonably be expected to result in
a Material Adverse Effect.

SECTION 3.04. Financial Condition; No Material Adverse Change.

(a) The Company has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended December 31, 2016, reported on by EKS&H LLLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended March 31, 2017, certified by its Financial

 

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Officer. Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to normal year-end audit adjustments all of which,
when taken as a whole, would not be materially adverse and the absence of
footnotes in the case of the statements referred to in clause (ii) above.

(b) No event, change or condition has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect, since December 31, 2016.

SECTION 3.05. Properties.

(a) As of the date of this Agreement, Schedule 3.05 sets forth the address of
each parcel of real property that is owned or leased by any Loan Party. Each of
such leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and no default by any Loan Party, or to the
knowledge of the Company, any counterparty to any such lease or sublease exists,
except to the extent that any inaccuracy in the foregoing could not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect. Each of the Loan Parties and each Subsidiary has good and indefeasible
title to, or valid leasehold interests in, all of its material real and personal
property, free of all Liens other than those permitted by Section 6.02.

(b) Each Loan Party and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, a correct and complete list of
all material registered trademarks, tradenames, copyrights, and patents, as of
the date of this Agreement, is set forth on Schedule 3.05, and the use thereof
by each Loan Party and each Subsidiary does not infringe in any material respect
upon the rights of any other Person, and each Loan Party’s and each Subsidiary’s
rights thereto are not subject to any licensing agreement or similar arrangement
(other than (A) restrictions relating to software licenses that may limit such
Loan Party’s ability to transfer or assign any such agreement to a third party,
(B) terms and conditions of license agreements pursuant to which Loan Parties
have licensed intellectual property from third party licensors in the ordinary
course of business, and (C) licensing agreements or similar agreements that do
not materially impair the ability of the Administrative Agent or the Lenders to
avail themselves of their rights under the Collateral Documents).

SECTION 3.06. Litigation and Environmental Matters.

(a) Except as set forth on Schedule 3.06, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of any Loan Party, threatened against or affecting
any Loan Party or any Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve any Loan Document or the
Transactions.

(b) (i) Except as set forth on Schedule 3.06, no Loan Party or any Subsidiary
has received notice of any claim with respect to any Environmental Liability or
knows of any basis for any Environmental Liability and (ii) except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, no Loan Party or
any Subsidiary (A) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law (B) has become subject to any Environmental Liability, (C) has
received notice of any claim with respect to any Environmental Liability or
(D) knows of any basis for any Environmental Liability. No claim or basis for
liability set forth on Schedule 3.06 could be reasonably expected to result in a
Material Adverse Effect.

 

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SECTION 3.07. Compliance with Laws and Agreements; No Default. Except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, each Loan Party and each
Subsidiary is in compliance with (i) all Requirements of Law applicable to it or
its property and (ii) all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.

SECTION 3.08. Investment Company Status. No Loan Party or any Subsidiary is an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

SECTION 3.09. Taxes. Each Loan Party and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which such Loan Party or such Subsidiary, as applicable, has set aside on its
books adequate reserves. No tax liens (other than as permitted by Section 6.02)
have been filed and no claims are being asserted with respect to any such Taxes,
except Taxes that are being contested in good faith by appropriate proceedings
and for which such Loan Party or such Subsidiary, as applicable, has set aside
on its books adequate reserves.

SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of all such
underfunded Plans.

SECTION 3.11. Disclosure. The Loan Parties have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of any Loan Party or any
Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to
the Effective Date, as of the Effective Date (it being understood that
projections are subject to inherent uncertainties and contingencies which may be
outside the control of any Loan Party).

SECTION 3.12. Material Agreements. No Loan Party or any Subsidiary is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any material agreement to which it is a
party or (ii) any agreement or instrument evidencing or governing Indebtedness,
except for any of the foregoing which would not, individually or in the
aggregate be reasonably expected to result in a Material Adverse Effect.

 

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SECTION 3.13. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
each Loan Party, at a fair valuation, in each case on a consolidated basis, will
exceed its debts and liabilities, subordinated, contingent or otherwise;
(ii) the present fair saleable value of the property of each Loan Party, in each
case on a consolidated basis, will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) no Loan Party, in each case on
a consolidated basis, will have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted after the Effective Date.

(b) No Loan Party intends to, nor will permit any Subsidiary to, and no Loan
Party believes that it or any Subsidiary will, incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the Indebtedness
of any such Subsidiary.

SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and their Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums due in respect of such
insurance have been paid. The Loan Parties believe that the insurance maintained
by or on behalf of the Loan Parties and their Subsidiaries is adequate and is
customary for companies engaged in the same or similar businesses operating in
the same or similar locations.

SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a
correct and complete list of the name and relationship to the Company of each
Subsidiary, (b) a true and complete listing of each class of each of the
Company’s authorized Equity Interests, of which all of such issued Equity
Interests are validly issued, outstanding, fully paid and non-assessable, and
(c) the type of entity of the Company and each Subsidiary. All of the issued and
outstanding Equity Interests owned by any Loan Party have been (to the extent
such concepts are relevant with respect to such ownership interests) duly
authorized and issued and are fully paid and non-assessable. The Company
purchased the remaining 45.4% of the Equity Interests of Heska Imaging US not
owned by the Company on or about May 31, 2017 for an aggregate price of
$13,756,844.92 (the “Heska Imaging US Minority Position Purchase”), thereby
owing 100% of the Equity Interests of Heska Imaging US. The Company then merged
Heska Imaging US and Heska Imaging International, LLC, a Delaware limited
liability company, into Heska Imaging Global, LLC, a Delaware limited liability
company, and changed the name of Heska Imaging Global, LLC to Heska Imaging,
LLC, a Delaware limited liability company. The Company owns 100% of the Equity
Interests of Heska Imaging, LLC.

SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Administrative Agent, for the benefit of the Secured Parties,
and such Liens constitute perfected and continuing Liens on the Collateral,
securing the Secured Obligations, enforceable against the applicable Loan Party,
and having priority over all other Liens on the Collateral except in the case of
(a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would
have priority over the Liens in favor of the Administrative Agent pursuant to
any applicable law or agreement, (b) Liens perfected only by possession
(including possession of any certificate of title), to the extent the
Administrative Agent has not obtained or does not maintain possession of such
Collateral and (c) Liens perfected only by control, filing or recording to the
extent that, despite due authorization by the applicable Loan Party, the
Administrative Agent has not obtained control or has not filed or recorded such
Lien.

 

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SECTION 3.17. Employment Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending
or, to the knowledge of any Loan Party, threatened. The hours worked by and
payments made to employees of the Loan Parties and their Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
federal, state, local or foreign law dealing with such matters. Except as would
not reasonably be expected to result in a Material Adverse Effect, all payments
due from any Loan Party or any Subsidiary, or for which any claim may be made
against any Loan Party or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of such Loan Party or such Subsidiary.

SECTION 3.18. Federal Reserve Regulations. No part of the proceeds of any Loan
or Letter of Credit has been used or will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X.

SECTION 3.19. Use of Proceeds. The proceeds of the Loans have been used and will
be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20. No Burdensome Restrictions. No Loan Party is subject to any
Burdensome Restrictions except Burdensome Restrictions permitted under
Section 6.10.

SECTION 3.21. Anti-Corruption Laws and Sanctions. Each Loan Party has
implemented and maintains in effect policies and procedures designed to ensure
compliance by such Loan Party, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and such Loan Party, its Subsidiaries and their respective officers
and employees and to the knowledge of such Loan Party its directors and agents,
are in compliance with Anti-Corruption Laws and applicable Sanctions in all
material respects. None of (a) any Loan Party, any Subsidiary or any of their
respective directors, officers or employees, or (b) to the knowledge of any such
Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that
will act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds, Transaction or other transaction contemplated by this Agreement
or the other Loan Documents will violate Anti-Corruption Laws or applicable
Sanctions.

SECTION 3.22. Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(a) successful operations of each of the other Loan Parties and (b) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose, in
furtherance of its direct and/or indirect business interests, will be of direct
and indirect benefit to such Loan Party, and is in its best interest.

SECTION 3.23. EEA Financial Institutions. No Loan Party is an EEA Financial
Institution.

 

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ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include fax or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement and (ii) duly executed copies
of the Loan Documents and such other certificates, documents, instruments and
agreements as the Administrative Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender and a written
opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the
Issuing Bank and the Lenders in substantially the form of Exhibit B.

(b) Financial Statements and Projections. The Lenders shall have received
(i) audited consolidated financial statements of the Company and its
Subsidiaries for the 2014, 2015 and 2016 fiscal years, (ii) unaudited interim
consolidated financial statements for each fiscal quarter ended after the date
of the latest applicable financial statements delivered pursuant to clause
(i) of this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the
Administrative Agent, reflect any material adverse change in the consolidated
financial condition of the Company and its Subsidiaries, taken as a whole, as
reflected in the audited, consolidated financial statements described in clause
(i) of this paragraph and (iii) reasonably satisfactory Projections.

(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of
each Loan Party, dated the Effective Date and executed by its Secretary or
Assistant Secretary, which shall (A) certify the resolutions of its Board of
Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, (B) identify by name
and title and bear the signatures of the officers of such Loan Party authorized
to sign the Loan Documents to which it is a party and, in the case of a
Borrower, its Financial Officers, and (C) contain appropriate attachments,
including the charter, articles or certificate of organization or incorporation
of each Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its bylaws or
operating, management or partnership agreement, or other organizational or
governing documents, and (ii) a long form good standing certificate for each
Loan Party from its jurisdiction of organization.

(d) No Default Certificate. The Administrative Agent shall have received a
certificate, signed by the a Financial Officer of the Borrower, dated as of each
Effective Date (i) stating that no Default has occurred and is continuing,
(ii) stating that the representations and warranties contained in the Loan
Documents are true and correct as of such date, and (iii) certifying as to any
other factual matters as may be reasonably requested by the Administrative
Agent.

(e) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all documented expenses required to be reimbursed for
which invoices have been presented (including the reasonable, documented fees
and expenses of legal counsel), on or

 

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before the Effective Date. All such amounts will be paid with proceeds of Loans
made on the Effective Date and will be reflected in the funding instructions
given by the Borrower Representative to the Administrative Agent on or before
the Effective Date.

(f) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in the jurisdiction of organization of each Loan Party and
each jurisdiction where assets of the Loan Parties are located, and such search
shall reveal no Liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.

(g) Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness required to be repaid and which
confirms that all Liens upon any of the property of the Loan Parties
constituting Collateral will be terminated concurrently with such payment and
all letters of credit issued or guaranteed as part of such Indebtedness shall
have been cash collateralized or supported by a Letter of Credit.

(h) Funding Account. The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrowers (the “Funding Account”) to
which the Administrative Agent is authorized by the Borrowers to transfer the
proceeds of any Borrowings requested or authorized pursuant to this Agreement.

(i) Solvency. The Administrative Agent shall have received a solvency
certificate signed by a Financial Officer of the Company dated the Effective
Date in form and substance reasonably satisfactory to the Administrative Agent.

(j) Closing Availability. After giving effect to all Borrowings to be made on
the Effective Date and the issuance of any Letters of Credit on the Effective
Date and payment of all fees and expenses due hereunder, and with all of the
Loan Parties’ Indebtedness, the Borrowers’ Availability shall not be less than
$5,000,000.

(k) Pledged Equity Interests; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates (if any) representing the Equity
Interests pledged pursuant to the Security Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Administrative Agent pursuant to the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.

(l) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person (other than
with respect to Liens expressly permitted by Section 6.02), shall be in proper
form for filing, registration or recordation.

(m) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of this
Agreement and of the Security.

 

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(n) Legal Due Diligence. The Administrative Agent and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Administrative Agent in its sole discretion.

(o) USA PATRIOT Act, Etc. The Administrative Agent and Lenders shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including USA PATRIOT Act, and a properly completed and
signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(p) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the Issuing Bank, any Lender or their
respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrowers, the Lenders and the Issuing
Bank of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a) The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

(c) After giving effect to any Borrowing or the issuance, amendment, renewal or
extension of any Letter of Credit, Availability shall not be less than zero.

(d) No event shall have occurred and no condition shall exist which has or could
be reasonably expected to have a Material Adverse Effect.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b), (c) and (d) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in
paragraphs (a), (b), (c) and (d) of this Section, unless otherwise directed by
the Required Lenders, the Administrative Agent may, but shall have no obligation
to, continue to make Loans and an Issuing Bank may, but shall have no obligation
to, issue, amend, renew or extend, or cause to be issued, amended, renewed or
extended, any Letter of Credit for the ratable account and risk of Lenders from
time to time if the Administrative Agent believes that making such Loans or
issuing, amending, renewing or extending, or causing the issuance, amendment,
renewal or extension of, any such Letter of Credit is in the best interests of
the Lenders.

 

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ARTICLE V

Affirmative Covenants

Until the Revolving Commitments shall have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full (other than contingent or indemnity obligations for which no
claim has been made) and all Letters of Credit shall have expired, terminated or
been cash collateralized hereunder, in each case without any pending draw, and
all LC Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the other Loan
Parties, with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. The Borrowers will
furnish to the Administrative Agent and each Lender:

(a) within one hundred twenty (120) days after the end of each fiscal year of
the Company, its audited consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by independent public accountants of
recognized national standing (without a “going concern” or like qualification,
commentary or exception, and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, accompanied by any
management letter prepared by said accountants; provided, that the requirements
regarding delivery of financial statements in this clause (a) shall be deemed to
have been satisfied if the Administrative Agent has been furnished with a
consolidated annual report for the Company and its Subsidiaries containing such
information on Form 10-K;

(b) within forty-five (45) days after the end of each of the first three fiscal
quarters of the Company, its consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of such fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by a Financial Officer of the Borrower Representative
as presenting fairly in all material respects the financial condition and
results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; provided, that
the requirements regarding delivery of financial statements in this clause
(b) shall be deemed to have been satisfied if the Administrative Agent has been
furnished with a quarterly report for the Company and its Subsidiaries
containing such information on Form 10-Q;

(c) The Company represents and warrants that it, its controlling Person and any
Subsidiary, in each case, if any, files its financial statements with the SEC
and/or makes its financial statements available to potential holders of its 144A
securities, and, accordingly, the Company hereby (i) authorizes the
Administrative Agent to make the financial statements to be provided under
Section 5.01(a) and (b) above (collectively or individually, as the context
requires, the “Financial Statements”), along with the Loan Documents, available
to Public-Siders and (ii) agree that at the time such Financial Statements are
provided hereunder, they shall already have been made available to holders of
its securities. The Company will not request that any other material be posted
to Public-Siders without expressly representing and warranting to

 

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the Administrative Agent in writing that such materials do not constitute
material non-public information within the meaning of the federal securities
laws or that the Company has no outstanding publicly traded securities,
including 144A securities. Notwithstanding anything herein to the contrary, in
no event shall the Company request that the Administrative Agent make available
to Public-Siders budgets or any certificates, reports or calculations with
respect to the Borrowers’ compliance with the covenants contained herein.

(d) concurrently with any delivery of the Financial Statements, a certificate of
a Financial Officer of the Borrower Representative in substantially the form of
Exhibit D (i) certifying, in the case of the Financial Statements delivered
under clause (b) above, as presenting fairly in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (ii) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (iii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.12 and
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the Financial Statements accompanying such certificate;

(e) as soon as available, but in any event no later than 90 days after the end
of, and no earlier than 60 days prior to the end of, each fiscal year of the
Company, a copy of the plan and forecast (including a projected consolidated
balance sheet, income statement and cash flow statement) of the Company for each
quarter of the upcoming fiscal year (the “Projections”) in form reasonably
satisfactory to the Administrative Agent (it being understood that the Company’s
customary format consistent with the format delivered to the Administrative
Agent in connection with the Effective Date will be satisfactory);

(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Loan Party
or any Subsidiary with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, or
distributed by the Company to its shareholders generally, as the case may be;

(g) promptly following any request therefor, such other information regarding
the operations, material changes in ownership of Equity Interests, business
affairs and financial condition of any Loan Party or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any
Lender may reasonably request; and

(h) promptly after any request therefor by the Administrative Agent or any
Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that
the Company or any ERISA Affiliate may request with respect to any Multiemployer
Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the
Company or any ERISA Affiliate may request with respect to any Multiemployer
Plan; provided that if the Company or any ERISA Affiliate has not requested such
documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, the Company or the applicable ERISA Affiliate shall promptly
make a request for such documents and notices from such administrator or sponsor
and shall provide copies of such documents and notices promptly after receipt
thereof.

 

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SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the
Administrative Agent and each Lender prompt (but in any event within any time
period that may be specified below) written notice of the following:

(a) the occurrence of any Default;

(b) receipt of any notice of any investigation by a Governmental Authority or
any litigation or proceeding commenced or threatened against any Loan Party or
any Subsidiary that (i) seeks damages in excess of $500,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or
any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under,
any Environmental Law or related Requirement of Law, or seeks to impose
Environmental Liability, (vi) asserts liability on the part of any Loan Party or
any Subsidiary in excess of $500,000 in respect of any tax, fee, assessment, or
other governmental charge, or (vii) involves any product recall;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $500,000;

(d) within two (2) Business Days after the occurrence thereof, any Loan Party
entering into a Swap Agreement or an amendment to a Swap Agreement, together
with copies of all agreements evidencing such Swap Agreement or amendment; and

(e) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower Representative
setting forth in reasonable detail the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.

SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; and (b) carry
on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted;
provided, that the foregoing (a) and (b) shall not prohibit engaging in any
business, or any merger, consolidation, disposition, liquidation or dissolution
permitted under Sections 6.03, 6.04 and 6.05.

SECTION 5.04. Payment of Obligations. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material
liabilities and obligations, including Taxes, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect; provided,
however, that each Loan Party will, and will cause each Subsidiary to, remit
withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.

 

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SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted and except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.

SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (b) permit any representatives
designated by the Administrative Agent or any Lender (including employees of the
Administrative Agent, any Lender or any consultants, accountants, lawyers,
agents and appraisers retained by the Administrative Agent), upon reasonable
prior notice, to visit and inspect its properties, conduct at the Loan Party’s
premises field examinations of the Loan Party’s assets, liabilities, books and
records, including examining and making extracts from its books and records,
environmental assessment reports and Phase I or Phase II studies, if any, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times during normal business hours and as
often as reasonably requested; provided that so long as no Event of Default has
occurred and is continuing, Borrowers shall only be required to reimburse the
Administrative Agent for one (1) such field report in any calendar year. The
Loan Parties acknowledge that the Administrative Agent, after exercising its
rights of inspection, may prepare and distribute to the Lenders certain Reports
pertaining to the Loan Parties’ assets for internal use by the Administrative
Agent and the Lenders and subject to the confidentiality obligations hereunder.

SECTION 5.07. Compliance with Laws and Material Contractual Obligations. Each
Loan Party will, and will cause each Subsidiary to, (i) comply in all material
respects with each Requirement of Law applicable to it or its property
(including without limitation Environmental Laws) and (ii) perform in all
material respects its obligations under material agreements to which it is a
party , except, in each case, where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Each Loan Party will maintain in effect and enforce policies and
procedures designed to ensure compliance by such Loan Party, its Subsidiaries
and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08. Use of Proceeds.

(a) The proceeds of the Loans and the Letters of Credit will be used only for
working capital, capital expenditures and other general corporate purposes,
including to refinance certain outstanding Indebtedness and for Permitted
Acquisitions. No part of the proceeds of any Loan and no Letter of Credit will
be used, whether directly or indirectly, (i) for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X or (ii) to make any Acquisition other than Permitted Acquisitions.

