Exhibit 10.31

 

Execution Version

 

 

CREDIT AGREEMENT

 

by and among

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Administrative Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Sole Lead Arranger and Book Runner,

 

THE LENDERS THAT ARE PARTIES HERETO

 

as the Lenders,

 

and

 

FTS INTERNATIONAL SERVICES, LLC and

 

FTS INTERNATIONAL, INC.

 

as Borrowers

 

Dated as of February 22, 2018

 

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

1.

DEFINITIONS AND CONSTRUCTION

 

1

 

 

 

 

 

1.1

Definitions

 

1

 

1.2

Accounting Terms

 

1

 

1.3

Code

 

2

 

1.4

Construction

 

2

 

1.5

Time References

 

3

 

1.6

Schedules and Exhibits

 

3

 

1.7

Rounding

 

3

 

1.8

Financial Statements

 

3

 

 

 

 

2.

LOANS AND TERMS OF PAYMENT

 

4

 

 

 

 

 

2.1

Revolving Loans

 

4

 

2.2

Reserved

 

5

 

2.3

Borrowing Procedures and Settlements

 

5

 

2.4

Payments; Reductions of Commitments; Prepayments

 

13

 

2.5

Promise to Pay; Promissory Notes

 

17

 

2.6

Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations

 

18

 

2.7

Crediting Payments

 

20

 

2.8

Designated Account

 

20

 

2.9

Maintenance of Loan Account; Statements of Obligations

 

20

 

2.10

Fees

 

21

 

2.11

Letters of Credit

 

21

 

2.12

LIBOR Option

 

29

 

2.13

Capital Requirements

 

31

 

2.14

Accordion

 

33

 

2.15

Joint and Several Liability of Borrowers

 

34

 

2.16

Increased Costs

 

37

 

 

 

 

3.

CONDITIONS; TERM OF AGREEMENT

 

37

 

 

 

 

 

3.1

Conditions Precedent to the Initial Extension of Credit

 

37

 

3.2

Conditions Precedent to all Extensions of Credit

 

37

 

3.3

Maturity

 

38

 

3.4

Effect of Maturity

 

38

 

3.5

Early Termination by Borrowers

 

38

 

 

 

 

4.

REPRESENTATIONS AND WARRANTIES

 

38

 

 

 

 

 

4.1

Due Organization and Qualification; Subsidiaries

 

39

 

4.2

Due Authorization; No Conflict

 

40

 

4.3

Governmental Consents

 

40

 

4.4

Binding Obligations; Perfected Liens

 

40

 

4.5

No Encumbrances

 

41

 

4.6

Litigation

 

41

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

 

4.7

Compliance with Laws

 

41

 

4.8

No Material Adverse Effect

 

41

 

4.9

Solvency

 

41

 

4.10

Employee Benefits

 

41

 

4.11

Environmental Condition

 

42

 

4.12

Complete Disclosure

 

42

 

4.13

Patriot Act

 

43

 

4.14

[Reserved]

 

43

 

4.15

Payment of Taxes

 

43

 

4.16

Margin Stock

 

43

 

4.17

Governmental Regulation

 

44

 

4.18

OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws

 

44

 

4.19

[Reserved]

 

44

 

4.20

[Reserved]

 

44

 

4.21

[Reserved]

 

44

 

4.22

Eligible Accounts

 

44

 

4.23

Eligible Inventory

 

44

 

4.24

Location of Inventory

 

45

 

4.25

Inventory Records

 

45

 

 

 

 

5.

AFFIRMATIVE COVENANTS

 

45

 

 

 

 

 

5.1

Financial Statements, Reports, Certificates

 

45

 

5.2

Reporting

 

46

 

5.3

Existence

 

46

 

5.4

Maintenance of Properties

 

46

 

5.5

Taxes

 

46

 

5.6

Insurance

 

46

 

5.7

Inspection

 

47

 

5.8

Compliance with Laws

 

47

 

5.9

Environmental

 

48

 

5.10

Disclosure Updates

 

48

 

5.11

Formation of Subsidiaries

 

48

 

5.12

Further Assurances

 

50

 

5.13

Lender Meetings

 

50

 

5.14

Location of Inventory

 

50

 

5.15

OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws

 

50

 

 

 

 

6.

NEGATIVE COVENANTS

 

51

 

 

 

 

 

6.1

Indebtedness

 

51

 

6.2

Liens

 

51

 

6.3

Restrictions on Fundamental Changes

 

51

 

6.4

Disposal of Assets

 

51

 

6.5

Nature of Business

 

52

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

 

6.6

Prepayments and Amendments

 

52

 

6.7

Restricted Payments

 

53

 

6.8

Accounting Methods

 

55

 

6.9

Investments

 

55

 

6.10

Transactions with Affiliates

 

55

 

6.11

Use of Proceeds

 

57

 

 

 

 

7.

FINANCIAL COVENANT

 

57

 

 

 

 

 

7.1

Fixed Charge Coverage Ratio

 

57

 

 

 

 

8.

EVENTS OF DEFAULT

 

57

 

 

 

 

 

8.1

Payments

 

57

 

8.2

Covenants

 

58

 

8.3

Judgments

 

58

 

8.4

Voluntary Bankruptcy, etc.

 

58

 

8.5

Involuntary Bankruptcy, etc.

 

58

 

8.6

Default Under Other Agreements

 

59

 

8.7

Representations, etc.

 

59

 

8.8

Guaranty

 

59

 

8.9

Collateral

 

59

 

8.10

Loan Documents

 

59

 

8.11

Change of Control

 

60

 

 

 

 

9.

RIGHTS AND REMEDIES

 

60

 

 

 

 

 

9.1

Rights and Remedies

 

60

 

9.2

Remedies Cumulative

 

61

 

 

 

 

10.

WAIVERS; INDEMNIFICATION

 

61

 

 

 

 

 

10.1

Demand; Protest; etc.

 

61

 

10.2

The Lender Group’s Liability for Collateral

 

61

 

10.3

Indemnification

 

61

 

 

 

 

11.

NOTICES

 

62

 

 

 

 

12.

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

 

64

 

 

 

 

13.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

 

65

 

 

 

 

 

13.1

Assignments and Participations

 

65

 

13.2

Successors

 

70

 

 

 

 

14.

AMENDMENTS; WAIVERS

 

70

 

 

 

 

 

14.1

Amendments and Waivers

 

70

 

14.2

Replacement of Certain Lenders

 

72

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

 

14.3

No Waivers; Cumulative Remedies

 

73

 

 

 

 

15.

AGENT; THE LENDER GROUP

 

74

 

 

 

 

 

15.1

Appointment and Authorization of Agent

 

74

 

15.2

Delegation of Duties

 

75

 

15.3

Liability of Agent

 

75

 

15.4

Reliance by Agent

 

75

 

15.5

Notice of Default or Event of Default

 

76

 

15.6

Credit Decision

 

76

 

15.7

Costs and Expenses; Indemnification

 

77

 

15.8

Agent in Individual Capacity

 

77

 

15.9

Successor Agent

 

78

 

15.10

Lender in Individual Capacity

 

78

 

15.11

Collateral and Guarantee Matters

 

79

 

15.12

Restrictions on Actions by Lenders; Sharing of Payments

 

82

 

15.13

Agency for Perfection

 

82

 

15.14

Payments by Agent to the Lenders

 

82

 

15.15

Concerning the Collateral and Related Loan Documents

 

82

 

15.16

Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information

 

83

 

15.17

Several Obligations; No Liability

 

84

 

15.18

Lead Arranger and Book Runner

 

84

 

 

 

 

16.

TAXES

 

84

 

 

 

 

 

16.1

Defined Terms

 

84

 

16.2

Payments Free of Taxes

 

84

 

16.3

Payment of Other Taxes by the Loan Parties

 

85

 

16.4

Indemnification by the Loan Parties

 

85

 

16.5

Indemnification by the Lenders

 

85

 

16.6

Evidence of Payments

 

86

 

16.7

Status of Lenders

 

86

 

16.8

Treatment of Certain Refunds

 

87

 

16.9

Survival

 

88

 

 

 

 

17.

