Exhibit 10.1

 

 

 

[ex_101319img001.gif]

 

 

 

 

CREDIT AGREEMENT

 

 

 

by and between

 

 

 

 

PROTO LABS, INC.

 

 

and

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

 

 

 

 

Dated as of November 27, 2017

 

 

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

 

 

TABLE OF CONTENTS

 

 

Article 1. DEFINITIONS AND ACCOUNTING TERMS

1

Section 1.1

Defined Terms

1

Section 1.2

Accounting Terms and Calculations

14

Section 1.3

Computation of Time Periods

14

Section 1.4

Other Definitional Terms

14

     

Article 2. AMOUNT AND TERMS OF CREDIT FACILITIES

14

Section 2.1

Revolving Loan and Letter of Credit Facilities

14

Section 2.2

Letter of Credit Subfeature

15

Section 2.3

Payments and Prepayments.

15

Section 2.4

Interest

16

Section 2.5

Fees and Expenses.

17

Section 2.6

Increased Costs

17

Section 2.7

[Reserved.]

18

Section 2.8

Termination of Revolving Loan Commitment

18

Section 2.9

Use of Revolving Loan Proceeds

19

Section 2.10

Collection of Payments

19

Section 2.11

Guaranties

19

Section 2.12

Rapid Manufacturing Acquisition

19

     

Article 3. CONDITIONS PRECEDENT

20

Section 3.1

Conditions of Initial Advances

20

Section 3.2

Conditions Precedent to all Advances

22

     

Article 4. REPRESENTATIONS AND WARRANTIES

22

Section 4.1

Organization, Standing, Etc.

22

Section 4.2

Authorization and Validity

22

Section 4.3

No Conflict; No Default; No Subordination

23

Section 4.4

Government Consent

23

Section 4.5

Financial Statements/Disclosure/Solvency

23

Section 4.6

Litigation and Contingent Liabilities

24

Section 4.7

Compliance

24

Section 4.8

Environmental, Health and Safety Laws

24

Section 4.9

ERISA

24

Section 4.10

Regulation U

25

Section 4.11

Ownership of Property

25

Section 4.12

Taxes

25

Section 4.13

Trademarks, Patents

25

Section 4.14

Investment Company Act

25

Section 4.15

Subsidiaries

25

Section 4.16

Employee Relations

25

Section 4.17

Burdensome Provisions

26

Section 4.18

Anti-Terrorism; Anti-Money Laundering

26

 

i

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

 

 

Section 4.19

Disclosure

26

Section 4.20

Insurance

26

     

Article 5. AFFIRMATIVE COVENANTS

27

Section 5.1

Financial Statements and Reports

27

Section 5.2

Financial Covenants

29

Section 5.3

Corporate Existence

29

Section 5.4

Insurance

29

Section 5.5

Payment of Taxes and Claims

30

Section 5.6

Inspection

30

Section 5.7

Maintenance of Properties and Licenses

30

Section 5.8

Books and Records

30

Section 5.9

Compliance

31

Section 5.10

ERISA

31

Section 5.11

Additional Domestic Subsidiaries

31

Section 5.12

Use of Proceeds

31

Section 5.13

Depository Accounts

31

     

Article 6. NEGATIVE COVENANTS

31

Section 6.1

Consolidation and Merger; Asset Acquisitions; Investments

32

Section 6.2

Sale of Assets

33

Section 6.3

Indebtedness

34

Section 6.4

Liens

34

Section 6.5

No Further Negative Pledges; Restrictive Agreements

36

Section 6.6

Restricted Payments

37

Section 6.7

Changes in Fiscal Periods

37

Section 6.8

Change in Nature of Business

37

Section 6.9

Restriction on Fundamental Changes

37

Section 6.10

Hedge Agreements

37

     

Article 7. EVENTS OF DEFAULT AND REMEDIES

38

Section 7.1

Events of Default

38

Section 7.2

Remedies

39

Section 7.3

Offset

40

     

Article 8. MISCELLANEOUS

40

Section 8.1

Waivers and Amendments

40

Section 8.2

Indemnities

41

Section 8.3

Notices

41

Section 8.4

Successors

42

Section 8.5

Participations and Information

42

Section 8.6

Failure or Indulgence Not Waiver; Remedies Cumulative

42

Section 8.7

Marshaling; Payments Set Aside

42

Section 8.8

Severability

42

Section 8.9

Treatment of Certain Information; Confidentiality

43

Section 8.10

Captions

43

Section 8.11

Entire Agreement; Exchanging Information

43

 

ii

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

 

 

Section 8.12

Counterparts

44

Section 8.13

Governing Law

44

Section 8.14

Consent to Jurisdiction

44

Section 8.15

Waiver of Jury Trial

44

Section 8.16

Arbitration

45

Section 8.17

Borrower Acknowledgements

47

 

 

SCHEDULES

 

 

Schedule

Contents

   

Schedule 4.6

Litigation and Contingent Liabilities Disclosure

Schedule 4.8

Environmental Disclosure

Schedule 4.15

Subsidiaries Disclosure

Schedule 6.1

Permitted Investments

Schedule 6.3

Existing Indebtedness

Schedule 6.4

Permitted Liens

 

EXHIBITS

 

Exhibit

Contents

   

A

Form of Revolving Note

   

B

Form of Compliance Certificate

 

iii

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

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, together with all exhibits and schedules attached hereto
and hereby made a part hereof (“Agreement”), is made as of November 27, 2017, by
and among PROTO LABS, INC., a Minnesota corporation (the “Borrower”), and WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Lender”).

 

RECITALS

 

The Borrower has requested that the Lender extend or continue credit to Borrower
as described below, and the Lender is willing to grant such request on the terms
and conditions set forth herein.

 

NOW THEREFORE, the parties agree as follows:

 

Article 1.     
DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1     Defined Terms. In addition to the terms defined elsewhere in
this Agreement, the following terms shall have the following respective meanings
(and such meanings shall be equally applicable to both the singular and plural
form of the terms defined, as the context may require):

 

“Advance” means each advance made under Section 2.1 hereof with respect to the
Revolving Loan Commitment.

 

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through a purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership interests of a partnership or limited
liability company.

 

“Advance Date” means the date of the making of any Advance hereunder.

 

“Affiliate” or “Affiliates” means with respect to any Person (a) each Person
that is directly or indirectly controlling, controlled by, or under common
control with such Person; (b) each Person that, directly or indirectly owns or
holds fifteen percent (15%) or more of any equity interest in such Person; or
(c) fifteen percent (15%) or more of whose voting stock or other equity interest
is directly or indirectly owned or held by such Person. For purposes of this
definition, “control” (including with correlative meanings, the terms
“controlling”, “controlled by” and “under common control with”) means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities or by contract or otherwise. Notwithstanding the foregoing,
neither Lender nor any of its Affiliates shall be considered an Affiliate of the
Borrower or any of its Domestic Subsidiaries.

 

1

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

 

 

“Agreement” means this Credit Agreement, as it may be amended, modified,
supplemented, restated or replaced from time to time.

 

“Anti-Terrorism Laws” has the meaning assigned thereto in Section 4.18

 

“Attributable Indebtedness” means, on any date of determination, (a) in respect
of any Capital Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or
principal amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a Capital Lease.

 

“Business Day” means any day (other than a Saturday, Sunday or legal holiday in
the State of Minnesota) on which national banks are permitted to be open in
Minneapolis, Minnesota.

 

“Capital Lease” means any lease of any property by the Borrower or any of its
Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and
accounted for as a capital lease on a Consolidated balance sheet of the Borrower
and its Subsidiaries. Notwithstanding the foregoing, any obligations of a Person
under a lease (whether existing now or entered into in the future) that is not
(or would not be) a Capital Lease under GAAP as in effect on the date of this
Agreement, shall not be treated as a Capital Lease solely as a result of the
adoption after the date of this Agreement of changes in GAAP described in the
Accounting Standards Update to Leases (Topic 842) issued by the Financial
Accounting Standards Board in February 2016.

 

“Capital Stock” means (a) in the case of a corporation, capital stock, (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests, (e) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (f) any and all warrants, rights or options to
purchase any of the foregoing.

 

“Change in Control” means an event or series of events by which: (i) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or its
Subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a “person” or “group” shall be deemed to have “beneficial ownership” of all
Capital Stock that such “person” or “group” has the right to acquire, whether
such right is exercisable immediately or only after the passage of time (such
right, an “option right”)), directly or indirectly, of more than thirty percent
(30%) of the Capital Stock of the Borrower entitled to vote in the election of
members of the board of directors (or equivalent governing body) of Borrower or
(ii) a majority of the members of the board of directors (or other equivalent
governing body) of Borrower shall not constitute Continuing Directors.

 

2

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

 

 

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
statute, together with regulations thereunder.

 

“Consolidated” means, when used with reference to financial statements or
financial statement items of any Person, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.

 

“Consolidated EBITDA” means, for any period, the sum of the following determined
on a Consolidated basis, without duplication, for the Borrower and its
Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such
period plus (b) the sum of the following, without duplication, to the extent
deducted in determining Consolidated Net Income for such period: (i) income and
franchise taxes paid during such period, (ii) Consolidated Interest Expense for
such period, and (iii) amortization, depreciation and other non-cash charges for
such period (except to the extent that such non-cash charges are reserved for
cash charges to be taken in the future), (iv) extraordinary losses during such
period (excluding extraordinary losses from discontinued operations), (v)
reasonable out-of-pocket fees, costs and expenses relating to Permitted
Acquisitions (including the Rapid Manufacturing Acquisition), Investments,
Indebtedness, securities offerings and Permitted Dispositions, including but not
limited to advisory fees and financing costs, and (vi) plus any losses and less
any gains related to foreign exchange to the extent agreed between the Borrower
and the Lender, less (c) interest income and any extraordinary gains during such
period. For the purposes of calculating Consolidated EBITDA during periods in
which the Borrower or any Subsidiary shall have made a Permitted Acquisition or
a Permitted Disposition, Consolidated EBITDA shall be calculated including the
property or Person either acquired or disposed of in such Specified Transaction
as of the date such Specified Transaction occurred unless the Borrower and the
Lender otherwise expressly agree.

 

“Consolidated Net Income” means, for any period, the net income (or loss) of the
Borrower and its Subsidiaries for such period, determined on a Consolidated
basis, without duplication, in accordance with GAAP; provided, that in
calculating Consolidated Net Income of the Borrower and its Subsidiaries for any
period, there shall be excluded (a) the net income (or loss) of any Person
(other than a Subsidiary which shall be subject to clause (c) below), in which
the Borrower or any of its Subsidiaries has a joint interest with a third party,
except to the extent such net income is actually paid in cash to the Borrower or
any of its Subsidiaries by dividend or other distribution during such period,
(b) the net income (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of the Borrower or any of its Subsidiaries or is merged into or
consolidated with the Borrower or any of its Subsidiaries or that Person’s
assets are acquired by the Borrower or any of its Subsidiaries except to the
extent included pursuant to the foregoing clause (a), and (c) the net income (if
positive) of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary to the Borrower or any of
its Subsidiaries of such net income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary but only
to the extent of such prohibition.

 

3

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

 

 

“Consolidated Total Leverage Ratio” means, as of any date of determination, the
ratio of (a) Funded Debt on such date to (b) Consolidated EBITDA for the period
of four (4) consecutive fiscal quarters ending on or immediately prior to such
date.

 

“Continuing Directors” means, during any period of 24 consecutive months after
the date of this Agreement, individuals (i) who were members of the board of
directors (or equivalent governing body) of the Borrower at the beginning of
such 24 month period, or (ii) whose election or nomination for election to the
board of directors (or equivalent governing body) of the Borrower was approved
by a vote of a majority of the then Continuing Directors.

 

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

 

“Credit Parties” or “Credit Parties” means, individually and collectively, the
Borrower and the Guarantors.

 

“Default” means any event which, with the giving of notice to the Borrower or
lapse of time, or both, would constitute an Event of Default.

 

“Disqualified Capital Stock” means any Capital Stock that, by its terms (or by
the terms of any security or other Capital Stock into which it is convertible or
for which it is exchangeable) or upon the happening of any event or condition,
(a)  matures or is mandatorily redeemable (other than solely for Qualified
Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a
result of a change of control or asset sale so long as any rights of the holders
thereof upon the occurrence of a change of control or asset sale event shall be
subject to the prior repayment in full of the Loans and all other Obligations
(other than contingent indemnification obligations and Letters of Credit) that
are accrued and payable, the termination, expiration or cash collateralization
of all Letters of Credit and the termination of the Commitments), (b) is
redeemable at the option of the holder thereof (other than solely for Qualified
Capital Stock) (except as a result of a change of control or asset sale so long
as any rights of the holders thereof upon the occurrence of a change of control
or asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations (other than contingent indemnification obligations and
Letters of Credit) that are accrued and payable, the termination, expiration or
cash collateralization of all Letters of Credit and the termination of the
Revolving Loan Commitment), in whole or in part, (c) provides for the scheduled
payment of dividends in cash or (d) is or becomes convertible into or
exchangeable for Indebtedness or any other Capital Stock that would constitute
Disqualified Capital Stock, in each case, prior to the date that is 91 days
after the Termination Date; provided, that if such Capital Stock is issued
pursuant to a plan for the benefit of the Borrower or its Subsidiaries or by any
such plan to such employees, such Capital Stock shall not constitute
Disqualified Capital Stock solely because it may be required to be repurchased
by the Borrower or its Subsidiaries in order to satisfy applicable statutory or
regulatory obligations.

 

4

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

 

 

“Dollars” and “$” means dollars in lawful currency of the United States.

 

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

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules
and regulations thereunder, each as amended or modified from time to time.

 

“ERISA Affiliate” means any Person who together with any Credit Party or any of
its Subsidiaries is treated as a single employer within the meaning of Section
414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

 

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the failure with
respect to any Plan to satisfy the “Minimum funding standard” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(c) of the Code or Section 303(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or an ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition upon
the Borrower or any of its ERISA Affiliates of withdrawal liability under
Section 4201 of ERISA or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

 

“Event of Default” means any event described in Section 7.1.

 

“Funded Debt” means, as of any date of determination with respect to the
Borrower and its Subsidiaries on a Consolidated basis without duplication, the
sum of all Indebtedness of the Borrower and its Subsidiaries (other than any
intercompany Indebtedness).

 

“GAAP” means generally accepted accounting principles as applied in the
preparation of the audited financial statement of the Borrower referred to in
Section 4.5; provided, to the extent any change in GAAP affects any computation
or determination required to be made pursuant to this Agreement, such
computation or determination shall be made as if such change in GAAP had
occurred if the Borrower and Lender agree in writing on an adjustment to such
computation or determination to account for such change in GAAP.

 

“Guarantors” means, collectively, PL-US International, LLC, a Delaware limited
liability company, and each other Domestic Subsidiary that shall become a
Guarantor as required by Section 5.11 hereof.