(b) The Borrowers will not request any Borrowing or Letter of Credit, and no
Borrower shall use, and each Borrower shall procure that its Subsidiaries and
its or their respective directors, officers, employees and agents shall not use,
the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in
any Sanctioned Country, to the extent that such activities, businesses or
transaction would be prohibited by Sanctions if conducted by a corporation
incorporated in the United States or the European Union, or (c) in any manner
that would result in the violation of any Sanctions applicable to any party
hereto.

 

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SECTION 5.09. Accuracy of Information. The Loan Parties will ensure that any
information, including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder contains no material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
furnishing of such information shall be deemed to be a representation and
warranty by the Borrowers on the date thereof as to the matters specified in
this Section 5.09; provided that, with respect to the Projections, the Loan
Parties will cause the Projections to be prepared in good faith based upon
assumptions believed to be reasonable at the time (it being understood that any
projections are subject to inherent uncertainties and contingencies which may be
outside the control of any Loan Party).

SECTION 5.10. Insurance. Each Loan Party will, and will cause each Subsidiary
to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company (a) insurance in such
amounts (with no greater risk retention) and against such risks (including loss
or damage by fire and loss in transit; theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; business interruption; and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required pursuant to the
Collateral Documents. The Borrowers will furnish to the Lenders, upon request of
the Administrative Agent, but no less frequently than annually, information in
reasonable detail as to the insurance so maintained.

SECTION 5.11. Appraisals. At any time after an Event of Default that the
Administrative Agent requests, each Loan Party will, and will cause each
Subsidiary to, provide the Administrative Agent with appraisals or updates
thereof of their Inventory, Equipment, and real property from an appraiser
selected and engaged by the Administrative Agent, and prepared on a basis
satisfactory to the Administrative Agent, such appraisals and updates to
include, without limitation, information required by any applicable Requirement
of Law.

SECTION 5.12. Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material portion
of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents

SECTION 5.13. Depository Banks. Each Loan Party and each Domestic Subsidiary
will maintain the Administrative Agent as its principal depository bank,
including for the maintenance of operating, administrative, cash management,
collection activity, and other deposit accounts for the conduct of its business;
provided that each Loan Party and each Domestic Subsidiary may maintain their
existing accounts until, but not after, December 1, 2017.

SECTION 5.14. Additional Collateral; Further Assurances.

(a) Subject to applicable Requirements of Law, each Loan Party will cause
(i) each of its Domestic Subsidiaries existing as of the date hereof to become a
Loan Party hereto and (ii) each of its Domestic Subsidiaries formed or acquired
after the date of this Agreement to become a Loan Party by executing a Joinder
Agreement. Upon execution and delivery thereof, each such Person (i) shall
automatically become a Loan Guarantor hereunder and thereupon shall have all of
the rights, benefits,

 

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duties, and obligations in such capacity under the Loan Documents and (ii) will
grant Liens to the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, in any property of such Loan Party which
constitutes Collateral, excluding any parcel of real property owned by any Loan
Party.

(b) Each Loan Party will cause (i) 100% of the issued and outstanding Equity
Interests of each of its Domestic Subsidiaries and (ii) 65% of the issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
in each Foreign Subsidiary directly owned by a Borrower or a Domestic Subsidiary
to be subject at all times to a first priority, perfected Lien in favor of the
Administrative Agent for the benefit of the Administrative Agent and the other
Secured Parties, pursuant to the terms and conditions of the Loan Documents or
other security documents as the Administrative Agent shall reasonably request.

(c) Without limiting the foregoing, each Loan Party will, and will cause each
Subsidiary to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by any Requirement of Law or
which the Administrative Agent may, from time to time, reasonably request to
carry out the terms and conditions of this Agreement and the other Loan
Documents and to ensure perfection and priority of the Liens created or intended
to be created by the Collateral Documents, all at the expense of the Loan
Parties.

(d) If any material assets (excluding any real property) are acquired by any
Loan Party after the Effective Date (other than assets constituting Collateral
under the Security Agreement that become subject to the Lien under the Security
Agreement upon acquisition thereof), the Borrower Representative will (i) notify
the Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, cause such assets to be subjected
to a Lien securing the Secured Obligations and (ii) take, and cause each
applicable Loan Party to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens, including
actions described in paragraph (c) of this Section, all at the expense of the
Loan Parties.

(e) The Loan Parties shall deliver a fully signed Collateral Access Agreement
with respect to the leased property in Loveland, Colorado on or before 30 days
after the Effective Date. Additionally, if required by the Administrative Agent,
the Loan Parties shall deliver fully signed Collateral Access Agreements with
respect to such other locations where material Collateral is located as
determined by the Administrative Agent and by such time as reasonably required
by the Administrative Agent.

ARTICLE VI

Negative Covenants

Until the Revolving Commitments shall have expired or been terminated and the
principal of and interest on each Loan and all fees, expenses and other amounts
payable under any Loan Document shall have been paid in full and all Letters of
Credit shall have expired or terminated, in each case without any pending draw,
and all LC Disbursements shall have been reimbursed, each Loan Party executing
this Agreement covenants and agrees, jointly and severally with all of the other
Loan Parties, with the Lenders that:

 

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SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except:

(a) the Secured Obligations;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
any extensions, renewals, refinancings and replacements of any such Indebtedness
in accordance with clause (f) hereof;

(c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any
Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to any Borrower or any other Loan Party
shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Administrative Agent;

(d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii)
Guarantees by any Borrower or other Loan Party of Indebtedness of any Subsidiary
that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees
permitted under this clause (d) shall be subordinated to the Secured Obligations
on the same terms as the Indebtedness so Guaranteed is subordinated to the
Secured Obligations;

(e) Indebtedness of any Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (f) below; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) below, shall not exceed
$2,000,000 at any time outstanding;

(f) Indebtedness which represents extensions, renewals, refinancing or
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b), (e), (i) and (j) and (k) hereof (such
Indebtedness being referred to herein as the “Original Indebtedness”); provided
that (i) such Refinance Indebtedness does not increase the principal amount or
interest rate of the Original Indebtedness, (ii) any Liens securing such
Refinance Indebtedness are not extended to any additional property of any Loan
Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not
originally obligated with respect to repayment of such Original Indebtedness is
required to become obligated with respect to such Refinance Indebtedness,
(iv) such Refinance Indebtedness does not result in a shortening of the average
weighted maturity of such Original Indebtedness, (v) the terms of such Refinance
Indebtedness (other than interest rate increases) are not less favorable to the
obligor thereunder than the original terms of such Original Indebtedness and
(vi) if such Original Indebtedness was subordinated in right of payment to the
Secured Obligations, then the terms and conditions of such Refinance
Indebtedness must include subordination terms and conditions that are at least
as favorable to the Administrative Agent and the Lenders as those that were
applicable to such Original Indebtedness;

 

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(g) Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;

(i) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (j) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) above, shall not exceed
$1,000,000 at any time outstanding;

(j) Indebtedness in respect of cash management and treasury obligations netting
services, overdraft protections, employee credit card programs and otherwise in
connection with deposit and checking accounts, in each case, in the ordinary
course of business;

(k) contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price (including working capital adjustments),
non-compete, or similar obligation of Company or the applicable Subsidiary, in
each case, in the ordinary course of business, incurred in connection with the
consummation of one or more Permitted Acquisitions;

(l) unsecured Indebtedness of Company or its Subsidiaries in respect of
earn-outs owing to sellers of assets or Equity Interests to the Company or its
Subsidiaries that is incurred in connection with the consummation of one or more
Permitted Acquisitions so long as such unsecured Indebtedness does not have any
principal payments due until at least six (6) months after the Revolving Credit
Maturity Date and is otherwise on terms and conditions reasonably acceptable to
the Administrative Agent, including, without limitation, reasonably satisfactory
subordination terms;

(m) Indebtedness in respect of Swap Agreements permitted under Section 6.07;

(n) Indebtedness representing deferred compensation to employees, directors and
officers of any Borrower and its Subsidiaries incurred in the ordinary course of
business;

(o) accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
is permitted hereunder;

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

(q) other unsecured Indebtedness in an aggregate principal amount not exceeding
$2,000,000 at any time outstanding.

 

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SECTION 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including Accounts) or rights in respect of any thereof, except:

(a) Liens created pursuant to any Loan Document;

(b) Permitted Encumbrances;

(c) any Lien on any property or asset of any Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of such Borrower or any
Subsidiary or any other Borrower or Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (iv) such Liens shall not apply to any other
property or assets of any Borrower or any Subsidiary;

(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by any Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

(f) Liens of a collecting bank arising in the ordinary course of business under
Section 4-208 of the UCC in effect in the relevant jurisdiction covering only
the items being collected upon;

(g) Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06;

(h) Liens granted by a Subsidiary that is not a Loan Party in favor of a
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;

(i) Liens on cash collateral securing obligations owed to Wells Fargo Bank, N.A.
(or any of its Affiliates) as set forth in the Pay-Off Letter, so long as any
remaining unapplied cash collateral is returned to the Company within 120 days
of the Effective Date;

(j) Liens solely on any cash earnest money deposits, escrow arrangements or
similar arrangements made by the Company or any Subsidiary, in each case, in the
ordinary course of business, in connection with any letter of intent or purchase
agreement for a Permitted Acquisition;

 

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(k) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under Section 6.1;

(l) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of custom duties in connection with the importation of goods
so long as such liens attach only to the imported goods; and

(m) non-exclusive licenses or sublicenses of intellectual property granted by
any Loan Party in the ordinary course of business.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s Real Property, other
than those permitted under clauses (a) and (f) of the definition of Permitted
Encumbrance and clause (a)  above.

SECTION 6.03. Fundamental Changes.

(a) No Loan Party will, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing, (i) any Subsidiary of any Borrower may merge
into a Borrower in a transaction in which a Borrower is the surviving entity,
(ii) any Loan Party (other than any Borrower) may merge into any other Loan
Party in a transaction in which the surviving entity is a Loan Party and
(iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Company determines in good faith that such liquidation or dissolution is in the
best interests of the Borrowers and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.

(b) No Loan Party will, nor will it permit any Subsidiary to, engage in any
business other than businesses of the type conducted by the Borrowers and its
Subsidiaries on the date hereof and businesses reasonably similar, related,
ancillary, complementary, synergistic or incidental thereto.

(c) No Loan Party will, nor will it permit any Subsidiary to change its fiscal
year or any fiscal quarter from the basis in effect on the Effective Date.

(d) No Loan Party will change the accounting basis upon which its financial
statements are prepared.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Subsidiary to, form any subsidiary after the
Effective Date, or purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Loan Party and a wholly owned Subsidiary prior to
such merger) any Equity Interests, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or make any Acquisition, except:

(a) Permitted Investments, subject to control agreements in favor of the
Administrative Agent for the benefit of the Secured Parties or otherwise subject
to a perfected security interest in favor of the Administrative Agent for the
benefit of the Secured Parties;

 

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(b) Permitted Acquisitions;

(c) investments in existence or contemplated on the date hereof and described in
Schedule 6.04;

(d) investments by the Borrowers and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (i) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Security Agreement (subject to
the limitations applicable to Equity Interests of a Foreign Subsidiary referred
to in Section 5.14) (ii) no Default exists or would be caused thereby and
(iii) the aggregate amount of investments by Loan Parties in Subsidiaries that
are not Loan Parties (together with outstanding intercompany loans permitted
under Section 6.04(e) and outstanding Guarantees permitted under
Section 6.04(f)) shall not exceed $3,000,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);

(e) loans or advances made by any Loan Party to any Subsidiary and made by any
Subsidiary to a Loan Party or any other Subsidiary, provided that (i) if
requested by the Administrative Agent, any such loans and advances made by a
Loan Party shall be evidenced by a promissory note pledged pursuant to the
Security Agreement, (ii) no Default exists or would be caused thereby and
(iii) the amount of such loans and advances made by Loan Parties to Subsidiaries
that are not Loan Parties (together with outstanding investments permitted under
Section 6.04(d) and outstanding Guarantees permitted under Section 6.04(f))
shall not exceed $3,000,000 at any time outstanding (in each case determined
without regard to any write-downs or write-offs);

(f) Guarantees constituting Indebtedness permitted by Section 6.01, provided
that (i) no Default exists or would be caused thereby and (ii) the aggregate
principal amount of Indebtedness of Subsidiaries that are not Loan Parties that
is Guaranteed by any Loan Party (together with outstanding investments permitted
under clause (iii) to the proviso to Section 6.04(d) and outstanding
intercompany loans permitted under clause (iii) to the proviso to
Section 6.04(e)) shall not exceed $3,000,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);

(g) loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $100,000 in the aggregate at any one time outstanding;

(h) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and accounts receivable, notes payable, or stock or
other securities issued by Account Debtors to a Loan Party pursuant to
negotiated agreements with respect to settlement of such Account Debtor’s
Accounts in the ordinary course of business, consistent with past practices;

(i) investments in the form of Swap Agreements permitted by Section 6.07;

(j) investments of any Person existing at the time such Person becomes a
Subsidiary of the Company or consolidates or merges with the Company or any
Subsidiary (including in connection with a Permitted Acquisition), so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;

 

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(k) investments received in connection with the disposition of assets permitted
by Section 6.05;

(l) investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;

(m) deposits, prepayments, advances and other credits to suppliers, vendors,
customers, lessors and landlords or in connection with marketing promotions, in
each instance, made in the ordinary course of business;

(n) advances of payroll payments to employees in the ordinary course of
business; and

(o) Investments in the ordinary course of business consisting of UCC Article 3
endorsements for collection or deposit.

SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will any Borrower permit any Subsidiary to
issue any additional Equity Interest in such Subsidiary (other than to another
Borrower or another Subsidiary in compliance with Section 6.04), except:

(a) sales, transfers and dispositions of (i) Inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus Equipment or property in
the ordinary course of business;

(b) sales, transfers and dispositions of assets to any Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with
Section 6.09;

(c) sales, transfers and dispositions of Accounts (excluding sales or
dispositions in a factoring arrangement) in connection with the compromise,
settlement or collection thereof;

(d) sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (k) of Section 6.04;

(e) Sale and Leaseback Transactions permitted by Section 6.06;

(f) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of any Borrower or any Subsidiary;

(g) dispositions of fixed or capital assets to the extent that (i) such property
is exchanged for credit against the purchase price of similar replacement
property or (ii) the proceeds of such disposition are promptly applied to the
purchase price of such replacement property; provided that to the extent the
property being transferred constitutes Collateral, such replacement property
shall constitute Collateral, and provided further that the disposition of assets
under this clause (g) shall not exceed $2,000,000 in the aggregate;

(h) the granting of Liens permitted by Section 6.02, the making of Investments
permitted by Section 6.04 and the making of Restricted Payments permitted by
Section 6.08;

(i) operating leases, operating subleases, licenses or sublicenses of real or
personal property, in each case in the ordinary course of business and which do
not materially interfere with the business of the Company and the Subsidiaries,
taken as a whole;

 

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(j) the unwinding of any Swap Agreement;

(k) the lapse or abandonment in the ordinary course of business of any
registrations or applications for registration of any immaterial intellectual
property; and

(l) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $500,000 during
any fiscal year of the Company;

provided that all sales, transfers, leases and other dispositions permitted
under this Section 6.05 (other than those permitted by paragraphs (b), (d), (f),
and (g)(i) above) shall be made for fair value and for at least 75% cash
consideration.

SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred (a “Sale and
Leaseback Transaction”), except for any such sale of any fixed or capital assets
by any Borrower or any Subsidiary that is made for cash consideration in an
amount not less than the fair value of such fixed or capital asset and is
consummated within 90 days after such Borrower or such Subsidiary acquires or
completes the construction of such fixed or capital asset.

SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which any Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of any Borrower
or any Subsidiary), and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from floating to fixed rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Borrower or any Subsidiary.

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.

(a) No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except (i) the Company
may declare and pay dividends with respect to its common stock payable solely in
additional shares of its common stock, and, with respect to its preferred stock,
payable solely in additional shares of such preferred stock or in shares of its
common stock, (ii) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (iii) the Company may make Restricted
Payments, not exceeding $250,000 during any fiscal year, pursuant to and in
accordance with stock option plans, restricted stock plans. or other benefit
plans for management or employees of the Company and its Subsidiaries and
(iv) so long as there exists no Default and the making of such Restricted
Payment would not cause a Default on a pro forma basis acceptable to the
Administrative Agent, the Company may make other Restricted Payments in an
aggregate amount not to exceed $10,000,000 in any fiscal year of the Company.

 

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(b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to
pay or make, directly or indirectly, any payment or other distribution (whether
in cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:

(i) payment of Indebtedness created under the Loan Documents;

(ii) payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness permitted under Section 6.01, other than
payments in respect of the Subordinated Indebtedness prohibited by the
subordination provisions thereof;

(iii) refinancings of Indebtedness to the extent permitted by Section 6.01; and

(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
to the extent such sale or transfer is permitted by the terms of Section 6.05.

SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to such Loan
Party or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Loan Parties and
Subsidiaries not involving any other Affiliate, (c) any investment permitted by
Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under
Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans
or advances to employees permitted under Section 6.04(f), (g) the payment of
reasonable fees to directors of any Borrower or any Subsidiary who are not
employees of such Borrower or any Subsidiary, and compensation and employee
benefit arrangements paid to, and indemnities provided for the benefit of,
directors, officers or employees of the Borrowers or their Subsidiaries in the
ordinary course of business, (h) any issuances of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment agreements, stock options and stock ownership plans approved by a
Borrower’s board of directors, and (i) transactions pursuant to that certain
Supply Agreement, dated as of February 24, 2013, and that certain Amended and
Restated Master License Agreement, dated as of February 22, 2013, each between
Cuattro, LLC, a Colorado Limited Liability Company and affiliate of Kevin S.
Wilson (Chief Executive Officer and President of the Company), the Company and
certain affiliates of the Company, as amended from time to time (the “Affiliate
Contracts”)

SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any Equity Interests or to make or repay loans or advances to any Borrower or
any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by any Requirement of Law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.10 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions

 

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and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it
permit any Subsidiary to, amend, modify or waive any of its rights under (a) any
agreement relating to any Subordinated Indebtedness, or (b) its charter,
articles or certificate of organization or incorporation and bylaws or
operating, management or partnership agreement, or other organizational or
governing documents to the extent any such amendment, modification or waiver
would be adverse to the Lenders, or (c) any Affiliate Contract to the extent any
such amendment, modification or waiver would be adverse to the Lenders.

SECTION 6.12. Financial Covenants.

(a) Leverage Ratio. The Borrowers will not permit the Leverage Ratio, on the
last day of any fiscal quarter, to be greater than 2.50 to 1.00.