GENERAL PROVISIONS

 

88

 

 

 

 

 

17.1

Effectiveness

 

88

 

17.2

Section Headings

 

88

 

17.3

Interpretation

 

88

 

17.4

Severability of Provisions

 

88

 

17.5

Bank Product Providers

 

88

 

17.6

Debtor-Creditor Relationship

 

89

 

17.7

Counterparts; Electronic Execution

 

89

 

17.8

Revival and Reinstatement of Obligations; Certain Waivers

 

90

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

 

17.9

Confidentiality

 

90

 

17.10

Survival

 

92

 

17.11

Patriot Act; Due Diligence

 

93

 

17.12

Integration

 

93

 

17.13

Parent Borrower as Agent for Borrowers

 

93

 

17.14

Intercreditor Agreement

 

94

 

17.15

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

 

94

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

Form of Assignment and Acceptance

Exhibit B-1

Form of Borrowing Base Certificate

Exhibit C-1

Form of Compliance Certificate

Exhibit J-1

Form of Joinder Agreement

Exhibit L-1

Form of LIBOR Notice

Exhibit P-1

Form of Perfection Certificate

Exhibit T-1

Form of U.S. Tax Compliance Certificate

Exhibit T-2

Form of U.S. Tax Compliance Certificate

Exhibit T-3

Form of U.S. Tax Compliance Certificate

Exhibit T-4

Form of U.S. Tax Compliance Certificate

 

 

Schedule A-1

Agent’s Account

Schedule A-2

Authorized Persons

Schedule C-1

Commitments

Schedule D-1

Designated Account

Schedule P-1

Permitted Investments

Schedule P-2

Permitted Liens

Schedule U-1

Unrestricted Subsidiaries

Schedule 1.1

Definitions

Schedule 2.11

Existing Letters of Credit

Schedule 3.1

Conditions Precedent

Schedule 4.1(c)

Capitalization of Parent Borrower’s Subsidiaries

Schedule 4.1(d)

Subscriptions, Options, Warrants, Calls

Schedule 4.11

Environmental Matters

Schedule 4.24

Location of Inventory

Schedule 5.1

Financial Statements, Reports, Certificates

Schedule 5.2

Collateral Reporting

Schedule 6.1

Permitted Indebtedness

 

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of February 22,
2018 by and among the lenders identified on the signature pages hereof (each of
such lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity, “Agent”), FTS INTERNATIONAL SERVICES, LLC, a Texas limited liability
company (“OpCo Borrower”), and FTS INTERNATIONAL, INC., a Delaware corporation
(“Parent Borrower,” together with the OpCo Borrower and those additional Persons
that are joined as a party hereto by executing the form of Joinder attached
hereto as Exhibit J-1, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”).

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

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

 

1.2                               Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP;
provided, that (a) subject to each of clause (b) of this sentence and the last
sentence of this Section 1.2, if Administrative Borrower notifies Agent that
Borrowers request an amendment to any provision hereof to eliminate the effect
of any Accounting Change occurring after the Closing Date or in the application
thereof on the operation of such provision (or if Agent notifies Administrative
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such Accounting Change or in the application thereof, then Agent and
Borrowers agree that they will negotiate in good faith amendments to the
provisions of this Agreement that are directly affected by such Accounting
Change with the intent of having the respective positions of the Lenders and
Borrowers after such Accounting Change conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon and agreed to by the Required Lenders, the
provisions in this Agreement shall be calculated as if no such Accounting Change
had occurred, and (b) notwithstanding the foregoing or any other provision of
the Loan Documents, Administrative Borrower may cause the definition of Capital
Lease to be defined as provided in clause (b) of the definition of Capital Lease
for so long as a Lease Accounting Change Effective Date occurs and is continuing
by notifying Agent in writing of Borrowers’ election to invoke such clause
(b) as of the Borrower Election Date specified in such notice (such notice, a
“Borrower Election Notice”).  When used herein, the term “financial statements”
shall include the notes and schedules thereto.  Whenever the term “Borrowers” is
used in respect of a financial covenant or a related definition, it shall be
understood to mean Parent Borrower and its Restricted Subsidiaries, on a
consolidated basis in accordance with GAAP, unless the context clearly requires
otherwise.  Notwithstanding anything to the contrary contained herein, (a) all
financial statements delivered hereunder shall be prepared, and all financial
covenants contained

 

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herein shall be calculated, without giving effect to any election under the
Statement of Financial Accounting Standards No. 159 (or any similar accounting
principle) permitting a Person to value its financial liabilities or
Indebtedness at the fair value thereof, and (b) the term “unqualified opinion”
as used herein to refer to opinions or reports provided by accountants shall
mean an opinion or report that is (i) unqualified, and (ii) does not include any
explanation, supplemental comment, or other comment concerning the ability of
the applicable Person to continue as a going concern or concerning the scope of
the audit.  Notwithstanding anything to the contrary in this Section 1.2 or any
other provision in any Loan Document, but subject to clause (b) of the first
sentence of this Section 1.2 (which clause (b) shall control over this
sentence), if a Lease Accounting Change Effective Date occurs and is continuing,
only those leases that would have constituted Capital Leases on the Closing Date
(assuming for purposes hereof that all leases were in existence on the Closing
Date regardless of whether any such leases were actually in existence on the
Closing Date or entered into thereafter) shall be considered Capital Leases as
defined in clause (a) of the definition thereof, and all calculations (including
the Fixed Charge Coverage Ratio and all definitions used therein) and
deliverables under this Agreement or any other Loan Document shall be made in
accordance therewith (provided that, until the Borrower Election Date, all
financial statements delivered to Agent in accordance with the terms of this
Agreement after the Lease Accounting Change Effective Date shall contain a
schedule showing the adjustments necessary to reconcile such financial
statements with GAAP as in effect immediately prior to the Lease Accounting
Change Effective Date).

 

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

 

1.4                               Construction.  Unless the context of this
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document, as the case may be, as a whole and not to
any particular provision of this Agreement or such other Loan Document, as the
case may be.  Section, subsection, clause, schedule, and exhibit references
herein are to this Agreement unless otherwise specified.  Any reference in this
Agreement or in any other Loan Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). 
Unless otherwise expressly provided herein, any definition or reference to any
law, rule or regulation shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such law,
rule or regulation.  The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties.  Any reference herein or in any other Loan Document to
the satisfaction, repayment, or payment in full of the Obligations shall mean
(a) the payment or repayment in full in

 

2

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immediately available funds of (i) the principal amount of, and interest accrued
and unpaid with respect to, all outstanding Loans, together with the payment of
any premium applicable to the repayment of the Loans, (ii) all Lender Group
Expenses and Indemnified Taxes that have accrued and are unpaid regardless of
whether demand has been made therefor, (iii) all fees or charges that have
accrued hereunder or under any other Loan Document (including the Letter of
Credit Fee and the Unused Line Fee) and are unpaid, (b) in the case of
contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, (c) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization, (d) the receipt by Agent of cash collateral in order
to secure any other contingent Obligations for which a claim or demand for
payment has been made on or prior to such time or in respect of matters or
circumstances known to Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys’
fees and legal expenses), such cash collateral to be in such amount as Agent
reasonably determines is appropriate to secure such contingent Obligations,
(e) the payment or repayment in full in immediately available funds of all other
outstanding Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Hedge Agreements provided by Hedge
Providers) other than (i) unasserted contingent indemnification Obligations,
(ii) any Bank Product Obligations (other than Hedge Obligations) that, at such
time, are allowed by the applicable Bank Product Provider to remain outstanding
without being required to be repaid or cash collateralized, and (iii) any Hedge
Obligations that, at such time, are allowed by the applicable Hedge Provider to
remain outstanding without being required to be repaid, and (f) the termination
of all of the Commitments of the Lenders.  Any reference herein to any Person
shall be construed to include such Person’s successors and assigns.  Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.

 

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

 

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

 

1.7                               Rounding.  Any financial ratios required to be
determined pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio or percentage is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

1.8                               Financial Statements.  Any action of Parent
Borrower or a Restricted Subsidiary that would be permitted based on delivery of
financial statements to Agent, will be permitted following the Closing Date and
prior to the delivery of four full fiscal quarters of financial

 

3

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statements under the Loan Documents based on the consolidated financial
statements of Parent Borrower for the most recently ended four fiscal quarters
for which internal financial statements are available.

 

2.                                      LOANS AND TERMS OF PAYMENT.

 

2.1                               Revolving Loans.

 

(a)                                 Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Revolving Lender agrees
(severally, not jointly or jointly and severally) to make revolving loans
(“Revolving Loans”) to Borrowers in an amount at any one time outstanding not to
exceed the lesser of:

 

(i)                                     such Lender’s Revolver Commitment, or

 

(ii)                                  such Lender’s Pro Rata Share of an amount
equal to the lesser of:

 

(A)                               the amount equal to (1) the Maximum Revolver
Amount less (2) the sum of (y) the Letter of Credit Usage at such time, plus
(z) the principal amount of Swing Loans outstanding at such time, and

 

(B)                               the amount equal to (1) the Borrowing Base as
of such date (based upon the most recent Borrowing Base Certificate delivered by
Borrowers to Agent), as adjusted for Reserves established by Agent in accordance
with Section 2.1(c), less (2) the sum of (y) the Letter of Credit Usage at such
time, plus (z) the principal amount of Swing Loans outstanding at such time.

