EXHIBIT 10.1 

 

 

SEVENTH AMENDMENT
TO REVOLVING CREDIT, TERM LOAN

AND SECURITY AGREEMENT

 

SEVENTH AMENDMENT, dated as of April 28, 2020 (this "Amendment"), to the
Revolving Credit, Term Loan and Security Agreement, dated as of March 31, 2017
(as amended, amended and restated, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), by and among GEE GROUP INC., an
Illinois corporation ("Holdings"), SCRIBE SOLUTIONS, INC., a Florida corporation
("Scribe"), AGILE RESOURCES, INC., a Georgia corporation ("Agile"), ACCESS DATA
CONSULTING CORPORATION, a Colorado corporation ("Access"), TRIAD PERSONNEL
SERVICES, INC., an Illinois corporation ("Triad Personnel"), TRIAD LOGISTICS,
INC., an Ohio corporation ("Triad Logistics"), PALADIN CONSULTING, INC., a Texas
corporation ("Paladin"), BMCH, INC., an Ohio corporation ("BMCH"), GEE GROUP
PORTFOLIO INC., a Delaware corporation and the surviving corporation of the
merger of SNI HOLDCO INC., a Delaware corporation, with and into GEE Group
Portfolio Inc., a Delaware corporation ("SNI Holdings"), and SNI COMPANIES, a
Delaware corporation ("SNI" and together with Holdings, Scribe, Agile, Access,
Triad Personnel, Triad Logistics, Paladin, BMCH, SNI Holdings and each other
Person joined thereto as a borrower from time to time, collectively, the
"Borrowers" and each a "Borrower"), each Subsidiary of Holdings listed as a
"Guarantor" on the signature pages thereto (together with each other Person
joined thereto as a guarantor from time to time, collectively, the "Guarantors",
and each a "Guarantor", and together with the Borrowers, collectively, the "Loan
Parties" and each a "Loan Party"), the lenders which now are or which thereafter
become a party thereto that make Revolving Advances thereunder (together with
their respective successors and assigns, collectively, the "Revolving Lenders"
and each a "Revolving Lender"), the lenders which now are or which thereafter
become a party thereto that made or acquire an interest in the Term Loans
(together with their respective successors and assigns, collectively, the "Term
Loan Lenders" and each a "Term Loan Lender", and together with the Revolving
Lenders, collectively, the "Lenders" and each a "Lender"), MGG INVESTMENT GROUP
LP ("MGG"), as administrative agent for the Lenders (together with its
successors and assigns, in such capacity, the "Administrative Agent"), as
collateral agent for the Lenders (together with its successors and assigns, in
such capacity, the "Collateral Agent"), and as term loan agent (together with
its successors and assigns, in such capacity, the "Term Loan Agent" and together
with the Administrative Agent and the Collateral Agent, each an "Agent" and,
collectively, the "Agents").

 

WHEREAS, the Loan Parties, the Agents and the Lenders are parties to the Credit
Agreement, pursuant to which the Lenders have made and may hereafter make
certain loans and have provided and may hereafter provide certain other
financial accommodations to the Borrowers;

 

WHEREAS, the Loan Parties have requested that the Agents and the Lenders amend
certain terms and conditions of the Credit Agreement; and

 

WHEREAS, the Agents and the Lenders are willing to amend such terms and
conditions of the Credit Agreement on the terms and conditions set forth herein.

 

 

 

 

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

1. DEFINITIONS. ALL TERMS USED HEREIN THAT ARE DEFINED IN THE CREDIT AGREEMENT
AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE
CREDIT AGREEMENT.

 

2. AMENDMENTS. THE CREDIT AGREEMENT IS HEREBY AMENDED TO (A) DELETE THE RED OR
GREEN STRICKEN TEXT (INDICATED TEXTUALLY IN THE SAME MANNER AS THE FOLLOWING
EXAMPLES: STRICKEN TEXT AND STRICKEN TEXT); AND (B) TO ADD THE BLUE OR GREEN
DOUBLE-UNDERLINED TEXT (INDICATED TEXTUALLY IN THE SAME MANNER AS THE FOLLOWING
EXAMPLES: DOUBLE-UNDERLINED TEXT AND DOUBLE-UNDERLINED TEXT), IN EACH CASE, AS
SET FORTH IN THE MARKED COPY OF THE CREDIT AGREEMENT ATTACHED AS ANNEX I HERETO
AND MADE A PART HEREOF FOR ALL PURPOSES.

 

3. LIMITED WAIVER.

 

(a) Subject to satisfaction of the conditions set forth in Section 5 hereof, and
in reliance upon the representations and warranties of Loan Parties set forth
herein, the Agents and the Required Lenders hereby waive any Defaults and Events
of Default under the Credit Agreement that have solely arisen or would otherwise
solely arise under Section 10.5(i) of the Credit Agreement solely by reason of
the Loan Parties failing to comply with the financial covenants in Section 6.5
of the Credit Agreement for the period ending March 31, 2020.

 

(b) The waiver in this Section 3 shall be effective only in this specific
instance and for the specific purpose set forth herein and does not allow for
any other or further departure from the terms and conditions of the Credit
Agreement or any Other Document, which terms and conditions shall continue in
full force and effect.

 

4. REPRESENTATIONS AND WARRANTIES. EACH LOAN PARTY HEREBY REPRESENTS AND
WARRANTS TO THE AGENTS AND THE LENDERS AS FOLLOWS:

 

(a) Representations and Warranties; No Event of Default. (i) The representations
and warranties herein, in the Credit Agreement and in each Other Document,
certificate or other writing delivered by or on behalf of the Loan Parties to
any Agent or any Lender pursuant to the Credit Agreement or any Other Document
on or prior to the Amendment No. 7 Effective Date are true and correct in all
material respects (except that such materiality qualifier shall not be applied
to any representations or warranties that already are qualified or modified as
to "materiality" or "Material Adverse Effect" in the text thereof, which
representations and warranties shall be true and correct in all respects subject
to such qualification) on and as of the Amendment No. 7 Effective Date as though
made on and as of such date (unless such representations or warranties are
stated to relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects (except that such
materiality qualifier shall not be applied to any representations or warranties
that already are qualified or modified as to "materiality" or "Material Adverse
Effect" in the text thereof, which representations and warranties shall be true
and correct in all respects subject to such qualification) on and as of such
earlier date), other than (A) the representations and warranties contained in
Section 5.5(a) and (b) of the Credit Agreement to the extent that the Pro Forma
Balance Sheet and the Projections were prepared in part based on representations
and warranties made by the Acquired Companies and/or the SNIH Stockholders (as
each such term is defined in the SNI Acquisition Documents) in respect of the
balance sheet and the cash flow and balance sheet projections of the Acquired
Companies that were not true and correct in all material respects as of the
Closing Date and (B) the representations and warranties contained in Section
5.19 of the Credit Agreement that there has been no breach of any material term
or condition of the SNI Acquisition Documents to the extent that any
representations and warranties made by the Acquired Companies and/or the SNIH
Stockholders were not true and correct in all material respects as of the
Closing Date, and (ii) no Default or Event of Default has occurred and is
continuing as of the Amendment No. 7 Effective Date or would result from this
Amendment becoming effective in accordance with its terms.

 

  -2-

 

 

(b) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation, or
limited liability company duly organized, validly existing and in good standing
under the laws of the state or jurisdiction of its organization, (ii) has all
requisite power and authority to conduct its business as now conducted and as
presently contemplated and to execute this Amendment and deliver each Other
Document to which it is a party, and to consummate the transactions contemplated
hereby and by the Credit Agreement, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except (solely for the purposes of this
subclause (iii)) where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.

 

(c) Authorization, Etc. The execution, delivery and performance of this
Amendment by the Loan Parties, and the performance of the Credit Agreement, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene (A) any of its Organizational Documents, (B) any material law or
regulation, or any judgment, order or decree of any Governmental Body or (C) any
Material Contract binding on or otherwise affecting it or any of its properties,
(iii) do not and will not result in or require the creation of any Lien (other
than pursuant to any Other Document) upon or with respect to any of its
properties, and (iv) do not and will not result in any default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to its operations or any of its
properties, except, in the case of clause (iv), to the extent where such
contravention, default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal could not reasonably be expected to have a Material
Adverse Effect.

 

(d) Governmental Approvals. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Body is required in connection
with the due execution, delivery and performance by any Loan Party of this
Amendment or any Other Document to which it is or will be a party.

 

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

 

  -3-

 

 

5. CONDITIONS TO EFFECTIVENESS. THIS AMENDMENT SHALL BECOME EFFECTIVE ONLY UPON
SATISFACTION IN FULL, IN A MANNER SATISFACTORY TO THE AGENTS, OF THE FOLLOWING
CONDITIONS PRECEDENT (THE FIRST DATE UPON WHICH ALL SUCH CONDITIONS SHALL HAVE
BEEN SATISFIED BEING HEREINAFTER REFERRED TO AS THE "AMENDMENT NO. 7 EFFECTIVE
DATE"):

 

(a) Payment of Fees, Etc. The Borrowers shall have paid, on or before the
Amendment No. 7 Effective Date, all fees (including the fees of Schulte Roth &
Zabel LLP, counsel to the Agents and the Lenders), costs, expenses and taxes
then payable pursuant to Article III and Section 16.09 of the Credit Agreement.

 

(b) Representations and Warranties. The representations and warranties contained
in this Amendment, the Credit Agreement and in each Other Document shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations or warranties that already are
qualified or modified as to "materiality" or "Material Adverse Effect" in the
text thereof, which representations and warranties shall be true and correct in
all respects subject to such qualification) on and as of the Amendment No. 7
Effective Date as though made on and as of such date, (i) except to the extent
that any such representation or warranty expressly relates solely to an earlier
date (in which case such representation or warranty shall be true and correct on
and as of such earlier date) and (ii) other than (A) the representations and
warranties contained in Section 5.5(a) and (b) of the Credit Agreement to the
extent that the Pro Forma Balance Sheet and the Projections were prepared in
part based on representations and warranties made by the Acquired Companies
and/or the SNIH Stockholders (as each such term is defined in the SNI
Acquisition Documents) in respect of the balance sheet and the cash flow and
balance sheet projections of the Acquired Companies that were not true and
correct in all material respects as of the Closing Date and (B) the
representations and warranties contained in Section 5.19 of the Credit Agreement
that there has been no breach of any material term or condition of the SNI
Acquisition Documents to the extent that any representations and warranties made
by the Acquired Companies and/or the SNIH Stockholders were not true and correct
in all material respects as of the Closing Date.

 

(c) No Default; Event of Default. No Default or Event of Default shall have
occurred and be continuing on the Amendment No. 7 Effective Date or result from
this Amendment becoming effective in accordance with its terms.

 

(d) Delivery of Documents. The Agents shall have received on or before the
Amendment No. 7 Effective Date, this Amendment, duly executed by the Loan
Parties, each Agent and each Lender.

 

(e) Material Adverse Effect. The Agents shall have determined, in their
reasonable judgment, that no event or development shall have occurred since
September 30, 2019, which could reasonably be expected to have a Material
Adverse Effect.

 

(f) Liens; Priority. The Agents shall be satisfied that the Collateral Agent has
been granted, and holds, for the benefit of the Agents and the Lenders, a
perfected, first priority Lien on and security interest in all of the
Collateral, subject only to Permitted Encumbrances, to the extent such Liens and
security interests are required pursuant to the Credit Agreement and the Other
Documents to be granted or perfected on or before the Amendment No. 7 Effective
Date.

 

  -4-

 

 

(g) Approvals. All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental Body
or other Person required in connection with the Credit Agreement and any Other
Document or the transactions contemplated thereby or the conduct of the Loan
Parties' business shall have been obtained or made and shall be in full force
and effect. There shall exist no claim, action, suit, investigation, litigation
or proceeding (including, without limitation, shareholder or derivative
litigation) pending or, to the knowledge of any Loan Party, threatened in any
court or before any arbitrator or Governmental Body which (i) relates to the
Credit Agreement and the Other Documents or the transactions contemplated
thereby or (ii) could reasonably be expected to have a Material Adverse Effect.

 

6. CONTINUED EFFECTIVENESS OF THE CREDIT AGREEMENT AND OTHER DOCUMENTS. EACH
LOAN PARTY HEREBY (I) ACKNOWLEDGES AND CONSENTS TO THIS AMENDMENT, (II) CONFIRMS
AND AGREES THAT THE CREDIT AGREEMENT AND EACH OTHER DOCUMENT TO WHICH IT IS A
PARTY IS, AND SHALL CONTINUE TO BE, IN FULL FORCE AND EFFECT AND IS HEREBY
RATIFIED AND CONFIRMED IN ALL RESPECTS EXCEPT THAT ON AND AFTER THE AMENDMENT
NO. 7 EFFECTIVE DATE ALL REFERENCES IN ANY SUCH OTHER DOCUMENT TO "THE CREDIT
AGREEMENT", THE "AGREEMENT", "THERETO", "THEREOF", "THEREUNDER" OR WORDS OF LIKE
IMPORT REFERRING TO THE CREDIT AGREEMENT SHALL MEAN THE CREDIT AGREEMENT AS
AMENDED OR MODIFIED BY THIS AMENDMENT, AND (III) CONFIRMS AND AGREES THAT TO THE
EXTENT THAT ANY SUCH OTHER DOCUMENT PURPORTS TO ASSIGN OR PLEDGE TO THE
COLLATERAL AGENT FOR THE BENEFIT OF THE AGENTS AND THE LENDERS, OR TO GRANT TO
THE COLLATERAL AGENT FOR THE BENEFIT OF THE AGENTS AND THE LENDERS A SECURITY
INTEREST IN OR LIEN ON, ANY COLLATERAL AS SECURITY FOR THE OBLIGATIONS OF THE
LOAN PARTIES FROM TIME TO TIME EXISTING IN RESPECT OF THE CREDIT AGREEMENT (AS
AMENDED HEREBY) AND THE OTHER DOCUMENTS, SUCH PLEDGE, ASSIGNMENT AND/OR GRANT OF
THE SECURITY INTEREST OR LIEN IS HEREBY RATIFIED AND CONFIRMED IN ALL RESPECTS.
THIS AMENDMENT DOES NOT AND SHALL NOT AFFECT ANY OF THE OBLIGATIONS OF THE LOAN
PARTIES, OTHER THAN AS EXPRESSLY PROVIDED HEREIN, INCLUDING, WITHOUT LIMITATION,
THE LOAN PARTIES' OBLIGATIONS TO REPAY THE LOANS IN ACCORDANCE WITH THE TERMS OF
CREDIT AGREEMENT, OR THE OBLIGATIONS OF THE LOAN PARTIES UNDER ANY OTHER
DOCUMENT TO WHICH THEY ARE A PARTY, ALL OF WHICH OBLIGATIONS SHALL REMAIN IN
FULL FORCE AND EFFECT. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE EXECUTION,
DELIVERY AND EFFECTIVENESS OF THIS AMENDMENT SHALL NOT OPERATE AS A WAIVER OF
ANY RIGHT, POWER OR REMEDY OF THE AGENTS OR ANY LENDER UNDER THE CREDIT
AGREEMENT OR ANY OTHER DOCUMENT, NOR CONSTITUTE A WAIVER OF ANY PROVISION OF THE
CREDIT AGREEMENT OR ANY OTHER DOCUMENT.

 

7. NO NOVATION. NOTHING HEREIN CONTAINED SHALL BE CONSTRUED AS A SUBSTITUTION OR
NOVATION OF THE OBLIGATIONS OUTSTANDING UNDER THE CREDIT AGREEMENT OR
INSTRUMENTS SECURING THE SAME, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT,
EXCEPT AS MODIFIED HEREBY.

 

8. NO REPRESENTATIONS BY AGENTS OR LENDERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES
THAT IT HAS NOT RELIED ON ANY REPRESENTATION, WRITTEN OR ORAL, EXPRESS OR
IMPLIED, BY ANY AGENT OR ANY LENDER, OTHER THAN THOSE EXPRESSLY CONTAINED
HEREIN, IN ENTERING INTO THIS AMENDMENT.

 

  -5-

 

 

9. Release.

 

(a) Each Loan Party hereby acknowledges and agrees that: (a) neither it nor any
of its Affiliates has any claim or cause of action against any Agent or any
Lender (or any of their respective Affiliates, officers, directors, employees,
attorneys, consultants or agents) under the Credit Agreement and the Other
Documents and (b) each Agent and each Lender has heretofore properly performed
and satisfied in a timely manner all of its obligations to such Loan Party and
its Affiliates under the Credit Agreement and the Other Documents.
Notwithstanding the foregoing, the Agents and the Lenders wish (and each Loan
Party agrees) to eliminate any possibility that any past conditions, acts,
omissions, events or circumstances would impair or otherwise adversely affect
any of the Agents' and the Lenders' rights, interests, security and/or remedies
under the Credit Agreement and the Other Documents. Accordingly, for and in
consideration of the agreements contained in this Amendment and other good and
valuable consideration, each Loan Party (for itself and its Affiliates and the
successors, assigns, heirs and representatives of each of the foregoing)
(collectively, the "Releasors") does hereby fully, finally, unconditionally and
irrevocably release and forever discharge each Agent, each Lender and each of
their respective Affiliates, officers, directors, employees, attorneys,
consultants and agents (collectively, the "Released Parties") from any and all
debts, claims, obligations, damages, costs, attorneys' fees, suits, demands,
liabilities, actions, proceedings and causes of action, in each case, whether
known or unknown, contingent or fixed, direct or indirect, and of whatever
nature or description, and whether in law or in equity, under contract, tort,
statute or otherwise, which any Releasor has heretofore had or now or hereafter
can, shall or may have against any Released Party by reason of any act, omission
or thing whatsoever done or omitted to be done on or prior to the Amendment No.
7 Effective Date and arising out of, connected with or related in any way to
this Amendment, the Credit Agreement or any Other Document, or any act, event or
transaction related or attendant thereto, or the agreements of any Agent or any
Lender contained therein, or the possession, use, operation or control of any of
the assets of each Loan Party, or the making of any Loans, or the management of
such Loans or the Collateral, in each case, on or prior to the Amendment No. 7
Effective Date.

 

(b) As to each and every claim released hereunder, each Loan Party hereby
represents that it has received the advice of legal counsel with regard to the
releases contained herein, and having been so advised, specifically waives the
benefit of each provision of applicable federal or state law (including without
limitation the laws of the state of New York), if any, pertaining to general
releases after having been advised by its legal counsel with respect thereto.

 

(c) Each Loan Party acknowledges that it may hereafter discover facts different
from or in addition to those now known or believed to be true with respect to
such claims, demands, or causes of action and agrees that this instrument shall
be and remain effective in all respects notwithstanding any such differences or
additional facts. Each Loan Party understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.

 

  -6-

 

 

(d) Each Loan Party, for itself and on behalf of its successors, assigns, and
officers, directors, employees, agents and attorneys, and any Person acting for
or on behalf of, or claiming through it, hereby absolutely, unconditionally and
irrevocably, covenants and agrees with and in favor of the Released Parties
above that it will not sue (at law, in equity, in any regulatory proceeding or
otherwise) the Released Parties on the basis of any claim released, remised and
discharged by such Person pursuant to this Section 9. Each Loan Party further
agrees that it shall not dispute the validity or enforceability of the Credit
Agreement or any of the Other Documents or any of its obligations thereunder, or
the validity, priority, enforceability or the extent of Collateral Agent's Lien
on any item of Collateral under the Credit Agreement or the Other Documents. If
any Loan Party or any of its respective successors, assigns, or officers,
directors, employees, agents and attorneys, or any Person acting for or on
behalf of, or claiming through it violate the foregoing covenant, such Person,
for itself and its successors, assigns and legal representatives, agrees to pay,
in addition to such other damages as the Released Parties may sustain as a
result of such violation, all reasonable attorneys' fees and costs incurred by
the Released Parties as a result of such violation.

 

10. FURTHER ASSURANCES. THE LOAN PARTIES SHALL EXECUTE ANY AND ALL FURTHER
DOCUMENTS, AGREEMENTS AND INSTRUMENTS, AND TAKE ALL FURTHER ACTIONS, AS MAY BE
REQUIRED UNDER APPLICABLE LAW OR AS ANY AGENT MAY REASONABLY REQUEST, IN ORDER
TO EFFECT THE PURPOSES OF THIS AMENDMENT.

 

11. LETTER AGREEMENTS. UPON THE OCCURRENCE OF THE AMENDMENT NO. 7 EFFECTIVE
DATE, EACH OF THE (A) SECOND AMENDED AND RESTATED LETTER AGREEMENT, DATED
DECEMBER 27, 2018, BETWEEN MGG AND HOLDINGS AND (B) LETTER AGREEMENT, DATED
DECEMBER 27, 2018, BETWEEN CM FINANCE INC. AND HOLDINGS SHALL BE TERMINATED AND
OF NO FURTHER FORCE AND EFFECT.

 

12. MISCELLANEOUS.

 

(a) This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of this Amendment by
facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart of this Amendment.

 

(b) Section and paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Amendment for any other
purpose.

 

(c) This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York.

 

(d) Each Loan Party hereby acknowledges and agrees that this Amendment
constitutes an "Other Document" under the Credit Agreement. Accordingly, it
shall be an immediate Event of Default under the Credit Agreement if (i) any
representation or warranty made by any Loan Party under or in connection with
this Amendment shall have been incorrect in any respect when made or deemed
made, or (ii) any Loan Party shall fail to perform or observe any term, covenant
or agreement contained in this Amendment.

 

(e) Any provision of this Amendment that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

[Remainder of page intentionally left blank.]

 

  -7-

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the date set forth on the first page hereof.

 

BORROWERS:                              

GEE GROUP  INC.

 

By:      ________________________

Name: 

Title:

 

SCRIBE SOLUTIONS INC.

 

By:      ________________________

Name: 

Title:

 

AGILE RESOURCES, INC.

 

By:      ________________________

Name: 

Title:

 

ACCESS DATA CONSULTING CORPORATION

 

By:      ________________________

Name: 

Title:

 

TRIAD PERSONNEL SERVICES, INC.

 

By:      ________________________

Name: 

Title:

 

TRIAD LOGISTICS, INC.

 

By:      ________________________

Name: 

Title:

 

PALADIN CONSULTING, INC.

 

By:      ________________________

Name: 

Title:

 

 

 

 

 

 

 

BMCH, INC.

 

By:      ________________________

Name: 

Title:

 

GEE GROUP PORTFOLIO INC.

 

By:      ________________________

Name: 

Title:

 

SNI COMPANIES

 

By:      ________________________

Name: 

Title:

 

 

 

 

 

AGENTS:

 

MGG INVESTMENT GROUP LP,

as Administrative Agent, Collateral Agent and Term Loan Agent

 

By:  MGG GP LLC, its general partner

 

By:      __________________________

Name: 

Title:   

LENDERS:

MGG (BVI) LIMITED, as a

Revolving Lender

 

By:      ___________________________

Name: 

Title:   

 

 

MGG SF EVERGREEN UNLEVERED MASTER FUND II (CAYMAN) LP, as a

Term Loan Lender and a Revolving Lender

 

By:  MGG Investment Group GP II LLC,

its general partner

 

By:      ___________________________

Name: 

Title:   

 

MGG SF DRAWDOWN UNLEVERED FUND LP, as a

Term Loan Lender and a Revolving Lender

 

By:  MGG Investment Group GP LLC, its general partner

 

By:      __________________________

Name: 

Title:   

 

 

 

 

 

MGG SF EVERGREEN UNLEVERED FUND LP, as a

Term Loan Lender and a Revolving Lender

 

By:  MGG Investment Group GP LLC, its general partner

 

By:      __________________________

Name: 

Title:   

 

MGG SF EVERGREEN MASTER FUND (CAYMAN) LP, as a

Revolving Lender

 

By:  MGG Investment Group GP LLC, its general partner

 

By:      __________________________

Name: 

Title:   

 

MGG SF DRAWDOWN MASTER FUND (CAYMAN) LP, as a

Revolving Lender

 

By:  MGG Investment Group GP II LLC, its general partner

 

By:      __________________________

Name: 

Title:   

 

 

 

 

 

 

 

MGG INSURANCE FUND SERIES OF INTERESTS IN SALI MULTI-SERIES FUND, LP (IDF), as a

Term Loan Lender

 

By:      MGG Investment Group LP, its investment sub-adviser

 

By:      MGG GP LLC, its general partner

 

By:                                                                 

Name: Kevin Griffin

Title: Chief Executive Officer

 

MGG OFFSHORE FUNDING I, LLC, as a

Term Loan Lender

 

By:  MGG Offshore Holding I LLC,

its sole member

 

By:  MGG Investment Group LP, its manager

 

By:      MGG GP LLC, its general partner

 

By:                                                                 

Name: Kevin Griffin

Title: Chief Executive Officer

 

MGG ONSHORE FUNDING II, LLC, as a

Term Loan A Lender

 

By:  MGG Onshore Holding II LLC,

its sole member

 

By:  MGG (BVI) Limited, its sole member

 

By:                                                                 

Name: Kevin Griffin

Title: Authorized Signatory

 

 

 

 

 

ANNEX I – CONFORMED CREDIT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

  

 

CONFORMED THROUGH SIXTHANNEX I TO SEVENTH AMENDMENT

 

REVOLVING CREDIT, TERM LOAN

AND

 SECURITY AGREEMENT

 

PNC BANK, NATIONAL ASSOCIATION

MGG INVESTMENT GROUP LP,

(AS ADMINISTRATIVE AGENT AND, COLLATERAL AGENT)

 

 AND MGG INVESTMENT GROUP LP,

(AS TERM LOAN AGENT)

 

THE LENDERS PARTY HERETO

WITH

 

GEE GROUP INC.

SCRIBE SOLUTIONS, INC.

AGILE RESOURCES, INC.

ACCESS DATA CONSULTING CORPORATION

TRIAD PERSONNEL SERVICES, INC.

TRIAD LOGISTICS, INC.

PALADIN CONSULTING, INC.

BMCH, INC.

GEE GROUP PORTFOLIO INC.

SNI COMPANIES

(AS BORROWERS)

AND

 

EACH PERSON JOINED AS A BORROWER OR GUARANTOR HERETO

(COLLECTIVELY, LOAN PARTIES)

 

March 31, 2017

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 Page

 

 

 

 

 

 

I. DEFINITIONS.

 

1

 

1.1

Accounting Terms

 

21

 

1.2

General Terms

 

2

 

1.3

Uniform Commercial Code Terms

 

4938

 

1.4

Certain Matters of Construction

 

4939

 

1.5

Fiscal Periods

 

5039

 

II. ADVANCES, PAYMENTS.

 

5039

 

2.1

Revolving Advances

 

5039

 

2.2

Procedures for Requesting Revolving Advances; Procedures for Selection of
Applicable Interest Rates for All Advances

 

5140

 

2.3

Term Loans

 

5342

 

2.4

Swing Loans

 

5442

 

2.5

Disbursement of Advance Proceeds

 

5543

 

2.6

Making and Settlement of Advances

 

5643

 

2.7

Maximum Advances

 

5845

 

2.8

Manner and Repayment of Advances

 

5845

 

2.9

Repayment of Excess Advances

 

5946

 

2.10

Statement of Account

 

5946

 

2.11

Letters of Credit

 

5946

 

2.12

Issuance of Letters of Credit

 

6047

 

2.13

Requirements For Issuance of Letters of Credit

 

6147

 

2.14

Disbursements, Reimbursement

 

6148

 

2.15

Repayment of Participation Advances

 

6349

 

2.16

Documentation

 

6349

 

2.17

Determination to Honor Drawing Request

 

6449

 

2.18

Nature of Participation and Reimbursement Obligations

 

6449

 

2.19

Liability for Acts and Omissions

 

6551

 

2.20

Mandatory and Voluntary Prepayments

 

6752

 

2.21

Use of Proceeds

 

7155

 

2.22

Defaulting Lender

 

7155

 

2.23

Payment of Obligations

 

7457

 

2.24

Increase in Maximum Revolving Advance Amount

 

7457

 

III. INTEREST AND FEES.

 

7759

 

3.1

Interest

 

7759

 

3.2

Letter of Credit Fees

 

7760

 

3.3

Facility Fee

 

7960

 

3.4

Collateral Evaluation Fee, Servicing Fee and Yield Enhancement

 

7961

 

3.5

Computation of Interest and Fees

 

8061

 

3.6

Maximum Charges

 

8061

 

3.7

Increased Costs

 

8061

 

3.8

Basis For Determining Interest Rate Inadequate or Unfair

 

8162

 

3.9

Capital Adequacy

 

8263

 

3.10

Taxes

 

8363

 

3.11

[Reserved]

 

8564

 

3.12

Mitigation of Obligations.

 

8564

 

3.13

Applicable Premium

 

8564

 

3.14

Fee Letter

 

8665

 

3.15

Payment for Consents

 

65

 

3.15 Second Amendment3.16 Exit Fee

 

8665

 

3.17

Restructuring Fee

 

65

 

3.18

Share Delivery Limitations

 

66

 

 

  i

 

  

IV. COLLATERAL:  GENERAL TERMS

 

8668

 

4.1

Security Interest in the Collateral

 

8668

 

4.2

Perfection of Security Interest

 

8768

 

4.3

Preservation of Collateral

 

8768

 

4.4

Ownership and Location of Collateral

 

8869

 

4.5

Defense of Agents’ and Lenders’ Interests

 

8869

 

4.6

Inspection of Premises

 

8969

 

4.7

[Reserved].

 

8970

 

4.8

Receivables; Deposit Accounts and Securities Accounts

 

8970

 

4.9

Inventory

 

9272

 

4.10

Maintenance of Equipment

 

9272

 

4.11

Exculpation of Liability

 

9372

 

4.12

Financing Statements

 

9372

 

4.13

Investment Property Collateral.

 

9372

 

V. REPRESENTATIONS AND WARRANTIES.

 

9473

 

5.1

Authority

 

9473

 

5.2

Formation and Qualification

 

9473

 

5.3

Survival of Representations and Warranties

 

9573

 

5.4

Tax Returns

 

9573

 

5.5

Financial Statements

 

9574

 

5.6

Entity Names

 

9674

 

5.7

O.S.H.A. Environmental Compliance; Flood Insurance

 

9674

 

5.8

Solvency; No Litigation, Violation, Indebtedness or Default; ERISA Compliance

 

9775

 

5.9

Patents, Trademarks, Copyrights and Licenses

 

9876

 

5.10

Licenses and Permits

 

9876

 

5.11

[Reserved]

 

9976

 

5.12

No Default

 

9976

 

5.13

No Burdensome Restrictions

 

9976

 

5.14

No Labor Disputes

 

9977

 

5.15

Margin Regulations

 

9977

 

5.16

Investment Company Act

 

9977

 

5.17

Disclosure

 

9977

 

5.18

[Reserved].

 

10077

 

5.19

Delivery of SNI Acquisition Documents

 

10077

 

5.20

Swaps

 

10077

 

5.21

Business and Property of Loan Parties

 

10077

 

5.22

Ineligible Securities

 

10078

 

5.23

[Reserved]

 

10078

 

5.24

Equity Interests

 

10078

 

5.25

Commercial Tort Claims

 

10178

 

5.26

Letter of Credit Rights

 

10178

 

5.27

Material Contracts

 

10178

 

5.28

Investment Property Collateral

 

10178

 

 

  ii

 

 

VI. AFFIRMATIVE COVENANTS.

 

10178

 

6.1

Compliance with Laws

 

10178

 

6.2

Conduct of Business and Maintenance of Existence and Assets

 

10279

 

6.3

Books and Records

 

10279

 

6.4

Payment of Taxes

 

10279

 

6.5

Financial Covenants

 

10380

 

6.6

Insurance

 

10481

 

6.7

Payment of Indebtedness and Leasehold Obligations

 

10582

 

6.8

Environmental Matters

 

10582

 

6.9

Standards of Financial Statements

 

10683

 

6.10

Specified Condition 106[Reserved]

 

83

 

6.11

Execution of Supplemental Instruments

 

10783

 

6.12

Exercise of Rights

 

10783

 

6.13

Government Receivables

 

10783

 

6.14

Keepwell

 

10783

 

6.15

Lender Meetings

 

10784

 

6.16

Additional Borrowers, Guarantors and Collateral Security

 

10884

 

6.17

Post-Closing Covenants 109[Reserved]

 

84

 

6.18

Conversion/Cancellation of Subordinated Indebtedness and Preferred Equity

 

85

 

6.19

Board of Directors Composition

 

85

 

6.20

President of Operations

 

85

 

VII. NEGATIVE COVENANTS.

 

10985

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets

 

10985

 

7.2

Creation of Liens

 

11086

 

7.3

Guarantees

 

11086

 

7.4

Investments

 

11086

 

7.5

Loans

 

11086

 

7.6

Capital Expenditures

 

11186

 

7.7

Dividends

 

11186

 

7.8

Indebtedness

 

11186

 

7.9

Nature of Business

 

11187

 

7.10

Transactions with Affiliates

 

11187

 

7.11

Leases

 

11187

 

7.12

Subsidiaries

 

111116

 

7.13

Fiscal Year and Accounting Changes

 

11287

 

7.14

Pledge of Credit

 

11287

 

7.15

Amendment of Organizational Documents

 

11287

 

7.16

Compliance with ERISA

 

11288

 

7.17

Modifications and Payments of Indebtedness

 

11388

 

7.18

Other Agreements

 

11489

 

 

  iii

 

 

VIII. CONDITIONS PRECEDENT.

 

11489

 

8.1

Conditions to Initial Advances

 

11489

 

8.2

Conditions to Each Advance

 

11890

 

IX. INFORMATION AS TO BORROWERS.

 

11891

 

9.1

Disclosure of Material Matters

 

11991

 

9.2

Schedules

 

11991

 

9.3

Environmental Reports

 

11992

 

9.4

Litigation

 

12092

 

9.5

Material Occurrences

 

12092

 

9.6

Government Receivables

 

12092

 

9.7

Annual Financial Statements

 

12092

 

9.8

Quarterly Financial Statements

 

12093

 

9.9

Monthly Financial Statements

 

12193

 

9.10

Compliance Certificate and Other Reports

 

12193

 

9.11

Additional Information

 

12295

 

9.12

Projected Operating Budget

 

12395

 

9.13

Variances From Operating Budget

 

12396

 

9.14

Notice of Suits, Adverse Events

 

12396

 

9.15

ERISA Notices and Requests

 

12396

 

9.16

Additional Documents

 

12496

 

9.17

Updates to Certain Schedules

 

12496

 

9.18

Financial Disclosure

 

12496

 

X. EVENTS OF DEFAULT.

 

12497

 

10.1

Nonpayment

 

12597

 

10.2

Breach of Representation

 

12597

 

10.3

Financial Information

 

12597

 

10.4

Judicial Actions

 

12597

 

10.5

Noncompliance

 

12597

 

10.6

Judgments

 

12597

 

10.7

Bankruptcy

 

12698

 

10.8

Material Adverse Effect

 

12698

 

10.9

Lien Priority

 

12698

 

10.10

Business Cessation

 

12698

 

10.11

Cross Default

 

12698

 

10.12

Breach of Guaranty, Guarantor Security Agreement or Pledge Agreement

 

12698

 

10.13

Change of Control

 

12798

 

10.14

Invalidity

 

12798

 

10.15

Seizures

 

12798

 

10.16

Indictment

 

12798

 

10.17

Pension Plans

 

12798

 

10.18

Anti-Money Laundering/International Trade Law Compliance

 

12799

 

 

  iv

 

 

XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

 

12799

 

11.1

Rights and Remedies

 

12799

 

11.2

Collateral Agent’s Discretion

 

130101

 

11.3

Setoff

 

130101

 

11.4

Rights and Remedies not Exclusive

 

130101

 

11.5

Allocation of Payments After Event of Default

 

130101

 

XII. WAIVERS AND JUDICIAL PROCEEDINGS.

 

133104

 

12.1

Waiver of Notice

 

133104

 

12.2

Delay

 

134104

 

12.3

Jury Waiver

 

134104

 

XIII. TERM AND TERMINATION.

 

134104

 

13.1

Term

 

134104

 

13.2

Termination

 

134105

 

13.3

Release of Collateral

 

135105

 

XIV. REGARDING AGENTS.

 

135106

 

14.1

Appointment

 

135106

 

14.2

Nature of Duties

 

135106

 

14.3

Lack of Reliance on Agents

 

136106

 

14.4

Resignation of Agent; Successor Agent

 

136107

 

14.5

Certain Rights of Agents

 

137107

 

14.6

Reliance

 

137108

 

14.7

Notice of Default

 

137108

 

14.8

Indemnification

 

138108

 

14.9

Administrative Agent in its Individual Capacity

 

138108

 

14.10

Delivery of Documents

 

138108

 

14.11

Loan Parties Undertaking to Agents

 

138109

 

14.12

No Reliance on any Agent’s Customer Identification Program

 

138109

 

14.13

Other Agreements

 

139109

 

 

  v

 

   

XV. BORROWING AGENCY.

 

 

139109

 

15.1

Borrowing Agency Provisions

 

 

139109

 

15.2

Waiver of Subrogation

 

 

140110

 

XVI. MISCELLANEOUS.

 

 

140111

 

16.1

Governing Law

 

 

140111

 

16.2

Entire Understanding

 

 

141111

 

16.3

Successors and Assigns; Participations; New Lenders

 

 

144114

 

16.4

Application of Payments

 

 

147117

 

16.5

Indemnity

 

 

147118

 

16.6

Notice

 

 

148119

 

16.7

Survival

 

 

150120

 

16.8

Severability

 

 

150121

 

16.9

Expenses

 

 

150121

 

16.10

Injunctive Relief

 

 

151122

 

16.11

Consequential Damages

 

 

151122

 

16.12

Captions

 

 

152122

 

16.13

Counterparts; Facsimile Signatures

 

 

152122

 

16.14

Construction

 

 

152122

 

16.15

Confidentiality; Sharing Information

 

 

152122

 

16.16

Publicity

 

 

153123

 

16.17

Certifications From Banks and Participants; USA PATRIOT Act

 

 

153123

 

16.18

Anti-Terrorism Laws

 

 

153123

 

XVII. GUARANTY.

 

 

154124

 

17.1

Guaranty

 

 

154124

 

17.2

Waivers

 

 

154124

 

17.3

No Defense

 

 

154124

 

17.4

Guaranty of Payment

 

 

154125

 

17.5

Liabilities Absolute

 

 

155125

 

17.6

Waiver of Notice

 

 

156126

 

17.7

Agents’ Discretion

 

 

156126

 

17.8

Reinstatement.

 

 

156126

 

 

  vi

 

 

LIST OF EXHIBITS AND SCHEDULES

 

 

 

Exhibits

 

 

Exhibit 1.2

Form of Borrowing Base Certificate

Exhibit 1.2(a)

Form of Compliance Certificate

Exhibit 2.1(a)

Form of Revolving Credit Note

Exhibit 2.3

Form of Term Loan Note

Exhibit 2.24

Form of Revolving Lender Joinder and Assumption Agreement

Exhibit 5.5(b)

Financial Projections

Exhibit 6.16

Form of Loan Party Joinder Agreement

Exhibit 8.1(b)

Form of Financial Condition Certificate

Exhibit 16.3

Form of Commitment Transfer Supplement

 

Schedules

 

 

Schedule 1.1

Commitments

Schedule 1.2

Permitted Encumbrances

Schedule 4.4

Equipment and Inventory Locations; Place of Business, Chief Executive Office,
Real Property

Schedule 4.8(j)

Deposit and Investment Accounts

Schedule 5.1

Consents

Schedule 5.2(a)

States of Qualification and Good Standing

Schedule 5.2(b)

Subsidiaries

Schedule 5.4

Federal Tax Identification Number

Schedule 5.6

Prior Names

Schedule 5.7

Environmental

Schedule 5.8(b)(i)

Litigation

Schedule 5.8(b)(ii)

Indebtedness

Schedule 5.8(d)

Plans

Schedule 5.9

Intellectual Property

Schedule 5.10

Licenses and Permits

Schedule 5.14

Labor Disputes

Schedule 5.24

Equity Interests

Schedule 5.25

Commercial Tort Claims

Schedule 5.26

Letter of Credit Rights

Schedule 5.27

Material Contracts

Schedule 7.3

Guarantees

 

  vii

 

 

REVOLVING CREDIT, TERM LOAN

AND

SECURITY AGREEMENT

 

Revolving Credit, Term Loan and Security Agreement dated as of March 31, 2017,
by and among GEE GROUP INC., an Illinois corporation (“Holdings”), SCRIBE
SOLUTIONS, INC., a Florida corporation (“Scribe”), AGILE RESOURCES, INC., a
Georgia corporation (“Agile”), ACCESS DATA CONSULTING CORPORATION, a Colorado
corporation (“Access”), TRIAD PERSONNEL SERVICES, INC., an Illinois corporation
(“Triad Personnel”), TRIAD LOGISTICS, INC., an Ohio corporation (“Triad
Logistics”), PALADIN CONSULTING, INC., a Texas corporation (“Paladin”), BMCH,
INC., an Ohio corporation (“BMCH”), GEE GROUP PORTFOLIO INC., a Delaware
corporation and the surviving corporation of the merger of SNI HOLDCO INC., a
Delaware corporation, with and into GEE Group Portfolio Inc., a Delaware
corporation (“SNI Holdings”), and SNI COMPANIES, a Delaware corporation (“SNI”
and together with Holdings, Scribe, Agile, Access, Triad Personnel, Triad
Logistics, Paladin, BMCH, SNI Holdings and each other Person joined hereto as a
borrower from time to time, collectively, the “Borrowers” and each a
“Borrower”), each Subsidiary of Holdings listed as a “Guarantor” on the
signature pages hereto (together with each other Person joined hereto as a
guarantor from time to time, collectively, the “Guarantors”, and each a
“Guarantor”, and together with the Borrowers, collectively, the “Loan Parties”
and each a “Loan Party”), the lenders which now are or which hereafter become a
party hereto that make Revolving Advances hereunder (together with their
respective successors and assigns, collectively, the “Revolving Lenders” and
each a “Revolving Lender”), the lenders which now are or which hereafter become
a party hereto that made or acquire an interest in the Term Loans (together with
their respective successors and assigns, collectively, the “Term Loan Lenders”
and each a “Term Loan Lender”, and together with the Revolving Lenders,
collectively, the “Lenders” and each a “Lender”), PNC BANK, NATIONAL ASSOCIATION
(“PNCMGG INVESTMENT GROUP LP (“MGG”), as administrative agent for the Lenders
(together with its successors and assigns, in such capacity, the “Administrative
Agent”) and as collateral agent for the Lenders (together with its successors
and assigns, in such capacity, the “Collateral Agent”), and MGG INVESTMENT GROUP
LP, as term loan agent (together with its successors and assigns, in such
capacity, the “Term Loan Agent” and together with the Administrative Agent and
the Collateral Agent, each an “Agent” and, collectively, the “Agents”).

 

Borrowers have asked Lenders to extend credit to Borrowers consisting of (a)
Term Loans (as hereinafter defined) in the aggregate principal amount of
$48,750,000 and (b) a revolving credit facility in an aggregate principal amount
of up to $25,000,000, which will include a subfacility for the issuance of
letters of credit.  Lenders are severally, and not jointly, willing to extend
such credit to the Borrowers subject to the terms and conditions hereinafter set
forth.

 

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Loan
Parties, Lenders and Agents hereby agree as follows:

 

I. DEFINITIONS.

 

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

 

  1

 

 

1.2 General Terms. For purposes of this Agreement the following terms shall have
the following meanings:

 

“Accountants” shall have the meaning set forth in Section 9.7 hereof.

 

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

 

“Administrative Agent” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.

 

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

 

“Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(i) hereof.

 

“Advances” shall mean and include the Revolving Advances, Letters of Credit, the
Swing Loans, and the Term Loans.

 

“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, manager, member, managing
member, general partner or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 10% or more of the Equity Interests having ordinary voting
power for the election of directors of such Person or other Persons performing
similar functions for any such Person, or (y) to direct or cause the direction
of the management and policies of such Person whether by ownership of Equity
Interests, contract or otherwise.

 

“Agent” and “Agents” shall have the meaning set forth in the preamble hereto.

 

“Agreement” shall mean this Revolving Credit, Term Loan and Security Agreement,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (a) the Base Rate in effect on such day, (b) the sum of the Federal
Funds Open Rate in effect on such day plus one half of one percent (0.50%), (c)
the sum of the Daily LIBOR Rate in effect on such day plus one percent (1.00%),
so long as a Daily LIBOR Rate is offered, ascertainable and not unlawful and (d)
three percent (3.00)% per annum.

 

“Alternate Source” shall have the meaning set forth in the definition of
“Federal Funds Open Rate”.

 

“Amendment No. 1” shall mean the First Amendment to Revolving Credit, Term Loan
and Security Agreement, dated as of October 2, 2017, by and among the Loan
Parties, the Agents and the Lenders.

 

“Amendment No. 2” shall mean the Second Amendment to Revolving Credit, Term Loan
and Security Agreement, dated as of November 14, 2017, by and among the Loan
Parties, the Agents and the Lenders.

 

  2

 

 

“Amendment No. 4” shall mean the Fourth Amendment to Revolving Credit, Term Loan
and Security Agreement, dated as of December 27, 2018, by and among the Loan
Parties, the Agents and the Lenders.

 

“Amendment No. 5” shall mean the Fifth Amendment to Revolving Credit, Term Loan
and Security Agreement, dated as of May 15, 2019, by and among the Loan Parties,
the Agents and the Lenders.

 

“Amendment No. 6” shall mean the Sixth Amendment to Revolving Credit, Term Loan
and Security Agreement, dated as of February 12, 2020, by and among the Loan
Parties, the Agents and the Lenders.

 

“Amendment No. 7” shall mean the Seventh Amendment to Revolving Credit, Term
Loan and Security Agreement, dated as of April 28, 2020, by and among the Loan
Parties, the Agents and the Lenders.

 

“Amendment No. 1 Effective Date” shall mean the ‘Amendment No. 1 Effective Date’
as set forth in Amendment No. 1.

 

“Amendment No. 2 Effective Date” shall mean the ‘Amendment No. 2 Effective Date’
as set forth in Amendment No. 2.

 

“Amendment No. 4 Effective Date” shall mean the ‘Amendment No. 4 Effective Date’
as set forth in Amendment No. 4.

 

“Amendment No. 5 Effective Date” shall mean the ‘Amendment No. 5 Effective Date’
as set forth in Amendment No. 5.

 

“Amendment No. 6 Effective Date” shall mean the ‘Amendment No. 6 Effective Date’
as set forth in Amendment No. 6.

 

“Amendment No. 7 Effective Date” shall mean the ‘Amendment No. 7 Effective Date’
as set forth in Amendment No. 7.

 

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering or bribery,
and any regulation, order, or directive promulgated, issued or enforced pursuant
to such Laws, all as amended, supplemented or replaced from time to time.

 

“Applicable Law” shall mean all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Other Document or contract in question,
including all applicable common law and equitable principles, all provisions of
all applicable state, federal and foreign constitutions, statutes, rules,
regulations, treaties, directives and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.

 

“Applicable Margin” shall mean:

 

(a) for the period commencing on the Amendment No. 2 Effective Date up to and
including May 31, 2018, (i) so long as the Senior Leverage Ratio is equal to or
greater than 3.75 to 1.00, an amount equal to 9.75% for Advances consisting of
Domestic Rate Loans and 10.75% for Advances consisting of LIBOR Rate Loans and
(ii) so long as the Senior Leverage Ratio is less than 3.75 to 1.00, an amount
equal to 9.00% for Advances consisting of Domestic Rate Loans and 10.00% for
Advances consisting of LIBOR Rate Loans;.

 

(b) for the period commencing on June 1, 2018 up to and including August 31,
2018, (i) so long as the Senior Leverage Ratio is equal to or greater than 4.00
to 1.00, an amount equal to 14.00% for Advances consisting of Domestic Rate
Loans and 15.00% for Advances consisting of LIBOR Rate Loans and (ii) so long as
the Senior Leverage Ratio is less than 4.00 to 1.00, an amount equal to 9.75%
for Advances consisting of Domestic Rate Loans and 10.75% for Advances
consisting of LIBOR Rate Loans; and

 

(c) for the period commencing on September 1, 2018 through the remainder of the
Term, (i) so long as the Senior Leverage Ratio is equal to or greater than 3.50
to 1.00, an amount equal to 14.00% for Advances consisting of Domestic Rate
Loans and 15.00% for Advances consisting of LIBOR Rate Loans and (ii) so long as
the Senior Leverage Ratio is less than 3.50 to 1.00, an amount equal to 9.00%
for Advances consisting of Domestic Rate Loans and 10.00% for Advances
consisting of LIBOR Rate Loans;

 

  3

 

 

which Senior Leverage Ratio (in the case of clauses (a), (b) and (c) above)
shall be calculated based on the financial results for the most recent trailing
twelve month period for which monthly financial statements and a certificate of
an Authorized Officer of Holdings are received by the Agents in accordance with
Section 9.9 and Section 9.10 of the Credit Agreement. Any adjustment of the
Applicable Margin will occur 2 Business Days after the date the Agents receive
the applicable monthly financial statements and a certificate of an Authorized
Officer of Holdings in accordance with Section 9.9 and Section 9.10 of the
Credit Agreement. Notwithstanding the foregoing, in the event that any financial
statement or certificate described in the preceding sentence is inaccurate and
such inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin with respect to any Advance for any fiscal period, then the
Applicable Margin for such fiscal period shall be adjusted retroactively (to the
effective date of the determination of the Applicable Margin that was based upon
the delivery of such inaccurate financial statement or certificate) to reflect
the correct Applicable Margin, and the Borrowers shall promptly make payments to
the Agents and the Lenders to reflect such adjustment. For the avoidance of
doubt, the Applicable Margin effective as of the Amendment No. 2 Effective Date
shall equal the amount specified in clause (a)(i) of this definition.

 

“Applicable Premium” shall mean:

 

(a) as of the date of the occurrence of an Applicable Premium Trigger Event
specified in clause (c), (d) or (e) of the definition thereof:

 

(i) during the period from and after the Closing Date up to and including the
date that is the first anniversary of the Closing Date (the “First Period”), an
amount equal to 5.00% times the sum of (A) the aggregate principal amount of the
Term Loans outstanding on the date of such Applicable Premium Trigger Event and
(B) the Total Revolving Commitments immediately prior to such Applicable Premium
Trigger Event;

 

(ii) during the period after the First Period up to and including the date that
is the second anniversary of the Closing Date (the “Second Period”), an amount
equal to 2.00% times the sum of (A) the aggregate principal amount of the Term
Loans outstanding on the date of such Applicable Premium Trigger Event and (B)
the Total Revolving Commitments immediately prior to such Applicable Premium
Trigger Event;

 

(iii) during the period after the Second Period up to and including the date
that is the third anniversary of the Closing Date (the “Third Period”), an
amount equal to 1.00% times the sum of (A) the aggregate principal amount of the
Term Loans outstanding on the date of such Applicable Premium Trigger Event and
(B) the Total Revolving Commitments immediately prior to such Applicable Premium
Trigger Event; and

 

(iv) thereafter, zero;

 

(b) as of the date of the occurrence of an Applicable Premium Trigger Event
specified in clause (a) of the definition thereof:

 

(i) during the First Period, an amount equal to 5.00% times the amount of the
permanent reduction of the Total Revolving Commitment on such date;

 

(ii) during the Second Period, an amount equal to 2.00% times the amount of the
permanent reduction of the Total Revolving Commitment on such date;

 

(iii) during the Third Period, an amount equal to 1.00% times the amount of the
permanent reduction of the Total Revolving Commitment on such date; and

 

(iv) thereafter, zero;

 

  4

 

 

(c) as of the date of the occurrence of an Applicable Premium Trigger Event
specified in clause (b) of the definition thereof:

 

(i) during the First Period, an amount equal to 5.00% times the principal amount
of the Term Loans being paid on such date;

 

(ii) during the Second Period, an amount equal to 2.00% times the principal
amount of the Term Loans being paid on such date;

 

(iii) during the Third Period, an amount equal to 1.00% times the principal
amount of the Term Loans being paid on such date; and

 

(iv) thereafter, zero.

 

“Applicable Premium Trigger Event” shall mean:

 

(a) any permanent reduction of the Total Revolving Commitment pursuant to
Section 11.1 or Section 13.1;

 

(b) any payment by any Loan Party of all, or any part, of the principal amount
of the Term Loans for any reason (including, without limitation, any optional
prepayment or mandatory prepayment (other than (x) scheduled payments under
Section 2.3(c), (y) any mandatory prepayment under Section 2.20(b) or (z) any
mandatory prepayment under Section 2.20(d) of Extraordinary Receipts that are
not SNI Receipts) whether before or after (i) the occurrence of an Event of
Default, or (ii) the commencement of any Insolvency Proceeding, and
notwithstanding any acceleration (for any reason) of the Obligations;

 

(c) the acceleration of the Obligations for any reason, including, without
limitation, acceleration in accordance with Section 11.1, including as a result
of the commencement of an Insolvency Proceeding;

 

(d) the satisfaction, release, payment, restructuring, reorganization,
replacement, reinstatement, defeasance or compromise of any of the Obligations
in any Insolvency Proceeding, foreclosure (whether by power of judicial
proceeding or otherwise) or deed in lieu of foreclosure or the making of a
distribution of any kind in any Insolvency Proceeding to any Agent, for the
account of the Lenders in full or partial satisfaction of the Obligations; or

 

(e) the termination of this Agreement for any reason.

 

“Applicable Term Loan PIK Margin” shall mean, as of any date of determination,
(a) so long as the Senior Leverage Ratio is equal to or greater than 5.00 to
1.00, 5.0% per annum, (b) so long as the Senior Leverage Ratio is less than 5.00
to 1.00 and equal to or greater than 4.50 to 1.00, 2.5% per annum, and (c) so
long as the Senior Leverage Ratio is less than 4.50 to 1.00, 1.0% per annum;
provided, that the Senior Leverage Ratio (in the case of clauses (a), (b) and
(c) above) shall be calculated based on the financial results for the most
recent trailing twelve month period for which monthly financial statements and a
certificate of an Authorized Officer of Holdings are received by the Agents in
accordance with Section 9.9 and Section 9.10 of the Credit Agreement. Any
adjustment of the Applicable Term Loan PIK Margin will occur 2 Business Days
after the date the Agents receive the applicable monthly financial statements
and a certificate of an Authorized Officer of Holdings in accordance with
Section 9.9 and Section 9.10 of the Credit Agreement. Notwithstanding the
foregoing, in the event that any financial statement or certificate described in
the preceding sentence is inaccurate and such inaccuracy, if corrected, would
have led to the application of a higher Applicable Term Loan PIK Margin with
respect to any Advance for any fiscal period, then the Applicable Term Loan PIK
Margin for such fiscal period shall be adjusted retroactively (to the effective
date of the determination of the Applicable Term Loan PIK Margin that was based
upon the delivery of such inaccurate financial statement or certificate) to
reflect the correct Applicable Term Loan PIK Margin, and the Borrowers shall
promptly make payments to the Agents and the Lenders to reflect such adjustment.
For the avoidance of doubt, the Applicable Margin effective as of the Amendment
No. 7 Effective Date shall equal the amount specified in clause (a) of this
definition.

 

  5

 

 

“Application Date” shall have the meaning set forth in Section 2.8(b) hereof.

 

“Approvals” shall have the meaning set forth in Section 5.7(b) hereof.

 

“Approved Electronic Communication” shall mean each communication transmitted,
posted or otherwise made or communicated by e-mail, E-Fax, the PINACLE System©,
or any other equivalent electronic service agreed to by the Agents, whether
owned, operated or hosted by any Agent, any Lender, any of their Affiliates or
any other Person, that any party is obligated to, or otherwise chooses to,
provide to the Agents pursuant to this Agreement or any Other Document,
including any financial statement, financial and other report, notice, request,
certificate and other information material; provided that Approved Electronic
Communications shall not include any notice, demand, communication, information,
document or other material that any Agent specifically instructs a Person to
deliver in physical form.

 

“Attribution Parties” means, with respect to each Lender, collectively, the
following Persons: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time, directly or
indirectly managed or advised by such Lender’s investment manager or any of its
“affiliates,” as defined for purposes of this definition of Attribution Parties
in Rule 405 under the Securities Act of 1933, as amended, or principals, (ii)
any direct or indirect affiliates of such Lender or any of the foregoing, (iii)
any Person acting or who could be deemed to be acting as a Group together with
such Lender or any of the foregoing and (iv) any other Persons whose beneficial
ownership of the Common Stock would or could be aggregated with such Lender’s
and the other Attribution Parties for purposes of Section 13(d) of the Exchange
Act. For clarity, the purpose of the foregoing is to subject collectively such
Lender and all other Attribution Parties to the Maximum Percentage.