(b) Fixed Charge Coverage Ratio. The Borrowers will not permit the Fixed Charge
Coverage Ratio, on the last day of any fiscal quarter, to be less than 1.25 to
1.00.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in, or in connection with, this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;

(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.08 or in Article VI;

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d)), and such failure

 

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shall continue unremedied for a period of (i) 5 days after the earlier of any
Loan Party’s knowledge of such breach or notice thereof from the Administrative
Agent (which notice will be given at the request of any Lender) if such breach
relates to terms or provisions of Section 5.01, 5.02 (other than
Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement or
(ii) 15 days after the earlier of any Loan Party’s knowledge of such breach or
notice thereof from the Administrative Agent (which notice will be given at the
request of any Lender) if such breach relates to terms or provisions of any
other Section of this Agreement;

(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable after any
applicable cure or grace period;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness to the extent such sale or transfer is
permitted by the terms of Section 6.05;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or Subsidiary or its debts, or of a substantial part of
its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Loan Party or any Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or ordering any of the
foregoing shall be entered;

(i) any Loan Party or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Loan Party or Subsidiary of any Loan Party or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(j) any Loan Party or any Subsidiary shall become unable, admit in writing its
inability, or publicly declare its intention not to, or fail generally, to pay
its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $500,000 shall be rendered against any Loan Party, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
thirty (30) consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Loan Party or any Subsidiary to enforce any such
judgment or any Loan Party or any Subsidiary shall fail within thirty (30) days
to discharge one or more non-monetary judgments or orders which, individually or
in the aggregate, could

 

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reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal and being appropriately
contested in good faith by proper proceedings diligently pursued;

(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Borrowers and their
Subsidiaries in an aggregate amount exceeding $500,000 for all periods;

(m) a Change in Control shall occur;

(n) the occurrence of any “default” or “event of default”, as defined in any
Loan Document (other than this Agreement), or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided;

(o) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Guarantor shall fail to comply with any of the terms
or provisions of the Loan Guaranty to which it is a party, or any Guarantor
shall deny that it has any further liability under the Loan Guaranty, or shall
give notice to such effect, including, but not limited to notice of termination
delivered pursuant to Section 10.08, except in connection with a dissolution or
liquidation of a Guarantor as permitted under this Agreement;

(p) except as permitted by the terms of any Collateral Document, (i) any
Collateral Document shall for any reason fail to create a valid security
interest in any Collateral purported to be covered thereby, or (ii) any Lien
securing any Secured Obligation shall cease to be a perfected, first priority
Lien (except as a result of the action or failure to act of the Administrative
Agent);

(q) any Collateral Document shall fail to remain in full force or effect (except
as a result of the action or failure to act of the Administrative Agent) or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document;

(r) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction that evidences its assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms); or

(s) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan
Party having a fair market value in excess of $500,000;

then, and in every such event (other than an event with respect to the Borrowers
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower Representative,
take either or both of the following actions, at the same or different
times: (i) terminate the Revolving Commitments, whereupon the Revolving
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, but ratably as among the
Classes of Loans and the Loans of each Class at the time outstanding, in which
case any principal not so declared to be due and payable may

 

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thereafter be declared to be due and payable), whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and all fees (including any Prepayment Fees) and other obligations of the
Borrowers accrued hereunder, shall become due and payable immediately, in each
case without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers; and in the case of any event with
respect to the Borrowers described in clause (h) or (i) of this Article, the
Revolving Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees
(including any Prepayment Fees) and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers. Upon the occurrence and during the continuance
of an Event of Default, the Administrative Agent may, and at the request of the
Required Lenders shall, increase the rate of interest applicable to the Loans
and other Obligations as set forth in this Agreement and exercise any rights and
remedies provided to the Administrative Agent under the Loan Documents or at law
or equity, including all remedies provided under the UCC.

ARTICLE VIII

The Administrative Agent

SECTION 8.01. Appointment. Each of the Lenders, on behalf of itself and any of
its Affiliates that are Secured Parties and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. In addition, to the extent required under
the laws of any jurisdiction other than the U.S., each of the Lenders and the
Issuing Bank hereby grants to the Administrative Agent any required powers of
attorney to execute any Collateral Document governed by the laws of such
jurisdiction on such Lender’s or Issuing Bank’s behalf. The provisions of this
Article are solely for the benefit of the Administrative Agent and the Lenders
(including the Swingline Lender and the Issuing Bank), and the Loan Parties
shall not have rights as a third party beneficiary of any of such provisions. It
is understood and agreed that the use of the term “agent” as used herein or in
any other Loan Documents (or any similar term) with reference to the
Administrative 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 as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.

SECTION 8.02. Rights as a Lender. The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with any Loan Party
or any Subsidiary or any Affiliate thereof as if it were not the Administrative
Agent hereunder.

SECTION 8.03. Duties and Obligations. The Administrative Agent shall not have
any duties or obligations except those expressly set forth in the Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section

 

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9.02), and, (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Loan Party
or any Subsidiary that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct as determined by a final nonappealable judgment of a court of
competent jurisdiction. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower Representative or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered hereunder or in connection with any Loan Document,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, (v) the creation, perfection or priority of
Liens on the Collateral or the existence of the Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

SECTION 8.04. Reliance. The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

SECTION 8.05. Actions through Sub-Agents. The Administrative Agent may perform
any and all of its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as the
Administrative Agent.

SECTION 8.06. Resignation. Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower Representative. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower Representative, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by its successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. The fees payable by the Borrowers to a successor
Administrative Agent shall be the same as those payable to its

 

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predecessor, unless otherwise agreed by the Borrowers and such successor.
Notwithstanding the foregoing, in the event no successor Administrative Agent
shall have been so appointed and shall have accepted such appointment within
thirty (30) days after the retiring Administrative Agent gives notice of its
intent to resign, the retiring Administrative Agent may give notice of the
effectiveness of its resignation to the Lenders, the Issuing Bank and the
Borrowers, whereupon, on the date of effectiveness of such resignation stated in
such notice, (a) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents, provided
that, solely for purposes of maintaining any security interest granted to the
Administrative Agent under any Collateral Document for the benefit of the
Secured Parties, the retiring Administrative Agent shall continue to be vested
with such security interest as collateral agent for the benefit of the Secured
Parties and, in the case of any Collateral in the possession of the
Administrative Agent, shall continue to hold such Collateral, in each case until
such time as a successor Administrative Agent is appointed and accepts such
appointment in accordance with this paragraph (it being understood and agreed
that the retiring Administrative Agent shall have no duly or obligation to take
any further action under any Collateral Document, including any action required
to maintain the perfection of any such security interest), and (b) the Required
Lenders shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, provided that
(i) all payments required to be made hereunder or under any other Loan Document
to the Administrative Agent for the account of any Person other than the
Administrative Agent shall be made directly to such Person and (ii) all notices
and other communications required or contemplated to be given or made to the
Administrative Agent shall also directly be given or made to each Lender and
each Issuing Bank. Following the effectiveness of the Administrative Agent’s
resignation from its capacity as such, the provisions of this Article,
Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and
indemnification provisions set forth in any other Loan Document, shall continue
in effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Administrative Agent and in
respect of the matters referred to in the proviso under clause (a)  above.

SECTION 8.07. Non-Reliance.

(a) Each Lender acknowledges and agrees that the extensions of credit made
hereunder are commercial loans and letters of credit and not investments in a
business enterprise or securities. Each Lender further represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement as a Lender, and to make, acquire or hold
Loans hereunder. Each Lender shall, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information (which may contain material, non-public information within the
meaning of the U.S. securities laws concerning the Borrowers and their
Affiliates) as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document, any related agreement or any document furnished
hereunder or thereunder and in deciding whether or to the extent to which it
will continue as a Lender or assign or otherwise transfer its rights, interests
and obligations hereunder.

(b) Each Lender hereby agrees that (i) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (ii) the Administrative
Agent (A) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(B) shall not be liable for any information contained in any Report; (iii) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and

 

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records, as well as on representations of the Loan Parties’ personnel and that
the Administrative Agent undertakes no obligation to update, correct or
supplement the Reports; (iv) it will keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party or any other
Person except as otherwise permitted pursuant to this Agreement; and (v) without
limiting the generality of any other indemnification provision contained in this
Agreement, (A) it will hold the Administrative Agent and any such other Person
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any extension of credit that the indemnifying Lender has made or
may make to the Borrower, or the indemnifying Lender’s participation in, or the
indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and
protect, and indemnify, defend, and hold the Administrative Agent and any such
other Person preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including reasonable
attorneys’ fees) incurred by the Administrative Agent or any such other Person
as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.

SECTION 8.08. Other Agency Titles. Any Lender named a syndication or
documentation agent shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to the relevant Lenders in
their respective capacities as a syndication or documentation agent, as
applicable, as it makes with respect to the Administrative Agent in the
preceding paragraph.

SECTION 8.09. Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties. (a) The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Administrative Agent)
authorized to act for, any other Lender. The Administrative Agent shall have the
exclusive right on behalf of the Lenders to enforce the payment of the principal
of and interest on any Loan after the date such principal or interest has become
due and payable pursuant to the terms of this Agreement.

(b) In its capacity, the Administrative Agent is a “representative” of the
Secured Parties within the meaning of the term “secured party” as defined in the
UCC. Each Lender authorizes the Administrative Agent to enter into each of the
Collateral Documents to which it is a party and to take all action contemplated
by such documents. Each Lender agrees that no Secured Party (other than the
Administrative Agent) shall have the right individually to seek to realize upon
the security granted by any Collateral Document, it being understood and agreed
that such rights and remedies may be exercised solely by the Administrative
Agent for the benefit of the Secured Parties upon the terms of the Collateral
Documents. In the event that any Collateral is hereafter pledged by any Person
as collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized, and hereby granted a power of attorney, to execute and
deliver on behalf of the Secured Parties any Loan Documents necessary or
appropriate to grant and perfect a Lien on such Collateral in favor of the
Administrative Agent on behalf of the Secured Parties.

SECTION 8.10. Credit Bidding. Credit Bidding. The Secured Parties hereby
irrevocably authorize the Administrative Agent, at the direction of the Required
Lenders, to credit bid all or any portion of the Obligations (including by
accepting some or all of the Collateral in satisfaction of some or all of the
Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such
manner purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral (a) at any sale thereof conducted under the
provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of
the Bankruptcy Code, or any similar laws in any other jurisdictions to which a
Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of
collateral in lieu of debt conducted by (or

 

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with the consent or at the direction of) the Administrative Agent (whether by
judicial action or otherwise) in accordance with any applicable law. In
connection with any such credit bid and purchase, the Obligations owed to the
Secured Parties shall be entitled to be, and shall be, credit bid by the
Administrative Agent at the direction of the Required Lenders on a ratable basis
(with Obligations with respect to contingent or unliquidated claims receiving
contingent interests in the acquired assets on a ratable basis that shall vest
upon the liquidation of such claims in an amount proportional to the liquidated
portion of the contingent claim amount used in allocating the contingent
interests) for the asset or assets so purchased (or for the equity interests or
debt instruments of the acquisition vehicle or vehicles that are issued in
connection with such purchase). In connection with any such bid (i) the
Administrative Agent shall be authorized to form one or more acquisition
vehicles and to assign any successful credit bid to such acquisition vehicle or
vehicles (ii) each of the Secured Parties’ ratable interests in the Obligations
which were credit bid shall be deemed without any further action under this
Agreement to be assigned to such vehicle or vehicles for the purpose of closing
such sale, (iii) the Administrative shall be authorized to adopt documents
providing for the governance of the acquisition vehicle or vehicles (provided
that any actions by the Administrative Agent with respect to such acquisition
vehicle or vehicles, including any disposition of the assets or equity interests
thereof, shall be governed, directly or indirectly, by, and the governing
documents shall provide for, control by the vote of the Required Lenders or
their permitted assignees under the terms of this Agreement or the governing
documents of the applicable acquisition vehicle or vehicles, as the case may be,
irrespective of the termination of this Agreement and without giving effect to
the limitations on actions by the Required Lenders contained in Section 9.02 of
this Agreement), (iv) the Administrative Agent on behalf of such acquisition
vehicle or vehicles shall be authorized to issue to each of the Secured Parties,
ratably on account of the relevant Obligations which were credit bid, interests,
whether as equity, partnership, limited partnership interests or membership
interests, in any such acquisition vehicle and/or debt instruments issued by
such acquisition vehicle, all without the need for any Secured Party or
acquisition vehicle to take any further action, and (v) to the extent that
Obligations that are assigned to an acquisition vehicle are not used to acquire
Collateral for any reason (as a result of another bid being higher or better,
because the amount of Obligations assigned to the acquisition vehicle exceeds
the amount of Obligations credit bid by the acquisition vehicle or otherwise),
such Obligations shall automatically be reassigned to the Secured Parties pro
rata and the equity interests and/or debt instruments issued by any acquisition
vehicle on account of such Obligations shall automatically be cancelled, without
the need for any Secured Party or any acquisition vehicle to take any further
action. Notwithstanding that the ratable portion of the Obligations of each
Secured Party are deemed assigned to the acquisition vehicle or vehicles as set
forth in clause (ii) above, each Secured Party shall execute such documents and
provide such information regarding the Secured Party (and/or any designee of the
Secured Party which will receive interests in or debt instruments issued by such
acquisition vehicle) as the Administrative Agent may reasonably request in
connection with the formation of any acquisition vehicle, the formulation or
submission of any credit bid or the consummation of the transactions
contemplated by such credit bid.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone or Electronic Systems (and subject in each case to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

 

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  (i) if to any Loan Party, to it in care of the Borrower Representative at:

3760 Rocky Mountain Avenue

Loveland, CO 80538

Attention: Chief Financial Officer

Fax No: 970-619-3003

with a copy to:

Osborn Maledon, P.A.

2929 North Central Avenue, Suite 2100

Phoenix, Arizona 85012

Attention: William M. Hardin

       Andrew D. Western

Fax No: 602-640-9050

 

  (ii) if to the Administrative Agent, the Swingline Lender, or Chase in its
capacity as an Issuing Bank, to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

Commercial Banking

1125 17th Street, 3rd Floor

Denver, CO 80202

Attention: * [Personal Identifying Information Omitted]

Fax No: 720-239-1045

 

  (iii) if to any other Lender or Issuing Bank, to it at its address or fax
number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail shall be deemed to have been
given when received, (ii) sent by fax shall be deemed to have been given when
sent, provided that if not given during normal business hours for the recipient,
such notice or communication shall be deemed to have been given at the opening
of business on the next Business Day of the recipient, or (iii) delivered
through Electronic Systems to the extent provided in paragraph (b) below shall
be effective as provided in such paragraph.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by Electronic Systems pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II or to compliance and no Default certificates delivered
pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent
and the applicable Lender. Each of the Administrative Agent and the Borrower
Representative (on behalf of the Loan Parties) may, in its discretion, agree to
accept notices and other communications to it hereunder by Electronic Systems
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise proscribes, all such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice,
e-mail or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next Business Day of the recipient.

 

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(c) Any party hereto may change its address, facsimile number or e-mail address
for notices and other communications hereunder by notice to the other parties
hereto.

(d) Electronic Systems.

(i) Each Loan Party agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the Issuing
Bank and the other Lenders by posting the Communications on Debt Domain,
Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

(ii) Any Electronic System used by the Administrative Agent is provided “as is”
and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including any warranty of merchantability, fitness for a particular
purpose, non-infringement of third-party rights or freedom from viruses or other
code defects, is made by any Agent Party in connection with the Communications
or any Electronic System. In no event shall the Administrative Agent or any of
its Related Parties (collectively, the “Agent Parties”) have any liability to
any Borrower or the other Loan Parties, any Lender, the Issuing Bank or any
other Person or entity for damages of any kind, including direct or indirect,
special, incidental or consequential damages, losses or expenses (whether in
tort, contract or otherwise) arising out of any Borrower’s, any Loan Party’s or
the Administrative Agent’s transmission of communications through an Electronic
System. “Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of any Loan
Party pursuant to any Loan Document or the transactions contemplated therein
which is distributed by the Administrative Agent, any Lender or the Issuing Bank
by means of electronic communications pursuant to this Section, including
through an Electronic System.

SECTION 9.02. Waivers; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

(b) Except as provided in the first sentence of Section 2.09(f), neither this
Agreement nor any other Loan Document nor any provision hereof or thereof may be
waived, amended or modified except (i) in the case of this Agreement, pursuant
to an agreement or agreements in writing entered into by the Borrowers and the
Required Lenders or (ii) in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Administrative Agent and
the Loan Party or Loan

 

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Parties that are parties thereto, with the consent of the Required Lenders;
provided that no such agreement shall (A) increase the Revolving Commitment of
any Lender without the written consent of such Lender (including any such Lender
that is a Defaulting Lender), (B) reduce or forgive the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or
forgive any interest or fees payable hereunder, without the written consent of
each Lender (including any such Lender that is a Defaulting Lender) directly
affected thereby (except as provided in Section 2.13(c)), (C) postpone any
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Revolving
Commitment, without the written consent of each Lender (including any such
Lender that is a Defaulting Lender) directly affected thereby, (D) change
Section 2.18(b) or (d) in a manner that would alter the manner in which payments
are shared, without the written consent of each Lender (other than any
Defaulting Lender), (E) change any of the provisions of this Section or the
definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (other than any Defaulting Lender) directly affected thereby,
(F) change Section 2.20, without the consent of each Lender (other than any
Defaulting Lender), (G) release any material Loan Guarantor from its obligation
under its Loan Guaranty (except as otherwise permitted herein or in the other
Loan Documents), without the written consent of each Lender (other than any
Defaulting Lender), or (H) except as provided in clause (c) of this Section or
in any Collateral Document, release all or substantially all of the Collateral
without the written consent of each Lender (other than any Defaulting Lender);
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Swingline Lender or the
Issuing Bank hereunder without the prior written consent of the Administrative
Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being
understood that any amendment to Section 2.20 shall require the consent of the
Administrative Agent, the Swingline Lender and the Issuing Bank); provided
further that no such agreement shall amend or modify the provisions of
Section 2.07 or any letter of credit application and any bilateral agreement
between the Borrower Representative and the Issuing Bank regarding the Issuing
Bank’s Issuing Bank Sublimit or the respective rights and obligations between
the Borrowers and the Issuing Bank in connection with the issuance of Letters of
Credit without the prior written consent of the Administrative Agent and the
Issuing Bank, respectively. The Administrative Agent may also amend the
Commitment Schedule to reflect assignments entered into pursuant to
Section 9.04. Any amendment, waiver or other modification of this Agreement or
any other Loan Document that by its terms affects the rights or duties under
this Agreement of the Lenders of one or more Classes (but not the Lenders of any
other Class), may be effected by an agreement or agreements in writing entered
into by the Borrowers and the requisite number or percentage in interest of each
affected Class of Lenders that would be required to consent thereto under this
Section if such Class of Lenders were the only Class of Lenders hereunder at the
time.

(c) The Lenders and the Issuing Bank hereby irrevocably authorize the
Administrative Agent, at its option and in its sole discretion, to release any
Liens granted to the Administrative Agent by the Loan Parties on any Collateral
(i) upon the termination of all of the Revolving Commitments, payment and
satisfaction in full in cash of all Secured Obligations (other than Unliquidated
Obligations), and the cash collateralization of all Unliquidated Obligations in
a manner satisfactory to each affected Lender, (ii) constituting property being
sold or disposed of if the Loan Party disposing of such property certifies to
the Administrative Agent that the sale or disposition is made in compliance with
the terms of this Agreement (and the Administrative Agent may rely conclusively
on any such certificate, without further inquiry), and to the extent that the
property being sold or disposed of constitutes 100% of the Equity Interests of a
Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty
provided by such Subsidiary, (iii) constituting property leased to a Loan Party
under a lease which has expired or been terminated in a transaction permitted
under this Agreement, or (iv) as

 

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required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Administrative Agent and the
Lenders pursuant to Article VII. Except as provided in the preceding sentence,
the Administrative Agent will not release any Liens on Collateral without the
prior written authorization of the Required Lenders; provided that the
Administrative Agent may, in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $1,000,000 during any calendar year
without the prior written authorization of the Required Lenders (it being agreed
that the Administrative Agent may rely conclusively on one or more certificates
of the Borrower Representative as to the value of any Collateral to be so
released, without further inquiry). Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral. Any
execution and delivery by the Administrative Agent of documents in connection
with any such release shall be without recourse to or warranty by the
Administrative Agent.

(d) If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender” or “each Lender affected thereby,” the consent of
the Required Lenders is obtained, but the consent of other necessary Lenders is
not obtained (any such Lender whose consent is necessary but has not been
obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrowers, the
Administrative Agent and the Issuing Bank shall agree, as of such date, to
purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to an Assignment and Assumption and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrowers hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.