 

(b)                                 Amounts borrowed pursuant to this
Section 2.1 may be repaid and, subject to the terms and conditions of this
Agreement, reborrowed at any time during the term of this Agreement.  The
outstanding principal amount of the Revolving Loans, together with interest
accrued and unpaid thereon, shall constitute Obligations and shall be due and
payable on the Maturity Date or, if earlier, on the date on which they are
declared due and payable pursuant to the terms of this Agreement.

 

(c)                                  Anything to the contrary in this
Section 2.1 notwithstanding, Agent shall have the right (but not the
obligation), in the exercise of its Permitted Discretion, to establish and
increase or decrease Receivable Reserves, Inventory Reserves, Bank Product
Reserves, and other Reserves against the Borrowing Base or the Maximum Revolver
Amount.  The amount of any Receivable Reserve, Inventory Reserve, Bank Product
Reserve, or other Reserve established by Agent shall have a reasonable
relationship to the event, condition, other circumstance, or fact that is the
basis for such reserve and shall not be duplicative of any other reserve
established and currently maintained.  Upon establishment or increase in
reserves, Agent agrees to promptly notify Borrowers and make itself available to
discuss the reserve or increase, and Borrowers may take such action as may be
required so that the event, condition, circumstance, or fact that is the basis
for such reserve or increase no longer exists, in a manner and to the extent
reasonably satisfactory to Agent in the exercise of its Permitted Discretion. 
In no event shall such notice and opportunity limit the right of Agent to
establish or change such Receivable Reserve, Inventory Reserve, Bank Product
Reserve, or other Reserves, unless Agent shall have

 

4

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determined, in its Permitted Discretion, that the event, condition, other
circumstance, or fact that was the basis for such Receivable Reserve, Inventory
Reserve, Bank Product Reserve, or other Reserves or such change no longer exists
or has otherwise been adequately addressed by Borrowers.

 

2.2                               Reserved.

 

2.3                               Borrowing Procedures and Settlements.

 

(a)                                 Procedure for Borrowing Revolving Loans. 
Each Borrowing shall be made by a written request by an Authorized Person
delivered to Agent (which may be delivered through Agent’s electronic platform
or portal) and received by Agent no later than (i) 11:00 a.m. (i) on the
Business Day that is the requested Funding Date in the case of a request for a
Swing Loan, (ii) on the Business Day that is one Business Day prior to the
requested Funding Date in the case of a request for a Base Rate Loan, and (iii)
on the Business Day that is three Business Days prior to the requested Funding
Date in the case of all other requests, specifying (A) the amount of such
Borrowing and (B) the requested Funding Date (which shall be a Business Day);
provided, that Agent may, in its sole discretion, elect to accept as timely
requests that are received later than the designated time on the applicable
Business Day. All Borrowing requests which are not made on-line via Agent’s
electronic platform or portal shall be subject to (and unless Agent elects
otherwise in the exercise of its sole discretion, such Borrowings shall not be
made until the completion of) Agent’s authentication process (with results
satisfactory to Agent) prior to the funding of such requested Revolving Loan.

 

(b)                                 Making of Swing Loans.  In the case of a
request for a Revolving Loan and so long as the aggregate amount of Swing Loans
made since the last Settlement Date, minus all payments or other amounts applied
to Swing Loans since the last Settlement Date, plus the amount of the requested
Swing Loan does not exceed 10% of the Maximum Revolver Amount, Swing Lender
shall make a Revolving Loan (any such Revolving Loan made by Swing Lender
pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and all such
Revolving Loans being referred to as “Swing Loans”) available to Borrowers on
the Funding Date applicable thereto by transferring immediately available funds
in the amount of such requested Borrowing to the Designated Account.  Each Swing
Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to
all the terms and conditions (including Section 3) applicable to other Revolving
Loans, except that all payments (including interest) on any Swing Loan shall be
payable to Swing Lender solely for its own account.  Subject to the provisions
of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to
make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of
the applicable conditions precedent set forth in Section 3 will not be satisfied
on the requested Funding Date for the applicable Borrowing, or (ii) the
requested Borrowing would exceed the Excess Availability on such Funding Date. 
Swing Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan.  The Swing Loans shall
be secured by Agent’s Liens, constitute Revolving Loans and Obligations, and
bear interest at the rate applicable from time to time to Revolving Loans that
are Base Rate Loans.

 

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(c)                                  Making of Revolving Loans.

 

(i)                                     In the case of a request for a Revolving
Loan (other than a Swing Loan), then after receipt of a request for a Borrowing
pursuant to Section 2.3(a), Agent shall notify the Lenders by telecopy,
telephone, email, or other electronic form of transmission, of the requested
Borrowing; such notification to be sent on the Business Day that is (A) in the
case of a Base Rate Loan, at least one Business Day prior to the requested
Funding Date, or (B) in the case of a LIBOR Rate Loan, prior to 1:00 p.m. at
least three Business Days prior to the requested Funding Date.  If Agent has
notified the Lenders of a requested Borrowing on the Business Day that is one
Business Day prior to the Funding Date, then each Lender shall make the amount
of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent’s Account, not later than 12:00 p.m. on
the Business Day that is the requested Funding Date.  After Agent’s receipt of
the proceeds of such Revolving Loans from the Lenders, Agent shall make the
proceeds thereof available to Borrowers on the applicable Funding Date by
transferring immediately available funds equal to such proceeds received by
Agent to the Designated Account; provided, that, subject to the provisions of
Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving
Loan, if (1) one or more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing
would exceed the Excess Availability on such Funding Date.

 

(ii)                                  Unless Agent receives notice from a Lender
prior to 9:30 a.m. on the Business Day that is the requested Funding Date
relative to a requested Borrowing as to which Agent has notified the Lenders of
a requested Borrowing that such Lender will not make available as and when
required hereunder to Agent for the account of Borrowers the amount of that
Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has
made or will make such amount available to Agent in immediately available funds
on the Funding Date and Agent may (but shall not be so required), in reliance
upon such assumption, make available to Borrowers a corresponding amount.  If,
on the requested Funding Date, any Lender shall not have remitted the full
amount that it is required to make available to Agent in immediately available
funds and if Agent has made available to Borrowers such amount on the requested
Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata
Share of the requested Borrowing available to Agent in immediately available
funds, to Agent’s Account, no later than 12:00 p.m. on the Business Day that is
the first Business Day after the requested Funding Date (in which case, the
interest accrued on such Lender’s portion of such Borrowing for the Funding Date
shall be for Agent’s separate account).  If any Lender shall not remit the full
amount that it is required to make available to Agent in immediately available
funds as and when required hereby and if Agent has made available to Borrowers
such amount, then that Lender shall be obligated to immediately remit such
amount to Agent, together with interest at the Defaulting Lender Rate for each
day until the date on which such amount is so remitted.  A notice submitted by
Agent to any Lender with respect to amounts owing under this
Section 2.3(c)(ii) shall be conclusive, absent manifest error.  If the amount
that a Lender is required to remit is made available to Agent, then such payment
to Agent shall constitute such Lender’s Revolving Loan for all purposes of this
Agreement.  If such amount is not made available to Agent on the Business Day
following the Funding Date, Agent will notify Administrative Borrower of such
failure to fund and, upon demand by Agent, Borrowers shall pay such amount to
Agent for Agent’s account, together with interest thereon for each day elapsed
since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Revolving Loans composing such Borrowing.

 

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(d)                                 Protective Advances and Optional
Overadvances.

 

(i)                                     Any contrary provision of this Agreement
or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv),
at any time (A) after the occurrence and during the continuance of a Default or
an Event of Default, or (B) that any of the other applicable conditions
precedent set forth in Section 3 are not satisfied, Agent hereby is authorized
by Borrowers and the Lenders, from time to time, in Agent’s sole discretion, to
make Revolving Loans to, or for the benefit of, Borrowers, on behalf of the
Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or
desirable (1) to preserve or protect the Collateral, or any portion thereof, or
(2) to enhance the likelihood of repayment of the Obligations (other than the
Bank Product Obligations) (the Revolving Loans described in this
Section 2.3(d)(i) shall be referred to as “Protective Advances”). Agent’s
authorization to make Protective Advances may be revoked at any time by the
Required Lenders delivering written notice of such revocation to Agent.  Any
such revocation shall become effective prospectively upon Agent’s receipt
thereof.