 

“Authorized Officer” means, with respect to any Loan Party, any of the Chief
Executive Officer, Chief Financial Officer or Treasurer of such Loan Party.

 

“Average Undrawn Availability” shall mean, as of any date of determination, the
sum of Undrawn Availability for each of the previous thirty (30) days, divided
by thirty (30).

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time and any successor statute or any similar federal or state law for
the relief of debtors.

 

“Base Rate” shall mean the rate last quoted by The Wall Street Journal as the
“Prime Rate” in the United States or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest
Rates) as the “bank prime loan” rate or, if such rate is no longer quoted
therein, any similar rate quoted therein (as determined by the Administrative
Agent) or any similar release by the Federal Reserve Board (as determined by the
Administrative Agent). Each change in the Base Rate shall be effective from and
including the date such change is publicly announced as being effective.

 

“Benefited Lender” shall have the meaning set forth in Section 2.6(e) hereof.

 

“Blocked Account Bank” shall mean each bank set forth on Schedule 4.8(j).

 

“Blocked Accounts” shall mean the bank accounts of each Loan Party maintained at
one or more Blocked Account Banks set forth on Schedule 4.8(j).

 

  6

 

 

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

 

“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such
Persons.

 

“Borrowers’ Account” shall have the meaning set forth in Section 2.10 hereof.

 

“Borrowing Agent” shall mean Holdings.

 

“Borrowing Base Certificate” shall mean a certificate in substantially the form
of Exhibit 1.2 hereto duly executed by an Authorized Officer of the Borrowing
Agent and delivered to the Administrative Agent, appropriately completed, by
which such officer shall certify to Administrative Agent the Formula Amount and
calculation thereof as of the date of such certificate.

 

“Borrowing Base Reference Date” shall have the meaning set forth in Section
2.20(b) hereof.

 

“Business Day” shall mean any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in East Brunswick, New Jersey and, if the applicable Business Day
relates to any LIBOR Rate Loans, such day must also be a day on which dealings
are carried on in the London interbank market.

 

“Capital Expenditures” shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements (or of any replacements or
substitutions thereof or additions thereto) which have a useful life of more
than one year and which, in accordance with GAAP, would be classified as capital
expenditures, provided that “Capital Expenditures” shall not include (a)
expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed with insurance proceeds, cash
awards arising from taking by eminent domain or condemnation, (b) expenditures
made in connection with reinvestment in replacement assets with cash proceeds of
asset dispositions, (c) the portion of the purchase price of equipment that is
credited to Borrowers by the seller of such equipment in connection with a
simultaneous trade in of existing equipment, (d) interest capitalized during
such period, (e) expenditures made with the proceeds of an equity issuance, and
(f) expenditures which are paid for or reimbursed in cash (or reimbursed through
consideration that offsets a related cash liability, such as a tenant allowance)
by a third party which is not a Loan Party or any Subsidiary of a Loan Party.
Capital Expenditures for any period shall include the principal portion of
Capitalized Lease Obligations paid in such period.

 

“Capitalized Lease Obligation” shall mean any Indebtedness of any Loan Party
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.

 

“Cash Management Liabilities” shall have the meaning provided in the definition
of “Cash Management Products and Services.”

 

“Cash Management Products and Services” shall mean agreements or other
arrangements under which Administrative Agent or any Revolving Lender or any
Affiliate of Administrative Agent or a Revolving Lender provides any of the
following products or services to any Loan Party: (a) credit cards; (b) credit
card processing services; (c) debit cards and stored value cards; (d) commercial
cards; (e) ACH transactions; and (f) cash management and treasury management
services and products, including without limitation controlled disbursement
accounts or services, lockboxes, automated clearinghouse transactions,
overdrafts, interstate depository network services. The indebtedness,
obligations and liabilities of any Loan Party to the provider of any Cash
Management Products and Services (including all obligations and liabilities
owing to such provider in respect of any returned items deposited with such
provider) (the “Cash Management Liabilities”) shall be “Obligations” hereunder,
secured by the Collateral, guaranteed obligations under any Guaranty and secured
obligations under any Guarantor Security Agreement, as applicable, and otherwise
treated as Obligations for purposes of each of the Other Documents.

 

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

 

  7

 

 

“CFTC” shall mean the Commodity Futures Trading Commission.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

 

“Change in Law” shall mean the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any Applicable Law; (b) any
change in any Applicable Law or in the administration, implementation,
interpretation or application thereof by any Governmental Body; or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Body; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, regulations, guidelines,
interpretations or directives thereunder or issued in connection therewith
(whether or not having the force of Applicable Law) and (y) all requests, rules,
regulations, guidelines, interpretations 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 (whether or not having the force of law), in each case pursuant to
Basel III, shall in each case be deemed to be a Change in Law regardless of the
date enacted, adopted, issued, promulgated or implemented.

 

“Change of Control” shall mean the occurrence of any of any of the following:

 

(a) the acquisition, directly or indirectly, by any person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) of beneficial ownership of more
than 33% of the aggregate outstanding voting or economic power of the Equity
Interests of Holdings;

 

(b) during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Holdings
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of Holdings was approved by a
vote of at least a majority of the directors of Holdings then still in office
who were either directors at the beginning of such period, or whose election or
nomination for election was previously approved) cease for any reason to
constitute a majority of the Board of Directors of Holdings;

 

(c) Holdings shall cease to have beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of 100% of the aggregate voting or economic power of the
Equity Interests of each other Loan Party and each of its Subsidiaries (other
than in connection with any transaction permitted pursuant to Section 7.1), free
and clear of all Liens (other than Permitted Specified Encumbrances);

 

(d) Derek Dewan shall cease to be Chairman of the Board of Directors of Holdings
or Chief Executive Officer of Holdings or be involved in the day to day
operations and management of the business of the Loan Parties and a successor
reasonably acceptable to the Agents and the Required Lenders is not appointed on
terms reasonably acceptable to the Agents and the Required Lenders within sixty
(60) days of such cessation of involvement; or[reserved]; or

 

(e) a “Change of Control” (or any comparable term or provision) has occurred
under any documents evidencing any of the Equity Interests or Indebtedness of
Holdings or any of its Subsidiaries.

 

“Charges” shall mean all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross income, gross receipts, sales, use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including the PBGC or any
environmental agency or superfund), upon the Collateral, any Loan Party or any
of its Affiliates.

 

“CIP Regulations” shall have the meaning set forth in Section 14.12 hereof.

 

“Claims” shall have the meaning set forth in Section 16.5 hereof.

 

  8

 

 

“Closing Costs” shall mean, collectively, the actual, documented transaction
fees and expenses (including legal fees and expenses) which are incurred in
connection with this Agreement and the Transactions and the restructuring of the
Specified Subordinated Indebtedness owing to JAX Legacy – Investment 1, LLC and
which are paid or accrued (a) on or prior to the Closing Date in the aggregate
amount up to $5,000,000 and (b) within ninety (90) days after the Closing Date
in the aggregate amount of up to $250,000.

 

“Closing Date” shall have the meaning set forth in Section 8.1 hereof.

 

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended
or supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

 

“Collateral” shall mean and include all right, title and interest of each Loan
Party in all of the property and assets of such Loan Party, in each case whether
now existing or hereafter arising or created and whether now owned or hereafter
acquired and wherever located, including:

 

(a) all Receivables and all supporting obligations relating thereto;

 

(b) all equipment and fixtures;

 

(c) all general intangibles (including all payment intangibles and all software)
and all supporting obligations related thereto;

 

(d) all Inventory;

 

(e) all Subsidiary Stock, securities, Investment Property, and financial assets;

 

(f) all contract rights, rights of payment which have been earned under a
contract rights, chattel paper (including electronic chattel paper and tangible
chattel paper), commercial tort claims (whether now existing or hereafter
arising); documents (including all warehouse receipts and bills of lading),
deposit accounts, goods, instruments (including promissory notes), letters of
credit (whether or not the respective letter of credit is evidenced by a
writing) and letter-of-credit rights, cash, certificates of deposit, insurance
proceeds (including hazard, flood and credit insurance), security agreements,
eminent domain proceeds, condemnation proceeds, tort claim proceeds and all
supporting obligations;

 

(g) all ledger sheets, ledger cards, files, correspondence, records, books of
account, business papers, computers, computer software (owned by any Loan Party
or in which it has an interest), computer programs, tapes, disks and documents,
including all of such property relating to the property described in clauses (a)
through and including (f) of this definition;

 

(h) all proceeds and products of the property described in clauses (a) through
and including (g) of this definition, in whatever form. It is the intention of
the parties that if Collateral Agent shall fail to have a perfected Lien in any
particular property or assets of any Loan Party for any reason whatsoever, but
the provisions of this Agreement and/or of the Other Documents, together with
all financing statements and other public filings relating to Liens filed or
recorded by Collateral Agent against Loan Parties, would be sufficient to create
a perfected Lien in any property or assets that such Loan Party may receive upon
the sale, lease, license, exchange, transfer or disposition of such particular
property or assets, then all such “proceeds” of such particular property or
assets shall be included in the Collateral as original collateral that is the
subject of a direct and original grant of a security interest as provided for
herein and in the Other Documents (and not merely as proceeds (as defined in
Article 9 of the Uniform Commercial Code) in which a security interest is
created or arises solely pursuant to Section 9-315 of the Uniform Commercial
Code); and

 

  9

 

 

(i) all other property and assets.

 

Notwithstanding the foregoing, Collateral shall not include any Excluded
Property.

 

“Collateral Agent” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.

 

“Commitment Transfer Supplement” shall mean a document in the form of Exhibit
16.3 hereto, properly completed and otherwise in form and substance satisfactory
to Agents pursuant to which a Purchasing Lender (a) purchases and assumes all or
a portion of a transferor Revolving Lender to make Advances under this
Agreement, or (b) purchases and assumes all or a portion of a transferor Term
Loan Lender’s interest in an outstanding Term Loan.

 

“Common Stock” shall mean the common stock, no par value, of Holdings or any
share capital into which such Common Stock shall have been changed or any share
capital resulting from a reclassification of such Common Stock.

 

“Compliance Certificate” shall have the meaning set forth in Section 9.10(a)
hereof.

 

“Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Loan Party’s
business or necessary (including to avoid a conflict or breach under any
agreement, instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement, the Other
Documents, or the SNI Acquisition Agreement, including any Consents required
under all applicable federal, state or other Applicable Law.

 

“Consolidated Basis” shall mean, with respect to any Person, the consolidation
of the accounts or other items of such Person and its Subsidiaries in accordance
with GAAP.

 

“Consolidated Net Interest Expense” shall mean, with respect to any Person for
any period, (a) gross interest expense of such Person and its Subsidiaries
(including, without limitation, interest expense paid to Affiliates of such
Person) for such period determined on a consolidated basis and in accordance
with GAAP (excluding any interest paid or payable in kind), less (b) the sum of
(i) all interest income of such Person and its Subsidiaries for such period and
(ii) all gains of such Person and its Subsidiaries for such period in respect of
any Interest Rate Hedge or Foreign Currency Hedge (to the extent not included in
interest income above and to the extent not deducted in the calculation of gross
interest expense), plus (c) the sum of (i) all losses of such Person and its
Subsidiaries for such period in respect of any Interest Rate Hedge or Foreign
Currency Hedge (to the extent not included in gross interest expense) and (ii)
all upfront costs or fees of such Person and its Subsidiaries for such period in
connection with any Interest Rate Hedge or Foreign Currency Hedge (to the extent
not included in gross interest expense), in each case, determined on a
consolidated basis and in accordance with GAAP.

 

“Contract Rate” shall have the meaning set forth in Section 3.1 hereof.

 

“Control Agreement” shall have the meaning set forth in Section 4.8(h) hereof.

 

“Controlled Group” shall mean, at any time, each Loan Party and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Loan Party, are treated as a single employer under Section 414(b) or (c) of
the Code as well as under Section 414(m) and (o) of the Code solely for the
purposes of Section 412 of the Code.

 

“Conversion/Cancellation Condition” shall have the meaning set forth in Section
6.18 hereof.

 

“Conversion/Cancellation Deadline” shall have the meaning set forth in Section
6.18 hereof.

 

“Conversion Rate” shall mean the conversion ratio applicable to the conversion
of the outstanding principal amount of the Specified Subordinated Indebtedness
(including any paid-in-kind interest on such Indebtedness) into Common Stock in
connection with the satisfaction of the Conversion/Cancellation Condition;
provided, that if the conversion ratio applicable to the conversion of the
liquidation preference of Holdings’ preferred Equity Interests into Common Stock
is more favorable to the Lenders than the conversion ratio applicable to the
conversion of the Specified Subordinated Indebtedness into Common Stock, at the
election of the Lenders the Conversion Rate shall be the more favorable ratio;
provided, further, that such Conversion Rate shall be adjusted for any stock
dividend, stock split, stock combination, reclassification or similar
transaction related to the Common Stock occurring after the date the Conversion
Rate is initially determined.

 

  10

 

 

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

 

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

 

“Customs” shall have the meaning set forth in Section 2.13(b) hereof.

 

“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to
1.00 minus the Reserve Percentage.

 

“Debt Payments” shall mean for any period, in each case, all cash actually
expended by any Borrower to make: (a) interest payments on any Advances
hereunder, plus (b) scheduled principal payments on the Term Loans, plus (c)
payments for all Letter of Credit Fees, Facility Fees and the collateral
monitoring fee set forth in Section 3.4(a), plus (d) payments for all fees,
commissions and charges set forth herein to the extent not included in EBITDA
for such period, plus (e) payments on Capitalized Lease Obligations, plus (f)
scheduled payments with respect to any other Indebtedness for borrowed money
(other than Advances).

 

“Debtor Relief Law” shall mean the Bankruptcy Code and any other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief law of the United States or other applicable jurisdiction from
time to time in effect.

 

“Default” shall mean an event, circumstance or condition which, with the giving
of notice or passage of time or both, would constitute an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 3.1 hereof.

 

“Defaulting Lender” shall mean any Lender that: (a) has failed, within two (2)
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Revolving Commitment Percentage, Term Loan Commitment Percentage of
Advances, (ii) if applicable, fund any portion of its Participation Commitment
in Letters of Credit or Swing Loans or (iii) pay over to Administrative Agent,
Issuer, Swing Loan Lender or any Lender any other amount required to be paid by
it hereunder, unless, in the case of clause (i) above, such Lender notifies
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 a particular Default or Event of Default, if any) has
not been satisfied; (b) has notified Loan Parties or Administrative Agent 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 a particular Default or Event of 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 two (2) Business Days after request by Administrative Agent, 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 Advances and, if applicable,
participations in then outstanding Letters of Credit and Swing Loans under this
Agreement, provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon Administrative Agent’s receipt of such
certification in form and substance satisfactory to the Administrative Agent;
(d) has become the subject of an Insolvency Event; or (e) has failed at any time
to comply with the provisions of Section 2.6(e) with respect to purchasing
participations from the other Lenders, whereby such Lender’s share of any
payment received, whether by setoff or otherwise, is in excess of its pro rata
share of such payments due and payable to all of the Lenders.

 

  11

 

 

“Disbursement Letter” shall mean the disbursement letter, dated as of the
Closing Date, by and among the Borrowers, the Agents, the Lenders and the other
Persons party thereto, and the related funds flow memorandum describing the
sources and uses of all cash payments in connection with the Transactions.

 

“Disqualified Equity Interests” shall mean any Equity Interests which, by their
terms (or by the terms of any security or other Equity Interests into which they
are convertible or for which they are exchangeable), or upon the happening of
any event or condition, (a) mature or are mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or are redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is six (6)
months after the Term (excluding any provisions requiring redemption upon a
“change of control” or similar event; provided that such “change of control” or
similar event results in the payment in full of the Obligations), (b) are
convertible into or exchangeable for (i) debt securities or (ii) any Equity
Interests referred to in (a) above, in each case, at any time on or prior to the
date that is six (6) months after the Term, or (c) are entitled to receive
scheduled dividends or distributions in cash prior to the time that the
Obligations are paid in full.

 

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

 

“Dollar” and the sign “$” shall mean lawful money of the United States of
America.

 

“Domestic Rate Loan” shall mean any Advance that bears interest based upon the
Alternate Base Rate.

 

“Drawing Date” shall have the meaning set forth in Section 2.14(b) hereof.

 

“EBITDA” shall mean for any period with respect to Holdings and its Subsidiaries
on a Consolidated Basis, the sum of (a) net income (or loss) for such period
(excluding extraordinary gains and losses), plus (b) all interest expense for
such period, plus (c) all charges against income for such period for federal,
state and local taxes, plus (d) depreciation expenses for such period, plus (e)
amortization expenses for such period, plus (f) Closing Costs (including, for
the avoidance of doubt, Closing Costs in connection with the SNI Acquisition) to
the extent deducted in calculating net income and to the extent the period in
which such Closing Costs are paid is included in the applicable testing period
for which EBITDA is being determined, plus (g) any non-cash losses and any
non-cash extraordinary and non-recurring charges and expenses, in each case to
the extent deducted in determining net income for such period and are factually
supportable by documentation reasonably satisfactory to the Agents, plus (h)
fees and expenses attributable to any Permitted Acquisition that are factually
supportable by documentation reasonably satisfactory to the Agents and in any
event not to exceed $500,000 in any fiscal year, plus (i) integration and
restructuring costs and expenses related to any Permitted Acquisition that are
factually supportable by documentation reasonably satisfactory to the Agents and
in any event not to exceed $500,000 in any fiscal year, plus (j) non-cash
compensation expenses arising from the issuance of Equity Interests, options to
purchase Equity Interests and Equity Interest appreciation rights, plus (k)
expenses related to severance, relocation and recruitment of senior level
employees to the extent such expenses are factually supportable by documentation
reasonably satisfactory to the Agents and in any event not to exceed $250,000 in
any fiscal year, plus (l) the amount of any cost savings realized by the Loan
Parties as a result of office closures, office consolidations and employee
head-count reductions that are factually supportable by documentation reasonably
satisfactory to the Agents and in any event not to exceed $4,000,000 in any
trailing twelve month period of Holdings and its Subsidiaries ending at the end
of a fiscal quarter plus (m) other non-cash extraordinary and non-recurring
charges and expenses as may be agreed to in advance by the Agents in their
Permitted Discretion minus (n) any federal, state, local and foreign income tax
credits to the extent added in determining net income for such period, minus (o)
any non-cash gains for such period to the extent added in determining net income
for such period, minus (p) any Receivable that is unpaid more than one hundred
twenty (120) days after the original invoice date to the extent included in
revenue in determining net income for such period and for which no corresponding
reserve has been established. Notwithstanding the foregoing, EBITDA for Holdings
and its Subsidiaries on a Consolidated Basis (x) for the fiscal quarter ending
on March 31, 2018 shall be deemed to be $2,887,000, (y) for the fiscal quarter
ending on June 30, 2018 shall be deemed to be $3,353,000 and (z) for the fiscal
quarter ending on September 30, 2018 shall be deemed to be $3,289,000.

 

  12

 

 

“ECF Annual Prepayment Date” shall have the meaning set forth in Section 2.20(b)
hereof.

 

“ECF Semiannual Prepayment Date” shall have the meaning set forth in Section
2.20(b) hereof.

 

“Effective Date” shall mean the date indicated in a document or agreement to be
the date on which such document or agreement becomes effective, or, if there is
no such indication, the date of execution of such document or agreement.

 

“Eligible Contract Participant” shall mean an “eligible contract participant” as
defined in the CEA and regulations thereunder.

 

“Eligibility Date” shall mean, with respect to each Loan Party and each Swap,
the date on which this Agreement or any Other Document becomes effective with
respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be
the Effective Date of such Swap if this Agreement or any Other Document is then
in effect with respect to such Loan Party, and otherwise it shall be the
Effective Date of this Agreement and/or such Other Document(s) to which such
Loan Party is a party).

 

“Eligible Receivables” shall mean and include, each Receivable of a Borrower (i)
arising in the Ordinary Course of Business, (ii) subject to the Collateral
Agent’s first priority perfected security interest and no other Lien (other than
Permitted Encumbrances), (iii) that is evidenced by an invoice or other
documentary evidence satisfactory to Administrative Agent in its Permitted
Discretion and (iv) which is not excluded as ineligible by virtue of one or more
of the exclusionary criteria set forth in the following sentence. No Receivable
shall be an Eligible Receivable if:

 

(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower
or to a Person controlled by an Affiliate of any Borrower;

 

(b) (i) it is a “due upon receipt” Receivable, it is due or unpaid more than
ninety (90) days after the original invoice date, or (ii) it is any other
Receivable, it is due or unpaid more than sixty (60) days after the original due
date or more than one hundred twenty (120) days after the original invoice date;
provided that, during the sixty (60) day period following the Closing Date, the
foregoing criteria shall not apply to any Receivable that is owing to SNI in
respect of an “SNI future dated invoice” for an SNI permanent placement so long
as the applicable Receivable is invoiced within thirty (30) days following the
date of commencement of employment of the applicable employee;

 

(c) it is due from a Customer with respect to which fifty percent (50%) or more
of the Receivables from such Customer are not eligible due to subclause (b)
above. Such percentage may, in Administrative Agent’s Permitted Discretion, be
increased or decreased from time to time;

 

(d) any covenant, representation or warranty contained in this Agreement with
respect to such Receivable has been breached in any material respect;

 

(e) it is due from a Customer with respect to which an Insolvency Event shall
have occurred;

 

(f) the sale is to a Customer outside the continental United States of America,
unless the sale giving rise thereto is on letter of credit, guaranty or
acceptance terms or covered under a credit insurance plan, in each case
acceptable to Administrative Agent in its Permitted Discretion;

 

(g) the sale to the Customer is on a bill-and-hold, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is evidenced by
chattel paper;

 

  13

 

 

(h) as determined by Administrative Agent in its Permitted Discretion, following
at least ninety (90) days prior written notice from Administrative Agent to
Borrower of such determination, it is due from a Customer which is the United
States of America, any state or any department, agency or instrumentality of any
of them, unless the applicable Borrower assigns its right to payment of such
Receivable to Administrative Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section
15 et seq.) or has otherwise complied with other applicable statutes or
ordinances;

 

(i) the goods giving rise to such Receivable have not been delivered to and
accepted by the Customer or the services giving rise to such Receivable have not
been performed by the applicable Borrower accepted by the Customer or the
Receivable otherwise does not represent a final sale;

 

(j) the Receivables of the Customer exceed ten percent (10%) of all Eligible
Receivables, or such higher percentage as determined by Administrative Agent, in
its Permitted Discretion, to the extent such Receivable exceeds such limit;

 

(k) the Receivable is subject to any valid offset, deduction, defense, dispute,
credits or counterclaim as determined by Administrative Agent in its Permitted
Discretion (but such Receivable shall only be ineligible to the extent of such
offset, deduction, defense, dispute, credits or counterclaim), subject to the
receipt by Administrative Agent of a no-offset letter from the Customer in form
and substance reasonably acceptable to Administrative Agent, the Customer is
also a creditor or supplier of a Borrower (but such Receivable shall only in
ineligible to the extent of the amounts owed by Borrowers to such Customer) or
the Receivable is contingent in any respect or for any reason (but such
Receivable shall only in ineligible to the extent of the amounts that are
contingent);

 

(l) the applicable Borrower has made any agreement with any Customer for any
deduction therefrom, except for discounts or allowances made in the Ordinary
Course of Business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;

 

(m) the rendition of services giving rise to such Receivable has been disputed
(but such Receivable shall only in ineligible to the extent of such dispute);

 

(n) such Receivable is not payable to a Borrower;

 

(o) such Receivable is not denominated in and payable in Dollars; or

 

(p) such Receivable is not otherwise satisfactory to Administrative Agent as
determined in good faith by Administrative Agent in the exercise of its
Permitted Discretion following delivery of reasonable advance notice under the
circumstances to Borrowers of such determination (which notice shall not be less
than ten (10) Business Days).

 

“Environmental Complaint” shall have the meaning set forth in Section 9.3(b)
hereof.

 

“Environmental Laws” shall mean all applicable federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes as well as common laws, relating to the
protection of the environment, human health and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Materials and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of federal, state,
international and local governmental agencies and authorities with respect
thereto.

 

“Environmental Liability” shall mean all liabilities (contingent or otherwise,
known or unknown), monetary obligations, losses (including monies paid in
settlement), damages, natural resource damages, costs and expenses (including
all reasonable and documented fees, costs, client charges and expenses of
counsel, experts and consultants), fines, penalties, sanctions and interest
arising directly or indirectly as a result of or based upon (a) any
Environmental Complaint; (b) any actual, alleged or threatened non-compliance
with Environmental Law or Environmental Permit; (c) any actual, alleged or
threatened Release of or exposure to Hazardous Materials; (d) any Remedial
Action; (f) any environmental condition; or (g) any contract, agreement, or
other arrangement pursuant to which liability is assumed or imposed with respect
to any of the foregoing.

 

  14

 

 

“Environmental Lien” shall mean any Lien in favor of any Governmental Body for
Environmental Liability.

 

“Environmental Permit” shall mean any permit, license, authorization, approval,
registration or entitlement required by or issued pursuant to any Environmental
Law or by any Governmental Body pursuant to Environmental Law.

 

“Equity Interests” shall mean, with respect to any Person, any and all shares,
rights to purchase, options, warrants, general, limited or limited liability
partnership interests, member interests, participation or other equivalents of
or interest in (regardless of how designated) equity of such Person, whether
voting or nonvoting, including common stock, preferred stock, convertible
securities or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Exchange Act), including in each case all of the following rights relating to
such Equity Interests, whether arising under the Organizational Documents of the
Person issuing such Equity Interests (the “issuer”) or under the applicable laws
of such issuer’s jurisdiction of organization relating to the formation,
existence and governance of corporations, limited liability companies or
partnerships or business trusts or other legal entities, as the case may be: (i)
all economic rights (including all rights to receive dividends and
distributions) relating to such Equity Interests; (ii) all voting rights and
rights to consent to any particular action(s) by the applicable issuer; (iii)
all management rights with respect to such issuer; (iv) in the case of any
Equity Interests consisting of a general partner interest in a partnership, all
powers and rights as a general partner with respect to the management,
operations and control of the business and affairs of the applicable issuer; (v)
in the case of any Equity Interests consisting of the membership/limited
liability company interests of a managing member in a limited liability company,
all powers and rights as a managing member with respect to the management,
operations and control of the business and affairs of the applicable issuer;
(vi) all rights to designate or appoint or vote for or remove any officers,
directors, manager(s), general partner(s) or managing member(s) of such issuer
and/or any members of any board of members/managers/partners/directors that may
at any time have any rights to manage and direct the business and affairs of the
applicable issuer under its Organizational Documents as in effect from time to
time or under Applicable Law; (vii) all rights to amend the Organizational
Documents of such issuer, (viii) in the case of any Equity Interests in a
partnership or limited liability company, the status of the holder of such
Equity Interests as a “partner”, general or limited, or “member” (as applicable)
under the applicable Organizational Documents and/or Applicable Law; and (ix)
all certificates evidencing such Equity Interests.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time and the rules and
regulations promulgated thereunder.

 

“Event of Default” shall have the meaning set forth in Article X hereof.

 

“Excess Cash Flow” shall mean, for any fiscal period, in each case for Holdings
and its Subsidiaries on a Consolidated Basis, the result of (a) EBITDA, minus,
(b) to the extent actually paid in cash during such fiscal period, the sum of
(i) Unfunded Capital Expenditures, (ii) taxes, (iii) dividends and
distributions, (iv) Debt Payments, and (v) the items added back to EBITDA in
clauses (f), (h) and (k) of the definition of “EBITDA”.

 

“Excess Cash Flow Prepayment Date” shall have the meaning set forth in Section
2.20(b) hereof.

 

“Excess Shares” shall have the meaning set forth in Section 3.18(a) hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Excluded Accounts” shall mean the following deposit accounts: (a) all deposit
accounts into which there is deposited no funds other than those intended solely
for the purpose of funding payroll taxes (only containing funds deducted from
pay otherwise due to employees for services rendered that has been directed to
be applied toward the tax obligations of such employees), payroll (for a period
of service no longer than one pay period at any time) and other ordinary course
compensation and benefits to employees of the Loan Parties and other similar
fiduciary purposes on behalf of Persons that are not Affiliates of any Loan
Party; (b) deposit accounts specifically and exclusively used for petty cash if
the aggregate available balance in all of such petty cash accounts does not
exceed, at any time, $50,000, (c) zero balance accounts and (d) deposit accounts
into which there is deposited funds not exceeding $200,000 in the aggregate at
any time outstanding for the purpose of securing Indebtedness described in
clause (m) of the definition of Permitted Indebtedness.

 

  15

 

 

“Excluded DACA Entities” shall mean Scribe, Agile, Access, Triad Personnel,
Triad Logistics, Paladin, BMCH and SNI.

 

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

 

“Excluded Property” shall mean (a) Excluded Accounts, (b) voting stock of a
Foreign Subsidiary or of a Foreign Subsidiary Holding Company, in excess of its
Subsidiary Stock, (c) any “intent to use” trademark applications for which a
statement of use has not been filed with the U.S. Patent and Trademark Office,
(d) Excluded Real Property, (e) any assets of any Foreign Subsidiary or of any
Foreign Subsidiary Holding Company (including, in each case, stock or other
equity in a domestic Subsidiary or other Foreign Subsidiary owned by such
entity), (f) those assets as to which, in Agents’ reasonable discretion, the
cost of obtaining a Lien therein in favor of the Collateral Agent or the
perfection thereof are excessive in relation to the benefit to the Lenders
afforded by such Lien, (g) leasehold interests, (h) motor vehicles and other
assets subject to certificates of title, but only to the extent that the
aggregate net book value of all assets in this clause (h) does not exceed
$250,000, (i) letter of credit rights (other than letter of credit rights that
are supporting obligations with respect to other Collateral), but only to the
extent that the aggregate value of all such assets does not exceed $250,000 and
(j) commercial tort claims of less than $250,000 in the aggregate, (k) equipment
owned by any Loan Party that is subject to a purchase money Lien or a capital
lease permitted under this Agreement only to the extent and for so long as the
contractual obligation pursuant to which such Lien is granted (or in the
document providing for such capital lease) prohibits or requires the consent of
any Person other than any Loan Party which has not been obtained as a condition
to the creation of any other Lien on such equipment (other than to the extent
that any such term would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the Uniform Commercial Code or any other applicable
law), and (l) any lease, license, contract or agreement to which any Loan Party
is a party, and any of its rights or interests thereunder, if and to the extent
that a security interest therein (i) shall result in (x) the abandonment,
invalidation or unenforceability of any right, title or interest of such Loan
Party therein or (y) a breach or termination (or result in any party having the
rights to so terminate) under such agreement or (ii) is prohibited by or in
violation of (x) any Applicable Law, or (y) a term, provision or condition of
any such lease, license, contract or agreement (unless in each case, such
Applicable Law, term, provision or condition would be rendered ineffective with
respect to the creation of such security interest pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision
or provisions) of any relevant jurisdiction or any other Applicable Law or
principles of equity), provided, however, that, the assets described in the
foregoing clauses (k) and (l) shall cease to be treated as “Excluded Property”
(and shall constitute Collateral) immediately at such time as the contractual or
legal prohibition shall no longer be applicable and to the extent severable,
such security interest shall attach immediately to any portion of such lease,
license, contract or agreement not subject to the prohibitions specified in (x)
or (y) above, provided, further that Excluded Property shall not include any
proceeds of any such lease, license, contract or agreement or any goodwill of
Loan Parties’ business associated therewith or attributable thereto.

 

  16

 

 

“Excluded Real Property” shall mean Real Property owned by any Loan Party with a
value of less than $250,000.

 

“Excluded Taxes” shall mean, with respect to any Agent, any Lender, Participant,
Swing Loan Lender, Issuer or any other recipient of any payment to be made by or
on account of any Obligations, (a) taxes imposed on or measured by net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes) (i) by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office or
applicable lending office is located or (ii) that are Other Connection Taxes,
(b) any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which any Loan Party is
located, (c) in the case of a Lender, any U.S. federal withholding tax that is
imposed on amounts payable to such Lender at the time such Lender becomes a
party hereto (or designates a new lending office, unless such designation was
pursuant to Section 3.12) or is attributable to such Lender’s failure (other
than as a result of a Change in Law) to comply with Section 3.10(e), except to
the extent that such Lender or Participant (or its assignor or seller of a
participation, if any) was entitled, at the time of designation of a new lending
office (or assignment or sale of a participation), to receive additional amounts
from Loan Parties with respect to such withholding tax pursuant to Section
3.10(a), or (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Existing Lenders” shall mean the lenders party to the Existing Loans.

 

“Existing Loans” shall mean, collectively, (a) the Indebtedness of Holdings and
certain of its Subsidiaries outstanding under the Loan and Security Agreement,
dated as of September 27, 2013, by and among Holdings, certain of its
Subsidiaries and ACF Finco I, LP (as successor to Keltic Financial Partners II,
LP), and (b) the Indebtedness of SNI outstanding under the Credit Agreement,
dated as of March 31, 2014, among SNI, the parties thereto as lenders, and
Monroe Capital Management Advisors, LLC, as Administrative Agent, in each case
as amended, restated and/or modified from time to time prior to the Closing
Date.

 

“Exit Fee” shall have the meaning set forth in Section 3.16 hereof.

 

“Exit Fee Trigger” shall have the meaning set forth in Section 3.16 hereof.

 

“Extraordinary Receipts” shall mean any cash received by Holdings or any of its
Subsidiaries not in the Ordinary Course of Business (and not consisting of
proceeds described in Section 2.20(a) or (c) hereof), including, without
limitation, (a) foreign, United States, state or local tax refunds, (b) pension
plan reversions, (c) proceeds of insurance, (d) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action, (e) condemnation awards (and payments in lieu thereof), (f) indemnity
payments and (g) any purchase price adjustment received in connection with any
purchase agreement. For the avoidance of doubt, Extraordinary Receipts shall
include any SNI Receipts.

 

“Facility Fee” shall have the meaning set forth in Section 3.3 hereof.

 

“FATCA” shall mean 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 thereunder or official interpretations thereof, any agreement
entered into pursuant to Section 1471(b)(1) of the Code and any Laws
implementing such agreements.

 

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

 

  17

 

 

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

 

“Fee Letter” shall mean the fee letter, dated as of the Closing Date, among
Borrowers and the Agents.

 

“Fixed Charge Coverage Ratio” shall mean, with respect to any Person for any
period, the ratio of (a) the result of (i) EBITDA of such Person and its
Subsidiaries for such period, minus (ii) Unfunded Capital Expenditures made by
such Person and its Subsidiaries during such period, to (b) the sum of (i) all
principal of Indebtedness of such Person and its Subsidiaries scheduled to be
paid or prepaid during such period (in the case of any revolving credit
facility, to the extent there is an equivalent permanent reduction in the
commitments thereunder), plus (ii) Consolidated Net Interest Expense of such
Person and its Subsidiaries for such period, plus (iii) income taxes paid or
payable by such Person and its Subsidiaries during such period, plus (iv) cash
dividends or distributions paid, or the purchase, redemption or other
acquisition or retirement for value (including in connection with any merger or
consolidation), by such Person and its Subsidiaries, in respect of the Equity
Interests of such Person and its Subsidiaries (other than dividends or
distributions paid by a Loan Party to any other Loan Party) during such period,
plus (v) any earnouts paid in cash by such Person and its Subsidiaries during
such period.

 

“Flood Laws” shall mean all Applicable Laws relating to policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 and other Applicable Laws related
thereto.

 

“Foreign Currency Hedge” shall mean any foreign exchange transaction, including
spot and forward foreign currency purchases and sales, listed or
over-the-counter options on foreign currencies, non-deliverable forwards and
options, foreign currency swap agreements, currency exchange rate price hedging
arrangements, and any other similar transaction providing for the purchase of
one currency in exchange for the sale of another currency entered into by any
Loan Party or any of their respective Subsidiaries.

 

“Foreign Currency Hedge Liabilities” shall have the meaning assigned in the
definition of “Lender-Provided Foreign Currency Hedge”.

 

“Foreign Lender” shall mean any Lender that is not a “United States Person” as
defined in Section 7701(a)(30) of the Code.

 

“Foreign Subsidiary” shall mean any Subsidiary of any Person that is not
organized or incorporated in the United States, any State or territory thereof
or the District of Columbia.

 

“Foreign Subsidiary Holding Company” shall mean any domestic Subsidiary who has
no material assets other than the equity or debt interests of one or more direct
or indirect Foreign Subsidiaries.

 

“Formula Amount” shall have the meaning set forth in Section 2.1(a) hereof.

 

  18

 

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time.

 

“Governmental Acts” shall mean any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental Body.

 

“Governmental Body” shall mean any nation or government, any state or other
political subdivision thereof or any entity, authority, agency, division or
department exercising the executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to a government
(including any supra-national bodies such as the European Union or the European
Central Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing).

 

“Group” means a “group” as that term is used in Section 13(d) of the Exchange
Act and as defined in Rule 13d-5 thereunder.

 

“Guarantor” or “Guarantors” shall have the meaning set forth in the preamble to
this Agreement and shall extend to (a) all permitted successors and assigns of
such Persons, and (b) any other Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations.

 

“Guarantor Security Agreement” shall mean any security agreement executed by any
Guarantor in favor of Collateral Agent securing the Obligations or the Guaranty
of such Guarantor, in form and substance satisfactory to the Agents.

 

“Guaranty” shall mean any guaranty of the Obligations executed by a Guarantor in
favor of Collateral Agent for its benefit and for the ratable benefit of
Lenders, in form and substance satisfactory to the Agents, including Article
XVII hereof.

 

“Hazardous Discharge” shall have the meaning set forth in Section 9.3(b) hereof.

 

“Hazardous Materials” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
as defined in or subject to regulation under Environmental Laws.

 

“Hazardous Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable Federal and state
laws now in force or hereafter enacted relating to hazardous waste disposal.

 

“Hedge Liabilities” shall mean collectively, the Foreign Currency Hedge
Liabilities and the Interest Rate Hedge Liabilities.

 

“Holdings” shall have the meaning set forth in the preamble hereof.

 

“Immaterial Subsidiaries” shall mean (a) BMPS, Inc., an Ohio corporation, (b)
BMCHPA, Inc., a Pennsylvania corporation, (c) BMCHMO, Inc., a Missouri
corporation, (d) Business Management Personnel Services, Inc., an Ohio
corporation, (e) Business Management Personnel Services, Inc., an Ohio
corporation, (f) Job Insurance, Inc., a Delaware corporation, and (g) GEE of New
York, a New York corporation.

 

“Increasing Revolving Lender” shall have the meaning set forth in Section
2.24(a) hereof.

 

  19

 

 

“Indebtedness” shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (a) borrowed money; (b) amounts
received under or liabilities in respect of any note purchase or acceptance
credit facility, and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all Capitalized Lease
Obligations; (d) reimbursement obligations (contingent or otherwise) under any
letter of credit agreement, banker’s acceptance agreement or similar
arrangement; (e) obligations under any Interest Rate Hedge, Foreign Currency
Hedge, or other interest rate management device, foreign currency exchange
agreement, currency swap agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement;
(f) any other advances of credit made to or on behalf of such Person or other
transaction (including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such Person to finance its operations or capital
requirements including to finance the purchase price of property or services and
all obligations of such Person to pay the deferred purchase price of property or
services (but not including trade payables and accrued expenses incurred in the
Ordinary Course of Business which are not represented by a promissory note or
other evidence of indebtedness and which are not more than sixty (60) days past
due, and in any case, not including any accrued expenses relating to the
Borrowers’ self-insurance plans for healthcare, workman’s compensation and
malpractice liability); (g) all Equity Interests of such Person subject to
repurchase or redemption rights or obligations (excluding repurchases or
redemptions at the sole option of such Person); (h) all indebtedness,
obligations or liabilities secured by a Lien on any asset of such Person,
whether or not such indebtedness, obligations or liabilities are otherwise an
obligation of such Person; (i) all obligations of such Person for “earnouts”,
purchase price adjustments, profit sharing arrangements, deferred purchase money
amounts and similar payment obligations or continuing obligations of any nature
of such Person arising out of purchase and sale contracts; (j) off-balance sheet
liabilities and/or pension plan liabilities of such Person; (k) obligations
arising under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business; and
(l) any guaranty of any indebtedness, obligations or liabilities of a type
described in the foregoing clauses (a) through (k).

 

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

 

“Ineligible Security” shall mean any security which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

 

“Insolvency Event” shall mean, with respect to any Person, including without
limitation any Lender, such Person or such Person’s direct or indirect parent
company (a) becomes the subject of an Insolvency Proceeding or similar
regulatory restrictions, (b) has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it or has called a meeting of its creditors, (c) admits in writing its
inability, or be generally unable, to pay its debts as they become due or ceases
operations of its present business, or (d) in the good faith determination of
the Agents, has taken any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any such proceeding or appointment of a
type described in clauses (a) or (b), provided that an Insolvency Event shall
not result solely by virtue of any ownership interest, or the acquisition of any
ownership interest, in such Person or such Person’s direct or indirect parent
company by a Governmental Body or instrumentality thereof if, and only if, such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Body or instrumentality) to reject, repudiate, disavow or disaffirm
any contracts or agreements made by such Person.

 

“Insolvency Proceeding” shall mean any proceeding commenced by or against any
Person under any provision of any Debtor Relief Law.

 

“Intellectual Property” shall mean property constituting a patent, copyright,
trademark (or any application in respect of the foregoing), service mark,
copyright application, trade name, mask work, trade secrets, design right,
assumed name or license or other right to use any of the foregoing under
Applicable Law.

 

“Intellectual Property Claim” shall mean the assertion, by any means, by any
Person of a claim that any Loan Party’s ownership, use, marketing, sale or
distribution of any Inventory, equipment, Intellectual Property or other
property or asset is violative of any ownership of or right to use any
Intellectual Property of such Person.

 

  20

 

 

“Intercompany Subordination Agreement” shall mean the Intercompany Subordination
Agreement, dated as of the Closing Date, by Holdings and its Subsidiaries in
favor of Collateral Agent for the benefit of the Secured Parties, in form and
substance reasonably satisfactory to the Agents.

 

“Interest Period” shall mean the period provided for any LIBOR Rate Loan
pursuant to Section 2.2(b) hereof.

 

“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
floor, adjustable strike cap, adjustable strike corridor, cross-currency swap or
similar agreements entered into by any Borrower, Guarantor and/or their
respective Subsidiaries in order to provide protection to, or minimize the
impact upon, such Borrower, any Guarantor and/or their respective Subsidiaries
of increasing floating rates of interest applicable to Indebtedness.

 

“Interest Rate Hedge Liabilities” shall have the meaning assigned in the
definition of “Lender-Provided Interest Rate Hedge”.

 

“Inventory” shall mean and include as to each Loan Party all of such Loan
Party’s inventory (as defined in Article 9 of the Uniform Commercial Code) and
all of such Loan Party’s goods, merchandise and other personal property,
wherever located, to be furnished under any consignment arrangement, contract of
service or held for sale or lease, all raw materials, work in process, finished
goods and materials and supplies of any kind, nature or description which are or
might be used or consumed in such Loan Party’s business or used in selling or
furnishing such goods, merchandise and other personal property, and all
Documents.

 

“Investment Property” shall mean and include, with respect to any Loan Party,
all of such Loan Party’s now owned or hereafter acquired securities (whether
certificated or uncertificated), securities entitlements, securities accounts,
commodities contracts and commodities accounts, and any other asset or right
that would constitute “investment property” under the Uniform Commercial Code.

 

“Issuer” shall mean (i) Administrative Agent in its capacity as the issuer of
Letters of Credit under this Agreement and (ii) any other Person which
Administrative Agent in its Permitted Discretion shall designate as the issuer
of and cause to issue any particular Letter of Credit under this Agreement in
place of Administrative Agent as issuer.

 

“Joinder Agreement” shall mean a Joinder Agreement, substantially in the form of
Exhibit 6.16 hereto, duly executed by a Subsidiary of a Loan Party made a party
hereto pursuant to Section 6.16.

 

“Law(s)” shall mean any law(s) (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, issued guidance, release, ruling,
order, executive order, injunction, writ, decree, bond, judgment, authorization
or approval, lien or award of or any settlement arrangement, by agreement,
consent or otherwise, with any Governmental Body, foreign or domestic.

 

“Leasehold Interests” shall mean all of each Loan Party’s right, title and
interest in and to, and as lessee of, the premises identified as leased Real
Property on Schedule 4.4 hereto.

 

“Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender. For the purpose of any provision
of this Agreement or any Other Document which provides for the granting of a
security interest or other Lien to the Collateral Agent for the benefit of the
Lenders as security for the Obligations, “Lenders” shall include any Affiliate
of a Lender to which such Obligation (specifically including any Hedge
Liabilities and any Cash Management Liabilities) is owed.

 

“Lender-Provided Foreign Currency Hedge” shall mean a Foreign Currency Hedge
which is provided by any Lender and for which such Lender confirms to
Administrative Agent in writing prior to the execution thereof that it: (a) is
documented in a standard International Swap Dealers Association, Inc. Master
Agreement or another reasonable and customary manner; (b) provides for the
method of calculating the reimbursable amount of the provider’s credit exposure
in a reasonable and customary manner; and (c) is entered into for hedging
(rather than speculative) purposes. The liabilities owing to the provider of any
Lender-Provided Foreign Currency Hedge (the “Foreign Currency Hedge
Liabilities”) by any Borrower, Guarantor, or any of their respective
Subsidiaries that is party to such Lender-Provided Foreign Currency Hedge shall,
for purposes of this Agreement and all Other Documents be “Obligations” of such
Person and of each other Borrower and Guarantor, be secured by the Collateral,
be guaranteed obligations under any Guaranty and secured obligations under any
Guarantor Security Agreement, as applicable, and otherwise treated as
Obligations for purposes of the Other Documents, except to the extent
constituting Excluded Hedge Liabilities of such Person.

 

  21

 

 

“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which such Lender confirms to
Administrative Agent in writing prior to the execution thereof that it: (a) is
documented in a standard International Swap Dealers Association, Inc. Master
Agreement or another reasonable and customary manner; (b) provides for the
method of calculating the reimbursable amount of the provider’s credit exposure
in a reasonable and customary manner; and (c) is entered into for hedging
(rather than speculative) purposes. The liabilities owing to the provider of any
Lender-Provided Interest Rate Hedge (the “Interest Rate Hedge Liabilities”) by
any Loan Party, Guarantor, or Subsidiary that is party to such Lender-Provided
Interest Rate Hedge shall, for purposes of this Agreement and all Other
Documents be “Obligations” of such Person and of each other Loan Party and
Guarantor, be secured by the Collateral, be guaranteed obligations under any
Guaranty and secured obligations under any Guarantor Security Agreement, as
applicable, and otherwise treated as Obligations for purposes of the Other
Documents, except to the extent constituting Excluded Hedge Liabilities of such
Person.

 

“Letter of Credit Application” shall have the meaning set forth in Section
2.12(a) hereof.

 

“Letter of Credit Borrowing” shall have the meaning set forth in Section 2.14(d)
hereof.

 

“Letter of Credit Fees” shall have the meaning set forth in Section 3.2 hereof.

 

“Letter of Credit Sublimit” shall mean $0.

 

“Letters of Credit” shall have the meaning set forth in Section 2.11 hereof.

 

“LIBOR” shall mean for any LIBOR Rate Loan for the then current Interest Period
relating thereto, the interest rate per annum determined by Administrative Agent
by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1% per annum) (a) the rate which appears on the Bloomberg
Page BBAM1 (or on such other substitute Bloomberg page that displays rates at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source selected by
Administrative Agent as an authorized information vendor for the purpose of
displaying rates at which U.S. dollar deposits are offered by leading banks in
the London interbank deposit market (a “LIBOR Alternate Source”), at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period as the London interbank offered rate for
U.S. Dollars for an amount comparable to such LIBOR Rate Loan and having a
borrowing date and a maturity comparable to such Interest Period (or if there
shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or
any substitute page) or any LIBOR Alternate Source, a comparable replacement
rate determined by Administrative Agent at such time (which determination shall
be conclusive absent manifest error)), by (b) a number equal to 1.00 minus the
Reserve Percentage.

 

“LIBOR Alternate Source” shall have the meaning assigned in the definition of
“LIBOR.”

 

“LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest
Period relating thereto, the greater of (i) LIBOR for such Interest Period and
(ii) 1.00%. The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan
that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. Administrative Agent shall give reasonably
prompt notice to the Borrowing Agent of the LIBOR Rate as determined or adjusted
in accordance herewith, which determination shall be conclusive absent manifest
error.

 

“LIBOR Rate Loan” shall mean any Advance that bears interest based on the LIBOR
Rate.

 

“License Agreement” shall mean any agreement between any Loan Party and a
Licensor pursuant to which such Loan Party is authorized to use any Intellectual
Property in connection with the manufacturing, marketing, sale or other
distribution of any Inventory of such Loan Party or otherwise in connection with
such Loan Party’s business operations.

 

  22

 

 

“Licensor” shall mean any Person from whom any Loan Party obtains the right to
use (whether on an exclusive or non-exclusive basis) any Intellectual Property
in connection with such Loan Party’s manufacture, marketing, sale or other
distribution of any Inventory or otherwise in connection with such Loan Party’s
business operations.

 

“Licensor/Agent Agreement” shall mean an agreement between Collateral Agent and
a Licensor, in form and substance reasonably satisfactory to the Agents, by
which Collateral Agent is given the unqualified right, vis-à-vis such Licensor,
to enforce Collateral Agent’s Liens with respect to and to dispose of any Loan
Party’s Inventory with the benefit of any Intellectual Property applicable
thereto, irrespective of such Loan Party’s default under any License Agreement
with such Licensor.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.

 

“Lien Waiver Agreement” shall mean an agreement which is executed in favor of
Collateral Agent by a Person who owns or occupies premises at which any
Collateral may be located from time to time in form and substance reasonably
satisfactory to the Agents.

 

“Loan Party” and “Loan Parties” shall have the meaning set forth in the preamble
to this Agreement and shall include any permitted successors and assigns of such
Persons.

 

“Material Adverse Effect” shall mean a material adverse effect on any of (a) the
operations, assets, liabilities or financial condition of the Loan Parties taken
as a whole, (b) the ability of the Loan Parties taken as a whole to perform any
of their obligations hereunder or under any Other Document, (c) the legality,
validity or enforceability of this Agreement or any Other Document, (d) the
rights and remedies of any Agent or any Lender hereunder or under any Other
Document, or (e) the validity, perfection or priority of a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties on Collateral having a
fair market value in excess of $250,000.

 

“Material Contract” shall mean, with respect to any Person, any contract or
agreement as to which the breach, nonperformance, cancellation or failure to
renew by any party thereto could reasonably be expected to have a Material
Adverse Effect.

 

“Maximum Percentage” shall have the meaning set forth in Section 3.18(a) hereof.

 

“Maximum Revolving Advance Amount” shall mean $25,000,000, as such amount may be
increased in accordance with Section 2.24 hereof.

 

“Maximum Swing Loan Advance Amount” shall mean $0.

 

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

 

“Modified Commitment Transfer Supplement” shall have the meaning set forth in
Section 16.3(d) hereof.

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section
3(37) or 4001(a)(3) of ERISA to which contributions are required or, within the
preceding five plan years, were required by any Loan Party or any member of the
Controlled Group.

 

  23

 

 

“Multiple Employer Plan” shall mean a Plan which has two or more contributing
sponsors (including any Loan Party or any member of the Controlled Group) at
least two of whom are not under common control, as such a plan is described in
Section 4063 or 4064 of ERISA.

 

“Negotiable Document” shall mean a Document that is “negotiable” within the
meaning of Article 7 of the Uniform Commercial Code.

 

“Net Cash Proceeds” shall mean with respect to any disposition of Collateral
(other than Inventory and cash and cash equivalents in the Ordinary Course of
Business), any issuance or incurrence of any Indebtedness, any issuance of
Equity Interests or the receipt of any Extraordinary Receipts by any Person or
any of its Subsidiaries, the aggregate cash proceeds (including cash proceeds
received pursuant to policies of insurance and by way of deferred payment of
principal pursuant to a note, installment receivable or otherwise, but only as
and when received) received by any Loan Party pursuant to such disposition,
issuance or receipt, net of (i) the reasonable direct costs related to such
disposition, issuance or receipt (including sales commissions and legal,
accounting and investment banking fees, commissions and expenses), (ii) any
portion of such proceeds deposited in an escrow account pursuant to the
documentation relating to such disposition, issuance or receipt (provided, that
such amounts shall be treated as Net Cash Proceeds upon their release from such
escrow account to any Loan Party), (iii) taxes paid or reasonably estimated by
any Loan Party to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), and (iv)
amounts required to be applied to the repayment of any Indebtedness secured by a
Permitted Encumbrance prior to the Lien of Collateral Agent on the asset subject
to such disposition, issuance or receipt, all of the costs and expenses
reasonably incurred in connection with the collection of such proceeds, award or
other payments, and any amounts retained by or paid to parties having superior
rights to such proceeds, awards or other payments.

 

“New Revolving Lender” shall have the meaning set forth in Section 2.24(a)
hereof.

 

“Non-Defaulting Lender” shall mean, at any time, any Lender holding a Revolving
Commitment that is not a Defaulting Lender at such time.

 

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

 

“Notes” shall mean collectively, the Term Loan Notes, the Revolving Credit Note
and the Swing Loan Note.

 

“Obligations” shall mean and include any and all loans (including without
limitation, all Advances), advances, debts, liabilities (including the Term Loan
PIK Amount), obligations (including without limitation all reimbursement
obligations and cash collateralization obligations with respect to Letters of
Credit issued hereunder), covenants and duties owing by any Loan Party to
Issuer, Swing Loan Lender, any Lender or any Agent (or to any other direct or
indirect subsidiary or affiliate of Issuer, Swing Loan Lender, any Lender or any
Agent) of any kind or nature, present or future (including any interest
(including, without limitation, the Term Loan PIK Amount), or other amounts
accruing thereon, any fees accruing under or in connection therewith, any costs
and expenses of any Person payable by any Loan Party and any indemnification
obligations payable by any Loan Party arising or payable after maturity, or
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to any Loan Party,
whether or not a claim for post-filing or post-petition interest, fees or other
amounts is allowable or allowed in such proceeding), whether or not evidenced by
any note, guaranty or other instrument, whether arising under any agreement,
instrument or document (including this Agreement, the Other Documents,
Lender-Provided Interest Rate Hedges, Lender-Provided Foreign Currency Hedges
and any Cash Management Products and Services) whether or not for the payment of
money, or out of any Agent’s or any Lender’s non-receipt of or inability to
collect funds or otherwise not being made whole in connection with depository
transfer check or other similar arrangements, whether direct or indirect,
absolute or contingent, joint or several, due or to become due, now existing or
hereafter arising, contractual or tortious, liquidated or unliquidated,
including, but not limited to, (i) any and all of any Loan Party’s Indebtedness
and/or liabilities under this Agreement, the Other Documents or under any other
agreement between Issuer, any Agent or any Lender and any Loan Party and any
amendments, extensions, renewals or increases and all costs and expenses of
Issuer, any Agent and any Lender incurred in the documentation, negotiation,
modification, enforcement, collection or otherwise in connection with any of the
foregoing, including but not limited to reasonable attorneys’ fees and expenses
and all obligations of any Loan Party to Issuer, any Agent or any Lender to
perform acts or refrain from taking any action, (ii) all Hedge Liabilities and
(iii) all Cash Management Liabilities. Notwithstanding anything to the contrary
contained in the foregoing, the Obligations shall not include any Excluded Hedge
Liabilities.

 

  24

 

 

“Ordinary Course of Business” shall mean, with respect to any Loan Party, the
ordinary course of such Loan Party’s business as conducted in accordance with
past practice.

 

“Organizational Documents” shall mean, with respect to any Person, any charter,
articles or certificate of incorporation, certificate of organization,
registration or formation, certificate of partnership or limited partnership,
bylaws, operating agreement, limited liability company agreement, or partnership
agreement of such Person and any and all other applicable documents relating to
such Person’s formation, organization or entity governance matters (including
any shareholders’ or equity holders’ agreement or voting trust agreement) and
specifically includes, without limitation, any certificates of designation for
preferred stock or other forms of preferred equity.

 

“Other Connection Taxes” shall mean, with respect to any Agent, any Lender,
Participant, Swing Loan Lender or other recipient of any payment made by or on
account of any Borrower, Taxes imposed as a result of a present or former
connection between such Person and the jurisdiction imposing such Tax (other
than connections arising solely from such Person 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 this Agreement.