 

5

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

 

 

“Guaranties” means, collectively, each and every Guaranty executed by a
Guarantor in favor of Lender, in form and substance acceptable to Lender, as
such Guaranty may hereafter be amended, modified, or replaced from time to time.

 

“Guaranty Obligation” means, with respect to the Borrower and its Subsidiaries,
without duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any
Indebtedness or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of any such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement condition or otherwise) or (b) entered into for the purpose
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.

 

“Hedge Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions.

 

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Hedge Agreements, (a) for any date on or after the
date such Hedge Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Hedge Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Hedge Agreements (which may include Lender or any
Affiliate of Lender).

 

“Indebtedness” means, with respect to any Person at any date and without
duplication, the sum of the following:

 

(a)     all liabilities, obligations and indebtedness for borrowed money
including, but not limited to, obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person;

 

(b)     all obligations to pay the deferred purchase price of property or
services of any such Person (excluding all obligations under non-competition,
earn-out or similar agreements and customary post-closing purchase price
adjustments), except trade payables and accrued expenses arising in the ordinary
course of business not more than ninety (90) days past due, or that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided for on the
books of such Person;

 

6

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

 

 

(c)     the Attributable Indebtedness of such Person with respect to such
Person’s obligations in respect of Capital Leases and Synthetic Leases
(regardless of whether accounted for as indebtedness under GAAP);

 

(d)     all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to the extent
of the value of such property (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary course of
business);

 

(e)     all Indebtedness of any other Person secured by a Lien on any asset
owned or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements except trade payable
arising in the ordinary course of business), whether or not such Indebtedness
shall have been assumed by such Person or is limited in recourse;

 

(f)     all obligations, contingent or otherwise, of such Person relative to the
face amount of letters of credit, whether or not drawn, including, without
limitation, any Reimbursement Obligation, and banker’s acceptances issued for
the account of such Person;

 

(g)     all obligations of such Person in respect of Disqualified Capital Stock;

 

(h)     all net obligations of such Person under any Hedge Agreements; and

 

(i)     all Guaranty Obligations of such Person with respect to any of the
foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, except to the extent such Indebtedness
is expressly made non-recourse to such Person. The amount of any net obligation
under any Hedge Agreement on any date shall be deemed to be the Hedge
Termination Value thereof as of such date.

 

“Investment” means, with respect to any Person, that such Person (a) purchases,
owns, invests in or otherwise acquires (in one transaction or a series of
transactions), directly or indirectly, any Capital Stock, interests in any
partnership or joint venture (including, without limitation, the creation or
capitalization of any Subsidiary), evidence of Indebtedness or other obligation
or security, substantially all or a portion of the business or assets of any
other Person or any other investment or interest whatsoever in any other Person,
(b) makes any Acquisition or (c) makes or permits to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person.

 

“Letter of Credit” means any letter of credit issued by Lender on the
application of the Borrower.

 

“Letter of Credit Obligations” means, as of any date of determination, the sum
of (a) the amount available to be drawn under Letters of Credit outstanding on
such date, (b) the aggregate amount of Unpaid Drawings on such date, and (c) to
the extent not included in the foregoing, all accrued and unpaid interest, fees
and expenses with respect thereto.

 

7

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

 

 

“Lien” means any security interest, mortgage, pledge, lien, hypothecation,
judgment lien or similar legal process, charge, encumbrance, title retention
agreement or analogous instrument or device (including, without limitation, the
interest of the lessors under capital leases and the interest of a vendor under
any conditional sale or other title retention agreement).

 

“Loan Documents” means this Agreement, the Revolving Note, and each other
instrument, document, guaranty, security agreement, mortgage, or other agreement
executed and delivered by the Borrower, any Credit Party, any Domestic
Subsidiary or any other party in connection with this Agreement, the Loans, the
Letters of Credit, any Hedge Agreement, any treasury management agreement, or
any other financial accommodations extended by the Lender or in connection with
any collateral now or hereafter securing the Indebtedness, in each case,
including any amendment, waiver, supplement or other modification to any of the
foregoing.

 

“Loans” means the Revolving Loan and all Advances thereunder.

 

“Marketable Securities” means any of the following:

 

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

 

(b)     certificates of deposit, time or demand deposit accounts or bankers
acceptances maturing within one year from the date of acquisition thereof issued
by a commercial bank or trust company organized under the laws of the United
States of America or a state thereof or that is Lender, provided that (i) such
deposits or bankers acceptances are denominated in Dollars, (ii) such bank or
trust company has capital, surplus and undivided profits of not less than
$100,000,000 and (iii) such bank or trust company has certificates of deposit or
other debt obligations rated at least A-1 (or its equivalent) by S&P or P-1 (or
its equivalent) by Moody’s;

 

(c)     open market commercial paper maturing within 360 days from the date of
acquisition thereof issued by a corporation organized under the laws of the
United States of America or a state thereof, provided such commercial paper is
rated at least A-1 (or its equivalent) by S&P or P-1 (or its equivalent) by
Moody’s;

 

(d)     any repurchase agreement entered into with a commercial bank or trust
company organized under the laws of the United States of America or a state
thereof or that is Lender, provided that (i) such bank or trust company has
capital, surplus and undivided profits of not less than $100,000,000, (ii) such
bank or trust company has certificates of deposit or other debt obligations
rated at least A 1 (or its equivalent) by S&P or P-1 (or its equivalent) by
Moody’s, (iii) the repurchase obligations of such bank or trust company under
such repurchase agreement are fully secured by a perfected security interest in
a security or instrument of the type described in clause (a), (b) or (c) above,
and (iv) such security or instrument so securing the repurchase obligations has
a fair market value at the time such repurchase agreement is entered into of not
less than 100% of such repurchase obligations;

 

8

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

 

 

(e)     shares of any money market mutual or similar fund that has all or at
least 95% of its assets invested continuously in investments satisfying the
requirements of clauses (a) through (d) of this definition;

 

(f)     securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A2 by Moody’s; and

 

(g)     other readily marketable investments made pursuant to the Borrower's
Investment Policy and Guidelines as approved and modified from time to time by
Borrower’s board of directors.

 

“Material Adverse Effect” means, with respect to the Borrower and its
Subsidiaries, (a) a material adverse effect on the properties, business,
operations or condition (financial or otherwise) of such Persons, taken as a
whole, (b) a material impairment of the ability of any such Person to perform
its obligations under the Loan Documents to which it is a party, (c) a material
impairment of the rights and remedies of the Lender under any Loan Document or
(d) a material impairment of the legality, validity, binding effect or
enforceability against any Credit Party of any Loan Document to which it is a
party.

 

“Maximum Line Amount” means Thirty Million Dollars ($30,000,000), subject to
adjustment as set forth in Section 2.8 hereof.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA that is subject to Title IV of ERISA to which any Credit
Party or any ERISA Affiliate is making, or is accruing an obligation to make, or
has accrued an obligation to make contributions within the preceding seven (7)
years.

 

“Obligations” means all of Borrower’s and each Guarantor’s liabilities,
obligations, and other Indebtedness to Lender of any and every kind and nature
under or with respect to the Loan Documents, whether heretofore, now or
hereafter owing, arising, due or payable and howsoever evidenced, created,
incurred, acquired, or owing, whether individually or collectively, direct or
indirect, joint or several, absolute or contingent, primary or secondary, fixed
or otherwise (including obligations of performance) and whether arising or
existing under written agreement, oral agreement or operation of law, including,
without limitation, all of Borrower’s reimbursement obligations, whether
contingent or liquidated, with respect to any Letter of Credit and all of
Borrower’s and each Guarantor’s other Indebtedness and obligations to Lender
under or in respect of this Agreement, the other Loan Documents and any Hedge
Agreement between Borrower and Lender or an Affiliate of Lender.

 

9

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

 

 

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

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), as amended.

 

“PBGC” means the Pension Benefit Guaranty Corporation, established pursuant to
Subtitle A of Title IV of ERISA, and any successor thereto or to the functions
thereof.

 

“Pension Plan” means any employee benefit plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which is maintained, funded or administered for the employees of any
Credit Party or any ERISA Affiliate.

 

“Permitted Acquisition” means any proposed Acquisition that complies with the
following terms and conditions:

 

(a)     if acquiring a business entity, such business entity must be (i) in the
same or related line of business as the Borrower or any Subsidiary or a line of
business incidental or complimentary thereto, and (ii) a corporation, limited
liability company, partnership or similar entity;

 

(b)     after giving effect to such Acquisition and the incurrence of any
Indebtedness in connection therewith, (i) no Default or Event of Default shall
exist, (ii) the Borrower shall be in compliance on a Pro-Forma Basis with the
financial covenants set forth in Section 5.2 hereof recomputed for the most
recently ended month for which information is available regarding the business
being acquired, and for all periods following the consummation of the proposed
Acquisition for which projections have been prepared, based on the projected
combined operating results of the targeted business and of the Borrower and its
then-existing Domestic Subsidiaries, each on a consolidated basis, and (iii) the
Borrower shall be in material compliance with all other terms and conditions
contained in this Agreement;

 

(c)     for any Acquisition of capital stock or other equity interests of a
Person that becomes a Domestic Subsidiary of Borrower, Borrower shall cause such
Person (together with, if applicable, any Domestic Subsidiary of Borrower used
to acquire such equity interest) to be in compliance with the requirements, and
to become a Guarantor hereunder by executing and delivering a Guaranty and
documents of the nature of those, described in Section 3.1(a)(ii) through (xii)
for any Guarantor, if applicable, each in form and substance acceptable to
Lender, together with any related documents and agreements that Lender may
request;

 

(d)     the Revolving Loan availability remaining hereunder (net of the Letter
of Credit Obligations), plus the sum of all cash, cash equivalents and
Marketable Securities of the Credit Parties maintained on an unconsolidated,
Pro-Forma Basis, shall be an amount not less than $20,000,000 after giving
effect to such proposed Acquisition;

 

10

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

 

 

(e)     the acquired entity and or the assets acquired shall be acquired on a
non-hostile basis;

 

(f)     Borrower shall purchase, or purchase through a Subsidiary, assets of the
acquired Person or with respect to the Acquisition of any equity interests, at
least 80% of the outstanding ownership interests of such acquired entity; and

 

(g)     as soon as available, but in any event not less than ten (10) Business
Days prior to the consummation of such proposed Acquisition, the Borrower shall
have provided prior written notice of such Acquisition to Lender and upon
request, shall promptly provide Lender with true, correct and complete copies of
all acquisition-related documents, historical financial statements of any
acquired entity, together with such other documents, reports, searches,
instruments and information as Lender may reasonably request.

 

“Permitted Disposition” has the meaning assigned thereto in Section 6.2

 

“Permitted Liens” shall have the meaning given in Section 6.4 hereto.

 

“Person” means any natural person, corporation, limited liability company,
partnership, joint venture, firm, association, trust, unincorporated
organization, government or governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other capacity.

 

“Plan” means any Pension Plan or Multiemployer Plan.

 

“Pro Forma Basis” means, for purposes of calculating Consolidated EBITDA for any
period during which one or more Specified Transactions occurs, that such
Specified Transaction (and all other Specified Transactions that have been
consummated during the applicable period) shall be deemed to have occurred as of
the first day of the applicable period of measurement and (a) all income
statement items (whether positive or negative) attributable to the Property or
Person disposed of in a Specified Disposition shall be excluded and (b) all
income statement items (whether positive or negative as reasonably estimated by
Borrower in good faith by a Responsible Officer) attributable to the Property or
Person acquired in a Permitted Acquisition shall be included; provided that the
foregoing pro forma adjustments may be applied to any such definition, test or
financial covenant solely to the extent that such adjustments (i) are reasonably
expected to be realized within twelve (12) months of such Specified Transaction
as set forth in reasonable detail on a certificate of a Responsible Officer of
the Borrower delivered to the Lender and (ii) are calculated on a basis
consistent with GAAP and Regulation S-X of the Exchange Act; and provided
further that the foregoing pro forma adjustments shall be without duplication of
any cost savings or additional costs that are already included in the
calculation of Consolidated EBITDA.

 

“Qualified Capital Stock” means any Capital Stock that is not Disqualified
Capital Stock.

 

“Rapid Manufacturing” means The Rapid Manufacturing Group LLC, a New Hampshire
limited liability company.

 

11

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

 

 

“Rapid Manufacturing Acquisition” means the Borrower’s purchase of all of the
capital stock of Rapid Manufacturing, as further set forth in the Rapid
Manufacturing Acquisition Agreement.

 

“Rapid Manufacturing Acquisition Agreement” means that certain Membership
Interest Purchase Agreement dated November 16, 2017, by and between Borrower,
Rapid Manufacturing and the sellers party thereto.

 

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

 

“Reportable Event” means, as to Borrower and each ERISA Affiliate, (i) a
reportable event as defined in Section 4043 of ERISA and the regulations issued
under such Section, with respect to a Plan, excluding, however, such events as
to which the PBGC by regulation has waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event,
provided that a failure to meet the minimum funding standard of Section 412 of
the Code and Section 302 of ERISA shall be a reportable event regardless of the
issuance of any such waivers in accordance with Section 412(d) of the Code, (ii)
the withdrawal of Borrower or any ERISA Affiliate from a Plan in which it was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed
to be a “substantial employer” under Section 4062(e) of ERISA, (iii) the
termination of a Plan, the filing of notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv)
the institution of proceedings to terminate a Plan by the PBGC, (v) the partial
or complete withdrawal from a Plan by Borrower or any ERISA Affiliate, (vi) the
imposition of a Lien on any property of Borrower or any ERISA Affiliate,
pursuant to IRC Section 412 or Section 302 of ERISA, (vii) the reorganization of
a Multiemployer Plan, and (viii) any event or condition which results in the
termination of a Plan, or the institution by the PBGC of proceedings to
terminate a Plan.

 

“Responsible Officer” means, as to any Person, the chief executive officer,
president, chief financial officer, chief accounting officer, controller or
treasurer of such Person or any other officer of such Person designated in
writing by the Borrower and reasonably acceptable to the Lender. Any document
delivered hereunder or under any other Loan Document that is signed by a
Responsible Officer of a Person shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Person and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Person.

 

“Restricted Payments” shall have the meaning set forth in Section 6.6.

 

“Revolving Loan Commitment” shall have the meaning given in Section 2.1(a).

 

“Revolving Loan” shall have the meaning given in Section 2.1(a).

 

“Revolving Note” shall have the meaning given in Section 2.1(a).

 

12

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

 

 

“S&P” means Standard & Poor’s Ratings Services, a division of S&P Global and any
successor thereto.

 

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx,
or as otherwise published from time to time.