(e) Notwithstanding anything to the contrary herein the Administrative Agent
may, with the consent of the Borrower Representative only, amend, modify or
supplement this Agreement or any of the other Loan Documents to cure any
ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03. Expenses; Indemnity; Damage Waiver.

(a) The Loan Parties, jointly and severally, shall pay all (i) reasonable,
documented out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable, documented fees, charges and disbursements
of counsel for the Administrative Agent (limited to one primary counsel and one
local counsel in each reasonably necessary jurisdiction), in connection with the
syndication and distribution (including, without limitation, via the internet or
through an Electronic System) of the credit facilities provided for herein, the
preparation and administration of the Loan Documents and any amendments,
modifications or waivers of the provisions of the Loan Documents (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii)
reasonable, documented out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) reasonable, documented
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the reasonable, documented fees, charges and disbursements
of any counsel for the Administrative Agent, the Issuing Bank or any Lender
(limited to one primary counsel and one local

 

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counsel in each reasonably necessary jurisdiction), in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Loan Parties under this Section include, without limiting the
generality of the foregoing, fees, costs and expenses incurred in connection
with:

(A) appraisals (as limited in Section 5.11) and insurance reviews;

(B) field examinations and the preparation of Reports based on the reasonable,
documented fees charged by a third party retained by the Administrative Agent or
the internally allocated fees for each Person employed by the Administrative
Agent with respect to each field examination (each as limited in Section 5.06);

(C) background checks regarding senior management and/or key investors, as
deemed necessary or appropriate in the sole discretion of the Administrative
Agent;

(D) Taxes, fees and other charges for (i) lien and title searches and title
insurance and (ii) recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the
Administrative Agent’s Liens;

(E) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and

(F) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.

All of the foregoing fees, costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).

(b) The Loan Parties, jointly and severally, shall indemnify the Administrative
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
penalties, incremental taxes, liabilities and related expenses, including the
reasonable, documented fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of the Loan
Documents or any agreement or instrument contemplated thereby, the performance
by the parties hereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or Release of Hazardous Materials on or from any property
owned or operated by a Loan Party or a Subsidiary, or any Environmental
Liability related in any way to a Loan Party or a Subsidiary, (iv) the failure
of a Loan Party to deliver to the Administrative Agent the required receipts or
other required documentary evidence with respect to a payment made by such Loan
Party for Taxes pursuant to Section 2.17, or (v) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not such claim, litigation, investigation or proceeding is brought by
any Loan Party or their respective equity holders, Affiliates, creditors or any
other third Person and whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
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Indemnitee, be available to the extent that such losses, claims, damages,
penalties, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
(i) the gross negligence or willful misconduct of any Indemnitee, or (ii) a
material breach in bad faith of any Loan Document by any Indemnitee. This
Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that
represent losses or damages arising from any non-Tax claim.

(c) To the extent that any Loan Party fails to pay any amount required to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank (or any Related Party of any of the foregoing) under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Swingline Lender or the Issuing Bank (or any Related
Party of any of the foregoing), as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount (it being understood that
the Borrowers’ failure to pay any such amount shall not relieve the Borrowers of
any default in the payment thereof); provided that the unreimbursed expense or
indemnified loss, claim, damage, penalty, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent, the
Swingline Lender or the Issuing Bank in its capacity as such.

(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each Loan Party hereby waives, any claim against any Indemnitee, (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet), or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document, or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof; provided that, nothing in this paragraph
(d) shall relieve any Loan Party of any obligation it may have to indemnify an
Indemnitee against special, indirect, consequential or punitive damages asserted
against such Indemnitee by a third party.

(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) no Borrower
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Persons (other than an Ineligible Institution)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Revolving Commitment, participations in Letters of
Credit and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

 

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(A) the Borrower Representative, provided that the Borrower Representative shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five (5) Business
Days after having received notice thereof, and provided further that no consent
of the Borrower Representative shall be required for an assignment to a Lender,
an Affiliate of a Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee;

(B) the Administrative Agent;

(C) the Issuing Bank; and

(D) the Swingline Lender.

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

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Revolving Commitment or Loans of any Class, the amount of the
Revolving Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower Representative and the
Administrative Agent otherwise consent, provided that no such consent of the
Borrower Representative shall be required if an Event of Default has occurred
and is continuing;

(B) 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;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent (x) an Assignment and Assumption or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants, together with a processing and
recordation fee of $3,500; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the other
Loan Parties and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including federal and
state securities laws.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:

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

“Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender or
its Parent, (c)

 

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company, investment vehicle or trust for, or owned and operated for the primary
benefit of, a natural person or relative(s) thereof; provided that, such
company, investment vehicle or trust shall not constitute an Ineligible
Institution if it (x) has not been established for the primary purpose of
acquiring any Loans or Revolving Commitments, (y) is managed by a professional
advisor, who is not such natural person or a relative thereof, having
significant experience in the business of making or purchasing commercial loans,
and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar
extensions of credit in the ordinary course of its business or (d) a Loan Party
or a Subsidiary or other Affiliate of a Loan Party.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing
Bank and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of (x) a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee or (y) to the extent applicable, an
agreement incorporating an Assignment and Assumption by reference pursuant to a
Platform as to which the Administrative Agent and the parties to the Assignment
and Assumption are participants, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

(c) Any Lender may, without the consent of the Borrowers, the Administrative
Agent, the Swingline Lender or the Issuing Bank, sell participations to one or
more banks or other entities (a “Participant”) other than an Ineligible
Institution in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment and the
Loans owing to it);

 

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provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged; (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations; and (iii) the Borrowers, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Sections 2.17(f) and (g) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender and the information and documentation
required under Section 2.17(g) will be delivered to the Borrower Representative
and the Administrative Agent)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Sections 2.15 or 2.17 with respect to any participation than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrowers’ request and
expense, to use reasonable efforts to cooperate with the Borrowers to effectuate
the provisions of Section 2.19(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement or
any other Loan Document (the “Participant Register”); provided that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any Revolving Commitments, Loans, Letters of
Credit or its other obligations under or any other Loan Document) to any Person
except to the extent that such disclosure is necessary to establish that such
Revolving Commitment, Loan, Letter of Credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

SECTION 9.05. Survival. All covenants, agreements, 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

 

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been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Revolving Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Revolving Commitments or the
termination of this Agreement or any other Loan Document or any provision hereof
or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution.
(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to (i) fees payable to the Administrative Agent and (ii) increases or
reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

(b) Delivery of an executed counterpart of a signature page of this Agreement by
telecopy, emailed pdf. or any other electronic means that reproduces an image of
the actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement. The words “execution,” “signed,”
“signature,” “delivery,” and words of like import in or relating to any document
to be signed in connection with this Agreement and the transactions contemplated
hereby or thereby shall be deemed to include Electronic Signatures, deliveries
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act; provided that
nothing herein shall require the Administrative Agent to accept electronic
signatures in any form or format without its prior written consent.

SECTION 9.07. Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of any Loan Party
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Obligations held by such Lender, irrespective of whether or not such Lender
shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The applicable Lender shall notify the Borrower
Representative and the Administrative Agent of such set-off or application,
provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) The Loan Documents (other than those containing a contrary express choice of
law provision) shall be governed by and construed in accordance with the
internal laws of the State of New York, but giving effect to federal laws
applicable to national banks.

(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of any U.S. federal or New York
state court sitting in New York, New York in any action or proceeding arising
out of or relating to any Loan Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court. 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 the Administrative Agent, the Issuing Bank or any Lender
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.

(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY
ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

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SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any Governmental Authority (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by any Requirement of Law or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (x) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (y) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Loan Parties and their obligations, (g) with the
consent of the Borrower Representative or (h) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a non-confidential basis from a source other than the
Borrowers. For the purposes of this Section, “Information” means all information
received from the Borrowers relating to the Borrowers or their business, other
than any such information that is available to the Administrative Agent, the
Issuing Bank or any Lender on a non-confidential basis prior to disclosure by
the Borrowers and other than information pertaining to this Agreement provided
by arrangers to data service providers, including league table providers, that
serve the lending industry; provided that, in the case of information received
from the Borrowers after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION 9.12)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED
PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED
IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION
THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS
COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

 

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SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. Each Lender
hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board) for the repayment of the Borrowings
provided for herein. Anything contained in this Agreement to the contrary
notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to
extend credit to the Borrowers in violation of any Requirement of Law.

SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15. Disclosure. Each Loan Party, each Lender and the Issuing Bank
hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with, any of the Loan Parties and their respective
Affiliates.

SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Secured Parties, in assets which, in accordance
with Article 9 of the UCC or any other applicable law can be perfected only by
possession or control. Should any Lender (other than the Administrative Agent)
obtain possession or control of any such Collateral, such Lender shall notify
the Administrative Agent thereof, and, promptly upon the Administrative Agent’s
request therefor shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions.

SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.18. Marketing Consent. The Borrowers hereby authorize Chase and its
affiliates (collectively, the “Chase Parties”), at their respective sole
expense, but without any prior approval by the Borrowers, to publish such
tombstones and give such other publicity to this Agreement as each may from time
to time determine in its sole discretion. The foregoing authorization shall
remain in effect unless the Borrower Representative notifies Chase in writing
that such authorization is revoked.

 

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SECTION 9.19. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document may be subject to the write-down and
conversion powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

ARTICLE X

Loan Guaranty

SECTION 10.01. Guaranty. Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and, as a primary obligor and not merely as surety, absolutely,
unconditionally and irrevocably guarantees to the Secured Parties, the prompt
payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, of the Secured Obligations and all costs and
expenses including, without limitation, all court costs and reasonable
attorneys’ and paralegals’ fees (including allocated costs of in-house counsel
and paralegals) and expenses paid or incurred by the Administrative Agent, the
Issuing Bank and the Lenders in endeavoring to collect all or any part of the
Secured Obligations from, or in prosecuting any action against, any Borrower,
any Loan Guarantor or any other guarantor of all or any part of the Secured
Obligations (such costs and expenses, together with the Secured Obligations,
collectively the “Guaranteed Obligations”); provided, however, that the
definition of “Guaranteed Obligations” shall not create any guarantee by any
Loan Guarantor of (or grant of security interest by any Loan Guarantor to
support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for
purposes of determining any obligations of any Loan Guarantor. Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that
extended any portion of the Guaranteed Obligations.

SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Loan Guarantor waives any right to require the
Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, or any
Loan Guarantor, or any other guarantor of, or any other Person obligated for all
or any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.

 

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SECTION 10.03. No Discharge or Diminishment of Loan Guaranty.

(a) Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of any Borrower or any other Obligated Party liable for any of the
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or
(iv) the existence of any claim, setoff or other rights which any Loan Guarantor
may have at any time against any Obligated Party, the Administrative Agent, the
Issuing Bank, any Lender, or any other Person, whether in connection herewith or
in any unrelated transactions.

(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the Guaranteed Obligations; (iii) any release,
non-perfection, or invalidity of any indirect or direct security for the
obligations of any Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other Obligated Party liable for any of the Guaranteed
Obligations; (iv) any action or failure to act by the Administrative Agent, the
Issuing Bank or any Lender with respect to any collateral securing any part of
the Guaranteed Obligations; or (v) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the Guaranteed Obligations,
or any other circumstance, act, omission or delay that might in any manner or to
any extent vary the risk of such Loan Guarantor or that would otherwise operate
as a discharge of any Loan Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of the Guaranteed Obligations).

SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of any Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of any Borrower, any Loan Guarantor or any other
Obligated Party, other than the indefeasible payment in full in cash of the
Guaranteed Obligations. Without limiting the generality of the foregoing, each
Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by law, any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Obligated Party, or any other Person. Each Loan Guarantor
confirms that it is not a surety under any state law and shall not raise any
such law as a defense to its obligations hereunder. The Administrative Agent
may, at its election, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in
lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with
any Obligated Party or exercise any other right or remedy available to it
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any Obligated Party, without affecting or impairing in any way the liability of
such Loan Guarantor under this Loan Guaranty, except to the extent the
Guaranteed Obligations have been fully and indefeasibly paid in cash. To the
fullest extent permitted by applicable law, each Loan Guarantor waives any
defense arising out of any such election even though that election may operate,
pursuant to applicable law, to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of any Loan Guarantor against any
Obligated Party or any security.

SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Administrative Agent, the Issuing Bank and the
Lenders.

SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the Guaranteed Obligations (including a payment effected
through exercise of a right of setoff) is rescinded, or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or otherwise (including pursuant to any settlement entered into by a
Secured Party in its discretion), each Loan Guarantor’s obligations under this
Loan Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Administrative
Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty.
If acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all
such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the Loan
Guarantors forthwith on demand by the Administrative Agent.

SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of the Borrowers’ financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
none of the Administrative Agent, the Issuing Bank or any Lender shall have any
duty to advise any Loan Guarantor of information known to it regarding those
circumstances or risks.

SECTION 10.08. Termination. Each of the Lenders and the Issuing Bank may
continue to make loans or extend credit to the Borrowers based on this Loan
Guaranty until five (5) days after it receives written notice of termination
from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lenders for any Guaranteed
Obligations created, assumed or committed to prior to the fifth day after
receipt of the notice, and all subsequent renewals, extensions, modifications
and amendments with respect to, or substitutions for, all or any part of such
Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to
constitute a waiver of, or eliminate, limit, reduce or otherwise impair any
rights or remedies the Administrative Agent or any Lender may have in respect
of, any Default or Event of Default that shall exist under Article VII hereof as
a result of any such notice of termination.

SECTION 10.09. Taxes. Each payment of the Guaranteed Obligations will be made by
each Loan Guarantor without withholding for any Taxes, unless such withholding
is required by law. If any Loan Guarantor determines, in its sole discretion
exercised in good faith, that it is so required to withhold Taxes, then such
Loan Guarantor may so withhold and shall timely pay the full amount of withheld
Taxes to the relevant Governmental Authority in accordance with applicable law.
If such Taxes are Indemnified Taxes, then the amount payable by such Loan
Guarantor shall be increased as necessary so that, net of such withholding
(including such withholding applicable to additional amounts payable under this
Section), the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives the amount it would have received had no such withholding been made.

 

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SECTION 10.10. Maximum Liability. Notwithstanding any other provision of this
Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be
limited to the extent, if any, required so that its obligations hereunder shall
not be subject to avoidance under Section 548 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law. In determining the limitations,
if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to
the preceding sentence, it is the intention of the parties hereto that any
rights of subrogation, indemnification or contribution which such Loan Guarantor
may have under this Loan Guaranty, any other agreement or applicable law shall
be taken into account.

SECTION 10.11. Contribution.

(a) To the extent that any Loan Guarantor shall make a payment under this Loan
Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Loan Guarantor,
exceeds the amount which otherwise would have been paid by or attributable to
such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed
Obligations satisfied by such Guarantor Payment in the same proportion as such
Loan Guarantor’s “Allocable Amount” (as defined below) (as determined
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of each of the Loan Guarantors as determined immediately prior to the
making of such Guarantor Payment, then, following indefeasible payment in full
in cash of the Guarantor Payment and the Guaranteed Obligations (other than
Unliquidated Obligations that have not yet arisen), and all Revolving
Commitments and Letters of Credit have terminated or expired or, in the case of
all Letters of Credit, are fully collateralized on terms reasonably acceptable
to the Administrative Agent and the Issuing Bank, and this Agreement, the Swap
Agreement Obligations and the Banking Services Obligations have terminated, such
Loan Guarantor shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Loan Guarantor for the amount of
such excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.

(b) As of any date of determination, the “Allocable Amount” of any Loan
Guarantor shall be equal to the excess of the fair saleable value of the
property of such Loan Guarantor over the total liabilities of such Loan
Guarantor (including the maximum amount reasonably expected to become due in
respect of contingent liabilities, calculated, without duplication, assuming
each other Loan Guarantor that is also liable for such contingent liability pays
its ratable share thereof), giving effect to all payments made by other Loan
Guarantors as of such date in a manner to maximize the amount of such
contributions.

(c) This Section 10.11 is intended only to define the relative rights of the
Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or
shall impair the obligations of the Loan Guarantors, jointly and severally, to
pay any amounts as and when the same shall become due and payable in accordance
with the terms of this Loan Guaranty.

(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Loan Guarantor or Loan
Guarantors to which such contribution and indemnification is owing.

(e) The rights of the indemnifying Loan Guarantors against other Loan Guarantors
under this Section 10.11 shall be exercisable upon the full and indefeasible
payment of the Guaranteed Obligations in cash (other than Unliquidated
Obligations that have not yet arisen) and the termination or expiry (or, in the
case of all Letters of Credit, full cash collateralization), on terms reasonably
acceptable to the Administrative Agent and the Issuing Bank, of the Revolving
Commitments and all Letters of Credit issued hereunder and the termination of
this Agreement, the Swap Agreement Obligations and the Banking Services
Obligations.

 

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SECTION 10.12. Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank
and the Lenders under this Agreement and the other Loan Documents to which such
Loan Party is a party or in respect of any obligations or liabilities of the
other Loan Parties, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.

SECTION 10.13. Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of its obligations under this Guarantee in respect of a Swap
Obligation (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Section 10.13 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 10.13 or otherwise under this Loan Guaranty voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). Except as otherwise provided herein, the obligations of each
Qualified ECP Guarantor under this Section 10.13 shall remain in full force and
effect until the termination of all Swap Obligations. Each Qualified ECP
Guarantor intends that this Section 10.13 constitute, and this Section 10.13
shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.

ARTICLE XI

The Borrower Representative.

SECTION 11.01. Appointment; Nature of Relationship. The Company is hereby
appointed by each of the Borrowers as its contractual representative (herein
referred to as the “Borrower Representative”) hereunder and under each other
Loan Document, and each of the Borrowers irrevocably authorizes the Borrower
Representative to act as the contractual representative of such Borrower with
the rights and duties expressly set forth herein and in the other Loan
Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article XI.
Additionally, the Borrowers hereby appoint the Borrower Representative as their
agent to receive all of the proceeds of the Loans in the Funding Account(s), at
which time the Borrower Representative shall promptly disburse such Loans to the
appropriate Borrower(s), provided that, in the case of a Revolving Loan, such
amount shall not exceed the Availability. The Administrative Agent and the
Lenders, and their respective officers, directors, agents or employees, shall
not be liable to the Borrower Representative or any Borrower for any action
taken or omitted to be taken by the Borrower Representative or the Borrowers
pursuant to this Section 11.01.

SECTION 11.02. Powers. The Borrower Representative shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Borrower Representative by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Borrower Representative shall have no
implied duties to the Borrowers, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.

SECTION 11.03. Employment of Agents. The Borrower Representative may execute any
of its duties as the Borrower Representative hereunder and under any other Loan
Document by or through authorized officers.

SECTION 11.04. Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default or Event of Default hereunder,
refer to this Agreement, describe such

 

97

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

Default or Event of Default, and state that such notice is a “notice of
default”. In the event that the Borrower Representative receives such a notice,
the Borrower Representative shall give prompt notice thereof to the
Administrative Agent and the Lenders. Any notice provided to the Borrower
Representative hereunder shall constitute notice to each Borrower on the date
received by the Borrower Representative.

SECTION 11.05. Successor Borrower Representative. Upon the prior written consent
of the Administrative Agent, the Borrower Representative may resign at any time,
such resignation to be effective upon the appointment of a successor Borrower
Representative. The Administrative Agent shall give prompt written notice of
such resignation to the Lenders.