 

“Other Documents” shall mean the Notes, the Perfection Certificate, any
Guaranty, any Guarantor Security Agreement, any Pledge Agreement, any
Lender-Provided Interest Rate Hedge, any Lender-Provided Foreign Currency Hedge,
the Intercompany Subordination Agreement, the Subordination Agreements, the SNI
Acquisition Collateral Assignment, the Disbursement Letter, any VCOC Management
Rights Agreement, the Fee Letter, any Joinder Agreement, the Specified Agreement
and any and all other agreements, instruments and documents, including the
intercreditor agreements, guaranties, pledges, powers of attorney, consents,
interest or currency swap agreements or other similar agreements and all other
writings heretofore, now or hereafter executed by any Loan Party and/or
delivered to any Agent or any Lender in respect of the transactions contemplated
by this Agreement or any of the Other Documents, in each case together with all
extensions, renewals, amendments, supplements, modifications, substitutions and
replacements thereto and thereof.

 

“Other Taxes” shall mean all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any Other Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
Other Document.

 

“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(e)
hereof.

 

“Parent” of any Person shall mean a corporation or other entity owning, directly
or indirectly, 50% or more of the Equity Interests issued by such Person having
ordinary voting power to elect a majority of the directors of such Person, or
other Persons performing similar functions for any such Person.

 

“Participant” shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.

 

“Participant Register” shall have the meaning set forth in Section 16.3(b)
hereof.

 

“Participation Advance” shall have the meaning set forth in Section 2.14(d)
hereof.

 

“Participation Commitment” shall mean the obligation hereunder of each Lender
holding a Revolving Commitment to buy a participation equal to its Revolving
Commitment Percentage (subject to any reallocation pursuant to Section
2.22(b)(iii) hereof) in the Swing Loans made by Swing Loan Lender hereunder as
provided for in Section 2.4(c) hereof and in the Letters of Credit issued
hereunder as provided for in Section 2.14(a) hereof.

 

  25

 

 

“Payment Office” shall mean the Administrative Agent’s office located at MGG
Investment Group LP, One Penn Plaza, 53rd Floor, New York, New York 10119, or at
such other office or offices of the Administrative Agent as may be designated in
writing from time to time by the Administrative Agent to the Collateral Agent
and the Borrowing Agent.

 

“Payroll Reserve” shall mean the reserve established and maintained by
Administrative Agent in its Permitted Discretion in an amount equal to the
weekly average of the payroll of the Borrowers for the most recently completed
one (1) week as calculated in the most recent field examination or in the most
recent Borrowing Base Certificate delivered to Administrative Agent.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.

 

“Pension Benefit Plan” shall mean at any time any “employee pension benefit
plan” as defined in Section 3(2) of ERISA (including a Multiple Employer Plan,
but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412, 430 or 436 of the
Code and either (i) is maintained or to which contributions are required by any
Loan Party or any member of the Controlled Group or (ii) has at any time within
the preceding five years been maintained or to which contributions have been
required by any Loan Party or any entity which was at such time a member of the
Controlled Group.

 

“Perfection Certificate” shall mean the information questionnaire and the
responses thereto provided by each Loan Party and delivered to Agents on or
about the Closing Date.

 

“Permitted Acquisition” shall mean any Acquisition by a Loan Party or any
wholly-owned Subsidiary of a Loan Party to the extent that each of the following
conditions shall have been satisfied:

 

(a) on the date of such Acquisition, no Default or Event of Default shall have
occurred and be continuing and no Default or Event of Default would result from
the consummation of such Acquisition;

 

(b) to the extent the Acquisition will be financed in whole or in part with the
proceeds of any Loan, the conditions set forth in Section 8.2 shall have been
satisfied;

 

(c) Borrowers shall have furnished to the Agents at least ten (10) Business Days
prior written notice of such proposed Acquisition, together with a term sheet
and/or commitment letter, if any, setting forth in reasonable detail the terms
and conditions of such Acquisition;

 

(d) on or prior to the date of such Acquisition, Agents shall have received (i)
the acquisition agreement and, at the request of any Agent, such other
information and documents that such Agent may reasonably request, including,
without limitation, executed counterparts of the respective agreements,
instruments or other documents pursuant to which such Acquisition is to be
consummated (including, without limitation, any related management, non-compete,
employment, option or other material agreements), any schedules to such
agreements, instruments or other documents and all other material ancillary
agreements, instruments or other documents to be executed or delivered in
connection therewith, (ii) pro forma financial statements of Holdings and its
Subsidiaries after the consummation of such Acquisition, (iii) a certificate of
an Authorized Officer of Holdings, demonstrating on a pro forma basis
compliance, as at the end of the most recently ended fiscal quarter for which
internally prepared financial statements are available, with all covenants set
forth in Section 6.5 hereof after the consummation of such Acquisition, and (iv)
copies of such other agreements, instruments or other documents as any Agent
shall reasonably request;

 

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

 

  26

 

 

(f) such Acquisition shall be effected in such a manner so that the acquired
assets or Equity Interests are owned either by a Loan Party or a wholly-owned
Subsidiary of a Loan Party and, if effected by merger or consolidation involving
a Loan Party, such Loan Party shall be the continuing or surviving Person;

 

(g) on the date of such Acquisition, and immediately after giving effect to such
Acquisition, (i) Borrowers shall have Undrawn Availability and Average Undrawn
Availability of not less than $7,500,000 and (ii) the Senior Leverage Ratio,
calculated on a pro forma basis after giving effect to such Acquisition, for the
four (4) fiscal quarter period most recently ended for which financial
statements have been delivered pursuant to Section 9.8 shall not exceed 3.50:
1.00

 

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

 

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

 

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

 

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

 

(l) within five (5) Business Days following the consummation of such
Acquisition, any such Subsidiary (and its equityholders) shall execute and
deliver the agreements, instruments and other documents required by Section 6.16
on or prior to the date of the consummation of such Acquisition;

 

(m) the total costs and liabilities (including without limitation, all assumed
liabilities, all earn-out payments, deferred payments and the value of any other
stock or assets transferred, assigned or encumbered with respect to such
Acquisitions) of any individual Acquisition does not exceed $10,000,000 and of
all such Acquisitions do not exceed $25,000,000 in the aggregate during the
Term; and

 

(n) the Agents shall have received (or in their Permitted Discretion have waived
their right to receive) a quality of earnings report prepared by an accounting
firm reasonably acceptable to the Agents in respect of the assets being acquired
or the Person whose Equity Interests are being acquired.

 

“Permitted Discretion” shall mean a determination made in good faith and in the
exercise (from the perspective of a secured asset-based lender) of commercially
reasonable business judgment.

 

“Permitted Dividends” shall mean dividends by any Loan Party to any other Loan
Party, so long as no Event of Default then exists or would exist after the
making of such dividends.

 

  27

 

 

“Permitted Encumbrances” shall mean: (a) Liens in favor of the Collateral Agent
for the benefit of the Secured Parties, including without limitation, Liens
securing Hedge Liabilities and Cash Management Products and Services; (b) Liens
for taxes, assessments or other governmental charges or levies not delinquent or
being Properly Contested; (c) deposits or pledges to secure obligations under
worker’s compensation, social security or similar laws, or under unemployment
insurance; (d) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds, performance bonds, and other obligations of like nature
arising in the Ordinary Course of Business; (e) Liens arising by virtue of the
rendition, entry or issuance against any Loan Party or any Subsidiary, or any
property of any Loan Party or any Subsidiary, of any judgment, writ, order, or
decree to the extent the rendition, entry, issuance or continued existence of
such judgment, writ, order or decree (or any event or circumstance relating
thereto) has not resulted in the occurrence of an Event of Default under Section
10.6 hereof; (f) carriers’, repairmens’, warehousemen’s, mechanics’, workers’,
materialmen’s or other like Liens arising in the Ordinary Course of Business
with respect to obligations which are not delinquent by more than thirty (30)
days or which are being Properly Contested; (g) Liens placed upon fixed assets
hereafter acquired (including through conditional sale or other title retention
agreements (including capital leases)) to secure a portion of the purchase price
thereof, provided that (I) any such lien shall not encumber any other property
of any Loan Party and (II) the aggregate amount of Indebtedness secured by such
Liens incurred as a result of such purchases during any fiscal year shall not
exceed the amount permitted in Section 7.6 hereof; (h) customary rights of
setoff in favor of banks solely to the extent incurred in connection with the
maintenance of such deposit accounts in the Ordinary Course of Business; (i) any
interests or title of a licensor, sublicensor, lessor or sublessor in the
property covered by any license or lease agreement of any Loan Party not
otherwise prohibited hereunder; (k) easements, rights-of-way, zoning ordinances
and restrictions and other requirements imposed by any Governmental Body, minor
defects or irregularities in title and other charges or encumbrances, in each
case, which do not interfere in any material respect with the Ordinary Course of
Business of Loan Parties and their Subsidiaries; (l) Liens disclosed on Schedule
1.2; provided that such Liens shall secure only those obligations which they
secure on the Closing Date and shall not subsequently apply to any other
property or assets of any Loan Party other than the property and assets to which
they apply as of the Closing Date; (m) Liens of a collecting bank arising in the
ordinary course of business under Section 4-208 of the Uniform Commercial Code
in effect in the relevant jurisdiction covering only the items being collected
upon; (n) Liens granted by a Subsidiary that is not a Loan Party in favor of any
Loan Party or any other Subsidiary that is not a Loan Party in respect of
Indebtedness owed by such Subsidiary; (o) Liens that are subject to Lien Waiver
Agreements or other lien waivers reasonably satisfactory to the Agents; (p) the
interests of lessors under operating leases and non-exclusive licensors under
license agreements; (q) Lien arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods; (r) Liens that are
contractual rights of set-off relating to purchase orders and other agreements
entered into with customers in the ordinary course of business, (s) Liens
consisting of an agreement to sell or otherwise transfer or dispose of any
property in an asset sale permitted hereunder; (t) any exceptions listed on any
title insurance policies delivered to and accepted by Agents; (u) non-exclusive
licenses, sublicenses, operating leases or subleases (including licenses and
sublicenses of Intellectual Property) granted in the Ordinary Course of
Business; (v) Liens arising from precautionary UCC financing statements relating
solely to operating leases of personal property entered into in the Ordinary
Course of Business; (w) Liens (including the right of set-off) in favor of a
bank or other depository institution arising as a matter of law encumbering
deposits, (x) rights of setoff in favor of contractual counterparties arising in
the Ordinary Course of Business; (y) 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 the definition
of “Permitted Indebtedness”; (z) utility and similar deposits in the Ordinary
Course of Business; (aa) Liens solely on any cash earnest money deposits made by
Holdings or any of its Subsidiaries in connection with any letter of intent or
purchase agreement with respect to a Permitted Acquisition; (bb) Liens on Equity
Interests in joint ventures; provided that, any such Lien is in favor of a
creditor of such joint venture and such creditor is not an Affiliate of any
partner to such joint venture; (cc) purchase options, call and similar rights
of, and restrictions for the benefit of, a third party with respect to Equity
Interests held by Holdings or any Subsidiary in joint ventures; (dd) deposits
and pledges of cash securing Indebtedness described in clause (m) of the
definition of Permitted Indebtedness in an aggregate amount not to exceed
$200,000 at any time and (ee) other Liens in an aggregate amount not to exceed
$250,000 outstanding at any one time.

 

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“Permitted Indebtedness” shall mean: (a) the Obligations; (b) Indebtedness
incurred for Capital Expenditures permitted in Section 7.6 hereof; (c) any
guarantees of Indebtedness permitted under Section 7.3 hereof; (d) any
Indebtedness listed on Schedule 5.8(b)(ii) hereof on the Closing Date; (e)
Interest Rate Hedges and Foreign Currency Hedges that are entered into by Loan
Parties to hedge their risks with respect to outstanding Indebtedness of Loan
Parties and not for speculative or investment purposes; (f) intercompany
Indebtedness owing from one or more Loan Parties to any other one or more Loan
Parties in accordance with clause (b) of the definition of “Permitted Loans”;
(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 arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument or
payment item drawn against insufficient funds in the Ordinary Course of
Business; (j) Indebtedness consisting of endorsements of items for collection or
deposit in the Ordinary Course of Business; (k) Indebtedness consisting of the
financing of insurance premiums 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 period in which such Indebtedness is
incurred and such Indebtedness is outstanding only during such period; (l)
unsecured Indebtedness in an aggregate outstanding principal amount that does
not exceed $250,000; (m) Indebtedness incurred in respect of purchase cards
(including so-called “procurement cards” or “P-cards”) incurred in the Ordinary
Course of Business; (n) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the Ordinary Course of Business; (o)
liabilities in respect of any indemnification obligation, adjustment of purchase
price, non-compete, or similar obligation incurred in connection with a
Permitted Acquisition; (p) Indebtedness consisting of Investments permitted
under the definitions of “Permitted Investments” or “Permitted Loans”; (q) to
the extent constituting Indebtedness, incentive, deferred compensation or
similar obligations to current and former officers, directors, employees and
consultants incurred in the Ordinary Course of Business (provided, that the
aggregate unfunded amount thereof shall not exceed $250,000 at any time); (r)
Indebtedness incurred by joint ventures in the aggregate amount not to exceed
$250,000 at any time outstanding to the extent such Indebtedness is non-recourse
to any Loan Party; (t) the Specified Subordinated Indebtedness; (s) trade
payables and other accounts payable not outstanding for more than 90 days after
the date any such payable was created; and (t) Indebtedness deemed to exist
pursuant to any guaranties, performance, surety, statutory or appeal bonds, in
respect of workers compensation claims or similar obligations.

 

“Permitted Investments” shall mean investments in: (a) obligations issued or
guaranteed by the United States of America or any agency thereof; (b) commercial
paper with maturities of not more than 365 days and a published rating of not
less than A-1 or P-1 (or the equivalent rating); (c) certificates of time
deposit and bankers’ acceptances having maturities of not more than 365 days and
repurchase agreements backed by United States government securities of a
commercial bank if (i) such bank has a combined capital and surplus of at least
$500,000,000, or (ii) its debt obligations, or those of a holding company of
which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency; (d) U.S. money market funds
that invest solely in obligations issued or guaranteed by the United States of
America or an agency thereof; (e) Permitted Loans; (f) investments (including
debt obligations) received in connection with the bankruptcy or reorganization
of suppliers and customer and in settlement of delinquent obligations of, and
other dispute with, customers and suppliers arising in the Ordinary Course of
Business; (g) investments otherwise permitted by Section 7.5 or 7.6; (h)
investments made by Foreign Subsidiaries in other Foreign Subsidiaries; (i)
investments in an aggregate outstanding principal amount that does not exceed
$250,000 and (j) Permitted Acquisitions; (k) the SNI Acquisition; (l) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state of any public instrumentality thereof
with maturities within one (1) year from the date of acquisition thereof, and at
the time of acquisition, having a published rating of not less than A-1 or P-1
(or the equivalent rating), (m) deposits made in the Ordinary Course of Business
to secure performance of leases or in connection with bidding on government
contracts, (n) Equity Interests issued by any Loan Party, (o) investments in
cash and cash equivalents held in deposit accounts maintained in accordance with
the terms of this Agreement (including Excluded Accounts), and (p) investments
in any Lender Provided Interest Rate Hedges and Lender-Provided Foreign Currency
Hedges.

 

“Permitted Loans” shall mean: (a) the extension of trade credit by a Loan Party
to its Customers in the Ordinary Course of Business in connection with a
rendition of services, in each case on open account terms; (b) intercompany
loans between and among Loan Parties, which loans shall be subject to the
Intercompany Subordination Agreement; (c) loans in an amount not to exceed
$250,000 in the aggregate at any time; and (d) loans and advances to employees
for moving, entertainment, travel and other similar expenses in the Ordinary
Course of Business not to exceed $50,000 in the aggregate at any time
outstanding.

 

“Permitted Specified Encumbrances” shall mean Permitted Encumbrances described
in clauses (a) and (b) of the definition of “Permitted Encumbrances”.

 

“Person” shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

  29

 

 

“Plan” shall mean any employee benefit plan (a) which is a Pension Benefit Plan
maintained by any Loan Party or any member of the Controlled Group or to which
any Loan Party or any member of the Controlled Group is required to contribute,
and (b) which is a material welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides self-insured benefits and which is maintained by any Loan
Party or to which any Loan Party is required to contribute.

 

“Pledge Agreement” shall mean the Collateral Pledge Agreement, dated as of the
Closing Date, by each Loan Party which is a party thereto in favor of Collateral
Agent and any other pledge agreement executed subsequent to the Closing Date by
any other Person to secure the Obligations.

 

“President” shall have the meaning set forth in Section 6.20 hereof.

 

“Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a)
hereof.

 

“Pro Forma Financial Statements” shall have the meaning set forth in Section
5.5(b) hereof.

 

“Projections” shall have the meaning set forth in Section 5.5(b) hereof.

 

“Properly Contested” shall mean, in the case of any Indebtedness, Lien or Taxes,
as applicable, of any Person that are not paid as and when due or payable by
reason of such Person’s bona fide dispute concerning its liability to pay the
same or concerning the amount thereof: (a) such Indebtedness, Lien or Taxes, as
applicable, are being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (b) such Person has
established appropriate reserves as shall be required in conformity with GAAP;
(c) no Lien is imposed upon any of such Person’s assets with respect to such
Indebtedness or taxes unless such Lien (x) is at all times junior and
subordinate in priority to the Liens in favor of the Collateral Agent (except
only with respect to property Taxes that have priority as a matter of applicable
state law) and, (y) enforcement of such Lien is stayed during the period prior
to the final resolution or disposition of such dispute; and (d) if such
Indebtedness or Lien, as applicable, results from, or is determined by the
entry, rendition or issuance against a Person or any of its assets of a
judgment, writ, order or decree, enforcement of such judgment, writ, order or
decree is stayed pending a timely appeal or other judicial review.

 

“Protective Advances” shall have the meaning set forth in Section 16.2(f)
hereof.

 

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

 

“Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.

 

“Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.

 

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

 

“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.

 

“Real Property” shall mean all of the real property owned, leased or operated by
any Loan Party on the Closing Date identified on Schedule 4.4 hereto or acquired
after the Closing Date, together with, in each case, all improvements and
appurtenant fixtures, equipment, personal property, easements and other property
and rights incidental to the ownership, lease or operation thereof.

 

  30

 

 

“Receivables” shall mean and include, as to each Loan Party, all of such Loan
Party’s accounts (as defined in Article 9 of the Uniform Commercial Code) and
all of such Loan Party’s contract rights, instruments (including those
evidencing indebtedness owed to such Loan Party by its Affiliates), documents,
chattel paper (including electronic chattel paper), general intangibles relating
to accounts, contract rights, instruments, documents and chattel paper, and
drafts and acceptances, credit card receivables and all other forms of
obligations owing to such Loan Party arising out of or in connection with the
sale or lease of Inventory or the rendition of services, all supporting
obligations, guarantees and other security therefor, whether secured or
unsecured, now existing or hereafter created, and whether or not specifically
sold or assigned to Administrative Agent hereunder.

 

“Register” shall have the meaning set forth in Section 16.3(e) hereof.

 

“Registration Condition” shall mean that Holdings and the Lenders have entered
into a registration rights agreement in respect of any Common Stock that may be
issued to the Lenders in accordance with the terms hereof, which agreement shall
be in form and substance reasonably satisfactory to the Lenders.

 

“Reimbursement Obligation” shall have the meaning set forth in Section 2.14(b)
hereof.

 

“Reinvestment Notice” shall mean a written notice from the Borrowing Agent to
the Agents (a) stating which Loan Party has received Net Cash Proceeds from or
in connection with (i) a sale or other disposition of Collateral or (ii) the
receipt of Extraordinary Receipts and the amount of such Net Cash Proceeds, as
applicable, (b) describing the nature of the event resulting in the receipt of
such Net Cash Proceeds, if applicable, (c) describing the Collateral sold
resulting in the receipt of such Net Cash Proceeds, if applicable, and (d)
stating the portion of such Net Cash Proceeds to be applied in accordance
Section 2.20(e)(v).

 

“Related Fund” shall mean, with respect to any Person, an Affiliate of such
Person, or a fund or account managed by such Person or an Affiliate of such
Person.

 

“Related Party Assignment” shall have the meaning set forth in Section 16.3(e)
hereof.

 

“Related Party Register” shall have the meaning set forth in Section 16.3(e)
hereof.

 

“Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.

 

“Remedial Action” shall mean any action (a) to correct or address any actual,
alleged or threatened non-compliance with any Environmental Law or Environmental
Permit, or (b) to clean up, remove, remediate, contain, treat, monitor, assess,
evaluate, investigate, prevent, minimize or in any other way address any
environmental condition or the presence, Release or threatened Release of any
Hazardous Material (including the performance of pre-remedial studies and
investigations and post-remedial operation and maintenance activities).

 

“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar
charging instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has
knowledge of facts or circumstances to the effect that it is reasonably likely
that any aspect of its operations is in actual or probable violation of any
Anti-Terrorism Law.

 

“Reportable ERISA Event” shall mean a reportable event described in Section 4043
of ERISA or the regulations promulgated thereunder, other than an event for
which the 30-day notice period is waived.

 

“Reported Outstanding Share Number” shall have the meaning set forth in Section
3.18(a) hereof.

 

“Required Lenders” shall mean (a) Lenders (not including Swing Loan Lender (in
its capacity as such Swing Loan Lender) or any Defaulting Lender) holding both
(x) at least fifty and one tenth of one percent (50.10%) of the Revolving
Commitment Amounts and (y) at least fifty and one tenth of one percent (50.10%)
of the outstanding principal amount of the Term Loans, or (b) after the
termination of all commitments of Lenders hereunder, Lenders (not including
Swing Loan Lender (in its capacity as such Swing Loan Lender) or any Defaulting
Lender) both (x) at least fifty and one tenth of one percent (50.10%) of the sum
of (1) the outstanding Revolving Advances and Swing Loans plus (2) the Maximum
Undrawn Amount of all outstanding Letters of Credit and (y) at least fifty and
one tenth of one percent (50.10%) of the outstanding Term Loans; provided,
however, (A) if there are fewer than three (3) unaffiliated Lenders, then
Required Lenders shall mean all Lenders (excluding any Defaulting Lender) and
(B) if there is more than one Lender, then Required Lenders shall in any event
include no fewer than two (2) unaffiliated Lenders (excluding Defaulting
Lenders), at least one of which shall be a Revolving Lender and at least one of
which shall be a Term Loan Lender.

 

  31

 

 

“Required Payment Date” shall have the meaning set forth in Section 2.20(h)
hereof.

 

“Required Revolving Lenders” shall mean Revolving Lenders (not including Swing
Loan Lender (in its capacity as Swing Loan Lender) or any Defaulting Lender)
holding at least fifty and one tenth of one percent (50.10%) of either (a) the
aggregate of the Revolving Commitment Amounts of all Revolving Lenders
(excluding any Defaulting Lender), or (b) after the termination of all Revolving
Commitments hereunder, the sum of the outstanding Revolving Advances and Swing
Loans, plus the Maximum Undrawn Amount of all outstanding Letters of Credit.

 

“Required Term Loan Lenders” shall mean Term Loan Lenders holding at least fifty
and one tenth of one percent (50.10%) of the outstanding Term Loans.

 

“Reserve Percentage” shall mean as of any day the maximum effective percentage
in effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”.

 

“Restructuring Fee” shall have the meaning set forth in Section 3.17 hereof.

 

“Restructuring Fee Trigger” shall have the meaning set forth in Section 3.17
hereof.

 

“Revolving Advances” shall mean Advances other than Letters of Credit, the Term
Loans and the Swing Loans.

 

“Revolving Commitment” shall mean, as to any Revolving Lender, the obligation of
such Revolving Lender (if applicable), to make Revolving Advances and
participate in Swing Loans and Letters of Credit, in an aggregate principal
and/or face amount not to exceed the Revolving Commitment Amount (if any) of
such Revolving Lender.

 

“Revolving Commitment Amount” shall mean, (a) as to any Revolving Lender other
than a New Revolving Lender, the Revolving Commitment amount (if any) set forth
opposite such Revolving Lender’s name on Schedule 1.1 hereto (or, in the case of
any Revolving Lender that became party to this Agreement after the Closing Date
pursuant to Section 16.3(c) or (d) hereof, the Revolving Commitment amount (if
any) of such Revolving Lender as set forth in the applicable Commitment Transfer
Supplement), and (b) as to any Revolving Lender that is a New Revolving Lender,
the Revolving Commitment amount provided for in the joinder signed by such New
Revolving Lender under Section 2.24(a)(x) hereof, in each case as the same may
be adjusted upon any increase by such Revolving Lender pursuant to Section 2.24
hereof, or any assignment by or to such Revolving Lender pursuant to Section
16.3(c) or (d) hereof.

 

“Revolving Commitment Percentage” shall mean, (a) as to any Revolving Lender
other than a New Revolving Lender, the Revolving Commitment Percentage (if any)
set forth opposite such Revolving Lender’s name on Schedule 1.1 hereto (or, in
the case of any Revolving Lender that became party to this Agreement after the
Closing Date pursuant to Section 16.3(c) or (d) hereof, the Revolving Commitment
Percentage (if any) of such Revolving Lender as set forth in the applicable
Commitment Transfer Supplement), and (b) as to any Revolving Lender that is a
New Revolving Lender, the Revolving Commitment Percentage provided for in the
joinder signed by such New Revolving Lender under Section 2.24(a)(ix) hereof, in
each case as the same may be adjusted upon any increase in the Maximum Revolving
Advance Amount pursuant to Section 2.24 hereof, or any assignment by or to such
Revolving Lender pursuant to Section 16.3(c) or (d) hereof.

 

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“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof.

 

“Revolving Interest Rate” shall mean (a) with respect to Revolving Advances that
are Domestic Rate Loans and Swing Loans, an interest rate per annum equal to the
sum of (i) the Applicable Margin plus (ii) the Alternate Base Rate and (b) with
respect to Revolving Advances that are LIBOR Rate Loans, an interest rate per
annum equal to the sum of (i) the Applicable Margin plus (ii) the LIBOR Rate.

 

“Revolving Lender” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.

 

“Revolving Loan Priority Collateral” shall mean and include all right, title and
interest of each Loan Party in all of the following property and assets of such
Loan Party, in each case whether now existing or hereafter arising or created
and whether now owned or hereafter acquired and wherever located: (a) all
Receivables and all supporting obligations relating thereto; (b) all Inventory;
(c) all deposit accounts (other than amounts therein constituting identifiable
Term Loan Priority Collateral Proceeds), letters of credit (whether or not the
respective letter of credit is evidenced by a writing), letter-of-credit rights,
cash and certificates of deposit and all supporting obligations relating
thereto, (d) all contract rights, rights of payment which have been earned under
any contract rights, chattel paper (including electronic chattel paper and
tangible chattel paper), commercial tort claims (whether now existing or
hereafter arising), documents (including all warehouse receipts and bills of
lading), goods, instruments (including promissory notes), insurance proceeds
(including any hazard, flood and credit insurance), security agreements, eminent
domain proceeds, condemnation proceeds, tort claim proceeds and all supporting
obligations relating thereto, in each case to the extent relating to the
property described in clauses (a) through and including (c) of this definition;
(e) all ledger sheets, ledger cards, files, correspondence, records, books of
account, business papers, computers, computer software (owned by any Loan Party
or in which it has an interest), computer programs, tapes, disks and documents,
in each case to the extent relating to the property described in clauses (a)
through and including (d) of this definition; and (f) all proceeds and products
of the property described in clauses (a) through and including (e) of this
definition, in whatever form; provided that Revolving Loan Priority Collateral
shall not include any Excluded Property. For the avoidance of doubt, Revolving
Loan Priority Collateral shall not include (i) equipment or any asset acquired
with cash proceeds from the sale of equipment, except to the extent such asset
acquired is described in clauses (a) through (f) above, and (ii) proceeds of
Revolving Advances unless such proceeds are used to acquire any asset described
in clauses (a) through (e) above.

 

“Revolving Loan Priority Collateral Proceeds” shall mean the proceeds of
Revolving Loan Priority Collateral.

 

“Sanctioned Country” shall mean a country subject to a sanctions program
maintained under any Anti-Terrorism Law.

 

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

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Secured Parties” shall mean, collectively, Agents, Issuer, Swing Loan Lender
and Lenders, together with any Affiliates of Administrative Agent or any
Revolving Lender to whom any Hedge Liabilities or Cash Management Liabilities
are owed and with each other holder of any of the Obligations, and the
respective successors and assigns of each of them.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Securitization” shall have the meaning set forth in Section 16.3(g).

 

“Semiannual Period” shall have the meaning set forth in Section 2.20(b) hereof.

 

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“Senior Leverage Ratio” shall mean, with respect to any Person and its
Subsidiaries for any period, the ratio of (a) all Indebtedness of such Person
and its Subsidiaries described in clauses (a), (b), (c), (d) and (f) in the
definition of “Indebtedness” as of the end of such period (other than
Subordinated Indebtedness), to (b) EBITDA of such Person and its Subsidiaries
for such period.

 

“Settlement” shall have the meaning set forth in Section 2.6(d) hereof.

 

“Settlement Date” shall have the meaning set forth in Section 2.6(d) hereof.

 

“SNI Acquisition Agreement” shall mean the Agreement and Plan of Merger, dated
as of March 31, 2017, by and among Holdings, GEE Group Portfolio Inc., SNI
Holdings and the Sellers’ Representative (as defined therein), as in effect on
the Closing Date.

 

“SNI Acquisition Assets” shall mean all of the property and assets (tangible and
intangible) acquired by Holdings pursuant to the SNI Acquisition Agreement.

 

“SNI Acquisition Collateral Assignment” shall mean the Collateral Assignment of
Acquisition Documents, dated as of the Closing Date, and in form and substance
satisfactory to the Agents, made by Holdings in favor of the Collateral Agent.

 

“SNI Acquisition Documents” shall mean, collectively, the following (as the same
may be amended, modified or supplemented to the extent permitted hereby): (a)
the Acquisition Agreement, (b) the SNI Seller Notes, (c) the Certificate of
Merger (as defined in the SNI Acquisition Agreement) and (d) all of the other
agreements, instruments and other documents related thereto or executed in
connection therewith, including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto, if any, and all amendments
thereto, waivers relating thereto and other side letters or agreements affecting
the terms thereof.

 

“SNI Receipts” shall mean any cash received by Holdings or any of its
Subsidiaries related to or arising out of Holdings’ acquisition of the SNI
Acquisition Assets that constitute one or more of the Extraordinary Receipts
identified in clauses (c), (d), (f) and (g) of the definition thereof.

 

“SNI Seller Noteholders” shall mean, collectively, the holders of the SNI Seller
Notes from time to time.

 

“SNI Seller Notes” shall mean, collectively, the 9.5% Convertible Subordinated
Notes due October 3, 2021, dated as of April 3, 2017, by Holdings in favor of
the SNI Seller Noteholders, in the aggregate original principal amount of
$12,500,000 (as the same may be amended, modified or supplemented to the extent
permitted hereby).

 

“Specified Agreement” mean the letter agreement, dated May 15, 2019, among the
Agents and Holdings.

 

“Specified Directors” shall have the meaning set forth in Section 6.20 hereof

 

“Specified Excess Cash Flow Amount” shall mean, for any fiscal yearperiod, the
amount equal to (a) 75% of Excess Cash Flow for such fiscal yearperiod, less (b)
the aggregate amount of all voluntary prepayments of the Term Loans made by
Borrowers pursuant to Section 2.20(g) in such fiscal yearperiod, less (c) the
amount of all permanent reductions of the Revolving Commitment in such fiscal
yearperiod which are accompanied by corresponding repayments of the Revolving
Advances.

 

“Specified Leased Locations” shall mean: (a) the Real Property leased by
Holdings located at 12950 Race Trace Road, Suite 216, Tampa, FL 33626, (b) the
Real Property leased by Access located at 8101 E. Prentice Avenue, Suite 1075,
Greenwood Village, CO 80111, (c) the Real Property leased by Paladin located at
3030 Lyndon Johnson Freeway, #1140, Dallas, TX 75234, and (d) the Real Property
leased by SNI located at 4500 Westown Parkway, Suite 120, West Des Moines, IA
50266.

 

  34

 

 

“Specified Prepayment Obligation” shall have the meaning specified in Section
2.20(i) hereof.

 

“Specified Subordinated Debt Documents” shall mean, collectively, the following
(as the same may be amended, modified or supplemented to the extent permitted
hereby): (a) the Subordinated Note (JAX), (b) the Subordinated Note (Timothy),
(c) the Subordinated Note (Dampier), (d) the SNI Seller Notes, (e) the
Subordinated Notes (Amendment No. 5) and (f) all of the other agreements,
instruments and other documents related thereto or executed in connection
therewith.

 

“Specified Subordinated Indebtedness” shall mean the Subordinated Indebtedness
from time to time outstanding under the Specified Subordinated Debt Documents.

 

“Specified Term Loan Prepayment Conditions” shall mean, on any applicable date
of determination: (a) Average Undrawn Availability is equal to or greater than
$6,000,000 immediately prior to the applicable prepayment of the Term Loans, and
(b), that on the date of the applicable prepayment of the Term Loans and
immediately after giving effect to such prepayment, Undrawn Availability shall
be equal to or greater than $6,000,000the Borrowers’ unrestricted cash and cash
equivalents in all of the checking, savings and other accounts of the Borrowers
shall exceed $2,500,000.

 

“Subcontractor Reserve” shall mean the reserve established and maintained by
Administrative Agent in its Permitted Discretion in an amount equal to the
outstanding accounts payable of the Borrowers owing to subcontractors retained
by the Borrowers as set forth in the most recent Borrowing Base Certificate
delivered to Administrative Agent.

 

“Subordinated Indebtedness” shall mean the Indebtedness of any Loan Party the
terms of which (including, without limitation, payment terms, interest rates,
covenants, remedies, defaults and other material terms) are satisfactory to the
Agents and which has been expressly subordinated in right of payment to all of
the Obligations (a) by the execution and delivery of a subordination agreement,
in form and substance satisfactory to the Agents, or (b) otherwise on terms and
conditions satisfactory to the Agents.

 

“Subordinated Note (Dampier)” shall mean the Subordinated Nonnegotiable
Promissory Note, dated October 4, 2015, by Holdings in favor of William Daniel
Dampier and Carol Lee Dampier in the original principal amount of $3,00,000 (as
the same may be amended, modified or supplemented to the extent permitted
hereby).

 

“Subordinated Note (JAX)” shall mean the Subordinated Note, dated April 3, 2017,
by Holdings in favor of JAX Legacy – Investment 1, LLC in the original principal
amount of $4,185,000 (as the same may be amended, modified or supplemented to
the extent permitted hereby).

 

“Subordinated Note (Timothy)” shall mean the Subordinated Nonnegotiable
Promissory Note, dated January 20, 2017, by Holdings in favor of Enoch S.
Timothy and Dorothy Timothy in the original principal amount of $1,000,000 (as
the same may be amended, modified or supplemented to the extent permitted
hereby).

 

“Subordinated Notes (Amendment No. 5)” shall mean the 8% Convertible
Subordinated Nonnegotiable Promissory Notes, dated May 15, 2019, by Holdings in
favor of the respective holders in the original aggregate principal amount of
$2,000,000 (as the same may be amended, modified or supplemented to the extent
permitted hereby), in form and substance satisfactory to the Agents.

 

“Subordination Agreement (Dampier)” shall mean the Subordination Agreement, to
be entered into by the time set forth in Section 6.17(d) of this Agreement, by
and among the Administrative Agent, the Collateral Agent, William Daniel Dampier
and Carol Lee Dampier, and acknowledged by the Loan Parties.

 

“Subordination Agreement (JAX)” shall mean the Subordination Agreement, dated as
of the Closing Date, by and among the Administrative Agent, the Collateral Agent
and JAX Legacy – Investment 1, LLC, and acknowledged by the Loan Parties, as in
effect on the Closing Date.

 

“Subordination Agreements (SNI)” shall mean, collectively, the Subordination
Agreements, dated as of the Closing Date, by and among the Administrative Agent,
the Collateral Agent and the SNI Seller Noteholders, and acknowledged by the
Loan Parties, as in effect on the Closing Date.

 

  35

 

 

“Subordination Agreement (Timothy)” shall the Subordination Agreement, dated as
of the Closing Date, by and among the Administrative Agent, the Collateral Agent
and Enoch S. Timothy and Dorothy Timothy, and acknowledged by the Loan Parties,
as in effect on the Closing Date.

 

“Subordination Agreements” shall mean, collectively, the Subordination Agreement
(JAX), the Subordination Agreement (Dampier), the Subordination Agreement
(Timothy), the Subordination Agreement (SNI) and the Subordination Agreements
(Amendment No. 5).

 

“Subordination Agreements (Amendment No. 5)” shall mean the Subordination
Agreements, dated as of May 15, 2019, by and among the Administrative Agent, the
Collateral Agent and the respective holders of the Subordinated Notes (Amendment
No. 5), substantially in the form attached as Exhibit A (as the same may be
amended, modified or supplemented to the extent permitted hereby).

 

“Subscription Agreements (Amendment No. 5)” shall mean the Subscription
Agreements dated as of May 1, 2019 executed by the respective holders of the
Subordinated Notes (Amendment No. 5).

 

“Subsidiary” shall mean of any Person a corporation or other entity of whose
Equity Interests having ordinary voting power (other than Equity Interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.

 

“Subsidiary Stock” shall mean (a) with respect to the Equity Interests issued to
a Loan Party by any Subsidiary (other than a Foreign Subsidiary), 100% of such
issued and outstanding Equity Interests, and (b) with respect to any Equity
Interests issued to a Loan Party by any Foreign Subsidiary (i) 100% of such
issued and outstanding Equity Interests not entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) and (ii) 66% (or such greater percentage
that, due to a change in an Applicable Law after the Closing Date, (x) could not
reasonably be expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax purposes to be
treated as a deemed dividend to such Loan Party and (y) could not reasonably be
expected to cause any material adverse tax consequences) of such issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956‑2(c)(2)).

 

“Swap” shall mean any “swap” as defined in Section 1a(47) of the CEA and
regulations thereunder other than (a) a swap entered into on, or subject to the
rules of, a board of trade designated as a contract market under Section 5 of
the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation
32.3(a).

 

“Swap Obligation” shall mean any obligation to pay or perform under any
agreement, contract or transaction that constitutes a Swap which is also a
Lender-Provided Interest Rate Hedge, or a Lender-Provided Foreign Currency
Hedge.

 

“Swing Loan Lender” shall mean MGG, in its capacity as lender of the Swing
Loans.

 

“Swing Loan Note” shall have the meaning set forth in Section 2.4(a) hereof.

 

“Swing Loans” shall have the meaning set forth in Section 2.4 hereof.

 

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Body, including any interest, additions to tax or penalties
applicable thereto.

 

“Term” shall have the meaning set forth in Section 13.1 hereof.

 

“Term Loans” shall have the meaning set forth in Section 2.3(a) hereof.

 

“Term Loan Agent” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.

 

  36

 

 

“Term Loan Amount” shall mean $48,750,000.

 

“Term Loan Commitment” shall mean, as to any Term Loan Lender, the obligation of
such Term Loan Lender to fund a portion of the Term Loans in an aggregate
principal amount equal to the Term Loan Commitment Amount of such Term Loan
Lender.

 

“Term Loan Commitment Amount” shall mean, as to any Term Loan Lender, the Term
Loan commitment amount set forth opposite such Term Loan Lender’s name on
Schedule 1.1 hereto (or, in the case of any Term Loan Lender that became party
to this Agreement after the Closing Date pursuant to Section 16.3(c) or (d)
hereof, the Term Loan commitment amount of such Term Loan Lender as set forth in
the applicable Commitment Transfer Supplement), as the same may be adjusted upon
any assignment by or to such Term Loan Lender pursuant to Section 16.3(c) or (d)
hereof.

 

“Term Loan Commitment Percentage” shall mean, as to any Term Loan Lender, the
Term Loan commitment percentage set forth opposite such Term Loan Lender’s name
on Schedule 1.1 hereto (or, in the case of any Term Loan Lender that became
party to this Agreement after the Closing Date pursuant to Section 16.3(c) or
(d) hereof, the Term Loan commitment percentage of such Term Loan Lender as set
forth in the applicable Commitment Transfer Supplement), as the same may be
adjusted upon any assignment by or to such Term Loan Lender pursuant to Section
16.3(c) or (d) hereof.

 

“Term Loan Lender” shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.

 

“Term Loan Notes” shall have the meaning set forth in Section 2.3(a) hereof.

 

“Term Loan PIK Amount” shall mean, as of any date of determination, the amount
of all interest accrued with respect to the Term Loan that has been paid in kind
by being added to the balance thereof in accordance with Section 3.1(a).

 

“Term Loan Priority Collateral” shall mean all Collateral other than Revolving
Loan Priority Collateral; provided that Term Loan Priority Collateral shall not
include any Excluded Property.

 

“Term Loan Priority Collateral Proceeds” shall mean the proceeds of the Term
Loan Priority Collateral.

 

“Term Loan Rate” shall mean (a) with respect to the portion of the Term Loans
that are Domestic Rate Loans, an interest rate per annum equal to the sum of the
Applicable Margin plus the Alternate Base Rate plus the Applicable Term Loan PIK
Margin and (b) with respect to the portion of the Term Loans that are LIBOR Rate
Loans, an interest rate per annum equal to the sum of the Applicable Margin plus
the LIBOR Rate plus the Applicable Term Loan PIK Margin.

 

“Termination Event” shall mean: (a) a Reportable ERISA Event with respect to any
Pension Benefit Plan; (b) the withdrawal of any Loan Party or any member of the
Controlled Group from a Pension Benefit Plan during a plan year in which such
entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or
a cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) the providing of notice of intent to terminate a Pension
Benefit Plan in a distress termination described in Section 4041(c) of ERISA;
(d) the commencement of proceedings by the PBGC to terminate a Pension Benefit
Plan or Multiemployer Plan; (e) any event or condition (i) which could
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Benefit Plan or, to the knowledge of any Loan Party, Multiemployer Plan, or (ii)
that could reasonably be expected to result in the termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; (f) the partial or
complete withdrawal, within the meaning of Section 4203 or 4205 of ERISA, of any
Loan Party or any member of the Controlled Group from a Multiemployer Plan; (g)
notice that a Multiemployer Plan is subject to Section 4245 of ERISA; or (h) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent, upon any Loan Party or any member of the
Controlled Group.

 

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“Total Commitment” shall mean the sum of the Total Revolving Commitment and the
Total Term Loan Commitment.

 

“Total Revolving Commitment” shall mean the sum of the amounts of the Revolving
Lenders’ Revolving Commitments.

 

“Total Term Loan Commitment” shall mean the sum of the amounts of the Term Loan
Lenders’ Term Loan Commitments.

 

“Toxic Substance” shall mean and include any material present on the Real
Property (including the Leasehold Interests) which has been shown to have
significant adverse effect on human health or which is subject to regulation
under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq.,
applicable state law, or any other applicable Federal or state laws now in force
or hereafter enacted relating to toxic substances. “Toxic Substance” includes
but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based
paints.

 

“Transactions” shall have the meaning set forth in Section 5.5(a) hereof.

 

“Transferee” shall have the meaning set forth in Section 16.3(d) hereof.

 

“Undrawn Availability” at a particular date shall mean an amount equal to (a)
the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount minus, with respect to this clause (ii), the Maximum Undrawn Amount of
all outstanding Letters of Credit, minus (b) the sum of (i) the outstanding
amount of Advances (other than the Term Loans) plus (ii) all amounts due and
owing to any Borrower’s trade creditors which are outstanding sixty (60) days or
more past their due date, plus (iii) fees and expenses incurred in connection
with the Transactions for which Borrowers are liable but which have not been
paid or charged to Borrowers’ Account, plus (iv) accrued payroll expenses for
the existing week to date and which Borrowers are liable but which have not been
paid or charged to Borrowers’ Account.

 

“Unfunded Capital Expenditures” shall mean, as to any Borrower, without
duplication, a Capital Expenditure funded (a) from such Borrower’s internally
generated cash flow or (b) with the proceeds of a Revolving Advance or Swing
Loan.

 

“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof.

 

“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107‑56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

 

“VCOC Management Rights Agreement” shall mean a Management Rights Agreement
between the Loan Parties and each Term Loan Lender that is intended to qualify
as a venture capital operating company under the United States Department of
Labor Regulation published at 29 C.F.R. Section 2510.3-101.

 

“Waivable Mandatory Prepayment” shall have the meaning set forth in Section
2.20(h) hereof.

 

“Yield Enhancement Amount” shall have the meaning set forth in Section 3.4(c)
hereof.

 

1.3 Uniform Commercial Code Terms. All terms used herein and defined in the
Uniform Commercial Code as adopted in the State of New York from time to time
(the “Uniform Commercial Code”) shall have the meaning given therein unless
otherwise defined herein. Without limiting the foregoing, the terms “accounts”,
“chattel paper” (and “electronic chattel paper” and “tangible chattel paper”),
“commercial tort claims”, “deposit accounts”, “documents”, “equipment”,
“financial asset”, “fixtures”, “general intangibles”, “goods”, “instruments”,
“inventory”, “investment property”, “letter-of-credit rights”, “payment
intangibles”, “proceeds”, “promissory note”, “securities”, “software” and
“supporting obligations” as and when used in the description of Collateral shall
have the meanings given to such terms in Articles 8 or 9 of the Uniform
Commercial Code. To the extent the definition of any category or type of
collateral is expanded by any amendment, modification or revision to the Uniform
Commercial Code, such expanded definition will apply automatically as of the
date of such amendment, modification or revision.

 

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1.4 Certain Matters of Construction. The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. 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,
except where the context clearly requires otherwise. Any pronoun used shall be
deemed to cover all genders. Wherever appropriate in the context, terms used
herein in the singular also include the plural and vice versa. All references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations. Unless otherwise provided, all references to
any instruments or agreements to which any Agent is a party, including
references to any of the Other Documents, shall include any and all
modifications, supplements or amendments thereto, any and all restatements or
replacements thereof and any and all extensions or renewals thereof. Except as
otherwise expressly provided for herein, all references herein to the time of
day shall mean the time in New York, New York. Whenever the words “including” or
“include” shall be used, such words shall be understood to mean “including,
without limitation” or “include, without limitation”. A Default or an Event of
Default shall be deemed to exist at all times during the period commencing on
the date that such Default or Event of Default occurs to the date on which such
Default or Event of Default is waived in writing pursuant to this Agreement or,
in the case of a Default, is cured within any period of cure expressly provided
for in this Agreement; and an Event of Default shall “continue” or be
“continuing” until such Event of Default has been waived in writing by Required
Lenders. Any Lien referred to in this Agreement or any of the Other Documents as
having been created in favor of Collateral Agent, any agreement entered into by
any Agent pursuant to this Agreement or any of the Other Documents, any payment
made by or to or funds received by any Agent pursuant to or as contemplated by
this Agreement or any of the Other Documents, or any act taken or omitted to be
taken by any Agent, shall, unless otherwise expressly provided, be created,
entered into, made or received, or taken or omitted, for the benefit or account
of Agents and Lenders. Wherever the phrase “to the best of Borrowers’ knowledge”
or “to the best of Loan Parties’ knowledge” or words of similar import relating
to the knowledge or the awareness of any Borrower or any Loan Party are used in
this Agreement or Other Documents, such phrase shall mean and refer to (i) the
actual knowledge of a senior officer of any Loan Party or (ii) the knowledge
that a senior officer would have obtained if he/she had engaged in a good faith
and diligent performance of his/her duties. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise within the limitations of, another covenant shall not
avoid the occurrence of a default if such action is taken or condition exists.
In addition, all representations and warranties hereunder shall be given
independent effect so that if a particular representation or warranty proves to
be incorrect or is breached, the fact that another representation or warranty
concerning the same or similar subject matter is correct or is not breached will
not affect the incorrectness of a breach of a representation or warranty
hereunder. References in this Agreement and the Other Documents to “paid in
full”, “satisfied in full” and words of similar import shall mean the payment in
full in cash of all Obligations (including without limitation, cash
collateralization or termination of all Letters of Credit, Hedge Liabilities and
Cash Management Liabilities) other than obligations for taxes, indemnifications,
damages and other contingent liabilities in respect of which no claim or demand
for payment has been made or, in the case of indemnifications or contingent
liabilities, no notice has been given.

 

1.5 Fiscal Periods. For purposes hereunder, whenever a provision of this
Agreement refers to a quarter ending March 31, June 30, September 30 or December
31 or a fiscal year ending September 30, such references shall mean the actual
date closest to such date which corresponds with the end of each of Loan
Parties’ quarter end or fiscal year.

 

II. ADVANCES, PAYMENTS.

 

2.1 Revolving Advances.

 

(a) Amount of Revolving Advances. Subject to the terms and conditions set forth
in this Agreement specifically including Sections 2.1(b) and (c), each Revolving
Lender, severally and not jointly, will make Revolving Advances to Borrowers in
aggregate amounts outstanding at any time equal to such Revolving Lender’s
Revolving Commitment Percentage of the lesser of (x) the Maximum Revolving
Advance Amount, less the outstanding amount of Swing Loans, less the aggregate
Maximum Undrawn Amount of all outstanding Letters of Credit or (y) an amount
equal to the sum of:

 

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(i) up to 85% (the “Advance Rate”) of Eligible Receivables, minus

 

(ii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit,
minus

 

(iii) such reserves (including without limitation, the Payroll Reserve and the
Subcontractor Reserve) as Administrative Agent may reasonably deem proper and
necessary from time to time in its Permitted Discretion.

 

The amount derived from the sum of (x) Section 2.1(a)(y)(i) minus (y) Sections
2.1 (a)(y)(ii) and (iii) at any time and from time to time shall be referred to
as the “Formula Amount”. The Revolving Advances shall be evidenced by one or
more secured promissory notes (collectively, the “Revolving Credit Note”)
substantially in the form attached hereto as Exhibit 2.1(a). Notwithstanding
anything to the contrary contained in the foregoing or otherwise in this
Agreement, the outstanding aggregate principal amount of Swing Loans and the
Revolving Advances at any one time outstanding shall not exceed an amount equal
to the lesser of (i) the Maximum Revolving Advance Amount less the Maximum
Undrawn Amount of all outstanding Letters of Credit or (ii) the Formula Amount.

 

(b) Discretionary Rights. The Advance Rate may be increased or decreased by the
Administrative Agent at any time and from time to time in the exercise of its
Permitted Discretion based on Administrative Agent’s review of Borrowing Base
Certificates, field examinations or other Collateral evaluations. Each Borrower
consents to any such increases or decreases and acknowledges that decreasing the
Advance Rate or increasing or imposing reserves may limit or restrict Advances
requested by Borrowing Agent. Prior to the occurrence of an Event of Default or
Default, the Administrative Agent shall give Borrowing Agent ten (10) Business
Days prior written notice of its intention to decrease the Advance Rate. The
rights of the Administrative Agent under this subsection are subject to the
provisions of Section 16.2(b) hereof.

 

2.2 Procedures for Requesting Revolving Advances; Procedures for Selection of
Applicable Interest Rates for All Advances.

 

(a) Borrowing Agent on behalf of any Borrower may notify Administrative Agent
prior to 12:00 p.m. on a Business Day of a Borrower’s request to incur, on the
date that is no earlier than two (2) Business Days after the date on which such
request is made, a Revolving Advance hereunder; provided that the Borrower may
obtain no more than one Revolving Advance during any calendar week. Should any
amount required to be paid as interest hereunder, or as fees or other charges
under this Agreement or any other agreement with Agents or Lenders, or with
respect to any other Obligation under this Agreement, become due, same shall be
deemed a request for a Revolving Advance maintained as a Domestic Rate Loan as
of the date such payment is due, in the amount required to pay in full such
interest, fee, charge or Obligation, and such request shall be irrevocable.

 

(b) Notwithstanding the provisions of subsection (a) above, in the event any
Borrower desires to obtain a LIBOR Rate Loan for any Advance (other than a Swing
Loan), Borrowing Agent shall give Administrative Agent written notice by no
later than 12:00 p.m. on the day which is three (3) Business Days prior to the
date such LIBOR Rate Loan is to be borrowed, specifying (i) the date of the
proposed borrowing (which shall be a Business Day), (ii) the type of borrowing
and the amount of such Advance to be borrowed, which amount shall be in a
minimum amount of $250,000 and in integral multiples of $100,000 thereafter, and
(iii) the duration of the first Interest Period therefor. Interest Periods for
LIBOR Rate Loans shall be for one, two or three months; provided that, if an
Interest Period would end on a day that is not a Business Day, it shall end on
the next succeeding Business Day unless such day falls in the next succeeding
calendar month in which case the Interest Period shall end on the next preceding
Business Day. No LIBOR Rate Loan shall be made available to any Borrower during
the continuance of a Default or an Event of Default. After giving effect to each
requested LIBOR Rate Loan, including those which are converted from a Domestic
Rate Loan under Section 2.2(e), there shall not be outstanding more than five
(5) LIBOR Rate Loans, in the aggregate at any time.

 

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(c) Each Interest Period of a LIBOR Rate Loan shall commence on the date such
LIBOR Rate Loan is made and shall end on such date as Borrowing Agent may elect
as set forth in subsection (b)(iii) above, provided that no Interest Period
shall end after the last day of the Term.

 

(d) Borrowing Agent shall elect the initial Interest Period applicable to a
LIBOR Rate Loan by its notice of borrowing given to Administrative Agent
pursuant to Section 2.2(b) or by its notice of conversion given to
Administrative Agent pursuant to Section 2.2(e), as the case may be. Borrowing
Agent shall elect the duration of each succeeding Interest Period by giving
irrevocable written notice to Administrative Agent of such duration not later
than 12:00 p.m. on the day which is three (3) Business Days prior to the last
day of the then current Interest Period applicable to such LIBOR Rate Loan. If
Administrative Agent does not receive timely notice of the Interest Period
elected by Borrowing Agent, Borrowing Agent shall be deemed to have elected to
convert such LIBOR Rate Loan to a Domestic Rate Loan as of the last day of the
Interest Period applicable to such LIBOR Rate Loan subject to Section 2.2(e)
below.

 

(e) Provided that no Event of Default shall have occurred and be continuing,
Borrowing Agent may, on the last Business Day of the then current Interest
Period applicable to any outstanding LIBOR Rate Loan, or on any Business Day
with respect to Domestic Rate Loans, convert any such loan into a loan of
another type in the same aggregate principal amount provided that any conversion
of a LIBOR Rate Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such LIBOR Rate Loan. If Borrowing Agent
desires to convert a loan, Borrowing Agent shall give Administrative Agent
written notice by no later than 12:00 p.m. (i) on the day which is three (3)
Business Days prior to the date on which such conversion is to occur with
respect to a conversion from a Domestic Rate Loan to a LIBOR Rate Loan, or (ii)
on the day which is one (1) Business Day prior to the date on which such
conversion is to occur (which date shall be the last Business Day of the
Interest Period for the applicable LIBOR Rate Loan) with respect to a conversion
from a LIBOR Rate Loan to a Domestic Rate Loan, specifying, in each case, the
date of such conversion, the Advances to be converted and if the conversion is
to a LIBOR Rate Loan, the duration of the first Interest Period therefor.
Administrative Agent shall provide Term Loan Agent with prompt notice of any
conversion of any Term Loan from a Domestic Rate Loan to a LIBOR Rate Loan or
from a LIBOR Rate Loan to a Domestic Rate Loan.

 

(f) At its option and upon written notice given prior to 12:00 p.m. at least
three (3) Business Days prior to the date of such prepayment, any Borrower may,
subject to Section 2.2(g) hereof, prepay the LIBOR Rate Loans in whole at any
time or in part from time to time with accrued interest on the principal being
prepaid to the date of such repayment. Such Borrower shall specify the date of
prepayment of Advances which are LIBOR Rate Loans and the amount of such
prepayment. In the event that any prepayment of a LIBOR Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, such Borrower shall indemnify Agents and
Lenders therefor in accordance with Section 2.2(g) hereof.

 

(g) Each Loan Party shall indemnify Agents and Lenders and hold Agents and
Lenders harmless from and against any and all losses or expenses that Agents and
Lenders may sustain or incur as a consequence of any prepayment, conversion of
or any default by any Borrower in the payment of the principal of or interest on
any LIBOR Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a LIBOR Rate Loan after notice thereof has
been given, including, but not limited to, any interest payable by Agents or
Lenders to lenders of funds obtained by it in order to make or maintain its
LIBOR Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by any Agent or any Lender to
Borrowing Agent shall be conclusive absent manifest error.