 

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, (b) a Person named on the lists
maintained by the United Nations Security Council available at
http://www.un.org/sc/committees/list_compend.shtml, or as otherwise published
from time to time, (c) a Person named on the lists maintained by the European
Union available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, or
as otherwise published from time to time, (d) a Person named on the lists
maintained by Her Majesty’s Treasury available at
http://www.hm-treasury.gov.uk/fin_sanctions_index.htm, or as otherwise published
from time to time, or (e) (i) an agency of the government of a Sanctioned
Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a
person resident in a Sanctioned Country, to the extent subject to a sanctions
program administered by OFAC.

 

“SEC” means the U.S. Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Specified Disposition” means any disposition of all or substantially all of the
assets or a majority or more of the Capital Stock of any Subsidiary of the
Borrower or any division, business unit, product line or line of business.

 

“Specified Transactions” means (a) any Specified Disposition, and (b) any
Permitted Acquisition.

 

“Subsidiary” means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the board of directors (or equivalent governing body) or other managers of such
corporation, partnership, limited liability company or other entity is at the
time owned by (directly or indirectly) or the management is otherwise controlled
by (directly or indirectly) such Person (irrespective of whether, at the time,
Capital Stock of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency). Unless otherwise qualified,
references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the
Borrower.

 

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP.

 

13

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

 

 

“Termination Date” means the earliest of (a) November 30, 2019, (b) the date on
which the Revolving Loan Commitment is terminated pursuant to Section 2.8
hereof, or (c) the date on which the Revolving Loan Commitment is terminated
pursuant to Section 7.2 hereof.

 

“Total Outstandings” means as of any date of determination, the sum of (a) the
aggregate unpaid principal balance of the Revolving Note outstanding on such
date and (b) the Letter of Credit Obligations.

 

“Unpaid Drawing” means any amount by which the Borrower has failed to reimburse
Lender for the full amount of any drawing on a Letter of Credit by 11:30 a.m. on
the date on which Lender in its notice indicated that it would pay such drawing,
until reimbursed from the proceeds of an Advance pursuant to Section 2.2.

 

Section 1.2     Accounting Terms and Calculations. Except as may be expressly
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder (including, without
limitation, determination of compliance with financial ratios and restrictions
in Article 5 and Article 6 hereof) shall be made in accordance with GAAP
consistently applied. Any reference to “consolidated,” “consolidating” and/or
“combined” financial terms shall be deemed to refer to those financial terms as
applied to the Borrower and its Subsidiaries in accordance with GAAP.

 

Section 1.3     Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word “from” means “from and including” and the word
“to” or “until” each means “to but excluding.”

 

Section 1.4     Other Definitional Terms. The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, Schedules and like references are
to this Agreement unless otherwise expressly provided.

 

Article 2.     
AMOUNT AND TERMS OF CREDIT FACILITIES

 

Section 2.1     Revolving Loan and Letter of Credit Facilities.

 

(a)     Revolving Loan Facility. On the terms and subject to conditions hereof,
Lender agrees to make revolving credit loans (“Revolving Loans”) to the Borrower
from time to time from the date hereof to the Termination Date in an aggregate
principal amount at any one time outstanding which, when added to the Letter of
Credit Obligations then outstanding, does not exceed the Maximum Line Amount (as
the same may be increased or reduced from time to time under the terms of this
Agreement, including Section 2.8 hereof, the “Revolving Loan Commitment”).
During such period, the Borrower may use the Revolving Loan Commitment by
borrowing, prepaying the Revolving Loan in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof and in the Revolving
Note.

 

14

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

 

 

The Borrower’s obligation to repay advances under the Revolving Loan Commitment
shall be evidenced by the Revolving Note (as the same may be amended,
supplemented or renewed, the “Revolving Note”) substantially in the form of
Exhibit A, all terms of which are incorporated herein by this reference.

 

Section 2.2     Letter of Credit Subfeature. As a subfeature under the Revolving
Loan Commitment, the Lender agrees from time to time during the term hereof to
issue or cause an affiliate to issue standby and commercial letters of credit
for the account of the Borrower (each, a “Letter of Credit” and collectively,
“Letters of Credit”); provided however, that the aggregate undrawn amount of all
outstanding Letters of Credit shall not at any time exceed Five Million and
00/100 Dollars ($5,000,000.00). The form and substance of each Letter of Credit
shall be subject to approval by the Lender, in its sole discretion. Without
limiting the foregoing, no Letter of Credit shall have an expiration date
subsequent to the Termination Date of the Revolving Loan Commitment except with
the prior written consent of the Lender. The undrawn amount of all Letters of
Credit shall be reserved under the Revolving Loan Commitment and shall not be
available for borrowings thereunder. Each Letter of Credit shall be subject to
the additional terms and conditions of the Letter of Credit agreements,
applications and any related documents required by the Lender in connection with
the issuance thereof. Each drawing paid under a Letter of Credit shall be deemed
an advance under the Revolving Loan Commitment and shall be repaid by the
Borrower in accordance with the terms and conditions of this Agreement
applicable to such advances; provided however, that if advances under the
Revolving Loan Commitment are not available, for any reason, at the time any
drawing is paid, then the Borrower shall, within one Business Day, pay to the
Lender the full amount drawn, together with interest thereon from the date such
drawing is paid to the date such amount is fully repaid by the Borrower, at the
rate of interest applicable to advances under the Revolving Loan Commitment. In
such event the Borrower agrees that the Lender, in its sole discretion, may
debit any account maintained by the Borrower with the Lender for the amount of
any such drawing.

 

If any Letters of Credit shall be outstanding on the expiration or termination
of the Revolving Loan Commitment, then upon the request of the Lender, the
Borrower shall deposit into a cash collateral account with Lender in immediately
available funds the undrawn face amount of all outstanding Letters of Credit,
plus reasonably anticipated costs and fees, which amounts shall secure the
repayment of all obligations of the Borrower under this Agreement and all
related Loan Documents.

 

Letters of Credit may also be issued for the account and in the name of any
Subsidiary provided that the Borrower (and each of the Domestic Subsidiaries as
guarantors) will be jointly and severally liable in connection with any such
letters of credit and will reduce the availability of the Letter of Credit
subfeature by the amount of each such Letter of Credit issued.

 

Section 2.3     Payments and Prepayments.

 

(a)     Payments. Payments and prepayments of principal of, and interest on, the
Loans and all fees, expenses and other Obligations under the Loan Documents
shall be made without setoff or counterclaim in immediately available funds and
shall be made in same day funds and delivered to Lender at its main office in
Minneapolis, Minnesota, not later than 3:00 P.M. (Minneapolis time) on the dates
called for under this Agreement, the Revolving Note and the other Loan
Documents. Funds received after such time shall be deemed to have been received
on the next Business Day. Whenever any payment to be made hereunder or on the
Revolving Note shall be stated to be due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time, in the case of a payment of principal, shall be included in
the computation of any interest on such principal payment.

 

15

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

 

 

(i)      Revolving Loan. The unpaid principal of the Revolving Note, together
with all accrued and unpaid interest thereon and all other Obligations shall be
due and payable on the Termination Date.

 

(ii)     Mandatory Prepayments. The Borrower agrees that the Obligations shall
be subject to mandatory prepayment if on any day the Total Outstandings exceed
the Revolving Loan Commitment. The Borrower agrees that on any such day, the
Borrower shall make a prepayment to the extent of such excess.

 

(iii)     Optional Prepayments. The Borrower may prepay Advances, in whole or in
part, at any time, without premium or penalty, but subject to the notice
requirements and payment of any applicable funding losses, interest and other
amounts as may be required under terms of the Revolving Note.

 

(iv)     Application of Payments. With respect to the prepayments described in
Subsections 2.3(a)(ii) and (iii), such prepayments shall first be applied to the
payment of all outstanding fees, costs and expenses due and payable by the
Borrower, then such prepayments shall be applied to reduce the outstanding
principal balance of the Revolving Loans in the manner set forth in the
Revolving Note. During the continuance of an Event of Default, the Borrower
irrevocably waives the right to direct the application of any and all payments
and the Borrower hereby irrevocably agrees that Lender shall have the continuing
exclusive right to thereafter apply payments in any manner it deems appropriate.

 

(v)      No Deductions. Any and all payments or reimbursements made hereunder or
under the Revolving Note shall be made free and clear of and without deduction
for any and all taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto of any nature whatsoever imposed by any
taxing authority, excluding such taxes to the extent imposed on Lender’s net
income by the jurisdiction in which Lender is organized. If the Borrower shall
be required by law to deduct any such amounts from or in respect of any sum
payable hereunder to Lender, then the sum payable hereunder shall be increased
as may be necessary so that, after making all required deductions, Lender
receives an amount equal to the sum it would have received had no such
deductions been made.

 

Section 2.4     Interest. The outstanding principal balance of each credit
subject hereto shall bear interest, and the amount of each drawing paid under
any Letter of Credit shall bear interest from the date such drawing is paid to
the date such amount is fully repaid by the Borrower, at the rate of interest
set forth in the Revolving Note or other instrument or document executed in
connection therewith, as applicable.

 

16

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

 

 

Section 2.5     Fees and Expenses.

 

(a)     Unused Commitment Fee. The Borrower shall pay to Lender a fee equal to
fifteen hundredths of one percent (0.15%) per annum (computed on the basis of a
360-day year, actual days elapsed) on the average daily unused amount of the
Revolving Loan Commitment commencing on the date hereof to and including the
Termination Date, which fee shall be calculated on a quarterly basis by Lender
and shall be due and payable by the Borrower in arrears within thirty (30) days
after each billing is sent by Lender and on the Termination Date.

 

(b)     Letter of Credit Fee. For each Letter of Credit issued, the Borrower
shall pay to Lender an issuance fee equal to Lender’s then current rate, payable
on the date of issuance of the Letter of Credit. The Borrower shall further pay
to Lender, a fee in an amount determined by applying a per annum rate equal to
one percent (1.00%) to the amount available to be drawn on the Letter of Credit
for each month that such Letter of Credit is outstanding, which fee shall be due
and payable monthly in arrears on the first day of the immediately following
month. In addition to the foregoing fees, the Borrower shall pay to Lender, on
demand, all issuance, amendment, drawing and other fees regularly charged by
Lender to its letter of credit customers and all out-of-pocket expenses incurred
by Lender in connection with the issuance, amendment, administration or payment
of any Letter of Credit.

 

(c)     Expenses and Attorneys’ Fees. Borrower agrees to promptly pay all
reasonable and documented out-of-pocket fees, costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by Lender in connection with
any matters contemplated by or arising out of the Loan Documents, in connection
with the examination, review, due diligence investigation, documentation,
negotiation, and closing of the transactions contemplated herein and in
connection with the continued administration of the Loan Documents, including
any amendments, modifications, consents and waivers. Borrower agrees to promptly
pay all fees, costs and expenses (including attorneys’ fees and expenses and the
allocated cost of internal legal staff) incurred by Lender in connection with
any action to enforce any Loan Document or to collect any payments due from
Borrower or any other Credit Party, and in connection with the prosecution or
defense of any action in any way related to any of the Loan Documents, including
without limitation, any action for declaratory relief, whether incurred at the
trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested
matter or motion brought by Lender or any other person) relating to any Credit
Party or any other Person.

 

Section 2.6     Increased Costs. If, as a result of any change in or the
adoption of any law, rule, regulation, treaty or directive, or any change in the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) from any court,
central bank, governmental authority, agency or instrumentality, or comparable
agency, in each case (x) occurring after the date of this Agreement (provided
that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a change in
law, regardless of the date enacted, adopted, implemented or issued), and (y)
having general application to financial institutions in the same classification
as Lender:

 

17

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

 

 

(a)     any tax, duty or other charge with respect to any Loan, the Revolving
Note or the Revolving Loan Commitment is imposed, modified or deemed applicable,
or the basis of taxation of payments to Lender of interest or principal of the
Loans or of any fees payable to Lender hereunder (other than taxes imposed on
the overall net income of Lender or franchise taxes) is changed;

 

(b)     any reserve, special deposit, special assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
Lender is imposed, modified or deemed applicable;

 

(c)     any increase in the amount of capital required or expected to be
maintained by Lender or any Person controlling Lender is imposed, modified or
deemed applicable; or

 

(d)     any other condition affecting this Agreement or the Revolving Loan
Commitment is imposed on Lender or the relevant funding markets; and

 

(e)     Lender determines that, by reason thereof, the cost to Lender of making
or maintaining the Loans, issuing the Letters of Credit or maintaining the
Revolving Loan Commitment is increased, or the amount of any sum receivable by
Lender hereunder or under the Revolving Note in respect of any Loan is reduced;

 

then, the Borrower shall pay to Lender upon demand such additional amount or
amounts as will compensate Lender (or the controlling Person in the instance of
(c) above) for such additional costs or reduction (provided that Lender has not
been compensated for such additional cost or reduction under the terms of the
Revolving Note); provided that the Borrower shall not be obligated to pay (i)
any such amount unless Lender shall first have notified the Borrower in writing
that it intends to seek compensation pursuant to this Section and (ii) any such
amounts which are attributable to any period of time occurring more than 45 days
prior to the date of receipt by the Borrower of the notice provided for in the
preceding clause (i). Determinations by Lender for purposes of this Section of
the additional amounts required to compensate Lender shall be conclusive in the
absence of manifest error. In determining such amounts, Lender may use any
reasonable averaging, attribution and allocation methods.

 

Section 2.7     [Reserved.].

 

Section 2.8     Termination of Revolving Loan Commitment. The Borrower may, at
any time, upon not less than three (3) Business Days prior written notice to
Lender, reduce the Revolving Loan Commitment, with any such reduction in a
minimum amount of $1,000,000, or, if more, in an integral multiple of thereof;
provided, however, that the Borrower may not at any time reduce the Revolving
Loan Commitment below the Total Outstandings. The Borrower may, at any time,
upon not less than three (3) Business Days prior written notice to Lender,
terminate the Revolving Loan Commitment in its entirety. Upon termination of the
Revolving Loan Commitment pursuant to this Section, the Borrower shall pay to
Lender the full amount of all outstanding Advances under the Loans, all accrued
and unpaid interest thereon, all unpaid fees, if any, accrued to the date of
such termination, and all other unpaid Obligations to Lender under the Loan
Documents or with respect to any outstanding Letters of Credit, and provide cash
collateral in form and substance acceptable to Lender.

 

18

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

 

 

Section 2.9     Use of Revolving Loan Proceeds. The proceeds of the Advances
shall be used for the Borrower’s general business purposes in a manner not in
conflict with any of the Borrower’s covenants in this Agreement.

 

Section 2.10     Collection of Payments. Except to the extent expressly
specified otherwise in any Loan Document other than this Agreement, Borrower
authorizes Lender to collect all amounts due to Lender from Borrower under this
Agreement or any other Loan Document (whether for principal, interest or fees,
or as reimbursement of drafts paid or other payments made by Lender under any
credit subject to this Agreement) by debiting any deposit account maintained by
Borrower with Lender for the full amount thereof. Should there be insufficient
funds in Borrower’s deposit accounts with Lender to pay all such sums when due,
the full amount of such deficiency shall be immediately due and payable by
Borrower.