 

(ii)                                  Any contrary provision of this Agreement
or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv),
the Lenders hereby authorize Agent or Swing Lender, as applicable, and either
Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly
and intentionally, continue to make Revolving Loans (including Swing Loans) to
Borrowers notwithstanding that an Overadvance exists or would be created
thereby, so long as (A) after giving effect to such Revolving Loans, the
outstanding Revolver Usage does not exceed the Borrowing Base by more than
$10,000,000, and (B) after giving effect to such Revolving Loans, the
outstanding Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, Indemnified Taxes, or Lender Group Expenses) does
not exceed the Maximum Revolver Amount.  In the event Agent obtains actual
knowledge that an Overadvance exists, Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts charged to the Loan Account for
interest, fees, Indemnified Taxes, or Lender Group Expenses) unless Agent
determines that prior notice would result in imminent harm to the Collateral or
its value, in which case Agent may make such Overadvances and provide notice as
promptly as practicable thereafter), and the Lenders with Revolver Commitments
thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers intended to eliminate the
Overadvance.  In such circumstances, if any Lender with a Revolver Commitment
objects to the proposed terms of reduction or repayment of any Overadvance, the
terms of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders.  In any event, (1) Borrowers may not have
outstanding Overadvances for more than 30 consecutive days and at the end of
such period shall immediately repay Revolving Loans in an amount sufficient to
eliminate all Overadvances, and (2) once eliminated, no further Overadvances may
exist or be made for at least 5 consecutive days thereafter.  The foregoing
provisions are meant for the benefit of the Lenders and Agent and are not meant
for the benefit of Borrowers, which shall continue to be bound by the provisions
of Section 2.4(e)(i).  Each Lender with a Revolver Commitment shall be obligated
to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as
applicable) for the amount of such Lender’s Pro Rata Share of any unintentional
Overadvances by Agent reported to such Lender, any intentional Overadvances made
as permitted under this Section 2.3(d)(ii), and any Overadvances resulting

 

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from the charging to the Loan Account of interest, fees, Indemnified Taxes, or
Lender Group Expenses.

 

(iii)                               Each Protective Advance and each Overadvance
(each, an “Extraordinary Advance”) shall be deemed to be a Revolving Loan
hereunder, except that no Extraordinary Advance shall be eligible to be a LIBOR
Rate Loan and, prior to Settlement therefor, all payments on the Extraordinary
Advances, including interest thereon, shall be payable to Agent solely for its
own account.  The Extraordinary Advances shall be repayable on demand, secured
by Agent’s Liens, constitute Obligations hereunder, and bear interest at the
rate applicable from time to time to Revolving Loans that are Base Rate Loans. 
The provisions of this Section 2.3(d) are for the exclusive benefit of Agent,
Swing Lender, and the Lenders and are not intended to benefit Borrowers (or any
other Loan Party) in any way.

 

(iv)                              Notwithstanding anything contained in this
Agreement or any other Loan Document to the contrary, no Extraordinary Advance
may be made by Agent if such Extraordinary Advance would cause the aggregate
principal amount of Extraordinary Advances outstanding to exceed an amount equal
to 10% of the Maximum Revolver Amount, or any Lender’s Pro Rata Share of the
Revolver Usage to exceed such Lender’s Revolver Commitments; provided that Agent
may make Extraordinary Advances in excess of the foregoing limitations so long
as such Extraordinary Advances that would cause the aggregate Revolver Usage to
exceed the Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver
Usage to exceed such Lender’s Revolver Commitments are for Agent’s sole and
separate account and not for the account of any Lender (except for amounts
charged to the Loan Account for interest, fees, Indemnified Taxes, and Lender
Group Expenses).  No Lender shall have an obligation to settle with Agent for
such Extraordinary Advances that cause the aggregate Revolver Usage to exceed
the Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver Usage
to exceed such Lender’s Revolver Commitments as provided in Section 2.3(e) (or
Section 2.3(g), as applicable).

 

(e)                                  Settlement.  It is agreed that each
Lender’s funded portion of the Revolving Loans is intended by the Lenders to
equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving
Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of Borrowers) that
in order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among the Lenders as to the Revolving Loans, the Swing
Loans, and the Extraordinary Advances shall take place on a periodic basis in
accordance with the following provisions:

 

(i)                                     Agent shall request settlement
(“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis
if so determined by Agent in its sole discretion (1) on behalf of Swing Lender,
with respect to the outstanding Swing Loans, (2) for itself, with respect to the
outstanding Extraordinary Advances, and (3) with respect to Borrowers’ or any of
their Restricted Subsidiaries’ payments or other amounts received, as to each by
notifying the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m. on the
Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”).  Such notice of
a Settlement Date shall include a summary statement of the amount of outstanding
Revolving

 

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Loans, Swing Loans, and Extraordinary Advances for the period since the prior
Settlement Date.  Subject to the terms and conditions contained herein
(including Section 2.3(g)):  (y) if the amount of the Revolving Loans (including
Swing Loans, and Extraordinary Advances) made by a Lender that is not a
Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans
(including Swing Loans, and Extraordinary Advances) as of a Settlement Date,
then Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer
in immediately available funds to a Deposit Account of such Lender (as such
Lender may designate), an amount such that each such Lender shall, upon receipt
of such amount, have as of the Settlement Date, its Pro Rata Share of the
Revolving Loans (including Swing Loans, and Extraordinary Advances), and (z) if
the amount of the Revolving Loans (including Swing Loans, and Extraordinary
Advances) made by a Lender is less than such Lender’s Pro Rata Share of the
Revolving Loans (including Swing Loans, and Extraordinary Advances) as of a
Settlement Date, such Lender shall no later than 12:00 p.m. on the Settlement
Date transfer in immediately available funds to Agent’s Account, an amount such
that each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing
Loans and Extraordinary Advances).  Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be applied against the
amounts of the applicable Swing Loans or Extraordinary Advances and, together
with the portion of such Swing Loans or Extraordinary Advances representing
Swing Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such
Lenders.  If any such amount is not made available to Agent by any Lender on the
Settlement Date applicable thereto to the extent required by the terms hereof,
Agent shall be entitled to recover for its account such amount on demand from
such Lender together with interest thereon at the Defaulting Lender Rate.

 

(ii)                                  In determining whether a Lender’s balance
of the Revolving Loans, Swing Loans, and Extraordinary Advances is less than,
equal to, or greater than such Lender’s Pro Rata Share of the Revolving Loans,
Swing Loans, and Extraordinary Advances as of a Settlement Date, Agent shall, as
part of the relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to principal, interest,
fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds
of Collateral.

 

(iii)                               Between Settlement Dates, Agent, to the
extent Extraordinary Advances or Swing Loans are outstanding, may pay over to
Agent or Swing Lender, as applicable, any payments or other amounts received by
Agent, that in accordance with the terms of this Agreement would be applied to
the reduction of the Revolving Loans, for application to the Extraordinary
Advances or Swing Loans.  Between Settlement Dates, Agent, to the extent no
Extraordinary Advances or Swing Loans are outstanding, may pay over to Swing
Lender any payments or other amounts received by Agent, that in accordance with
the terms of this Agreement would be applied to the reduction of the Revolving
Loans, for application to Swing Lender’s Pro Rata Share of the Revolving Loans. 
If, as of any Settlement Date, payments or other amounts of Borrowers or their
Restricted Subsidiaries received since the then immediately preceding Settlement
Date have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans
other than to Swing Loans, as provided for in the previous sentence, Swing
Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay
to the Lenders (other than a Defaulting Lender if Agent has implemented the
provisions of Section 2.3(g)), to be applied to the outstanding Revolving Loans
of such Lenders, an amount such that each such Lender shall, upon receipt of
such amount, have, as of such Settlement Date, its Pro Rata Share of the

 

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Revolving Loans.  During the period between Settlement Dates, Swing Lender with
respect to Swing Loans, Agent with respect to Extraordinary Advances, and each
Lender with respect to the Revolving Loans other than Swing Loans and
Extraordinary Advances, shall be entitled to interest at the applicable rate or
rates payable under this Agreement on the daily amount of funds employed by
Swing Lender, Agent, or the Lenders, as applicable.

 

(iv)                              Anything in this Section 2.3(e) to the
contrary notwithstanding, in the event that a Lender is a Defaulting Lender,
Agent shall be entitled to refrain from remitting settlement amounts to the
Defaulting Lender and, instead, shall be entitled to elect to implement the
provisions set forth in Section 2.3(g).

 

(f)                                   Notation.  Agent, as a non-fiduciary agent
for Borrowers, shall maintain a register showing the principal amount and stated
interest of the Revolving Loans owing to each Lender, including the Swing Loans
owing to Swing Lender, and Extraordinary Advances owing to Agent, and the
interests therein of each Lender, from time to time and such register shall,
absent manifest error, conclusively be presumed to be correct and accurate.

 

(g)                                  Defaulting Lenders.