SECTION 11.06. Execution of Loan Documents. The Borrowers hereby empower and
authorize the Borrower Representative, on behalf of the Borrowers, to execute
and deliver to the Administrative Agent and the Lenders the Loan Documents and
all related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Loan Documents,
including, without limitation, the Compliance Certificates. Each Borrower agrees
that any action taken by the Borrower Representative or the Borrowers in
accordance with the terms of this Agreement or the other Loan Documents, and the
exercise by the Borrower Representative 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 Borrowers.

SECTION 11.07. Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal quarter to the Borrower Representative a copy
of any certificate or report required hereunder or requested by the Borrower
Representative on which the Borrower Representative shall rely to prepare the
Compliance Certificate required pursuant to the provisions of this Agreement.

[Signature Page Follows]

 

98

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective authorized officers as of the day and
year first above written.

HESKA CORPORATION

DIAMOND ANIMAL HEALTH, INC.

HESKA IMAGING, LLC

By: /s/ John McMahon

Name: John McMahon

Title: Chief Financial Officer of each of the above, on

behalf of each of the above

 

 

 

 

Signature Page to Heska Credit Agreement

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

JPMORGAN CHASE BANK, N.A., as a Lender, and as

Administrative Agent, Swingline Lender and Issuing

Bank

By: /s/ *

Name: * [Personal Identifying Information Omitted]

Title: Authorized Officer

 

 

 

Signature Page to Heska Credit Agreement

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

COMMITMENT SCHEDULE

 

Lender

   Revolving Commitment  

JPMorgan Chase Bank, N.A.

   $ 30,000,000     

 

 

 

Total

   $ 30,000,000     

 

 

 

 

 

 

Commitment Schedule

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

SCHEDULE 3.05(a)

PROPERTIES

 

Property Address

   Property
Type    Owned/
Leased    Expiration of
Lease
(if applicable)   

Loan Party

3760 Rocky Mountain Avenue,

Loveland, Colorado 80538

   Building    Lease    2023    Heska Corporation 1959 Big Sandy Place,
Loveland, Colorado 80538    Townhome    Owned    N/A    Heska Corporation

2538 SE 43rd Street

Des Moines, Iowa 50327

   Building    Owned    N/A    Diamond Animal Health, Inc.

4334 170th Ave and 4770 170th Avenue

Carlisle, Iowa 50047

   Farm    Owned    N/A    Diamond Animal Health, Inc.

4592 170th Avenue

Carlisle, Iowa 50047

   Residence    Owned    N/A    Diamond Animal Health, Inc.

 

1

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

SCHEDULE 3.05(b)

PROPERTIES

 

  1. See attached list of all U.S. and foreign registered trademarks and pending
trademark applications owned solely by Heska Corporation, as of June 12, 2017.

 

  2. See attached list of all U.S. issued patents owned solely by Heska
Corporation, as of June 12, 2017.

 

  3. On an ongoing basis, and in the ordinary course of business, Heska
Corporation evaluates its patent and patent application portfolio. As patents
and/or patent applications come up for renewal, Heska Corporation will evaluate
whether a patent or patent application is material to the business of the
Borrowers and whether such patent or patent application will be renewed.

 

2

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

U.S. and Foreign Registered Trademarks and Pending Trademark Applications owned
solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE
NUMBER

  

COUNTRY

  

TRADEMARK

  

REGISTRATION
NUMBER

   REGISTRATION
DATE    APPLICATION
NUMBER    FILING
DATE    CLASS (ES)   

STATUS

2618-105

   USA    IMMUCHECK    2,913,428    12/21/2004    75/912,501    2/8/2000    42
   REGISTERED

2618-105-CTM

   European Union    IMMUCHECK    002685154    12/1/2003    002685154   
4/3/2002    05, 42, 44    REGISTERED

2618-117-CH

   Switzerland    E-SCREEN    493 504    7/1/2002    252520.1    10/27/2000   
10    REGISTERED

2618-117-CTM

   European Union    E-SCREEN    001933282    7/25/2003    001933282   
10/27/2000    10    REGISTERED

2618-117-NO

   Norway    E-SCREEN    212129    12/6/2001    2000 13104    10/26/2000    10
   REGISTERED

2618-122-JP

   Japan    HESKA in Katakana    4624176    11/22/2002    2001-112667   
12/18/2001    05, 10, 42    REGISTERED

2618-123-HK

   Hong Kong    TRI-HEART    300580554    7/13/2006    300580554    2/14/2006   
05    REGISTERED

2618-123-KR

   South Korea    TRI-HEART    40-0685701    11/15/2006    40-2006-0011110   
3/3/2006    05    REGISTERED

2618-123-TH

   Thailand    TRI-HEART    TM269052    10/16/2007    619166    2/28/2006    05
   REGISTERED

2618-123-TW

   Taiwan    TRI-HEART    1233979    11/1/2006    95006936    2/15/2006    05   
REGISTERED

2618-123-TW-1

   Taiwan    TRI-HEART    1418709    7/16/2010    98047611    10/28/2009    05
   REGISTERED

2618-130-AU

   Australia    E.R.D.-HEALTHSCREEN    953376    6/28/2004    953376   
5/12/2003    10    REGISTERED

2618-130-CA

   Canada    E.R.D.-HEALTHSCREEN    TMA651,278    10/24/2005    1177640   
5/12/2003    10    REGISTERED

2618-130-JP-1

   Japan    ERD -HEALTHSCREEN w/ Katakana    5141567    6/13/2008    2006-100052
   10/27/2006    10    REGISTERED

2618-136-2

   USA    ERD    3,753,400    2/23/2010    78/981,276    2/23/2010    44   
REGISTERED

2618-142

   USA    HEMATRUE    3,509,683    9/30/2008    77/243,946    8/1/2007    05, 10
   REGISTERED

2618-142-CA

   Canada    HEMATRUE    TMA741650    9/9/2009    1,385,154    3/4/2008    05   
REGISTERED

2618-143

   USA    HESKAVIEW INTEGRATED SOFTWARE    3,538,197    11/25/2008    77/273,909
   9/7/2007    09    REGISTERED

2618-143-CA

   Canada    HESKAVIEW INTEGRATED SOFTWARE    TMA746550    8/31/2009   
1,380,774    1/25/2008    09    REGISTERED

2618-41

   USA    HESKA    2,494,527    10/2/2001    75/034,381    12/19/1995    05, 42
   REGISTERED

2618-41-1

   USA    HESKA    2,655,214    12/3/2002    75/420,172    1/20/1998    05   
REGISTERED

2618-41-2

   USA    HESKA    2,177,633    7/28/1998    75/977,369    12/19/1995    42   
REGISTERED

2618-41-3

   USA    HESKA    2,948,416    5/10/2005    76/144,611    10/10/2000    05   
REGISTERED

2618-41-4

   USA    HESKA    2,474,543    7/31/2001    75/980,370    1/20/1998    10   
REGISTERED

2618-41-5

   USA    HESKA    3,336,031    11/13/2007    78/531,627    12/13/2004    05   
REGISTERED

2618-41-AU

   Australia    HESKA    702979    5/29/1997    702979    2/23/1996    05   
REGISTERED

2618-41-AU-1

   Australia    HESKA    732620    2/9/1998    732620    4/16/1997    42   
REGISTERED

2618-41-AU-2

   Australia    HESKA    890675    8/5/2002    890675    9/28/2001    10   
REGISTERED

2618-41-BR

   Brazil    HESKA    819225568    10/17/2000    819225568    5/10/1996    05   
REGISTERED

2618-41-BR-2

   Brazil    HESKA    830902880    6/17/2014    830902880    1/11/2011    10   
REGISTERED

2618-41-CA

   Canada    HESKA    TMA558,841    3/6/2002    805330    2/26/1996    05   
REGISTERED

2618-41-CA-1

   Canada    HESKA    TMA545,654    5/28/2001    842405    4/16/1997    42   
REGISTERED

2618-41-CA-2

   Canada    HESKA    TMA574,232    1/22/2003    1,096,586    3/20/2001   
10, 31    REGISTERED

2618-41-CH

   Switzerland    HESKA    444 805    9/22/1997    01478/1996    3/4/1996   
05, 10    REGISTERED

2618-41-CH-1

   Switzerland    HESKA    446 156    11/17/1997    03226/1997    4/24/1997   
42    REGISTERED

 

3

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

U.S. and Foreign Registered Trademarks and Pending Trademark Applications owned
solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE
NUMBER

  

COUNTRY

  

TRADEMARK

  

REGISTRATION
NUMBER

   REGISTRATION
DATE    APPLICATION
NUMBER    FILING
DATE    CLASS (ES)   

STATUS

2618-41-CN

   China    HESKA    1068630    8/7/1997    960038820    3/21/1996    05   
REGISTERED

2618-41-CN-2

   China    HESKA    1906801    8/7/2002    2001056270    4/11/2001    05   
REGISTERED

2618-41-CN-3

   China    HESKA    2015580    9/21/2002    2001056271    4/11/2001    42   
REGISTERED

2618-41-CO

   Colombia    HESKA    218815    7/8/1999    98056943    9/30/1998    05   
REGISTERED

2618-41-CTM

   European Union    HESKA    35055    9/6/1999    35055    4/1/1996    05   
REGISTERED

2618-41-CTM-1

   European Union    HESKA    521740    12/14/1998    521740    4/16/1997    42
   REGISTERED

2618-41-HK-3

   Hong Kong    HESKA    200200488AA    12/4/2000    200200488AA    12/4/2000   
05, 10, 42    REGISTERED

2618-41-JP

   Japan    HESKA    4638918    1/25/2003    8-32003    3/25/1996    05   
REGISTERED

2618-41-JP-1

   Japan    HESKA    4215403    11/27/1998    9-120112    5/23/1997    42   
REGISTERED

2618-41-KR

   South Korea    HESKA    40-0714321    6/21/2007    40-2006-0011109   
3/3/2006    10    REGISTERED

2618-41-MX-4

   Mexico    HESKA    1260578    1/16/2012    1146865    1/11/2011    05   
REGISTERED

2618-41-NO

   Norway    HESKA    197881    6/9/1999    96.1270    3/27/1996    05   
REGISTERED

2618-41-NO-1

   Norway    HESKA    187509    12/18/1997    97.3116    4/17/1997    42   
REGISTERED

2618-41-NZ

   New Zealand    HESKA    259206    7/30/1998    259206    2/26/1996    05   
REGISTERED

2618-41-NZ-2

   New Zealand    HESKA    708642    2/25/2004    708642    2/25/2004    44   
REGISTERED

2618-41-SG

   Singapore    HESKA    T96/02766Z    12/19/1995    T96/02766Z    3/22/1996   
05    REGISTERED

2618-41-SG-1

   Singapore    HESKA    T97/05350H    5/8/1997    T97/05350H    5/8/1997    42
   REGISTERED

2618-41-TH

   Thailand    HESKA    269424    10/22/2007    619165    2/28/2006    05   
REGISTERED

2618-41-TW

   Taiwan    HESKA    756827    4/16/1997    (85)9563    2/29/1996    05   
REGISTERED

2618-41-TW-1

   Taiwan    HESKA    097332    1/31/1998    (86)19642    4/11/1997    42   
REGISTERED

2618-51

   USA    HESKA AND DESIGN    2,628,459    10/1/2002    75/189,883    10/30/1996
   05,42    REGISTERED

2618-51-1

   USA    HESKA AND DESIGN    2,623,862    9/24/2002    76/221,281    3/7/2001
   10    REGISTERED

2618-51-AU

   Australia    HESKA AND DESIGN    730379    1/30/1998    730379    3/20/1997
   05, 42    REGISTERED

2618-51-AU-1

   Australia    HESKA AND DESIGN    890674    5/8/2002    890674    9/28/2001   
10    REGISTERED

2618-51-BR-1

   Brazil    HESKA AND DESIGN    819954926    12/14/1999    819905496   
4/30/1997    44    REGISTERED

2618-51-CA

   Canada    HESKA AND DESIGN    TMA559,861    4/3/2002    840115    3/21/1997
   05, 42    REGISTERED

2618-51-CA-1

   Canada    HESKA AND DESIGN    TMA574,233    1/22/2003    1096585    3/20/2001
   10, 31    REGISTERED

2618-51-CH

   Switzerland    HESKA AND DESIGN    445 463    10/22/1997    2677/1997   
4/7/1997    05, 10, 42    REGISTERED

2618-51-CN-2

   China    HESKA AND DESIGN    1906799    9/21/2002    2001056260    4/11/2001
   05    REGISTERED

2618-51-CN-3

   China    HESKA AND DESIGN    2015583    9/21/2002    2001056261    4/11/2001
   42    REGISTERED

2618-51-CTM

   European Union    HESKA AND DESIGN    494021    11/4/1998    494021   
3/20/1997    05, 42    REGISTERED

2618-51-HK-3

   Hong Kong    HESKA AND DESIGN    200106759AA    12/4/2000    200106759AA   
12/4/2000    05, 10, 42    REGISTERED

2618-51-JP

   Japan    HESKA AND DESIGN    4638919    1/25/2003    9-111471    4/25/1997   
05    REGISTERED

2618-51-JP-1

   Japan    HESKA AND DESIGN    4215387    11/27/1998    9-111472    4/25/1997
   42    REGISTERED

2618-51-NO

   Norway    HESKA AND DESIGN    200166    11/11/1999    19972388    3/21/1997
   05, 42    REGISTERED

2618-51-NZ

   New Zealand    HESKA AND DESIGN    274355    10/30/1996    274355   
3/20/1997    05    REGISTERED

2618-51-NZ-1

   New Zealand    HESKA AND DESIGN    274356    10/30/1996    274356   
3/20/1997    42    REGISTERED

2618-51-TW

   Taiwan    HESKA AND DESIGN    816354    9/16/1998    (86)17443    4/11/1997
   05    REGISTERED

 

4

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

U.S. and Foreign Registered Trademarks and Pending Trademark Applications owned
solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE
NUMBER

  

COUNTRY

  

TRADEMARK

  

REGISTRATION
NUMBER

   REGISTRATION
DATE    APPLICATION
NUMBER    FILING
DATE    CLASS (ES)   

STATUS

2618-51-TW-1

   Taiwan    HESKA AND DESIGN    097209    1/1/1998    (86)17444    4/11/1997   
42    REGISTERED

2618-51-VE

   Venezuela    HESKA AND DESIGN    P-213.369    6/8/1999    5.952/97   
4/1/1997    05    REGISTERED

2618-51-VE-1

   Venezuela    HESKA AND DESIGN    S-10.293    6/8/1999    5.953/97    4/1/1997
   42    REGISTERED

2618-63

   USA    ALLERCEPT    2,612,937    8/27/2002    75/325,290    7/16/1997    05
   REGISTERED

2618-63-2

   USA    ALLERCEPT    2,530,646    1/15/2002    75/980,372    7/16/1997    42
   REGISTERED

2618-63-AU

   Australia    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013   
05, 44    REGISTERED

2618-63-CA

   Canada    ALLERCEPT          1631209    6/14/2013    05, 44    REGISTERED

2618-63-CH

   Switzerland    ALLERCEPT    501047    7/16/2002    8557/2001    8/30/2001   
05, 44    REGISTERED

2618-63-CN

   China    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013    05, 44
   REGISTERED

2618-63-CTM

   European Union    ALLERCEPT    620138    11/18/1999    620138    8/29/1997   
05, 42    REGISTERED

2618-63-JP

   Japan    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013    05, 44
   REGISTERED

2618-63-MX

   Mexico    ALLERCEPT    1546775    6/15/2015    1190788    6/10/2013    05, 44
   REGISTERED

2618-63-NO

   Norway    ALLERCEPT    212.574    12/27/2001    2001 10495    8/31/2001   
05, 42    REGISTERED

2618-63-NZ

   New Zealand    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013   
05, 44    REGISTERED

2618-63-PL

   Poland    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013    05, 44
   REGISTERED

2618-63-RU

   Russia    ALLERCEPT    1190788    8/14/2015    1190788    6/10/2013    44   
REGISTERED

2618-63-SG

   Singapore    ALLERCEPT          1190788    6/10/2013    05, 44    PENDING

2618-63-KR

   South Korea    ALLERCEPT    1190788    6/10/2013    1190788    6/10/2013   
05, 44    REGISTERED

2618-76-3

   USA    SOLO STEP    2,509,741    11/20/2001    76/169,305    11/21/2000    10
   REGISTERED

2618-76-3-CA

   Canada    SOLO STEP    TMA636,108    3/24/2005    1136071    5/7/2002    10
   REGISTERED

2618-76-JP

   Japan    SOLO STEP    4406804    8/4/2000    11-88921    9/29/1999    10   
REGISTERED

2618-76-JP-1

   Japan    SOLO STEP w/ Katakana    4454194    2/16/2001    2000-24733   
3/14/2000    05, 10    REGISTERED

2618-96

   USA    VET/SENSOR    2,454,228    5/22/2001    75/612,052    12/21/1998    10
   REGISTERED

2618-170

   USA    VITALPATH    3,908,910    1/18/2011    77/830223    9/18/2009    10   
REGISTERED

2618-170-CA

   CANADA    VITALPATH    841,936    1/13/2013    1,478,308    3/16/2010    10
   REGISTERED

2618-207

   USA    ELEMENT DC    4,318,224    4/9/2013    85/501,345    12/21/2011    10
   REGISTERED

2618-209

   USA    ELEMENT i    4,851,518    11/10/2015    85/531,712    2/2/2012    10
   REGISTERED

2618-213

   USA    ELEMENT POC    4,550,666    6/17/2014    86/062,771    9/12/2013    10
   REGISTERED

2618-215

   USA    ELEMENT HT5    4,849,883    11/10/2015    86/548,170    2/27/2015   
05, 10    REGISTERED

2618-215-AU

   Australia    ELEMENT HT5    1728208    1/28/2016    1268876    10/15/2015   
05, 10    REGISTERED

2618-215-CH

   Switzerland    ELEMENT HT5    1268876    3/25/2017    1268876    10/15/2015
   05, 10    REGISTERED

2618-215-CTM

   European Union    ELEMENT HT5    1268876    8/17/2016    1268876   
10/15/2015    05, 10    REGISTERED

2618-215-NO

   Norway    ELEMENT HT5    1268876    9/16/2016    1268876    10/15/2015    05,
10    PENDING

2618-215-NZ

   New Zealand    ELEMENT HT5    1029762    1/3/2016    1268876    10/15/2015   
05, 10    REGISTERED

T00014US0

   USA    DIAMOND AND DESIGN    1917148    9/5/1995    74-491,987    2/18/1994
   5    REGISTERED

 

5

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

U.S. Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILE DATE    U.S. PATENT
NUMBER    ISSUE
DATE    STATUS

2618-17-C2-PUS-1

   Ectoparasite Saliva Proteins    10/271,344    10/14/2002    7,166,693 B2   
1/23/2007    ISSUED

2618-17-C5-PUS-1

   Ectoparasite Saliva Proteins and Apparatus to Collect Such Proteins   
09/004,730    1/8/1998    6,485,968 B1    11/26/2002    ISSUED

2618-25-C1-2

   Flea Protease Proteins, Nucleic Acid Molecules and Uses Thereof    08/485,443
   6/7/1995    6,146,870    11/14/2000    ISSUED

2618-25-C6

   Flea Protease Proteins, Nucleic Acid Molecules and Uses Thereof    09/032,215
   2/27/1998    6,204,010 B1    3/20/2001    ISSUED

2618-43-1-1

   Anti-Parasitic Helminth Macrophage Migration Inhibitory Factor Antibodies and
Uses Thereof    09/774,377    1/30/2001    6,455,039 B2    9/24/2002    ISSUED

2618-45-2

   Antiparasitic Helminth Larval Thiol Specific Antioxidant Antibodies and Uses
Thereof    09/477,510    1/4/2000    6,489,448 B1    12/3/2002    ISSUED