 

Section 2.11    Guaranties. The payment and performance of all indebtedness and
other obligations of Borrower to Lender, together with any future extensions of
credit of the Lender to any Domestic Subsidiary, shall be guaranteed jointly and
severally by the Borrower and each Domestic Subsidiary, as evidenced by and
subject to the terms of the Guaranty, and subject further to the terms and
provisions of Section 5.11 hereof.

 

Section 2.12   Rapid Manufacturing Acquisition. Borrower agrees that its
consummation of the Rapid Manufacturing Acquisition shall be subject to its
satisfaction of the following requirements and conditions as and when required
below, together with each other covenant and requirement under this Agreement
for Borrower’s consummation of a Permitted Acquisition.

 

(a)     Deliveries at Closing. Contemporaneously with or prior to the closing of
the Rapid Manufacturing Acquisition, Borrower shall have delivered to Lender the
following in form and substance acceptable to Lender:

 

(i)     True, correct and complete copies of the Rapid Manufacturing Acquisition
Agreement related to the Rapid Manufacturing Acquisition, duly executed by
Borrower, Rapid Manufacturing and the other parties thereto, together with all
related sale documents; and

 

(ii)     Reserved.

 

(b)     Post-Closing Deliveries. Within 30 days of the consummation of the Rapid
Manufacturing Acquisition, Borrower and Rapid Manufacturing shall deliver to
Lender the following, each in form and substance acceptable to Lender:

 

(i)     Updated lien searches and copies of all applicable lien releases
reflecting that no liens other than Permitted Liens remain on the assets of
Rapid Manufacturing; and

 

19

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

 

 

(ii)     Such other documents as reasonably requested by Lender, including all
documents and agreements required to be delivered to Lender in connection with a
Permitted Acquisition, including, without limitation, as required by Section
5.11 of this Agreement.

 

Article 3.     
CONDITIONS PRECEDENT

 

Section 3.1     Conditions of Initial Advances. The making of the initial
Advance, or issuance of any initial Letter of Credit hereunder, shall be subject
to the prior or simultaneous fulfillment of the following conditions, each in
form and substance acceptable to Lender:

 

(a)     Documents. Lender shall have received the following:

 

(i)     The Revolving Note payable to Lender and duly executed by the Borrower.

 

(ii)     The Guaranty duly executed by the Borrower.

 

(iii)    A certificate from a Responsible Officer of the Borrower to the effect
that (A) all representations and warranties of the Credit Parties contained in
this Agreement and the other Loan Documents are true, correct and complete in
all material respects (except to the extent any such representation and warranty
is qualified by materiality or reference to Material Adverse Effect, in which
case, such representation and warranty shall be true, correct and complete in
all respects); (B) none of the Credit Parties is in violation of any of the
covenants contained in this Agreement and the other Loan Documents; (C) no
Default or Event of Default has occurred and is continuing as of the date of
this Agreement; and (D) since the fiscal quarter ending September 30, 2017, no
event has occurred or condition arisen, either individually or in the aggregate,
that could reasonably be expected to have a Material Adverse Effect.

 

(iv)     Lien searches of the Borrower and each Domestic Subsidiary reflecting
that no Liens exist on the personal property of such entities except Permitted
Liens.

 

(v)     Certificates of good standing or existence with respect to the Borrower
and each Guarantor, issued as of a recent date by the Secretary of State of such
entity’s state of organization.

 

(vi)     A copy of the Articles of Incorporation or similar organizational
documents of the Borrower and each Guarantor with all amendments thereto,
certified by the appropriate governmental official of the jurisdiction of its
incorporation as of a date not more than 45 days prior to the date hereof.

 

20

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

 

 

(vii)     A copy of the bylaws, operating agreement, shareholder agreement and
other similar governance documents of the Borrower and each Guarantor, certified
as of the date hereof by the Secretary or an Assistant Secretary of each such
entity, as applicable.

 

(viii)    A copy of the corporate or company resolutions of the Borrower and
each Guarantor duly authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of each such entity, as applicable.

 

(ix)     An incumbency certificate showing the names and titles, and bearing the
signatures of, the officers of the Borrower and each Guarantor, authorized to
execute the Loan Documents and to request the Loans hereunder, certified by the
Secretary or an Assistant Secretary of the Borrower.

 

(x)     The Borrower and each of the Domestic Subsidiaries have provided to the
Lender the documentation and other information requested by the Lender in order
to comply with requirements of the PATRIOT Act, applicable “know your customer”
and anti-money laundering rules and regulations.

 

(xi)     An opinion of Borrower’s and Guarantors’ legal counsel in favor of and
in form and substance acceptable to Lender.

 

(xii)    With respect to all existing direct and indirect Domestic Subsidiaries
of the Borrower, each of the documents and agreements required by Section 5.11
hereof.

 

(b)     Compliance. The Borrower shall have performed and complied with all
agreements, terms and conditions contained in this Agreement required to be
performed or complied with by the Borrower prior to or simultaneously with the
date hereof.

 

(c)     Other Matters. All corporate and legal proceedings relating to the
Borrower and all instruments and agreements in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in scope, form
and substance to Lender and its counsel, and Lender shall have received all
information and copies of all documents, including records of corporate
proceedings, as Lender or its counsel may reasonably have requested in
connection therewith, such documents where appropriate to be certified by proper
corporate or governmental authorities.

 

(d)     Fees and Expenses. Lender shall have received all fees and other amounts
due and payable by the Borrower or any Guarantor on or prior to the date hereof.

 

21

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

 

 

Section 3.2     Conditions Precedent to all Advances. The obligation of Lender
to make any Advances hereunder (including the initial advances on the Loans) or
to issue any Letter of Credit hereunder shall be subject to the fulfillment of
the following conditions:

 

(a)     Representations and Warranties. The representations and warranties
contained in Article 4 shall be true and correct in all material respects on and
as of the date hereof and on the date of each Advance, with the same force and
effect as if made on such date, except to the extent such representations and
warranties specifically relate to an earlier date in which case such
representations and warranties were true and correct in all material respects as
of such date.

 

(b)     No Default. No Default or Event of Default shall have occurred and be
continuing as of the date hereof and on the date of each Advance or will exist
after giving effect to the Advance.

 

(c)     Notices and Requests. Lender shall have received the Borrower’s request
for such advance as required under this Agreement and/or the Revolving Note.

 

(d)     Additional Documents. The execution and delivery to Lender of all other
documents and instruments as may be required under the terms of this Agreement
as a condition to such Advance or Letter of Credit, including, if applicable,
all documents required by Section 5.11 hereof, or under any other Loan Documents
(provided however that any such documents (including a Guaranty joinder) due
with respect to by PL-US International, LLC, a Delaware limited liability
company and a Domestic Subsidiary of the Borrower, shall not be required prior
to any initial Advances requested under this Agreement but shall be delivered to
Lender no later than December 8, 2017.

 

Article 4.     
REPRESENTATIONS AND WARRANTIES

 

To induce Lender to enter into this Agreement and to make Loans and issue
Letters of Credit hereunder, the Borrower represents and warrants to Lender:

 

Section 4.1     Organization, Standing, Etc. The Borrower and each of its
Domestic Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction of their respective
organization and have all requisite corporate power and authority to carry on
their respective businesses as now conducted, and to enter into the Loan
Documents and to issue the Revolving Note and to perform their respective
obligations under the Loan Documents. The Borrower and each of its Domestic
Subsidiaries are (a) duly qualified and in good standing as a foreign
corporation or other entity, as applicable, in each jurisdiction in which the
character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary and the failure to qualify
would reasonably be expected to have a Material Adverse Effect, and (b) not the
target of any trade or economic sanctions promulgated by the United Nations or
the governments of the United States, the United Kingdom, the European Union, or
any other jurisdiction in which the Borrower is located or operates
(collectively, “Sanctions”).

 

Section 4.2     Authorization and Validity. The execution, delivery and
performance by the Borrower and each of its Domestic Subsidiaries of the Loan
Documents to which it is a party have been duly authorized by all necessary
corporate, company or other legal action of such entity and constitute the
legal, valid and binding obligations of the Borrower and/or its Domestic
Subsidiaries to the extent a party thereto, enforceable in accordance with their
respective terms, subject to limitations as to enforceability which might result
from bankruptcy, insolvency, moratorium and other similar laws affecting
creditors’ rights generally and subject to limitations on the availability of
equitable remedies.

 

22

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

 

 

Section 4.3     No Conflict; No Default; No Subordination. The execution,
delivery and performance by the Borrower of the Loan Documents will not (a)
violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to
the Borrower and/or its Domestic Subsidiaries, (b) violate or contravene any
provisions of the Articles (or Certificate) of Incorporation, by-laws or other
organizational documents of the Borrower and its Domestic Subsidiaries, or (c)
result in a breach of or constitute a default under any indenture, loan or
credit agreement or any other agreement evidencing any obligation in an amount
equal to $1,000,000 or greater to which the Borrower and/or its Domestic
Subsidiaries is a party or by which it or any of its properties may be bound or
result in the creation of any Lien on any asset of the Borrower or any Domestic
Subsidiary. Neither the Borrower nor any Domestic Subsidiary is in default under
or in violation of any such law, statute, rule or regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture, loan
or credit agreement or other agreement, lease or instrument in any case in which
the consequences of such default or violation could constitute a Material
Adverse Effect. No Default or Event of Default has occurred or is continuing.
There is no agreement, indenture, contract or instrument to which Borrower is a
party or by which Borrower may be bound that requires the subordination in right
of payment of any of Borrower’s Obligations to any other obligation of Borrower.

 

Section 4.4     Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of the Borrower or any Domestic Subsidiary to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, the Loan Documents.

 

Section 4.5     Financial Statements/Disclosure/Solvency.

 

(a)     The Borrower’s audited, consolidated financial statements as of
December 31, 2016 and its company prepared consolidated financial statements as
of September 30, 2017, as heretofore furnished to Lender, have been prepared on
a consistent basis (except for the absence of footnotes and subject to year-end
adjustments as to interim statements) and (in the case of the audited financial
statements) in accordance with GAAP and fairly present in all material respects
the financial condition of the Borrower, and its respective Subsidiaries as at
such dates and the results of their operations and changes in financial position
for the respective periods then ended. Since September 30, 2017, no Material
Adverse Effect has occurred.

 

(b)     No representation or warranty of Borrower or any Domestic Subsidiary
contained in the Loan Documents, the financial statements referred to above or
any other document, certificate or written statement furnished to Lender by or
on behalf of any such Person for use in connection with the Loan Documents
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made.

 

23

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

 

 

(c)     Borrower and each of its Domestic Subsidiaries: (a) owns and will own
assets the fair saleable value of which are (i) greater than the total amount of
its liabilities (including contingent liabilities) and (ii) greater than the
amount that will be required to pay the probable liabilities of its then
existing debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to it; (b) has
capital that is not unreasonably small in relation to its business as presently
conducted or after giving effect to any contemplated transaction; and (c) does
not intend to incur and does not believe that it will incur debts beyond its
ability to pay such debts as they become due.

 

Section 4.6     Litigation and Contingent Liabilities. Except as described in
Schedule 4.6, there are no actions, suits or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any of their properties before any court or arbitrator, or any
governmental department, board, agency or other instrumentality which, if
determined adversely to the Borrower or such Subsidiary, would constitute a
Material Adverse Effect. Except as described in Schedule 4.6, neither the
Borrower nor any Subsidiary has any contingent liabilities which are material to
the Borrower or its Subsidiaries as a consolidated enterprise.

 

Section 4.7     Compliance. The Borrower and its Subsidiaries are in material
compliance with all statutes and governmental rules and regulations applicable
to them, except where failure to be in such compliance could not reasonably be
expected to have a Material Adverse Effect.

 

Section 4.8     Environmental, Health and Safety Laws. Except as described in
Schedule 4.8, there does not exist any violation by the Borrower or any
Subsidiary of any applicable federal, state or local law, rule or regulation or
order of any government, governmental department, board, agency or other
instrumentality relating to environmental, pollution, health or safety matters
which will or threatens to impose a material liability on the Borrower or a
Subsidiary or which would require a material expenditure by the Borrower or such
Subsidiary to cure. Except as described in Schedule 4.8, neither the Borrower
nor any Subsidiary has received any notice to the effect that any part of its
operations or properties is not in material compliance with any such law, rule,
regulation or order or notice that it, or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to any release of any toxic or hazardous waste or substance into the
environment, the consequences of which non-compliance or remedial action could
reasonably be expected to constitute a Material Adverse Effect.

 

Section 4.9     ERISA. Each Pension Plan complies with all material applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event, other than a Reportable Event for which
the reporting requirements have been waived by regulations of the PBGC, has
occurred and is continuing with respect to any Pension Plan, or to the knowledge
of the Borrower, any Multiemployer Plan. All of the minimum funding standards
applicable to such Plans have been satisfied and there exists no event or
condition which would permit the institution of proceedings to terminate any
Plan under Section 4042 of ERISA.

 

24

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

 

 

Section 4.10     Regulation U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
and no part of the proceeds of any Loan will be used to purchase or carry margin
stock or for any other purpose which would violate any of the margin
requirements of the Board of Governors of the Federal Reserve System.

 

Section 4.11     Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries, if any, has good and marketable title to its real properties and
good and sufficient title to its other properties, including all properties and
assets referred to as owned by the Borrower and its Subsidiaries in the
financial statements of the Borrower referred to in Section 4.5 (other than
property disposed of since the date of such financial statement in the ordinary
course of business). None of the properties, revenues or assets of the Borrower
or any of the Subsidiaries is subject to a Lien, except for (a) Liens disclosed
in the financial statements referred to in Section 4.5 hereof, or (b) Liens
permitted under Section 6.4. Taxes. Each of the Borrower and its Subsidiaries
has filed all federal, state and local tax returns required to be filed (after
giving effect to any extension) and has paid or made provision for the payment
of all taxes due and payable pursuant to such returns and pursuant to any
assessments made against it or any of its property and all other taxes, fees and
other charges imposed on it or any of its property by any governmental authority
(other than taxes, fees or charges the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books and the
financial statements of the Borrower and its Subsidiaries). No tax Liens have
been and remain filed and, to the knowledge of the Borrower, no material claims
are being asserted with respect to any such taxes, fees or charges. The charges,
accruals and reserves on the books of the Borrower in respect of taxes and other
governmental charges are adequate. Trademarks, Patents. Each of the Borrower and
the Subsidiaries possesses or has the right to use all of the material patents,
trademarks, trade names, service marks and copyrights, and applications
therefor, and all technology, know-how, processes, methods and designs used in
or necessary for the conduct of its business, without known conflict with the
rights of others, except for those the failure to own or not have the right to
use would not reasonably be expected to have a Material Adverse Effect.