 

(i)                                     Notwithstanding the provisions of
Section 2.4(b)(ii), Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrowers to Agent for the Defaulting Lender’s
benefit or any proceeds of Collateral that would otherwise be remitted hereunder
to the Defaulting Lender, and, in the absence of such transfer to the Defaulting
Lender, Agent shall transfer any such payments (A) first, to Agent to the extent
of any Extraordinary Advances that were made by Agent and that were required to
be, but were not, paid by Defaulting Lender, (B) second, to Swing Lender to the
extent of any Swing Loans that were made by Swing Lender and that were required
to be, but were not, paid by the Defaulting Lender, (C) third, to Issuing Bank,
to the extent of the portion of a Letter of Credit Disbursement that was
required to be, but was not, paid by the Defaulting Lender, (D) fourth, to each
Non-Defaulting Lender ratably in accordance with their Commitments (but, in each
case, only to the extent that such Defaulting Lender’s portion of a Revolving
Loan (or other funding obligation) was funded by such other Non-Defaulting
Lender), (E) fifth, to a suspense account maintained by Agent, the proceeds of
which shall be retained by Agent and may be made available to be re-advanced to
or for the benefit of Borrowers (upon the request of Borrowers and subject to
the conditions set forth in Section 3.2) as if such Defaulting Lender had made
its portion of Revolving Loans (or other funding obligations) hereunder, and
(F) sixth, from and after the date on which all other Obligations have been paid
in full, to such Defaulting Lender in accordance with tier (L) of Section
2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its discretion,
re-lend to Borrowers for the account of such Defaulting Lender the amount of all
such payments received and retained by Agent for the account of such Defaulting
Lender.  Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents (including the calculation of Pro Rata Share in connection
therewith) and for the purpose of calculating the fee payable under
Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and
such Lender’s Commitment shall be deemed to be zero; provided, that the
foregoing shall not apply to any of the matters governed by
Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall
remain effective with respect to such Defaulting Lender until the earlier of
(y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Bank,

 

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and Borrowers shall have waived, in writing, the application of this
Section 2.3(g) to such Defaulting Lender, or (z) the date on which such
Defaulting Lender makes payment of all amounts that it was obligated to fund
hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of
the amounts that it was obligated to fund hereunder, and, if requested by Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder (on which earlier date, so long as no Event of Default has occurred
and is continuing, any remaining cash collateral held by Agent pursuant to
Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this
Section 2.3(g) shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by any Borrower of its duties and
obligations hereunder to Agent, Issuing Bank, or to the Lenders other than such
Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it
was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrowers, at their
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided,
that any such assumption of the Commitment of such Defaulting Lender shall not
be deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’
rights or remedies against any such Defaulting Lender arising out of or in
relation to such failure to fund.  In the event of a direct conflict between the
priority provisions of this Section 2.3(g) and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.

 

(ii)                                  If any Swing Loan or Letter of Credit is
outstanding at the time that a Lender becomes a Defaulting Lender then:

 

(A)                               such Defaulting Lender’s Swing Loan Exposure
and Letter of Credit Exposure shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Shares but only to the
extent (x) the sum of all Non-Defaulting Lenders’ Pro Rata Share of Revolver
Usage plus such Defaulting Lender’s Swing Loan Exposure and Letter of Credit
Exposure does not exceed the total of all Non-Defaulting Lenders’ Revolver
Commitments and (y) the conditions set forth in Section 3.2 are satisfied at
such time;

 

(B)                               if the reallocation described in
clause (A) above cannot, or can only partially, be effected, Borrowers shall
within one Business Day following notice by the Agent (x) first, prepay such
Defaulting Lender’s Swing Loan Exposure (after giving effect to any partial
reallocation pursuant to clause (A) above) and (y) second, cash collateralize
such Defaulting Lender’s Letter of Credit Exposure (after giving effect to any
partial reallocation

 

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pursuant to clause (A) above), pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent, for so
long as such Letter of Credit Exposure is outstanding; provided, that Borrowers
shall not be obligated to cash collateralize any Defaulting Lender’s Letter of
Credit Exposure if such Defaulting Lender is also the Issuing Bank;

 

(C)                               if Borrowers cash collateralize any portion of
such Defaulting Lender’s Letter of Credit Exposure pursuant to this
Section 2.3(g)(ii), Borrowers shall not be required to pay any Letter of Credit
Fees to Agent for the account of such Defaulting Lender pursuant to
Section 2.6(b) with respect to such cash collateralized portion of such
Defaulting Lender’s Letter of Credit Exposure during the period such Letter of
Credit Exposure is cash collateralized;

 

(D)                               to the extent the Letter of Credit Exposure of
the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii),
then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to
Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’
Letter of Credit Exposure;

 

(E)                                to the extent any Defaulting Lender’s Letter
of Credit Exposure is neither cash collateralized nor reallocated pursuant to
this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of
the Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would
have otherwise been payable to such Defaulting Lender under Section 2.6(b) with
respect to such portion of such Letter of Credit Exposure shall instead be
payable to the Issuing Bank until such portion of such Defaulting Lender’s
Letter of Credit Exposure is cash collateralized or reallocated;

 

(F)                                 so long as any Lender is a Defaulting
Lender, the Swing Lender shall not be required to make any Swing Loan and the
Issuing Bank shall not be required to issue, amend, or increase any Letter of
Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share
of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this
Section 2.3(g)(ii) or (y) the Swing Lender or Issuing Bank, as applicable, has
not otherwise entered into arrangements reasonably satisfactory to the Swing
Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing
Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s
participation in Swing Loans or Letters of Credit; and

 

(G)                               Agent may release any cash collateral provided
by Borrowers pursuant to this Section 2.3(g)(ii) to the Issuing Bank and the
Issuing Bank may apply any such cash collateral to the payment of such
Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is
not reimbursed by Borrowers pursuant to Section 2.11(d). Subject to Section
17.14, no reallocation hereunder shall constitute a waiver or release of any
claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

 

(h)                                 Independent Obligations.  All Revolving
Loans (other than Swing Loans and Extraordinary Advances) shall be made by the
Lenders contemporaneously and in accordance with their Pro Rata Shares.  It is
understood that (i) no Lender shall be responsible

 

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

 

2.4                               Payments; Reductions of Commitments;
Prepayments.

 

(a)                                 Payments by Borrowers.

 

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

 

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

 

(b)                                 Apportionment and Application.

 

(i)                                     So long as no Application Event has
occurred and is continuing and except as otherwise provided herein with respect
to Defaulting Lenders, all principal and interest payments received by Agent
shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Obligations to which such payments relate held by each
Lender) and all payments of fees and expenses received by Agent (other than fees
or expenses that are for Agent’s separate account or for the separate account of
Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata
Share of the type of Commitment or Obligation to which a particular fee or
expense relates.  Subject to Section 2.4(b)(iv), all payments to be made
hereunder by Borrowers shall be remitted to Agent and all such payments, and all
proceeds of Collateral received by Agent, shall be applied, so long as no
Application Event has occurred and is continuing and except as otherwise
provided herein with respect to Defaulting Lenders, to reduce the balance of the
Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

 

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(ii)                                  At any time that an Application Event has
occurred and is continuing and except as otherwise provided herein with respect
to Defaulting Lenders, all payments remitted to Agent and all proceeds of
Collateral received by Agent shall, subject to the terms of the Intercreditor
Agreement, be applied as follows:

 

(A)                               first, to pay any Lender Group Expenses
(including cost or expense reimbursements) or indemnities (including any
indemnities for Taxes pursuant to Section 16) then due to Agent under the Loan
Documents and to pay interest and principal on Extraordinary Advances that are
held solely by Agent pursuant to the terms of Section 2.4(d)(iv), until paid in
full,

 

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

 

(C)                               third, to pay interest due in respect of all
Protective Advances until paid in full,

 

(D)                               fourth, to pay the principal of all Protective
Advances until paid in full,

 

(E)                                fifth, ratably, to pay any Lender Group
Expenses (including cost or expense reimbursements) or indemnities (including
any indemnities for Taxes pursuant to Section 16) then due to any of the Lenders
under the Loan Documents, until paid in full,

 

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

 

(G)                               seventh, to pay interest accrued in respect of
the Swing Loans until paid in full,

 

(H)                              eighth, to pay the principal of all Swing Loans
until paid in full,

 

(I)                                   ninth, ratably, to pay interest accrued in
respect of the Revolving Loans (including Extraordinary Advances other than
Protective Advances) until paid in full,

 

(J)                                   tenth, ratably, (i) ratably, to pay the
principal of all Revolving Loans (including Extraordinary Advances other than
Protective Advances) until paid in full, (ii) to Agent, to be held by Agent, for
the benefit of Issuing Bank (and for the ratable benefit of each of the Lenders
that have an obligation to pay to Agent, for the account of Issuing Bank, a
share of each Letter of Credit Disbursement), as cash collateral in an amount up
to 105% of the Letter of Credit Usage (to the extent permitted by applicable
law, such cash collateral shall be applied to the reimbursement of any Letter of
Credit Disbursement as and when such disbursement occurs and, if a Letter of
Credit expires undrawn, the cash collateral held by Agent in respect of such
Letter of Credit shall, to the extent permitted by applicable law, be reapplied
pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof), and
(iii) ratably, up to the amount (after taking into account any amounts
previously paid pursuant to this clause iii. during