AD-1

   Canine COX-2 Nucleic Acid Molecules and Uses Thereof    09/919,060   
7/31/2001    6,638,744 B2    10/28/2003    ISSUED

AD-1-3

   Canine COX-2 Proteins and Uses Thereof    12/352,511    1/12/2009   
7,666,641    2/23/2010    ISSUED

AL-2-C3

   Dermatophagoides Nucleic Acid Molecules, Proteins and Uses Thereof   
09/292,225    4/15/1999    6,455,686 B1    9/24/2002    ISSUED

AL-2-C3-1

   Novel Dermatophagoides Proteins and Uses Thereof    10/218,743    8/13/2002
   7,256,263 B2    8/14/2007    ISSUED

AL-2-C4

   Novel Dermatophagoides Proteins and Uses Thereof    09/662,293    9/14/2000
   7,128,921 B1    10/31/2006    ISSUED

AL-2-C4-1

   Novel Dermatophagoides Proteins and Uses Thereof    11/506,444    8/18/2006
   7,891,187    9/15/2009    ISSUED

AL-4

   Feline Immunoglobulin E Molecules and Compositions Thereof    09/479,614   
1/7/2000    6,573,372 B2    6/3/2003    ISSUED

AL-4-1

   Feline Immunoglobulin E Molecules and Related Methods    10/409,772   
4/7/2003    7,183,386 B2    2/27/2007    ISSUED

AL-5

   Canine Low Affinity IgE Receptor (CD23) Nucleic Acid Molecules and Uses
Thereof    09/535,521    3/24/2000    6,410,714 B1    6/25/2002    ISSUED

 

6

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

U.S. Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILE DATE    U.S. PATENT
NUMBER    ISSUE
DATE    STATUS

AL-7

   Compositions and Methods Related to Canine IgG and Canine IL-13 Receptor   
09/828,995    4/9/2001    6,703,360 B2    3/9/2004    ISSUED

AL-7-1

   Canine IL-13 Receptor Alpha-1 Subunit Nucleic Acid Molecules    10/753,159   
1/7/2004    7,378,275 B2    5/27/2008    ISSUED

AS-1

   Detection of Anti-FcEpsilonR Autoantibodies in Asthmatics    08/985,863   
12/5/1997    6,165,799    12/26/2000    ISSUED

DE-1

   Delivery Method for Recombinant Raccoon Poxvirus    09/018,798    2/4/1998   
6,106,841    8/22/2000    ISSUED

DE-3-C2-PUS-1

   Cationic Lipid-Mediated Enhancement of Nucleic Acid Immunization of Cats   
10/864,903    6/9/2004    7,314,627 B2    1/1/2008    ISSUED

DE-3-C2-PUS-2

   Cationic Lipid-Mediated Enhancement of Nucleic Acid Immunization of Cats   
11/866,558    10/3/2007    8,029,776 B2    10/4/2011    ISSUED

DI-13-C2

   Methods for Detecting Early Renal Disease in Animals    10/112,648   
3/28/2002    7,172,873 B2    2/6/2007    ISSUED

DI-13-C2-1

   Methods of Detecting Early Renal Disease in Animals    11/627,784   
1/26/2007    7,935,495 B2    5/3/2011    ISSUED

DI-4

   Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules and Uses
Thereof    09/015,734    1/29/1998    6,057,127    5/2/2000    ISSUED

DI-4-1

   Equine Fc Epsilon Receptor Alpha Chain Proteins and Uses Thereof   
09/515,311    2/29/2000    6,582,701 B1    6/24/2003    ISSUED

DI-4-2

   Anti-Equine Fc Epsilon Receptor Alpha Chain Antibodies and Method to Detect
IgE    10/434,817    5/8/2003    6,887,672 B2    5/3/2005    ISSUED

DI-4-3

   Equine Fc Epsilon Receptor Alpha Chain Protein    11/086,903    3/21/2005   
7,226,996 B2    6/5/2007    ISSUED

DI-6-C1

   Haemobartonella PCR Methods and Materials    09/398,577    9/17/1999   
6,518,020 B1    2/11/2003    ISSUED

DI-7-C1

   PCR Methods and Materials    09/398,179    9/17/1999    6,300,072 B1   
10/9/2001    ISSUED

EQ-2

   Intranasal Delivery System    09/408,584    9/29/1999    6,398,774 B1   
6/4/2002    ISSUED

EQ-2-C1-PUS

   Intranasal Delivery System    10/089,224    3/27/2002    7,204,822 B1   
4/17/2007    ISSUED

EQ-2-C1-PUS-1

   Equine Intranasal Delivery System    10/941,727    9/15/2004    7,678,087 B2
   3/16/2010    ISSUED

 

7

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

U.S. Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILE DATE    U.S. PATENT
NUMBER    ISSUE
DATE    STATUS

FC-11-PUS-1

   Flea Octopamine Receptor Nucleic Acid Molecules, Proteins and Uses Thereof   
12/200,456    8/28/2008    7,932,371 B2    4/26/2011    ISSUED

FC-2-1

   Serine Protease Inhibitor Nucleic Acid Molecules and Uses Thereof   
09/005,352    1/9/1998    6,479,253 B1    11/12/2002    ISSUED

FC-3

   Novel Flea Epoxide Hydrolase Nucleic Acid Molecules, Proteins and Uses
Thereof    08/989,510    12/12/1997    6,037,160    3/14/2000    ISSUED

FC-3-C1

   Flea Epoxide Hydrolase Nucleic Acid Molecules, Proteins and Uses Thereof   
09/182,816    10/29/1998    6,143,542    11/7/2000    ISSUED

FC-3-C1-1

   Flea Epoxide Hydrolase Proteins and Uses Thereof    09/471,528    12/27/1999
   6,153,397    11/28/2000    ISSUED

FC-3-C1-2

   Anti-Flea Epoxide Hydrolase Antibodies and Uses Thereof    09/634,530   
8/8/2000    6,290,958 B1    9/18/2001    ISSUED

FC-4

   Flea Ecdysone and Ultraspiracle Nucleic Acid Molecules, Proteins and Uses
Thereof    09/435,019    11/5/1999    6,489,140 B1    12/3/2002    ISSUED

FC-4-2

   Flea Ultraspiracle Nucleic Acid Molecules and Uses Thereof    10/855,541   
5/27/2004    7,208,589 B2    4/24/2007    ISSUED

FC-4-3

   Flea Ultraspiracle Nucleic Acid Molecules    11/697,551    4/6/2007   
7,667,019    2/23/2010    ISSUED

FC-5-C1

   Flea Chitinase Nucleic Acid Molecules and Uses Thereof    09/545,814   
4/7/2000    6,416,977 B1    7/9/2002    ISSUED

FC-6-C1-C1-1

   Flea Allantoinase Proteins and Uses Thereof    10/180,165    6/26/2002   
6,905,682 B2    6/14/2005    ISSUED

FC-6-C2-2

   Flea Peritrophin Nucleic Acid Molecules    11/778,533    7/16/2007   
7,662,622 B2    2/16/2010    ISSUED

FC-7-PUS-1

   Flea GABA Receptor Subunit Nucleic Acid Molecules    12/352,535    1/12/2009
   8,268,976    9/18/2012    ISSUED

FC-8-C3-1

   Flea Head, Nerve Cord, Hindgut and Malpighian Tubule Nucleic Acid Molecules,
Proteins and Uses Thereof    11/565,729    12/1/2006    8,088,903 B2    1/3/2012
   ISSUED

FO-3-C1

   Method and Composition to Protect an Obligate Carnivore From a Disease of
Abnormal Carbohydrate Metabolism    09/387,809    9/1/1999    6,203,825 B1   
3/20/2001    ISSUED

HW-5-C1-1

   Dirofilaria and Brugia Ankyrin Proteins and Uses Thereof    09/557,034   
4/21/2000    6,365,569 B1    4/2/2002    ISSUED

 

8

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

U.S. Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILE DATE    U.S. PATENT
NUMBER    ISSUE
DATE    STATUS

HW-8

   Parasitic Helminth Cuticlin Nucleic Acid Molecules and Uses Thereof   
09/323,427    6/1/1999    6,248,329 B1    6/19/2001    ISSUED

HW-8-1

   Parasitic Helminth Cuticlin Nucleic Acid Molecules and Uses Thereof   
09/812,642    3/20/2001    6,368,600 B1    4/9/2002    ISSUED

HW-9

   Parasitic Helminth DiAg2 Proteins, Nucleic Acid Molecules, and Uses Thereof
   09/361,434    7/27/1999    6,136,963    10/24/2000    ISSUED

HW-9-1

   Parasitic Helminth DiAg2 Proteins and Uses Thereof    09/635,025    8/4/2000
   6,392,017 B1    5/21/2002    ISSUED

IM-1-C1-PUS-1

   Canine and Feline B7-2 Proteins, Compositions and Uses Thereof    10/790,396
   3/1/2004    7,053,181 B2    5/30/2006    ISSUED

IM-2-C1-1

   Canine IL-4 Nucleic Acid Molecules and Uses Thereof    10/218,654   
8/13/2002    7,078,506 B2    7/18/2006    ISSUED

IM-2-C1-2

   Feline Granulocyte Macrophage Colony Stimulating Factor Nucleic Acid
Molecules    11/486,995    7/14/2006    7,780,959 B2    8/24/2010    ISSUED

IM-2-C1-3

   Feline Granulocyte Macrophage Colony Stimulating Factor Nucleic Acid
Molecules    12/819,964    6/21/2010    8,263,559    9/11/2012    ISSUED

IM-2-C1-C1-1

   Canine IL-5 Nucleic Acid Molecules    10/787,382    2/24/2004    7,183,080 B2
   2/27/2007    ISSUED

IM-2-C1-C1-2

   Canine IL-5 Proteins and Fragments Thereof    11/561,562    11/20/2006   
7,427,661 B2    9/23/2008    ISSUED

IM-2-C1-R

   Canine IL-4 Immunoregulatory Proteins and Uses Thereof    10/916,286   
8/11/2004    RE39,614 E

(Reissue)

   05/08/2007

(10/29/2002)

   ISSUED

IM-2-C2-1

   Canine IL-13 Nucleic Acid Molecules and Uses Thereof    10/262,439   
9/30/2002    7,026,139 B2    4/11/2006    ISSUED

IM-2-C2-R

   Canine IL-13 Immunoregulatory Proteins and Uses Thereof    10/918,292   
8/13/2004    RE40,374 E

(Reissue)

   06/10/2008

(11/19/2002)

   ISSUED

IM-5-1

   Feline IL-12 Single Chain Nucleic Acid Molecules    10/821,670    4/9/2004   
7,205,143 B2    4/17/2007    ISSUED

IM-5-3

   Feline IL-18 Nucleic Acid Molecules    12/128,440    5/28/2008    7,928,197
B2    4/19/2011    ISSUED

IN-1-C5

   Electrode for Evaluating Cardiac Functions Via Esophagus    09/513,737   
2/22/2000    6,438,400 B1    8/20/2002    ISSUED

 

9

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

U.S. Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILE DATE    U.S. PATENT
NUMBER    ISSUE
DATE    STATUS

TX-1-C2

   Methods for the Detection of Encysted Parasites    09/216,393    12/18/1998
   6,514,694 B2    2/4/2003    ISSUED

TX-1-C2-1

   Methods for the Detection of Encysted Parasites    10/321,856    12/17/2002
   7,052,899 B2    5/30/2006    ISSUED

 

10

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

Foreign Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILING
DATE    GRANTED
PATENT
NUMBER    ISSUE
DATE    STATUS

AL-2-C3-PAU

   Novel Dermatophagoides Nucleic Acid Molecules, Proteins and Uses Thereof   
36521/99    4/16/1999    762249    10/2/2003    GRANTED

DI-13-C2-PEP

   Methods of Detecting Early Renal Disease in Animals    02733963.9   
3/28/2002    02733963.9    12/16/2009    GRANTED

DI-1-CH

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-DE

   Method to Detect IgE    97949625.4    11/24/1997    69723860.1-08   
7/30/2003    GRANTED

DI-1-DK

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-ES

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-FR

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-GB

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-IE

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-IT

   Method to Detect IgE    97949625.4    11/24/1997    0943097    7/30/2003   
GRANTED

DI-1-PAU-1

   Method to Detect IgE    57951/01    11/24/1997    769954    5/27/2004   
GRANTED

DI-1-PCA

   Method to Detect IgE    2,270,868    11/24/1997    2,270,868    1/24/2006   
GRANTED

DI-1-PEP

   Method to Detect IgE    97949625.4    11/24/1997    943097    7/30/2003   
GRANTED

DI-1-PJP

   Method to Detect IgE    10-526731    11/24/1997    3993245    8/3/2007   
GRANTED

DI-2-PCA

   Novel Feline FC Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    2,273,855    12/16/1997    2,273,855    5/27/2003    GRANTED

DI-4-BE

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-CH

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-DE

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    National no. to
be assigned    7/14/2010    GRANTED

DI-4-DK

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

 

11

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

Foreign Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILING
DATE    GRANTED
PATENT
NUMBER    ISSUE
DATE    STATUS

DI-4-ES

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    2348971    7/14/2010    GRANTED

DI-4-FI

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-FR

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-GB

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-IE

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-IT

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-NL

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-PAU

   Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins and
Uses Thereof    25674/99    1/28/1999    746218    8/1/2002    GRANTED

DI-4-PCA

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    2,319,310    1/28/1999    2,319,310    5/24/2011    GRANTED

DI-4-PEP

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-PT

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    1051491    7/14/2010    GRANTED

DI-4-SE

   Novel Equine Fc Epsilon Receptor Alpha Chain Nucleic Acid Molecules, Proteins
and Uses Thereof    99905532.0    1/26/1999    99905532.0    7/14/2010   
GRANTED

EQ-2-C1-PAU

   Intranasal Delivery System    77376/00    9/29/2000    774757    10/28/2004
   GRANTED

EQ-2-C1-PAU-1

   Intranasal Delivery System    20044218666    10/7/2004    20044218666   
12/14/2006    GRANTED

EQ-2-C1-PAU-2

   Intranasal Delivery System    2006236004    11/14/2006    2006236004   
6/26/2008    GRANTED

EQ-2-C1-PCA

   Intranasal Delivery System    2,386,110    9/29/2000    2,386,110   
5/30/2006    GRANTED

 

12

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

Foreign Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILING
DATE    GRANTED
PATENT
NUMBER    ISSUE
DATE    STATUS

EQ-2-C1-PCA-1

   Intranasal Delivery System    2,541,848    9/29/2000    2,541,848   
12/2/2008    GRANTED

EQ-2-C1-PCA-2

   Intranasal Delivery System    2,640,663    9/25/2008    2,640,663   
9/13/2011    GRANTED

FC-6-C1-PEP

   Flea Head, Nerve Cord, Hindgut and Malpighian Tubule Nucleic Acid Molecules,
Proteins and Uses Thereof    918540.6    4/7/2000    1169343    5/24/2006   
GRANTED

FC-6-C2-PEP

   Flea Peritrophin Nucleic Acid Molecules, Proteins and Uses Thereof   
1977740.8    10/11/2001    1328662    9/8/2010    GRANTED

FO-3-C1-AT

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
E 243943    7/2/2003    GRANTED

FO-3-C1-DE

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

FO-3-C1-ES

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

FO-3-C1-FR

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

FO-3-C1-GB

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

FO-3-C1-IT

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

FO-3-C1-NL

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

 

13

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

Foreign Issued Patents owned solely by Heska Corporation

(as of June 12, 2017)

 

HESKA FILE NUMBER

  

TITLE

   APPLICATION
NUMBER    FILING
DATE    GRANTED
PATENT
NUMBER    ISSUE
DATE    STATUS

FO-3-C1-PAU

   Method and Composition to Protect an Obligate Carnivore From a Disease of
Abnormal Carbohydrate Metabolism    60252/99    9/1/1999    769669    5/13/2004
   GRANTED

FO-3-C1-PCA

   Method and Composition to Protect an Obligate Carnivore From a Disease of
Abnormal Carbohydrate Metabolism    2,342,861    9/1/1999    2,342,861   
6/9/2009    GRANTED

FO-3-C1-PEP

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999    1109457
   7/2/2003    GRANTED

FO-3-C1-SE

   Method to Manufacture a Composition to Protect an Obligate Carnivore From a
Disease of Abnormal Carbohydrate Metabolism    99968209.9    9/1/1999   
01109457    7/2/2003    GRANTED

 

14

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

SCHEDULE 3.06

LITIGATION AND ENVIRONMENTAL MATTERS

(a)

From time to time, the Company and its Subsidiaries may be involved in
litigation related to claims arising out of their operations. On March 12, 2015,
a complaint was filed against the Company by Shaun Fauley in the United States
District Court Northern District of Illinois alleging the transmittal by the
Company of unauthorized faxes in violation of the federal Telephone Consumer
Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, as a
class action seeking stated damages of the greater of actual monetary loss or
five hundred dollars per violation. The Company intends to defend itself
vigorously in this matter. As of the Effective Date of the Credit Agreement, the
Loan Parties were not a party to any other legal proceedings that are expected,
individually or in the aggregate, to have a material adverse effect on their
business, financial condition or operating results.

(b)

None.

 

15

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

SCHEDULE 3.14

INSURANCE

See attached list of insurance policies.

 

16

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

Portions of Schedule 3.14 to this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act. Omitted information, marked
“[***]” in Schedule 3.14 to this Exhibit, has been filed separately with the
Securities and Exchange Commission together with such request for confidential
treatment.

 

 

Heska Schedule of Insurance

June 30, 2017 to June 30, 2018

  LOGO [g428566dsp112.jpg]

 

COVERAGE DESCRIPTION

   AMOUNT/LIMIT      COMPANY      POLICY NO.      POLICY PERIOD      PREMIUM  

COMMERCIAL PACKAGE - GENERAL LIABILITY

        Travelers        630 5J930041        6/30/17 - 6/30/18        [***]  

◆

  General Aggregate      [***]              

◆

  Each Occurrence      [***]              

◆

  Products Completed Operations Aggregate      [***]              

◆

  Advertising Injury and Personal Injury Aggregate      [***]              

◆

  Damage to Premises Rented to You Limit      [***]              

◆

  Medical Expenses Each Person Limit      [***]              

Employee Benefits - Claims Made

              

◆

  Aggregate Limit      [***]              

◆

  Each Claim      [***]              

Deductibles

              

◆

  BI/PD and Adv and Pers Injury - Each Event      [***]              

◆

  Employee Benefits - Each Claim      [***]              

◆

  Retroactive Date      [***]              

COMMERCIAL PACKAGE - PROPERTY

        Travelers        630 5J930041        6/30/17 - 6/30/18        [***]  

Domestic Blanket Limits

              

◆

  Building      [***]              

◆

  Business Personal Property - Excluding Stock      [***]              

◆

  Business Income, Including Extra Expense      [***]              

Sublimits

              

◆

  Property in Transit      [***]              

◆

  Property in other locations (worldwide)      [***]              

◆

  Ordinance or Law (Blanket) Coverage A      [***]              

◆

  Ordinance of Law Coverage B & C      [***]              

◆

  Blanket Flood except Iowa locations      [***]              

◆

  Blanket Flood - Iowa      [***]              

◆

  Earth Movement      [***]              

◆

  Limited Coverage for Bio-Contamical Annual Aggregate      [***]              

◆

  Scientific Animals & Other Animals Per Occurrence      [***]              

◆

  Accounts Receivable      [***]              

◆

  Property at Miscellaneous Locations      [***]              

◆

  Tenants Improvements & Betterments      [***]              

◆

  Dependent Properites      [***]              

◆

  Green Upgrade      [***]              

Deductibles

              

◆

  Each Occurrence      [***]              

◆

  Each Occurrence - Iowa Residence      [***]              

◆

  Business Income      [***]              

◆

  Earth Movement      [***]              

◆

  Flood (Excluding Iowa locations)      [***]              

◆

  Flood (Iowa locations)      [***]              

COMMERCIAL PACKAGE - AUTO LIABILITY

        Travelers        BA 5J930041        06/30/17 - 6/30/18        [***]  

◆

  Liability -      [***]              

◆

  Uninsured Autos      [***]              

◆

  Medical Payments      [***]              

◆

  Hired Car Physical Damage      [***]              

Deductibles

              

◆

  Liability - Any Auto      [***]              

◆

  Comprehensive      [***]              

◆

  Collision      [***]              

 

17

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

Portions of Schedule 3.14 to this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act. Omitted information, marked
“[***]” in Schedule 3.14 to this Exhibit, has been filed separately with the
Securities and Exchange Commission together with such request for confidential
treatment.