 

Section 4.14    Investment Company Act. Neither the Borrower nor any Domestic
Subsidiary is an “investment company” or a company “controlled” by an investment
company within the meaning of the Investment Company Act of 1940, as amended.

 

Section 4.15     Subsidiaries. Schedule 4.15 sets forth as of the date of this
Agreement a list of each direct and indirect Subsidiary of the Borrower, the
number and percentage of the shares of each class of Stock owned beneficially or
of record by the Borrower or any other therein, and the jurisdiction of
incorporation or organization of each Subsidiary.

 

Section 4.16   Employee Relations. Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

25

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

 

 

Section 4.17     Burdensome Provisions. Borrower and its Subsidiaries do not
presently anticipate that future expenditures needed to meet the provisions of
any statutes, orders, rules or regulations of a governmental authority will be
so burdensome as to have a Material Adverse Effect. No Subsidiary is party to
any agreement or instrument or otherwise subject to any consensual restriction
or encumbrance that restricts or limits its ability to make dividend payments or
other distributions in respect of its Capital Stock to the Borrower or any
Subsidiary or to transfer any of its assets or properties to the Borrower or any
other Subsidiary in each case other than as permitted by Section 6.5 hereof.

 

Section 4.18     Anti-Terrorism; Anti-Money Laundering. Neither the Borrower nor
any Subsidiary or, to their knowledge, any director, officer, employee or Agent
of such Person (i) is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App.
§§ 1 et seq.), as amended, (ii) is in violation of (A) the Trading with the
Enemy Act, as amended, (B) any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto or (C) the PATRIOT
Act (collectively, the “Anti-Terrorism Laws”), (iii) is a Sanctioned Person,
(iv) has more than 10% of its assets in Sanctioned Countries, or (v) derives
more than 10% of its operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any
extension of credit hereunder will be unlawfully used directly or indirectly by
Borrower or any Subsidiary to fund any operations in, finance any investments or
activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country, or in any other manner that will result in any violation by any Person
(including the Lender) of any Anti-Terrorism Laws.

 

Section 4.19     Disclosure. No financial statement, material report, material
certificate or other material information furnished in writing by or on behalf
of any Borrower or any Subsidiary thereof to the Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished), taken together as a whole, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, pro forma financial information, estimated financial information
and other projected or estimated information, such information was prepared in
good faith based upon assumptions believed to be reasonable at the time (it
being recognized by Lender that such projections are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from projected results and such differences may be
material).

 

Section 4.20     Insurance. The properties of the Borrower and each Subsidiary
are insured with financially sound and reputable insurance companies against at
least such risks and in at least such amounts (and subject to such deductibles
and self-insurance retentions) as are customarily maintained by similar
businesses and as may be required by Applicable Law (including, without
limitation, hazard and business interruption insurance).

 

26

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

 

 

Article 5.     
AFFIRMATIVE COVENANTS

 

From the date of this Agreement and thereafter until any obligation of Lender to
make Advances shall have expired or been terminated, the Revolving Note, and all
of the Borrower’s and any Guarantor’s other Obligations have been paid in full
(other than (i) indemnification obligations which survive the termination of
this Agreement or any other Loan Documents or (ii) outstanding Letters of
Credit, Obligations under any outstanding Hedging Agreement or cash management
arrangements with Lender, which shall have been cash collateralized or other
arrangements made satisfactory to Lender), the Borrower will do, and will cause
each Subsidiary to do, all of the following:

 

Section 5.1     Financial Statements and Reports. Furnish to Lender:

 

(a)     Financial Statements.

 

(i)     Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days (or, if earlier, within 15 days of the date of any
required public filing thereof) after the end of each fiscal year (commencing
with the fiscal year ended December 31, 2017), an audited Consolidated balance
sheet of the Borrower and its Subsidiaries as of the close of such fiscal year
and audited Consolidated statements of income, stockholders’ equity and cash
flows including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
preceding fiscal year and prepared in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the year. Such annual financial statements shall be audited by
Ernst & Young LLP or any other independent certified public accounting firm of
recognized national standing selected by the Borrower and accompanied by a
report and opinion thereon by such certified public accountants prepared in
accordance with generally accepted auditing standards that is not subject to any
“going concern” or similar qualification or exception or any qualification as to
the scope of such audit or with respect to accounting principles followed by the
Borrower or any of its Subsidiaries not in accordance with GAAP.

 

(ii)     Quarterly Financial Statements. As soon as practicable and in any event
within forty-five (45) days (or, if earlier, within 15 days of the date of any
required public filing thereof) after the end of the first three (3) fiscal
quarters of each Fiscal Year (commencing with the fiscal quarter ended March 31,
2018), an unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated
statements of income and cash flows and a report containing management’s
discussion and analysis of such financial statements for such fiscal quarter and
that portion of the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures as
of the end of and for the corresponding period in the preceding Fiscal Year and
prepared by the Borrower in accordance with GAAP, subject to normal year-end
adjustments and the absence of footnotes, and, if applicable, containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
period, and certified by the chief financial officer, chief accounting officer,
controller or treasurer of the Borrower to present fairly in all material
respects the financial condition of the Borrower and its Subsidiaries on a
consolidated basis as of their respective dates and the results of operations of
the Borrower and its Subsidiaries on a consolidated basis for the respective
periods then ended.

 

27

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

 

 

Documents required to be delivered pursuant to this Section 5.1(a) or Section
5.1(b) or (c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address
http://phx.corporate-ir.net/phoenix.zhtml?c=248039&p=irol-irhome; or (ii) on
which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which the Lender has access (whether a commercial,
governmental or third-party website or sponsored by the Lender). Notwithstanding
anything contained herein, the Borrower shall be required to directly provide
Lender with paper or electronic copies of the Officer’s Compliance Certificates
required by Section 5.1(b).

 

(b)     At each time financial statements are delivered pursuant to Section
5.1(a), a duly completed Officer’s Compliance Certificate, substantially in the
form of Exhibit B hereto, signed by a Responsible Officer of the Borrower
certifying, among other things, as to compliance or non-compliance with all
financial covenants hereunder and stating that no Default or Event of Default
exists, or if any Default or Event of Default exists, stating the nature and
status thereof.

 

(c)     Promptly, and in any event within five (5) Business Days after receipt
thereof by the Borrower or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of the Borrower or any Subsidiary thereof.

 

(d)     Notice in writing promptly and in any event within five (5) Business
Days (other than with respect to clause (i) below, which shall be two (2)
Business Days) after a Responsible Officer of Borrower obtains knowledge
thereof, of the occurrence of any of the following:

 

(i)     any Default or Event of Default;

 

(ii)     the filing or commencement of any action, suit or proceeding by or
before any arbitrator or governmental authority against the Borrower or any
Subsidiary thereof that would reasonably be expected to result in a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
extensions of credit by Lender;

 

(iii)     with respect to a Plan, (i) any failure by the Borrower to pay all
required minimum contributions and installments on or before the due dates
provided under Section 4300 of the Code or (ii) the filing pursuant to Section
412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of
the minimum funding standard;

 

28

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

 

 

(iv)     the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, would reasonably be expected to have a
Material Adverse Effect;

 

(v)     any material change in accounting policies of, or financial reporting
practices by, the Borrower or any Subsidiary; and

 

(vi)     any other development, financial or otherwise, which would reasonably
be expected to have a Material Adverse Effect.

 

Each notice delivered under this Section 5.1(d) shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.

 

(e)     Promptly upon the request thereof, such information and documentation
required by bank regulatory authorities under applicable “know your customer”
and anti-money laundering rules and regulations (including, without limitation,
the PATRIOT Act), as from time to time reasonably requested by the Lender; and

 

(f)     Promptly upon the request thereof, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary thereof as the Lender may reasonably request.

 

Section 5.2     Financial Covenants. The Borrower and its Subsidiaries on a
consolidated basis shall maintain the following financial covenants in
accordance with GAAP:

 

(a)    Consolidated Total Leverage Ratio. As of the last day of any fiscal
quarter, a Consolidated Total Leverage Ratio for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date of not
greater than 2.00 to 1.00.

 

(b)    Minimum Consolidated EBITDA. As of the last day of any fiscal quarter,
Consolidated EBITDA for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date of not less than $40,000,000.

 

Section 5.3     Corporate Existence. Subject to Section 6.1 in the instance of a
Subsidiary, each of the Borrower and its Domestic Subsidiaries, as applicable,
shall maintain its corporate or other legal existence in good standing under the
laws of its jurisdiction of organization and its qualification to transact
business in each jurisdiction in which the character of the properties owned,
leased or operated by it or the business conducted by it makes such
qualification necessary, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.4     Insurance. Maintain with financially sound and reputable
insurance companies property insurance, liability insurance and environmental
insurance in such amounts, subject to such deductibles and self-insurance
retentions and covering such properties and risks as is customarily maintained
by similarly situated businesses, and the Borrower will furnish to the Lender
upon request full information as to the insurance carried.

 

29

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

 

 

Section 5.5     Payment of Taxes and Claims. File all tax returns and reports
which are required by law to be filed by it (after giving effect to any
extension) and pay before they become delinquent all taxes, assessments and
governmental charges and levies imposed upon it or its property and all claims
or demands of any kind (including, without limitation, those of suppliers,
mechanics, carriers, warehouses, landlords and other like Persons) which, if
unpaid, might result in the creation of a Lien upon its property; provided that
the foregoing items need not be paid if they are being contested in good faith
by appropriate proceedings and adequate reserves with respect thereto have been
set aside on the Borrower’s or such Subsidiary’s books in accordance with GAAP.

 

Section 5.6     Inspection. Permit any authorized representatives of Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and business with its and their officers and certified public
accountants, upon reasonable notice and at such reasonable times during normal
business hours and as often as may be reasonably requested; provided that, so
long as no Event of Default has occurred and is continuing, such visits and
inspections shall be limited to once annually. Representatives of Lender will be
permitted to accompany representatives of Lender during each visit, inspection
and discussion referred to in the immediately preceding sentence. Without in any
way limiting the foregoing, Borrower will participate and will cause its key
management personnel to participate in a meeting with Lender at least once
during each year, which meeting shall be held at such time and such place as may
be reasonably requested by Lender.

 

Section 5.7     Maintenance of Properties and Licenses.

 

(a)     Protect and preserve all properties necessary in and material to its
business, including copyrights, patents, trade names, service marks and
trademarks; maintain in good working order and condition, ordinary wear and tear
excepted, all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all repairs, renewals
and replacements thereof and additions to such property necessary for the
conduct of its business, so that the business carried on in connection therewith
may be conducted in a commercially reasonable manner; in each case except as
such action or inaction would not reasonably be expected to result in a Material
Adverse Effect.

 

(b)     Maintain, in full force and effect in all material respects, each and
every material license, permit, certification, qualification, approval or
franchise issued by any governmental authority (each a “License”) required for
each of them to conduct their respective businesses as presently conducted,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

Section 5.8     Books and Records. Keep adequate and proper records and books of
account in which full and correct entries will be made of its dealings, business
and affairs.

 

30

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

 

 

Section 5.9     Compliance. Comply in all material respects with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.10     ERISA. Maintain each Pension Plan in compliance with all
material applicable requirements of ERISA and of the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and of
the Code.

 

Section 5.11     Additional Domestic Subsidiaries. Without limiting or modifying
other provisions regarding Domestic Subsidiaries or an Investment therein,
within 30 days of the formation or acquisition of or additional Investment in
any entity that would become a Domestic Subsidiary, the Borrower shall (a) cause
such Domestic Subsidiary to become a Guarantor hereunder by executing and
delivering a joinder to the Guaranty, in form and substance acceptable to the
Lender, to be accompanied by an updated organizational chart for the Borrower
and its Subsidiaries substantially similar to Schedule 4.15 hereto designating
such Domestic Subsidiary as such, and (b) deliver to Lender documents of the
nature of those described in Section 3.1(a)(ii) through Section 3.1(a)(x) and
Section 3.1(a)(xii) for such Domestic Subsidiary and as may otherwise be
required by the Loan Documents.

 

Section 5.12     Use of Proceeds. Use the proceeds of the Revolving Loan and all
other extensions of credit from the Lender for the general corporate and working
capital purposes, acquisitions, capital expenditures, dividends and
distributions, repurchases of the Borrower’s common stock, and other corporate
purposes. The Borrower will not, nor will it permit any Subsidiary to, request
or use any of the proceeds of any extensions of credit from Lender (a) to
purchase or carry any “margin stock” (as defined in Regulation U but excluding
any stock the purchase of which is not subject to restriction or regulation
under Regulation U), or (b) (i) in furtherance of an offer, payment, promise to
pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Terrorism Laws (ii) in any
Sanctioned Country, (iii) for the purpose of knowingly funding or financing any
Sanctioned Person, or (iv) in any transaction that would result in the violation
of any Sanctions by any Person involved or participating in the transaction,
whether the Borrower, any Subsidiary or the Lender.

 

Section 5.13     Depository Accounts. At all times maintain the primary deposit
accounts of the Borrower or any Domestic Subsidiary with the Lender.