 

(h) Notwithstanding any other provision hereof, if any Applicable Law, treaty,
regulation or directive, or any change therein or in the interpretation or
application thereof, including without limitation any Change in Law, shall make
it unlawful for Lenders or any Lender (for purposes of this subsection (h), the
term “Lender” shall include any Lender and the office or branch where any Lender
or any Person controlling such Lender makes or maintains any LIBOR Rate Loans)
to make or maintain its LIBOR Rate Loans, the obligation of Lenders (or such
affected Lender) to make LIBOR Rate Loans hereunder shall forthwith be cancelled
and Borrowers shall, if any affected LIBOR Rate Loans are then outstanding,
promptly upon request from Administrative Agent, either (at Borrower’s option)
pay all such affected LIBOR Rate Loans or convert such affected LIBOR Rate Loans
into loans of another type either (i) on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan if such Lender may lawfully
continue to maintain such Loan to such date or (ii) immediately if such Lender
shall determine that it may not lawfully continue to maintain such LIBOR Rate
Loan to such date. If any such payment or conversion of any LIBOR Rate Loan is
made on a day that is not the last day of the Interest Period applicable to such
LIBOR Rate Loan, Borrowers shall pay each Agent, upon such Agent’s request, such
amount or amounts set forth in clause (g) above. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Lenders to Borrowing Agent shall be conclusive absent manifest error.

 

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2.3 Term Loans

 

1.2 .

 

(a) Subject to the terms and conditions of this Agreement, each Term Loan
Lender, severally and not jointly, will make a term loan to Borrowers in the
amount equal to such Term Loan Lender’s Term Loan Commitment Percentage of the
Term Loan Amount (collectively, the “Term Loans”). If requested by any Term Loan
Lender, the portion of Term Loans owing to such Term Loan Lender shall be
evidenced by one or more secured promissory notes by the Borrowers in favor of
such Term Loan Lender (collectively the “Term Loan Notes”) in substantially the
form attached hereto as Exhibit 2.3.

 

(b) The Term Loan Commitment shall terminate at 5:00 p.m. (New York City time)
on the Closing Date. Any principal amount of the Term Loans which is repaid or
prepaid may not be re-borrowed.

 

(c) The Term Loans shall be advanced on the Closing Date and shall be, with
respect to principal, payable as follows, subject to acceleration upon the
occurrence of an Event of Default under this Agreement or termination of this
Agreement and provided that all unpaid principal, accrued and unpaid interest
and all unpaid fees and expenses shall be due and payable in full on the last
day of the Term:

 

Date

Principal Payment Required

June 30, 2021

$444,525

September 30, 2021

$444,525

December 31, 2021

$444,525

March 31, 20202022

$500,000.00444,525

June 30, 20202022

$500,000.00444,525

September 30, 20202022

$500,000.00444,525

December 31, 20202022

$500,000.00444,525

March 31, 20212023

$500,000.00444,525

 

(d) The Term Loans may consist of Domestic Rate Loans or LIBOR Rate Loans, or a
combination thereof, as Borrowing Agent may request; and in the event that
Borrowers desire to obtain or extend any portion of the Term Loans as a LIBOR
Rate Loan or to convert any portion of the Term Loans from a Domestic Rate Loan
to a LIBOR Rate Loan, Borrowing Agent shall comply with the notification
requirements set forth in Sections 2.2(b) and/or (e) and the provisions of
Sections 2.2(b) through (h) shall apply.

 

2.4 Swing Loans.

 

(a) Subject to the terms and conditions set forth in this Agreement, and in
order to minimize the transfer of funds between Revolving Lenders and
Administrative Agent for administrative convenience, Administrative Agent,
Revolving Lenders and Swing Loan Lender agree that in order to facilitate the
administration of this Agreement, Swing Loan Lender may, at its election and
option made in its sole discretion cancelable at any time for any reason
whatsoever, make swing loan advances (“Swing Loans”) available to Borrowers as
provided for in this Section 2.4 at any time or from time to time after the
Closing Date to, but not including, the expiration of the Term, in an aggregate
principal amount up to but not in excess of the Maximum Swing Loan Advance
Amount, provided that the outstanding aggregate principal amount of Swing Loans
and the Revolving Advances at any one time outstanding shall not exceed an
amount equal to the lesser of (i) the Maximum Revolving Advance Amount less the
Maximum Undrawn Amount of all outstanding Letters of Credit or (ii) the Formula
Amount. All Swing Loans shall be Domestic Rate Loans only. Borrowers may borrow
(at the option and election of Swing Loan Lender), repay and re-borrow (at the
option and election of Swing Loan Lender) Swing Loans and Swing Loan Lender may
make Swing Loans as provided in this Section 2.4 during the period between
Settlement Dates. All Swing Loans shall be evidenced by a secured promissory
note in form and substance satisfactory to Swing Loan Lender (the “Swing Loan
Note”). Swing Loan Lender’s agreement to make Swing Loans under this Agreement
is cancelable at any time for any reason whatsoever and the making of Swing
Loans by Swing Loan Lender from time to time shall not create any duty or
obligation, or establish any course of conduct, pursuant to which Swing Loan
Lender shall thereafter be obligated to make Swing Loans in the future.

 

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(b) Upon either (i) any request by Borrowing Agent for a Revolving Advance made
pursuant to Section 2.2(a) hereof or (ii) the occurrence of any deemed request
by Borrowers for a Revolving Advance pursuant to the provisions of the last
sentence of Section 2.2(a) hereof, Swing Loan Lender may elect, in its sole
discretion, to have such request or deemed request treated as a request for a
Swing Loan, and may advance same day funds to Borrowers as a Swing Loan;
provided that notwithstanding anything to the contrary provided for herein,
Swing Loan Lender may not make Swing Loan Advances if Swing Loan Lender has been
notified by any Agent or by Required Revolving Lenders or Required Term Loan
Lenders that one or more of the applicable conditions set forth in Section 8.2
of this Agreement have not been satisfied or the Revolving Commitments have been
terminated for any reason.

 

(c) Upon the making of a Swing Loan (whether before or after the occurrence of a
Default or an Event of Default and regardless of whether a Settlement has been
requested with respect to such Swing Loan), each Revolving Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from Swing Loan Lender, without recourse or warranty, an
undivided interest and participation in such Swing Loan in proportion to its
Revolving Commitment Percentage. Swing Loan Lender or Administrative Agent may,
at any time, require the Revolving Lenders to fund such participations by means
of a Settlement as provided for in Section 2.6(d) below. From and after the
date, if any, on which any Revolving Lender is required to fund, and funds, its
participation in any Swing Loans purchased hereunder, Administrative Agent shall
promptly distribute to such Revolving Lender its Revolving Commitment Percentage
of all payments of principal and interest and all proceeds of Collateral
received by Administrative Agent in respect of such Swing Loan; provided that no
Revolving Lender shall be obligated in any event to make Revolving Advances in
an amount in excess of its Revolving Commitment Amount minus its Participation
Commitment (taking into account any reallocations under Section 2.22) of the
Maximum Undrawn Amount of all outstanding Letters of Credit.

 

2.5 Disbursement of Advance Proceeds. All Advances shall be disbursed from
whichever office or other place Administrative Agent may designate from time to
time and, together with any and all other Obligations of Loan Parties to
Administrative Agent or Lenders, shall be charged to Borrowers’ Account on
Administrative Agent’s books. The proceeds of each Revolving Advance or Swing
Loan requested by Borrowing Agent on behalf of any Borrower or deemed to have
been requested by any Borrower under Sections 2.2(a), 2.6(b) or 2.14 hereof
shall, (i) with respect to requested Revolving Advances, to the extent Lenders
make such Revolving Advances in accordance with Section 2.2(a), 2.6(b) or 2.14
hereof, and with respect to Swing Loans made upon any request by Borrowing Agent
for a Revolving Advance to the extent Swing Loan Lender makes such Swing Loan in
accordance with Section 2.4(b) hereof, be made available to the applicable
Borrower on the day so requested by way of credit to such Borrower’s operating
account at PNC, or such other bank as Borrowing Agent may designate following
notification to Administrative Agent, in immediately available federal funds or
other immediately available funds or, (ii) with respect to Revolving Advances
deemed to have been requested by any Borrower or Swing Loans made upon any
deemed request for a Revolving Advance by any Borrower, be disbursed to
Administrative Agent to be applied to the outstanding Obligations giving rise to
such deemed request. During the Term, Borrowers may use the Revolving Advances
and Swing Loans by borrowing, prepaying and reborrowing, all in accordance with
the terms and conditions hereof.

 

2.6 Making and Settlement of Advances.

 

(a) Each borrowing of Revolving Advances shall be advanced according to the
applicable Revolving Commitment Percentages of Revolving Lenders (subject to any
contrary terms of Sections 2.6(c) or 2.22). The Term Loans shall be advanced
according to the applicable Term Loan Commitment Percentage of the Term Loan
Lenders. Each borrowing of Swing Loans shall be advanced by Swing Loan Lender
alone.

 

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(b) Promptly after receipt by Administrative Agent of a request or a deemed
request for a Revolving Advance pursuant to Section 2.2(a) and, with respect to
Revolving Advances, to the extent Administrative Agent elects not to provide a
Swing Loan or the making of a Swing Loan would result in the aggregate amount of
all outstanding Swing Loans exceeding the maximum amount permitted in Section
2.4(a), Administrative Agent shall notify Revolving Lenders of its receipt of
such request specifying the information provided by Borrowing Agent and the
apportionment among Revolving Lenders of the requested Revolving Advance as
determined by Administrative Agent in accordance with the terms hereof. Each
Revolving Lender shall remit the principal amount of each Revolving Advance to
Administrative Agent such that Administrative Agent is able to, and
Administrative Agent shall, to the extent the applicable Revolving Lenders have
made funds available to it for such purpose and subject to Section 8.2, fund
such Revolving Advance to Borrowers in U.S. Dollars and immediately available
funds at the Payment Office prior to the close of business, on the applicable
borrowing date; provided that if any applicable Revolving Lender fails to remit
such funds to Administrative Agent in a timely manner, Administrative Agent may
elect in its sole discretion to fund with its own funds the Revolving Advance of
such Revolving Lender on such borrowing date, and such Revolving Lender shall be
subject to the repayment obligation in Section 2.6(c) hereof.

 

(c) Unless Administrative Agent shall have been notified by telephone, confirmed
in writing, by any Revolving Lender that such Revolving Lender will not make the
amount which would constitute its applicable Revolving Commitment Percentage of
the requested Revolving Advance available to Administrative Agent,
Administrative Agent may (but shall not be obligated to) assume that such
Revolving Lender has made such amount available to Administrative Agent on such
date in accordance with Section 2.6(b) and may, in reliance upon such
assumption, make available to Borrowers a corresponding amount. In such event,
if a Revolving Lender has not in fact made its applicable Revolving Commitment
Percentage of the requested Revolving Advance available to Administrative Agent,
then the applicable Revolving Lender and Borrowers severally agree to pay to
Administrative Agent on demand such corresponding amount with interest thereon,
for each day from and including the date such amount is made available to
Borrowers through but excluding the date of payment to Administrative Agent, at
(i) in the case of a payment to be made by such Revolving Lender, the greater of
(A) (x) the daily average Federal Funds Effective Rate (computed on the basis of
a year of 360 days) during such period as quoted by Administrative Agent, times
(y) such amount or (B) a rate determined by Administrative Agent in accordance
with banking industry rules on interbank compensation, and (ii) in the case of a
payment to be made by Borrowers, the Revolving Interest Rate for Revolving
Advances that are Domestic Rate Loans. If such Revolving Lender pays its share
of the applicable Revolving Advance to Administrative Agent, then the amount so
paid shall constitute such Revolving Lender’s Revolving Advance. Any payment by
Borrowers shall be without prejudice to any claim Borrowers may have against a
Revolving Lender that shall have failed to make such payment to Administrative
Agent. A certificate of Administrative Agent submitted to any Revolving Lender
or Borrowers with respect to any amounts owing under this paragraph (c) shall be
conclusive, in the absence of manifest error.

 

(d) Administrative Agent, on behalf of Swing Loan Lender, shall demand
settlement (a “Settlement”) of all or any Swing Loans with Revolving Lenders on
at least a weekly basis, or on any more frequent date that Administrative Agent
elects or that Swing Loan Lender at its option exercisable for any reason
whatsoever may request, by notifying Revolving Lenders of such requested
Settlement by facsimile, telephonic or electronic transmission no later than
3:00 p.m. on the date of such requested Settlement (the “Settlement Date”).
Subject to any contrary provisions of Section 2.22, each Revolving Lender shall
transfer the amount of such Revolving Lender’s Revolving Commitment Percentage
of the outstanding principal amount (plus interest accrued thereon to the extent
requested by Administrative Agent) of the applicable Swing Loan with respect to
which Settlement is requested by Administrative Agent, to such account of
Administrative Agent as Administrative Agent may designate not later than 5:00
p.m. on such Settlement Date if requested by Administrative Agent by 3:00 p.m.,
otherwise not later than 5:00 p.m. on the next Business Day. Settlements may
occur at any time notwithstanding that the conditions precedent to making
Revolving Advances set forth in Section 8.2 have not been satisfied or the
Revolving Commitments shall have otherwise been terminated at such time. All
amounts so transferred to Administrative Agent shall be applied against the
amount of outstanding Swing Loans and, when so applied shall constitute
Revolving Advances of such Revolving Lenders accruing interest as Domestic Rate
Loans. If any such amount is not transferred to Administrative Agent by any
Revolving Lender on such Settlement Date, Administrative Agent shall be entitled
to recover such amount on demand from such Lender together with interest thereon
as specified in Section 2.6(c).

 

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(e) If any Lender or Participant (a “Benefited Lender”) shall at any time
receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender’s
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such Benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender’s Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such Benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under Applicable Law, that each
Lender so purchasing a portion of another Lender’s Advances may exercise all
rights of payment (including rights of set-off) with respect to such portion as
fully as if such Lender were the direct holder of such portion, and the
obligations owing to each such purchasing Lender in respect of such
participation and such purchased portion of any other Lender’s Advances shall be
part of the Obligations secured by the Collateral, and the obligations owing to
each such purchasing Lender in respect of such participation and such purchased
portion of any other Lender’s Advances shall be part of the Obligations secured
by the Collateral.

 

2.7 Maximum Advances

 

. The aggregate balance of Revolving Advances plus Swing Loans outstanding at
any time shall not exceed the lesser of (a) the Maximum Revolving Advance Amount
less the aggregate Maximum Undrawn Amount of all issued and outstanding Letters
of Credit or (b) the Formula Amount.

 

2.8 Manner and Repayment of Advances.

 

(a) The Revolving Advances and Swing Loans shall be due and payable in full on
the last day of the Term subject to earlier prepayment as herein provided. The
Term Loans shall be due and payable as provided in Section 2.3 hereof and shall
be due and payable in full on the last day of the Term, subject to mandatory
prepayments as herein provided. Notwithstanding the foregoing, all Advances
shall be subject to earlier repayment upon (x) acceleration upon the occurrence
of an Event of Default under this Agreement or (y) termination of this
Agreement. Each payment (including each prepayment) by any Borrower on account
of the principal of and interest on the Advances (other than the Term Loans)
shall be applied, first to the outstanding Swing Loans and next, pro rata
according to the applicable Revolving Commitment Percentages of Revolving
Lenders, to the outstanding Revolving Advances (subject to any contrary
provisions of Section 2.22). Subject to any provisions to the contrary in
Sections 2.20(e) or Section 2.20(g), each payment (including each prepayment) by
any Borrower on account of the principal of and interest on any Term Loan shall
be applied to the Term Loans according to the Term Loan Commitment Percentages
of the Term Loan Lenders in the inverse order of maturities thereof.

 

(b) Each Borrower recognizes that the amounts evidenced by checks, notes, drafts
or any other items of payment relating to and/or proceeds of Collateral may not
be collectible by Administrative Agent on the date received by Administrative
Agent. Administrative Agent shall conditionally credit Borrowers’ Account for
each item of payment on the next Business Day after the Business Day on which
such item of payment is received by Administrative Agent (and the Business Day
on which each such item of payment is so credited shall be referred to, with
respect to such item, as the “Application Date”). Administrative Agent is not,
however, required to credit Borrowers’ Account for the amount of any item of
payment which is unsatisfactory to Administrative Agent in its Permitted
Discretion and Administrative Agent may charge Borrowers’ Account for the amount
of any item of payment which is returned, for any reason whatsoever, to
Administrative Agent unpaid. Subject to the foregoing, Borrowers agree that for
purposes of computing the interest charges under this Agreement, each item of
payment received by Administrative Agent shall be deemed applied by
Administrative Agent on account of the Obligations on its respective Application
Date. Loan Parties further agree that there is a monthly float charge payable to
Administrative Agent for Administrative Agent’s sole benefit, in an amount equal
to (y) the face amount of all items of payment received during the prior month
(including items of payment received by Administrative Agent as a wire transfer
or electronic depository check) multiplied by (z) the Revolving Interest Rate
with respect to Domestic Rate Loans for one (1) Business Day. All proceeds
received by Administrative Agent shall be applied to the Obligations in
accordance with Section 4.8(h).

 

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(c) All payments of principal, interest and other amounts payable hereunder, or
under any of the Other Documents shall be made to Administrative Agent at the
Payment Office not later than 12:00 p.m. on the due date therefor in Dollars in
federal funds or other funds immediately available to Administrative Agent.
Administrative Agent shall have the right to effectuate payment of any and all
Obligations due and owing hereunder by charging Borrowers’ Account or by making
Advances as provided in Section 2.2 hereof.

 

(d) Except as expressly provided herein, all payments (including prepayments) to
be made by any Borrower on account of principal, interest, fees and other
amounts payable hereunder shall be made without deduction, setoff or
counterclaim and shall be made to Administrative Agent on behalf of Lenders to
the Payment Office, in each case on or prior to 12:00 p.m., in Dollars and in
immediately available funds.

 

2.9 Repayment of Excess Advances. If at any time the aggregate balance of
outstanding Revolving Advances, Swing Loans, and/or Advances taken as a whole
exceeds the maximum amount of such type of Advances and/or Advances taken as a
whole (as applicable) permitted hereunder, such excess Advances shall be
immediately due and payable without the necessity of any demand, at the Payment
Office, whether or not a Default or an Event of Default has occurred.

 

2.10 Statement of Account. Administrative Agent shall maintain, in accordance
with its customary procedures, a loan account (“Borrowers’ Account”) in the name
of Borrowers in which shall be recorded the date and amount of each Advance made
by Administrative Agent or Lenders and the date and amount of each payment in
respect thereof; provided, however, the failure by Administrative Agent to
record the date and amount of any Advance shall not adversely affect
Administrative Agent or any Lender. Each month, Administrative Agent shall send
to Borrowing Agent and Lenders a statement showing the accounting for the
Advances made, payments made or credited in respect thereof, and other
transactions between Administrative Agent, Lenders and Borrowers during such
month. The monthly statements shall be deemed correct and binding upon Borrowers
in the absence of manifest error and shall constitute an account stated between
Lenders and Borrowers unless Administrative Agent receives a written statement
of Borrowers’ specific exceptions thereto within sixty (60) days after such
statement is received by Borrowing Agent. The records of Administrative Agent
with respect to Borrowers’ Account shall be conclusive evidence absent manifest
error of the amounts of Advances and other charges thereto and of payments
applicable thereto.

 

2.11 Letters of Credit.

 

(a) Subject to the terms and conditions hereof, Issuer shall issue or cause the
issuance of standby and/or trade letters of credit denominated in Dollars
(“Letters of Credit”) for the account of any Borrower except to the extent that
the issuance thereof would then cause the sum of (i) the outstanding Revolving
Advances plus (ii) the outstanding Swing Loans, plus (iii) the Maximum Undrawn
Amount of all outstanding Letters of Credit, plus (iv) the Maximum Undrawn
Amount of the Letter of Credit to be issued to exceed the lesser of (x) the
Maximum Revolving Advance Amount or (y) the Formula Amount (calculated without
giving effect to the deductions provided for in Section 2.1(a)(y)(iii)). The
Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in
the aggregate at any time the Letter of Credit Sublimit. All disbursements or
payments related to Letters of Credit not reimbursed the same day shall be
deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear
interest at the Revolving Interest Rate for Domestic Rate Loans. Letters of
Credit that have not been drawn upon shall not bear interest (but fees shall
accrue in respect of outstanding Letters of Credit as provided in Section 3.2
hereof).

 

(b) Notwithstanding any provision of this Agreement, Issuer shall not be under
any obligation to issue any Letter of Credit if (i) any order, judgment or
decree of any Governmental Body or arbitrator shall by its terms purport to
enjoin or restrain Issuer from issuing any Letter of Credit, or any Law
applicable to Issuer or any request or directive (whether or not having the
force of law) from any Governmental Body with jurisdiction over Issuer shall
prohibit, or request that Issuer refrain from, the issuance of letters of credit
generally or the Letter of Credit in particular or shall impose upon Issuer with
respect to the Letter of Credit any restriction, reserve or capital requirement
(for which Issuer is not otherwise compensated hereunder) not in effect on the
date of this Agreement, or shall impose upon Issuer any unreimbursed loss, cost
or expense which was not applicable on the date of this Agreement, and which
Issuer in good faith deems material to it, or (ii) the issuance of the Letter of
Credit would violate one or more policies of Issuer applicable to letters of
credit generally.

 

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2.12 Issuance of Letters of Credit.

 

(a) Borrowing Agent, on behalf of any Borrower, may request Issuer to issue or
cause the issuance of a Letter of Credit by delivering to Issuer, with a copy to
Administrative Agent at the Payment Office, prior to 12:00 p.m., at least five
(5) Business Days prior to the proposed date of issuance, such Issuer’s form of
Letter of Credit Application (the “Letter of Credit Application”) completed to
the satisfaction of Administrative Agent and Issuer; and, such other
certificates, documents and other papers and information as Administrative Agent
or Issuer may reasonably request. Issuer shall not issue any requested Letter of
Credit if such Issuer has received notice from any Agent or any Lender that one
or more of the applicable conditions set forth in Section 8.2 of this Agreement
have not been satisfied or the commitments of Revolving Lenders to make
Revolving Advances hereunder have been terminated for any reason.

 

(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts, other written demands for payment, or acceptances of usance
drafts when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an expiry
date not later than twelve (12) months after such Letter of Credit’s date of
issuance, subject to “evergreen” provisions mutually acceptable to
Administrative Agent and Borrowing Agent, and in no event later than the last
day of the Term. Each standby Letter of Credit shall be subject either to the
Uniform Customs and Practice for Documentary Credits as most recently published
by the International Chamber of Commerce at the time a Letter of Credit is
issued (the “UCP”) or the International Standby Practices (International Chamber
of Commerce Publication Number 590), or any subsequent revision thereof at the
time a standby Letter of Credit is issued, as determined by Issuer, and each
trade Letter of Credit shall be subject to the UCP. In addition, no trade Letter
of Credit may permit the presentation of an ocean bill of lading that includes a
condition that the original bill of lading is not required to claim the goods
shipped thereunder.

 

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

 

2.13 Requirements For Issuance of Letters of Credit.

 

(a) Borrowing Agent shall authorize and direct any Issuer to name the applicable
Borrower as the “Applicant” or “Account Party” of each Letter of Credit. If
Administrative Agent is not the Issuer of any Letter of Credit, Borrowing Agent
shall authorize and direct Issuer to deliver to Administrative Agent all
instruments, documents, and other writings and property received by Issuer
pursuant to the Letter of Credit and to accept and rely upon Administrative
Agent’s instructions and agreements with respect to all matters arising in
connection with the Letter of Credit, the application therefor.

 

(b) In connection with all trade Letters of Credit issued or caused to be issued
by Issuer under this Agreement, each Borrower hereby appoints Issuer, or its
designee, as its attorney, with full power and authority if an Event of Default
shall have occurred: (i) to sign and/or endorse such Borrower’s name upon any
warehouse or other receipts, and acceptances; (ii) to sign such Borrower’s name
on bills of lading; (iii) to clear Inventory through the United States of
America Customs Department (“Customs”) in the name of such Borrower or Issuer or
Issuer’s designee, and to sign and deliver to Customs officials powers of
attorney in the name of such Borrower for such purpose; and (iv) to complete in
such Borrower’s name or Issuer’s, or in the name of Issuer’s designee, any
order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Administrative Agent,
Issuer nor their attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Administrative Agent’s,
Issuer’s or their respective attorney’s gross negligence or willful misconduct.
This power, being coupled with an interest, is irrevocable as long as any
Letters of Credit remain outstanding.

 

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2.14 Disbursements, Reimbursement.

 

(a) Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from Issuer a participation in each Letter of Credit and each drawing
thereunder in an amount equal to such Revolving Lender’s Revolving Commitment
Percentage of the Maximum Undrawn Amount of such Letter of Credit (as in effect
from time to time) and the amount of such drawing, respectively.

 

(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, Issuer will promptly notify Administrative
Agent and Borrowing Agent. Provided that Borrowing Agent shall have received
such notice on or prior to 10:00 a.m. on any Business Day, Borrowers shall
reimburse (such obligation to reimburse Issuer shall sometimes be referred to as
a “Reimbursement Obligation”) Issuer prior to 1:00 p.m., on each date that an
amount is paid by Issuer under any Letter of Credit (each such date, a “Drawing
Date”) in an amount equal to the amount so paid by Issuer. In the event
Borrowers fail to reimburse Issuer for the full amount of any drawing under any
Letter of Credit by 1:00 p.m., on the Drawing Date, Issuer will promptly notify
Administrative Agent and each Revolving Lender thereof, and Borrowers shall be
automatically deemed to have requested that a Revolving Advance maintained as a
Domestic Rate Loan be made by Revolving Lenders to be disbursed on the Drawing
Date under such Letter of Credit, and Revolving Lenders shall be unconditionally
obligated to fund such Revolving Advance (all whether or not the conditions
specified in Section 8.2 are then satisfied or the Revolving Commitments have
been terminated for any reason) as provided for in Section 2.14(c) immediately
below. Any notice given by Issuer pursuant to this Section 2.14(b) may be oral
if promptly confirmed in writing; provided that the lack of such a confirmation
shall not affect the conclusiveness or binding effect of such notice.

 

(c) Each Revolving Lender shall upon any notice pursuant to Section 2.14(b) make
available to Issuer through Administrative Agent at the Payment Office an amount
in immediately available funds equal to its Revolving Commitment Percentage
(subject to any contrary provisions of Section 2.22) of the amount of the
drawing, whereupon the participating Revolving Lenders shall (subject to Section
2.14(d)) each be deemed to have made a Revolving Advance maintained as a
Domestic Rate Loan to Borrowers in that amount. If any Revolving Lender so
notified fails to make available to Administrative Agent, for the benefit of
Issuer, the amount of such Revolving Lender’s Revolving Commitment Percentage of
such amount by 3:00 p.m. on the Drawing Date, then interest shall accrue on such
Revolving Lender’s obligation to make such payment, from the Drawing Date to the
date on which such Revolving Lender makes such payment (i) at a rate per annum
equal to the Federal Funds Effective Rate during the first three (3) days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Revolving Advances maintained as a Domestic Rate Loan on and after
the fourth day following the Drawing Date. Administrative Agent and Issuer will
promptly give notice of the occurrence of the Drawing Date, but failure of
Administrative Agent or Issuer to give any such notice on the Drawing Date or in
sufficient time to enable any Revolving Lender to effect such payment on such
date shall not relieve such Revolving Lender from its obligations under this
Section 2.14(c), provided that such Revolving Lender shall not be obligated to
pay interest as provided in Section 2.14(c)(i) and (ii) until and commencing
from the date of receipt of notice from Administrative Agent or Issuer of a
drawing.

 

(d) With respect to any unreimbursed drawing that is not converted into a
Revolving Advance maintained as a Domestic Rate Loan to Borrowers in whole or in
part as contemplated by Section 2.14(b), because of Borrowers’ failure to
satisfy the conditions set forth in Section 8.2 hereof (other than any notice
requirements) or for any other reason, Borrowers shall be deemed to have
incurred from Administrative Agent a borrowing (each a “Letter of Credit
Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
the rate per annum applicable to a Revolving Advance maintained as a Domestic
Rate Loan. Each applicable Revolving Lender’s payment to Administrative Agent
pursuant to Section 2.14(c) shall be deemed to be a payment in respect of its
participation in such Letter of Credit Borrowing and shall constitute a
“Participation Advance” from such Revolving Lender in satisfaction of its
Participation Commitment in respect of the applicable Letter of Credit under
this Section 2.14.

 

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

 

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2.15 Repayment of Participation Advances.

 

(a) Upon (and only upon) receipt by Administrative Agent for the account of
Issuer of immediately available funds from Borrowers (i) in reimbursement of any
payment made by Issuer or Administrative Agent under the Letter of Credit with
respect to which any Revolving Lender has made a Participation Advance to
Administrative Agent, or (ii) in payment of interest on such a payment made by
Issuer or Administrative Agent under such a Letter of Credit, Administrative
Agent will pay to each Revolving Lender, in the same funds as those received by
Administrative Agent, the amount of such Revolving Lender’s Revolving Commitment
Percentage of such funds, except Administrative Agent shall retain the amount of
the Revolving Commitment Percentage of such funds of any Revolving Lender that
did not make a Participation Advance in respect of such payment by
Administrative Agent (and, to the extent that any of the other Revolving
Lender(s) have funded any portion such Defaulting Lender’s Participation Advance
in accordance with the provisions of Section 2.22, Administrative Agent will pay
over to such Non-Defaulting Lenders a pro rata portion of the funds so withheld
from such Defaulting Lender).

 

(b) If Issuer or Administrative Agent is required at any time to return to any
Borrower, or to a trustee, receiver, liquidator, custodian, or any official in
any insolvency proceeding, any portion of the payments made by Borrowers to
Issuer or Administrative Agent pursuant to Section 2.15(a) in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each
applicable Revolving Lender shall, on demand of Administrative Agent, forthwith
return to Issuer or Administrative Agent the amount of its Revolving Commitment
Percentage of any amounts so returned by Issuer or Administrative Agent plus
interest at the Federal Funds Effective Rate.

 

2.16 Documentation. Each Borrower agrees to be bound by the terms of the Letter
of Credit Application and by Issuer’s reasonable interpretations of any Letter
of Credit issued on behalf of such Borrower and by Issuer’s written regulations
and customary practices relating to letters of credit, though Issuer’s
interpretations may be different from such Borrower’s own. In the event of a
conflict between the Letter of Credit Application and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), Issuer shall not be liable for
any error, negligence and/or mistakes, whether of omission or commission, in
following Borrowing Administrative Agent’s or any Borrower’s instructions or
those contained in the Letters of Credit or any modifications, amendments or
supplements thereto.

 

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

 

2.18 Nature of Participation and Reimbursement Obligations. The obligation of
each Revolving Lender in accordance with this Agreement to make the Revolving
Advances or Participation Advances as a result of a drawing under a Letter of
Credit, and the obligations of Borrowers to reimburse Issuer upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable other than to
the extent of bad faith, gross negligence or willful misconduct of the Issuer
(as determined by a court of competent jurisdiction in a final non-appealable
judgment), and shall be performed strictly in accordance with the terms of this
Section 2.18 under all circumstances, including the following circumstances:

 

(i) any set-off, counterclaim, recoupment, defense or other right which such
Revolving Lender or any Borrower, as the case may be, may have against Issuer,
Administrative Agent, any Borrower or any Revolving Lender, as the case may be,
or any other Person for any reason whatsoever;

 

(ii) the failure of any Borrower or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in this
Agreement for the making of a Revolving Advance, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of Revolving Lenders to make Participation Advances under Section
2.14;

 

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(iii) any lack of validity or enforceability of any Letter of Credit;

 

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

 

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

 

(vi) payment by Issuer under any Letter of Credit against presentation of a
demand, draft or certificate or other document which is forged or does not fully
comply with the terms of such Letter of Credit (provided that the foregoing
shall not excuse Issuer from any obligation under the terms of any applicable
Letter of Credit to require the presentation of documents that on their face
appear to satisfy any applicable requirements for drawing under such Letter of
Credit prior to honoring or paying any such draw);

 

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

 

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

 

(ix) the occurrence of any Material Adverse Effect;

 

(x) any breach of this Agreement or any Other Document by any party thereto;

 

(xi) the occurrence or continuance of an insolvency proceeding with respect to
any Loan Party;

 

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

 

(xiii) the fact that the Term shall have expired or this Agreement or the
obligations of Lenders to make Advances have been terminated; and

 

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

 

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2.19 Liability for Acts and Omissions.

 

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

 

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

 

(c) In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Issuer under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), shall not put Issuer under any
resulting liability to any Borrower, any Agent or any Lender.

 

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2.20 Mandatory and Voluntary Prepayments.

 

(a) Subject to Section 7.1 hereof, when any Loan Party or any of its
Subsidiaries sells or otherwise disposes of any Collateral other than Inventory
and cash and cash equivalents in the Ordinary Course of Business (excluding the
first $100,000 of Net Cash Proceeds received by any Loan Party or any of its
Subsidiaries during any fiscal year from any single transaction or series of
related transactions that are not reinvested in accordance with Section
2.20(e)(v)), Loan Parties shall prepay the Advances in an amount equal to the
Net Cash Proceeds of such sale or disposition, such prepayments to be made
promptly but in no event more than three (3) Business Days following receipt of
such Net Cash Proceeds, and until the date of payment, such Net Cash Proceeds
shall be held in trust for the Agents and Lenders. The foregoing shall not be
deemed to be implied consent to any such sale otherwise prohibited by the terms
and conditions hereof.

 

(b) Borrowers shall prepay the outstanding amount of the Term Loans in an amount
equal to the Specified Excess Cash Flow Amount for the immediately precedingas
follows:

 

(i) For each 6 month period ending on March 31 of each year (each, a “Semiannual
Period”) commencing with the Semiannual Period ending March 31, 2021, Borrowers
shall pay the Specified Excess Cash Flow Amount for such Semiannual Period,
payable upon the delivery to the Agents of the financial statements referred to
in and required by Section 9.8 but in any event not later than sixty (60) days
after the end of each such Semiannual Period (the “ECF Semiannual Prepayment
Date”);

 

(ii) For each fiscal year, commencing with the fiscal year ending September 30,
20182021, Borrowers shall pay an amount equal to the excess of (A) the Specified
Excess Cash Flow Amount for such fiscal year over (B) the amount prepaid by
Borrowers under Section 2.20(b)(i) in respect of the Semiannual Period of such
fiscal year, payable following the delivery to the Agents of the financial
statements referred to in and required by Section 9.7 for such fiscal year but
in any event not later than one hundred five (105) days after the end of each
such fiscal year (the “ECF Annual Prepayment Date” and together with the ECF
Semiannual Prepayment Date, the “Excess Cash Flow Prepayment Date”);

 

provided that (i) if the Specified Term Loan Prepayment Conditions shall not be
satisfied on any Excess Cash Flow Prepayment Date, Borrowers shall (A) on the
Excess Cash Flow Prepayment Date, pay such portion of the Specified Excess Cash
Flow Amount then due for such period that does not cause Borrowers to breach the
Specified Term Loan Prepayment Conditions, (B) on the date on which the next
Borrowing Base Certificate is due to be delivered to Agents pursuant to Section
9.2 (the “Borrowing Base Reference Date”), pay the remaining portion of such
Specified Excess Cash Flow Amount (or such portion thereof that does not cause
Borrowers to breach the Specified Term Loan Prepayment Conditions) and (C) if
any Specified Excess Cash Flow Amount for such period remains due and owing
after payment of the amount described in preceding clause (ii), on the next
Borrowing Base Reference Date and each Borrowing Base Reference Date thereafter,
pay such portion of the unpaid Specified Excess Cash Flow Amount that does not
cause Borrowers to breach the Specified Term Loan Prepayment Conditions until
such Specified Excess Flow Amount then due for such period is paid in full, and
(ii) the failure of the Borrowers to make a prepayment of all or any portion of
the Specified Excess Cash Flow Amount pursuant to this Section 2.20(b) solely as
a result of Borrowers’ failure to satisfy the Specified Term Loan Prepayment
Conditions shall not constitute an Event of Default under Section 10.1
hereunder. In the event that any financial statements described in this Section
2.20(b) are not delivered to the Agents (or are not delivered to Agents on or
prior to the date such financial statements are required to be delivered
pursuant to Section 9.7), then a calculation based upon estimated amounts shall
be made by the Agents and notified to Borrowers upon which calculation Borrowers
shall make the prepayment required by this Section 2.20(b), subject to
adjustment when the financial statements are delivered to the Agents as required
hereby. The calculation made by the Agents shall not be deemed a waiver of any
rights Agents or Lenders may have as a result of the failure by Borrowers to
deliver such financial statements.

 

(c) In the event of any issuance or other incurrence of Indebtedness (other than
Permitted Indebtedness) by any Loan Party or any of its Subsidiaries or the
issuance of any Equity Interests by any Loan Party or any of its Subsidiaries,
the Borrowers shall, no later than three (3) Business Days after the receipt by
such Loan Party or such Subsidiary of (i) the Net Cash Proceeds from any such
issuance or incurrence of Indebtedness or (ii) the Net Cash Proceeds of any
issuance of Equity Interests (other than (A) after the satisfaction of the
Specified Prepayment Obligation, the Net Cash Proceeds of Equity Interests
issued for purposes of funding all or a portion of the purchase price of any
Permitted Acquisition so long as 100% of the Net Cash Proceeds received in
connection therewith are used to fund such purchase price and (B) after the
application of any Net Cash Proceeds of Equity Interests in accordance with
Section 2.20(e)(iii)(A), the next $5,000,000 of Net Cash Proceeds of Equity
Interests issued on or before December 31, 2017 that are used to prepay
Specified Subordinated Indebtedness in accordance with Section 7.17(b)), as
applicable, prepay the Advances in an amount equal to (x) prior to the
satisfaction of the Specified Prepayment Obligation, one hundred percent (100%)
of such Net Cash Proceeds and (y) after the satisfaction of the Specified
Prepayment Obligation, fifty percent (50%) of such Net Cash Proceeds.

 

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(d) Upon the receipt by any Loan Party or any of its Subsidiaries of any
Extraordinary Receipts (excluding (i) the first $100,000 of Extraordinary
Receipts received by the Loan Parties during any fiscal year from any single
transaction or series of related transactions that are not reinvested in
accordance with Section 2.20(e)(v) and (ii) the first $1,000,000 of any cash tax
refund arising from the SNI Acquisition), the Borrowers shall prepay the
Advances in an amount equal to one hundred percent (100%) of the Net Cash
Proceeds received by such Person in connection therewith no later than three (3)
Business Days following receipt thereof; provided, that Extraordinary Receipts
consisting of the Net Cash Proceeds received by any Loan Party or any of its
Subsidiaries (i) under any insurance policy on account of damage or destruction
of any assets or property of any Loan Party or any of its Subsidiaries, or (ii)
as a result of any taking or condemnation of any assets or property of any Loan
Party or any of its Subsidiaries shall, in each case, be applied in accordance
with Section 6.6 hereof.

 

(e) Subject to Section 11.5, all prepayments required by Sections 2.20(a), (b),
(c) and (d) hereof shall be applied as follows:

 

(i) the proceeds of a sale or other disposition of Term Loan Priority Collateral
described in Section 2.20(a) and the proceeds received by any Loan Party or any
of its Subsidiaries in connection with any Extraordinary Receipts constituting
Term Loan Priority Collateral (to the extent required to be prepaid pursuant to
Section 2.20(d) hereof) shall be applied as follows: (x) first, to the Term
Loans against the remaining installments of principal of the Term Loans in the
inverse order of maturity, and (y) second, to the remaining Advances (including
cash collateralization of all Obligations relating to any outstanding Letters of
Credit in accordance with the provisions of Section 3.2(b)); provided however
that if no Default or Event of Default has occurred and is continuing, such
prepayments shall not be applied to cash collateralize any Obligations related
to outstanding Letters of Credit) in such order as Administrative Agent may
determine, subject to Borrowers’ ability to re-borrow Revolving Advances in
accordance with the terms hereof;

 

(ii) the proceeds of a sale or other disposition of Revolving Loan Priority
Collateral described in Section 2.20(a) and the proceeds received by any Loan
Party or any of its Subsidiaries in connection with any Extraordinary Receipts
(other than any SNI Receipts that shall be applied in accordance with the second
proviso of this clause (ii)) constituting Revolving Loan Priority Collateral (to
the extent required to be prepaid pursuant to Section 2.20(d) hereof) shall be
applied as follows: (x) first, to the Revolving Advances, the Swing Loans, and
Letters of Credit (including cash collateralization of all Obligations relating
to any outstanding Letters of Credit in accordance with the provisions of
Section 3.2(b)); provided however that if no Default or Event of Default has
occurred and is continuing, such prepayments shall not be applied to cash
collateralize any Obligations related to outstanding Letters of Credit) in such
order as Administrative Agent may determine, subject to Borrowers’ ability to
re-borrow Revolving Advances in accordance with the terms hereof, and (y)
second, to the Term Loans against the remaining installments of principal of the
Term Loans in the inverse order of maturity; provided further that, prior to the
satisfaction of the Specified Prepayment Obligation, all SNI Receipts shall be
applied in accordance with Section 2.20(i);

 

(iii) the proceeds of any issuance or other incurrence of Indebtedness or
issuance of Equity Interests by any Loan Party or any of its Subsidiaries
described in Section 2.20(c) hereof shall be applied as follows: (A) to the
extent such proceeds are received by any Loan Party or any of its Subsidiaries
as a result of such Loan Party’s issuance of Equity Interests in order to
satisfy the Specified Prepayment Obligation, such proceeds shall be applied in
accordance with Section 2.20(i) and (B) after the satisfaction of the Specified
Prepayment Obligation, (x) first, to the Term Loans against the remaining
installments of principal of the Term Loans in the inverse order of maturity,
and (y) second, to the remaining Advances (including cash collateralization of
all Obligations relating to any outstanding Letters of Credit in accordance with
the provisions of Section 3.2(b)); provided however that if no Default or Event
of Default has occurred and is continuing, such prepayments shall not be applied
to cash collateralize any Obligations related to outstanding Letters of Credit)
in such order as Administrative Agent may determine, subject to Borrowers’
ability to re-borrow Revolving Advances in accordance with the terms hereof;

 

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(iv) the Specified Excess Cash Flow Amount (to the extent required to be prepaid
pursuant to Section 2.20(b) hereof) shall be applied as follows: (x) first, to
the Term Loans against the remaining installments of principal of the Term Loans
in the inverse order of maturity, and (y) second, to the remaining Advances
(including cash collateralization of all Obligations relating to any outstanding
Letters of Credit in accordance with the provisions of Section 3.2(b)); provided
however that if no Default or Event of Default has occurred and is continuing,
such prepayments shall not be applied to cash collateralize any Obligations
related to outstanding Letters of Credit) in such order as Administrative Agent
may determine, subject to Borrowers’ ability to re-borrow Revolving Advances in
accordance with the terms hereof; and

 

(v) notwithstanding anything herein to the contrary, in the event any Loan Party
has received Net Cash Proceeds from or in connection with (y) the sale or
disposition of Collateral or (z) the receipt of Extraordinary Receipts
consisting of insurance proceeds or condemnation awards that are required to be
used to prepay the Obligations pursuant to Section 2.20(a) or Section 2.20(d),
as the case may be, and the Borrowing Agent has delivered a Reinvestment Notice
to the Agents within five (5) Business Days following receipt of such Net Cash
Proceeds, up to $500,000 in the aggregate in any fiscal year of such Net Cash
Proceeds from all such dispositions or Extraordinary Receipts may be used to
repair, replace, or reconstruct the Collateral affected, or purchase replacement
Collateral, so long as in each case (1) such repair, replacement, reconstruction
or purchase is completed by the date that is one hundred eighty (180) from the
date such Loan Party receives such Net Cash Proceeds, (2) no Event of Default
has occurred and is continuing on the date such Loan Party receives such Net
Cash Proceeds, or on the date of such repair, replacement, reconstruction or
purchase, (3) such Net Cash Proceeds are deposited into a Blocked Account until
used for such repair, replacement, reconstruction or purchase, and (4) upon the
earlier of (y) the expiration of the period specified in clause (1) above or (z)
the occurrence of an Event of Default, such Net Cash Proceeds, if not
theretofore so used, shall be used to prepay the Term Loans in accordance with
Section 2.20(a) or Section 2.20(d), as applicable, and Section 2.20(e).

 

(f) Any prepayment of the Term Loans required to be made pursuant to this
Section 2.20 shall in each case be accompanied by (i) accrued interest on the
principal amount being prepaid to the date of prepayment, (ii) any amounts
payable to Agents or Lenders under Section 2.2(g) hereof and (iii) the
Applicable Premium, if any, payable in connection with such prepayment of the
Advances, to the extent required under Section 3.13.

 

(g) The Borrowers may voluntarily, at any time and from time to time, upon at
least five (5) Business Days prior written notice to Agents, prepay the
principal of the Term Loans, in whole or in part, so long as on the date of any
such prepayment and immediately after giving effect thereto, (y) the Specified
Term Loan Prepayment Conditions shall have been satisfied and (z) no Event of
Default shall have occurred and be continuing. Each such prepayment shall be
applied to the Term Loans against the remaining installments of principal due on
the Term Loans in the inverse order of maturity, and shall in each case be
accompanied by (i) accrued interest on the principal amount being prepaid to the
date of prepayment, (ii) any amounts payable to Agents or Lenders under Section
2.2(g) hereof and (iii) the Applicable Premium, if any, payable in connection
with such prepayment of the Advances to the extent required under Section 3.13.

 

(h) Anything contained herein to the contrary notwithstanding, in the event that
Borrowers are required to make any mandatory prepayment of the Advances pursuant
to Sections 2.20(a), (b), (c) or (d) (each a “Waivable Mandatory Prepayment”),
not less than one (1) Business Day prior to the date on which Borrowers are
required to make such Waivable Mandatory Prepayment (the “Required Prepayment
Date”), Borrowing Agent shall notify the Agents of the amount of such
prepayment, and the Agent will promptly thereafter notify the Lenders of the
amount of each Lender’s pro rata share of such Waivable Mandatory Prepayment and
such Lender’s option to refuse such amount. Each such Lender may exercise such
option by giving written notice to Borrowing Agent and the Agents of its
election to do so on or before the Business Day prior to the Required Prepayment
Date (it being understood that any Lender that does not notify Borrowing Agent
and the Agents of its election to exercise such option on or before the Business
Day prior to the Required Prepayment Date shall be deemed to have elected, as of
such date, not to exercise such option). On the Required Prepayment Date,
Borrowing Agent shall pay to the Administrative Agent the amount of the Waivable
Mandatory Prepayment, which amount shall be applied (i) in an amount equal to
that portion of the Waivable Mandatory Prepayment payable to those Lenders that
have elected not to exercise such option, to prepay the Advances of such Lenders
(which prepayment shall be applied to prepay the outstanding principal amount of
the Obligations in accordance with Section 2.20(e) and any excess shall be
retained by the Borrowers for working capital and general corporate purposes).

 

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(i) Use commercially reasonable efforts to prepay, or cause to be prepaid,
$10,000,000 in principal amount of Advances outstanding (the “Specified
Prepayment Obligation”), which amount shall be applied to prepay the Term Loans
in accordance with Section 2.20(f).

 

2.21 Use of Proceeds.

 

(a) Borrowers shall apply the proceeds of Advances to (i) pay fees and expenses
relating to this Agreement and the Transactions, (ii) repay in full the Existing
Loans, all accrued and unpaid interest thereon and all fees and other amounts
related thereto, (iii) fund a portion of the purchase price for the SNI
Acquisition, (iv) provide for their working capital and general corporate needs
and reimburse drawings under Letters of Credit, (v) fund Permitted Acquisitions,
and (vi) make other payments not prohibited by this Agreement.

 

(b) Without limiting the generality of Section 2.21(a) above, neither the Loan
Parties nor any other Person which may in the future become party to this
Agreement or the Other Documents as a Loan Party, intends to use nor shall they
use any portion of the proceeds of the Advances, directly or indirectly, for any
purpose in violation of Applicable Law.

 

2.22 Defaulting Lender.

 

(a) Notwithstanding anything to the contrary contained herein, in the event any
Lender is a Defaulting Lender, all rights and obligations hereunder of such
Defaulting Lender and of the other parties hereto shall be modified to the
extent of the express provisions of this Section 2.22 so long as such Lender is
a Defaulting Lender.

 

(b) (i) Except as otherwise expressly provided for in this Section 2.22,
Revolving Advances shall be made pro rata from Revolving Lenders which are not
Defaulting Lenders based on their respective Revolving Commitment Percentages,
and no Revolving Commitment Percentage of any Lender or any pro rata share of
any Revolving Advances required to be advanced by any Lender shall be increased
as a result of any Lender being a Defaulting Lender. Amounts received in respect
of principal of any type of Revolving Advances shall be applied to reduce such
type of Revolving Advances of each Revolving Lender (other than any Revolving
Lender that is a Defaulting Lender) in accordance with their Revolving
Commitment Percentages; provided, that, Administrative Agent shall not be
obligated to transfer to a Defaulting Lender any payments received by
Administrative Agent for such Defaulting Lender’s benefit, nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder
(including any principal, interest or fees). Amounts payable to a Defaulting
Lender shall instead be paid to or retained by Administrative Agent.
Administrative Agent may hold and, in its discretion, re-lend to a Borrower the
amount of such payments received or retained by it for the account of such
Defaulting Lender.

 

(i) Fees pursuant to Section 3.3 hereof shall cease to accrue in favor of such
Defaulting Lender.

 

(ii) If any Swing Loans are outstanding or any Letters of Credit (or drawings
under any Letter of Credit for which Issuer has not been reimbursed) are
outstanding or exist at the time any such Revolving Lender becomes a Defaulting
Lender, then:

 

(A) Defaulting Lender’s Participation Commitment in the outstanding Swing Loans
and of the Maximum Undrawn Amount of all outstanding Letters of Credit shall be
reallocated among Revolving Lenders which are Non-Defaulting Lenders in
proportion to the respective Revolving Commitment Percentages of such
Non-Defaulting Lenders to the extent (but only to the extent) that (x) such
reallocation does not cause the aggregate sum of outstanding Revolving Advances
made by any such Revolving Lender that is a Non-Defaulting Lender plus such
Revolving Lender’s reallocated Participation Commitment in the outstanding Swing
Loans plus such Revolving Lender’s reallocated Participation Commitment in the
aggregate Maximum Undrawn Amount of all outstanding Letters of Credit to exceed
the Revolving Commitment Amount of any such Non-Defaulting Lender, and (y) no
Default or Event of Default has occurred and is continuing at such time;

 

(B) if the reallocation described in clause (A) above cannot, or can only
partially, be effected, Borrowers shall within one Business Day following notice
by Administrative Agent (x) first, prepay any outstanding Swing Loans that
cannot be reallocated, and (y) second, cash collateralize for the benefit of
Issuer, Borrowers’ obligations corresponding to such Defaulting Lender’s
Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit
(after giving effect to any partial reallocation pursuant to clause (A) above)
in accordance with Section 3.2(b) for so long as such Obligations are
outstanding;

 

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(C) if Borrowers cash collateralize any portion of such Defaulting Lender’s
Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit
pursuant to clause (B) above, Borrowers shall not be required to pay any fees to
such Defaulting Lender pursuant to Section 3.2(a) with respect to such
Defaulting Lender’s Revolving Commitment Percentage of Maximum Undrawn Amount of
all Letters of Credit during the period such Defaulting Lender’s Participation
Commitment in the Maximum Undrawn Amount of all Letters of Credit are cash
collateralized;

 

(D) if Defaulting Lender’s Participation Commitment in the Maximum Undrawn
Amount of all Letters of Credit is reallocated pursuant to clause (A) above,
then the fees payable to Revolving Lenders pursuant to Section 3.2(a) shall be
adjusted and reallocated to Revolving Lenders which are Non-Defaulting Lenders
in accordance with such reallocation;

 

(E) if all or any portion of such Defaulting Lender’s Participation Commitment
in the Maximum Undrawn Amount of all Letters of Credit is neither reallocated
nor cash collateralized pursuant to clauses (A) or (B) above, then, without
prejudice to any rights or remedies of Issuer or any other Lender hereunder, all
Letter of Credit Fees payable under Section 3.2(a) with respect to such
Defaulting Lender’s Revolving Commitment Percentage of the Maximum Undrawn
Amount of all Letters of Credit shall be payable to the Issuer (and not to such
Defaulting Lender) until (and then only to the extent that) such Participation
Commitment in the Maximum Undrawn Amount of all Letters of Credit is reallocated
and/or cash collateralized; and

 

(F) so long as any Revolving Lender is a Defaulting Lender, Swing Loan Lender
shall not be required to fund any Swing Loans and Issuer shall not be required
to issue, amend or increase any Letter of Credit, unless such Issuer is
satisfied that the related exposure and Defaulting Lender’s Participation
Commitment in the Maximum Undrawn Amount of all Letters of Credit and all Swing
Loans (after giving effect to any such issuance, amendment, increase or funding)
will be fully allocated to Revolving Lenders which are Non-Defaulting Lenders
and/or cash collateral for such Letters of Credit will be provided by Borrowers
in accordance with clause (A) and (B) above, and participating interests in any
newly made Swing Loan or any newly issued or increased Letter of Credit shall be
allocated among Non-Defaulting Lenders in a manner consistent with Section
2.22(b)(iii)(A) above (and such Defaulting Lender shall not participate
therein).

 

(c) A Defaulting Lender shall not be entitled to give instructions to
Administrative Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the Other Documents (other than such
matters that require the approval of all Lenders), and all amendments, waivers
and other modifications of this Agreement and the Other Documents may be made
without regard to a Defaulting Lender (other than amendments, waivers or other
modifications that require the approval of all Lenders) and, for purposes of the
definitions of “Required Lenders” and “Required Revolving Lenders”, a Defaulting
Lender shall not be deemed to be a Lender, to have any outstanding Advances, a
Revolving Commitment, a Revolving Commitment Percentage, a Term Loan Commitment
or a Term Loan Commitment Percentage.

 

(d) Other than as expressly set forth in this Section 2.22, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify
Agents) and the other parties hereto shall remain unchanged. Nothing in this
Section 2.22 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, any Agent or any
Lender may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.

 

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(e) In the event that the Administrative Agent, Borrowers, Swing Loan Lender and
Issuer agree in writing that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then Administrative
Agent will so notify the parties hereto, and, if such cured Defaulting Lender is
a Revolving Lender, then Participation Commitments of Revolving (including such
cured Defaulting Lender) of the Swing Loans and Maximum Undrawn Amount of all
outstanding Letters of Credit shall be reallocated to reflect the inclusion of
such Revolving Lender’s Revolving Commitment, and on such date such Revolving
Lender shall purchase at par such of the Revolving Advances of the other Lenders
as Administrative Agent shall determine may be necessary in order for such
Revolving Lender to hold such Revolving Advances in accordance with its
Revolving Commitment Percentage.

 

(f) If Swing Loan Lender or Issuer has a good faith belief that any Revolving
Lender has defaulted in fulfilling its obligations under one or more other
agreements in which such Revolving Lender commits to extend credit, Swing Loan
Lender shall not be required to fund any Swing Loans and Issuer shall not be
required to issue, amend or increase any Letter of Credit, unless Swing Loan
Lender or Issuer, as the case may be, shall have entered into arrangements with
Borrowers or such Revolving Lender, satisfactory to Swing Loan Lender or Issuer,
as the case may be, to defease any risk to it in respect of such Revolving
Lender hereunder.

 

2.23 Payment of Obligations

 

. Administrative Agent may charge to Borrowers’ Account as a Revolving Advance
or, at the discretion of Swing Loan Lender, as a Swing Loan (a) all payments
with respect to any of the Obligations required hereunder (including without
limitation principal payments, payments of interest, payments of Letter of
Credit Fees and all other fees provided for hereunder and payments under
Sections 16.5 and 16.9) as and when each such payment shall become due and
payable (whether as regularly scheduled, upon or after acceleration, upon
maturity or otherwise), (b) without limiting the generality of the foregoing
clause (a), (i) all amounts expended by any Agent or any Lender pursuant to
Sections 4.2 or 4.3 hereof and (i) all expenses which any Agent incurs in
connection with the forwarding of Advance proceeds and the establishment and
maintenance of any Blocked Accounts as provided for in Section 4.8(h), and (c)
any sums expended by any Agent or any Lender due to any Borrower’s failure to
perform or comply with its obligations under this Agreement or any Other
Document including any Borrower’s obligations under Sections 3.3, 3.4, 3.13,
4.4, 6.4, 6.6, 6.7 and 6.8 hereof, and all amounts so charged shall be added to
the Obligations and shall be secured by the Collateral. To the extent Revolving
Advances are not actually funded by the other Lenders in respect of any such
amounts so charged, all such amounts so charged shall be deemed to be Revolving
Advances made by and owing to Administrative Agent and Administrative Agent
shall be entitled to all rights (including accrual of interest) and remedies of
a Lender under this Agreement and the Other Documents with respect to such
Revolving Advances.