 

 

Heska Schedule of Insurance

June 30, 2017 to June 30, 2018

  LOGO [g428566dsp112.jpg]

 

COVERAGE DESCRIPTION

   AMOUNT/LIMIT      COMPANY      POLICY NO.      POLICY PERIOD      PREMIUM  

FOREIGN PACKAGE

        Travelers        ZPP 51M83852        06/30/17 - 06/30/18
     [***]  

International General Liability

              

◆

  General Aggregate      [***]              

◆

  Products Completed Operations Aggregate      [***]              

◆

  Personal & Advertising Injury      [***]              

◆

  Each Occurrence      [***]              

◆

  Medical Expense (Any One Person)      [***]              

◆

  Damage to Premises Rented to You Limit      [***]              

Deductibles

              

◆

  Liability      [***]              

FOREIGN PACKAGE

        Travelers        ZPP 51M83852        06/30/17 - 06/30/18        [***]  

International Auto Liability

              

Coverage is excess/DIC over local compulsory insurance

              

◆

  Liability - Owned, Hired & Non-Owned Autos Only      [***]              

◆

  Auto Medical Payments - Hired Autos Only      [***]              

◆

  Physical Damage - Hired Auto only      [***]              

Deductibles

              

◆

  Liability      [***]              

FOREIGN VOLUNTARY WORKERS COMPENSATION

        Travelers        ZPP 51M83852        06/30/17 - 06/30/18        [***]  

◆

  U.S. Employees/Canadian Nationals      [***]              

◆

  Local Nationals      [***]              

◆

  Third Country Nationals      [***]              

◆

  Bodily Injury by Accident - Each Accident      [***]              

◆

  Bodily Injury by Disease - Aggregate      [***]              

◆

  Bodily Injury by Disease - Each Employee      [***]              

◆

  Per Employee      [***]              

◆

  Annual Aggregate      [***]              

FOREIGN PACKAGE

        Travelers        ZPP 51M83852        06/30/17 - 06/30/18        [***]  

Business Travel Accident

              

◆

  Each Accident Benefit Amount      [***]              

◆

  Medical Expenses      [***]              

◆

  Annual Aggregate      [***]              

FOREIGN PACKAGE

        Travelers        ZPP 51M83852        06/30/17 - 06/30/18        [***]  

Kidnap, Ransom & Extortion

              

◆

  Kidnap, Ransom or Extortion      [***]              

◆

  Related Defense Expenses      [***]              

◆

  Crisis Response Expenses      [***]              

UMBRELLA

        Travelers        CUP 5J936924        06/30/17 - 06/30/18        [***]  

◆

  Aggregate Limit      [***]              

◆

  Each Occurrence      [***]              

◆

  Professional Services & Medical Products Exclusion      [***]              

◆

  Products Completed Operations Exclusion      [***]              

◆

  25% Minimum Earned      [***]              

Deductible

              

◆

  Retained Limit      [***]              

Underlying Policies

              

◆

  Workers Compensation      [***]              

◆

  Auto Liability      [***]              

◆

  General Liability      [***]              

◆

  Employee Benefits (part of GL policy)      [***]              

◆

  Foreign Liability (AL, GL, Foreign Employee Benefits)      [***]              

 

18

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

Portions of Schedule 3.14 to this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act. Omitted information, marked
“[***]” in Schedule 3.14 to this Exhibit, has been filed separately with the
Securities and Exchange Commission together with such request for confidential
treatment.

 

 

Heska Schedule of Insurance

June 30, 2017 to June 30, 2018

  LOGO [g428566dsp112.jpg]

 

COVERAGE DESCRIPTION

 

AMOUNT/LIMIT

 

COMPANY

 

POLICY NO

 

POLICY PERIOD

 

PREMIUM

Excess - $10M X $10M

    Navigators   CH17EXR846973IV   06/30/17 - 06/30/18   [***]

◆

  Aggregate Limit   [***]        

◆

  Each Occurrence   [***]        

◆

  Professional Services & Medical Products Exclusion   [***]        

◆

  Products Completed Operations Exclusion   [***]        

◆

  25% Minimum Earned   [***]        

Medical Products Liability

    Noetic Specialty  

Medical Products

N17CO380009

Errors & Omissions

E17CO380002

  06/30/17 to 6/30/18  

[***]

◆

  Each Occurrence   [***]        

◆

  Aggregate Limit   [***]        

Errors & Omissions

         

◆

  Each Economic Injury & Aggregate Limit   [***]        

Deductibles

         

◆

  Self Insured Retention   [***]        

◆

  Aggregate SIR   [***]        

Boiler & Machinery

    Travelers   BMEI-3H279191   06/30/17 -06/30/18   [***]

◆

  Property Damage - Per Breakdown   [***]        

Covered Locations

         

◆

  3760 Rocky Mountain Ave., Loveland CO          

◆

  6707 McMurray Ranch Road, Bellevue CA          

◆

  2538 SE 43rd St, Des Moines, IA          

◆

  Rural Route 3, Carlisle, IA          

Sub-Limits

         

◆

  Expediting Expense   [***]        

◆

  Spoilage/Refridgerant Damage   [***]        

◆

  Utility Interruption / Time Element   [***]        

◆

  Ammonia Contamination   [***]        

◆

  Water Damage   [***]        

Boiler & Machinery Deductibles

         

◆

  Property Damage - Per Breakdown   [***]        

◆

  Spoilage   [***]        

Marine Cargo

    Allianz   OC91726200   6/30/17 to 6/30/18   [***]

◆

  Limit of Liability   [***]        

◆

  Limit at any unnamed storage location   [***]        

Marine Cargo Deductible

            Each Claim   [***]        

Directors & Officers Liability

    QBE Insurance Corporation   QPL0109722   06/30/17 to 06/30/18   [***]

◆

  Maximum Aggregate Limit   [***]        

◆

  Additional Limit Dedicated for Executives   [***]        

◆

  Pending or Prior Proceedings Dates   [***]        

D&O Retentions

         

◆

  Non-Indemnifiable Loss Retention   [***]        

◆

  Indemnifiable Loss Retention   [***]        

◆

  Securities Claim Retention   [***]        

◆

  Mergers & Acquistions Retention   [***]        

EXCESS - DIRECTORS & OFFICERS

  Liberty Mutual Fire Ins Co   074869-217   06/30/17 to 06/30/18   [***]

◆

  Limit of Insurance   [***]        

◆

  Retention   [***]        

EXCESS - DIRECTORS & OFFICERS

  Great American   DFX1491088   06/30/17 to 06/30/18   [***]

◆

  Limit of Insurance   [***]        

◆

  Retention   [***]        

EXCESS DIC SIDE A - DIRECTORS & OFFICERS

  Old Republic   ORPRO 39719   06/30/17 to 06/30/18   [***]

◆

  Limit of Insurance   [***]        

◆

  Retention   [***]        

EXCESS DIC SIDE A - DIRECTORS & OFFICERS

  Berkley   BPRO8027134   06/30/17 to 06/30/18   [***]

◆

  Limit of Insurance   [***]        

◆

  Retention   [***]        

 

19

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

Portions of Schedule 3.14 to this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act. Omitted information, marked
“[***]” in Schedule 3.14 to this Exhibit, has been filed separately with the
Securities and Exchange Commission together with such request for confidential
treatment.

 

 

Heska Schedule of Insurance

June 30, 2017 to June 30, 2018

  LOGO [g428566dsp112.jpg]

 

COVERAGE DESCRIPTION

 

AMOUNT/LIMIT

 

COMPANY

 

POLICY NO.

 

POLICY PERIOD

 

PREMIUM

CRIME

    AIG   01-600-55-13   6/30/17 - 6/30/18   [***]

Crime Limits

         

◆

  Employee Theft   [***]        

◆

  Forgery or Alerations   [***]        

◆

  Inside the Premises - Theft of Money & Securities   [***]        

◆

  Inside the Premises - Robbery or Safe Burglary of Other Property   [***]      
 

◆

  Outside the Premises   [***]        

◆

  Computer Fraud   [***]        

◆

  Funds Transfer Fraud   [***]        

◆

  Money Orders and Counterfeit Currency   [***]        

◆

  Client’s Property   [***]        

◆

  Corporate Deception Fraud   [***]        

◆

  Destruction of Electronic Data or Computer Programs   [***]        

Crime Deductibles

         

◆

  Money Orders and Counterfeit Currency   [***]        

◆

  All Other Deductibles, Per Loss   [***]        

Employment Practices Liability

    Travelers   105642270   06/30/17 to 06/30/18   [***]

◆

  Maximum Aggregate Limit   [***]        

◆

  Clause A: Employment Practices Liability   [***]        

◆

  Clause B: Third Party Liability   [***]        

◆

  Pending or Prior Proceedings Dates   [***]        

EPL Retentions

         

◆

  Clause A: Employment Practices Liability   [***]        

◆

  Clause B: Third Party Liability   [***]        

Fiduciary Liability

         

◆

  Maximum Aggregate Limit   [***]           Pending or Prior Proceedings Dates  
[***]        

◆

  Pending or Prior Proceedings Dates   [***]        

Fiduciary Retentions

         

◆

  Clause A: Fiduciary Liability   [***]        

◆

  Clause B: Voluntary Settlement Program   [***]        

 

20

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

SCHEDULE 3.15

CAPITALIZATION AND SUBSIDIARIES

Heska Corporation is a Delaware corporation.

Equity Interests of Heska Corporation

 

  1. Preferred Stock, par value $0.01 per share. 2,500,000 shares authorized.

 

  2. Common Stock, par value $0.01 per share. 10,000,000 shares authorized.

 

  3. Public Common Stock, par value $0.01 per share. 10,000,000 shares
authorized.

Subsidiaries of Heska Corporation

 

  1. Diamond Animal Health, Inc., an Iowa corporation. Heska Corporation owns
100% of the issued and outstanding capital stock.

 

  2. Heska Imaging, LLC, a Delaware limited liability company. Heska Corporation
owns 100% of the outstanding membership interests.

 

  3. Heska AG, a corporation incorporated under the laws of Switzerland. Heska
Corporation owns 100% of the outstanding equity interests.

 

  4. Heska Canada Limited, a company formed under the Business Corporations Act
(British Columbia). Heska Corporation owns 100% of the outstanding equity
interests.

 

21

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

SCHEDULE 6.01

EXISTING INDEBTEDNESS

None.

 

22

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

SCHEDULE 6.02

EXISTING LIENS

 

DELAWARE

HESKA CORPORATION

Ref.

   File No.      Date      Type     

Secured Party

  

Collateral

1      20142183606        05/27/2014        UCC-1     

Bankers Leasing Company

(Urbandale, Iowa)

  

1- MX 3111 Full color copier w/accessories SN 25025451

 

1- MX 3111 Full color copier w/accessories SN 25025441

 

1- MX3110N color copiers w/accessories SN 15043974

 

1- MX3110N color copiers w/accessories SN 15093048

 

HESKA AG

2      20142183606        05/27/2014        UCC-1     

Bankers Leasing Company

(Urbandale, Iowa)

  

1- MX 3111 Full color copier w/accessories SN 25025451

 

1- MX 3111 Full color copier w/accessories SN 25025441

 

1- MX3110N color copiers w/accessories SN 15043974

 

1- MX3110N color copiers w/accessories SN 15093048

 

IOWA

HESKA CORPORATION

3      E13072582-7        10/10/2013        UCC-1     

Bankers Leasing Company

(Urbandale, Iowa)

  

1- Sharp MXM 283N w/attachments s/n 35003327 (lease reference)

 

4      P140033270        05/29/2014        UCC-1     

Bankers Leasing Company

(Urbandale, Iowa)

  

1- MX 3111 Full color copier w/accessories SN 25025451

 

1- MX 3111 Full color copier w/accessories SN 25025441

 

1- MX3110N color copiers w/accessories SN 15043974

 

1- MX3110N color copiers w/accessories SN 15093048

 

23

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

SCHEDULE 6.04

EXISTING AND CONTEMPLATED INVESTMENTS

None.

 

24

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

SCHEDULE 6.10

EXISTING RESTRICTIVE AGREEMENTS

None.

 

25

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

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit and guarantees and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and other
rights of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

1.

   Assignor:                                         
                                       

2.

   Assignee:                                         
                                             

[and is an Affiliate/Approved Fund of [identify Lender]]

3.

   Borrowers:    Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC

4.

   Administrative Agent:    JPMorgan Chase Bank, N.A., as the administrative
agent under the Credit Agreement

5.

   Credit Agreement:    Credit Agreement dated as of July 27, 2017 among Heska
Corporation, Diamond Animal Health, Inc., Heska Imaging, LLC, the other Loan
Parties party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent

 

1

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

6. Assigned Interest:

 

Facility Assigned

 

Aggregate Amount of

Commitment/Loans for

all Lenders

 

Amount of

Commitment/Loans

Assigned

 

Percentage Assigned of

Commitment/Loans

  $   $                   %   $   $                   %   $   $  
                %

Effective Date:            , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Company, the Loan Parties and their Related
Parties or their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable laws, including federal and state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:    

Name:    

Title:    

 

ASSIGNEE

[NAME OF ASSIGNEE]

By:    

Name:    

Title:    

 

2

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

Consented to and Accepted:

JPMORGAN CHASE BANK, N.A., as

Administrative Agent, Issuing Bank and Swingline Lender

 

By:     Name:     Title:    

[Consented to:]

HESKA CORPORATION

 

By:     Name:     Title:    

 

3

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

ANNEX 1 to

ASSIGNMENT AND ASSUMPTION

HESKA CORPORATION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of any
Borrower, any Subsidiary or Affiliate or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by any Borrower, any
Subsidiary or Affiliate, or any other Person of any of their respective
obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor 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 the Loan
Documents, and (ii) 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.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Acceptance and
adoption of the terms of this Assignment and Assumption by the Assignee and the
Assignor by Electronic Signature (as defined in the Credit Agreement) or
delivery of an executed counterpart of a signature page of this Assignment and
Assumption by any Electronic System (as defined in the Credit Agreement) shall
be effective as delivery of a manually executed counterpart of this Assignment
and Assumption. This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of New York.

 

1

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

EXHIBIT B

See attached.

 

1

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

OPINION OF COUNSEL FOR THE LOAN PARTIES

[SUBJECT TO REVIEW OF OSBORN MALEDON, P.A. OPINION COMMITTEE]

[Effective Date]

To the Lenders and the Administrative

Agent Referred to Below

c/o JPMorgan Chase Bank, N.A., as

Administrative Agent

1125 17th Street, 3rd Floor

Denver, CO 80202

Dear Sirs:

We have acted as counsel for Heska Corporation, Diamond Animal Health, Inc.
(“Diamond”), and Heska Imaging, LLC (the “Borrowers”) in connection with the
Credit Agreement dated as of July 27, 2017 (the “Credit Agreement”), among the
Borrowers, the other Loan Parties party thereto, the banks and other financial
institutions identified therein as Lenders, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other parties signatory thereto. Capitalized terms
used and not otherwise defined in this letter shall have the same meanings
ascribed to them in the Credit Agreement.

1.    DOCUMENTS REVIEWED. For purposes of this opinion, we have examined only
the following documents and have made no other investigation or inquiry:

(a)    The Credit Agreement;

(b)    The Security Agreement;

(c)    The Financing Statements;

(d)    The Patent and Trademark Security Agreement (collectively with the
Security Agreement and the Financing Statements, the “Collateral Documents”);

(e)    The Collateral Access Agreement;

(f)    The Proforma Compliance Certificate;

(g)    The Closing Certificates of each of the Borrowers; and

(h)    The Certificates of Incorporation or Articles of Incorporation and Bylaws
for each of the Borrowers that is a corporation and the Certificate of Formation
and operating agreement for the Borrower that is a limited liability company and
the other documents listed in Section 4(e) of this opinion.

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

For purposes of this Opinion, the Credit Agreement, the Security Agreement, the
Patent and Trademark Security Agreement and the Financing Statements are
collectively referred to as the “Loan Documents.”

For purposes of this opinion, we have examined such questions of law and fact as
we have deemed necessary or appropriate. We have also examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, corporate records, certificates of public officials and
officers of each of the Loan Parties, and other instruments and have conducted
such other investigations of fact and law as we have deemed necessary or
advisable for purposes of this opinion.

2.    OPINIONS. Based on the foregoing and subject to the assumptions,
qualifications, and limitations set forth below, we are of the opinion that:

(a)    Each Loan Party (i) is a corporation or limited liability company validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization,
(ii) has the requisite corporate or limited liability company power and
authority, as the case may be, to carry on its business as now conducted and
(iii) is in good standing in each jurisdiction set forth on Exhibit B attached
hereto.

(b)    The Transactions (i) are within each Loan Party’s corporate or limited
liability company power, as applicable, and (ii) have been duly authorized by
all necessary corporate action or limited liability company action, as
applicable. The Loan Documents to which the Loan Parties are party to have been
duly executed and delivered by each of the Loan Parties and constitute legal,
valid and binding obligations of the Loan Parties, enforceable in accordance
with their terms.

(c)    The Transactions (i) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
to be obtained by any Loan Party to execute, deliver and consummate the
Transactions, except such as have been obtained or made, (ii) will not violate
any applicable law or regulation or the charter, by-laws or other organizational
documents of any Loan Party or any order of any Governmental Authority to which
the any Loan Party is a party or by which it is bound, (iii) will not violate or
result in a default under any indenture, agreement or other instrument known to
us and binding upon any Loan Party or its assets, or give rise to a right
thereunder to require any payment to be made by such Loan Party, and (iv) will
not result in the creation or imposition of any Lien on any asset of any Loan
Party.

(d)    Except as set forth on Schedule 3.06 to the Credit Agreement, to our
knowledge there are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to our knowledge, threatened
against or affecting any Loan Party (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect or (ii) that involve the Loan Documents or the Transactions.

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

(e)    None of the Loan Parties is an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940.

(f)    The provisions of the Collateral Documents are sufficient to create in
favor of the Administrative Agent a security interest in all right, title and
interest of each Loan Party in those items and types of collateral described in
the Collateral Documents in which a security interest may be created under
Article 9 of the UCC except for federally registered copyrights, common law
copyrights, trademarks or service marks, or applications for any such marks, and
patents. Financing Statements on Form UCC1 have been duly authorized by each
Loan Party and have been duly filed in each filing office indicated on Exhibit A
hereto under the UCC. The description of the Collateral set forth in said
Financing Statements is sufficient to perfect a security interest in the items
and types of collateral described therein in which a security interest may be
perfected by the filing of a financing statement under the UCC in the offices
set forth on Exhibit A. Such filings are in proper form for filing and are
sufficient to perfect the security interest created by the Collateral Documents
in all right, title and interest of the Loan Parties in those items and types of
collateral described in the Collateral Documents in which a security interest
may be perfected by the filing of a financing statement under the UCC in the
offices set forth on Exhibit A.