 

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the continuation of the applicable Application Event) of the most recently
established Bank Product Reserve to (y) the Bank Product Providers that are
existing Lenders or Affiliates of existing Lenders based upon amounts then
certified by the applicable Bank Product Provider to Agent (in form and
substance satisfactory to Agent) to be due and payable to such Bank Product
Providers on account of Bank Product Obligations, and (z) with any balance to be
paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product
Providers that are existing Lenders or Affiliates of existing Lenders, as cash
collateral (which cash collateral may be released by Agent to the applicable
Bank Product Provider and applied by such Bank Product Provider to the payment
or reimbursement of any amounts due and payable with respect to Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such Bank
Product Obligations are paid or otherwise satisfied in full, the cash collateral
held by Agent in respect of such Bank Product Obligations shall be reapplied
pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof),

 

(K)                               eleventh, to pay any other Obligations other
than Obligations owed to Defaulting Lenders (including being paid, ratably, to
the Bank Product Providers on account of all amounts then due and payable in
respect of Bank Product Obligations, with any balance to be paid to Agent, to be
held by Agent, for the ratable benefit of the Bank Product Providers, as cash
collateral),

 

(L)                                twelfth, ratably to pay any Obligations owed
to Defaulting Lenders, and

 

(M)                            thirteenth, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

 

(iii)                               Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided in Section 2.3(e).

 

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

 

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

 

(vi)                              In the event of a direct conflict between the
priority provisions of this Section 2.4 and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any

 

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actual, irreconcilable conflict that cannot be resolved as aforesaid, if the
conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then
the provisions of Section 2.3(g) shall control and govern, and if otherwise,
then the terms and provisions of this Section 2.4 shall control and govern.

 

(c)                                  Reduction of Commitments.  The Revolver
Commitments shall terminate on the Maturity Date.  Borrowers may reduce the
Revolver Commitments, without premium or penalty, from time to time and at any
time to an amount (which may be zero) not less than the sum of (i) the Revolver
Usage as of such date, plus (ii) the principal amount of all Revolving Loans not
yet made as to which a request has been given by Borrowers under Section 2.3(a),
plus (iii) the amount of all Letters of Credit not yet issued as to which a
request has been given by Borrowers pursuant to Section 2.11(a).  Each such
reduction shall be in an amount which is not less than $5,000,000, shall be made
by providing not less than three Business Days prior written notice to Agent,
and shall be irrevocable.  Once reduced, the Revolver Commitments may not be
increased.  Each such reduction of the Revolver Commitments shall reduce the
Revolver Commitments of each Lender proportionately in accordance with its
ratable share thereof. In connection with any reduction in the Revolver
Commitments prior to the Maturity Date, if any Loan Party or any of its
Subsidiaries owns any Margin Stock, Borrowers shall deliver to Agent an updated
Form U-1 (with sufficient additional originals thereof for each Lender), duly
executed and delivered by the Borrowers, together with such other documentation
as Agent shall reasonably request, in order to enable Agent and the Lenders to
comply with any of the requirements under Regulations T, U or X of the Federal
Reserve Board.

 

(d)                                 Optional Prepayments.  Borrowers may prepay
the principal of any Revolving Loan from time to time and at any time in whole
or in part, without premium or penalty.

 

(e)                                  Mandatory Prepayments.

 

(i)                                     Borrowing Base.  If, at any time,
(A) the Revolver Usage on such date exceeds (B) the lesser of (x) Borrowing Base
reflected in the Borrowing Base Certificate most recently delivered by Borrowers
to Agent, or (y) the Maximum Revolver Amount, in all cases as adjusted for any
establishment, increase or decrease in Reserves since the date of such Borrowing
Base Certificate, then Borrowers shall promptly, but in any event, within 1
Business Day, prepay the Obligations in accordance with Section 2.4(f) in an
aggregate amount equal to the amount of such excess.

 

(ii)                                  Dispositions.  Within 2 Business Days of
the date of receipt by Parent Borrower or any of its Restricted Subsidiaries of
the Net Cash Proceeds of any voluntary or involuntary sale or disposition by
Parent Borrower or the applicable Restricted Subsidiary of Collateral (including
casualty losses or condemnations but excluding sales or dispositions which
qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (i),
(j), (k), (l), (m), (n), (o), (q), (r) or (s) of the definition of Permitted
Dispositions), subject to the terms of the Intercreditor Agreement, Borrowers
shall prepay the outstanding principal amount of the Obligations in accordance
with Section 2.4(f) in an amount equal to 100% of such Net Cash Proceeds
(including condemnation awards and payments in lieu thereof) received by such
Person in

 

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connection with such sales or dispositions; provided however, that,
notwithstanding the foregoing,

 

(1) unless an Activation Instruction has been given by the Agent (which has not
been rescinded), no prepayment shall be required until the aggregate Net Cash
Proceeds received in any 12-month period exceeds $5 million and (2) in the case
of Net Cash Proceeds constituting proceeds of Note Collateral, so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, Parent Borrower may, at its option apply such funds to
(x) (1) repay the Term Loan Facility and/or other Pari Passu Lien Obligations
(as defined in the Term Loan Facility Credit Agreement), (2) repay Indebtedness
of a Restricted Subsidiary that is not a Guarantor of the Term Loan Facility, or
(3) make a Collateral Waivable Mandatory Prepayment (as defined in the Term Loan
Facility Credit Agreement), in each case, pursuant to Section 4.4(b)(ii) the
Term Loan Facility Credit Agreement, or (y) purchase Replacement Assets, so long
as (I) Parent Borrower shall have given Agent prior written notice of its
intention to apply such monies to the costs of Replacement Assets, and
(II) Parent Borrower or the applicable Restricted Subsidiary, as applicable,
complete such replacement, purchase, or construction within 365 days after the
initial receipt of such monies; provided, however, that any Net Cash Proceeds
remaining after having been applied as set forth in subclauses (x) and (y) above
shall be applied to prepay the outstanding principal amount of the Obligations
pursuant to Section 2.4(f) of the Agreement.

 

Nothing contained in this Section 2.4(e)(ii) shall permit Parent Borrower or any
of its Restricted Subsidiaries to sell or otherwise dispose of any assets other
than in accordance with Section 6.4.

 

(f)                                   Application of Payments.  Each prepayment
pursuant to Section 2.4(e) shall, (A) so long as no Application Event shall have
occurred and be continuing, be applied, first, to the outstanding principal
amount of the Revolving Loans until paid in full (but, for purposes of
clarification, with no corresponding reduction in the Maximum Revolver Amount or
Commitments) and second, to cash collateralize the Letters of Credit in an
amount equal to 105% of the then outstanding Letter of Credit Usage, provided
that such cash collateral shall be returned to Borrowers promptly if an
Overadvance does not exist (or after an Overadvance no longer exists) upon
delivery to Lender of a written request of Borrowers requesting the return of
such cash collateral and (B) if an Application Event shall have occurred and be
continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

2.5                               Promise to Pay; Promissory Notes.

 

(a)                                 Borrowers agree to pay the Lender Group
Expenses on the earlier of (i) the first day of the month following the date on
which the applicable Lender Group Expenses were first incurred or (ii) 5
Business Days after the date on which demand therefor is made by Agent (it being
acknowledged and agreed that any charging of such Lender Group Expenses to the
Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to
constitute a demand for payment thereof for the purposes of this subclause
(ii)).  Borrowers promise to pay all of the Obligations (including principal,
interest, premiums, if any, fees, costs, and expenses (including Lender Group
Expenses)) in full on the Maturity Date or, if earlier, on the date on which the
Obligations (other than the Bank Product Obligations) become due and payable
pursuant to the terms of this Agreement.  Borrowers agree that their obligations
contained in the

 

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first sentence of this Section 2.5(a) shall survive payment or satisfaction in
full of all other Obligations.

 

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

 

2.6                               Interest Rates and Letter of Credit Fee: 
Rates, Payments, and Calculations.

 

(a)                                 Interest Rates.  Except as provided in
Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest as follows:

 

(i)                                     if the relevant Obligation is a LIBOR
Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate
Margin, and

 

(ii)                                  otherwise, at a per annum rate equal to
the Base Rate plus the Base Rate Margin.

 

(b)                                 Letter of Credit Fee.  Borrowers shall pay
Agent (for the ratable benefit of the Revolving Lenders), a Letter of Credit fee
(the “Letter of Credit Fee”) (which fee shall be in addition to the fronting
fees and commissions, other fees, charges and expenses set forth in
Section 2.11(k)) that shall accrue at a per annum rate equal to the LIBOR Rate
Margin times the average amount of the Letter of Credit Usage during the
immediately preceding quarter (or if an Event of Default has occurred and is
continuing, month).