 

2.24 Increase in Maximum Revolving Advance Amount.

 

(a) Borrowers may, at any time, request that the Maximum Revolving Advance
Amount be increased by (1) one or more of the current Revolving Lenders
increasing their Revolving Commitment Amount (any current Revolving Lender which
elects to increase its Revolving Commitment Amount shall be referred to as an
“Increasing Revolving Lender”) or (2) one or more new Revolving Lenders (each a
“New Revolving Lender”) joining this Agreement and providing a Revolving
Commitment Amount hereunder, subject to the following terms and conditions:

 

(i) no current Revolving Lender shall be obligated to increase its Revolving
Commitment Amount and any increase in the Revolving Commitment Amount by any
current Revolving Lender shall be in the sole discretion of such current
Revolving Lender;

 

(ii) Borrowers may not request the addition of a New Revolving Lender unless
(and then only to the extent that) there is insufficient participation on behalf
of the existing Revolving Lenders in the increased Revolving Commitments being
requested by Borrowers;

 

(iii) no Default or Event of Default shall have occurred and be continuing on
the effective date of such increase after giving effect to such increase;

 

(iv) after giving effect to such increase, the Maximum Revolving Advance Amount
shall not exceed $40,000,000;

 

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(v) Borrowers may not request an increase in the Maximum Revolving Advance
Amount under this Section 2.24 more than two (2) times during the Term, and no
single such increase in the Maximum Revolving Advance Amount shall be for an
amount less than $5,000,000;

 

(vi) Borrowers shall deliver to Agents on or before the effective date of such
increase the following documents in form and substance satisfactory to Agents:
(A) a certificate dated as of the effective date of such increase certifying
that (i) the increase in the Revolving Commitment Amounts has been approved by
the board of directors Board of Directors of each Borrower, (ii) no Default or
Event of Default shall have occurred and be continuing on the date of such
increase, and (iii) all of the representations and warranties made by each
Borrower herein and in the Other Documents are true and complete in all material
respects with the same force and effect as if made on and as of such date
(except to the extent any such representation or warranty expressly relates only
to any earlier and/or specified date), and (B) such other agreements,
instruments and information (including supplements or modifications to this
Agreement and/or the Other Documents executed by Borrowers) as Administrative
Agent reasonably deems necessary in order to document the increase to the
Maximum Revolving Advance Amount and to protect, preserve and continue the
perfection and priority of the liens, security interests, rights and remedies of
Agents and Lenders hereunder and under the Other Documents in light of such
increase;

 

(vii) Borrowers shall execute and deliver (A) to each Increasing Revolving
Lender a replacement Revolving Credit Note (if requested by such Revolving
Lender) reflecting the new amount of such Increasing Revolving Lender’s
Revolving Commitment Amount after giving effect to the increase (and the prior
Revolving Credit Note issued to such Increasing Revolving Lender shall be deemed
to be canceled) and (B) to each New Revolving Lender a Revolving Credit Note (if
requested by such Revolving Lender) reflecting the amount of such New Revolving
Lender’s Revolving Commitment Amount;

 

(viii) any New Revolving Lender and any increase in the Maximum Revolving
Advance Amount shall be subject to the approval of each Agent and Issuer, in
each case in their sole discretion;

 

(ix) each Increasing Revolving Lender shall confirm its agreement to increase
its Revolving Commitment Amount pursuant to an acknowledgement in a form
acceptable to Administrative Agent, signed by it and each Borrower and delivered
to Administrative Agent at least five (5) days before the effective date of such
increase; and

 

(x) each New Revolving Lender shall execute a Revolving Lender joinder and
assumption agreement in substantially the form of Exhibit 2.24 hereto pursuant
to which such New Revolving Lender shall join and become a party to this
Agreement and the Other Documents with a Revolving Commitment Amount as set
forth in such Revolving Lender agreement.

 

(b) On the effective date of such increase: (i) the Revolving Commitment
Percentages of Revolving Lenders (including each Increasing Revolving Lender
and/or New Revolving Lender) shall be recalculated such that each such Revolving
Lender’s Revolving Commitment Percentage is equal to (x) the Revolving
Commitment Amount of such Revolving Lender divided by (y) the aggregate of the
Revolving Commitment Amounts of all Revolving Lenders; (ii) each Revolving
Lender shall participate in any new Revolving Advances made on or after such
date in accordance with its Revolving Commitment Percentage after giving effect
to the increase in the Maximum Revolving Advance Amount and recalculation of the
Revolving Commitment Percentages contemplated by this Section 2.24; (iii) each
reference to the term “Maximum Revolving Advance Amount” herein and in any of
the Other Documents shall be deemed amended to mean the amount of the Maximum
Revolving Advance Amount as so increased pursuant to this Section 2.24; and (iv)
each reference to a dollar threshold for Undrawn Availability and Average
Undrawn Availability set forth in this Agreement shall be automatically
increased to an amount such that the ratios of Undrawn Availability and Average
Undrawn Availability to the Maximum Revolving Advance Amount as so increased
remains the same as prior to such increase.

 

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(c) On the effective date of such increase, each Increasing Revolving Lender
shall be deemed to have purchased an additional/increased participation in, and
each New Revolving Lender will be deemed to have purchased a new participation
in, each then outstanding Letter of Credit and each drawing thereunder and each
then outstanding Swing Loan in an amount equal to such Revolving Lender’s
Revolving Commitment Percentage (as calculated pursuant to Section 2.24(b)
above) of the Maximum Undrawn Amount of each such Letter of Credit (as in effect
from time to time) and the amount of each drawing and of each such Swing Loan,
respectively. As necessary to effectuate the foregoing, each existing Revolving
Lender that is not an Increasing Revolving Lender shall be deemed to have sold
to each applicable Increasing Revolving Lender and/or New Revolving Lender, as
necessary, a portion of such existing Revolving Lender’s participations in such
outstanding Letters of Credit and drawings and such outstanding Swing Loans such
that, after giving effect to all such purchases and sales, each Revolving Lender
(including each Increasing Revolving Lender and/or New Revolving Lender) shall
hold a participation in all Letters of Credit (and drawings thereunder) and all
Swing Loans in accordance with their respective Revolving Commitment Percentages
(as calculated pursuant to Section 2.24(b) above).

 

(d) On the effective date of such increase, Borrowers shall pay all costs and
expenses incurred by each Agent and each Increasing Revolving Lender or New
Revolving Lender in connection with the negotiations regarding, and the
preparation, negotiation, execution and delivery of all agreements and
instruments executed and delivered by any Agent, any Borrower, such Increasing
Revolving Lender and/or such New Revolving Lender in connection with, such
increase (including all fees for any supplemental or additional public filings
of any Other Documents necessary to protect, preserve and continue the
perfection and priority of the liens, security interests, rights and remedies of
Agents and Revolving Lenders hereunder and under the Other Documents in light of
such increase and the reasonable and documented fees and expenses of counsel to
Agents).

 

III. INTEREST AND FEES.

 

3.1 Interest. Interest on Advances shall be payable (a) in arrears in cash on
the first day of each month with respect to Domestic Rate Loans and the Term
Loans and, ; provided that (i) interest accruing at a rate per annum equal to
the Applicable Term Loan PIK Margin shall be paid by capitalizing such interest
and adding such capitalized interest to the then outstanding principal amount of
the Term Loan, and (ii) any interest to be so capitalized pursuant to this
clause (a) shall be capitalized on the last day of each calendar month
(commencing on March 31, 2020) and added to the then outstanding principal
amount of the Term Loan and, thereafter, shall bear interest as provided
hereunder as if it had originally been part of the outstanding principal of the
Term Loan, and (b) with respect to Revolving Advances and Swing Loans that are
LIBOR Rate Loans, at the end of each Interest Period, provided further that all.
All accrued and unpaid interest shall be due and payable in cash at the end of
the Term.; provided, that subject to the prior satisfaction of the
Conversion/Cancellation Condition and the Registration Condition and, if not
prohibited pursuant to Section 3.18(b), automatically upon the occurrence of a
Change of Control, the aggregate Term Loan PIK Amount outstanding as of the date
of such Change of Control shall be (y) converted into Common Stock at the
Conversion Rate and (z) immediately thereafter issued to each of the Lenders in
accordance with their respective pro rata shares of the Advances then
outstanding. Interest charges shall be computed on the actual principal amount
of Advances outstanding during the month or Interest Period, as applicable, at a
rate per annum equal to (i) with respect to Revolving Advances, the applicable
Revolving Interest Rate and (ii) with respect to Swing Loans, the Revolving
Interest Rate for Domestic Rate Loans and (iii) with respect to the Term Loans,
the applicable Term Loan Rate (as applicable, the “Contract Rate”). Except as
expressly provided otherwise in this Agreement, any Obligations other than the
Advances that are not paid when due shall accrue interest at the Revolving
Interest Rate for Domestic Rate Loans, subject to the provision of the final
sentence of this Section 3.1 regarding the Default Rate. Whenever, subsequent to
the date of this Agreement, the Alternate Base Rate is increased or decreased,
the applicable Contract Rate shall be similarly changed without notice or demand
of any kind by an amount equal to the amount of such change in the Alternate
Base Rate during the time such change or changes remain in effect. The LIBOR
Rate shall be adjusted with respect to LIBOR Rate Loans without notice or demand
of any kind on the effective date of any change in the Reserve Percentage as of
such effective date. Upon and after the occurrence of an Event of Default, and
during the continuation thereof, automatically upon the occurrence of any such
Event of Default without the requirement of any affirmative action by any party,
the Obligations (including the Term Loan PIK Amount) shall bear interest, from
the date such Event of Default occurred until the date such Event of Default is
cured or waived in writing in accordance herewith, at the applicable Contract
Rate plus three percent (3.0%) per annum (as applicable, the “Default Rate”).

 

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3.2 Letter of Credit Fees.

 

(a) Borrowers shall pay (x) to Administrative Agent, for the ratable benefit of
Revolving Lenders, fees for each Letter of Credit for the period from and
excluding the date of issuance of same to and including the date of expiration
or termination, equal to the average daily face amount of each outstanding
Letter of Credit multiplied by the Applicable Margin for Revolving Advances
consisting of LIBOR Rate Loans, such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable quarterly
in arrears on the first day of each calendar quarter and on the last day of the
Term, and (y) to Issuer, a fronting fee of one quarter of one percent (0.25%)
per annum times the average daily Maximum Undrawn Amount of each outstanding
Letter of Credit for the period from and excluding the date of issuance of same
to and including the date of expiration or termination, to be payable quarterly
in arrears on the first day of each calendar quarter and on the last day of the
Term (all of the foregoing fees, the “Letter of Credit Fees”). In addition,
Borrowers shall pay to Administrative Agent, for the benefit of Issuer, any and
all administrative, issuance, amendment, payment and negotiation charges with
respect to Letters of Credit and all fees and expenses as agreed upon by Issuer
and the Borrowing Agent in connection with any Letter of Credit, including in
connection with the opening, amendment or renewal of any such Letter of Credit
and any acceptances created thereunder, all such charges, fees and expenses, if
any, to be payable on demand. All such charges shall be deemed earned in full on
the date when the same are due and payable hereunder and shall not be subject to
rebate or pro-ration upon the termination of this Agreement for any reason. Any
such charge in effect at the time of a particular transaction shall be the
charge for that transaction, notwithstanding any subsequent change in Issuer’s
prevailing charges for that type of transaction. Upon and after the occurrence
of an Event of Default, and during the continuation thereof, automatically upon
the occurrence of any such Event of Default without the requirement of any
affirmative action by any party, the Letter of Credit Fees described in clause
(x) of this Section 3.2(a) shall be increased, from the date such Event of
Default occurred until the date such Event of Default is cured or waived in
writing in accordance herewith, by an additional three percent (3.0%) per annum.

 

(b) At any time following the occurrence and during the continuance of an Event
of Default, at the option of Administrative Agent or at the direction of the
Required Revolving Lenders (or, in the case of any Event of Default under
Section 10.7, immediately and automatically upon the occurrence of such Event of
Default, without the requirement of any affirmative action by any party), or
upon the expiration of the Term or any other termination of this Agreement (and
also, if applicable, in connection with any mandatory prepayment under Section
2.20), Borrowers will (i) cancel all outstanding Letters of Credit or (ii) cause
cash to be deposited and maintained in an account with Administrative Agent, as
cash collateral, in an amount equal to one hundred and five percent (105%) of
the Maximum Undrawn Amount of all outstanding Letters of Credit, and each
Borrower hereby irrevocably authorizes Administrative Agent, in its discretion,
on such Borrower’s behalf and in such Borrower’s name, to open such an account
and to make and maintain deposits therein, or in an account opened by such
Borrower, in the amounts required to be made by such Borrower, out of the
proceeds of Receivables or other Collateral or out of any other funds of such
Borrower coming into any Lender’s possession at any time. Administrative Agent
may, in its discretion, invest such cash collateral (less applicable reserves)
in such short-term money-market items as to which Administrative Agent and such
Borrower mutually agree and the net return on such investments shall be credited
to such account and constitute additional cash collateral, or Administrative
Agent may (notwithstanding the foregoing) establish the account provided for
under this Section 3.2(b) as a non-interest bearing account and in such case
Administrative Agent shall have no obligation (and Borrowers hereby waive any
claim) under Article 9 of the Uniform Commercial Code or under any other
Applicable Law to pay interest on such cash collateral being held by
Administrative Agent. No Borrower may withdraw amounts credited to any such
account except upon (i) the waiver or cure of the applicable Event of Default or
(ii) the occurrence of all of the following: (x) payment and performance in full
of all Obligations; (y) expiration of all Letters of Credit; and (z) termination
of this Agreement. Borrowers hereby assign, pledge and grant to Administrative
Agent, for its benefit and the ratable benefit of Issuer, Lenders and each other
Secured Party, a continuing security interest in and to and Lien on any such
cash collateral and any right, title and interest of Borrowers in any deposit
account, securities account or investment account into which such cash
collateral may be deposited from time to time to secure the Obligations,
specifically including all Obligations with respect to any Letters of Credit.
Borrowers agree that upon the coming due of any Reimbursement Obligations (or
any other Obligations, including Obligations for Letter of Credit Fees) with
respect to the Letters of Credit, Administrative Agent may use such cash
collateral to pay and satisfy such Obligations.

 

3.3 Facility Fee. If, for any calendar quarter during the Term, the average
daily unpaid balance of the sum of Revolving Advances plus Swing Loans plus the
Maximum Undrawn Amount of all outstanding Letters of Credit for each day of such
calendar quarter does not equal the Maximum Revolving Advance Amount, then
Borrowers shall pay to Administrative Agent, for the ratable benefit of
Revolving Lenders based on their Revolving Commitment Percentages, a fee at a
rate equal to 0.375% per annum on the amount by which the Maximum Revolving
Advance Amount exceeds such average daily unpaid balance (the “Facility Fee”).
Such Facility Fee shall be payable to Administrative Agent in arrears on the
first day of each calendar quarter with respect to the previous calendar quarter
and on the last day of the Term with respect to the period ending on the last
day of the Term.

 

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3.4 Collateral Evaluation Fee, Servicing Fee and Yield Enhancement.

 

(a) Borrowers shall pay to the Administrative Agent promptly at the conclusion
of any collateral evaluation performed by or for the benefit of Administrative
Agent - namely any field examination, collateral analysis or other business
analysis, the need for which is to be determined by Administrative Agent in its
Permitted Discretion but otherwise subject to the terms of this Agreement
(including Section 4.6 hereof), and which evaluation is undertaken by
Administrative Agent or for its benefit - a collateral evaluation fee in an
amount equal to $1,000 (or such other amount customarily charged by
Administrative Agent to its customers per day for each person employed to
perform such evaluation), plus a per examination manager review fee (whether
such examination is performed by Administrative Agent’s employees or by a third
party retained by Administrative Agent) in the amount of $1,300 (or such other
amount customarily charged by Administrative Agent to its customers), plus all
costs and disbursements incurred by Administrative Agent in the performance of
such examination or analysis, and further provided that if third parties are
retained to perform such collateral evaluations, either at the request of the
Required Lenders or for extenuating reasons determined by Administrative Agent
in its Permitted Discretion, then such fees charged by such third parties plus
all costs and disbursements incurred by such third party, shall be the
responsibility of Borrowers and shall not be subject to the foregoing limits.

 

(b) Borrowers shall pay Administrative Agent, for the benefit of Administrative
Agent, a servicing fee equal to $18,750 per quarter commencing on the first
Business Day of the first calendar quarter following the Closing Date and on the
first Business Day of each calendar quarter thereafter during the Term. The
servicing fee shall be deemed earned in full on the date when same is due and
payable hereunder and shall not be subject to rebate or proration upon
termination of this Agreement for any reason.

 

(c) Borrowers shall pay Term Loan Agent, for the benefit of Term Loan Agent, a
yield enhancement amount (a “Yield Enhancement Amount”) equal to $6,250 per
quarter commencing on the first Business Day of the first calendar quarter
following the Closing Date and on the first Business Day of each calendar
quarter thereafter during the Term. The Yield Enhancement Amount shall be deemed
earned in full on the date when same is due and payable hereunder and shall not
be subject to rebate or proration upon termination of this Agreement for any
reason. Any Yield Enhancement Amount may be distributed to the Term Loan Lenders
in the Term Loan Agent’s sole discretion.

 

3.5 Computation of Interest and Fees. Interest and fees hereunder shall be
computed on the basis of a year of 360 days and for the actual number of days
elapsed. If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the applicable
Contract Rate during such extension.

 

3.6 Maximum Charges. In no event whatsoever shall interest and other charges
charged hereunder exceed the highest rate permissible under Applicable Law. In
the event interest and other charges as computed hereunder would otherwise
exceed the highest rate permitted under Applicable Law: (i) the interest rates
hereunder will be reduced to the maximum rate permitted under Applicable Law;
(ii) such excess amount shall be first applied to any unpaid principal balance
owed by Borrowers; and (iii) if the then remaining excess amount is greater than
the previously unpaid principal balance, Lenders shall promptly refund such
excess amount to Borrowers and the provisions hereof shall be deemed amended to
provide for such permissible rate.

 

3.7 Increased Costs. In the event that any Change in Law or compliance by any
Lender (for purposes of this Section 3.7, the term “Lender” shall include any
Agent, Swing Loan Lender, any Issuer or Lender and any corporation or bank
controlling any Agent, Swing Loan Lender, any Lender or Issuer and the office or
branch where any Agent, Swing Loan Lender, any Lender or Issuer (as so defined)
makes or maintains any LIBOR Rate Loans) with any request or directive (whether
or not having the force of law) from any central bank or other financial,
monetary or other authority, shall:

 

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(a) subject any Agent, Swing Loan Lender, any Lender or Issuer to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Rate Loan, or change the basis
of taxation of payments to such Agent, Swing Loan Lender, such Lender or Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.10 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Agent, Swing Loan Lender, such Lender or the Issuer);

 

(b) impose, modify or deem applicable any reserve, special deposit, assessment,
special deposit, compulsory loan, insurance charge or similar requirement
against assets held by, or deposits in or for the account of, advances or loans
by, or other credit extended by, any office of any Agent, Swing Loan Lender,
Issuer or any Lender, including pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or

 

(c) impose on any Agent, Swing Loan Lender, any Lender or Issuer or the London
interbank LIBOR market any other condition, loss or expense (other than Taxes)
affecting this Agreement or any Other Document or any Advance made by any
Lender, or any Letter of Credit or participation therein;

 

and the result of any of the foregoing is to increase the cost to any Agent,
Swing Loan Lender, any Lender or Issuer of making, converting to, continuing,
renewing or maintaining its Advances hereunder by an amount that such Agent,
Swing Loan Lender, such Lender or Issuer deems to be material or to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of the Advances by an amount that such Agent, Swing Loan Lender or such
Lender or Issuer deems to be material, then, in any case Borrowers shall
promptly pay such Agent, Swing Loan Lender, such Lender or Issuer, upon its
demand, such additional amount as will compensate such Agent, Swing Loan Lender
or such Lender or Issuer for such additional cost or such reduction, as the case
may be, provided that the foregoing shall not apply to increased costs which are
reflected in the LIBOR Rate, as the case may be. Such Agent, Swing Loan Lender,
such Lender or Issuer shall certify in reasonable detail the amount of such
additional cost or reduced amount to Borrowing Agent, and such certification
shall be conclusive absent manifest error.

 

Borrowers shall not be under any obligation to compensate any Lender under this
Section 3.7 with respect to increased costs or reductions with respect to any
period prior to the date that is one hundred eighty (180) days prior to such
request except with respect to costs or other amounts described in Section
3.7(a); provided, further, that the foregoing limitation shall not apply to any
increased costs or reductions arising out of the retroactive application of any
Change in Law within such 180-day period.

 

3.8 Basis For Determining Interest Rate Inadequate or Unfair. In the event that
any Agent or any Lender shall have determined that:

 

(a) reasonable means do not exist for ascertaining the LIBOR Rate for any
Interest Period; or

 

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

 

(c) the making, maintenance or funding of any LIBOR Rate Loan has been made
impracticable or unlawful by compliance by Administrative Agent or such Lender
in good faith with any Applicable Law or any interpretation or application
thereof by any Governmental Body or with any request or directive of any such
Governmental Body (whether or not having the force of law); or

 

(d) the LIBOR Rate will not adequately and fairly reflect the cost to such
Lender of the establishment or maintenance of any LIBOR Rate Loan,

 

then Administrative Agent shall give Borrowing Agent prompt written or
telephonic notice of such determination. If such notice is given, (i) any such
requested LIBOR Rate Loan shall be made as a Domestic Rate Loan, unless
Borrowing Agent shall notify Administrative Agent no later than 12:00 p.m. two
(2) Business Days prior to the date of such proposed borrowing, that its request
for such borrowing shall be cancelled or made as an unaffected type of LIBOR
Rate Loan, (ii) any Domestic Rate Loan or LIBOR Rate Loan which was to have been
converted to an affected type of LIBOR Rate Loan shall be continued as or
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Administrative Agent, no later than 12:00 p.m. two (2) Business Days prior to
the proposed conversion, shall be maintained as an unaffected type of LIBOR Rate
Loan, and (iii) any outstanding affected LIBOR Rate Loans shall be converted
into a Domestic Rate Loan, or, if Borrowing Agent shall notify Administrative
Agent, no later than 12:00 p.m. two (2) Business Days prior to the last Business
Day of the then current Interest Period applicable to such affected LIBOR Rate
Loan, shall be converted into an unaffected type of LIBOR Rate Loan, on the last
Business Day of the then current Interest Period for such affected LIBOR Rate
Loans (or sooner, if any Lender cannot continue to lawfully maintain such
affected LIBOR Rate Loan). Until such notice has been withdrawn, Lenders shall
have no obligation to make an affected type of LIBOR Rate Loan or maintain
outstanding affected LIBOR Rate Loans and no Borrower shall have the right to
convert a Domestic Rate Loan or an unaffected type of LIBOR Rate Loan into an
affected type of LIBOR Rate Loan.

 

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3.9 Capital Adequacy.

 

(a) In the event that any Agent, Swing Loan Lender or any Lender shall have
determined that any Applicable Law or guideline regarding capital adequacy, or
any Change in Law or any change in the interpretation or administration thereof
by any Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Agent, Swing Loan
Lender, Issuer or any Lender (for purposes of this Section 3.9, the term
“Lender” shall include any Agent, Swing Loan Lender, Issuer or any Lender and
any corporation or bank controlling any Agent, Swing Loan Lender or any Lender
and the office or branch where any Agent, Swing Loan Lender or any Lender (as so
defined) makes or maintains any LIBOR Rate Loans) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on any Agent, Swing Loan Lender or any Lender’s
capital as a consequence of its obligations hereunder (including the making of
any Swing Loans) to a level below that which such Agent, Swing Loan Lender or
such Lender could have achieved but for such adoption, change or compliance
(taking into consideration each Agent’s, Swing Loan Lender’s and each Lender’s
policies with respect to capital adequacy) by an amount deemed by any Agent,
Swing Loan Lender or any Lender to be material, then, from time to time,
Borrowers shall pay upon written demand (including reasonable documentation
supporting such request) to such Agent, Swing Loan Lender or such Lender such
additional amount or amounts as will compensate such Agent, Swing Loan Lender or
such Lender for such reduction. In determining such amount or amounts, such
Agent, Swing Loan Lender or such Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.9 shall be available to
each Agent, Swing Loan Lender and each Lender regardless of any possible
contention of invalidity or inapplicability with respect to the Applicable Law,
rule, regulation, guideline or condition.

 

(b) A certificate of such Agent, Swing Loan Lender or such Lender setting forth
such amount or amounts in reasonable detail as shall be necessary to compensate
such Agent, Swing Loan Lender or such Lender with respect to Section 3.9(a)
hereof when delivered to Borrowing Agent shall be conclusive absent manifest
error.

 

3.10 Taxes.

 

(a) Any and all payments by or on account of any Obligations hereunder or under
any Other Document shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes; provided that if Borrowers
shall be required by Applicable Law to deduct any Indemnified Taxes (including
any Other Taxes) from such payments, then (i) Borrowers shall make such
deductions and (ii) Borrowers shall timely pay the full amount deducted to the
relevant Governmental Body in accordance with Applicable Law and (iii) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) any Agent, Swing Loan Lender, any Lender, Issuer or any
Participant, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made.

 

(b) Without limiting the provisions of Section 3.10(a) above, Borrowers shall
timely pay any Other Taxes to the relevant Governmental Body in accordance with
Applicable Law.

 

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(c) Each Borrower shall indemnify each Agent, Swing Loan Lender, each Lender,
Issuer and any Participant, within ten (10) days after demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by such Agent, Swing Loan Lender, such Lender, Issuer, or
such Participant, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Body. A certificate as to the amount of such
payment or liability delivered to Borrowers by any Lender, Swing Loan Lender,
Participant or Issuer (with a copy to Agents), or by any Agent on its own behalf
or Administrative Agent on behalf of Swing Loan Lender, a Lender or Issuer,
shall be conclusive absent manifest error.

 

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by any Borrower to a Governmental Body, Borrowers shall deliver to Agents the
original or a certified copy of a receipt issued by such Governmental Body
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to Agents.

 

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which any Borrower is
resident for tax purposes, or under any treaty to which such jurisdiction is a
party, with respect to payments hereunder or under any Other Document shall
deliver to Borrowers (with a copy to Agents), at the time or times prescribed by
Applicable Law or reasonably requested by Borrowers or Agents, such properly
completed and executed documentation prescribed by Applicable Law as will permit
such payments to be made without withholding or at a reduced rate of
withholding. Notwithstanding the submission of such documentation claiming a
reduced rate of or exemption from U.S. withholding tax, an Agent shall be
entitled to withhold United States federal income taxes at the full 30%
withholding rate if in its reasonable judgment it is required to do so under the
due diligence requirements imposed upon a withholding agent under § 1.1441-7(b)
of the United States Income Tax Regulations or other Applicable Law. Further,
Agents are indemnified under §1.1461-1(e) of the United States Income Tax
Regulations against any claims and demands of any Lender, Issuer or assignee or
participant of a Lender or Issuer for the amount of any tax it deducts and
withholds in accordance with regulations under § 1441 of the Code. In addition,
any Lender, if requested by Borrowers or Agents, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by the
Borrowers or Agents as will enable Borrowers or Agents to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements. Without limiting the generality of the foregoing, each Lender
shall deliver to Borrowers and Agents (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the request
of Borrowers or Agents, but only if such Lender is legally entitled to do so),
whichever of the following is applicable:

 

(i) two (2) duly completed valid originals of IRS Form W-8BEN or W-8BEN-E
claiming eligibility for benefits of an income tax treaty to which the United
States of America is a party,

 

(ii) two (2) duly completed valid originals of IRS Form W-8ECI,

 

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Borrowers
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) two
duly completed valid originals of IRS Form W-8BEN or W-8BEN-E,

 

(iv) any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrowers to determine the withholding or deduction
required to be made, or

 

(v) To the extent that any Lender is not a Foreign Lender, such Lender shall
submit to Agents two (2) originals of an IRS Form W-9 or any other form
prescribed by Applicable Law demonstrating that such Lender is exempt from U.S.
federal backup withholding tax.

 

Unless such Agent has already provided such form in its capacity as a Lender,
each Agent shall provide to the Borrower an IRS Form W-9 or successor form
prescribed by Applicable Law demonstrating that such Agent is a United States
person exempt from U.S. federal backup withholding tax.

 

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(f) If a payment made to a Lender, Swing Loan Lender, Participant, Issuer or an
Agent under this Agreement or any Other Document would be subject to U.S.
Federal withholding Tax imposed by FATCA if such Person fails 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, Swing Loan Lender,
Participant, Issuer or Agent shall deliver to the Administrative Agent (in the
case of Swing Loan Lender, a Lender, Participant or Issuer) and Borrowers (A) a
certification signed by the chief financial officer, principal accounting
officer, treasurer or controller of such Person, and (B) other documentation
reasonably requested by any Agent or any Borrower sufficient for Agents and
Borrowers to comply with their obligations under FATCA and to determine that
Swing Loan Lender, such Lender, Participant, Issuer or such Agent have complied
with such applicable reporting requirements.

 

(g) If any Agent, Swing Loan Lender, any Lender, any Participant or Issuer
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by Borrowers or with respect to which Borrowers have paid additional
amounts pursuant to this Section, it shall pay to Borrowers an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrowers under this Section with respect to the Indemnified
Taxes or Other Taxes giving rise to such refund); net of all out-of-pocket
expenses of such Agent, Swing Loan Lender, Lender, Participant, or the Issuer,
as the case may be, and without interest (other than any interest paid by the
relevant Governmental Body with respect to such refund within forty-five (45)
Business Days of the determination that such Agent, or such Lender, Issuer or
Participant has received such refund or is entitled to such direct credit),
provided that Borrowers, upon the request of such Agent, Swing Loan Lender, such
Lender, Participant, or Issuer, agrees to repay the amount paid over to
Borrowers (plus any penalties, interest or other charges imposed by the relevant
Governmental Body) to such Agent, Swing Loan Lender, such Lender, Participant or
the Issuer in the event such Agent, Swing Loan Lender, such Lender, Participant
or the Issuer is required to repay such refund to such Governmental Body;
provided, further that such Borrower shall not be required to repay such Agent,
Swing Loan Lender, such Lender, Participant or the Issuer an amount in excess of
the amount paid over by such party to such Borrower pursuant to this Section
3.10(g). This Section shall not be construed to require any Agent, Swing Loan
Lender, any Lender, Participant, or Issuer to make available its tax returns (or
any other information relating to its taxes that it deems confidential) to
Borrowers or any other Person.

 

3.11 [Reserved].

 

3.12 Mitigation of Obligations. If any Lender requests compensation under
Sections 3.7 or 3.9 or if any Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Agent or any
Lender pursuant to Section 3.10, then such Lender shall (at the request of the
Borrowers) use reasonable efforts to designate a different lending office for
funding or booking the Advances hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in
the reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.7, 3.9 or 3.10, as
applicable, in the future and (ii) would not be unlawful nor 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 such Lender in connection with any such designation or
assignment requested by the Borrowers.

 

3.13 Applicable Premium.

 

(a) Upon the occurrence of an Applicable Premium Trigger Event, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders (in
accordance with a written agreement among the Agents and the Lenders), the
Applicable Premium.

 

(b) Any Applicable Premium payable in accordance with this Section 3.13 shall be
presumed to be equal to the liquidated damages sustained by Lenders as the
result of the occurrence of the Applicable Premium Trigger Event and Loan
Parties agree that it is reasonable under the circumstances currently existing.
LOAN PARTIES EXPRESSLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY
PROHIBIT THE COLLECTION OF THE FOREGOING APPLICABLE PREMIUM IN CONNECTION WITH
ANY ACCELERATION.

 

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

 

3.14 Fee Letter. Borrowers shall pay the fees set forth in the Fee Letter as and
when due and payable under the terms of the Fee Letter.

 

3.15 Payment for Consents. No consent, amendment or similar fee shall be due
from the Borrowers to the Agents or the Lenders with respect to any waiver,
amendment or other modification (if any) of this Agreement implemented following
the Amendment No. 7 Effective Date through September 30, 2020. Notwithstanding
the foregoing, (a) neither the Agents nor the Lenders shall be under any
obligation to approve any such waiver or amendment, and (b) the Borrowers will
be liable for the Agents' and the Lenders' costs and expenses (including
reasonable legal fees incurred in preparing any such waiver or amendment, in
each case, whether or not any such waiver or amendment becomes effective)
subject to and in accordance with the terms hereof.

 

3.16 3.15 Second AmendmentExit Fee. The Borrowers shall pay to the
Administrative Agent for the account of the Lenders, in accordance with a
written agreement among the Agents and the Lenders, an amendmenta non-refundable
exit fee (the “Exit Fee”) equal to $364,140.631,500,000, which feeExit Fee shall
be deemed to be fully-earned on the Amendment No. 27 Effective Date and payable
in cash on the earlier of (a) June 30, 2018 and (b) the first date on which all
of the Obligations are paid in full in cash and the Total Commitment of the
Lenders is terminated.earliest to occur of (a) the expiration of the Term, (b)
the occurrence of a Change of Control, (c) the date of any refinancing of the
Advances under the Credit Agreement and (d) the termination of the Credit
Agreement for any other reason (each, an “Exit Fee Trigger”); provided, that
upon the satisfaction of the Conversion/Cancellation Condition, the Borrowers
may, subject to the prior satisfaction of the Registration Condition and if not
prohibited pursuant to Section 3.18(b), elect to pay the Exit Fee in Common
Stock at the Conversion Rate on or before the first occurrence of an Exit Fee
Trigger.

 

3.17 Restructuring Fee. The Borrowers shall pay to the Administrative Agent for
the account of the Lenders, in accordance with a written agreement among the
Agents and the Lenders, a non-refundable restructuring fee (the “Restructuring
Fee”) equal to $3,478,196.94, which Restructuring Fee shall be fully-earned on
the Amendment No. 7 Effective Date and payable in cash on the earliest to occur
of (a) the expiration of the Term, (b) the occurrence of a Change of Control,
(c) the date of any refinancing of the Advances under the Credit Agreement, (d)
the termination of the Credit Agreement for any other reason and (e) the
acquisition by a Loan Party, in one transaction or a series of related
transactions, all or substantially all of the assets and/or equity interests of
one or more third parties (each, a “Restructuring Fee Trigger”); provided, that
upon the satisfaction of the Conversion/Cancellation Condition, the Borrowers
may, subject to the prior satisfaction of the Registration Condition and if not
prohibited pursuant to Section 3.18(b), elect to pay the Restructuring Fee in
Common Stock at the Conversion Rate on or before the first occurrence of a
Restructuring Fee Trigger.

 

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3.18 Share Delivery Limitations. (a) Beneficial Ownership. Notwithstanding
anything to the contrary contained herein, Holdings shall not issue any shares
of Common Stock pursuant to the terms of the Credit Agreement, and no Lender
shall have the right to any shares of Common Stock otherwise issuable pursuant
to the terms of the Credit Agreement and such issuance shall be null and void
and treated as if never made, to the extent that after giving effect to such
issuance, such Lender together with its other Attribution Parties collectively
would beneficially own in excess of 9.9% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such
issuance. For purposes of the foregoing sentence, the aggregate number of shares
of Common Stock beneficially owned by any Lender and its other Attribution
Parties shall include the number of shares of Common Stock held by such Lender
and all other Attribution Parties plus the number of shares of Common Stock
issuable pursuant to the Credit Agreement with respect to which the
determination of such sentence is being made, but shall exclude any remaining
shares of Common Stock which would be issuable pursuant to the Credit Agreement.
For purposes of this Section 3.18(a), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act. For purposes of
determining the number of outstanding shares of Common Stock each Lender may
acquire pursuant to the Credit Agreement without exceeding the Maximum
Percentage, such Lender may rely on the number of outstanding shares of Common
Stock as reflected in (i) Holdings’ most recent Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing
with the SEC, as the case may be, (ii) a more recent public announcement by
Holdings or (iii) any other written notice by the Holdings or its transfer agent
setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). For any reason at any time, upon the written or oral
request of any Lender, Holdings shall within one Business Day confirm orally and
in writing or by electronic mail to such Lender the number of shares of Common
Stock then outstanding. In the event that the issuance of shares of Common Stock
to any Lender pursuant to the Credit Agreement results in any Lender and its
other Attribution Parties being deemed to beneficially own, in the aggregate,
more than the Maximum Percentage of the number of outstanding shares of Common
Stock (as determined under Section 13(d) of the Exchange Act), the number of
shares so issued by which such Lender’s and the other Attribution Parties’
aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess
Shares”) shall be deemed null and void and shall be cancelled ab initio, and
such Lender shall not have the power to vote or to transfer the Excess Shares.
Upon delivery of a written notice to Holdings, such Lender may from time to time
increase or decrease the Maximum Percentage to any other percentage not in
excess of 9.9% as specified in such notice; provided that (i) any such increase
in the Maximum Percentage will not be effective until the sixty-first (61st) day
after such notice is delivered to Holdings and (ii) any such increase or
decrease will apply only to such Lender its other Attribution Parties and not to
any other Lender that is not an Attribution Party of such Lender. For purposes
of clarity, the shares of Common Stock issuable pursuant to the terms of the
Credit Agreement in excess of the Maximum Percentage shall not be deemed to be
beneficially owned by such Lender for any purpose including for purposes of
Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 3.18(a) to the extent necessary
to correct this paragraph (or any portion of this paragraph) which may be
defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 3.18(a) or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitation contained
in this paragraph may not be waived and shall apply to a successor Lender.

 

(b) Principal Market Regulation. Holdings shall not be obligated or permitted to
issue any shares of Common Stock pursuant to the terms of the Credit Agreement,
and no Lender shall have the right to receive pursuant to the terms of the
Credit Agreement any shares of Common Stock, to the extent the issuance of such
shares of Common Stock combined with all shares of Common Stock issued pursuant
to the Credit Agreement or in any related transaction would exceed in the
aggregate 3,169,622 (as adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction related to the Common Stock
occurring after the date of Amendment No. 7), except that such limitation shall
not apply in the event that Holdings obtains the approval of its stockholders,
pursuant to Section 713 of the NYSE American Company Guide for issuances of
Common Stock in excess of such amount.

 

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IV. COLLATERAL: GENERAL TERMS

 

4.1 Security Interest in the Collateral. To secure the prompt payment and
performance to each Agent, Issuer and each Lender (and each other Secured Party)
of the Obligations, each Loan Party hereby assigns, pledges and grants to
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties, a continuing security interest in and to and Lien on all of its
Collateral, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located. Each Loan Party shall mark its books and
records as may be necessary to evidence, protect and perfect Collateral Agent’s
security interest. Each Loan Party shall provide the Administrative Agent with
written notice of all commercial tort claims in excess of $250,000 promptly upon
the occurrence of any events giving rise to any such claim(s) (regardless of
whether legal proceedings have yet been commenced), such notice to contain a
brief description of the claim(s), the events out of which such claim(s) arose
and the parties against which such claims may be asserted and, if applicable in
any case where legal proceedings regarding such claim(s) have been commenced,
the case title together with the applicable court and docket number. Upon
delivery of each such notice, such Loan Party shall be deemed to thereby grant
to Collateral Agent a security interest and lien in and to such commercial tort
claims described therein and all proceeds thereof. Each Loan Party shall provide
the Administrative Agent with written notice promptly upon becoming the
beneficiary under any letter of credit in excess of $250,000 or otherwise
obtaining any right, title or interest in any letter of credit rights in excess
of $250,000 and at Collateral Agent’s request shall take such actions as
Collateral Agent may reasonably request for the perfection of Collateral Agent’s
security interest therein.

 

4.2 Perfection of Security Interest. Each Loan Party shall take all action that
may be necessary or desirable, or that Collateral Agent may reasonably request,
so as at all times to maintain the validity, perfection, enforceability and
priority of Collateral Agent’s security interest in and Lien on the Collateral
or to enable Collateral Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (i) promptly
discharging all Liens other than Permitted Encumbrances, (ii) using commercially
reasonable efforts to obtain Lien Waiver Agreements, (iii) delivering to
Collateral Agent, endorsed or accompanied by such instruments of assignment as
Collateral Agent may specify, and stamping or marking, in such manner as
Collateral Agent may reasonably specify, any and all chattel paper, instruments,
letters of credits and advices thereof and documents evidencing or forming a
part of the Collateral, (iv) entering into warehousing, lockbox (other than with
respect to Excluded Accounts), customs and freight agreements and other
custodial arrangements reasonably satisfactory to Collateral Agent, and (v)
executing and delivering financing statements, control agreements, instruments
of pledge, mortgages, notices and assignments, in each case in form and
substance reasonably satisfactory to Collateral Agent, relating to the creation,
validity, perfection, maintenance or continuation of Collateral Agent’s security
interest and Lien under the Uniform Commercial Code or other Applicable Law. By
its signature hereto, each Loan Party hereby authorizes Collateral Agent to file
against such Loan Party, one or more financing, continuation or amendment
statements pursuant to the Uniform Commercial Code in form and substance
reasonably satisfactory to Collateral Agent (which statements may have a
description of collateral which is broader than that set forth herein, including
without limitation a description of Collateral as “all assets” and/or “all
personal property” of any Loan Party). All charges, expenses and fees Collateral
Agent may incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrowers’ Account as a Revolving Advance of a
Domestic Rate Loan and added to the Obligations, or, at Collateral Agent’s
option, shall be paid by Loan Parties to Collateral Agent for its benefit and
for the ratable benefit of Lenders promptly upon demand.

 

4.3 Preservation of Collateral. Following the occurrence and during the
continuance of a Default or Event of Default, in addition to the rights and
remedies set forth in Section 11.1 hereof, Collateral Agent: (a) may at any time
take such steps as Collateral Agent deems necessary to protect Collateral
Agent’s interest in and to preserve the Collateral, including the hiring of
security guards or the placing of other security protection measures as
Collateral Agent may deem appropriate; (b) may employ and maintain at any of any
Loan Party’s premises a custodian who shall have full authority to do all acts
necessary to protect Collateral Agent’s interests in the Collateral; (c) may
lease warehouse facilities to which Collateral Agent may move all or part of the
Collateral; (d) may use any Loan Party’s owned or leased lifts, hoists, trucks
and other facilities or equipment for handling or removing the Collateral; and
(e) shall have, and is hereby granted, a right of ingress and egress to the
places where the Collateral is located, and may proceed over and through any of
Loan Parties’ owned or leased property. Each Loan Party shall cooperate fully
with all of Collateral Agent’s efforts to preserve the Collateral and will take
such actions to preserve the Collateral as Collateral Agent may direct. All of
Collateral Agent’s expenses of preserving the Collateral, including any expenses
relating to the bonding of a custodian, may, in Collateral Agent’s sole
discretion, be charged to Borrowers’ Account as a Revolving Advance maintained
as a Domestic Rate Loan and added to the Obligations.

 

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4.4 Ownership and Location of Collateral.

 

(a) With respect to the Collateral, at the time the Collateral becomes subject
to Collateral Agent’s security interest: (i) each Loan Party shall be the sole
owner of and fully authorized and able to sell, transfer, pledge and/or grant a
first priority security interest in each and every item of its respective
Collateral to Collateral Agent; and, except for Permitted Encumbrances the
Collateral shall be free and clear of all Liens and encumbrances whatsoever;
(ii) each document and agreement executed by each Loan Party or delivered to
Collateral Agent or any Lender in connection with this Agreement shall be true
and correct in all material respects; (iii) all signatures and endorsements of
each Loan Party that appear on such documents and agreements shall be genuine
and each Loan Party shall have full capacity to execute same; and (iv) each Loan
Party’s equipment and Inventory shall be located as set forth on Schedule 4.4,
as such Schedule may be updated from time to time, and shall not be removed from
such location(s) without the prior written consent of Collateral Agent except
with respect to the sale of Inventory in the Ordinary Course of Business,
equipment to the extent permitted in Section 7.1(b) hereof and Inventory in
transit and equipment sent for repair.

 

(b) (i) There is no location at which any Loan Party has any Collateral (other
than equipment sent for repair or Inventory in transit) in excess of $100,000,
other than those locations listed on Schedule 4.4(b)(i); (ii) Schedule
4.4(b)(ii) hereto sets forth a correct and complete list as of the Closing Date
of (A) each place of business of each Loan Party and (B) the chief executive
office of each Loan Party; and (iv) Schedule 4.4(b)(iii) hereto sets forth a
correct and complete list as of the Closing Date of the location, by state and
street address, of all Real Property owned or leased by each Loan Party,
identifying which properties are owned and which are leased, together with the
names and addresses of any landlords.

 

4.5 Defense of Agents’ and Lenders’ Interests. Until (a) payment and performance
in full of all of the Obligations and (b) termination of this Agreement,
Collateral Agent’s interests in the Collateral shall continue in full force and
effect. During such period no Loan Party shall, without Collateral Agent’s prior
written consent, pledge, sell (except for sales or other dispositions otherwise
permitted in Section 7.1(b) hereof), assign, transfer, create or suffer to exist
a Lien upon or encumber or allow or suffer to be encumbered in any way except
for (x) sales or other transfers permitted under Section 7.1(b), or (y)
Permitted Encumbrances, any part of the Collateral. Each Loan Party shall defend
Collateral Agent’s interests in the Collateral against any and all Persons
whatsoever. At any time following an Event of Default and demand by
Administrative Agent for payment of all Obligations, Collateral Agent shall have
the right to take possession of the indicia of the Collateral and the Collateral
in whatever physical form contained, including: labels, stationery, documents,
instruments and advertising materials. If Collateral Agent exercises this right
to take possession of the Collateral during the continuance of an Event of
Default and demand for payment of all Obligations, Loan Parties shall, upon
demand, assemble it in the best manner possible and make it available to
Collateral Agent at a place reasonably convenient to Collateral Agent. In
addition, with respect to all Collateral, Collateral Agent and Lenders shall be
entitled to all of the rights and remedies set forth herein and further provided
by the Uniform Commercial Code or other Applicable Law. Upon the occurrence and
during the continuance of an Event of Default. Collateral Agent may, at its
option, instruct all suppliers, carriers, forwarders, warehousers or others
receiving or holding cash, checks, Inventory, documents or instruments in which
Collateral Agent holds a security interest to deliver same to Collateral Agent
and/or subject to Collateral Agent’s order and if they shall come into any Loan
Party’s possession, they, and each of them, shall be held by such Loan Party in
trust as Collateral Agent’s trustee, and such Loan Party will promptly deliver
them to Collateral Agent in their original form together with any necessary
endorsement.

 

4.6 Inspection of Premises. At all reasonable times following delivery of
reasonable notice to Borrower (unless an Event of Default has occurred and is
continuing or other exigent circumstances exists, in which case, at all times
without notice), each Agent and each Lender shall have full access to and the
right to audit, check, inspect and make abstracts and copies from each Loan
Party’s books, records, audits, correspondence and all other papers relating to
the Collateral and the operation of each Loan Party’s business, including the
ability to enter upon any premises of any Loan Party at any time during business
hours and at any other reasonable time, and from time to time as often as such
Agent or Lender shall elect in its sole discretion in the absence of an Event of
Default, after giving reasonable advance notice thereof, for the purpose of
inspecting the Collateral and any and all records pertaining thereto and the
operation of such Loan Party’s business; provided, however, that so long as no
Default or Event of Default has occurred, Loan Parties shall not be responsible
for the costs and expenses of the Agents of more than two (2) such field
examinations in any consecutive twelve (12) month period.

 

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4.7 [Reserved].

 

4.8 Receivables; Deposit Accounts and Securities Accounts.

 

(a) Each of the Receivables shall be a bona fide and valid account representing
a bona fide indebtedness incurred by the Customer therein named, for a fixed sum
as set forth in the invoice relating thereto (provided immaterial or
unintentional invoice (or books and records) errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of a Loan Party, or work, labor or services theretofore
rendered by a Loan Party as of the date each Receivable is created. Same shall
be due and owing in accordance with the applicable Loan Party’s standard terms
of sale without dispute, setoff or counterclaim except as may be stated on the
accounts receivable schedules delivered by Loan Parties to Administrative Agent.

 

(b) Each Customer, to each Loan Party’s knowledge is, and, as of the date each
Receivable is created, is and will be solvent and able to pay all Receivables on
which the Customer is obligated in full when due. With respect to such Customers
of any Loan Party who to such Loan Party’s knowledge are not solvent, such Loan
Party has set up on its books and in its financial records bad debt reserves
adequate to cover such Receivables.

 

(c) As of the Closing Date, each Loan Party’s chief executive office is located
as set forth on Schedule 4.4(b)(iii). Until written notice is given to
Administrative Agent by Borrowing Agent of any other office at which any Loan
Party keeps its records pertaining to Receivables, all such records shall be
kept at such executive office.

 

(d) Loan Parties shall instruct their Customers to deliver all remittances upon
Receivables (whether paid by check or by wire transfer of funds) to such Blocked
Accounts (and any associated lockboxes) as Administrative Agent shall designate
from time to time as contemplated by Section 4.8(h) or as otherwise agreed to
from time to time by Administrative Agent. Notwithstanding the foregoing, to the
extent any Loan Party directly receives any remittances upon Receivables, such
Loan Party will, at such Loan Party’s sole cost and expense, but on
Administrative Agent’s behalf and for Administrative Agent’s account, collect as
Administrative Agent’s property and in trust for the Secured Parties all amounts
received on Receivables, and shall not commingle such collections with any Loan
Party’s funds or use the same except to pay Obligations, and shall as soon as
possible and in any event no later than three (3) Business Days after the
receipt thereof (i) in the case of remittances paid by check, deposit all such
remittances in their original form (after supplying any necessary endorsements)
and (ii) in the case of remittances paid by wire transfer of funds, transfer all
such remittances, in each case, into such Blocked Accounts. Each Loan Party
shall deposit in the Blocked Account or, upon request by Administrative Agent,
deliver to Administrative Agent, in original form and on the date of receipt
thereof, all checks, drafts, notes, money orders, acceptances, cash and other
evidences of Indebtedness.

 

(e) At any time following the occurrence and during the continuance of an Event
of Default, Administrative Agent shall have the right to send notice of the
assignment of, and Collateral Agent’s security interest in and Lien on, the
Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral and direct such Person to pay such
Receivable to Borrowers’ Blocked Account or lockbox for the benefit of the
Secured Parties. Thereafter, solely during the existence of an Event of Default,
Collateral Agent shall have the sole right to collect the Receivables, take
possession of the Collateral, or both. The Administrative Agent’s and Collateral
Agent’s actual collection expenses, including, but not limited to, stationery
and postage, telephone, facsimile, telegraph, secretarial and clerical expenses
and the salaries of any collection personnel used for collection, may be charged
to Borrowers’ Account and added to the Obligations.

 

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(f) Collateral Agent shall have the right to receive, endorse, assign and/or
deliver in the name of Collateral Agent or any Loan Party any and all checks,
drafts and other instruments for the payment of money relating to the
Receivables, and each Loan Party hereby waives notice of presentment, protest
and non-payment of any instrument so endorsed. Each Loan Party hereby
constitutes Collateral Agent or Collateral Agent’s designee as such Loan Party’s
attorney with power (i) at any time: (A) to file financing statements or
amendments thereto deemed necessary or appropriate by Collateral Agent to
preserve, protect, or perfect Collateral Agent’s interest in the Collateral; and
(B) in connection with the cash management of the Loan Parties, to receive, open
and dispose of all mail addressed to any Loan Party at any post office
box/lockbox maintained by Collateral Agent for Loan Parties or at any other
business premises of Collateral Agent; and (ii) at any time following the
occurrence and during the continuance of an Event of Default: (A) to endorse
such Loan Party’s name upon any notes, acceptances, checks, drafts, money orders
or other evidences of payment or Collateral received by Collateral Agent; (B) in
connection with the cash management of the Loan Parties, to sign such Loan
Party’s name on any invoice or bill of lading relating to any of the
Receivables, drafts against Customers, assignments and verifications of
Receivables; (C) to send verifications of Receivables to any Customer in the
name of any Loan Party or a third party and, following the occurrence and during
the continuance of an Event of Default, in the name of Collateral Agent or any
Lender; (D) to demand payment of the Receivables; (E) to sign such Loan Party’s
name on all documents or instruments deemed necessary or appropriate by
Collateral Agent to preserve, protect, or perfect Collateral Agent’s interest in
the Collateral and to file same (F) to enforce payment of the Receivables by
legal proceedings or otherwise; (G) to exercise all of such Loan Party’s rights
and remedies with respect to the collection of the Receivables and any other
Collateral; (H) to sue upon or otherwise collect, extend the time of payment of,
settle, adjust, compromise, extend or renew the Receivables; (I) to settle,
adjust or compromise any legal proceedings brought to collect Receivables; (J)
to prepare, file and sign such Loan Party’s name on a proof of claim in
bankruptcy or similar document against any Customer; (K) to prepare, file and
sign such Loan Party’s name on any notice of Lien, assignment or satisfaction of
Lien or similar document in connection with the Receivables; (L) to accept the
return of goods represented by any of the Receivables; (M) to change the address
for delivery of mail addressed to any Loan Party to such address as Collateral
Agent may designate; and (N) to do all other acts and things necessary to carry
out this Agreement. All acts of said attorney or designee are hereby ratified
and approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done maliciously or with gross (not mere) negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment); this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid.

 

(g) Neither Agents nor any Lender shall, under any circumstances or in any event
whatsoever, have any liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of the Receivables or
any instrument received in payment thereof, or for any damage resulting
therefrom.

 

(h) All proceeds of Collateral shall be deposited promptly, and in any event no
later than the next Business Day after the date of receipt thereof, by the Loan
Parties into a Blocked Account. Within thirty (30) days of the Amendment No. 2
Effective Date, each applicable Loan Party, Collateral Agent and each Blocked
Account Bank shall enter into a deposit account control agreement (a “Control
Agreement”) in form and substance satisfactory to Collateral Agent that is
sufficient to give Collateral Agent “control” (for purposes of Articles 8 and 9
of the Uniform Commercial Code) over each Blocked Account (other than Excluded
Accounts and any accounts maintained by any Excluded DACA Entity; provided that
the aggregate amount on deposit in all accounts maintained by the Excluded DACA
Entities shall not exceed $2,000,000 at any time). Upon the terms and subject to
the conditions set forth in each Control Agreement with respect to each Blocked
Account, all amounts received in such Blocked Account shall, at the Collateral
Agent’s direction, be wired each Business Day into the Administrative Agent’s
Account, except that, so long as no Event of Default has occurred and is
continuing, the Collateral Agent will not direct the Blocked Account Bank to
transfer funds in such Blocked Account to the Administrative Agent’s Account and
such funds may be used by the Borrowers in accordance with the terms of this
Agreement. All funds deposited in such Blocked Accounts shall immediately become
subject to the security interest of Collateral Agent for its own benefit and the
ratable benefit of Issuer, Lenders and all other holders of the Obligations, and
Borrowing Agent shall use commercially reasonable efforts to obtain the
agreement by such Blocked Account Bank to waive any offset rights against the
funds so deposited. Neither Collateral Agent nor any Lender assumes any
responsibility for such blocked account arrangement, including any claim of
accord and satisfaction or release with respect to deposits accepted by any
Blocked Account Bank thereunder. Subject to Section 11.5 hereof, Administrative
Agent shall apply all funds received by it from the Blocked Accounts to the
satisfaction of the Obligations (including the cash collateralization of the
Letters of Credit) in such order as Administrative Agent shall determine in its
sole discretion; provided that, in the absence of any Event of Default,
Administrative Agent shall apply all such funds representing collection of
Receivables first to the prepayment of the principal amount of the Swing Loans,
if any, and then to the Revolving Advances.

 

(i) No Loan Party will, without Collateral Agent’s consent, compromise or adjust
any material amount of the Receivables (or extend the time for payment thereof)
or accept any material returns of merchandise or grant any additional discounts,
allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in
the Ordinary Course of Business of such Loan Party.

 

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(j) All deposit accounts (including all Blocked Accounts), securities accounts
and investment accounts of each Loan Party and its Subsidiaries as of the
Closing Date are set forth on Schedule 4.8(j). No Loan Party shall open any new
deposit account, securities account or investment account unless (i) Loan
Parties shall have given at least ten (10) days prior written notice to
Collateral Agent and (ii) if such account (other than any Excluded Account) is
to be maintained with a bank, depository institution or securities intermediary
that is not Collateral Agent, such bank, depository institution or securities
intermediary, each applicable Loan Party and Collateral Agent shall first have
entered into an account control agreement in form and substance satisfactory to
Collateral Agent sufficient to give Collateral Agent “control” (for purposes of
Articles 8 and 9 of the Uniform Commercial Code) over such account.