 

Article 6.     
NEGATIVE COVENANTS

 

From the date of this Agreement and thereafter until any obligation of Lender to
make Advances shall have expired or been terminated, the Revolving Note, and all
of the Borrower’s and any Guarantor’s other Obligations have been paid in full
(other than (i) indemnification obligations which survive the termination of
this Agreement or any other Loan Documents or (ii) outstanding Letters of
Credit, Obligations under any outstanding Hedging Agreement or cash management
arrangements with Lender, which shall have been cash collateralized or other
arrangements made satisfactory to Lender), the Borrower will not, and will not
permit any Subsidiary to, do any of the following:

 

31

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

 

 

Section 6.1     Consolidation and Merger; Asset Acquisitions; Investments.
Consolidate with or merge into any Person, or permit any other Person to merge
into it (provided, however, (i) any non-Credit Party may be merged with or
liquidated into the Borrower or any other Subsidiary, (ii) any Credit Party may
be merged with or liquidated into another Credit Party (with the Borrower or any
Subsidiary being the survivor of any merger with any such Subsidiary), or (iii)
the Borrower or any Subsidiary may merge or consolidate with or into any Person
in connection with any Permitted Disposition or Permitted Acquisition (with the
Borrower being the survivor of such merger or consolidation)), or consummate any
Acquisition, except in connection with a Permitted Acquisition; nor make or
permit to exist any Investment, except:

 

(a)     Investments in Marketable Securities;

 

(b)     travel advances or loans to the Borrower’s officers and employees not
exceeding at any one time an aggregate of $1,000,000;

 

(c)     advances in the form of progress payments, prepaid rent not exceeding
twelve (12) months or security deposits;

 

(d)     Investments constituting Permitted Acquisitions (including, without
limitation, any nominal amounts invested by the Borrower or a Subsidiary thereof
to capitalize a new Subsidiary formed to consummate the applicable Acquisition,
together with any incidental amounts required to be paid as part of the
formation process for such Subsidiary), subject however to the limitations set
forth in Section 6.1(i) with respect to maximum Investments in non-Domestic
Subsidiaries;

 

(e)     Investments existing on the date of this Agreement and (i) disclosed on
the Borrower’s financial statements delivered to Lender and referred to under
Section 4.5 or (ii) disclosed on Schedule 6.1 hereof;

 

(f)     extensions of trade credit in the ordinary course of business;

 

(g)     the repurchase of any Capital Stock of Borrower to the extent permitted
by Section 6.6(a);

 

(h)     Investments in the Borrower or any Domestic Subsidiaries;

 

(i)     existing Investments by the Borrower or a Domestic Subsidiary in
non-Domestic Subsidiaries, plus additional Investments by the Borrower or a
Domestic Subsidiary in non-Domestic Subsidiaries now existing or hereafter
created and made after September 30, 2017, provided that the amount of such
additional Investments, together with any intercompany Indebtedness incurred
pursuant to Section 6.3(d)(iv), does not exceed $50,000,000 in the aggregate;

 

32

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

 

 

(j)     Investments by non-Domestic Subsidiaries in other non-Domestic
Subsidiaries or any other Person; and

 

(k)     other Investments made after September 30, 2017, provided that the
aggregate amount of such other Investments does not exceed $25,000,000. In
determining the amount of Investments permitted under this clause (k), loans,
advances, bonds, notes, debentures and similar Investments shall be taken at the
principal amount thereof then remaining unpaid, and stocks, mutual funds,
partnership interests and similar Investments shall be taken at the original
cost thereof (regardless of any subsequent appreciation or depreciation therein)
net of any cash distributions in respect thereof.

 

Section 6.2     Sale of Assets. Lease, sell or otherwise dispose of its property
to any other Person, except the following (each a “Permitted Disposition”):

 

(a)     sales of inventory, or used, worn-out or surplus equipment, all in the
ordinary course of business;

 

(b)     the sale of equipment to the extent that such equipment is exchanged for
credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are applied with reasonable promptness to the purchase
price of such replacement equipment;

 

(c)     sales of property (i) between Credit Parties, (ii) between non-Credit
Parties, (iii) by a non-Credit Party to a Credit Party so long as such sale is
on arm’s length terms, and (iv) by a Credit Party to a non-Credit Party to the
extent reasonably necessary to facilitate international tax planning strategies
provided that all such sales under clause (iv) occurring after September 30,
2017 shall not exceed $10,000,000 in the aggregate.

 

(d)     the licensing of rights to use intellectual property in the ordinary
course of business or in settlement of any litigation or claims in respect of
intellectual property and the leasing of real property or equipment in the
ordinary course of business or as part of or incidental to the provision of
transitional services to a purchaser of Property in connection with a
disposition of such property permitted by this Agreement;

 

(e)     sales of Investments permitted by Section 6.1(a); and

 

(f)     any other lease, sale or other disposition of its property that,
together with all other property of the Borrower and its Subsidiaries previously
leased, sold or disposed of pursuant to this clause (f) during the four quarter
period ending with the quarter in which such lease, sale or other disposition
occurs, does not exceed five percent (5%) of consolidated total assets of the
Borrower during any fiscal year, and provided further that after giving effect
to any disposition of majority ownership or all or substantially all of the
assets of any Subsidiary, Borrower shall be in compliance on a Pro Forma Basis
with the financial covenants contained in Section 5.2 as of the last day of the
most recent fiscal quarter ended prior to the consummation of such disposition
for which financial statements have been delivered pursuant to Section 5.1
calculated as if such disposition, including the consideration therefor, had
been consummated on such date.

 

33

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

 

 

Section 6.3     Indebtedness. Not incur, create, assume or permit to exist any
Indebtedness of the Borrower or any Subsidiary for borrowed money, loans or
similar advances, including capital leases, except:

 

(a)     the Obligations;

 

(b)     Indebtedness existing on the date of this Agreement and to the extent
each such obligation is in excess of $1,000,000, listed on Schedule 6.3 and any
renewal, refinancing, extension or replacement thereof (but not the increase in
the aggregate principal amount thereof);

 

(c)     Indebtedness incurred in connection with capital leases and purchase
money Indebtedness to finance the acquisition of assets used in its business, if
(i) at the time of such incurrence no Default or Event of Default has occurred
and is continuing or would result from such incurrence, (ii) such Indebtedness
does not exceed $10,000,000 in aggregate principal amount outstanding at any
time, and (iii) the Borrower shall be in compliance, on a Pro Forma Basis, with
the financial covenants set forth in Section 5.2 as of the end of the most
recent fiscal quarter of the Borrower for which financial statements have been
delivered pursuant to Section 5.1;

 

(d)     unsecured intercompany Indebtedness: (i) owed by any Credit Party to
another Credit Party, (ii) owed by any non-Credit Party to another non-Credit
Party, (iii) owed by any Credit Party to any non-Domestic Subsidiary (provided
that such indebtedness shall be subordinated to the Obligations in a manner
satisfactory to the Lender), or (iv) owed by any non-Credit Party to any Credit
Party (provided that such Indebtedness, together with any Investments made
pursuant to Section 6.1(i), shall not exceed $50,000,000 in the aggregate);

 

(e)     without duplication, any Guaranty Obligations of (i) Indebtedness
permitted pursuant to any other clause of this Section 6.3, and (ii)
Indebtedness or any other liabilities of any non-Domestic Subsidiary provided
that the consolidated principal amount of such Guaranty Obligations of the
Borrower and its Domestic Subsidiaries as outstanding from time to time shall
not in the aggregate exceed $5,000,000; and

 

(f)     other unsecured Indebtedness incurred after September 30, 2017, provided
that the aggregate amount of such other Indebtedness outstanding at any time
does not exceed $5,000,000.

 

Section 6.4     Liens. Create, incur or suffer to exist any Lien upon any
property of the Borrower or any Subsidiary, whether now owned or hereafter
acquired; excluding, however, from the operation of the foregoing, the following
(collectively, “Permitted Liens”):

 

(a)     Liens in existence on the date hereof and listed in Schedule 6.4 hereto;
and Liens securing any refinancing, refunding, renewal or extension of the
Indebtedness or other liabilities or obligations secured by such existing Liens
(provided that (i) the principal amount of such Indebtedness is not increased,
and (ii) the scope of such Liens shall not be increased, or otherwise expanded,
to cover any additional property or type of assets, as applicable, beyond that
in existence on the date hereof, except for products and proceeds of the
foregoing);

 

34

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

 

 

(b)     Liens for taxes, assessments or governmental charges or levies on its
Property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;

 

(c)     Liens imposed by law, such as carriers’, warehousemen’s and mechanics’
liens and other similar liens arising in the ordinary course of business which
secure payment of obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;

 

(d)     Liens arising out of pledges or deposits under worker’s compensation
laws, unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation;

 

(e)     utility easements, building restrictions and such other encumbrances or
charges against real property as are of a nature generally existing with respect
to properties of a similar character and which do not in any material way affect
the marketability of the same or interfere with the use thereof in the business
of the Borrower or its Subsidiaries;

 

(f)     Liens arising solely by virtue of any statutory or common law provision
relating to bankers’ liens, rights of set-off or similar rights and remedies as
to deposit accounts, securities accounts or other funds maintained with a
creditor depository institution; provided that (i) such account is not a
dedicated cash collateral account and is not subject to restriction against
access by Borrower or a Subsidiary in excess of those set forth by regulations
promulgated by the Board of Governors of the Federal Reserve, and (ii) such
account is not intended by the Borrower or any Subsidiary to provide collateral
to the depository institution;

 

(g)     Liens on property acquired in any Permitted Acquisition, provided that
such Liens extend only to the property so acquired and were not created in
contemplation of such acquisition;

 

(h)     Liens granted pursuant to this Agreement;

 

(i)     Liens to secure the performance of bids, tenders, contracts (other than
for the payment of Indebtedness), leases, statutory obligations, liability to
insurance carriers, surety or appeal bonds, performance bonds or other
obligations of a like nature (including Liens to secure letters of credit issued
to assure payment of such obligations);

 

(j)     Liens securing Indebtedness permitted by Section 6.3(c);

 

(k)     Liens consisting of licenses or leases permitted by Section 6.2(d); and

 

(l)     Liens related to judgments or orders that do not constitute an Event of
Default under Section 7.1(i).

 

35

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

 

 

Section 6.5     No Further Negative Pledges; Restrictive Agreements.

 

(a)     Enter into, assume or be subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other obligation,
except (i) pursuant to this Agreement and the other Loan Documents, (ii)
restrictions and conditions imposed by law, (iii) customary restrictions in
connection with any Permitted Lien or in any document or instrument governing
any Permitted Lien (provided that any such restriction relates only to the asset
or assets subject to such Permitted Lien and the products and proceeds thereof),
(iv) restrictions and conditions contained in documentation relating to a
Subsidiary acquired after the date of this Agreement provided that (x) such
restriction or condition existed at the time such person became a Subsidiary and
was not created in contemplation of or in connection with such Person becoming a
Subsidiary and (y) applies only to such Subsidiary, (v) customary restrictions
contained in an agreement relating to the sale of property (to the extent such
sale is permitted pursuant to Section 6.2) that limit the granting of Liens on
such property (and/or, if such property consists of all or substantially all of
the Capital Stock of any Subsidiary, the property of such Subsidiary) pending
consummation of such sale, and (vi) customary provisions in leases, licenses and
other contracts restricting or conditioning the assignment or encumbrance
thereof, including, without limitation, licenses and sublicenses of patents,
trademarks, copyrights and similar intellectual property rights.

 

(b)     Create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any Credit Party or any
Subsidiary thereof to (i) pay dividends or make any other distributions to any
Credit Party or any Subsidiary on its Capital Stock, (ii) pay any Indebtedness
or other obligation owed to any Credit Party or (iii) make loans or advances to
any Credit Party, except in each case for such encumbrances or restrictions
existing under or by reason of (A) this Agreement and the other Loan Documents
and (B) applicable law.

 

(c)     Create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any Credit Party or any
Subsidiary thereof to (i) sell, lease or transfer any of its properties or
assets to any Credit Party, or (ii) act as a Credit Party pursuant to the Loan
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof, except in each case for such encumbrances or restrictions existing
under or by reason of (A) this Agreement and the other Loan Documents, (B)
applicable law, (C) any document or instrument governing Indebtedness incurred
pursuant to Section 6.3(c) (provided that any such restriction contained therein
relates only to the asset or assets acquired in connection therewith and the
products and proceeds thereof), (D) any Permitted Lien or any document or
instrument governing any Permitted Lien (provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien and the products and proceeds thereof), (E) obligations that are binding on
a Subsidiary at the time such Subsidiary first becomes a Subsidiary of the
Borrower, so long as such obligations are not entered into in contemplation of
such Person becoming a Subsidiary, (F) customary restrictions contained in an
agreement related to the sale of property (to the extent such sale is permitted
pursuant to Section 6.2) that limit the transfer of such property (and/or, in
case such property consists of all or substantially all of the Capital Stock of
any Subsidiary, the property of such Subsidiary) pending the consummation of
such sale, (G) customary restrictions in leases, subleases, licenses and
sublicenses or asset sale agreements otherwise permitted by this Agreement so
long as such restrictions relate only to the assets subject thereto, and (H)
customary provisions restricting assignment of any agreement whether or not such
agreement is entered into in the ordinary course of business.

 

36

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

 

 

Section 6.6     Restricted Payments. Declare or pay any dividend on, or make any
payment or other distribution on account of, or purchase, redeem, retire or
otherwise acquire (directly or indirectly), or set apart assets for a sinking or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, any class of Capital Stock of any Credit Party, or make any
distribution of cash, property or assets to the holders of shares of any Capital
Stock of any Credit Party in respect of such Capital Stock (all of the
foregoing, the “Restricted Payments”) provided that:

 

(a)     so long as no Default or Event of Default has occurred and is continuing
or would result therefrom, and (ii) the Borrower shall be in compliance, on a
pro forma basis, with the financial covenants set forth in Section 5.2 as of the
end of the most recent fiscal quarter of the Borrower for which financial
statements have been delivered pursuant to Section 5.1, the Borrower may declare
or pay cash dividends on its Capital Stock and/or make repurchases of its
Capital Stock; and

 

(b)     Any Credit Party may pay dividends in shares of its own Capital Stock
and any Domestic Subsidiary may pay cash dividends to the Borrower or any other
Domestic Subsidiary;

 

provided further that for the avoidance of doubt, the term “Restricted Payments”
shall not be deemed to include any payment or prepayment of principal, interest
or other amounts due in respect of any Indebtedness convertible into shares of
Capital Stock of any Credit Party or any Domestic Subsidiary thereof, which
Indebtedness is permitted by Section 6.3.

 

Section 6.7     Changes in Fiscal Periods. Permit the fiscal year of Borrower to
end on a day other than December 31 or change the Borrower’s method of
determining fiscal quarters.

 

Section 6.8     Change in Nature of Business. Make any material change in the
nature of the business of the Borrower or any Subsidiary, as carried on at the
date hereof, other than any line of business acquired in connection with and
permitted by a Permitted Acquisition.

 

Section 6.9     Restriction on Fundamental Changes. Directly or indirectly to:
(a) change its name or jurisdiction of organization except with the consent of
Lender which will not be unreasonably withheld; or (b) liquidate, wind-up or
dissolve the Borrower (or suffer any liquidation or dissolution).

 

Section 6.10     Hedge Agreements. Enter into any Hedge Agreement, except Hedge
Agreements entered into for non-speculative purposes and with the Lender.