 

(c)                                  Default Rate.  Upon the occurrence and
during the continuation of an Event of Default, at the election of Agent or the
Required Lenders,

 

(i)                                     all Obligations (except for undrawn
Letters of Credit) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable thereunder (or in the event
there is no applicable rate, 2 percentage points per annum in excess of the rate
otherwise applicable to Base Rate Loans from time to time), and

 

(ii)                                  the Letter of Credit Fee shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.

 

(d)                                 Payment.  Except to the extent provided to
the contrary in Section 2.10, Section 2.11(k) or Section 2.12(a), (i) all
interest and all other fees payable hereunder or under any of the other Loan
Documents (other than Letter of Credit Fees) shall be due and payable, in
arrears, on the first day of each quarter; provided, that if an Event of Default
has occurred and is continuing, such amounts shall be due and payable, in
arrears, on the first day of each month, (ii) all Letter of Credit Fees payable
hereunder, and all fronting fees and all commissions, other fees,

 

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charges and expenses provided for in Section 2.11(k)  shall be due and payable,
in arrears, on the first Business Day of each quarter; provided, that if an
Event of Default has occurred and is continuing, such Letter of Credit Fees
shall be due and payable, in arrears, on the first Business Day of each month,
and (iii) all costs and expenses payable hereunder or under any of the other
Loan Documents, and all other Lender Group Expenses shall be due and payable on
the earlier of (x) the first day of the month following the date on which the
applicable costs, expenses, or Lender Group Expenses were first incurred, or
(y) the date on which demand therefor is made by Agent (it being acknowledged
and agreed that any charging of such costs, expenses or Lender Group Expenses to
the Loan Account pursuant to the provisions of the following sentence shall be
deemed to constitute a demand for payment thereof for the purposes of this
subclause (y)).  Borrowers hereby authorize Agent, from time to time without
prior notice to Borrowers, to charge to the Loan Account (A) on the first day of
each quarter (or, if an Event of Default has occurred and is continuing, on the
first day of each month), all interest accrued during the prior quarter (or if
an Event of Default has occurred and is continuing, month) on the Revolving
Loans, (B) on the first Business Day of each quarter (or, if an Event of Default
has occurred and is continuing, on the first Business Day of each month), all
Letter of Credit Fees accrued or chargeable hereunder during the prior quarter
(or, if an Event of Default has occurred and is continuing, during the prior
month), (C) as and when incurred or accrued, all fees and costs provided for in
Section 2.10(a) or (c), (D) on the first day of each quarter (or, if an Event of
Default has occurred and is continuing, during the prior month), the Unused Line
Fee accrued during the prior quarter (or if an Event of Default has occurred and
is continuing, month) pursuant to Section 2.10(b), (E) as and when due and
payable, all other fees payable (including any Indemnified Taxes payable
pursuant to Section 16) hereunder or under any of the other Loan Documents,
(F) as and when incurred or accrued, all other Lender Group Expenses, and (G) as
and when due and payable all other payment obligations payable under any Loan
Document or any Bank Product Agreement (including any amounts due and payable to
the Bank Product Providers in respect of Bank Products).  All amounts (including
interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable
hereunder or under any other Loan Document or under any Bank Product Agreement)
charged to the Loan Account shall thereupon constitute Revolving Loans hereunder
(unless paid on the same day they are charged to the Loan Account, in which case
they shall not constitute Revolving Loans and shall not accrue interest), shall
constitute Obligations hereunder, and shall initially accrue interest at the
rate then applicable to Revolving Loans that are Base Rate Loans (unless and
until converted into LIBOR Rate Loans in accordance with the terms of this
Agreement).

 

(e)                                  Computation.  All interest and fees
chargeable under the Loan Documents shall be computed on the basis of a 360 day
year, in each case, for the actual number of days elapsed in the period during
which the interest or fees accrue.  In the event the Base Rate is changed from
time to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.

 

(f)                                   Intent to Limit Charges to Maximum Lawful
Rate.  In no event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable.  Borrowers and the Lender
Group, in executing and delivering this Agreement, intend legally to agree upon
the rate or rates of interest

 

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and manner of payment stated within it; provided, that, anything contained
herein to the contrary notwithstanding, if such rate or rates of interest or
manner of payment exceeds the maximum allowable under applicable law, then, ipso
facto, as of the date of this Agreement, Borrowers are and shall be liable only
for the payment of such maximum amount as is allowed by law, and payment
received from Borrowers in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.

 

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

 

2.8                               Designated Account.  Agent is authorized to
make the Revolving Loans, and Issuing Bank is authorized to issue the Letters of
Credit, under this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person or, without
instructions, if pursuant to Section 2.6(d).  Borrowers agree to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Revolving Loans requested by Borrowers and made
by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and
Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by
Agent or the Lenders hereunder shall be made to the Designated Account.

 

2.9                               Maintenance of Loan Account; Statements of
Obligations.  Agent shall maintain an account on its books in the name of
Borrowers (the “Loan Account”) on which Borrowers will be charged with all
Revolving Loans (including Extraordinary Advances and Swing Loans) made by
Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the
Letters of Credit issued or arranged by Issuing Bank for Borrowers’ account, and
with all other payment Obligations hereunder or under the other Loan Documents,
including, accrued interest, fees and expenses (including Indemnified Taxes
payable pursuant to Section 16), and Lender Group Expenses.  In accordance with
Section 2.7, the Loan Account will be credited with all payments received by
Agent from Borrowers or for Borrowers’ account.  Agent shall make available to
Borrowers monthly statements regarding the Loan Account, including the principal
amount of the Revolving Loans, interest accrued hereunder, fees accrued or
charged hereunder or under the other Loan Documents, and a summary itemization
of all charges and expenses constituting Lender Group Expenses accrued hereunder
or under the other Loan Documents, and each such statement, absent manifest
error, shall be conclusively presumed to be correct and accurate and constitute
an account stated between Borrowers and the Lender Group unless, within 30 days
after Agent first makes such a statement available to Borrowers, Borrowers shall
deliver to Agent written objection thereto describing the error or errors
contained in such statement.

 

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2.10                        Fees.

 

(a)                                 Agent Fees.  Borrowers shall pay to Agent,
for the account of Agent, as and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter.

 

(b)                                 Unused Line Fee.  Borrowers shall pay to
Agent, for the ratable account of the Revolving Lenders, an unused line fee (the
“Unused Line Fee”) in an amount equal to the Applicable Unused Line Fee
Percentage per annum times the result of (i) the aggregate amount of the
Revolver Commitments, less (ii) the average amount of the Revolver Usage during
the immediately preceding quarter, which Unused Line Fee shall be due and
payable on the first day of each calendar quarter; provided, that if an Event of
Default has occurred and is continuing, such Unused Line Fee shall be due and
payable, in arrears, on the first day of each month, from and after the Closing
Date until the first day of the calendar quarter (or month, if applicable) prior
to the date on which the Obligations are paid in full and on the date on which
the Obligations are paid in full.

 

(c)                                  Field Examination and Other Fees. 
Borrowers shall pay to Agent, field examination, appraisal, and valuation fees
and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000
per day, per examiner, plus reasonable, documented out-of-pocket expenses
(including travel, meals, and lodging) for each field examination of a Borrower
performed by personnel employed by Agent, and (ii) the reasonable fees or
charges paid or incurred by Agent (but, in any event, no less than a charge of
$1,000 per day, per Person, plus reasonable, documented out-of-pocket expenses
(including travel, meals, and lodging)) if it elects to employ the services of
one or more third Persons to perform field examinations of a Borrower or to
appraise the Collateral, or any portion thereof; provided, that (i) so long as
no Event of Default shall have occurred and be continuing, Borrowers shall not
be obligated to reimburse Agent for more than one (1) field examination during
any calendar year or more than one (1) inventory appraisal during any calendar
year, in each case, whether any such field examination or appraisal is conducted
as to any or all Borrowers and/or all or any portion of their respective
Collateral; provided further that Agent will be able to conduct, at the sole
cost and expense of Borrowers, one (1) additional field examination and one
(1) additional inventory appraisal during any calendar year, if Excess
Availability shall be less than the greater of (1) $20,000,000 and (2) 15.0% of
the Line Cap at any time.  Notwithstanding the foregoing, following the
occurrence and during the continuation of an Event of Default such field
examinations and inventory appraisals may be conducted at the Borrowers’ expense
as many times as the Agent shall consider reasonably necessary.