 

4.9 Inventory. To the extent Inventory held for sale or lease has been produced
by any Loan Party, it has been and will be produced by such Loan Party in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.

 

4.10 Maintenance of Equipment. Loan Parties’ equipment shall be maintained in
good operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the equipment shall be maintained and preserved. No
Loan Party shall use or operate the equipment in violation of any law, statute,
ordinance, code, rule or regulation.

 

4.11 Exculpation of Liability. Nothing herein contained shall be construed to
constitute Collateral Agent or any Lender as any Loan Party’s agent for any
purpose whatsoever, nor shall Collateral Agent or any Lender be responsible or
liable for any shortage, discrepancy, damage, loss or destruction of any part of
the Collateral wherever the same may be located and regardless of the cause
thereof. Neither Collateral Agent nor any Lender, whether by anything herein or
in any assignment or otherwise, assumes any of any Loan Party’s obligations
under any contract or agreement assigned to Collateral Agent or such Lender, and
neither Collateral Agent nor any Lender shall be responsible in any way for the
performance by any Loan Party of any of the terms and conditions thereof.

 

4.12 Financing Statements. Except with respect to the financing statements filed
by Collateral Agent, the financing statements described on Schedule 1.2 hereto,
and any financing statements filed in connection with Permitted Encumbrances, no
Loan Party will authorize any financing statement covering any of the Collateral
or any proceeds thereof is or will be on file in any public office.

 

4.13 Investment Property Collateral.

 

(a) Each Loan Party represents and warrants that it has the right to transfer
the Investment Property free of any Liens other than Permitted Encumbrances and
will use commercially reasonable efforts to defend its title to the Investment
Property against the claims of all Persons. Each Loan Party shall (i) ensure
that each operating agreement, limited partnership agreement and any other
similar agreement permits Collateral Agent’s Lien on the Equity Interests of
wholly-owned Subsidiaries (other than Foreign Subsidiaries) arising thereunder,
foreclosure of Collateral Agent’s Lien and admission of any transferee as a
member, limited partner or other applicable equity holder thereunder and (ii)
use commercially reasonable efforts to provide that each operating agreement,
limited partnership agreement and any other similar agreement with respect to
any other Person permits Collateral Agent’s Lien on the Investment Property of
such Loan Party arising thereunder, foreclosure of Collateral Agent’s Lien and
admission of any transferee as a member, limited partner or other applicable
equity holder thereunder.

 

(b) Each Loan Party shall, if the Investment Property includes securities or any
other financial or other asset maintained in a securities account, cause the
custodian with respect thereto to execute and deliver a notification and control
agreement or other applicable agreement satisfactory to Collateral Agent in
order to perfect and protect the Collateral Agent’s Lien in such Investment
Property.

 

(c) Except as set forth in Article XI or in any Pledge Agreement, (i) the Loan
Parties will have the right to exercise all voting rights with respect to the
Investment Property and (ii) the Loan Parties will have the right to receive all
cash dividends and distributions, interest and premiums declared and paid on the
Investment Property to the extent otherwise permitted under this Agreement. In
the event any additional Equity Interests are issued to any Loan Party as a
stock dividend or distribution or in lieu of interest on any of the Investment
Property, as a result of any split of any of the Investment Property, by
reclassification or otherwise, any certificates evidencing any such additional
shares will be delivered to the Collateral Agent within ten (10) Business Days
and such shares will be subject to this Agreement and a part of the Investment
Property to the same extent as the original Investment Property.

 

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V. REPRESENTATIONS AND WARRANTIES.

 

Each Loan Party represents and warrants as follows:

 

5.1 Authority. Each Loan Party has full power, authority and legal right to
enter into this Agreement and the Other Documents to which it is a party and to
perform all its respective Obligations hereunder and thereunder. This Agreement
and the Other Documents to which it is a party have been duly executed and
delivered by each Loan Party, and this Agreement and the Other Documents to
which it is a party constitute the legal, valid and binding obligation of such
Loan Party enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally. The execution,
delivery and performance of this Agreement and of the Other Documents to which
it is a party (a) are within such Loan Party’s corporate or company powers, as
applicable, have been duly authorized by all necessary corporate or company
action, as applicable, are not in contravention of law or the terms of such Loan
Party’s Organizational Documents or to the conduct of such Loan Party’s business
or of any Material Contract or undertaking to which such Loan Party is a party
or by which such Loan Party is bound, (b) will not conflict with or violate any
material law or regulation, or any judgment, order or decree of any Governmental
Body, (c) will not require the Consent of any Governmental Body, any party to a
Material Contract or any other Person, except those Consents set forth on
Schedule 5.1 hereto, all of which will have been duly obtained, made or compiled
prior to the Closing Date and which are in full force and effect and (d) will
not conflict with, nor result in any breach in any of the provisions of or
constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of such Loan Party under the provisions of
any material agreement, instrument, or other document to which such Loan Party
is a party or by which it or its property is a party or by which it may be
bound, including the SNI Acquisition Agreement.

 

5.2 Formation and Qualification.

 

(a) Each Loan Party is duly incorporated or formed, as applicable, and in good
standing under the laws of the states listed on Schedule 5.2(a) and is qualified
to do business (or has filed or will file no later than thirty (30) calendar
days after the Closing Date applications to be qualified to do business) and is
in good standing in the states listed on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for such Loan
Party to conduct its business and own its property except where the failure to
so qualify could reasonably be expected to have a Material Adverse Effect on
such Loan Party. Each Loan Party has delivered to Agents true and complete
copies of its Organizational Documents and will promptly notify Agents of any
amendment or changes thereto

 

(b) All Subsidiaries of each Loan Party are listed on Schedule 5.2(b) (as
updated from time to time). Schedule 5.2(b) sets forth a true, complete and
correct list of all Equity Interests held by Holdings and each Loan Party in
each of its Subsidiaries.

 

5.3 Survival of Representations and Warranties. All representations and
warranties of such Loan Party contained in this Agreement and the Other
Documents to which it is a party shall be true at the time of such Loan Party’s
execution of this Agreement and the Other Documents to which it is a party, and
shall survive the execution, delivery and acceptance thereof by the parties
thereto and the closing of the transactions described therein or related
thereto.

 

5.4 Tax Returns. Each Loan Party’s federal tax identification number is set
forth on Schedule 5.4. Each Loan Party has filed all federal, state and local
income tax returns and other material Tax returns each is required by law to
file and has paid all income taxes, and all other material Taxes, that are due
and payable, except (a) Taxes not overdue by more than thirty (30) days or, if
more than thirty (30) days overdue, that are being Properly Contested or (b)
Taxes not exceeding $250,000 in the aggregate. The provision for taxes on the
books of each Loan Party is adequate in all material respects for all years not
closed by applicable statutes, and for its current fiscal year, and no Loan
Party has any knowledge of any material deficiency or additional material
assessment in connection therewith not provided for on its books.

 

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5.5 Financial Statements.

 

(a) The pro forma balance sheet of Holdings and its Subsidiaries on a
Consolidated Basis (the “Pro Forma Balance Sheet”) furnished to Agents on the
Closing Date reflects the consummation of the transactions contemplated under
this Agreement and the SNI Acquisition Documents (collectively, the
“Transactions”) and is accurate, complete and correct in all material respects
and fairly reflects in all material respects the financial condition of Holdings
and its Subsidiaries on a Consolidated Basis as of the Closing Date after giving
effect to the Transactions, and has been prepared in accordance with GAAP,
consistently applied. The Pro Forma Balance Sheet has been certified to the best
of such signatory’s knowledge, as accurate, complete and correct in all material
respects by an Authorized Officer of Borrowing Agent. All financial statements
referred to in this subsection 5.5(a), including the related schedules and notes
thereto, have been prepared in accordance with GAAP, except as may be disclosed
in such financial statements.

 

(b) The twelve-month cash flow and balance sheet projections of Holdings and its
Subsidiaries on a Consolidated Basis, copies of which are annexed hereto as
Exhibit 5.5(b) (as updated from time to time pursuant to Section 9.12, the
“Projections”) were prepared by an Authorized Officer of Borrowers, are based on
underlying assumptions which provide a reasonable basis for the projections
contained therein and reflect Loan Parties’ judgment based on present
circumstances of the most likely set of conditions and course of action for the
projected period, it being acknowledged and agreed by Agents and Lenders that
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered thereby may differ from the
projected results (and that such differences may be material). The cash flow
Projections together with the Pro Forma Balance Sheet are referred to as the
“Pro Forma Financial Statements”.

 

(c) The consolidated audited balance sheet of Holdings and its Subsidiaries on a
Consolidated Basis, as of September 30, 2016 and the related audited statement
of income for the period ended on such date, copies of which have been delivered
to Agents, have been prepared in accordance with GAAP, unless otherwise
disclosed to Agents in writing, consistently applied (except for changes in
application to which such accountants concur) and present fairly in all material
respects the financial position of Borrowers at such date and the results of
their operations for such period. Since September 30, 2016 no event or
development has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.

 

(d) The Quality of Earnings report prepared by Grant Thornton regarding
Borrowers, a copy of which has been delivered to Agents, presents, to the best
of Borrowers’ knowledge, fairly in all material respects the financial position
of Borrowers as of December 31, 2016 and the results of their operations during
the periods described therein.

 

5.6 Entity Names. No Loan Party has been known by any other company or corporate
name, as applicable, in the past five (5) years except as set forth on Schedule
5.6, nor has any Loan Party been the surviving corporation or company (other
than in connection with the Transactions), as applicable, of a merger or
consolidation or acquired all or substantially all of the assets of any Person
during the preceding five (5) years except as set forth on Schedule 5.6.

 

5.7 O.S.H.A. Environmental Compliance; Flood Insurance.

 

(a) Except as set forth on Schedule 5.7 hereto, each Loan Party is in compliance
with, and its facilities, business, assets, property, leaseholds, Real Property
and Equipment are in compliance with the Federal Occupational Safety and Health
Act, and Environmental Laws and there are no outstanding citations, notices or
orders of non-compliance issued to any Loan Party or relating to its business,
assets, property, leaseholds or Equipment under any such laws, rules or
regulations, in each case except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

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(b) Except as set forth on Schedule 5.7 hereto, each Loan Party has been issued
all required federal, state and local licenses, certificates or permits
(collectively, “Approvals”) relating to all applicable Environmental Laws and
all such Approvals are current and in full force and effect, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

(c) Except as set forth on Schedule 5.7: (i) there have been no releases,
spills, discharges, leaks or disposal (collectively referred to as “Releases”)
of Hazardous Materials at, upon, under or migrating from or onto any Real
Property owned, leased or occupied by any Loan Party, except for those Releases
which are in full compliance with Environmental Laws; (ii) there are no
underground storage tanks or polychlorinated biphenyls on any Real Property
owned, leased or occupied by any Loan Party, except for such underground storage
tanks or polychlorinated biphenyls that are present in compliance with
Environmental Laws; (iii) the Real Property including any premises owned, leased
or occupied by any Loan Party has never been used by any Loan Party to dispose
of Hazardous Materials, except as authorized by Environmental Laws; and (iv) no
Hazardous Materials are managed by any Loan Party on any Real Property including
any premises owned, leased or occupied by any Loan Party, excepting such
quantities as are managed in accordance with all applicable manufacturer’s
instructions and compliance with Environmental Laws and as are necessary for the
operation of the commercial business of any Loan Party or of its tenants, except
in each case of clauses (i) through (iv) above, where the non-compliance thereof
could not reasonably be expected to have a Material Adverse Effect.

 

(d) All Real Property owned by Loan Parties, if any, is insured pursuant to
policies and other bonds which are valid and in full force and effect and which
provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each such Loan Party in
accordance with prudent business practice in the industry of such Loan Party.
Each Loan Party has taken all actions required under the Flood Laws and/or
requested by any Agent to assist in ensuring that each Lender is in compliance
with the Flood Laws applicable to the Collateral, including, but not limited to,
providing Agents with the address and/or GPS coordinates of each structure
located upon any Real Property owned by any Loan Party that will be subject to a
mortgage in favor of Collateral Agent, for the benefit of the Secured Parties,
and, to the extent required, obtaining flood insurance for such property,
structures and contents prior to such property, structures and contents becoming
Collateral.

 

5.8 Solvency; No Litigation, Violation, Indebtedness or Default; ERISA
Compliance.

 

(a) (i) After giving effect to the Transactions, the Loan Parties, taken as a
whole will be solvent, able to pay their debts as they mature, will have capital
sufficient to carry on their businesses, (ii) as of the Closing Date, the fair
present saleable value of their assets, calculated on a going concern basis, is
in excess of the amount of their liabilities, and (iii) subsequent to the
Closing Date, the fair saleable value of their assets (calculated on a going
concern basis) will be in excess of the amount of their liabilities.

 

(b) Except as disclosed in Schedule 5.8(b)(i), no Loan Party has any pending, or
to any Loan Party’s knowledge, threatened litigation, arbitration, actions or
proceedings, that if adversely determined, could reasonably be expected to have
a Material Adverse Effect.

 

(c) No Loan Party is in violation of any applicable statute, law, rule,
regulation or ordinance in any respect which could reasonably be expected to
have a Material Adverse Effect, nor is any Loan Party in violation of any order
of any court, Governmental Body or arbitration board or tribunal which could
reasonably be expected to have a Material Adverse Effect.

 

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(d) No Loan Party or any member of the Controlled Group maintains or is required
to contribute to any Plan or Multiemployer Plan (excluding welfare benefit plans
maintained by members of the Controlled Group other than the Loan Parties) other
than those listed on Schedule 5.8(d) hereto, which shall be updated from time to
time with consent of Agents and which consent shall not be unreasonably
withheld. Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Applicable Laws. (i) Each
Loan Party and each member of the Controlled Group has met all applicable
minimum funding requirements under Section 302 of ERISA and Section 412 of the
Code in respect of each Pension Benefit Plan and Multiemployer Plan, and each
Pension Benefit Plan is in compliance with Sections 412, 430 and 436 of the Code
and Sections 206(g), 302 and 303 of ERISA, without regard to waivers and
variances; (ii) each Plan which is intended to be a qualified plan under Section
401(a) of the Code as currently in effect has been determined by the Internal
Revenue Service to be qualified under Section 401(a) of the Code and the trust
related thereto is exempt from federal income tax under Section 501(a) of the
Code or an application for such a determination is currently being processed by
the Internal Revenue Service; (iii) neither any Loan Party nor any member of the
Controlled Group has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
which have not been timely made; (iv) no Pension Benefit Plan or Multiemployer
Plan has been terminated by the plan administrator thereof nor by the PBGC, and
there is no occurrence which would cause the PBGC to institute proceedings under
Title IV of ERISA to terminate any Pension Benefit Plan or, to the knowledge of
any Loan Party, any Multiemployer Plan; (v) no Loan Party has breached any of
the material responsibilities, obligations or duties imposed on it by ERISA with
respect to any Plan; (vi) neither any Loan Party nor any member of the
Controlled Group has incurred any material liability for any excise tax arising
under Section 4971, 4972 or 4980B of the Code, and no fact exists which could
give rise to any such liability; (vii) no Loan Party has engaged in a
“prohibited transaction” described in Section 406 of ERISA or Section 4975 of
the Code nor taken any action which would constitute or result in a Termination
Event with respect to any Plan which is subject to ERISA; (viii) no Termination
Event has occurred or is reasonably expected to occur; (ix) there exists no
Reportable ERISA Event; (x) neither any Loan Party nor any member of the
Controlled Group has engaged in a transaction that could be subject to Section
4069 or 4212(c) of ERISA; (xi) no Loan Party is required to contribute to any
Plan which provides health, accident or life insurance benefits to former
employees, their spouses or dependents, other than in accordance with Section
4980B of the Code; (xii) neither any Loan Party nor any member of the Controlled
Group has withdrawn, completely or partially, within the meaning of Section 4203
or 4205 of ERISA, from any Multiemployer Plan so as to incur liability under the
Multiemployer Pension Plan Amendments Act of 1980 and there exists no fact which
would reasonably be expected to result in any such liability. No Pension Benefit
Plan is in “at risk” status under Section 430(i)(4) of the Code or Section
303(i)(4) of ERISA.

 

5.9 Patents, Trademarks, Copyrights and Licenses. All Intellectual Property
owned or necessary to the business of the Loan Parties: (i) is set forth on
Schedule 5.9 (as updated from time to time); (ii) is valid and has been duly
registered or filed with all appropriate Governmental Bodies, to the extent
applicable; and (iii) constitutes all of the intellectual property rights which
are necessary for the operation of its business. There is no objection to,
pending challenge to the validity of, or proceeding by any Governmental Body to
suspend, revoke, terminate or adversely modify, any material Intellectual
Property and no Loan Party is aware of any grounds for any challenge or
proceedings, except as set forth in Schedule 5.9 hereto. All Intellectual
Property owned or held by any Loan Party consists of original material or
property developed by such Loan Party or was lawfully acquired or licensed by
such Loan Party from the proper and lawful owner thereof. Each of such items
material to the business of the Loan Parties has been maintained using
commercially reasonable efforts so as to preserve the value thereof from the
date of creation or acquisition thereof.

 

5.10 Licenses and Permits. Except as set forth in Schedule 5.10, each Loan Party
(a) is in compliance with and (b) has procured and is now in possession of, all
material licenses or permits required by any applicable federal, state or local
law, rule or regulation for the operation of its business in each jurisdiction
wherein it is now conducting or proposes to conduct business except where the
failure to comply with, or procure, such licenses or permits could reasonably be
expected to have a Material Adverse Effect.

 

5.11 [Reserved].

 

5.12 No Default. No Loan Party is in default in the payment or performance of
any of its Material Contracts and no Default or Event of Default has occurred.

 

5.13 No Burdensome Restrictions. No Loan Party is party to any contract or
agreement the performance of which could reasonably be expected to have a
Material Adverse Effect. Each Loan Party has heretofore delivered to Agents (or
provided Agents access to) true and complete copies of all Material Contracts to
which it is a party or to which it or any of its properties is subject. No Loan
Party has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.

 

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5.14 No Labor Disputes. No Loan Party is involved in any labor dispute; there
are no strikes or walkouts or union organization of any Loan Party’s employees
in existence or to any Loan Party’s knowledge, threatened and no labor contract
is scheduled to expire during the Term other than as set forth on Schedule 5.14
hereto, in each case set forth on Schedule 5.14, which could reasonably be
expected to have a Material Adverse Effect.

 

5.15 Margin Regulations. No Loan Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. No part of the proceeds of any Advance will be used for
“purchasing” or “carrying” “margin stock” as defined in Regulation U of such
Board of Governors.

 

5.16 Investment Company Act. No Loan Party is an “investment company” registered
or required to be registered under the Investment Company Act of 1940, as
amended, nor is it controlled by such a company.

 

5.17 Disclosure. No representation or warranty made by any Loan Party in this
Agreement, the SNI Acquisition Agreement, or in any financial statement, report,
certificate or any other document furnished to any Agent or any Lender in
connection herewith or therewith, taken as a whole, contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein in light of the circumstances under which
they were made, not misleading in any material respect as of the date such
representation or warranty was made; provided that, with respect to financial
estimates, projected financial information and other forward-looking
information, Borrowers represent only that such information was prepared in good
faith based upon assumptions believed by Borrowers to be reasonable at the time
of preparation, it being understood that (i) such financial statements,
projected financial information and forward-looking statements are not to be
viewed as facts, that actual results during the period or periods covered
thereby may differ from the projected results (and that such differences may be
material) and (ii) no representation or warranty is made with respect to
information of a general economic or industry-specific nature. There is no fact
known to any Loan Party or which reasonably should be known to such Loan Party
which such Loan Party has not disclosed to Agents in writing with respect to the
Transactions which could reasonably be expected to have a Material Adverse
Effect.

 

5.18 [Reserved].

 

5.19 Delivery of SNI Acquisition Documents. As of the Closing Date, Agents have
received complete copies of the SNI Acquisition Documents. As of the Closing
Date, none of the SNI Acquisition Documents has been amended or supplemented,
nor have any of the provisions thereof been waived, in each case in any material
respect, except pursuant to a written agreement or instrument which has
heretofore been delivered to Agents. As of the Closing Date, each of the
representations made by any Loan Party under the SNI Acquisition Documents is
true and correct in all material respects. As of the Closing Date, all
conditions precedent to the SNI Acquisition Documents have been fulfilled or
waived and there has been no breach of any material term or condition of any of
the SNI Acquisition Documents.

 

5.20 Swaps. No Loan Party is a party to, nor will it be a party to, any swap
agreement whereby such Loan Party has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited “two-way basis”
without regard to fault on the part of either party.

 

5.21 Business and Property of Loan Parties.

 

(a) Loan Parties do not engage or propose to engage in any business other than
providing professional staffing services and solutions in the information
technology, engineering, finance and accounting specialties and commercial
staffing services, and activities necessary to conduct the foregoing. On the
Closing Date, each Loan Party will own all the property and possess all of the
rights and Consents necessary for the conduct of the business of such Loan
Party.

 

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(b) The Immaterial Subsidiaries do not have any material liabilities or
Indebtedness, own any material assets (other than the Equity Interests of its
Subsidiaries) or engage in any operations or business (other than the ownership
of its Subsidiaries).

 

5.22 Ineligible Securities. Loan Parties do not intend to use and shall not use
any portion of the proceeds of the Advances, directly or indirectly, to purchase
during the underwriting period, or for thirty (30) days thereafter, Ineligible
Securities being underwritten by a securities Affiliate of any Agent or any
Lender.

 

5.23 [Reserved].

 

5.24 Equity Interests. The authorized and outstanding Equity Interests of each
Loan Party (other than those of Holdings), and each legal and beneficial holder
thereof as of the Closing Date, are as set forth on Schedule 5.24(a) hereto. All
of the Equity Interests of each Loan Party have been duly and validly authorized
and issued and are fully paid and non-assessable and have been sold and
delivered to the holders thereof in compliance with, or under valid exemption
from, all federal and state laws and the rules and regulations of each
Governmental Body governing the sale and delivery of securities. Except for the
rights and obligations set forth on Schedule 5.24(b), there are no
subscriptions, warrants, options, calls, commitments, rights or agreement by
which any Loan Party or any of the shareholders of any Loan Party is bound
relating to the issuance, transfer, voting or redemption of shares of its Equity
Interests or any pre-emptive rights held by any Person with respect to the
Equity Interests of Loan Parties. Except as set forth on Schedule 5.24(c), Loan
Parties have not issued any securities convertible into or exchangeable for
shares of its Equity Interests or any options, warrants or other rights to
acquire such shares or securities convertible into or exchangeable for such
shares.

 

5.25 Commercial Tort Claims. As of the Closing Date, the Loan Parties do not
have commercial tort claims with a value greater than $250,000 in the aggregate,
except as set forth on Schedule 5.25 hereto.

 

5.26 Letter of Credit Rights. As of the Closing Date, no Loan Party has any
letter of credit rights except as set forth on Schedule 5.26 hereto.

 

5.27 Material Contracts. As of the Closing Date, Schedule 5.27 sets forth all
Material Contracts of the Loan Parties. As of the Closing Date, all Material
Contracts are in full force and effect and no material defaults currently exist
thereunder. As of the Closing Date, no Loan Party has (i) received any notice of
termination or non-renewal of any Material Contract, or (ii) exercised any
option to terminate or not to renew any Material Contract.

 

5.28 Investment Property Collateral. (i) There are no restrictions on the pledge
or transfer of any of the Subsidiary Stock other than restrictions referenced on
the face of any certificates evidencing such Subsidiary Stock or restrictions
under Applicable Law, as applicable; (ii) each Loan Party is the legal owner of
the Investment Property Collateral pledged by it hereunder, which is registered
in the name of such Loan Party, a custodian or a nominee; (iii) the Investment
Property Collateral is free and clear of any Liens except for Permitted
Encumbrances which, in the case of any Investment Property Collateral
constituting certificated securities, do not have priority over the Liens of
Collateral Agent thereon, except as by operation of law and so long as such
Liens are being Properly Contested; (iv) the pledge of and grant of the security
interest in the Investment Property Collateral is effective to vest in
Collateral Agent a valid security interest therein; and (v) none of the
operating agreements, limited partnership agreements or other agreements
governing any Investment Property Collateral issued by a limited liability
company, limited partnership or similar Person provide that such Investment
Property Collateral governed thereby are securities governed by Article 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.

 

VI. AFFIRMATIVE COVENANTS.

 

Each Loan Party shall, until payment in full of the Obligations (other than
contingent indemnification obligations which have not been asserted by any Agent
and/or any Lender) and termination of this Agreement:

 

6.1 Compliance with Laws. Comply in all material respects with all material
Applicable Laws with respect to the Collateral or any part thereof or to the
operation of such Loan Party’s business. Each Loan Party may, however, contest
or dispute any Applicable Laws in any reasonable manner, provided that any
related Lien is inchoate or stayed and sufficient reserves are established to
the reasonable satisfaction of Agents to protect Collateral Agent’s Lien on or
security interest in the Collateral.

 

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6.2 Conduct of Business and Maintenance of Existence and Assets. (a) Conduct
continuously and operate actively its business according to proper business
practices and maintain all of its properties necessary in its business in good
working order and condition (reasonable wear and tear excepted and except as may
be disposed of in accordance with the terms of this Agreement), including all
material Intellectual Property and take all commercially reasonable actions
necessary to enforce and protect the validity of any intellectual property right
or other right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all such
reports and pay all such franchise and license fees and do all such other acts
and things as may be lawfully required to maintain its rights, licenses, leases,
powers and franchises under the laws of the United States or any political
subdivision thereof where the failure to do so could reasonably be expected to
have a Material Adverse Effect.

 

6.3 Books and Records. Keep proper books of record and account in which full,
true and correct entries will be made in all material respects of all material
dealings or transactions of or in relation to its business and affairs
(including without limitation accruals for taxes, assessments, Charges, levies
and claims, allowances against doubtful Receivables and accruals for
depreciation, obsolescence or amortization of assets), all in accordance with,
or as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Loan Parties.

 

6.4 Payment of Taxes. Pay, when due, all income taxes, and other material taxes,
material assessments and other material Charges lawfully levied or assessed upon
such Loan Party or any of the Collateral, including real and personal property
taxes, assessments and charges and all franchise, income, employment, social
security benefits, withholding, and sales taxes, to the extent the aggregate
amount for all such taxes, assessments and charges exceeds $250,000, except
where (a) the validity or amount thereof is being Properly Contested and (b)
such contest effectively suspends collection of the contested obligation and the
foreclosure of any Lien securing such obligation. If any Charge by any
Governmental Body is or may be imposed on or as a result of any transaction
between any Loan Party and any Agent or any Lender which any Agent or any Lender
may be required to withhold or pay any Charge or if any taxes, assessments, or
other Charges remain unpaid after the date fixed for their payment, or if any
claim shall be made which, in any Agent’s determination, may possibly create a
valid Lien on the Collateral, any Agent may without notice to Loan Parties pay
the taxes, assessments or other Charges and each Loan Party hereby indemnifies
and holds each Agent and each Lender harmless in respect thereof. No Agent will
pay any taxes, assessments or Charges to the extent that any applicable Loan
Party has Properly Contested those taxes, assessments or Charges. The amount of
any payment by any Agent under this Section 6.4 shall be charged to Borrowers’
Account as a Revolving Advance maintained as a Domestic Rate Loan and added to
the Obligations and, until Loan Parties shall furnish Agents with an indemnity
therefor (or supply Agents with evidence satisfactory to Agents that due
provision for the payment thereof has been made), Administrative Agent may hold
without interest any balance standing to Loan Parties’ credit and Collateral
Agent shall retain its security interest in and Lien on any and all Collateral
held by Collateral Agent.

 

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6.5 Financial Covenants.

 

(a) Fixed Charge Coverage Ratio. Cause to be maintained as of the last day of
each fiscal quarter, a Fixed Charge Coverage Ratio for Holdings and its
Subsidiaries on a Consolidated Basis of not less than the amount set forth below
opposite such fiscal quarter, in each case, measured on a trailing four (4)
quarter basis:

 

Fiscal Quarter Ending

Minimum Fixed Charge Coverage Ratio

For the two (2) fiscal quarters ending March 31, 20192020

1.000.85 to 1.00

For the three (3) fiscal quarters ending June 30, 20192020

0.60 to 1.00

For the four (4) fiscal quarters ending September 30, 20192020

0.700.60 to 1.00

For the four (4) fiscal quarters ending December 31, 2019

0.75 to 1.00

For the four (4) fiscal quarters ending MarchDecember 31, 2020

0.850.90 to 1.00

For the four (4) fiscal quarters ending June 30, 2020 and forMarch 31, 2021 and
each four (4) fiscal quarter period ending thereafter

1.001.10 to 1.00

 

(b) Minimum EBITDA. Cause to be maintained as of the last day of each fiscal
quarter, EBITDA for Holdings and its Subsidiaries on a Consolidated Basis of not
less than the amount set forth below opposite such fiscal quarter, in each case,
measured on a trailing four (4) quarter basis:

 

Fiscal Quarter Ending

EBITDA

March 31, 20192020

$13,000,00011,000,000

June 30, 20192020

$10,000,0005,500,000

September 30, 2020

$5,000,000

December 31, 2020

$5,500,000

March 31, 2021

$7,500,000

June 30, 2021

$7,500,000

September 30, 20192021

$10,000,000

December 31, 20192021

$10,000,000

March 31, 2022

$10,000,000

March 31, 2020June 30, 2022 and each fiscal quarter ending thereafter

$11,000,000

 

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(c) Senior Leverage Ratio. Cause to be maintained as of the last day of each
fiscal quarter, a Senior Leverage Ratio for Holdings and its Subsidiaries on a
Consolidated Basis of not greater than the amount set forth below opposite such
fiscal quarter, in each case, measured on a trailing four (4) quarter basis:

 

Fiscal Quarter Ending

Senior Leverage Ratio

March 31, 20192020

4.255.00 to 1.00

June 30, 20192020

5.5010.40 to 1.00

September 30, 20192020

5.5011.60 to 1.00

December 31, 20192020

5.6010.60 to 1.00

March 31, 2021

7.90 to 1.00

June 30, 2021

7.90 to 1.00

September 30, 2021

5.90 to 1.00

December 31, 2021

5.90 to 1.00

March 31, 2022

5.90 to 1.00

March 31, 2020June 30, 2022 and each fiscal quarter ending thereafter

5.005.40 to 1.00

 

6.6 Insurance.

 

(a) (i) Keep all its insurable properties insured against the hazards of fire,
sprinkler leakage, those hazards covered by extended coverage insurance and such
other hazards, and for such amounts, as is customary, if any, in the case of
companies engaged in businesses similar to such Loan Party’s including business
interruption insurance; (ii) maintain all such worker’s compensation or similar
insurance as may be required under the laws of any state or jurisdiction in
which such Loan Party is engaged in business; and (iii) furnish Agents with (A)
copies of all policies and evidence of the maintenance of such policies by the
renewal thereof at least thirty (30) days before any expiration date, and (B)
appropriate loss payable endorsements in form and substance satisfactory to
Agents, naming Collateral Agent as an additional insured and mortgagee and/or
lender loss payee (as applicable) as its interests may appear with respect to
all insurance coverage referred to in clause (i) above, and providing (I) that
all proceeds thereunder shall be payable to Collateral Agent, (II) no such
insurance shall be affected by any act or neglect of the insured or owner of the
property described in such policy, and (III) that such policy and loss payable
clauses may not be cancelled, amended or terminated unless at least thirty (30)
days prior written notice is given to Collateral Agent (or in the case of
non-payment, at least ten (10) days prior written notice). In the event of any
loss thereunder, the carriers named therein hereby are directed by Collateral
Agent and the applicable Loan Party to make payment for such loss to Collateral
Agent and not to such Loan Party and Collateral Agent jointly. If any insurance
losses are paid by check, draft or other instrument payable to any Loan Party
and Collateral Agent jointly, Collateral Agent may endorse such Loan Party’s
name thereon and do such other things as Collateral Agent may deem advisable to
reduce the same to cash.

 

(b) To the extent applicable, each Loan Party shall take all actions required
under the Flood Laws and/or requested by Agents to assist in ensuring that each
Lender is in compliance with the Flood Laws applicable to the Collateral,
including, but not limited to, providing Agents with the address and/or GPS
coordinates of each structure on any owned Real Property that will be subject to
a mortgage in favor of Collateral Agent, for the benefit of the Secured Parties,
and, to the extent required, obtaining flood insurance for such property,
structures and contents prior to such property, structures and contents becoming
Collateral, and thereafter maintaining such flood insurance in full force and
effect for so long as required by the Flood Laws.

 

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(c) Following the occurrence and during the continuance of an Event of Default,
Collateral Agent (with the consent of Term Loan Agent) is hereby authorized to
adjust and compromise claims under insurance coverage referred to in Sections
6.6(a)(i) and (iii) and 6.6(b) above. All loss recoveries received by Collateral
Agent under any such insurance shall be applied to the Obligations, in the
manner set forth in Section 2.20(a), or, if an Event of Default has occurred and
is continuing, in the manner set forth in Section 11.5. Any surplus shall be
paid by Collateral Agent to Loan Parties or applied as may be otherwise required
by law. Any deficiency thereon shall be paid by Loan Parties to Collateral
Agent, on demand. If any Loan Party fails to obtain insurance as hereinabove
provided, or to keep the same in force, any Agent, if such Agent so elects, may
obtain such insurance and pay the premium therefor on behalf of such Loan Party,
which payments shall be charged to Borrowers’ Account and constitute part of the
Obligations.

 

6.7 Payment of Indebtedness and Leasehold Obligations. Pay, discharge or
otherwise satisfy (i) at or before maturity (subject, where applicable, to
specified grace periods and, in the case of the trade payables, to normal
payment practices) all its Indebtedness, except when the failure to do so could
not reasonably be expected to have a Material Adverse Effect or when the amount
or validity thereof is currently being Properly Contested, subject at all times
to any applicable subordination arrangement in favor of Lenders and (ii) when
due its rental obligations under all leases under which it is a tenant, and
shall otherwise comply with all other terms of such leases and keep them in full
force and effect, except when the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

6.8 Environmental Matters.

 

(a) Ensure that the Real Property and all operations and businesses conducted
thereon are in compliance and remain in compliance with all Environmental Laws
and it shall manage any and all Hazardous Materials on any Real Property in
compliance with Environmental Laws, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

(b) In the reasonable discretion of the Loan Parties, all material violations of
Environmental Laws by a Loan Party shall be reviewed with legal counsel to
determine any required reporting to applicable Governmental Bodies and any
required corrective actions to address such potential violations or violations

 

(c) Respond promptly to any material Hazardous Discharge or Environmental
Complaint and take all necessary action in order to safeguard the health of any
Person and to avoid subjecting the Collateral or Real Property to any Lien. If
any Loan Party shall fail to respond promptly to any Hazardous Discharge or
Environmental Complaint or any Loan Party shall fail to comply with any of the
requirements of any Environmental Laws that could reasonably be expected to
result in liability in excess of $250,000 Collateral Agent on behalf of Lenders
may, but without the obligation to do so, for the sole purpose of protecting
Collateral Agent’s interest in the Collateral: (i) give such notices or (ii)
enter onto the Real Property (or authorize qualified third parties to enter onto
the Real Property) and take such actions as Agents (or such third parties as
directed by Collateral Agent) deem reasonably necessary or advisable, to
remediate, remove, mitigate or otherwise manage with any such Hazardous
Discharge or Environmental Complaint. All reasonable costs and expenses incurred
by Collateral Agent and Lenders (or such third parties) in the exercise of any
such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for Domestic Rate
Loans constituting Revolving Advances shall be paid upon demand by Loan Parties,
and until paid shall be added to and become a part of the Obligations secured by
the Liens created by the terms of this Agreement or any other agreement between
Collateral Agent, any Lender and any Loan Party.

 

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(d) Promptly upon the written request of any Agent from time to time, following
the occurrence and during the continuance of an Event of Default, Loan Parties
shall provide Collateral Agent, at Loan Parties’ expense, with an environmental
site assessment or environmental compliance audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of Agents,
to assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, remediation and
removal of any Hazardous Materials found on, under, at or within the Real
Property owned by any Loan Party to the extent such abatement, cleanup or
removal is required by Environmental Law. Any report or investigation of such
Hazardous Discharge proposed and acceptable to the responsible Governmental Body
shall be acceptable to Agents. If such estimates, individually or in the
aggregate, exceed $250,000, any Agent shall have the right to require Loan
Parties to post a bond, letter of credit or other security reasonably
satisfactory to any Agent to secure payment of these costs and expenses.

 

6.9 Standards of Financial Statements. Cause all financial statements referred
to in Sections 9.7, 9.8, 9.9, 9.10, 9.11 and 9.12 as to which GAAP is applicable
to be complete and correct in all material respects (subject, in the case of
interim financial statements, to normal year-end audit adjustments) and to be
prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein (except as disclosed therein and agreed
to by such reporting accountants or officer, as applicable).

 

6.10 Specified Condition. The Loan Parties shall satisfy the Specified Condition
(as such term is defined in the Specified Agreement).

 

6.10 [Reserved].

 

6.11 Execution of Supplemental Instruments. Execute and deliver to Collateral
Agent from time to time, promptly upon demand, such supplemental agreements,
statements, assignments and transfers, or instructions or documents relating to
the Collateral, and such other instruments as any Agent may reasonably request,
in order that the full intent of this Agreement may be carried into effect.

 

6.12 Exercise of Rights. Enforce the rights of Borrowers, as determined by
Borrowers in their reasonable discretion, to be prudent to pursue under the SNI
Acquisition Agreement any indemnification agreement executed in connection
therewith including, but not limited to, all indemnification rights and pursue
all remedies available to it with diligence and in good faith in connection with
the enforcement of any such rights.

 

6.13 Government Receivables. Upon Collateral Agent’s request in its Permitted
Discretion, following the prior written notice set forth in clause (h) of the
Eligible Receivables definition, make all commercially reasonable efforts to
protect Collateral Agent’s interest in the Collateral under the Federal
Assignment of Claims Act, the Uniform Commercial Code and all other applicable
state or local statutes or ordinances and deliver to Collateral Agent
appropriately endorsed, any instrument or chattel paper connected with any
Eligible Receivable to the extent such Eligible Receivables exceed $100,000 in
the aggregate, arising out of any contract between any Loan Party and the United
States, any state or any department, agency or instrumentality of any of them.

 

6.14 Keepwell. If it is a Qualified ECP Loan Party, then jointly and severally,
together with each other Qualified ECP Loan Party, hereby absolutely
unconditionally and irrevocably (a) guarantees the prompt payment and
performance of all Swap Obligations owing by each Non-Qualifying Party (it being
understood and agreed that this guarantee is a guaranty of payment and not of
collection), and (b) undertakes to provide such funds or other support as may be
needed from time to time by any Non-Qualifying Party to honor all of such
Non‑Qualifying Party’s obligations under this Agreement or any Other Document in
respect of Swap Obligations (provided, however, that each Qualified ECP Loan
Party shall only be liable under this Section 6.14 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 6.14, or otherwise under this Agreement or any Other
Document, voidable under applicable law, including applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified ECP Loan Party under this Section 6.14 shall
remain in full force and effect until payment in full of the Obligations and
termination of this Agreement and the Other Documents. Each Qualified ECP Loan
Party intends that this Section 6.14 constitute, and this Section 6.14 shall be
deemed to constitute, a guarantee of the obligations of, and a “keepwell,
support, or other agreement” for the benefit of each other Loan Party and
Guarantor for all purposes of Section 1a(18(A)(v)(II) of the CEA.

 

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6.15 Lender Meetings. Upon the request of any Agent or the Required Lenders
(which request, so long as no Event of Default shall have occurred and be
continuing, shall not be made more than once during each fiscal year),
participate in a meeting with the Agents and the Lenders at the Borrowers’
corporate offices (or at such other location as may be reasonably agreed to by
the Borrowing Agent and such Agent or the Required Lenders) at such time as may
be reasonably agreed to by the Borrowing Agent and such Agent or the Required
Lenders.

 

6.16 Additional Borrowers, Guarantors and Collateral Security. Cause:

 

(a) each Subsidiary of any Loan Party not in existence on the Closing Date, and
each Subsidiary of any Loan Party which is a non-borrowing Subsidiary on the
Closing Date or upon formation or acquisition but later ceases to be a
non-borrowing Subsidiary, to execute and deliver to the Agents promptly and in
any event within five (5) Business Days after the formation, acquisition or
change in status thereof, (A) a Joinder Agreement, pursuant to which such
Subsidiary shall be made a party to this Agreement as a Borrower or a Guarantor,
as the Agents shall determine, (B) a supplement to the Pledge Agreement,
together with (1) originals of all certificates evidencing 100% (or 66%, as
applicable) of the Equity Interests of any Person owned by such Subsidiary
required to be pledged under the terms of the Pledge Agreement, (2) undated
stock powers for such Equity Interests executed in blank with signature
guaranteed, and (3) such opinions of counsel as the Agents may reasonably
request, (C) to the extent required under the terms of this Agreement, one or
more mortgages creating on the Real Property of such Subsidiary a perfected,
first priority Lien (in terms of priority, subject only to Permitted Specified
Encumbrances) on such Real Property and such other collateral and related
documents as may be required by the Agents with respect to each such Real
Property, and (D) such other agreements, instruments, approvals or other
documents reasonably requested by the Agents in order to create, perfect,
establish the first priority of or otherwise protect any Lien purported to be
covered hereby or otherwise to effect the intent that such Subsidiary shall
become bound by all of the terms, covenants and agreements contained in this
Agreement and the Other Documents and that all property and assets of such
Subsidiary shall become Collateral for the Obligations; and

 

(b) each owner of the Equity Interests of any such Subsidiary to execute and
deliver promptly and in any event within five (5) Business Days after the
formation or acquisition of such Subsidiary a Pledge Amendment (as defined in
the Pledge Agreement), together with (A) original certificates, if any,
evidencing 100% (or 66%, as applicable) of the Equity Interests of such
Subsidiary required to be pledged under the terms of the Pledge Agreement, (B)
undated stock powers or other appropriate instruments of assignment for such
Equity Interests executed in blank with signature guaranteed, (C) such opinions
of counsel as the Agents may reasonably request and (D) such other agreements,
instruments, approvals or other documents requested by the Agents.

 

Notwithstanding the foregoing, no Foreign Subsidiary shall be required to become
a Borrower or Guarantor hereunder (and, as such, shall not be required to
deliver the documents required by clause (a)(i) above; provided, however, that
if the Equity Interests of a Foreign Subsidiary are owned by a Loan Party, such
Loan Party shall deliver all such documents, instruments, agreements (including,
without limitation, at the reasonable request of the Agents, a pledge agreement
governed by the laws of the jurisdiction of the organization of such Foreign
Subsidiary) and certificates described in clause (a)(ii) above to the
Administrative Agent, and take all commercially reasonable actions reasonably
requested by the Agents or otherwise necessary to grant and to perfect a
first-priority Lien (subject to Permitted Specified Encumbrances) in favor of
the Collateral Agent, for the benefit of the Secured Parties, in 66% of the
voting Equity Interests of such Foreign Subsidiary and 100% of all other Equity
Interests of such Foreign Subsidiary owned by such Loan Party.

 

6.17 Post-Closing Covenants.

 

(a) Lien Waiver Agreements. Within sixty (60) days following the Closing Date
(or such later date as the Agents shall agree in their Permitted Discretion),
the Borrowers shall use commercially reasonable efforts to deliver to the
Agents, in form and substance reasonably satisfactory to the Collateral Agent,
Lien Waiver Agreements with respect to the Specified Leased Locations; provided
that, in the event that the Borrowers fail to deliver a Lien Waiver for any
Specified Leased Location, such failure shall not result in an Event of Default
but the Administrative Agent may establish a reserve against the Formula Amount
with respect to such Specified Leased Location as Administrative Agent shall
deem appropriate in its Permitted Discretion.

 

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6.17 (b) [Reserved].

 

6.18 Conversion/Cancellation of Subordinated Indebtedness and Preferred Equity.
Within 60 days following the Amendment No. 7 Effective Date (the
“Conversion/Cancellation Deadline”), each holder of Specified Subordinated
Indebtedness and any issued and outstanding preferred Equity Interests of
Holdings shall have entered into a binding agreement with Holdings pursuant to
which such Specified Subordinated Indebtedness and preferred Equity Interests
shall be either (a) converted into or exchanged for common Equity Interests of
Holdings or (b) cancelled, terminated and expunged, in each case (i) on or
before the date that is 90 days after the Conversion/Cancellation Deadline;
provided, that at the request of Holdings and upon the written consent of the
Agents not to be unreasonably withheld, such date shall be extended to the date
that is 120 days after the Conversion/Cancellation Deadline, and (ii) on terms
and conditions and subject to documentation reasonably acceptable to the Agents
(the “Conversion/Cancellation Condition”).

 

6.19 Board of Directors Composition. From and after the Amendment No. 7
Effective Date, the Board of Directors shall contain not less than 2 independent
directors that are reasonably acceptable to the Agents; provided, that if the
number of members of the Board of Directors of Holdings increases after the
Amendment No. 7 Effective Date, each additional member shall be an independent
director reasonably acceptable to the Agents.

 

6.20 President of Operations. Within 60 days of the Amendment No. 7 Effective
Date, Holdings shall determine whether to hire a president of operations (the
“President”), which determination shall be based on the recommendation of a
majority of the independent members of the Board of Directors of Holdings (the
“Specified Directors”). In the event Holdings shall determine to hire a
President, Holdings shall thereafter use commercially reasonable efforts to
employ, as soon as reasonably practicable, a President consented to by a
majority of the Specified Directors.

 

(c) Accounting Software. Within one year following the Closing Date (or such
later date as the Agents shall agree in their Permitted Discretion), the
Borrowers shall covert their accounting software from QuickBooks to Microsoft
Dynamics (Great Plains).

 

(d) [Reserved].

 

(e) Lien Terminations. On or before the date that is forty-five (45) days
following the Closing Date (or such later date as the Agents shall agree in
their Permitted Discretion), the Agents shall have received, in form and
substance reasonably satisfactory to the Agents, evidence of the termination of
the following Liens set forth on Schedule 1.2: (i) the UCC-1 filed by JPMorgan
Chase Bank, N.A. in Colorado (file no. 20092093771/20132091524); and (ii) the
UCC-1 filed by Wells Fargo Bank, National Association in Ohio (file no.
OH00149500432).

 

VII. NEGATIVE COVENANTS.

 

No Loan Party or any of its Subsidiaries shall, until satisfaction in full of
the Obligations and termination of this Agreement:

 

7.1 Merger, Consolidation, Acquisition and Sale of Assets.

 

(a) merge, consolidate or amalgamate with any Person, or permit any of its
Subsidiaries to do (or agree to do) any of the foregoing; provided, however,
that any wholly-owned Subsidiary of any Loan Party (other than a Borrower) may
be merged into such Loan Party or another wholly-owned Subsidiary of such Loan
Party, or may consolidate or amalgamate with another wholly-owned Subsidiary of
such Loan Party, so long as, in each case: (i) no other provision of this
Agreement would be violated thereby, (ii) such Loan Party gives the Agents at
least thirty (30) days’ prior written notice of such merger, consolidation or
amalgamation accompanied by true, correct and complete copies of all material
agreements, documents and instruments relating to such merger, consolidation or
amalgamation, including, without limitation, the certificate or certificates of
merger or amalgamation to be filed with each appropriate Secretary of State
(with a copy as filed promptly after such filing), (iii) no Default or Event of
Default shall have occurred and be continuing either before or after giving
effect to such merger, consolidation or amalgamation, (iv) the Collateral
Agent’s rights in any Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by such
merger, consolidation or amalgamation, and (v) the surviving Subsidiary, if any,
if not already a Loan Party, is joined as a Loan Party hereunder and such Other
Documents as requested by any Agent pursuant to a Joinder Agreement, in each
case, which is in full force and effect on the date of and immediately after
giving effect to such merger, consolidation or amalgamation;

 

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(b) sell, lease, transfer or otherwise dispose of any of its properties or
assets, except (i) the sale of Inventory in the Ordinary Course of Business,
(ii) the disposition or transfer of obsolete, surplus or worn-out equipment in
the Ordinary Course of Business or other property not material (other than
Eligible Receivables) to the operations of the Loan Parties’ business, in each
during any fiscal year having an aggregate fair market value of not more than
$100,000 and only to the extent that (x) the proceeds of any such disposition
are used to acquire replacement equipment which is subject to Collateral Agent’s
first priority security interest or (y) the proceeds of which are remitted to
Administrative Agent to be applied pursuant to Section 2.20, (iii) sales or
dispositions of other Collateral with a value of less than $100,000 in the
aggregate in any fiscal year; provided that the proceeds of such sales or
dispositions are paid to the Administrative Agent in accordance with Section
2.20(a) or applied as required by Section 2.20(e)(v); (iv) any sales, transfers
or other dispositions which constitute Permitted Investments; (v) any
involuntary loss, damage or destruction of property, or involuntary condemnation
of property, of Holdings or any of its Subsidiaries to the extent the proceeds
of such casualty, insured damage or condemnation are paid to the Administrative
Agent in accordance with Section 2.20(d) or applied as required by Section
2.20(e)(v); and (v) any other sales or dispositions expressly permitted by this
Agreement;

 

(c) consummate any Acquisition other than a Permitted Acquisition; or

 

(d) wind-up, liquidate or dissolve or permit any of its Subsidiaries to do (or
agree to do) any of the foregoing unless such Subsidiary is an Immaterial
Subsidiary.

 

7.2 Creation of Liens. Create or suffer to exist any Lien or transfer upon or
against any of its property or assets now owned or hereafter created or
acquired, except Permitted Encumbrances.

 

7.3 Guarantees. Become liable upon the obligations or liabilities of any Person
by assumption, endorsement or guaranty thereof or otherwise (other than to
Lenders) except (a) as disclosed on Schedule 7.3, (b) guarantees made in the
Ordinary Course of Business up to an aggregate amount of $250,000, (c)
guarantees by one or more Loan Party(s) of Permitted Indebtedness of any other
Loan Party(s), and (d) the endorsement of checks in the Ordinary Course of
Business.

 

7.4 Investments. Purchase or acquire obligations or Equity Interests of, or any
other interest in, any Person, other than Permitted Investments.

 

7.5 Loans. Make advances, loans or extensions of credit to any Person, including
any Parent, Subsidiary or Affiliate other than Permitted Loans.

 

7.6 Capital Expenditures. Contract for, purchase or make any expenditure or
commitments for Capital Expenditures in any fiscal year in an aggregate amount
for all Loan Parties in excess of $750,000.

 

7.7 Dividends. Declare, pay or make any dividend or distribution on any Equity
Interests of any Loan Party (other than dividends or distributions payable in
its stock (other than Disqualified Equity Interests), or split-ups or
reclassifications of its stock (other than Disqualified Equity Interests)) or
apply any of its funds, property or assets to the purchase, redemption or other
retirement of any Equity Interest, or of any options to purchase or acquire any
Equity Interest of any Loan Party other than Permitted Dividends.

 

7.8 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness
other than Permitted Indebtedness.

 

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7.9 Nature of Business.

 

(a) Change the nature of the business in which it is presently engaged (other
than activities incidental or complimentary thereof and providing reasonably
related consulting services relating to staffing matters), nor except as
specifically permitted hereby purchase or invest, directly or indirectly, in any
assets or property other than in the Ordinary Course of Business for assets or
property which are useful in, necessary for and are to be used in its business
as presently conducted.

 

(b) Permit any Immaterial Subsidiary to have any material liabilities or
Indebtedness, own any material assets (other than the Equity Interests of its
Subsidiaries) or engage in any operations or business (other than the ownership
of its Subsidiaries).

 

7.10 Transactions with Affiliates. Directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise enter into any transaction or deal with, any Affiliate, except for (i)
transactions among Loan Parties which are not prohibited by the terms of this
Agreement, (ii) payment by Loan Parties of dividends and distributions permitted
under Section 7.7 hereof, (iii) the transactions contemplated under the
Specified Subordinated Debt Documents to the extent permitted under the
applicable Subordination Agreements and (iv) transactions disclosed to Agents in
writing prior to the consummation thereof, which are in the Ordinary Course of
Business, for fair consideration, on an arm’s-length basis on terms and
conditions no less favorable than terms and conditions which would have been
obtainable from a Person other than an Affiliate; provided, however, that
neither the extension of credit to, nor the assumption, endorsement or guaranty
of any Indebtedness of, any Affiliate (other than a Loan Party) shall be deemed
to be a transaction in the Ordinary Course of Business for purposes of this
Section 7.10.

 

7.11 Leases. Enter as lessee into any lease arrangement for real or personal
property (unless capitalized and permitted under Section 7.6 hereof) if after
giving effect thereto, aggregate annual rental payments for all leased property
would exceed $5,000,000 in any one fiscal year in the aggregate for all Loan
Parties.

 

7.12 Subsidiaries. (a) Except as permitted under Section 6.16, form any
Subsidiary or (b) enter into any partnership, joint venture or similar
arrangement.

 

7.13 Fiscal Year and Accounting Changes. Change its fiscal year from September
30 (other than the change by all Loan Parties to a calendar year end following
thirty (30) days prior written notice of such intended change to the Agents) or
make any significant change (i) in accounting treatment and reporting practices
except as required by GAAP or (ii) in tax reporting treatment except as required
by law.

 

7.14 Pledge of Credit. Now or hereafter pledge any Agent’s or any Lender’s
credit on any purchases, commitments or contracts or for any purpose whatsoever
or use any portion of any Advance in or for any business other than such Loan
Party’s business operations as conducted on the Closing Date.

 

7.15 Amendment of Organizational Documents.

 

(a) (i) Change its legal name, (ii) change its form of legal entity (e.g.,
converting from a corporation to a limited liability company or vice versa) or
(iii) change its jurisdiction of organization or become (or attempt or purport
to become) organized in more than one jurisdiction, in each case without giving
at least thirty (30) days prior written notice of such intended change to
Agents; or

 

(b) Amend, modify or change any material term or material provision of its
Organizational Documents, or enter into any new agreement with respect to any of
its Equity Interests, except that any Loan Party may enter into any such
amendments, modifications or changes or any such new agreements or arrangements
pursuant to this clause (b) that either individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.

 

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7.16 Compliance with ERISA. (i) (x) Maintain, or permit any member of the
Controlled Group to maintain, or (y) become obligated to contribute, or permit
any member of the Controlled Group to become obligated to contribute, to any
Plan or Multiemployer Plan, other than those Plans and Multiemployer Plans
disclosed on Schedule 5.8(d), (ii) engage in any material non-exempt “prohibited
transaction”, as that term is defined in Section 406 of ERISA or Section 4975 of
the Code, (iii) terminate, or permit any member of the Controlled Group to
terminate, any Pension Benefit Plan where such event could result in any
material liability of any Loan Party or any member of the Controlled Group or
the imposition of a lien on the property of any Loan Party or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (iv) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (v) fail promptly to notify Agents of the occurrence of any
Termination Event, (vi) fail to comply, or permit any member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
Applicable Laws in respect of any Plan, (vii) fail to meet, permit any member of
the Controlled Group to fail to meet, or permit any Plan to fail to meet all
minimum funding requirements under ERISA and the Code, without regard to any
waivers or variances, or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect to any Pension
Benefit Plan or Multiemployer Plan, or (viii) cause, or permit any member of the
Controlled Group to cause, a representation or warranty in Section 5.8(d) to
cease to be true and correct, in each case described in clauses (i) through
(vii) above, to the extent such event could reasonably be expected to result in
a Material Adverse Effect.