 

37

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

 

 

Article 7.
EVENTS OF DEFAULT AND REMEDIES

 

Section 7.1     Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:

 

(a)     Any Credit Party shall fail to make, whether by acceleration or
otherwise, (a) any payment of principal of any Loan when due, or (b) any payment
of interest on any of the Loans, or any fee or other amount required to be paid
to Lender pursuant to the Loan Documents, within five (5) Business Days after
any such interest, fee or other amount becomes due in accordance with the terms
of this Agreement or any other Loan Document;

 

(b)     A Change in Control shall occur;

 

(c)     Any representation, warranty, certification or statement of fact made or
deemed made by or on behalf of any Credit Party or any Subsidiary thereof in
this Agreement, in any other Loan Document, or in any document delivered in
connection herewith or therewith that is subject to materiality or Material
Adverse Effect qualifications, shall be incorrect or misleading in any respect
when made or deemed made or any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of any Credit Party or any
Subsidiary thereof in this Agreement, any other Loan Document, or in any
document delivered in connection herewith or therewith that is not subject to
materiality or Material Adverse Effect qualifications, shall be incorrect or
misleading in any material respect when made or deemed made.;

 

(d)     Any Credit Party shall fail to comply with Section 5.2, Section 5.3 or
Section 5.11 hereof or any Section of Article 6 hereof;

 

(e)     Any Credit Party or Subsidiary shall fail to comply with any agreement,
covenant, condition, provision or term contained in the Loan Documents (and such
failure shall not constitute an Event of Default under any of the other
provisions of this Section 7.1) and such failure to comply shall continue for 30
calendar days after notice thereof to the Borrower by Lender;

 

(f)     Any Credit Party shall become insolvent or shall generally not pay its
debts as they mature or shall apply for, shall consent to, or shall acquiesce in
the appointment of a custodian, trustee or receiver of a Credit Party or for a
substantial part of the property thereof or, in the absence of such application,
consent or acquiescence, a custodian, trustee or receiver shall be appointed for
a Credit Party or for a substantial part of the property thereof and shall not
be discharged within 30 days;

 

(g)     Any bankruptcy, reorganization, debt arrangement or other proceedings
under any bankruptcy or insolvency law shall be instituted by or against a
Credit Party, and, if instituted against a Credit Party, shall have been
consented to or acquiesced in by a Credit Party, or shall remain undismissed for
60 days, or an order for relief shall have been entered against a Credit Part,
or a Credit Party shall take any corporate action to approve institution of, or
acquiescence in, such a proceeding;

 

38

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

 

 

(h)     Any dissolution or liquidation proceeding (other than any dissolution or
liquidation permitted under Section 6.1 of this Agreement) shall be instituted
by or against a Credit Party and, if instituted against a Credit Party, shall be
consented to or acquiesced in by a Credit Party or shall remain for 30 days
undismissed, or a Credit Party shall take any corporate action to approve
institution of, or acquiescence in, such a proceeding;

 

(i)     A judgment, writ, warrant for attachment, executions or similar process
for the payment of money in excess of the sum of (1) an amount in any individual
case in excess of $1,000,000 or (2) an amount in the aggregate at any time in
excess of $5,000,000 (in either case to the extent not adequately covered by
insurance as to which the insurance company has acknowledged coverage) shall be
rendered against a Credit Party or Subsidiary and a Credit Party or Subsidiary
shall not discharge the same or provide for its discharge in accordance with its
terms, or procure a stay of execution thereof, prior to any execution on such
judgments by such judgment creditor, within 30 days from the date of entry
thereof, and within said period of 30 days, or such longer period during which
execution of such judgment shall be stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal;

 

(j)     (i) With respect to a Plan, the Borrower or an ERISA Affiliate is
subject to a lien in excess of $1,000,000 pursuant to Section 430(k) of the Code
or Section 302(c) of ERISA or Title IV of ERISA, or (ii) an ERISA Event shall
have occurred that, in the opinion of the Lender, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to have a
Material Adverse Effect; or

 

(k)     The maturity of any Indebtedness (excluding accounts payable) of a
Credit Party or Subsidiary (other than Obligations under the Loan Documents) in
excess of $5,000,000 shall be accelerated, or any event shall occur or condition
shall exist and shall continue for more than the period of grace, if any,
applicable thereto and shall have the effect of causing, or permitting (any
required notice having been given and grace period having expired) the holder of
any such Indebtedness or any trustee or other Person acting on behalf of such
holder to cause, such Indebtedness to become due prior to its stated maturity or
to realize upon any collateral given as security therefor.

 

Section 7.2     Remedies. If (a) any Event of Default described in Section
7.1(f), (g) or (h) shall occur with respect to a Credit Party or Domestic
Subsidiary, the Revolving Loan Commitment shall automatically terminate and the
outstanding unpaid principal balance of the Loans, the accrued interest thereon
and all other obligations of the Borrower or any Subsidiary to Lender under the
Loan Documents shall automatically become immediately due and payable without
presentment, demand, protest or notice of any kind; or (b) any other Event of
Default shall occur and be continuing, then Lender may (i) by written notice
declare the Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment shall terminate, and/or (ii) by written notice declare that the
outstanding unpaid principal balance of the Loans, the accrued and unpaid
interest thereon and all other Obligations of the Credit Parties to Lender under
the Loan Documents to be forthwith due and payable, whereupon the Loans, all
accrued and unpaid interest thereon and all such Obligations shall immediately
become due and payable, in each case without demand or notice of any kind, all
of which are hereby expressly waived, anything in this Agreement or in the
Revolving Note to the contrary notwithstanding. In addition, without limiting
the foregoing (y) upon the occurrence of any Default, Lender may without notice
or demand, immediately suspend all or any portion of Lender’s obligations to
make additional Loans or issue or cause to be issued Letters of Credit under the
Revolving Loan Commitment; provided that if the subject condition or event is
waived by Lender or cured within any applicable grace or cure period, the
Revolving Loan Commitment shall be reinstated; and (z) upon the occurrence of
any Event of Default or at any time thereafter until such Event of Default is
cured or waived to the written satisfaction of Lender, Lender may take any or
all of the following actions: (i) exercise all rights and remedies available
under any instrument, document or agreement between any Credit Party or
Subsidiary and Lender; and (ii) enforce all rights and remedies under any
applicable law.

 

39

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

 

 

Section 7.3     Offset. In addition to the remedies set forth in Section 7.2,
upon and after the occurrence of an Event of Default, (a) Borrower hereby
authorizes Lender, at any time and from time to time, without notice, which is
hereby expressly waived by Borrower, and whether or not Lender shall have
declared any credit subject hereto to be due and payable in accordance with the
terms hereof, to set off against, and to appropriate and apply to the payment
of, Borrower's obligations and liabilities under the Loan Documents (whether
matured or unmatured, fixed or contingent, liquidated or unliquidated), any and
all amounts owing by Lender to Borrower (whether payable in U.S. dollars or any
other currency, whether matured or unmatured, and in the case of deposits,
whether general or special (except trust and escrow accounts), time or demand
and however evidenced), and (b) pending any such action, to the extent
necessary, to hold such amounts as collateral to secure such obligations and
liabilities and to return as unpaid for insufficient funds any and all checks
and other items drawn against any deposits so held as Lender, in its sole
discretion, may elect. Lender may exercise this remedy regardless of the
adequacy of any collateral for the obligations of Borrower to Lender and whether
or not the Lender is otherwise fully secured. Borrower hereby grants to Lender a
security interest in all deposits and accounts maintained with Lender to secure
the payment of all obligations and liabilities of Borrower to Lender under the
Loan Documents.

 

Article 8.
MISCELLANEOUS

 

Section 8.1     Waivers and Amendments. No failure on the part of Lender or the
holder(s) of the Revolving Note to exercise and no delay in exercising any power
or right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The remedies herein and in any other instrument, document or agreement
delivered or to be delivered to Lender hereunder or in connection herewith are
cumulative and not exclusive of any remedies provided by law. No notice to or
demand on the Borrower not required hereunder or under the Revolving Note shall
in any event entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of Lender or
the holder(s) of the Revolving Note to any other or further action in any
circumstances without notice or demand. No amendment, modification or waiver of
any provision of the Loan Documents or consent to any departure by the Borrower
therefrom shall be effective unless the same shall be in writing and signed by
Lender, and then such amendment, modifications, waiver or consent shall be
effective only in the specific instances and for the specific purpose for which
given.

 

40

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

 

 

Section 8.2     Indemnities. Without limiting and in addition to the terms of
Section 2.5 hereof, Borrower agrees to indemnify, pay, and hold Lender and its
respective officers, directors, employees, agents, and attorneys (the
“Indemnitees”) harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs and
expenses (including all reasonable and documented out-of-pocket fees and
expenses of counsel to such Indemnitees) of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Indemnitee as a result
of such Indemnitees being a party to this Agreement or any Loan Documents or the
transactions consummated pursuant thereto or any of the transactions or
agreements with any Credit Party; provided that Borrower shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, Borrower agrees to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law. This subsection and other indemnification
provisions contained within the Loan Documents shall survive the termination of
this Agreement.

 

Section 8.3     Notices.

 

(a)     Except as otherwise provided herein, including without limitation
Section 8.3(b), all notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three (3) Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed to such party at the address specified on the signature page hereof,
or at such other address as such party shall have specified to the other party
hereto in writing; provided, however, that any notice, demand or request to
Lender shall be deemed to have been given only when received by Lender.

 

(b)     Notices and other communications to Lender hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by
Lender; provided that the foregoing shall not apply to notices pursuant to
Article 2 unless otherwise agreed by Lender. Lender or the Borrower may, in
their discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications. Additionally, if Lender agrees to accept a notice pursuant to
Article 2, including any notice of borrowing, made by e-mail transmission, such
e-mail transmission shall be binding on the Borrower whether or not written
confirmation is sent by the Borrower or requested by Lender, and Lender may act
prior to the receipt of any requested written confirmation, without any
liability whatsoever, based upon e-mail notice believed by Lender in good faith
to be from the Borrower. Lender’s records of the terms of any e-mail notice
pursuant to Article 2 shall be conclusive on the Borrower in the absence of
gross negligence or willful misconduct on the part of Lender in connection
therewith.

 

41

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

 

 

Section 8.4     Successors. This Agreement shall be binding upon and inure to
the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interests or rights hereunder without Lender's prior
written consent. Lender reserves the right to sell, assign, transfer, negotiate
or grant participations in all or any part of, or any interest in, Lender's
rights and benefits under each of the Loan Documents; provided, however, that in
the absence of any continuing Event of Default, the Borrower must consent to any
assignments other than to a domestic affiliate of Lender or with respect to any
participation. In connection therewith, Lender may disclose all documents and
information which Lender now has or may hereafter acquire relating to any credit
subject hereto, Borrower or its business, any Guarantor hereunder or the
business of such guarantor, if any, or any collateral required hereunder.

 

Section 8.5     Participations and Information. Upon ten (10) calendar days’
prior written notice to Borrower, which notice shall identify the participant,
Lender may sell participation interests in any or all of the Loans to any
Person. Subject to Section 8.9 hereof, Lender may furnish any information
concerning the Borrower in the possession of Lender from time to time to
participants and prospective participants and may furnish information in
response to credit inquiries consistent with general banking practice. Lender
and its loan participants, if any, are not partners or joint venturers with
Borrower.

 

Section 8.6     Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Lender to exercise, nor any partial exercise of,
any power, right or privilege hereunder or under any other Loan Documents shall
impair such power, right, or privilege or be construed to be a waiver of any
Default or Event of Default. All rights and remedies existing hereunder or under
any other Loan Document are cumulative to and not exclusive of any rights or
remedies otherwise available.

 

Section 8.7     Marshaling; Payments Set Aside. Lender shall not be under any
obligation to marshal any assets in payment of any or all of the Obligations. To
the extent that Borrower makes payment(s) or Lender enforces its Liens or Lender
exercises its right of set-off, and such payment(s) or the proceeds of such
enforcement or set-off is subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid by anyone, then to the extent
of such recovery, the Obligations or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or set off had not occurred.

 

Section 8.8     Severability. Any provision of the Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

42

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

 

 

Section 8.9     Treatment of Certain Information; Confidentiality. The Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its
Related Parties (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent required or
requested by, or required to be disclosed to, any rating agency, or regulatory
or similar authority purporting to have jurisdiction over such Person or its
Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
under this Agreement, under any other Loan Document or under any Hedge
Agreement, or any action or proceeding relating to this Agreement, any other
Loan Document or any Hedge Agreement, or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights and obligations
under this Agreement, or (ii) any actual or prospective party (or its Related
Parties) to any swap, derivative or other transaction under which payments are
to be made by reference to the Borrower and its obligations, this Agreement or
payments hereunder; (g) on a confidential basis to (i) any rating agency in
connection with rating the Borrower or its Subsidiaries or the credit facility
hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection
with the issuance and monitoring of CUSIP numbers with respect to the credit
facility; (h) with the consent of the Borrower, (i) to Gold Sheets and other
similar bank trade publications, such information to consist of deal terms and
other information customarily found in such publications, (j) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Lender or any of its respective
Affiliates from a third party that is not, to such Person’s knowledge, subject
to confidentiality obligations to the Borrower, (k) to governmental regulatory
authorities in connection with any regulatory examination of the Lender or in
accordance with the Lender’s regulatory compliance policy if the Lender deems
necessary for the mitigation of claims by those authorities against the Lender
or any of its subsidiaries or affiliates, (l) to the extent that such
information is independently developed by the Lender, or (m) for purposes of
establishing a “due diligence” defense. For purposes of this Section,
“Information” means all information received from any Credit Party or any
Subsidiary thereof relating to any Credit Party or any Subsidiary thereof or any
of their respective businesses, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by any
Credit Party or any Subsidiary thereof; provided that, in the case of
information received from a Credit Party or any Subsidiary thereof after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding any provision in this
Agreement to the contrary, the obligations of the Lender under this Section 8.9
shall survive termination of this Agreement for a period of one year.

 

Section 8.10     Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, limit or describe
the scope or intent of any provision of this Agreement.

 

Section 8.11     Entire Agreement; Exchanging Information. This Agreement and
the Revolving Note embody the entire agreement and understanding between the
Borrower and Lender with respect to the subject matter hereof and thereof. This
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof. Without limiting the Lender’s right to share information
regarding the Borrower and its Affiliates with the Lender’s participants,
accountants, lawyers and other advisors, the Lender, Wells Fargo & Company, and
all direct and indirect subsidiaries of Wells Fargo & Company, may exchange any
and all information they may have in their possession regarding the Borrower and
its Affiliates, and the Borrower waives any right of confidentiality it may have
with respect to such exchange of such information.

 

43

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

 

 

Section 8.12     Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”)
format shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

Section 8.13     Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT, THE REVOLVING NOTE AND EACH OF THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS.

 

Section 8.14     Consent to Jurisdiction. SUBJECT TO THE ARBITRATION PROVISIONS
OF SECTION 8.16 BELOW AS TO ALL DISPUTES AND MATTERS THAT SHALL BE SUBMITTED TO
ARBITRATION, AT THE OPTION OF LENDER, THIS AGREEMENT, THE REVOLVING NOTE AND THE
LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT
SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE BORROWER CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY
OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, LENDER AT ITS
OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

 

Section 8.15     Waiver of Jury Trial. THE BORROWER WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR (b) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

44

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

 

 

Section 8.16     Arbitration.

 

(a)     Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise in any way arising out of
or relating to (i) any credit subject hereto, or any of the Loan Documents, and
their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit. In the event of
a court ordered arbitration, the party requesting arbitration shall be
responsible for timely filing the demand for arbitration and paying the
appropriate filing fee within 30 days of the abatement order or the time
specified by the court. Failure to timely file the demand for arbitration as
ordered by the court will result in that party’s right to demand arbitration
being automatically terminated.