(g)    The provisions of the Collateral Documents are effective to create a
valid security interest in that portion of the collateral consisting of
federally registered copyrights, common law copyrights, trademarks or service
marks, or applications for any such marks, and patents, to the extent that
(i) the applicable Loan Party has rights in such collateral, and (ii) a security
interest in such collateral may be granted pursuant to Article 9 of the UCC.
Under current law, upon the filing of the UCC1 Financing Statement in the
offices set forth on Exhibit A, all action necessary to perfect a security
interest in such collateral (with the exception of federally-registered
copyrights) will have been taken. Regarding federally-registered copyrights,
under current law, upon the recording of the transfer with the United States
Copyright Office, all action necessary to perfect a security interest in
federally-registered copyrights will have been taken. The federal statutes
governing trademarks and patents do not set forth the procedure for perfection
and priority of liens encumbering trademarks and patents in the same detail as
in the United States Copyright Act. Accordingly, certain courts have reached the
conclusion that the Lanham Act and the Patent Act do not preempt state law and
that recordation of a security interest with the United States Patent and
Trademark Office is not required to perfect an otherwise valid security
interest. In re Cybernetic Servs, Inc., 239 B.R. 917, 920 (B.A.P. 9th Cir.
1999); In re Together Dev. Corp., 227 B.R. 439, 441 (Bankr. D. Mass. 1988); In
re TR-3 Indus., 41 B.R. 128, 131 (Bankr. C.D. Cal. 1984). However, there is no
guarantee that filing the UCC1 Financing Statement in the manner described above
alone will be sufficient in the future to maintain a perfected security interest
in patents, federally registered trademarks or service marks or applications for
such marks.

3.    ASSUMPTIONS. With your permission, in rendering the opinions expressed in
paragraph 2 above, we have made the following assumptions. We have made these
assumptions without independent verification, and with the understanding that we
are under no duty to inquire or investigate regarding such matters.

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(a)    No Outside Agreements. All terms and conditions of, or relating to, the
Transactions contemplated by the Loan Documents are correctly and completely
embodied in the Loan Documents. The Lenders will receive no interest, charges,
fees or other benefits or compensation in the nature of interest in connection
with the transactions contemplated in the Loan Documents other than those that
the Loan Parties have agreed in writing in the Loan Documents to pay.

(b)    Genuineness, Authenticity and Conformity. All signatures not witnessed by
us are genuine, all documents submitted to us as originals are authentic, all
documents submitted to us as copies are accurate and complete copies of
authentic originals thereof. That each natural person who is executing any of
the Loan Documents on behalf of a Loan Party, and each natural person otherwise
involved in the Transactions, possesses the legal competency and capacity
necessary for such individual to execute such documents and/or to carry out such
individual’s role in the Transactions.

(c)    Enforceable as to Lenders and Administrative Agent. The Loan Documents,
and the transactions evidenced thereby, are valid, binding and enforceable
obligations with regard to the Lenders and the Administrative Agent in
accordance with their respective terms. That the Notes will be duly delivered
for value and for the consideration for in or contemplated by the Loan Documents
and that value has been given for the creation of any security interest.

(d)    Title. The Loan Parties hold requisite title and rights to the
Collateral.

(e)    Mistake. The Loan Documents accurately and completely describe and
contain the parties’ mutual intent, understanding, and business purposes, and
that there are no oral or written statements, agreements, understandings, or
negotiations, nor useage of trade or course of prior dealing among the parties,
that directly or indirectly modify, define, amend, supplement, or vary, or
purport to modify, define, amend, supplement, or vary, any of the terms of the
Loan Documents or any of the parties’ rights or obligations thereunder, by
waiver or otherwise. There has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence in connection with the
Transactions contemplated by the Loan Documents.

(f)    Conduct. All parties to the Loan Documents have complied and will comply
with any requirement of good faith and fair dealing and will act in a
commercially reasonable manner. Immediately after delivery, the applicable
documents will be properly filed or recorded in the appropriate governmental
offices, that Lenders will timely file all necessary continuation statements,
and that all fees, charges, and taxes due as owing as of this date will have
been paid. Where tangible personal property is to be acquired after the date
hereof, that a security interest is created under the after-acquired property
clause of the Security Agreement.

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4.    QUALIFICATIONS. The opinions expressed in paragraph 2 above are subject to
the following qualifications:

(a)    Bankruptcy-Insolvency; Equitable Principles. The enforceability of the
Loan Documents may be subject to or limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar laws relating to or
affecting the rights of creditors generally or (ii) general principles of
equity. We advise you that there are a number of inherent limitations in an
opinion of this nature, including the pervasive equitable powers and
discretionary judgment of the bankruptcy judge reviewing the facts and
circumstances as they may exist at a future time, the overriding congressional
goal of promoting reorganizations to which other legal rights and policies may
be subordinated, the interplay of facts, circumstances, relationship and other
considerations, some of which may not now exist, and the nature of the
bankruptcy process. Further, an opinion is not a guarantee of what a court would
hold; rather it is an informed judgment as to a specific question of law. Thus,
this opinion is not a prediction of what a court would actually hold, but an
opinion as to the decision a court would reach if the issue were properly
presented to it and the court followed existing legal precedents applicable to
the subject matter of this opinion.

(b)    Surety. Enforceability of the Loan Documents is subject to the
qualification that certain waivers, procedures, remedies and other provisions of
the Loan Documents may be unenforceable under or limited by the law of the State
of Arizona; however, such law does not in our opinion, substantially prevent the
practical realization of the benefits or security intended by the Loan
Documents, except that the application of principles of guaranty and suretyship
to the acts or omissions of the Lender after execution and delivery of the
Guaranty may prevent the practical realization of the benefits intended by the
Guaranty through a release or discharge of a guarantor.

(c)    UCC. We express no opinion as to matters of title, priority or perfection
of liens or priority or perfection of security interests except as specifically
set forth herein. Our opinion as to fixtures and personal property cover only
(i) security interests created under Chapter 9 (Revised Article 9) of the
Arizona UCC, (ii) UCC collateral or transactions, and (iii) UCC perfection
methods that are limited to filing a financing statement.

(d)    Further Qualifications. Without limiting the generality of clause
(a) above, we express no opinion with respect to: (1) the availability of
specific performance or other equitable remedies for noncompliance with any of
the provisions contained in the Loan Documents; (2) the enforceability of any
provision in the Loan Documents relating to the effect of laws which may be
enacted in the future; (3) the enforceability of provisions in the Loan
Documents purporting to waive the effect of applicable laws to the extent such
waivers are prohibited by such applicable laws; (4) the effectiveness of any
power-of-attorney given under the Loan Documents which is intended to bind
successors and assigns which have not granted such powers by a power-
of-attorney specifically executed by them; (5) provisions related to rights or
remedies available to any party for violations or breaches of any provisions
which are immaterial or the enforcement of

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which would be unreasonable under the then-existing circumstances; (6) the
rights or remedies available to any party for violations or breaches which are
the proximate result of actions taken by any party to the Loan Documents other
than the party against whom enforcement is sought, which actions such other
party is not entitled to take pursuant to the Loan Documents or which otherwise
violate applicable laws; (7) any self-help provisions; (8) provisions in the
Loan Documents that provide that certain rights or obligations are absolute or
unconditional or purport to give a party the right to make any conclusive
determination in its sole discretion; (9) the rights or remedies available to
any party which takes discretionary action which is arbitrary, unreasonable or
capricious, or is not taken in good faith or in a commercially reasonable
manner; (10) except with respect to any account subject to a control agreement,
the right of the Lender to set off against funds held in any account maintained
with the Lender by a Loan Party and which account is designated or contains
funds that the Lender is aware have been set aside for special purposes, such as
payroll accounts; (11) provisions that provide for the enforceability of the
remaining terms and provisions of the applicable Loan Document in circumstances
in which certain other terms and provisions of such Loan Document are illegal or
unenforceable; (12) any provision of the Loan Documents that purports to provide
that the terms thereof may not be varied or waived except in writing to the
extent such provision is inconsistent with course of performance and/or usage of
the trade or the doctrine of promissory estoppel; or (13) any provision of any
Loan Document purporting to reinstate, as against any obligor or guarantor,
obligations or liabilities of such obligor or guarantor which have been avoided
or which have arisen from transactions which have been rescinded or the payment
of which has been required to be returned by any court of competent
jurisdiction.

(e)    Reliance as to Organization. Our opinions set forth in paragraph 2(a) and
the first sentence of paragraph 2(b) above are based solely upon our review of
(i) certificates issued by the Delaware Secretary of State and Iowa Secretary of
State (as to formation or incorporation, as applicable) or the good standing
certificates issued by certain states (as to qualification), copies of which
have been provided to you, and is rendered solely as of the date of each such
certificate, (ii) each Loan Party’s respective certificate of formation or
incorporation or articles of incorporation, as applicable, and bylaws or
operating agreement, as applicable, in each case as represented in an officer’s
certificate of each Loan Party to be in effect on the date hereof, (iii) the
applicable resolutions of each of the Loan Parties approving the Loan Documents
and related Transactions; and (iv) applicable law.

5. LIMITATIONS. This opinion letter is issued subject to the following
limitations:

(a)    No Title Opinion. We have made no examination of title to any Collateral
and we express no opinion with respect thereto nor with respect to the priority
of the liens and security interests created by the Loan Documents and the
Financing Statements. We understand you are relying upon your due diligence and
UCC searches for assurances of this nature.

(b)    Penalties. We express no opinion as to the enforceability of any
provision of the Loan Documents that permits any party to charge a late fee or
to increase the rate of interest in the event of delinquency or default or to
collect a prepayment penalty or similar charge.

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(c)    Responsibility. We express no opinion as to the enforceability of any
provision that purports to absolve Lender or the Administrative Agent from
responsibility for its conduct.

(d)    Securities or Anti-trust Laws. Except for our opinion in paragraph 2(e),
we express no opinion with respect to any securities or antitrust laws.

(e)    Security Interests. With respect to our opinion in paragraphs 2(f) and
2(g) above, we bring to your attention that (i) continuation statements relating
to the Financing Statements must be filed within six months prior to the date
which is five years after the date of the original filing in order to continue
the effectiveness of the Financing Statements beyond the date which is five
years after the date of the original filing, and (ii) additional filings may be
necessary if any of the Loan Parties changes its respective name or identity.
Further, with respect to our opinion in paragraphs 2(f) and 2(g) above, we
express no opinion as to the enforceability or perfection of any security
interests in Collateral consisting of after-acquired property, except in each
case to the extent such property is properly classified in a category
specifically referred to in the grant clause of the Collateral Documents.

(f)    Licensed Only in Arizona. We are licensed to practice law only in the
State of Arizona and we do not purport to be experts on, or to express any
opinion with respect to the effect of any laws other than the laws of the State
of Arizona, Federal laws of general applicability, and, with respect to the
opinions expressed in paragraphs 2(a) and 2(b), the laws of the State of
Delaware governing corporations and limited liability companies. We note in this
regard that the Loan Documents purport to be governed by the laws of the State
of New York and that Diamond is a corporation formed under the laws of the State
of Iowa. We have no knowledge of the laws of New York or Iowa and render no
opinion thereon. For purposes of this opinion, we have assumed, with your
permission, that the laws of the State of New York and the State of Iowa are
identical in all material respects to the laws of Arizona. We express no opinion
about the reasonableness of this assumption.

(g)    Subsequent Events. We undertake no obligation to advise you of facts or
changes in law occurring after the date of this opinion letter which might
affect the opinions expressed herein.

(h)    Captions. The captions in this opinion are for convenience of reference
only and shall not limit, amplify or otherwise modify the provisions hereof.

(i)    Restriction on Use. This opinion is furnished to the Administrative Agent
and is solely for the benefit of the Administrative Agent and the Lenders in
connection with the Transactions contemplated by the Loan Documents and may not
be: (i) used or relied upon by, or quoted or delivered to, any other person or
entity other than the Administrative Agent and the Lenders respective successors
and assigns, or (ii) used or relied upon for any purpose other than the purpose
contemplated in the Transactions without, in each instance, our prior written
consent.

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(j)    Knowledge. As used in this opinion and unless otherwise specified herein,
the phrases “to our knowledge,” “known to us” and word of similar import refer
to the actual present knowledge of lawyers currently in the firm who have
performed substantive legal services on behalf of the Loan Parties in connection
with the Transactions.

 

Very Truly Yours, OSBORN MALEDON, P.A.

By    

   

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EXHIBIT A

FILED FINANCING STATEMENTS

ON FORM UCC-1

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EXHIBIT B

GOOD STANDING CERTIFICATES RECEIVED

Heska Corporation

Jurisdictions: Delaware

Diamond Animal Health, Inc.

Jurisdictions: Iowa

Heska Imaging, LLC

Jurisdictions: Delaware

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EXHIBIT C-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 27, 2017 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC, as Borrowers, the other Loan Parties party hereto, the Lenders
party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and Beneficial Owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to any Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower
Representative with a certificate of its non-U.S. Person status on IRS Form
W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform the Borrower Representative
and the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower Representative and the Administrative Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:_________________________ Name:_______________________
Title:________________________

Date: ________ __, 20[    ]

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EXHIBIT C-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 27, 2017 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC, as Borrowers, the other Loan Parties party hereto, the Lenders
party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and Beneficial Owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable.
By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender in writing, and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:_________________________ Name:_______________________
Title:________________________

Date: ________ __, 20[    ]

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EXHIBIT C-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 27, 2017 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC, as Borrowers, the other Loan Parties party hereto, the Lenders
party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole Beneficial Owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of any
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form
W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s
Beneficial Owners that is claiming the portfolio interest exemption. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:_________________________ Name:_______________________
Title:________________________

Date: ________ __, 20[    ]

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EXHIBIT C-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of July 27, 2017 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC, as Borrowers, the other Loan Parties party hereto, the Lenders
party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole Beneficial Owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of any Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to any
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower
Representative with IRS Form W-8IMY accompanied by one of the following forms
from each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or
(ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable, from each of such partner’s/member’s Beneficial Owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform the Borrower Representative
and the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower Representative and the Administrative Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:_________________________ Name:_______________________
Title:________________________

Date: ________ __, 20[    ]

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EXHIBIT D

COMPLIANCE CERTIFICATE

 

To: The Lenders party to the

Credit Agreement described below

This Compliance Certificate (“Certificate”), for the period ended _______ __,
20__, is furnished pursuant to that certain Credit Agreement dated as of
July 27, 2017 (as amended, modified, renewed or extended from time to time, the
“Agreement”) among Heska Corporation, Diamond Animal Health, Inc. and Heska
Imaging, LLC (the “Borrowers”), the other Loan Parties, the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
and as the Issuing Bank and Swingline Lender. Unless otherwise defined herein,
capitalized terms used in this Certificate have the meanings ascribed thereto in
the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES ON BEHALF OF THE BORROWERS THAT:

 

1. I am the                of the Company and I am authorized to deliver this
Certificate on behalf of the Company and its Subsidiaries;

 

2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the compliance of the Company
and its Subsidiaries with the Agreement during the accounting period covered by
the attached financial statements (the “Relevant Period”);

 

3. The attached financial statements of the Company and, as applicable, its
Subsidiaries and/or Affiliates for the Relevant Period: (a) have been prepared
on an accounting basis (the “Accounting Method”) consistent with the
requirements of the Agreement and, except as may have been otherwise expressly
agreed to in the Agreement, in accordance with GAAP consistently applied, and
(b) to the extent that the attached are not the Company’s annual fiscal year end
statements, are subject to normal year-end audit adjustments and the absence of
footnotes;

 

4. The examinations described in paragraph 2 did not disclose and I have no
knowledge of, except as set forth below, (a) the existence of any condition or
event which constitutes a Default or an Event of Default under the Agreement or
any other Loan Document during or at the end of the Relevant Period or as of the
date of this Certificate or (b) any change in the Accounting Method or in the
application thereof that has occurred since the date of the annual financial
statements delivered to the Administrative Agent in connection with the closing
of the Agreement or subsequently delivered as required in the Agreement;

 

5. I hereby certify that, except as set forth below, no Loan Party has changed
(i) its name, (ii) its chief executive office, (iii) its principal place of
business, (iv) the type of entity it is or (v) its state of incorporation or
organization without having given the Administrative Agent the notice required
by the Security Agreement;

 

6.

The representations and warranties of the Loan Parties set forth in the Loan
Documents are true and correct in all material respects as of the date hereof,
except (i) to the extent that any such representation or warranty specifically
refers to an earlier date, in which

 

1

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  case it is true and correct in all material respects only as of such earlier
date, and (ii) that any representation or warranty which is subject to any
materiality qualifier is true and correct in all respects;

 

7. Schedule I attached hereto sets forth financial data and computations
evidencing the Company’s compliance with certain covenants of the Agreement, all
of which data and computations are true, complete and correct; and

Described below are the exceptions, if any, referred to in paragraph 4 hereof by
listing, in detail, the (i) nature of the condition or event, the period during
which it has existed and the action which the Company has taken, is taking, or
proposes to take with respect to each such condition or event or (ii) change in
the Accounting Method or the application thereof and the effect of such change
on the attached financial statements:

 

                       

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered by the undersigned on behalf of the
Borrowers this      day of                 ,                 .

 

 

By:  

 

        Name:  

 

        Title:  

 

 

2

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Schedule I to Compliance Certificate

Compliance as of _________, ____ with

Provisions of Section 6.12(a) and (b) of the Agreement

 

3

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EXHIBIT E

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [    ], is entered into
between ________________________________, a _________________ (the “New
Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative
agent (the “Administrative Agent”) under that certain Credit Agreement dated as
of July 27, 2017 (as the same may be amended, modified, extended or restated
from time to time, the “Credit Agreement”) among HESKA CORPORATION, DIAMOND
ANIMAL HEALTH, INC. and HESKA IMAGING, LLC (the “Borrowers”), the other Loan
Parties party thereto, the Lenders party thereto and the Administrative Agent
for the Lenders. All capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Credit Agreement.

The New Subsidiary and the Administrative Agent, for the benefit of the Secured
Parties, hereby agree as follows:

1.    The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the
Credit Agreement and shall have all of the obligations of a Loan Party and a
Loan Guarantor thereunder as if it had executed the Credit Agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Agreement,
including without limitation (a) all of the representations and warranties of
the Loan Parties set forth in Article III of the Credit Agreement, (b) all of
the covenants set forth in Articles V and VI of the Credit Agreement and (c) all
of the guaranty obligations set forth in Article X of the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
New Subsidiary, subject to the limitations set forth in Section 10.10 and 10.13
of the Credit Agreement, hereby guarantees, jointly and severally with the other
Loan Guarantors, to the Administrative Agent and the Lenders, as provided in
Article X of the Credit Agreement, the prompt payment and performance of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) strictly in accordance with
the terms thereof and agrees that if any of the Guaranteed Obligations are not
paid or performed in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and
severally together with the other Loan Guarantors, promptly pay and perform the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.

2.    If required, the New Subsidiary is, simultaneously with the execution of
this Agreement, executing and delivering such Collateral Documents (and such
other documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.

3.    The address of the New Subsidiary for purposes of Section 9.01 of the
Credit Agreement is as follows:

 

 

 

    

 

    

 

  

 

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4.    The New Subsidiary hereby waives acceptance by the Administrative Agent
and the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.

5.    This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.

6.    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Secured Parties, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.

 

[NEW SUBSIDIARY]

By:     

Name:     

Title: 

   

 

Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

By:     

Name:     

Title: 

   

 

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