 

7.17 Modifications and Payments of Indebtedness.

 

(a) Amend, modify or otherwise change (or permit the amendment, modification or
other change in any manner of) any of the provisions of any of its or its
Subsidiaries’ Indebtedness or of any instrument or agreement (including, without
limitation, any purchase agreement, indenture, loan agreement or security
agreement) relating to any such Indebtedness if such amendment, modification or
change would shorten the final maturity or average life to maturity of, or
require any payment to be made earlier than the date originally scheduled on,
such Indebtedness, would increase the interest rate applicable to such
Indebtedness, would add any covenant or event of default, would change the
subordination provision, if any, of such Indebtedness, or would otherwise be
adverse to the Lenders or the issuer of such Indebtedness in any respect; or

 

(b) Except for the Obligations, (i) make any voluntary or optional payment
(including, without limitation, any payment of interest in cash that, at the
option of the issuer, may be paid in cash or in kind), prepayment, redemption,
defeasance, sinking fund payment or other acquisition for value of any of its or
its Subsidiaries’ Indebtedness (including, without limitation, by way of
depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when due),
(ii) refund, refinance, replace or exchange any other Indebtedness for any such,
(iii) make any payment, prepayment, redemption, defeasance, sinking fund payment
or repurchase of any Indebtedness in violation of the subordination provisions
thereof or any subordination agreement with respect thereto, (iv) make any
payment (other than any payment of interest made by capitalizing such interest
and adding such capitalized interest to the then outstanding principal balance),
prepayment, redemption, defeasance, sinking fund payment or repurchase of any
Specified Subordinated Indebtedness; provided, that notwithstanding any of the
foregoing in this clause (iv), subject to the terms of the Subordination
Agreements, (A) from January 1, 2018 through and including December 31, 2018,
Holdings may prepay any Specified Subordinated Indebtedness in an aggregate
amount not to exceed $5,000,000 so long as (1) such prepayment is made solely
with the Net Cash Proceeds of Equity Interests issued by any Loan Party after
the Closing Date, and (2) on the date of any such prepayment and after giving
effect to such prepayment, no Event of Default has occurred and is continuing or
would result therefrom, (B) Holdings may make regularly scheduled cash interest
payments with respect to the Specified Subordinated Indebtedness evidenced by
the Subordinated Note (Timothy) in an amount not to exceed $55,000 in any
calendar year so long as on the date of any such payment, no Event of Default
has occurred and is continuing and no Event of Default would result therefrom,
and (C) Holdings may pay the principal amount of the Specified Subordinated
Indebtedness under the Subordinated Note (Dampier) that is outstanding as of the
Amendment No. 1 Effective Date in 12 equal monthly installments so long as (1)
on the date of such payment, and immediately after giving effect thereto,
Borrowers shall have Undrawn Availability and Average Undrawn Availability of
not less than $1,500,000 and (2) on the date of any such payment, no Event of
Default has occurred and is continuing and no Event of Default would result
therefrom or (v) make any payment, prepayment, redemption, defeasance, sinking
fund payment or repurchase of any Indebtedness as a result of any asset sale,
change of control, issuance and sale of debt or equity securities or similar
event, or give any notice with respect to any of the foregoing.

 

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7.18 Other Agreements. Agree to any amendment, modification or other change to
or waiver of any of its rights under any Material Contract or any SNI
Acquisition Document if such amendment, modification, change or waiver would be
adverse in any material respect to any Loan Party or any of its Subsidiaries or
any Agent or any Lender.

 

VIII. CONDITIONS PRECEDENT.

 

8.1 Conditions to Initial Advances. This Agreement shall become effective as of
the Business Day (the “Closing Date”) when each of the following conditions
precedent shall have been satisfied in a manner satisfactory to the Agents:

 

(a) Notes and Other Documents. Agents shall have received each of the following
Other Documents, each in form and substance satisfactory to Agents and, unless
indicated otherwise, dated as of the Closing Date and, if applicable, duly
executed by the Persons party thereto:

 

(i) the Notes (to the extent requested by any Lender);

 

(ii) the Perfection Certificate;

 

(iii) the SNI Acquisition Collateral Assignment;

 

(iv) each VCOC Management Rights Agreement;

 

(v) the Intercompany Subordination Agreement;

 

(vi) the Fee Letter;

 

(vii) the Pledge Agreement;

 

(viii) the Subordination Agreement (JAX);

 

(ix) the Subordination Agreement (Timothy); and

 

(x) the Subordination Agreement (SNI);

 

(b) Financial Condition Certificate. Agents shall have received an executed
Financial Condition Certificate in the form of Exhibit 8.1(b);

 

(c) Closing Certificate. Agents shall have received a closing certificate signed
by an Authorized Officer of each Borrower dated as of the Closing Date, stating
that (i) all representations and warranties set forth in this Agreement and the
Other Documents are true and correct in all material respects (without
duplication of any materiality provisions therein) on and as of such date except
to the extent that such representation or warranty expressly relates to an
earlier date, and (ii) on such date no Default or Event of Default has occurred
or is continuing;

 

(d) Stock Certificates. The Collateral Agent shall have received originals of
all stock certificates representing 100% (or 66%, as applicable) of the Equity
Interest of each Subsidiary of Holdings, together with stock powers executed in
blank;

 

(e) Quality of Earnings. Agents shall have received the Quality of Earnings
Report prepared by Grant Thornton regarding Borrowers, which report shall
evidence that Borrowers have EBITDA for the twelve (12) month period ending
December 31, 2016 of at least $16,500,000;

 

(f) Borrowing Base; Undrawn Availability. The Agents shall have received
evidence (as determined by the Administrative Agent) that (i) the aggregate
amount of Eligible Receivables is sufficient in value and amount to support
Revolving Advances in the amount requested by Borrowers on the Closing Date, and
(ii) after giving effect to the initial Advances hereunder to be made on the
Closing Date, Borrowers shall have Undrawn Availability of at least $6,750,000;

 

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(g) Repayment of Existing Loans. Agents shall have received evidence of the
payment in full of all Indebtedness under the Existing Loans, together with (i)
payoff, termination and/or release agreements with respect to the Existing Loans
and all related documents, in each case duly executed by the applicable Loan
Parties and the Existing Lenders, (ii) a termination of security interest in
Intellectual Property for each assignment for security recorded by the Existing
Lenders at the United States Patent and Trademark Office or the United States
Copyright Office and covering any intellectual property of the Loan Parties, and
(iii) UCC‑3 termination statements for all UCC-1 financing statements filed by
the Existing Lenders and covering any portion of the Collateral;

 

(h) Senior Leverage Ratio. As of the Closing Date, the Senior Leverage Ratio of
Holdings and its Subsidiaries, on a Consolidated Basis (including, for the
avoidance of doubt, the Advances made hereunder) as of the end of and for the
period of twelve (12) consecutive months prior to the Closing Date shall not
exceed 3.50 to 1.00;

 

(i) [Reserved];

 

(j) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by this Agreement, any related
agreement or under law to be filed, registered or recorded in order to create,
in favor of Collateral Agent, a perfected security interest in or lien upon the
Collateral shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested;

 

(k) Secretary’s Certificates, Authorizing Resolutions and Good Standing
Certificates. Agents shall have received, in form and substance satisfactory to
Agents, a certificate of the Secretary or Assistant Secretary (or other
equivalent officer or manager) of each Loan Party dated as of the Closing Date
which shall certify (i) copies of resolutions in form and substance reasonably
satisfactory to Agents, of the boardBoard of directorsDirectors (or other
equivalent governing body, member or partner) of such Loan Party authorizing (x)
the execution, delivery and performance of this Agreement, the Notes and each
Other Document to which such Loan Party is a party (including authorization by
each Borrower of the incurrence of indebtedness, borrowing of Revolving
Advances, Swing Loans and the Term Loans and requesting of Letters of Credit on
a joint and several basis with all other Borrowers as provided for herein), and
(y) the granting by such Loan Party of the security interests in and liens upon
the Collateral to secure all of the joint and several Obligations of the Loan
Parties (and such certificate shall state that such resolutions have not been
amended, modified, revoked or rescinded as of the date of such certificate),
(ii) the incumbency and signature of the officers of such Loan Party authorized
to execute this Agreement and the Other Documents, (iii) copies of the
Organizational Documents of such Loan Party as in effect on such date, complete
with all amendments thereto, and (iv) the good standing (or equivalent status)
of such Loan Party in its jurisdiction of organization dated not more than
thirty (30) days prior to the Closing Date, issued by the Secretary of State or
other appropriate official of each such jurisdiction;

 

(l) Legal Opinions. Agents shall have received, in form and substance reasonably
satisfactory to the Agents, the executed legal opinion of (i) McDermott Will &
Emery LLP, as counsel to the Loan Parties, and (ii) such local counsel to the
Loan Parties as the Agents shall reasonably require, which opinions shall cover
such matters incident to the Transactions as Agents may reasonably require and
each Loan Party hereby authorizes and directs such counsel to deliver such
opinions to Agents and Lenders;

 

(m) No Litigation. No litigation, investigation or proceeding before or by any
arbitrator or Governmental Body shall be continuing or threatened against any
Loan Party or against the officers or directors of any Loan Party (A) in
connection with this Agreement, the Other Documents, the SNI Acquisition
Documents or any of the Transactions and which, in the reasonable opinion of
Agents, is deemed material or (B) which could, in the reasonable opinion of
Agents, have a Material Adverse Effect; and (ii) no injunction, writ,
restraining order or other order of any nature materially adverse to any Loan
Party or the conduct of its business or inconsistent with the due consummation
of the Transactions shall have been issued by any Governmental Body;

 

(n) SNI Acquisition. (i) Agents shall have received, in form and substance
reasonably satisfactory to Agents, final executed copies of the SNI Acquisition
Documents, all of which shall be duly authorized, executed and delivered by the
parties thereto, and (ii) concurrently with the making of the initial Advances
on the Closing Date, Holdings shall have purchased pursuant to the SNI
Acquisition Documents, and shall have become the owner, free and clear of all
Liens other than Permitted Encumbrances, of all of the SNI Acquisition Assets,
(iii) the proceeds of the initial Advances made on the Closing Date shall have
been applied in full to pay the purchase price payable pursuant to the SNI
Acquisition Documents for the SNI Acquisition Assets and the closing and other
costs relating thereto, (iv) each of Holdings and the SNI Sellers (as defined in
the SNI Acquisition Agreement) shall have fully performed all of the obligations
to be performed by it under the SNI Acquisition Documents, and (v) no provision
of the SNI Acquisition Agreement shall have been amended or otherwise modified
or waived without the prior written consent of the Agents;

 

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(o) Collateral Examination. The Administrative Agent shall have completed its
examination of the Receivables of the Loan Parties and all books and records
related thereto, the results of which shall be satisfactory to the Agents;

 

(p) Fees. Agents shall have received all fees payable to Agents and Lenders on
or prior to the Closing Date hereunder, including pursuant to Article III
hereof;

 

(q) Pro Forma Financial Statements. Agents shall have received a copy of the Pro
Forma Financial Statements which shall be satisfactory in all respects to the
Agents;

 

(r) Insurance. Agents shall have received in form and substance reasonably
satisfactory to Agents, (i) evidence that adequate insurance, including without
limitation, casualty and liability insurance, required to be maintained under
this Agreement is in full force and effect, (ii) insurance certificates issued
by Loan Parties’ insurance broker containing such information regarding Loan
Parties’ casualty and liability insurance policies as Agents shall request and
naming Collateral Agent as an additional insured, lenders loss payee and/or
mortgagee, as applicable, and (iii) loss payable endorsements issued by Loan
Parties’ insurer naming Collateral Agent as lenders loss payee and mortgagee, as
applicable;

 

(s) Payment Instructions. Agents shall have received the Disbursement Letter
which shall include, among other things, written instructions from Borrowing
Agent directing the application of proceeds of the initial Advances made
pursuant to this Agreement on the Closing Date;

 

(t) Consents. Agents shall have received any and all Consents necessary to
permit the effectuation of the Transactions, and Agents shall have received such
Consents and waivers of such third parties as might assert claims with respect
to the Collateral, as Agents and their counsel shall deem necessary;

 

(u) No Adverse Material Change. The Agents shall have determined, in their sole
judgment, that no event or development shall have occurred since September 30,
2016 which could reasonably be expected to have a Material Adverse Effect;

 

(v) Contract Review. Agents shall have received and reviewed all Material
Contracts of Loan Parties and such Material Contracts shall be satisfactory in
all respects to Agents;

 

(w) Compliance with Laws. Agents shall be reasonably satisfied that each Loan
Party is in material compliance with all pertinent federal, state, local or
territorial regulations, including those with respect to the Federal
Occupational Safety and Health Act, the Environmental Protection Act, ERISA and
the Anti-Terrorism Laws;

 

(x) Due Diligence. The Agents shall have completed their business, legal and
collateral due diligence with respect to each Loan Party and the results thereof
shall be acceptable to the Agents, in their sole and absolute discretion;

 

(y) Management Reference Checks. The Agents shall have received satisfactory
reference checks for, and shall have had an opportunity to meet with, key
management of each Loan Party;

 

(z) Specified Subordinated Debt Documents. Agents shall have received, in form
and substance reasonably satisfactory to Agents, final executed copies of each
of the Specified Subordinated Debt Documents, duly executed and delivered by the
applicable Loan Parties and lenders party thereto, each of which shall include a
maturity date for the Specified Subordinated Indebtedness thereunder that occurs
no earlier than the date that is six (6) months after the last day of the Term;
and

 

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(aa) Other. All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the Transactions shall be reasonably
satisfactory in form and substance to Agents and their counsel.

 

8.2 Conditions to Each Advance. The agreement of Lenders to make any Advance
requested to be made on any date (including the Advances to be made on the
Closing Date), is subject to the satisfaction of the following conditions
precedent as of the date such Advance is made:

 

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to this Agreement, the Other Documents and
any related agreements to which it is a party, and each of the representations
and warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement, the
Other Documents or any related agreement shall be true and correct in all
material respects (without duplication of any materiality provisions therein) on
and as of such date as if made on and as of such date (except that any
representation or warranty that relates to a specific date shall be true and
correct in all material respects as of such date).

 

(b) No Default. No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date and, in the case of the Advances made on the
Closing Date, after giving effect to the consummation of the Transactions;
provided, however that Administrative Agent, in its sole discretion, may
continue to make Advances notwithstanding the existence of an Event of Default
or Default and that any Advances so made shall not be deemed a waiver of any
such Event of Default or Default.

 

(c) Maximum Advances. In the case of any type of Advance requested to be made,
after giving effect thereto, the aggregate amount of such type of Advance shall
not exceed the maximum amount of such type of Advance permitted under this
Agreement.

 

(d) Legality. The making of such Advance shall not contravene any law, rule or
regulation applicable to any Agent or any Lender.

 

Each request for an Advance by any Loan Party hereunder shall constitute a
representation and warranty by each Loan Party as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.

 

IX. INFORMATION AS TO BORROWERS.

 

Each Loan Party shall, or (except with respect to Section 9.11) shall cause
Borrowing Agent on its behalf to, until satisfaction in full of the Obligations
and the termination of this Agreement:

 

9.1 Disclosure of Material Matters. Promptly upon learning thereof, report to
Agents (a) all matters materially affecting the value, enforceability or
collectability of any portion of the Collateral, including any Loan Party’s
reclamation or repossession of, or the return to any Loan Party of, a material
amount of goods or claims or disputes asserted by any Customer or other obligor,
and (b) any investigation, hearing, proceeding or other inquest into any
Borrower, any Guarantor, or any Affiliate of any Borrower or any Guarantor by
any Governmental Body with respect to Anti-Terrorism Laws.

 

9.2 Schedules. Deliver to Agents (i) on or before the twenty-fifth (25th) day of
each month as and for the prior month (a) accounts receivable agings inclusive
of reconciliations to the general ledger, (b) accounts payable schedules
inclusive of reconciliations to the general ledger, and (c) a Borrowing Base
Certificate in form and substance reasonably satisfactory to Administrative
Agent (which shall be calculated as of the last day of the prior month and which
shall not be binding upon Administrative Agent or restrictive of any Agent’s
rights under this Agreement), and (ii) on or before Thursday of each week, a
sales report / roll forward for the immediately preceding week. In addition,
Borrowing Agent will deliver to Agents at such intervals as any Agent may
reasonably request: (i) confirmatory assignment schedules; (ii) copies of
Customer’s invoices; and (iii) such further schedules, documents and/or
information regarding the Collateral as any Agent may reasonably require
including trial balances and test verifications. Administrative Agent shall have
the right to confirm and verify all Receivables by any manner and through any
medium it considers advisable and do whatever it may deem reasonably necessary
to protect its interests hereunder; provided that, so long as no Event of
Default is continuing, Agents shall work and cooperate with the Borrowers to
conduct such confirmation and verification in a manner designed to minimize
interruption of the Borrowers’ business and keep confidential the transactions
contemplated hereby. The items to be provided under this Section are to be in
form reasonably satisfactory to Agents and executed by Borrowing Agent and
delivered to Agents from time to time solely for Agents’ convenience in
maintaining records of the Collateral, and any Loan Party’s failure to deliver
any of such items to Agents shall not affect, terminate, modify or otherwise
limit Collateral Agent’s Lien with respect to the Collateral. The items to be
provided under this Section 9.2 shall be delivered to Administrative Agent by
the specific method of Approved Electronic Communication designated by
Administrative Agent to Borrowing Agent (unless otherwise agreed to by
Administrative Agent) and the items to be provided under this Section 9.2 shall
be delivered to the Term Loan Agent by the specific method of Approved
Electronic Communication designated by Term Loan Agent to Borrowing Agent
(unless otherwise agreed to by Term Loan Agent).

 

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9.3 Environmental Reports. In the event any Loan Party obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity of
any Hazardous Materials at the Real Property (any such event being hereinafter
referred to as a “Hazardous Discharge”) or receives any notice of violation,
request for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property,
demand letter or complaint, order, citation, or other written notice with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or any Loan Party’s interest therein or the operations or the business
of a Loan Party, in each case in any material respect, (any of the foregoing is
referred to herein as an “Environmental Complaint”) from any Person, including
any Governmental Body, then Borrowing Agent shall, within five (5) Business
Days, give written notice of same to Agents detailing facts and circumstances of
which any Loan Party is aware giving rise to the Hazardous Discharge or
Environmental Complaint. Such information is to be provided to allow Collateral
Agent to protect its security interest in and Lien on the Collateral and is not
intended to create nor shall it create any obligation upon any Agent or any
Lender with respect thereto.

 

9.4 Litigation. Promptly notify Agents in writing of any claim, litigation, suit
or administrative proceeding affecting any Loan Party, whether or not the claim
is covered by insurance, and of any litigation, suit or administrative
proceeding, which in any such case materially affects the Collateral or which
could reasonably be expected to have a Material Adverse Effect.

 

9.5 Material Occurrences. Promptly, but in any event within three (3) Business
Days, notify Agents in writing following the occurrence of: (a) any Event of
Default; (b) any event, development or circumstance whereby any financial
statements or other reports furnished to Agent fail in any material respect to
present fairly, in accordance with GAAP consistently applied, the financial
condition or operating results of any Loan Party as of the date of such
statements; (c) any funding deficiency which, if not corrected as provided in
Section 4971 of the Code, could subject any Loan Party or any member of the
Controlled Group to a tax imposed by Section 4971 of the Code; (d) any material
breach of or default under any Material Contract and (e) any other development
in the business or affairs of any Loan Party, which could reasonably be expected
to have a Material Adverse Effect; in each case describing the nature thereof
and the action Loan Parties propose to take with respect thereto.

 

9.6 Government Receivables. Notify Agents immediately if any of its Receivables
arise out of contracts between any Loan Party and the United States, any state,
or any department, agency or instrumentality of any of them.

 

9.7 Annual Financial Statements. Furnish Agents within ninety (90) days after
the end of each fiscal year of Loan Parties, financial statements of Holdings
and its Subsidiaries on a Consolidated Basis including, but not limited to,
statements of income and stockholders’ equity and cash flow from the beginning
of the current fiscal year to the end of such fiscal year and the balance sheet
as at the end of such fiscal year, all prepared in accordance with GAAP applied
on a basis consistent with prior practices, and setting forth in comparative
form the figures for the corresponding date or period set forth in (A) the
financial statements for the immediately preceding fiscal year and (B) the
Projections, and in case in reasonable detail and reported upon without
qualification by an independent certified public accounting firm selected by
Loan Parties and satisfactory to Agents (the “Accountants”).

 

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9.8 Quarterly Financial Statements. Furnish Agents within forty-five (45) days
after the end of each fiscal quarter, an unaudited balance sheet of Holdings and
its Subsidiaries on a Consolidated Basis and unaudited statements of income and
stockholders’ equity and cash flow of Holdings and its Subsidiaries on a
Consolidated Basis reflecting results of operations from the beginning of the
fiscal year to the end of such fiscal quarter and for such fiscal quarter,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal and recurring year-end adjustments that
individually and in the aggregate are not material to Loan Parties’ business
operations and setting forth in comparative form the figures for the
corresponding date or period set forth in (A) the financial statements for the
immediately preceding fiscal year and (B) commencing with the fiscal quarter
ending September 30, 2017, the Projections.

 

9.9 Monthly Financial Statements. Furnish Agents within thirty (30) days after
the end of each month (except for each month ending September 30, which shall be
furnished within forty-five (45) days after the end of such month), an unaudited
balance sheet of Holdings and its Subsidiaries on a Consolidated Basis and
unaudited statements of income and stockholders’ equity and cash flow of
Holdings and its Subsidiaries on a Consolidated Basis reflecting results of
operations from the beginning of the fiscal year to the end of such month and
for such month, prepared on a basis consistent with prior practices and complete
and correct in all material respects, subject to normal and recurring year-end
adjustments that individually and in the aggregate are not material to Loan
Parties’ business operations and setting forth in comparative form the figures
for the corresponding date or period set forth in (A) the financial statements
for the immediately preceding fiscal year and (B) commencing with the fiscal
month ending September 30, 2017, the Projections.

 

9.10 Compliance Certificate and Other Reports.

 

(a) Simultaneously with the delivery of the financial statements of the Holdings
and its Subsidiaries required by Sections 9.7, 9.8 and 9.9, furnish a
certificate of an Authorized Officer of Holdings in the form of Exhibit 1.2(a)
(a “Compliance Certificate”):

 

(i) stating that such officer has reviewed the provisions of this Agreement and
the Other Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of Holdings and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether Holdings and its Subsidiaries were in compliance with all
of the provisions of this Agreement and such Other Documents at the times such
compliance is required hereby and thereby, and that such review has not
disclosed, and such officer has no knowledge of, the occurrence and continuance
during such period of an Event of Default or Default or, if an Event of Default
or Default had occurred and continued or is continuing, describing the nature
and period of existence thereof and the action which Holdings and its
Subsidiaries propose to take or have taken with respect thereto,

 

(ii) in the case of the delivery of the financial statements of Holdings and its
Subsidiaries required by Sections 9.7 and 9.8, (A) attaching a schedule showing
the calculation of the financial covenants specified in Section 6.5 and (B)
including a discussion and analysis of the financial condition and results of
operations of Holdings and its Subsidiaries for the portion of the fiscal year
then elapsed and discussing the reasons for any significant variations from the
Projections for such period and the figures for the corresponding period in the
previous fiscal year, and

 

(iii) in the case of the delivery of the financial statements of the Parent and
its Subsidiaries required by Section 9.7, attaching (A) a summary of all
material insurance coverage maintained as of the date thereof by any Loan Party
or any of its Subsidiaries and evidence that such insurance coverage meets the
requirements set forth in Section 6.6, together with such other related
documents and information as Agents may reasonably require, (B) the calculation
of the Excess Cash Flow in accordance with the terms of Section 2.20(b) and (C)
confirmation that there have been no changes to the information contained in the
Perfection Certificate delivered on the Closing Date or the date of the most
recently updated Perfection Certificate delivered pursuant to this clause (C)
and/or attaching an updated Perfection Certificate identifying any such changes
to the information contained therein.

 

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(b) To the extent not otherwise delivered hereunder, furnish Agents as soon as
available, but in any event within three (3) days after the issuance or receipt
thereof, with copies of (i) all statements, reports and other information any
Loan Party sends to any holders of its Indebtedness or its securities or files
with the SEC or any national (domestic or foreign) securities exchange and (ii)
any material notice received from any holder of its Indebtedness.

 

(c) Simultaneously with the delivery of the financial statements of Holdings and
its Subsidiaries required by Sections 9.7, 9.8 and 9.9, reports in form and
detail reasonably satisfactory to the Agents and certified by an Authorized
Officer of Borrowing Agent as being accurate and complete (A) listing sales,
gross profit and EBITDA of the Loan Parties on a consolidating basis by business
Subsidiary (including, without limitation, Holdings, Scribe, BMCH, Triad
Personnel, Paladin, Agile, Access and SNI), including any Subsidiary acquired
after the Closing Date, (B) listing total hours billed for temporary contract
placements, new headcount placed, headcount fall off, and end-of-period
headcount for temporary contract revenue of the Loan Parties by business
subsidiary and (C) total permanent placement headcount and revenue falloff for
permanent contracts of the Loan Parties by business subsidiary, in each case,
for the period covered by such financial statements.

 

(d) As soon as available and in any event within thirty (30) days after the end
of each fiscal month (commencing with the fiscal month ending April 30, 2017),
reports in form and detail reasonably satisfactory to the Agents and certified
by an Authorized Officer of Borrowing Agent as being accurate and complete (i)
listing all Receivables of the Loan Parties as of such day, which shall include
the amount and age of each such Receivable, showing separately those which are
more than 30, 60, 90 and 120 days old, together with a reconciliation of such
schedule with the schedule delivered to Agents pursuant to this Section 9.10(d)
for the immediately preceding fiscal month and such other information as Agents
may request and (ii) listing all accounts payable of the Loan Parties as of each
such day which shall include the amount and age of each such account payable and
such other information as Agents may request.

 

9.11 Additional Information. Furnish Agents with such additional information as
Agents shall reasonably request in order to enable Agents to determine whether
the terms, covenants, provisions and conditions of this Agreement and the Notes
have been complied with by Loan Parties including, without the necessity of any
request by any Agent, (a) copies of all available environmental audits and
reviews, if any, (b) (i) at least thirty (30) days prior thereto, notice of any
Loan Party’s opening of any new office or place of business containing material
Collateral and (ii) prompt notice following any Loan Party’s closing of any
existing office or place of business, and (c) promptly upon any Loan Party’s
learning thereof, notice of any material labor dispute to which any Loan Party
may become a party, any material strikes or walkouts relating to any of its
facilities, and the expiration of any material labor contract to which any Loan
Party is a party or by which any Loan Party is bound.

 

9.12 Projected Operating Budget. Furnish Agents, prior to the beginning of each
Loan Party’s fiscal years (commencing with fiscal year ending September 30,
2018), a fiscal quarter by fiscal quarter projected operating budget and cash
flow of Holdings and its Subsidiaries on a consolidated for such fiscal year
(including an income statement for each fiscal quarter and a balance sheet as at
the end of the last fiscal quarter), such projections to be accompanied by a
certificate signed by an Authorized Officer of each Borrower to the effect that
such projections have been prepared on the basis of sound financial planning
practice consistent with past budgets delivered (from and after the Closing
Date) and financial statements and that such officer has no reason to question
the reasonableness of any material assumptions on which such projections were
prepared. Furnish Agents within thirty (30) days after the end of each month
(except for each month ending September 30, which shall be furnished within
forty-five (45) days after the end of such month), a 13-week cash flow forecast
of Holdings and its Subsidiaries on a Consolidated Basis, in form and substance
reasonably satisfactory to the Agents.

 

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9.13 Variances From Operating Budget. Furnish Agents, upon reasonable request a
written summary of all material variances from budgets submitted by Loan Parties
pursuant to Section 9.12.

 

9.14 Notice of Suits, Adverse Events. Furnish Agents promptly (but in any event
within three (3) Business Days after obtaining knowledge thereof) with written
notice of (a) any lapse or other termination of any Consent issued to any Loan
Party by any Governmental Body or any other Person that is material to the
operation of any Loan Party’s business, (b) any refusal by any Governmental Body
or any other Person to renew or extend any such Consent; (c) copies of any
periodic or special reports filed by any Loan Party with any Governmental Body
or Person, if such reports indicate any material change in the business,
operations, affairs or condition of any Loan Party, or if copies thereof are
requested by Lender, (d) copies of any material notices and other communications
from any Governmental Body or Person which specifically relate to any Loan
Party; and (e) any notice of any action, suit or proceeding before any court or
other Governmental Body or other regulatory body or any arbitrator which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.

 

9.15 ERISA Notices and Requests. Promptly furnish Agents with written notice in
the event that (a) any Loan Party or any member of the Controlled Group knows or
has reason to know that a Termination Event has occurred, together with a
written statement describing such Termination Event and the action, if any,
which such Loan Party or any member of the Controlled Group has taken, is
taking, or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, Department of Labor or PBGC
with respect thereto, (b) any Loan Party knows or has reason to know that a
prohibited transaction (as defined in Section 406 of ERISA or 4975 of the Code)
has occurred together with a written statement describing such transaction and
the action which such Loan Party has taken, is taking or proposes to take with
respect thereto, (c) a funding waiver request has been filed with respect to any
Plan together with all communications received by any Loan Party or any member
of the Controlled Group with respect to such request, (d) any material increase
liabilities of any existing Plan or Multiemployer Plan or the establishment of
any new Plan or the commencement of contributions to any Plan or Multiemployer
Plan to which any Loan Party or any member of the Controlled Group (excluding
welfare benefit plans maintained by members of the Controlled Group other than
the Loan Parties) was not previously contributing shall occur, (e) any Loan
Party or any member of the Controlled Group shall receive from the PBGC a notice
of intention to terminate a Pension Benefit Plan or Multiemployer Plan or to
have a trustee appointed to administer a Pension Benefit Plan or Multiemployer
Plan, together with copies of each such notice, (f) any Loan Party shall receive
any unfavorable determination letter from the Internal Revenue Service regarding
the qualification of a Plan under Section 401(a) of the Code; (g) any Loan Party
or any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such notice;
(h) any Loan Party or any member of the Controlled Group shall fail to make a
required installment or any other required payment under the Code or ERISA on or
before the due date for such installment or payment with respect to a Pension
Benefit Plan or Multiemployer Plan; or (i) any Loan Party or any member of the
Controlled Group knows that (i) a Multiemployer Plan has been terminated, (ii)
the administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, (iii) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan or (iv) a
Multiemployer Plan is subject to Section 432 of the Code or Section 305 of
ERISA.

 

9.16 Additional Documents. Execute and deliver to Agents, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to
carry out the purposes, terms or conditions of this Agreement.

 

9.17 Updates to Certain Schedules. Deliver to Agents promptly as shall be
required to maintain the related representations and warranties as true and
correct, updates to Schedules 4.4 (Locations of equipment and Inventory), 5.2(b)
(Subsidiaries), 5.9 (Intellectual Property, 5.24 (Equity Interests), 5.25
(Commercial Tort Claims), and 5.26 (Letter-of-Credit Rights). Any such updated
Schedules delivered by Loan Parties to Agents in accordance with this Section
9.17 shall automatically and immediately be deemed to amend and restate the
prior version of such Schedule previously delivered to Agents and attached to
and made part of this Agreement.

 

9.18 Financial Disclosure. Each Loan Party hereby irrevocably authorizes and
directs, and hereby agrees to use commercially reasonable efforts to cause, all
accountants and auditors employed by such Loan Party at any time during the Term
to exhibit and deliver to each Agent and each Lender copies of any of such Loan
Party’s financial statements, trial balances or other accounting records of any
sort in the accountant’s or auditor’s possession, and to disclose to each Agent
and each Lender any information such accountants may have concerning such Loan
Party’s financial status and business operations. Each Loan Party hereby
irrevocably authorizes, and hereby agrees to use commercially reasonable efforts
to cause, all Governmental Bodies to furnish to each Agent and each Lender
copies of reports or examinations relating to such Loan Party, whether made by
such Loan Party or otherwise; provided however, each Agent and each Lender will
attempt to obtain such information or materials directly from such Loan Party
prior to obtaining such information or materials from such accountants or
Governmental Bodies.

 

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X. EVENTS OF DEFAULT.

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default”:

 

10.1 Nonpayment. Failure by any Loan Party to pay when due (a) any principal or
interest on the Obligations (including without limitation pursuant to Section
2.9), or (b) any other fee, charge, amount or liability provided for herein or
in any Other Document, in each case whether at maturity, by reason of
acceleration pursuant to the terms of this Agreement, by notice of intention to
prepay or by required prepayment.

 

10.2 Breach of Representation. Except as provided in Section 10.18, any
representation or warranty made or deemed made by any Loan Party in this
Agreement, any Other Document or any related agreement or in any certificate,
document or financial or other statement furnished in writing at any time in
connection herewith or therewith shall prove to have been incorrect or
misleading in any material respect on the date when made or deemed to have been
made;

 

10.3 Financial Information. Failure by any Loan Party to (i) furnish or make
available financial statements as required by Section 9.2, 9.7, 9.8, 9.9,
9.10(a), 9.10(c), 9.10(d) or 9.12 when due, (ii) furnish other financial reports
or other information required herein within a reasonable time following the time
required under this Agreement (which in no event shall exceed ten (10) days) or
(iii) permit the inspection of its books or records or access to its premises
for audits and appraisals in accordance with the terms hereof;

 

10.4 Judicial Actions. Issuance of a notice of Lien (except Permitted
Encumbrances), levy, assessment, injunction or attachment (a) against Eligible
Receivables in an aggregate amount in excess of $250,000 or (b) against a
material portion of any Loan Party’s other property which is not stayed or
lifted within ten (10) days;

 

10.5 Noncompliance. Except as otherwise provided for in Sections 10.1, 10.3,
10.5(ii), and 10.18, (i) failure or neglect of any Loan Party to perform, keep
or observe any term, provision, condition, covenant contained in Sections 4.6,
4.8(h), 6.1, 6.2(b), 6.2(c), 6.5, 6.6, and 6.7, 6.106.18, 6.17(d)6.19, 6.20,
Article VII, and Sections 9.2, 9.7, 9.8, 9.9, 9.10 and 9.12 of this Agreement,
(ii) failure or neglect of any Loan Party to perform, keep or observe any
affirmative covenant contained in Article IV hereof or the Pledge Agreement with
respect to the delivery of Collateral to the Collateral Agent or any negative
covenant contained in Article IV hereof or the Pledge Agreement which (if
capable of being cured) is not cured within five (5) days from the earlier of
date such Loan Party (x) has knowledge thereof or (y) receives notice thereof
from any Agent of such failure or neglect, or (iii) failure or neglect of any
Loan Party to perform, keep or observe any other term, provision, condition or
covenant, contained in this Agreement or any Other Document which (if capable of
being cured) is not cured within fifteen (15) days from the earlier of date such
Loan Party (x) has knowledge thereof or (y) receives notice thereof from any
Agent of such failure or neglect;

 

10.6 Judgments. Any (a) judgment or judgments, writ(s), order(s) or decree(s)
for the payment of money (or any settlement of any litigation or other
proceeding that, if breached, could result in a judgment, order or award) are
rendered against any Loan Party for an aggregate amount in excess of $250,000 or
against all Loan Parties for an aggregate amount in excess of $250,000 (except
to the extent the applicable Loan Party is fully insured) and (b) (i) action
shall be legally taken by any judgment creditor to levy upon assets or
properties of any Loan Party to enforce any such judgment, (ii) such judgment
shall remain undischarged for a period of fifteen (15) consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, shall not be in effect, or (iii) any Liens arising by virtue of the
rendition, entry or issuance of such judgment upon assets or properties of any
Loan Party or any Guarantor shall be senior to any Liens in favor of Collateral
Agent on such assets or properties;

 

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10.7 Bankruptcy. Any Loan Party, or any Subsidiary of any Loan Party shall (i)
apply for, consent to or suffer the appointment of, or the taking of possession
by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or
of all or a substantial part of its property, (ii) admit in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment for the
benefit of creditors, (iv) commence a voluntary case under any state or federal
bankruptcy or receivership laws (as now or hereafter in effect), (v) be
adjudicated a bankrupt or insolvent (including by entry of any order for relief
in any involuntary bankruptcy or insolvency proceeding commenced against it),
(vi) file a petition seeking to take advantage of any other law providing for
the relief of debtors, (vii) acquiesce to, or fail to have dismissed, within
thirty (30) days, any petition filed against it in any involuntary case under
such bankruptcy laws, or (viii) take any action for the purpose of effecting any
of the foregoing;

 

10.8 Material Adverse Effect. The occurrence of any Material Adverse Effect;

 

10.9 Lien Priority. Any Lien created hereunder or provided for hereby or under
any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest (subject only to Permitted
Encumbrances) on any portion of the Collateral having a fair market value in
excess of $250,000;

 

10.10 Business Cessation. Any material damage to, or loss, theft or destruction
of, any Collateral, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other casualty
which causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Loan Party, if any such event or circumstance could reasonably be expected to
have a Material Adverse Effect;

 

10.11 Cross Default. Either (x) any specified “event of default” under any
Indebtedness (other than the Obligations) of any Loan Party with a
then-outstanding principal balance (or, in the case of any Indebtedness not so
denominated, with a then-outstanding total obligation amount) of $250,000 or
more, or any other event or circumstance which would permit the holder of any
such Indebtedness of any Loan Party to accelerate such Indebtedness (and/or the
obligations of Loan Party thereunder) prior to the scheduled maturity or
termination thereof, shall occur (regardless of whether the holder of such
Indebtedness shall actually accelerate, terminate or otherwise exercise any
rights or remedies with respect to such Indebtedness) or (y) a default of the
obligations of any Loan Party under any other agreement to which it is a party
shall occur which has or is reasonably likely to have a Material Adverse Effect;

 

10.12 Breach of Guaranty, Guarantor Security Agreement or Pledge Agreement.
Failure or neglect of any Loan Party to perform, keep or observe any term,
provision, condition, covenant contained in any Guaranty, Guarantor Security
Agreement, Pledge Agreement or similar agreement executed and delivered to any
Agent in connection with the Obligations of any Loan Party, or if any Loan Party
or pledgor attempts to terminate, challenges the validity of, or its liability
under, any such Guaranty, Guarantor Security Agreement, Pledge Agreement or
similar agreement;

 

10.13 Change of Control. Any Change of Control shall occur;

 

10.14 Invalidity. Any material provision of this Agreement or any Other Document
shall, for any reason, cease to be valid and binding on any Loan Party, or any
Loan Party shall so claim in writing to any Agent or any Lender or any Loan
Party challenges the validity of or its liability under this Agreement or any
Other Document;

 

10.15 Seizures. Any (a) Collateral in excess of $250,000 in the aggregate shall
be seized, subject to garnishment or taken by a Governmental Body, or (b) the
title and rights of any Loan Party, or any Original Owner which is the owner of
any material portion of the Collateral shall have become the subject matter of
claim, litigation, suit, garnishment or other proceeding which might, in the
reasonable opinion of any Agent, upon final determination, result in impairment
or loss of the security provided by this Agreement or the Other Documents;

 

10.16 Indictment. The indictment of any Loan Party under any criminal statute,
or commencement of criminal or civil proceedings against any Loan Party,
pursuant to which statute or proceedings the penalties or remedies sought or
available include forfeiture to any Governmental Authority of any material
portion of the property of such Person;

 

10.17 Pension Plans. An event or condition specified in Section 7.16 or 9.15
hereof shall occur or exist with respect to any Plan or Multiemployer Plan and,
as a result of such event or condition, together with all other such events or
conditions, any Loan Party or any member of the Controlled Group shall incur, or
in the opinion of any Agent be reasonably likely to incur, a liability to a
Plan, Multiemployer Plan or the PBGC (or any one or more of them) which, in the
reasonable judgment of any Agent, would have a Material Adverse Effect; or

 

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10.18 Anti-Money Laundering/International Trade Law Compliance. (i) Any
representation or warranty contained in Section 16.18 hereof is or becomes false
or misleading at any time, or (ii) any Loan Party shall fail to comply with its
obligations under Section 16.18 hereof.

 

XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

 

11.1 Rights and Remedies.

 

(a) Upon the occurrence of (i) an Event of Default pursuant to Section 10.7, all
Obligations (including the Applicable Premium) shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated and (ii) any of the other Events of Default and at any time
thereafter, at the option of the Administrative Agent or at the direction of the
Required Lenders or the Term Loan Agent, all Obligations (including the
Applicable Premium) shall be immediately due and payable and Agents or Required
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances. Upon the occurrence of any Event of
Default, Administrative Agent and Collateral Agent shall have the right to
exercise any and all rights and remedies provided for herein, under the Other
Documents, under the Uniform Commercial Code and at law or equity generally,
including the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process. Collateral Agent may enter any of any Loan Party’s premises or other
premises without legal process and without incurring liability to any Loan Party
therefor, and Collateral Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Collateral Agent may deem advisable and Collateral Agent may
require Loan Parties to make the Collateral available to Collateral Agent at a
convenient place. With or without having the Collateral at the time or place of
sale, Collateral Agent may sell the Collateral, or any part thereof, at public
or private sale, at any time or place, in one or more sales, at such price or
prices, and upon such terms, either for cash, credit or future delivery, as
Collateral Agent may elect. Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Collateral Agent shall give Loan Parties reasonable
notification of such sale or sales, it being agreed that in all events written
notice mailed to Borrowing Agent at least ten (10) days prior to such sale or
sales is reasonable notification. At any public sale, with the consent of the
Required Lenders, any Agent or any Lender may bid (including credit bid) for and
become the purchaser, and any Agent, any Lender or any other purchaser at any
such sale thereafter shall hold the Collateral sold absolutely free from any
claim or right of whatsoever kind, including any equity of redemption and all
such claims, rights and equities are hereby expressly waived and released by
each Loan Party. In connection with the exercise of the foregoing remedies,
including the sale of Inventory, Collateral Agent is granted a perpetual
nonrevocable, royalty free, nonexclusive license and Collateral Agent is granted
permission to use all of each Loan Party’s (a) Intellectual Property which is
used or useful in connection with Inventory for the purpose of marketing,
advertising for sale and selling or otherwise disposing of such Inventory and
(b) equipment for the purpose of completing the manufacture of unfinished goods.
The cash proceeds realized from the sale of any Collateral shall be applied to
the Obligations in the order set forth in Section 11.5 hereof. Noncash proceeds
will only be applied to the Obligations as they are converted into cash. If any
deficiency shall arise, Loan Parties shall remain liable to Agents and Lenders
therefor.

 

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(b) To the extent that Applicable Law imposes duties on Collateral Agent to
exercise remedies in a commercially reasonable manner, each Loan Party
acknowledges and agrees that it is not commercially unreasonable for Collateral
Agent: (i) to fail to incur expenses reasonably deemed significant by Collateral
Agent to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition; (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of; (iii) to fail to
exercise collection remedies against Customers or other Persons obligated on
Collateral or to remove Liens on or any adverse claims against Collateral; (iv)
to exercise collection remedies against Customers and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists; (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature; (vi) to contact other Persons, whether or not in the
same business as any Loan Party, for expressions of interest in acquiring all or
any portion of such Collateral; (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the
Collateral is of a specialized nature; (viii) to dispose of Collateral by
utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets; (ix) to dispose of assets in wholesale
rather than retail markets; (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to Collateral Agent a guaranteed return
from the collection or disposition of Collateral; or (xii) to the extent deemed
appropriate by the Collateral Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist Collateral
Agent in the collection or disposition of any of the Collateral. Each Loan Party
acknowledges that the purpose of this Section 11.1(b) is to provide
non-exhaustive indications of what actions or omissions by Collateral Agent
would not be commercially unreasonable in Collateral Agent’s exercise of
remedies against the Collateral and that other actions or omissions by
Collateral Agent shall not be deemed commercially unreasonable solely on account
of not being indicated in this Section 11.1(b). Without limitation upon the
foregoing, nothing contained in this Section 11.1(b) shall be construed to grant
any rights to any Loan Party or to impose any duties on Collateral Agent that
would not have been granted or imposed by this Agreement or by Applicable Law in
the absence of this Section 11.1(b).

 

(c) Without limiting any other provision hereof:

 

(i) At any bona fide public sale, and to the extent permitted by Applicable Law,
at any private sale, Collateral Agent shall be free to purchase all or any part
of the Investment Property Collateral. Any such sale may be on cash or credit.
Collateral Agent shall be authorized at any such sale (if it deems it advisable
to do so) to restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Investment Property Collateral
for their own account in compliance with Regulation D of the Securities Act or
any other applicable exemption available under the Securities Act. Collateral
Agent will not be obligated to make any sale if it determines not to do so,
regardless of the fact that notice of the sale may have been given. Collateral
Agent may adjourn any sale and sell at the time and place to which the sale is
adjourned. If the Investment Property Collateral is customarily sold on a
recognized market or threatens to decline speedily in value, Collateral Agent
may sell such Investment Property Collateral at any time without giving prior
notice to any Loan Party or other Person.

 

(ii) Each Loan Party recognizes that Collateral Agent may be unable to effect or
cause to be effected a public sale of the Investment Property Collateral by
reason of certain prohibitions contained in the Securities Act, so that
Collateral Agent may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obligated to agree, among other
things, to acquire the Investment Property Collateral for their own account, for
investment and without a view to the distribution or resale thereof. Each Loan
Party understands that private sales so made may be at prices and on other terms
less favorable to the seller than if the Investment Property Collateral were
sold at public sales, and agrees that Collateral Agent has no obligation to
delay or agree to delay the sale of any of the Investment Property Collateral
for the period of time necessary to permit the issuer of the securities which
are part of the Investment Property Collateral (even if the issuer would agree),
to register such securities for sale under the Securities Act. Each Loan Party
agrees that private sales made under the foregoing circumstances shall be deemed
to have been made in a commercially reasonable manner.

 

(iii) The net proceeds arising from the disposition of the Investment Property
Collateral after deducting expenses incurred by Collateral Agent will be applied
to the Obligations pursuant to Section 11.5. If any excess remains after the
discharge of all of the Obligations, the same will be paid to the applicable
Loan Party or to any other Person that may be legally entitled thereto.

 

(d) At any time after the occurrence and during the continuance of an Event of
Default (i) Collateral Agent may transfer any or all of the Investment Property
Collateral into its name or that of its nominee and may exercise all voting
rights with respect to the Investment Property Collateral, but no such transfer
shall constitute a taking of such Investment Property Collateral in satisfaction
of any or all of the Obligations, and (ii) Collateral Agent shall be entitled,
at its request, to receive, for application to the Obligations, all cash or
stock dividends and distributions, interest and premiums declared or paid on the
Investment Property Collateral.

 

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11.2 Collateral Agent’s Discretion. Collateral Agent shall have the right in its
sole discretion to determine which rights, Liens, security interests or remedies
Collateral Agent may at any time pursue, relinquish, subordinate, or modify,
which procedures, timing and methodologies to employ, and what any other action
to take with respect to any or all of the Collateral and in what order, thereto
and such determination will not in any way modify or affect any of Collateral
Agent’s or Lenders’ rights hereunder as against Loan Parties or each other.

 

11.3 Setoff. Subject to Section 14.13, in addition to any other rights which any
Agent or any Lender may have under Applicable Law, upon the occurrence of an
Event of Default hereunder, such Agent and such Lender shall have a right,
immediately and without notice of any kind, to apply any Loan Party’s property
held by such Agent or such Lender or any of their Affiliates to reduce the
Obligations and to exercise any and all rights of setoff which may be available
to such Agent and such Lender with respect to any deposits held by such Agent or
such Lender.

 

11.4 Rights and Remedies not Exclusive. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive and the exercise of any rights or
remedy shall not preclude the exercise of any other right or remedies provided
for herein or otherwise provided by law, all of which shall be cumulative and
not alternative.

 

11.5 Allocation of Payments After Event of Default. Notwithstanding any other
provisions of this Agreement to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received by
Administrative Agent or Collateral Agent on account of the Obligations
(including without limitation any amounts on account of any of Cash Management
Liabilities or Hedge Liabilities), or in respect of the Collateral may, at
Administrative Agent’s discretion or at the direction of the Term Loan Agent or
the Required Lenders, be paid over or delivered as follows:

 

(a) Except to the extent provided in Section 11.5(c) below, all Revolving Loan
Priority Collateral Proceeds shall be applied:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each Agent in connection with
enforcing its rights and the rights of Lenders under this Agreement and the
Other Documents, and any Out-of-Formula Loans and Protective Advances funded by
the Administrative Agent with respect to the Collateral under or pursuant to the
terms of this Agreement;

 

SECOND, to payment of any fees (other than any Applicable Premium) owed to any
Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of any Lender to the extent owing to such
Lender pursuant to the terms of this Agreement;

 

FOURTH, to the payment of all of the Obligations consisting of accrued interest
in respect of the Swing Loans;

 

FIFTH, to the payment of the outstanding principal amount of the Obligations
consisting of Swing Loans;

 

SIXTH, to the payment of all accrued fees (other than any Applicable Premium)
and interest arising under this Agreement and the Other Documents in respect of
the Revolving Advances and Letters of Credit;

 

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SEVENTH, to the payment of the outstanding principal amount of the Revolving
Advances and Obligations in respect of Letters of Credit (including the payment
or cash collateralization of any outstanding Letters of Credit in accordance
with Section 3.2(b) hereof);

 

EIGHTH, to the payment of all outstanding Cash Management Liabilities and Hedge
Liabilities in an amount not to exceed the lesser of (i) $3,000,000 and (ii) the
amount of all reserves established against the Formula Amount in respect of Cash
Management Liabilities and Hedge Liabilities;

 

NINTH, to the payment of any Protective Advances funded by the Term Loan Agent
with respect to the Collateral under or pursuant to the terms of this Agreement;

 

TENTH, to the payment of all accrued fees (other than any Applicable Premium)
and interest arising under this Agreement and the Other Documents in respect of
the Term Loans;

 

ELEVENTH, to the payment of the outstanding principal amount of the Term Loans
(including the Term Loan PIK Amount);

 

TWELFTH, to the payment of any Applicable Premium;

 

THIRTEENTH, to the payment of all outstanding Cash Management Liabilities and
Hedge Liabilities in excess of the amount applied pursuant to clause EIGHTH
above;

 

FOURTEENTH, to all other Obligations which shall have become due and payable
(under this Agreement, under the Other Documents or otherwise) and not repaid
pursuant to clauses “FIRST” through “THIRTEENTH” above; and

 

FIFTEENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

(b) Except to the extent provided in Section 11.5(c) below, all Term Loan
Priority Collateral Proceeds shall be applied:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each Agent in connection with
enforcing its rights and the rights of Lenders under this Agreement and the
Other Documents, and any Protective Advances funded by Agents with respect to
the Collateral under or pursuant to the terms of this Agreement;

 

SECOND, to payment of any fees (other than any Applicable Premium) owed to any
Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of any Lender to the extent owing to such
Lender pursuant to the terms of this Agreement;

 

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FOURTH, to the payment of all accrued fees (other than any Applicable Premium)
and interest arising under this Agreement and the Other Documents in respect of
Term Loans;

 

FIFTH, to the payment of the outstanding principal amount of Term Loans
(including the Term Loan PIK Amount);

 

SIXTH, to the payment of all accrued fees (other than any Applicable Premium)
and interest arising under this Agreement and the Other Documents in respect of
the Swing Loans, Revolving Advances (including Out-of-Formula Loans) and Letters
of Credit;

 

SEVENTH, to the payment of the outstanding principal amount of the Swing Loans,
Revolving Advances (including Out-of-Formula Loans) and Obligations in respect
of Letters of Credit (including the payment or cash collateralization of any
outstanding Letters of Credit in accordance with Section 3.2(b) hereof);

 

EIGHTH, to the payment of any Applicable Premium;

 

NINTH, to the payment of all outstanding Cash Management Liabilities and Hedge
Liabilities;

 

TENTH, to all other Obligations which shall have become due and payable (under
this Agreement, under the Other Documents or otherwise) and not repaid pursuant
to clauses “FIRST” through “NINTH” above; and

 

ELEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

(c) All amounts collected or received by Collateral Agent or Administrative
Agent in respect of Collateral that includes both Revolving Loan Priority
Collateral Proceeds and Term Loan Priority Collateral Proceeds shall be applied
in a manner mutually determined by the Agents acting reasonably and in good
faith.

 

(d) In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances, Cash Management Liabilities and
Hedge Liabilities held by such Lender bears to the aggregate then outstanding
Advances, Cash Management Liabilities and Hedge Liabilities) of amounts
available to be applied pursuant to clauses “SIXTH”, “SEVENTH”, “EIGHTH” and
“THIRTEENTH” of subsection(a) above and clauses “SIXTH”, “SEVENTH”, “NINTH” and
“TENTH” of subsection (b) above; (iii) notwithstanding anything to the contrary
in this Section 11.5, no Swap Obligations of any Non-Qualifying Party shall be
paid with amounts received from such Non-Qualifying Party under its Guaranty
(including sums received as a result of the exercise of remedies with respect to
such Guaranty) or from the proceeds of such Non-Qualifying Party’s Collateral if
such Swap Obligations would constitute Excluded Hedge Liabilities, provided,
however, that to the extent possible appropriate adjustments shall be made with
respect to payments and/or the proceeds of Collateral from other Borrowers
and/or Guarantors that are Eligible Contract Participants with respect to such
Swap Obligations to preserve the allocation to Obligations otherwise set forth
above in this Section 11.5; and (iv) to the extent that any amounts available
for distribution pursuant to clauses “SIXTH” and “SEVENTH” of subsection (a)
above and clauses “SIXTH” and “SEVENTH” of subsection (b) above are attributable
to the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by Administrative Agent as cash collateral for the Letters of
Credit pursuant to Section 3.2(b) hereof and applied (A) first, to reimburse
Issuer from time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
Obligations of the types described in clauses “SIXTH”, “SEVENTH” and
“FOURTEENTH” of subsection (a) above and clauses “SIXTH”, “SEVENTH” and “TENTH”
of subsection (b) above in the manner provided in this Section 11.5.

 

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XII. WAIVERS AND JUDICIAL PROCEEDINGS.

 

12.1 Waiver of Notice. Each Loan Party hereby waives, to the extent permitted by
law, notice of non-payment of any of the Receivables, demand, presentment,
protest and notice thereof with respect to any and all instruments, notice of
acceptance hereof, notice of loans or advances made, credit extended, Collateral
received or delivered, or any other action taken in reliance hereon, and all
other demands and notices of any description, except such as are expressly
provided for herein.

 

12.2 Delay. No delay or omission on any Agent’s or any Lender’s part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any Default or Event of Default.

 

12.3 Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(A) ARISING UNDER THIS AGREEMENT, ANY OTHER DOCUMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY OTHER DOCUMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, COUNTERCLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

XIII. TERM AND TERMINATION.

 

13.1 Term. This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of each Loan Party,
each Agent and each Lender, shall become effective on the Closing Date and shall
continue in full force and effect until June 30, 20212023 (the “Term”) unless
sooner terminated as herein provided.

 

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13.2 Termination. Borrowing Agent may, upon at least fifteen (15) Business Days
prior written notice to each Agent, terminate this Agreement by paying to
Administrative Agent, in cash, the Obligations in full, plus the Applicable
Premium, if any, payable in connection with such termination of this Agreement.
If the Borrowing Agent has sent a notice of termination pursuant to this Section
13.2, then Lenders’ obligations to extend credit hereunder shall terminate and
Borrowers shall be obligated to repay in cash the Obligations in full, plus the
Applicable Premium, if any, payable in connection with such termination of this
Agreement on the date set forth as the date of termination of this Agreement in
such notice. The termination of the Agreement shall not affect any Agent’s or
any Lender’s rights, or any of the Obligations having their inception prior to
the effective date of such termination or any Obligations which pursuant to the
terms hereof continue to accrue after such date, and the provisions hereof shall
continue to be fully operative until (a) all transactions entered into, rights
or interests created and Obligations have been fully paid, disposed of,
concluded or liquidated, and (b) all Loan Parties have released Secured Parties
from and against any and all claims of any nature whatsoever that any Loan Party
may have against Secured Parties. The security interests, Liens and rights
granted to Agents and Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrowers’ Account may from time
to time be temporarily in a zero or credit position, until all of the
Obligations of each Loan Party have been paid and performed in full after the
termination of this Agreement or each Loan Party has furnished Agents and
Lenders with an indemnification satisfactory to Agents and Lenders with respect
thereto. Accordingly, each Loan Party waives any rights which it may have under
the Uniform Commercial Code to demand the filing of termination statements with
respect to the Collateral, and Collateral Agent shall not be required to send
such termination statements to each Loan Party, or to file them with any filing
office, unless and until this Agreement shall have been terminated in accordance
with its terms and all Obligations have been paid in full in immediately
available funds. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until all
Obligations are paid and performed in full.

 

13.3 Release of Collateral. At such time as this Agreement shall have been
terminated in accordance with its terms and all Obligations have been paid in
full (and receipt thereof is acknowledged in writing by Agents), (i) the
Collateral shall be automatically released from the Liens created hereby without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Loan Parties and (ii) at the
request and sole expense of the Loan Parties, Collateral Agent shall deliver to
the Borrowing Agent any tangible, possessory Collateral held by Agents
hereunder, and execute and deliver to the Borrowing Agent such documents (in
form and substance reasonably satisfactory to Collateral Agent) as the Borrowing
Agent shall reasonably request to evidence such termination.

 

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XIV. REGARDING AGENTS.