 

(b)     Governing Rules. Any arbitration proceeding will (i) proceed in a
location in the State selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA’s optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to herein, as applicable, as the “Rules”). If
there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any
similar applicable state law.

 

(c)     No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

 

45

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

 

 

(d)     Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State or a neutral retired judge of the state or
federal judiciary of the State, in either case with a minimum of ten years’
experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of the State and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the corresponding rules of civil practice and procedure
applicable in the State or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.

 

(e)     Discovery. In any arbitration proceeding, discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.

 

(f)     Class Proceedings and Consolidations. No party hereto shall be entitled
to join or consolidate disputes by or against others in any arbitration, except
parties who have executed any Loan Document, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.

 

(g)     Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.

 

(h)     Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

 

46

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

 

 

Section 8.17     Borrower Acknowledgements. The Borrower hereby acknowledges
that (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents, (b) Lender has no
fiduciary relationship to the Borrower, the relationship being solely that of
debtor and creditor, (c) no joint venture exists between the Lender and Borrower
or any Subsidiary, and (d) Lender undertakes no responsibility to the Borrower
to review or inform the Borrower of any matter in connection with any phase of
the business or operations of the Borrower and the Borrower shall rely entirely
upon its own judgment with respect to its business, and any review, inspection
or supervision of, or information supplied to, the Borrower by Lender is for the
protection of Lender and neither the Borrower nor any third party is entitled to
rely thereon.

 

[Signature page follows]

 

 

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

 

 

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

 

BORROWER:

 

PROTO LABS, INC.

     

By:

/s/ John A. Way

Name:

John A. Way

Title:

Chief Financial Officer

   

 

Address:

5540 Pioneer Creek Drive

 

Maple Plain, MN 55359

 

Attention: Chief Financial Officer

 

 

 

LENDER

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

     

By:

/s/ Joshua D. Villas

Name:

Joshua D. Villas

Title:

Vice President

   

 

Address:

90 South 7th Street

 

18th Floor - MAC N9305-187

 

Minneapolis, MN 55402

 

 

Signature Page to Credit Agreement

 

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

 

 

EXHIBIT A

 

REVOLVING NOTE

 

 

$30,000,000.00 

Minneapolis, Minnesota

 

November ___, 2017

 

FOR VALUE RECEIVED, the undersigned PROTO LABS, INC., a Minnesota corporation
(“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”) at its office at 90 South 7th Street, 18th Floor MAC
N9305-187, Minneapolis, MN 55402, or at such other place as the holder hereof
may designate, in lawful money of the United States of America and in
immediately available funds, the principal sum of THIRTY Million and 00/100
Dollars ($30,000,000.00), or so much thereof as may be advanced and be
outstanding pursuant to the terms of the Credit Agreement, as defined herein,
with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:

 

(a)     “Daily One Month LIBOR” means, for any day, the rate of interest equal
to LIBOR then in effect for delivery for a one (1) month period.

 

(b)     “LIBOR” means (i) for the purpose of calculating effective rates of
interest for loans making reference to LIBOR Periods, the rate of interest per
annum determined by Bank based on the rate for United States dollar deposits for
delivery on the first day of each LIBOR Period for a period approximately equal
to such LIBOR Period as published by the ICE Benchmark Administration Limited, a
United Kingdom company, at approximately 11:00 a.m., London time, two London
Business Days prior to the first day of such LIBOR Period (or if not so
published, then as determined by Bank from another recognized source or
interbank quotation), or (ii) for the purpose of calculating effective rates of
interest for loans making reference to Daily One Month LIBOR, the rate of
interest per annum determined by Bank based on the rate for United States dollar
deposits for delivery of funds for one (1) month as published by the ICE
Benchmark Administration Limited, a United Kingdom company, at approximately
11:00 a.m., London time, or, for any day not a London Business Day, the
immediately preceding London Business Day (or if not so published, then as
determined by Bank from another recognized source or interbank quotation);
provided, however, that if LIBOR determined as provided above would be less than
zero percent (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).

 

 

 

[ex_101319img002.gif]

 

 

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

 

 

(c)     “LIBOR Period” means a period commencing on a New York Business Day and
continuing for either one, three or six months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that (i) no
LIBOR Period may be selected for a principal amount less than One Hundred
Thousand & 00/1000 Dollars ($100,000.00), (ii) if the day after the end of any
LIBOR Period is not a New York Business Day (so that a new LIBOR Period could
not be selected by Borrower to start on such day), then such LIBOR Period shall
continue up to, but shall not include, the next New York Business Day after the
end of such LIBOR Period, unless the result of such extension would be to cause
any immediately following LIBOR Period to begin in the next calendar month in
which event the LIBOR Period shall continue up to, but shall not include, the
New York Business Day immediately preceding the last day of such LIBOR Period,
and (iii) no LIBOR Period shall extend beyond the scheduled maturity date
hereof.

 

(d)     “London Business Day” means any day that is a day for trading by and
between banks in dollar deposits in the London interbank market.

 

(e)     “New York Business Day” means any day except a Saturday, Sunday or any
other day on which commercial banks in New York are authorized or required by
law to close.

 

(f)     “State Business Day” means any day except a Saturday, Sunday or any
other day on which commercial banks in the jurisdiction described in “Governing
Law” herein are authorized or required by law to close.

 

INTEREST:

 

(a)     Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum determined by Bank to be one percent (1%)
above Daily One Month LIBOR in effect from time to time, or (ii) at a fixed rate
per annum determined by Bank to be one percent (1%) above LIBOR in effect on the
first day of the applicable LIBOR Period. Bank is hereby authorized to note the
date, principal amount and interest rate applicable thereto and any payments
made thereon on Bank’s books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted.

 

(b)     Selection of Interest Rate Options. Subject to the provisions herein
regarding LIBOR Periods and the prior notice required for the selection of a
LIBOR interest rate, (i) at any time any portion of this Note bears interest
determined in relation to LIBOR for a LIBOR Period, it may be continued by
Borrower at the end of the LIBOR Period applicable thereto so that all or a
portion thereof bears interest determined in relation to Daily One Month LIBOR
or to LIBOR for a new LIBOR Period designated by Borrower, (ii) at any time any
portion of this Note bears interest determined in relation to Daily One Month
LIBOR, Borrower may convert all or a portion thereof so that it bears interest
determined in relation to LIBOR for a LIBOR Period designated by Borrower, and
(iii) at the time an advance is made hereunder, Borrower may choose to have all
or a portion thereof bear interest determined in relation to Daily One Month
LIBOR or to LIBOR for a LIBOR Period designated by Borrower.

 

-3-

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

 

 

To select an interest rate option hereunder determined in relation to LIBOR for
a LIBOR Period, Borrower shall give Bank notice thereof that is received by Bank
prior to 11:00 a.m. in the jurisdiction described in “Governing Law” herein on a
State Business Day at least two State Business Days prior to the first day of
the LIBOR Period, or at a later time during such State Business Day if Bank, at
its sole discretion, accepts Borrower’s notice and quotes a fixed rate to
Borrower. Such notice shall specify: (A) the interest rate option selected by
Borrower, (B) the principal amount subject thereto, and (C) for each LIBOR
selection, the length of the applicable LIBOR Period. If Bank has not received
such notice in accordance with the foregoing before an advance is made hereunder
or before the end of any LIBOR Period, Borrower shall be deemed to have made a
Daily One Month LIBOR interest selection for such advance or the principal
amount to which such LIBOR Period applied. Any such notice may be given by
telephone (or such other electronic method as Bank may permit) so long as it is
given in accordance with the foregoing and, with respect to each LIBOR
selection, if requested by Bank, Borrower provides to Bank written confirmation
thereof not later than three State Business Days after such notice is given.
Borrower shall reimburse Bank immediately upon demand for any loss or expense
(including any loss or expense incurred by reason of the liquidation or
redeployment of funds obtained to fund or maintain a LIBOR borrowing) incurred
by Bank as a result of the failure of Borrower to accept or complete a LIBOR
borrowing hereunder after making a request therefor. Any reasonable
determination of such amounts by Bank shall be conclusive and binding upon
Borrower. Should more than one person or entity sign this Note as a Borrower,
any notice required above may be given by any one Borrower acting alone, which
notice shall be binding on all other Borrowers.

 

(c)     Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any and
all (i) withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) costs,
expenses and liabilities arising from or in connection with reserve percentages
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the
Federal Reserve Board, as amended), assessment rates imposed by the Federal
Deposit Insurance Corporation, or similar requirements or costs imposed by any
domestic or foreign governmental authority or resulting from compliance by Bank
with any request or directive (whether or not having the force of law) from any
central bank or other governmental authority and related in any manner to LIBOR.
In determining which of the foregoing are attributable to any LIBOR option
available to Borrower hereunder, any reasonable allocation made by Bank among
its operations shall be conclusive and binding upon Borrower.

 

(d)     Default Interest. From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, or upon the occurrence and during the continuance of
an Event of Default, then at the option of Bank, in its sole and absolute
discretion, the outstanding principal balance of this Note shall bear interest
at an increased rate per annum (computed on the basis of a 360-day year, actual
days elapsed) equal to two percent (2%) above the rate of interest from time to
time applicable to this Note.

 

BORROWING AND REPAYMENT:

 

(a)     Borrowing and Repayment of Principal. Borrower may from time to time
during the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on November 30, 2019.

 

-4-

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

 

 

(b)     Payment of Interest. Interest accrued on this Note shall be payable on
the first (1st) day of each month, commencing December 1, 2017 and on the
maturity date set forth above.

 

(c)     Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of (i)
the President and Chief Executive Officer, Chief Financial Officer or Controller
of the Borrower, any one acting alone, who are authorized to request advances
and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (ii) any other officer or employee of the Borrower to which any
officer specified in clause (i) hereof has in writing or electronically
delegated such authority to obtain advances, including in connection with the
utilization of the Bank’s electronic banking system. The holder shall have no
obligation to determine whether any person requesting an advance is or has been
authorized by Borrower.

 

(d)     Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to Daily One Month LIBOR, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in
relation to LIBOR, with such payments applied to the oldest LIBOR Period first.

 

PREPAYMENT:

 

(a)     Daily One Month LIBOR. Borrower may prepay principal on any portion of
this Note which bears interest determined in relation to the Daily One Month
LIBOR rate at any time, in any amount and without penalty.

 

(b)     LIBOR. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to LIBOR at any time and in the minimum
amount of One Hundred Thousand & 00/100 Dollars ($100,000.00); provided however,
that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding
principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the LIBOR Period applicable thereto
by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand
a fee which is the sum of the discounted monthly differences for each month from
the month of prepayment through the month in which such LIBOR Period matures,
which Bank shall calculate as follows for each such month, providing such
calculation to Borrower to review:

 

-5-

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

 

 

(i)     Determine the amount of interest which would have accrued each month on
the amount prepaid at the interest rate applicable to such amount had it
remained outstanding until the last day of the LIBOR Period applicable thereto.

 

(ii)     Subtract from the amount determined in (i) above the amount of interest
which would have accrued for the same month on the amount prepaid for the
remaining term of such LIBOR Period at LIBOR in effect on the date of prepayment
for new loans made for such term and in a principal amount equal to the amount
prepaid.

 

(iii)     If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.

 

Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum one percent (1%) above the Daily
One Month LIBOR rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed).

 

(c)     Application of Prepayments. If principal under this Note is payable in
more than one installment, then any prepayments of principal shall be applied to
the most remote principal installment or installments then unpaid.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the terms and conditions of that
certain Credit Agreement between Borrower and Bank of even date herewith, as
amended from time to time (the “Credit Agreement”). Any Event of Default under
the Credit Agreement shall constitute an “Event of Default” under this Note.

 

MISCELLANEOUS:

 

(a)     Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder’s option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Borrower shall pay to the holder immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys’ fees (to include outside counsel fees
and all allocated costs of the holder’s in-house counsel), expended or incurred
by the holder in connection with the enforcement of the holder’s rights and/or
the collection of any amounts which become due to the holder under this Note
whether or not suit is brought, and the prosecution or defense of any action in
any way related to this Note, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.

 

-6-

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

 

 

(b)     Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.

 

(c)     Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS
NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT
GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO
FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

 

[Signature Page Follows]

 

-7-

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

 

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

 

PROTO LABS, INC.

 

 

 

By:                                                 
Name:                                                    
Title:                                             

 

 

[Signature page to $30,000,000 Revolving Note payable to the order of

 

Wells Fargo Bank, National Association]

 

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

 

 

EXHIBIT B

 

Compliance Certificate

 

To:

Joshua D Villas

 

Wells Fargo Bank, National Association, as Lender (“Lender”)

 

Date:

__________________, 20___

 

Subject:

__________________, 20___ Financial Statements

 

In accordance with our Credit Agreement dated as of November 27, 2017 (as
heretofore and hereafter amended, the “Credit Agreement”), Proto Labs, Inc. (the
“Borrower”) has delivered to Lender the financial statements of Borrower and its
Subsidiaries as of and for ________________, 20____ (the “Reporting Date”) and
the year-to-date period then ended (the “Current Financials”), which are
required to be delivered pursuant to [Section 5.1(a)(i)] OR [Section 5.1(a)(ii)]
of the Credit Agreement. All terms used in this certificate have the meanings
given in the Credit Agreement.

 

I certify that the Current Financials have been prepared in accordance with
GAAP, applied on a basis consistent with the accounting practices reflected in
the annual financial statements of Borrower referred to in [Section 5.1(a)(i)]
OR [Section 5.1(a)(ii)] of the Credit Agreement subject to year-end audit
adjustments and absence of footnotes, and present fairly in all material
respects the financial condition of the Borrower and its Subsidiaries on a
Consolidated basis as of the date thereof.

 

Events of Default. (Check one):

 

☐     The undersigned does not have knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement except as previously reported in
writing to the Lender.

 

☐     The undersigned has knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement not previously reported in writing to the
Lender and attached hereto is a statement of the facts with respect to thereto.

 

Financial Covenants. I further hereby certify as follows:

 

1.

Consolidated Total Leverage Ratio. Pursuant to Section 5.2(a) of the Credit
Agreement, as of the last day of the Reporting Date, the Consolidated Total
Leverage Ratio of the Borrower and its Subsidiaries for the period of four (4)
consecutive fiscal quarters ending on such date was _____ to 1.00, which ☐
satisfies ☐ does not satisfy the requirement that such ratio be not more than
2.00 to 1.00.

 

2.

Minimum Consolidated EBITDA. Pursuant to Section 5.2(b) of the Credit Agreement,
as of the last day of the Reporting Date, Consolidated EBITDA of the Borrower
and its Subsidiaries for the period of four (4) consecutive fiscal quarters
ending on such date was $_______________, which ☐ satisfies ☐ does not satisfy
the requirement that Consolidated EBITDA be at least $40,000,000.

 

-9-

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

 

 

Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.

 

PROTO LABS, INC.

     

By:

   

[____________]

 

Its: [____________]

 

 2