 

14.1 Appointment. Each Lender hereby designates each Agent to perform the duties
of such Agent under this Agreement and the Other Documents, and irrevocably
authorizes such Agent to take such action on its behalf under the provisions of
this Agreement and the Other Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of such Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto, and Agents shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
2.8(b) and 3.4), charges and collections received pursuant to this Agreement,
for the ratable benefit of Lenders. Agents may perform any of their duties
hereunder by or through its agents or employees. As to any matters not expressly
provided for by this Agreement (including collection of the Notes), Agents shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of Required Lenders, and
such instructions shall be binding; provided, however, that no Agent shall not
be required to take any action which, in such Agent’s discretion, exposes such
Agent to liability or which is contrary to this Agreement or the Other Documents
or Applicable Law unless such Agent is furnished with an indemnification
reasonably satisfactory to such Agent with respect thereto.

 

14.2 Nature of Duties. Agents shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Other Documents. No Agent
nor any of its respective officers, directors, employees or agents shall be (i)
liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement, or in any of the Other
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by such Agent under or in connection with, this
Agreement or any of the Other Documents or for the value, validity,
effectiveness, genuineness, due execution, enforceability or sufficiency of this
Agreement, or any of the Other Documents or for any failure of any Loan Party to
perform its obligations hereunder. Agents shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any of the
Other Documents, or to inspect the properties, books or records of any Loan
Party. The duties of Administrative Agent as respects the Advances to Loan
Parties shall be mechanical and administrative in nature. No Agent shall have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or the transactions described herein except as expressly set forth
herein.

 

14.3 Lack of Reliance on Agents. Independently and without reliance upon any
Agent or any other Lender, each Lender has made and shall continue to make (i)
its own independent investigation of the financial condition and affairs of each
Loan Party in connection with the making and the continuance of the Advances
hereunder and the taking or not taking of any action in connection herewith, and
(ii) its own appraisal of the creditworthiness of each Loan Party. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before making of the Advances or at
any time or times thereafter except as shall be provided by any Loan Party
pursuant to the terms hereof. No Agent shall be responsible to any Lender for
any recitals, statements, information, representations or warranties herein or
in any agreement, document, certificate or a statement delivered in connection
with or for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Agreement or any Other Document, or of the
financial condition of any Loan Party, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Other Documents or the financial
condition or prospects of any Loan Party, or the existence of any Event of
Default or any Default.

 

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14.4 Resignation of Agent; Successor Agent. Any Agent may resign on thirty (30)
days written notice to each Lender and Borrowing Agent and upon such
resignation, Required Lenders will promptly designate a successor Agent
reasonably satisfactory to Loan Parties (provided that no such approval by Loan
Parties shall be required after the occurrence and during the continuance of any
Event of Default). Any such successor Agent shall succeed to the rights, powers
and duties of the resigning Agent and shall in particular succeed to all of such
Agent’s right, title and interest in and to all of the Liens in the Collateral
securing the Obligations created hereunder or any Other Document (including the
Pledge Agreement and all Control Agreements), and the term “Administrative
Agent”, “Collateral Agent” or “Term Loan Agent” shall mean such successor agent
effective upon its appointment, and the former Agent’s rights, powers and duties
as such Agent shall be terminated, without any other or further act or deed on
the part of such former Agent. However, notwithstanding the foregoing, if at the
time of the effectiveness of a new Collateral Agent’s appointment, any further
actions need to be taken in order to provide for the legally binding and valid
transfer of any Liens in the Collateral from the former Collateral Agent to such
new Collateral Agent and/or for the perfection of any Liens in the Collateral as
held by such new Collateral Agent or it is otherwise not then possible for such
new Collateral Agent to become the holder of a fully valid, enforceable and
perfected Lien as to any of the Collateral, the former Collateral Agent shall
continue to hold such Liens solely as agent for perfection of such Liens on
behalf of the new Collateral Agent until such time as such new Collateral Agent
can obtain a fully valid, enforceable and perfected Lien on all Collateral,
provided that the former Collateral Agent shall not be required to or have any
liability or responsibility to take any further actions after such date as such
agent for perfection to continue the perfection of any such Liens (other than to
forego from taking any affirmative action to release any such Liens). After any
Agent’s resignation as an Agent, the provisions of this Article XIV, and any
indemnification rights under this Agreement, including without limitation,
rights arising under Section 16.5 hereof, shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement (and in the event the resigning Collateral Agent continues to hold any
Liens pursuant to the provisions of the immediately preceding sentence, the
provisions of this Article XIV and any indemnification rights under this
Agreement, including without limitation, rights arising under Section 16.5
hereof, shall inure to its benefit as to any actions taken or omitted to be
taken by it in connection with such Liens).

 

14.5 Certain Rights of Agents. If any Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, such Agent shall be
entitled to refrain from such act or taking such action unless and until such
Agent shall have received instructions from Required Lenders; and such Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, Lenders shall not have any right of action whatsoever
against any Agent as a result of its acting or refraining from acting hereunder
in accordance with the instructions of Required Lenders.

 

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14.6 Reliance. Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
email, facsimile, telex, teletype or telecopier message, cablegram, order or
other document or telephone message believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to this Agreement and the Other
Documents and its duties hereunder, upon advice of counsel selected by it. Any
Agent may employ agents and attorneys-in-fact and shall not be liable for the
default or misconduct of any such agents or attorneys-in-fact selected by such
Agent with reasonable care.

 

14.7 Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder or under the Other
Documents, unless such Agent has received notice from a Lender or Borrowing
Agent referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that any Agent receives such a notice, such Agent shall
give notice thereof to Lenders. Such Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by Required
Lenders; provided, that, unless and until such Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.

 

14.8 Indemnification. To the extent any Agent is not reimbursed and indemnified
by Loan Parties, each Lender will reimburse and indemnify such Agent in
proportion to its respective portion of the outstanding Advances and its
respective Participation Commitments in the outstanding Letters of Credit and
outstanding Swing Loans (or, if no Advances are outstanding, pro rata according
to the percentage that its Revolving Commitment Amount constitutes of the Total
Revolving Commitment), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against such Agent in performing its duties hereunder, or in any
way relating to or arising out of this Agreement or any Other Document; provided
that Lenders shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross (not mere)
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment).

 

14.9 Administrative Agent in its Individual Capacity. With respect to the
obligation of Administrative Agent to lend under this Agreement, the Advances
made by it shall have the same rights and powers hereunder as any other Lender
and as if it were not performing the duties as Administrative Agent specified
herein; and the term “Lender” or any similar term shall, unless the context
clearly otherwise indicates, include Administrative Agent in its individual
capacity as a Lender. Administrative Agent may engage in business with any Loan
Party as if it were not performing the duties specified herein, and may accept
fees and other consideration from any Loan Party for services in connection with
this Agreement or otherwise without having to account for the same to Lenders.

 

14.10 Delivery of Documents. To the extent Administrative Agent receives
financial statements required under Sections 9.7, 9.8, 9.9, 9.10, 9.12 and 9.13
or Borrowing Base Certificates from Borrowing Agent pursuant to the terms of
this Agreement which Borrowing Agent is not obligated to deliver to each Lender,
Administrative Agent will promptly furnish such documents and information to
Lenders.

 

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14.11 Loan Parties Undertaking to Agents. Without prejudice to their respective
obligations to Lenders under the other provisions of this Agreement, each Loan
Party hereby undertakes with Agents to pay to Agents from time to time on demand
all amounts from time to time due and payable by it for the account of Agents or
Lenders or any of them pursuant to this Agreement to the extent not already
paid. Any payment made pursuant to any such demand shall pro tanto satisfy the
relevant Loan Party’s obligations to make payments for the account of Lenders or
the relevant one or more of them pursuant to this Agreement.

 

14.12 No Reliance on any Agent’s Customer Identification Program. To the extent
the Advances or this Agreement is, or becomes, syndicated in cooperation with
other Lenders, each Lender acknowledges and agrees that neither such Lender, nor
any of its Affiliates, participants or assignees, may rely on any Agent to carry
out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the USA PATRIOT Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti‑Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
Loan Parties, their Affiliates or their agents, the Other Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such Anti-Terrorism Laws.

 

14.13 Other Agreements. Each of the Lenders agrees that it shall not, without
the prior written consent of Administrative Agent and Term Loan Agent, and that
it shall, to the extent it is lawfully entitled to do so, upon the request of
Administrative Agent and Term Loan Agent, set off against the Obligations, any
amounts owing by such Lender to any Loan Party or any deposit accounts of any
Loan Party now or hereafter maintained with such Lender. Anything in this
Agreement to the contrary notwithstanding, each of the Lenders further agrees
that it shall not, unless specifically requested to do so by Administrative
Agent, take any action to protect or enforce its rights arising out of this
Agreement or the Other Documents, it being the intent of Lenders that any such
action to protect or enforce rights under this Agreement and the Other Documents
shall be taken in concert and at the direction or with the consent of
Administrative Agent or Required Lenders.

 

XV. BORROWING AGENCY.

 

15.1 Borrowing Agency Provisions.

 

(a) Each Borrower (and each Loan Party with regards to (viii) below) hereby
irrevocably designates Borrowing Agent to be its attorney and agent and in such
capacity to (i) borrow, (ii) request advances, (iii) request the issuance of
Letters of Credit, (iv) sign and endorse notes, (v) execute and deliver all
instruments, documents, applications, security agreements, reimbursement
agreements and letter of credit agreements for Letters of Credit and all other
certificates, notice, writings and further assurances now or hereafter required
hereunder, (vi) make elections regarding interest rates, (vii) give instructions
regarding Letters of Credit and agree with Issuer upon any amendment, extension
or renewal of any Letter of Credit and (viii) otherwise take action under and in
connection with this Agreement and the Other Documents, all on behalf of and in
the name such Loan Party or Loan Parties, and hereby authorizes Administrative
Agent to pay over or credit all loan proceeds hereunder in accordance with the
request of Borrowing Agent.

 

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(b) The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Loan Parties and at their request. No Agent nor any Lender
shall incur liability to Loan Parties as a result thereof. To induce Agents and
Lenders to do so and in consideration thereof, each Loan Party hereby
indemnifies each Agent and each Lender and holds each Agent and each Lender
harmless from and against any and all liabilities, expenses, losses, damages and
claims of damage or injury asserted against any Agent or any Lender by any
Person arising from or incurred by reason of the handling of the financing
arrangements of Loan Parties as provided herein, reliance by any Agent or any
Lender on any request or instruction from Borrowing Agent or any other action
taken by any Agent or any Lender with respect to this Section 15.1 except due to
willful misconduct or gross (not mere) negligence by the indemnified party (as
determined by a court of competent jurisdiction in a final and non-appealable
judgment).

 

(c) All Obligations shall be joint and several, and each Loan Party shall make
payment upon the maturity of the Obligations by acceleration or otherwise, and
such obligation and liability on the part of each Loan Party shall in no way be
affected by any extensions, renewals and forbearance granted by any Agent or any
Lender to any Loan Party, failure of any Agent or any Lender to give any Loan
Party notice of borrowing or any other notice, any failure of any Agent or any
Lender to pursue or preserve its rights against any Loan Party, the release by
Collateral Agent of any Collateral now or thereafter acquired from any Loan
Party, and such agreement by each Loan Party to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by any Agent
or any Lender to the other Loan Parties or any Collateral for such Loan Party’s
Obligations or the lack thereof. Each Loan Party waives all suretyship defenses.

 

15.2 Waiver of Subrogation. Each Loan Party expressly waives any and all rights
of subrogation, reimbursement, indemnity, exoneration, contribution of any other
claim which such Loan Party may now or hereafter have against the other Loan
Parties or any other Person directly or contingently liable for the Obligations
hereunder, or against or with respect to any other Loan Parties’ property
(including, without limitation, any property which is Collateral for the
Obligations), arising from the existence or performance of this Agreement, until
termination of this Agreement and repayment in full of the Obligations.

 

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XVI. MISCELLANEOUS.

 

16.1 Governing Law. This Agreement and each Other Document (unless and except to
the extent expressly provided otherwise in any such Other Document), and all
matters relating hereto or thereto or arising herefrom or therefrom (whether
arising under contract law, tort law or otherwise) shall, in accordance with
Section 5-1401 of the General Obligations Law of the State of New York, be
governed by and construed in accordance with the laws of the State of New York.
Any judicial proceeding brought by or against any Loan Party with respect to any
of the Obligations, this Agreement, the Other Documents or any related agreement
may be brought in any court of competent jurisdiction in the State of New York,
United States of America, and, by execution and delivery of this Agreement, each
Loan Party accepts for itself and in connection with its properties, generally
and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Each Loan Party hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified or registered mail (return receipt requested) directed to Borrowing
Agent at its address set forth in Section 16.6 and service so made shall be
deemed completed five (5) days after the same shall have been so deposited in
the mails of the United States of America, or, at Administrative Agent’s option,
by service upon Borrowing Agent which each Loan Party irrevocably appoints as
such Loan Party’s agent for the purpose of accepting service within the State of
New York. Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of any Agent or any Lender to bring
proceedings against any Loan Party in the courts of any other jurisdiction. Each
Loan Party waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. Each Loan Party waives
the right to remove any judicial proceeding brought against such Loan Party in
any state court to any federal court. Any judicial proceeding by any Loan Party
against any Agent or any Lender involving, directly or indirectly, any matter or
claim in any way arising out of, related to or connected with this Agreement or
any related agreement, shall be brought only in a federal or state court located
in the County of New York, State of New York.

 

16.2 Entire Understanding.

 

(a) This Agreement and the documents executed concurrently herewith contain the
entire understanding between each Loan Party, each Agent and each Lender and
supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof. Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed each Loan Party’s, each Agent’s and each Lender’s respective
officers. Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged. Notwithstanding the
foregoing, Agents and Borrowing Agent may modify this Agreement or any of the
Other Documents for the purposes of completing missing content or correcting
erroneous content of an administrative nature, without the need for a written
amendment, provided that Administrative Agent shall send a copy of any such
modification to each Lender (which copy may be provided by electronic mail).
Each Loan Party acknowledges that it has been advised by counsel in connection
with the execution of this Agreement and Other Documents and is not relying upon
oral representations or statements inconsistent with the terms and provisions of
this Agreement.

 

(b) Required Lenders (or, Agents with the consent in writing of Required
Lenders), and Loan Parties may, subject to the provisions of this Section
16.2(b), from time to time enter into written supplemental agreements to this
Agreement or the Other Documents executed by Loan Parties, for the purpose of
adding or deleting any provisions or otherwise changing, varying or waiving in
any manner the rights of Lenders, Agents or Loan Parties thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that no such supplemental agreement shall:

 

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(i) except in connection with any increase pursuant to Section 2.24 hereof, (A)
increase the Revolving Commitment Percentage or the maximum dollar amount of the
Revolving Commitment Amount of any Revolving Lender without the consent of such
Revolving Lender, (B) increase the Term Loan Commitment Percentage or the Term
Loan Commitment Amount of any Term Loan Lender without the consent of such Term
Loan Lender or (C) increase the Total Commitment without the consent of each
Lender;

 

(ii) whether or not any Advances are outstanding, extend the Term or the time
for payment of principal or interest of any Advance (excluding the due date of
any mandatory prepayment of an Advance), or any fee payable to any Lender, or
reduce the principal amount of or the rate of interest borne by any Advances or
reduce any fee payable to any Lender, without the consent of each Lender
directly affected thereby (except that Required Lenders may elect to waive or
rescind any imposition of the Default Rate under Section 3.1 or of default rates
of Letter of Credit fees under Section 3.2 (unless imposed by Administrative
Agent));

 

(iii) except in connection with any increase pursuant to Section 2.24 hereof,
increase the Maximum Revolving Advance Amount without the consent of all
Lenders;

 

(iv) (A) alter, amend or modify the definition of the term “Required Lenders” or
this Section 16.2(b) without the consent of all Lenders, (B) alter, amend or
modify the definition of the term “Required Revolving Lenders” without the
consent of all Revolving Lenders, or (C) alter, amend or modify the definition
of the term “Required Term Loan Lenders” without the consent of all Term Loan
Lenders;

 

(v) alter, amend or modify the provisions of Section 2.20 or Section 11.5
without the consent of all Lenders;

 

(vi) release all or a substantial portion of the Collateral (except pursuant to
a disposition of Collateral permitted by this Agreement or approved by the
Required Lenders or all of the Lenders, as applicable) or subordinate any Lien
granted in favor of the Collateral Agent for the benefit of the Secured Parties,
in each case, without the written consent of each Lender;

 

(vii) change the rights and duties of any Agent without the consent of all
Agents and all Lenders;

 

(viii) subject to clause (e) below, permit any Revolving Advance to be made if,
at the time such Revolving Advance was made and, after giving effect thereto the
total of Revolving Advances outstanding hereunder would (I) exceed the Formula
Amount for more than thirty (30) consecutive Business Days or (II) exceed the
Formula Amount by fifteen percent (15%) of the Maximum Revolving Advance Amount,
without the consent of all Lenders;

 

(ix) increase the Advance Rate above the Advance Rate in effect on the Closing
Date without the consent of the Required Revolving Lenders and the Required
Lenders; or

 

(x) release any Loan Party (other than in accordance with the provisions of this
Agreement) without the consent of all Lenders.

 

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(c) Any such supplemental agreement shall apply equally to each Lender and shall
be binding upon Loan Parties, Lenders and Agents and all future holders of the
Obligations. In the case of any waiver, Loan Parties, Agents and Lenders shall
be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.

 

(d) [Reserved].

 

(e) Notwithstanding (i) the existence of a Default or an Event of Default, (ii)
that any of the other applicable conditions precedent set forth in Section 8.2
hereof have not been satisfied or the Revolving Commitments have been terminated
for any reason, or (iii) any other contrary provision of this Agreement,
Administrative Agent may at its discretion and without the consent of any
Lender, voluntarily permit the outstanding Revolving Advances (calculated at the
time such Revolving Advances were made) at any time to exceed the Formula Amount
by up to fifteen percent (15%) of the Maximum Revolving Advance Amount for up to
thirty (30) consecutive Business Days (the “Out-of-Formula Loans”). If
Administrative Agent is willing in its sole and absolute discretion to permit
such Out-of-Formula Loans, Revolving Lenders shall be obligated to fund such
Out-of-Formula Loans in accordance with their respective Revolving Commitment
Percentages, and such Out-of-Formula Loans shall be payable on demand and shall
bear interest at the Default Rate for Revolving Advances consisting of Domestic
Rate Loans; provided that, if Administrative Agent does permit Out-of-Formula
Loans, neither Administrative Agent nor Lenders shall be deemed thereby to have
changed the limits of Section 2.1(a) nor shall any Revolving Lender be obligated
to fund Revolving Advances in excess of its Revolving Commitment Amount. For
purposes of this paragraph, the discretion granted to Administrative Agent
hereunder shall not preclude involuntary overadvances that may result from time
to time due to the fact that the Formula Amount was unintentionally exceeded for
any reason, including, but not limited to, Collateral previously deemed to be
“Eligible Receivables” becomes ineligible, collections of Receivables applied to
reduce outstanding Revolving Advances are thereafter returned for insufficient
funds or overadvances are made to protect or preserve the Collateral. In the
event Administrative Agent involuntarily permits the outstanding Revolving
Advances to exceed the Formula Amount by more than ten percent (10%),
Administrative Agent shall use its efforts to have Loan Parties decrease such
excess in as expeditious a manner as is practicable under the circumstances and
not inconsistent with the reason for such excess. Revolving Advances made after
Administrative Agent has determined the existence of involuntary overadvances
shall be deemed to be involuntary overadvances and shall be decreased in
accordance with the preceding sentence. To the extent any Out-of-Formula Loans
are not actually funded by the other Revolving Lenders as provided for in this
Section 16.2(e), Administrative Agent may elect in its discretion to fund such
Out-of-Formula Loans and any such Out-of-Formula Loans so funded by
Administrative Agent shall be deemed to be Revolving Advances made by and owing
to Administrative Agent, and Administrative Agent shall be entitled to all
rights (including accrual of interest) and remedies of a Revolving Lender under
this Agreement and the Other Documents with respect to such Revolving Advances.

 

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(f) In addition to (and not in substitution of) the discretionary Revolving
Advances permitted above in this Section 16.2, each Agent is hereby authorized
by Loan Parties and Lenders, at any time in such Agent’s sole discretion,
regardless of (i) the existence of a Default or an Event of Default, (ii)
whether any of the other applicable conditions precedent set forth in Section
8.2 hereof have not been satisfied or the Revolving Commitments have been
terminated for any reason, or (iii) any other contrary provision of this
Agreement, to make disbursements and advances constituting Revolving Advances
(if made by Administrative Agent) or Term Loans (if made by Term Loan Agent) to
Borrowers on behalf of Lenders which such Agent, in its reasonable business
judgment, deems necessary or desirable (a) to preserve or protect the
Collateral, or any portion thereof, (b) to enhance the likelihood of, or
maximize the amount of, repayment of the Advances and other Obligations, or (c)
to pay any other amount chargeable to Loan Parties pursuant to the terms of this
Agreement (the “Protective Advances”). The Agent making the Protective Advance
shall notify the other Agent and each Lender and the Borrowing Agent in writing
of each such Protective Advance, which notice shall include a description of the
purpose of such Protective Advance. To the extent any Protective Advances are
not actually funded by the Lenders as provided for in this Section 16.2(f), any
such Protective Advances funded by either Agent shall be deemed to be Revolving
Advances (if made by the Administrative Agent) or Term Loans (if made by the
Term Loan Agent) made by and owing to such Agent, and such Agent shall be
entitled to all rights (including accrual of interest) and remedies of a
Revolving Lender or Term Loan Lender, as the case may be, under this Agreement
and the Other Documents with respect to such Revolving Advances or Term Loans.

 

16.3 Successors and Assigns; Participations; New Lenders.

 

(a) This Agreement shall be binding upon and inure to the benefit of Loan
Parties, each Agent, each Lender, all future holders of the Obligations and
their respective successors and assigns, except that no Loan Party may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Agent and each Lender.

 

(b) Each Loan Party acknowledges that in the regular course of commercial
banking business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other Persons (each such transferee
or purchaser of a participating interest, a “Participant”). Each Participant may
exercise all rights of payment (including rights of set-off) with respect to the
portion of such Advances held by it or other Obligations payable hereunder as
fully as if such Participant were the direct holder thereof (subject to the
requirements and limitations herein, including the requirements under Section
3.10(e) (it being understood that the documentation required under Section
3.10(e) shall be delivered to the participating Lender)) provided that in no
event shall (a) any Loan Party be required to pay to any Participant more than
the amount which it would have been required to pay to the Lender which granted
a participation interest in its Advances or other Obligations payable hereunder
to such Participant had such Lender retained such interest in the Advances
hereunder or other Obligations payable hereunder (except to the extent that such
greater amount results from a Change in Law that occurs after the Participant
acquired the applicable participation), and (b) any Loan Party be required to
pay any such amount arising from the same circumstances and with respect to the
same Advances or other Obligations payable hereunder to both such Lender and
such Participant. Each Loan Party hereby grants to any Participant a continuing
security interest in any deposits, moneys or other property actually or
constructively held by such Participant as security for the Participant’s
interest in the Advances. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary 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 any
Obligations under the this Agreement or any Other Documents (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
commitments, loans, letters of credit or its other obligations under this
Agreement or any Other Documents) to any Person except to the extent that such
disclosure is necessary to establish that such 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 shall have no
responsibility for maintaining a Participant Register.

 

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(c) Any Lender may sell, assign or transfer all or any part of its rights and
obligations under or relating to Revolving Advances and/or Term Loans, as
applicable, under this Agreement and the Other Documents to one or more
additional Persons and one or more additional Persons may commit to make
Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less
than $3,000,000 or such smaller increments as the applicable Agent approves
(provided that such minimum amount shall not apply to an assignment by a Lender
to another Lender, an Affiliate of such Lender or a Related Fund of such
Lender), pursuant to a Commitment Transfer Supplement, executed by a Purchasing
Lender, the transferor Lender and Administrative Agent (or Term Loan Agent, as
applicable) and delivered to Administrative Agent (or Term Loan Agent, as
applicable) for recording, provided, that (i) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to each of the
Revolving Advances and/or Term Loans under this Agreement in which such Lender
has an interest; (ii) any assignment by any Revolving Lender or any Term Loan
Lender shall require the written consent of each Agent; and (iii) no written
consent of Administrative Agent or Term Loan Agent shall be required (A) in
connection with any assignment by a Lender to another Lender, an Affiliate of
such Lender or a Related Fund of such Lender or (B) if such assignment is in
connection with any merger, consolidation, sale, transfer, or other disposition
of all or any substantial portion of the business or loan portfolio of such
Lender. Upon such execution, delivery, acceptance and recording, from and after
the transfer effective date determined pursuant to such Commitment Transfer
Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Revolving Commitment Percentage and/or
Term Loan Commitment Percentage as set forth therein, and (ii) the transferor
Lender thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Revolving Commitment
Percentages and/or Term Loan Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. Each Loan Party
hereby consents to the addition of such Purchasing Lender and the resulting
adjustment of the Revolving Commitment Percentages and/or Term Loan Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. Loan Parties shall execute and deliver such
further documents and do such further acts and things in order to effectuate the
foregoing.

 

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(d) Any Revolving Lender, with the consent of Administrative Agent, or any Term
Loan Lender, with the consent of Term Loan Agent, in each case, which shall not
be unreasonably withheld, delayed or conditioned, may directly or indirectly
sell, assign or transfer all or any portion of its rights and obligations under
or relating to Revolving Advances and/or Term Loans, as applicable, under this
Agreement and the Other Documents to an entity, whether a corporation,
partnership, trust, limited liability company or other entity that (i) is
engaged in making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and (ii) is
administered, serviced or managed by the assigning Lender or an Affiliate of
such Lender (a “Purchasing CLO” and together with each Participant and
Purchasing Lender, each a “Transferee” and collectively the “Transferees”),
pursuant to a Commitment Transfer Supplement modified as appropriate to reflect
the interest being assigned (“Modified Commitment Transfer Supplement”),
executed by any intermediate purchaser, the Purchasing CLO, the transferor
Lender, and Administrative Agent (or Term Loan Agent, as applicable) as
appropriate and delivered to Administrative Agent (or Term Loan Agent, as
applicable) for recording. Upon such execution and delivery, from and after the
transfer effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose. Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO. Each Loan Party hereby consents to the addition of such
Purchasing CLO. Loan Parties shall execute and deliver such further documents
and do such further acts and things in order to effectuate the foregoing.

 

(e) Administrative Agent and Term Loan Agent, acting as a non-fiduciary agents
of Loan Parties, shall maintain at its respective address a copy of each
Commitment Transfer Supplement and Modified Commitment Transfer Supplement
delivered to it and a register (the “Register”) for the recordation of the names
and addresses of each Revolving Lender and Term Loan Lender and the outstanding
principal, accrued and unpaid interest and other fees due hereunder. The entries
in the Register shall be conclusive, in the absence of manifest error, and each
Loan Party, each Agent, and each Lender shall treat each Person whose name is
recorded in the Register as the owner of the Advance recorded therein for the
purposes of this Agreement. The Register shall be available for inspection by
Borrowing Agent or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent (or Term Loan Agent) shall receive
a fee in the amount of $3,500 (except the payment of such fee shall not be
required in connection with an assignment by a Lender to another Lender, an
Affiliate of such Lender or a Related Fund of such Lender) payable by the
applicable Purchasing Lender and/or Purchasing CLO upon the effective date of
each transfer or assignment (other than to an intermediate purchaser) to such
Purchasing Lender and/or Purchasing CLO. Notwithstanding anything to the
contrary contained in this Section 16.3(e), a Lender may assign any or all of
its rights under this Agreement and the Other Documents to an Affiliate of such
Lender or a Related Fund of such Lender without delivering a Commitment Transfer
Supplement to Agents or to any other Person (a “Related Party Assignment”);
provided, however, that (A) Borrowers and Agents may continue to deal solely and
directly with such assigning Lender until a Commitment Transfer Supplement has
been delivered to Administrative Agent for recordation on the Register, (B) the
failure of such assigning Lender to deliver a Commitment Transfer Supplement to
the applicable Agent shall not affect the legality, validity, or binding effect
of such assignment, and (C) a Commitment Transfer Supplement between the
assigning Lender and an Affiliate of such Lender or a Related Fund of such
Lender shall be effective as of the date specified in such Commitment Transfer
Supplement and recordation on the Related Party Register referred to in the last
sentence of this clause (e). In the case of an assignment pursuant to the
preceding sentence as to which a Commitment Transfer Supplement is not delivered
to the applicable Agent, the assigning Lender shall, acting solely for this
purpose as a non-fiduciary agent of the Borrowers, maintain, or cause to be
maintained, a register (the “Related Party Register”) comparable to the Register
on behalf of Borrowers. The Related Party Register shall be available for
inspection by Borrowers and any Lender at any reasonable time and from time to
time upon reasonable prior notice.

 

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(f) Each Loan Party authorizes each Lender to disclose to any Transferee and any
prospective Transferee any and all financial information in such Lender’s
possession concerning such Loan Party which has been delivered to such Lender by
or on behalf of such Loan Party pursuant to this Agreement or in connection with
such Lender’s credit evaluation of such Loan Party.

 

(g) Notwithstanding anything to the contrary contained in this Agreement, any
Lender may at any time and from time to time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or loans made to such Lender pursuant to
securitization or similar credit facility (a ”Securitization”); provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

16.4 Application of Payments. Administrative Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion of the Obligations. To the extent that any
Loan Party makes a payment or any Agent or any Lender receives any payment or
proceeds of the Collateral for any Loan Party’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver, custodian or any other
party under any bankruptcy law, common law or equitable cause, then, to such
extent, the Obligations or part thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been received by
such Agent or such Lender.

 

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16.5 Indemnity. Each Loan Party shall defend, protect, indemnify, pay and save
harmless each Agent, Issuer, each Lender and each of their respective officers,
directors, Affiliates, attorneys, employees and agents (each an “Indemnified
Party”) for and from and against any and all claims, demands, liabilities,
obligations, losses, damages, penalties, fines, actions, judgments, suits,
costs, charges, expenses and disbursements of any kind or nature whatsoever
(including reasonable and documented fees and disbursements of counsel
(collectively, “Claims”) which may be imposed on, incurred by, or asserted
against any Indemnified Party in arising out of or in any way relating to or as
a consequence, direct or indirect, of: (i) this Agreement, the Other Documents,
the Advances and other Obligations and/or the transactions contemplated hereby
including the Transactions, (ii) any action or failure to act or action taken
only after delay or the satisfaction of any conditions by any Indemnified Party
in connection with and/or relating to the negotiation, execution, delivery or
administration of the Agreement and the Other Documents, the credit facilities
established hereunder and thereunder and/or the transactions contemplated hereby
including the Transactions, (iii) any Loan Party’s failure to observe, perform
or discharge any of its covenants, obligations, agreements or duties under or
breach of any of the representations or warranties made in this Agreement and
the Other Documents, (iv) the enforcement of any of the rights and remedies of
each Agent, Issuer or any Lender under the Agreement and the Other Documents,
(v) any threatened or actual imposition of fines or penalties, or disgorgement
of benefits, for violation of any Anti-Terrorism Law by any Loan Party or any
Subsidiary of any Loan Parties, and (vi) any claim, litigation, proceeding or
investigation instituted or conducted by any Governmental Body or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not any Agent or any Lender is a
party thereto, in each such case except to the extent that any of the foregoing
arises out of the bad faith, gross negligence or willful misconduct of the
Indemnified Party (as determined by a court of competent jurisdiction in a final
and non-appealable judgment). Without limiting the generality of any of the
foregoing, each Loan Party shall defend, protect, indemnify, pay and save
harmless each Indemnified Party from (x) any Claims which may be imposed on,
incurred by, or asserted against any Indemnified Party arising out of or in any
way relating to or as a consequence, direct or indirect, of the issuance of any
Letter of Credit hereunder and (y) any Claims which may be imposed on, incurred
by, or asserted against any Indemnified Party under any Environmental Laws with
respect to or in connection with the Real Property, any Hazardous Discharge, the
presence of any Hazardous Materials affecting the Real Property (whether or not
the same originates or emerges from the Real Property or any contiguous real
estate), including any Claims consisting of or relating to the imposition or
assertion of any Lien on any of the Real Property under any Environmental Laws
and any loss of value of the Real Property as a result of the foregoing except
to the extent such loss, liability, damage and expense is attributable to any
Hazardous Discharge resulting from actions on the part of any Agent or any
Lender. Loan Parties’ obligations under this Section 16.5 shall arise upon the
discovery of the presence of any Hazardous Materials at the Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Materials, in each such case except to the extent that any of the foregoing
arises out of the bad faith, gross negligence or willful misconduct of the
Indemnified Party (as determined by a court of competent jurisdiction in a final
and non-appealable judgment). Without limiting the generality of the foregoing,
this indemnity shall extend to any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including fees and disbursements of counsel) asserted
against or incurred by any of the Indemnified Parties by any Person under any
Environmental Laws or similar laws by reason of any Loan Party’s or any other
Person’s failure to comply with laws applicable to solid or hazardous waste
materials, including Hazardous Materials and Hazardous Waste, or other Toxic
Substances , in each such case except to the extent that any of the foregoing
arises out of the bad faith, gross negligence or willful misconduct of the
Indemnified Party (as determined by a court of competent jurisdiction in a final
and non-appealable judgment). This Section 16.5 shall not apply with respect to
Taxes other than any Taxes that represent losses, claims or damages from any
non-Tax claim.

 

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16.6 Notice. Any notice or request hereunder may be given to Borrowing Agent or
any Loan Party or any Agent or any Lender at their respective addresses set
forth below or at such other address as may hereafter be specified in a notice
designated as a notice of change of address under this Section. Any notice,
request, demand, direction or other communication (for purposes of this Section
16.6 only, a “Notice”) to be given to or made upon any party hereto under any
provision of this Agreement shall be given or made by telephone or in writing
(which includes by means of electronic transmission (i.e., “e-mail”) or
facsimile transmission or by setting forth such Notice on a website to which
Loan Parties are directed (an “Internet Posting”) if Notice of such Internet
Posting (including the information necessary to access such site) has previously
been delivered to the applicable parties hereto by another means set forth in
this Section 16.6) in accordance with this Section 16.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on Section 16.6 hereof or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 16.6. Any Notice shall be effective:

 

(a) In the case of hand-delivery, when delivered;

 

(b) If given by mail, four (4) days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;

 

(c) In the case of a telephonic Notice, when a party is contacted by telephone,
if delivery of such telephonic Notice is confirmed no later than the next
Business Day by hand delivery, a facsimile or electronic transmission, an
Internet Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);

 

(d) In the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;

 

(e) In the case of electronic transmission, when actually received;

 

(f) In the case of an Internet Posting, upon delivery of a Notice of such
posting (including the information necessary to access such site) by another
means set forth in this Section 16.6; and

 

(g) If given by any other means (including by overnight courier), when actually
received.

 

Any Lender giving a Notice to Borrowing Agent or any Loan Party shall
concurrently send a copy thereof to each Agent, and each Agent shall promptly
notify the other Lenders of its receipt of such Notice.

 

(i) [Reserved].

 

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(ii) If to Administrative Agent, Collateral Agent, Term Loan Agent, Issuer,
Swing Loan Lender, any Revolving Lender or any Term Loan Lender, to:

 

MGG Investment Group LP

One Penn Plaza, 53rd Floor

New York, New York 10119

Attention: Kevin F. Griffin

Telephone: 212-356-6100

Email: creditagreementnotices@mgginv.com

 

with a copy to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attention: Frederic L. Ragucci, Esq.

Telephone: (212) 756-2409

Facsimile: (212) 593-5955

 

(iii) If to a Lender other than a Lender which is an Agent, as specified on the
signature pages hereof (or, in the case of any Lender that became party to this
Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, as
specified in the applicable Commitment Transfer Supplement).

 

(iv) If to Borrowing Agent or any Loan Party:

 

GEE Group Inc.

12950 Race Track Rd., Suite 216

Tampa, Florida 33626

Attention: Andrew J. Norstrud

Telephone: (813) 803-8275

Email: andrew.norstrud@geegroup.com

 

with a copy to:

 

McDermott Will & Emery LLP

340 Madison Avenue

New York, NY 10173-1922

Attention: John J. Sullivan, Esq.

Telephone: (212) 547 5567

Email: jsullivan@mwe.com

 

16.7 Survival. The obligations of Loan Parties under Sections 2.2(f), 2.2(g),
2.2(h), 3.7, 3.8, 3.9, 3.10, 16.5 and 16.9 and the obligations of Lenders under
Sections 2.2, 2.15(b), 2.16, 2.18, 2.19, 14.8 and 16.5, shall survive
termination of this Agreement and the Other Documents and payment in full of the
Obligations.

 

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16.8 Severability. If any part of this Agreement is contrary to, prohibited by,
or deemed invalid under Applicable Laws, such provision shall be inapplicable
and deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given effect so
far as possible.

 

16.9 Expenses. Loan Parties will pay on demand, all costs and expenses incurred
by or on behalf of each Agent (and, in the case of clauses (b) through (n)
below, each Lender), including, without limitation, all reasonable and
documented fees, costs, client charges and expenses of counsel for each Agent
(and, in the case of clauses (b) through (n) below, each Lender), accounting,
due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, the rating of the Advances, title searches and reviewing
environmental assessments, miscellaneous disbursements, examination, travel,
lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the Other Documents (including, without limitation, the
preparation of any additional Other Documents pursuant to Section 6.16 or the
review of any of the agreements, instruments and documents referred to in
Section 4.6), (b) any requested amendments, waivers or consents to this
Agreement or the Other Documents whether or not such documents become effective
or are given, (c) the preservation and protection of Agents’ and Lenders’ rights
under this Agreement or the Other Documents, (d) the defense of any claim or
action asserted or brought against any Agent or any Lender by any Person that
arises from or relates to this Agreement, any Other Document, Agents’ or
Lenders’ claims against any Loan Party, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court
proceeding arising from or related to this Agreement or any Other Document, (f)
the filing of any petition, complaint, answer, motion or other pleading by any
Agent or any Lender, or the taking of any action in respect of the Collateral or
other security, in connection with this Agreement or any Other Document, (g) the
protection, collection, lease, sale, taking possession of or liquidation of, any
Collateral or other security in connection with this Agreement or any Other
Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any Other
Document, (i) any attempt to collect from any Loan Party, (j) any Environmental
Complaint, Environmental Liability or Remedial Action arising from or in
connection with the past, present or future operations of, or any property
currently, formerly or in the future owned, leased or operated by, any Loan
Party, any of its Subsidiaries or any predecessor in interest, (k) any
Environmental Lien, (l) the rating of the Advances by one or more rating
agencies in connection with any Lender’s Securitization, or (m) the receipt by
any Agent or any Lender of any advice from professionals with respect to any of
the foregoing. Without limitation of the foregoing or any other provision of any
Other Document: (x) the Loan Parties agree to pay all broker fees that may
become due in connection with the Transactions and (y) if any Loan Party fails
to perform any covenant or agreement contained herein or in any Other Document,
any Agent may itself perform or cause performance of such covenant or agreement,
and the expenses of such Agent incurred in connection therewith shall be
reimbursed on demand by the Loan Parties. The obligations of the Loan Parties
under this Section 16.9 shall survive the repayment of the Obligations and
discharge of any Liens granted under this Agreement and the Other Documents.

 

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16.10 Injunctive Relief. Each Loan Party recognizes that, in the event any Loan
Party fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefor, each Agent, if such Agent so requests,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving that actual damages are not an adequate remedy.

 

16.11 Consequential Damages. No Agent nor any Lender, nor any agent or attorney
for any of them, shall be liable to any Loan Party (or any Affiliate of any such
Person) for indirect, punitive, exemplary or consequential damages arising from
any breach of contract, tort or other wrong relating to the establishment,
administration or collection of the Obligations or as a result of any
transaction contemplated under this Agreement or any Other Document.

 

16.12 Captions. The captions at various places in this Agreement are intended
for convenience only and do not constitute and shall not be interpreted as part
of this Agreement.

 

16.13 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of and by different parties hereto on separate counterparts, all of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement. Any signature delivered by a party
by facsimile or electronic transmission (including email transmission of a PDF
image) shall be deemed to be an original signature hereto.

 

16.14 Construction. The parties acknowledge that each party and its counsel have
reviewed this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendments, schedules or
exhibits thereto.

 

16.15 Confidentiality; Sharing Information. Each Agent, each Lender and each
Transferee shall hold all non-public information obtained by such Agent, such
Lender or such Transferee pursuant to the requirements of this Agreement in
accordance with such Agent’s, such Lender’s and such Transferee’s customary
procedures for handling confidential information of this nature; provided,
however, each Agent, each Lender and each Transferee may disclose such
confidential information (a) to its Affiliates and to its and its Affiliates’
respective equityholders (including, without limitation, investors and/or
partners), directors, officers, employees, agents, trustees, counsel, advisors
and representatives, (b) to any Agent, any Lender, any prospective Transferees
and any party to a Securitization (including, for the avoidance of doubt,
leverage providers) (it being understood that the Persons to whom such
disclosure is made in clauses (a) and (b) of this Section 16.15 will be informed
of the confidential nature of such information and instructed to keep such
information confidential in accordance with this Section 16.15), and (c) as
required or requested by any Governmental Body or representative thereof or
pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, each Agent, each Lender and each Transferee shall
use its reasonable best efforts prior to disclosure thereof, to notify the
applicable Loan Party of the applicable request for disclosure of such
non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the financial
condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant
to legal process and (ii) in no event shall any Agent, any Lender or any
Transferee be obligated to return any materials furnished by any Loan Party
other than those documents and instruments in possession of any Agent or any
Lender in order to perfect its Lien on the Collateral once the Obligations have
been paid in full and this Agreement has been terminated. Each Loan Party
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to such Loan Party or one or more of
its Affiliates (in connection with this Agreement or otherwise) by any Lender or
by one or more Subsidiaries or Affiliates of such Lender and each Loan Party
hereby authorizes each Lender to share any information delivered to such Lender
by such Loan Party and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement, to any
such Subsidiary or Affiliate of such Lender, it being understood that any such
Subsidiary or Affiliate of any Lender receiving such information shall be bound
by the provisions of this Section 16.15 as if it were a Lender hereunder. Such
authorization shall survive the repayment of the other Obligations and the
termination of this Agreement. Notwithstanding any non-disclosure agreement or
similar document executed by any Agent in favor of any Loan Party or any of any
Loan Party’s Affiliates, the provisions of this Agreement shall supersede such
agreements.

 

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16.16 Publicity. Each Loan Party and each Lender hereby authorizes each Agent to
make appropriate announcements of the financial arrangement entered into among
Loan Parties, Agents and Lenders, including announcements which are commonly
known as tombstones, in such publications and to such selected parties as such
Agent shall in its sole and absolute discretion deem appropriate.

 

16.17 Certifications From Banks and Participants; USA PATRIOT Act.

 

(a) Each Lender or assignee or participant of a Lender that is not incorporated
under the Laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
PATRIOT Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to the Agents the certification, or, if applicable,
recertification, certifying that such Lender is not a “shell” and certifying to
other matters as required by Section 313 of the USA PATRIOT Act and the
applicable regulations: (1) within ten (10) days after the Closing Date, and (2)
as such other times as are required under the USA PATRIOT Act.

 

(b) The USA PATRIOT Act requires all financial institutions to obtain, verify
and record certain information that identifies individuals or business entities
which open an “account” with such financial institution. Consequently, Lender
may from time to time request, and each Loan Party shall provide to Lender, such
Loan Party’s name, address, tax identification number and/or such other
identifying information as shall be necessary for Lender to comply with the USA
PATRIOT Act and any other Anti-Terrorism Law.

 

16.18 Anti-Terrorism Laws.

 

(a) Each Loan Party represents and warrants that (i) no Covered Entity is a
Sanctioned Person and (ii) no Covered Entity, either in its own right or through
any third party, (A) has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (B) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (C) engages in any dealings or
transactions prohibited by any Anti-Terrorism Law.

 

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(b) Each Loan Party covenants and agrees that (i) no Covered Entity will become
a Sanctioned Person, (ii) no Covered Entity, either in its own right or through
any third party, will (B) have any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (C) do business in or with, or derive any of its income from
investments in or transactions with, any Sanctioned Country or Sanctioned Person
in violation of any Anti-Terrorism Law; (D) engage in any dealings or
transactions prohibited by any Anti-Terrorism Law or (E) use the Advances to
fund any operations in, finance any investments or activities in, or, make any
payments to, a Sanctioned Country or Sanctioned Person in violation of any
Anti-Terrorism Law, (iii) the funds used to repay the Obligations will not be
derived from any unlawful activity, (iv) each Covered Entity shall comply with
all Anti-Terrorism Laws and (v) the Loan Parties shall promptly notify the
Agents in writing upon the occurrence of a Reportable Compliance Event.

 

XVII. GUARANTY.

 

17.1 Guaranty. Each Guarantor hereby unconditionally guarantees, as a primary
obligor and not merely as a surety, jointly and severally with each other
Guarantor when and as due, whether at maturity, by acceleration, by notice of
prepayment or otherwise, the due and punctual performance of all Obligations;
provided that with respect to Obligations under or in respect of any Swap
Obligation, the foregoing guarantee shall only be effective to the extent that
such Guarantor is a Qualified ECP Loan Party at the time such Swap Obligation is
entered into and such Obligations and such guarantee thereof are not Excluded
Hedge Liabilities). Each payment made by any Guarantor pursuant to this Guaranty
shall be made in lawful money of the United States in immediately available
funds.

 

17.2 Waivers. Each Guarantor hereby absolutely, unconditionally and irrevocably
waives (i) promptness, diligence, notice of acceptance, notice of presentment of
payment and any other notice hereunder, (ii) demand of payment, protest, notice
of dishonor or nonpayment, notice of the present and future amount of the
Obligations and any other notice with respect to the Obligations, (iii) any
requirement that any Agent, any Lender protect, secure, perfect or insure any
security interest or Lien on any property subject thereto or exhaust any right
or take any action against any other Loan Party, or any Person or any
Collateral, (iv) any other action, event or precondition to the enforcement
hereof or the performance by each such Guarantor of the Obligations, and (v) any
defense arising by any lack of capacity or authority or any other defense of any
Loan Party or any notice, demand or defense by reason of cessation from any
cause of Obligations other than payment and performance in full of the
Obligations by the Loan Parties and any defense that any other guarantee or
security was or was to be obtained by any Agent.

 

17.3 No Defense. No invalidity, irregularity, voidableness, voidness or
unenforceability of this Agreement or any Other Document or any other agreement
or instrument relating thereto, or of all or any part of the Obligations or of
any collateral security therefor shall affect, impair or be a defense hereunder.

 

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17.4 Guaranty of Payment. The Guaranty hereunder is one of payment and
performance, not collection, and the obligations of each Guarantor hereunder are
independent of the Obligations of the other Loan Parties, and a separate action
or actions may be brought and prosecuted against any Guarantor to enforce the
terms and conditions of this Article XVII, irrespective of whether any action is
brought against any other Loan Party or other Persons or whether any other Loan
Party or other Persons are joined in any such action or actions. Each Guarantor
waives any right to require that any resort be had by any Agent or any Lender to
any security held for payment of the Obligations or to any balance of any
deposit account or credit on the books of any Agent or any Lender in favor of
any Loan Party or any other Person. No election to proceed in one form of action
or proceedings, or against any Person, or on any Obligations, shall constitute a
waiver of each Agent’s right to proceed in any other form of action or
proceeding or against any other Person unless such Agent has expressed any such
right in writing. Without limiting the generality of the foregoing, no action or
proceeding by any Agent against any Loan Party under any document evidencing or
securing indebtedness of any Loan Party to any Agent shall diminish the
liability of any Guarantor hereunder, except to the extent any Agent receives
actual payment on account of Obligations by such action or proceeding,
notwithstanding the effect of any such election, action or proceeding upon the
right of subrogation of any Guarantor in respect of any Loan Party.

 

17.5 Liabilities Absolute. The liability of each Guarantor hereunder shall be
absolute, unlimited and unconditional and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any claim, defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of any other Obligation or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor
shall not be discharged or impaired, released, limited or otherwise affected by:

 

(a) any change in the manner, place or terms of payment or performance, and/or
any change or extension of the time of payment or performance of, release,
renewal or alteration of, or any new agreements relating to any Obligation, any
security therefor, or any liability incurred directly or indirectly in respect
thereof, or any rescission of, or amendment, waiver or other modification of, or
any consent to departure from, this Agreement or any Other Document, including
any increase in the Obligations resulting from the extension of additional
credit to any Loan Party or otherwise;

 

(b) any sale, exchange, release, surrender, loss, abandonment, realization upon
any property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, all or any of the Obligations, and/or any offset there
against, or failure to perfect, or continue the perfection of, any Lien in any
such property, or delay in the perfection of any such Lien, or any amendment or
waiver of or consent to departure from any other guaranty for all or any of the
Obligations;

 

(c) the failure of any Agent or any Lender to assert any claim or demand or to
enforce any right or remedy against any Loan Party or any other Loan Party or
any other Person under the provisions of this Agreement or any Other Document or
any other document or instrument executed and delivered in connection herewith
or therewith;

 

  125

 

 

(d) any settlement or compromise of any Obligation, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and any subordination of the payment of all or any
part thereof to the payment of any obligation (whether due or not) of any Loan
Party to creditors of any Loan Party other than any other Loan Party;

 

(e) any manner of application of Collateral, or proceeds thereof, to all or any
of the Obligations, or any manner of sale or other disposition of any Collateral
for all or any of the Obligations or any other assets of any Loan Party; and

 

(f) any other agreements or circumstance of any nature whatsoever that may or
might in any manner or to any extent vary the risk of any Guarantor, or that
might otherwise at law or in equity constitute a defense available to, or a
discharge of, the Guaranty hereunder and/or the obligations of any Guarantor, or
a defense to, or discharge of, any Loan Party or any other Person or party
hereto or the Obligations or otherwise with respect to the Advances or other
financial accommodations to Loan Parties pursuant to this Agreement and/or the
Other Documents.

 

17.6 Waiver of Notice. Agents shall have the right to do any of the above
without notice to or the consent of any Guarantor and each Guarantor expressly
waives any right to notice of, consent to, knowledge of and participation in any
agreements relating to any of the above or any other present or future event
relating to Obligations whether under this Agreement or otherwise or any right
to challenge or question any of the above and waives any defenses of such
Guarantor which might arise as a result of such actions.

 

17.7 Agents’ Discretion

 

. Agents may at any time and from time to time (whether prior to or after the
revocation or termination of this Agreement) without the consent of, or notice
to, any Guarantor, and without incurring responsibility to any Guarantor or
impairing or releasing the Obligations, apply any sums by whomsoever paid or
howsoever realized to any Obligations regardless of what Obligations remain
unpaid in accordance with the provisions of this Agreement.

 

17.8 Reinstatement.

 

(a) The Guaranty provisions herein contained shall continue to be effective or
be reinstated, as the case may be, if claim is ever made upon any Agent or any
Lender for repayment or recovery of any amount or amounts received by such
Person in payment or on account of any of the Obligations and such Person repays
all or part of said amount for any reason whatsoever, including, without
limitation, by reason of any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or the respective
property of each, or any settlement or compromise of any claim effected by such
Person with any such claimant (including any Loan Party); and in such event each
Guarantor hereby agrees that any such judgment, decree, order, settlement or
compromise or other circumstances shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any note or other
instrument evidencing any Obligation, and each Guarantor shall be and remain
liable to Agents and/or Lenders for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by such
Person(s).

 

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(b) No Agent shall not be required to marshal any assets in favor of any
Guarantor, or against or in payment of Obligations.

 

(c) No Guarantor shall be entitled to claim against any present or future
security held by any Agent from any Person for Obligations in priority to or
equally with any claim of such Agent, or assert any claim for any liability of
any Loan Party to any Guarantor in priority to or equally with claims of any
Agent for Obligations, and no Guarantor shall be entitled to compete with any
Agent with respect to, or to advance any equal or prior claim to any security
held by such Agent for Obligations.

 

(d) If any Loan Party makes any payment to any Agent, which payment is wholly or
partly subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to any Person under any federal or provincial
statute or at common law or under equitable principles, then to the extent of
such payment, the Obligation intended to be paid shall be revived and continued
in full force and effect as if the payment had not been made, and the resulting
revived Obligation shall continue to be guaranteed, uninterrupted, by each
Guarantor hereunder.

 

(e) All present and future monies payable by any Loan Party to any Guarantor,
whether arising out of a right of subrogation or otherwise, are assigned to
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties as security for such Guarantor’s liability to Agents and Lenders
hereunder and are postponed and subordinated to Agents’ and Lenders’ prior right
to payment in full of Obligations. Except to the extent prohibited otherwise by
this Agreement, all monies received by any Guarantor from any Loan Party shall
be held by such Guarantor as agent and trustee for Agents. This assignment,
postponement and subordination shall only terminate when the Obligations are
paid in full in cash and this Agreement is irrevocably terminated.

 

(f) Each Loan Party acknowledges this assignment, postponement and subordination
and, except as otherwise set forth herein, agrees to make no payments to any
Guarantor without the prior written consent of Agents. Each Loan Party agrees to
give full effect to the provisions hereof.

 

[signature pages follows]

 

  127

 

 

Each of the parties has signed this Agreement as of the day and year first above
written.

 

BORROWERS:

GEE GROUP INC.

 

By: ________________________

Name:

Title:

 

SCRIBE SOLUTIONS INC.

 

By: ________________________

Name:

Title:

 

AGILE RESOURCES, INC.

 

By: ________________________

Name:

Title:

 

ACCESS DATA CONSULTING CORPORATION

 

By: ________________________

Name:

Title:

 

TRIAD PERSONNEL SERVICES, INC.

 

By: ________________________

Name:

Title:

 

TRIAD LOGISTICS, INC.

 

By: ________________________

Name:

Title:

 

PALADIN CONSULTING, INC.

 

By: ________________________

Name:

Title:

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

 

 

 

 

BMCH, INC.

 

By: ________________________

Name:

Title:

 

GEE GROUP PORTFOLIO INC.

 

By: ________________________

Name:

Title:

 

SNI COMPANIES

 

By: ________________________

Name:

Title:

 

 

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

 

 

 

 

AGENTS:

 

PNC BANK, NATIONAL ASSOCIATION,

MGG INVESTMENT GROUP LP,

as Administrative Agent and Collateral Agent

 

 

 

By: __________________________

Name:

Title:

 

 

 

MGG INVESTMENT GROUP LP,

as Term Loan Agent

 

By: __________________________

Name:

Title:

 

LENDERS:

PNC BANK, NATIONAL ASSOCIATION,

as Revolving Lender and a Term Loan Lender

 

By: ___________________________

Name:

Title:

 

 

 

MGG SPECIALTY FINANCE FUND LP, as a

Term Loan Lender

 

By: __________________________

Name:

Title:

 

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

 

 

 

 

 

MGG SF EVERGREEN FUND LP, as a Term Loan Lender

 

By: __________________________

Name:

Title:

 

 

 

MGG SF DRAWDOWN UNLEVERED FUND LP, as a Term Loan Lender

 

By: __________________________

Name:

Title:

 

MGG SF EVERGREEN UNLEVERED FUND LP, as a Term Loan Lender

 

By: __________________________

Name:

Title:

 

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

 

 

 

  

Schedule 1.1

Commitments

 

Lender

Revolving Commitment Amount

Revolving Term Loan Commitment Amount

Revolving Loan Commitment Percentage

Term Loan Commitment Amount

Term Loan Commitment Percentage

Total Commitment

Amount

Total Commitment Percentage

MGG Specialty Finance Fund LP(BVI) Limited

$11,473,840.34

$25,000,0000

100%

$7,500,000

15.385%

$32,500,00011,473,840.34

44.068%

MGG Funding II, LLCSF Drawdown Master Fund (Cayman) LP

$4,414,517.59

$0

0%

$20,687,415

42.436%

$20,687,4154,414,517.59

28.051%

MGG SF Drawdown Unlevered Fund LP

$2,426,288.00

$0

0%

$5,825,504

11.950%

$5,825,5042,426,288.00

7.899%

MGG SF Evergreen Unlevered Fund LP

$0

0%

$5,282,986

10.837%

$5,282,986

7.163%

MGG SF Evergreen Master Fund (Cayman) LP

$3,600,515.07

$0

0%

$3,873,982

7.947%

$3,873,9823,600,515.07

5.253%

MGG SF Evergreen Unlevered Fund LP

$2,941,899.00

$0

$2,941,899.00

MGG SF DrawdownEvergreen Unlevered Master Fund II (Cayman) LP

$142,940.00

$0

0%

$5,580,113

11.446%

$5,580,113142,940.00

7.566%

Total

$25,000,000

$25,000,0000

100%

$48,750,000

100.000%

$73,750,00025,000,000

100.000%

 

[SIGNATURE PAGE TO LOAN AGREEMENT]