 

2.11                        Letters of Credit.

 

(a)                                 Subject to the terms and conditions of this
Agreement, upon the request of Borrowers made in accordance herewith, and prior
to the Maturity Date, Issuing Bank agrees to issue a requested standby Letter of
Credit or a sight commercial Letter of Credit for the account of either or both
of Borrowers or any of their respective Restricted Subsidiaries.  By submitting
a request to Issuing Bank for the issuance of a Letter of Credit, Borrowers
shall be deemed to have requested that Issuing Bank issue the requested Letter
of Credit.  Each request for the issuance of a Letter of Credit, or the
amendment, renewal, or extension of any outstanding Letter of Credit, shall be
(i) irrevocable made in writing by an Authorized Person (ii) delivered to Agent
and

 

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Issuing Bank via telefacsimile or other electronic method of transmission
reasonably acceptable to Agent and Issuing Bank and reasonably in advance of the
requested date of issuance, amendment, renewal, or extension and (iii) subject
to Issuing Bank’s authentication procedures with results satisfactory to Issuing
Bank.  Each such request shall be in form and substance reasonably satisfactory
to Agent and Issuing Bank and (i) shall specify (A) the amount of such Letter of
Credit, (B) the date of issuance, amendment, renewal, or extension of such
Letter of Credit, (C) the proposed expiration date of such Letter of Credit,
(D) the name and address of the beneficiary of the Letter of Credit, and
(E) such other information (including, the conditions to drawing, and, in the
case of an amendment, renewal, or extension, identification of the Letter of
Credit to be so amended, renewed, or extended) as shall be necessary to prepare,
amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by
such Issuer Documents as Agent or Issuing Bank may request or require, to the
extent that such requests or requirements are consistent with the Issuer
Documents that Issuing Bank generally requests for Letters of Credit in similar
circumstances.  Issuing Bank’s records of the content of any such request will
be conclusive.  Anything contained herein to the contrary
notwithstanding, Issuing Bank may, but shall not be obligated to, issue a Letter
of Credit that supports the obligations of Borrowers or one of the Restricted
Subsidiaries in respect of (x) a lease of real property to the extent that the
face amount of such Letter of Credit exceeds the highest rent (including all
rent-like charges) payable under such lease for a period of one year, or (y) an
employment contract to the extent that the face amount of such Letter of Credit
exceeds the highest compensation payable under such contract for a period of one
year.

 

(b)                                 Issuing Bank shall not issue a Letter of
Credit if any of the following would result after giving effect to the requested
issuance:

 

(i)                                     the Letter of Credit Usage would exceed
$50,000,000; or

 

(ii)                                  the Letter of Credit Usage would exceed
the Maximum Revolver Amount less the outstanding amount of Revolving Loans
(including Swing Loans), or

 

(iii)                               the Letter of Credit Usage would exceed the
Borrowing Base at such time less the outstanding principal balance of the
Revolving Loans (inclusive of Swing Loans) at such time.

 

(c)                                  In the event there is a Defaulting Lender
as of the date of any request for the issuance of a Letter of Credit, Issuing
Bank shall not be required to issue or arrange for such Letter of Credit to the
extent (i) the Defaulting Lender’s Letter of Credit Exposure with respect to
such Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or
(ii) Issuing Bank has not otherwise entered into arrangements reasonably
satisfactory to it and Borrowers to eliminate Issuing Bank’s risk with respect
to the participation in such Letter of Credit of the Defaulting Lender, which
arrangements may include Borrowers cash collateralizing such Defaulting Lender’s
Letter of Credit Exposure in accordance with Section 2.3(g)(ii). 
Additionally, Issuing Bank shall have no obligation to issue a Letter of Credit
if (A) any order, judgment, or decree of any Governmental Authority or
arbitrator shall, by its terms, purport to enjoin or restrain Issuing Bank from
issuing such Letter of Credit, or any law applicable to Issuing Bank or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Issuing Bank shall prohibit or
request that Issuing

 

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Bank refrain from the issuance of letters of credit generally or such Letter of
Credit in particular, (B) the issuance of such Letter of Credit would violate
one or more policies of Issuing Bank applicable to letters of credit generally,
or (C) if amounts demanded to be paid under any Letter of Credit will not or may
not be in United States Dollars.

 

(d)                                 Any Issuing Bank (other than Wells Fargo or
any of its Affiliates) shall notify Agent in writing no later than the Business
Day prior to the Business Day on which such Issuing Bank issues any Letter of
Credit.  In addition, each Issuing Bank (other than Wells Fargo or any of its
Affiliates) shall, on the first Business Day of each week, submit to Agent a
report detailing the daily undrawn amount of each Letter of Credit issued by
such Issuing Bank during the prior calendar week.  Borrowers and the Lender
Group hereby acknowledge and agree that all Existing Letters of Credit listed on
Schedule 2.11 shall constitute Letters of Credit under this Agreement on and
after the Closing Date with the same effect as if such Existing Letters of
Credit were issued by Issuing Bank at the request of Borrowers on the Closing
Date; provided that, notwithstanding the foregoing or any other provision of the
Loan Documents to the contrary, no issuance or similar fees shall be charged to
Borrowers pursuant to Section 2.11(k) or any other provision of the Loan
Documents with respect to any Existing Letter of Credit on or after the Closing
Date (all of which are hereby waived by the Lender Group) unless such Existing
Letter of Credit is renewed or extended. If Issuing Bank makes a payment under a
Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable
Letter of Credit Disbursement on the Business Day such Letter of Credit
Disbursement is made and, in the absence of such payment, the amount of the
Letter of Credit Disbursement immediately and automatically shall be deemed to
be a Revolving Loan hereunder (notwithstanding any failure to satisfy any
condition precedent set forth in Section 3) and, initially, shall bear interest
at the rate then applicable to Revolving Loans that are Base Rate Loans.  If a
Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder,
Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to
Issuing Bank shall be automatically converted into an obligation to pay the
resulting Revolving Loan.  Promptly following receipt by Agent of any payment
from Borrowers pursuant to this paragraph, Agent shall distribute such payment
to Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Revolving
Lenders and Issuing Bank as their interests may appear.

 

(e)                                  Promptly following receipt of a notice of a
Letter of Credit Disbursement pursuant to Section 2.11(d), each Revolving Lender
agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to
Section 2.11(d) on the same terms and conditions as if Borrowers had requested
the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing
Bank the amounts so received by it from the Revolving Lenders.  By the issuance
of a Letter of Credit (or an amendment, renewal, or extension of a Letter of
Credit) and without any further action on the part of Issuing Bank or the
Revolving Lenders, Issuing Bank shall be deemed to have granted to each
Revolving Lender, and each Revolving Lender shall be deemed to have purchased, a
participation in each Letter of Credit issued by Issuing Bank, in an amount
equal to its Pro Rata Share of such Letter of Credit, and each such Revolving
Lender agrees to pay to Agent, for the account of Issuing Bank, such Revolving
Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing
Bank under the applicable Letter of Credit.  In consideration and in furtherance
of the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to Agent, for the account of Issuing Bank, such Revolving

 

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Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing
Bank and not reimbursed by Borrowers on the date due as provided in
Section 2.11(d), or of any reimbursement payment that is required to be refunded
(or that Agent or Issuing Bank elects, based upon the advice of counsel, to
refund) to Borrowers for any reason.  Each Revolving Lender acknowledges and
agrees that its obligation to deliver to Agent, for the account of Issuing Bank,
an amount equal to its respective Pro Rata Share of each Letter of Credit
Disbursement pursuant to this Section 2.11(e) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3.  If any such Revolving Lender fails to make
available to Agent the amount of such Revolving Lender’s Pro Rata Share of a
Letter of Credit Disbursement as provided in this Section, such Revolving Lender
shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing
Bank) shall be entitled to recover such amount on demand from such Revolving
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.

 

(f)                                   Each Borrower agrees to indemnify, defend
and hold harmless each member of the Lender Group (including Issuing Bank and
its branches, Affiliates, and correspondents) and each such Person’s respective
directors, officers, employees, attorneys and agents (each, including Issuing
Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), which may be incurred by
or awarded against any Letter of Credit Related Person (other than Taxes, except
for Taxes arising from a non-Tax claim pursuant to this Section 2.11(f)) (the
“Letter of Credit Indemnified Costs”), and which arise out of or in connection
with, or as a result of this Agreement, any Letter of Credit, any Issuer
Document, or any Drawing Document referred to in or related to any Letter of
Credit, or any action or proceeding arising out of any of the foregoing (whether
administrative, judicial or in connection with arbitration); in each case,
including that resulting from the Letter of Credit Related Person’s own
negligence, or any prohibition or payment or delay in payment of any amount
payable by Issuing Bank to a beneficiary or transferee beneficiary of a Letter
of Credit arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or
Sanctions; provided, however, that such indemnity shall not be available to any
Letter of Credit Related Person claiming indemnification to the extent that such
Letter of Credit Indemnified Costs may be finally determined in a final,
non-appealable judgment of a court of competent jurisdiction to have resulted
directly from the gross negligence, bad faith or willful misconduct of the
Letter of Credit Related Person claiming indemnity or the material breach by the
Letter of Credit Related Person of this Agreement, any other Loan Document or
any Issuer Document finally determined in a final, non-appealable judgment of a
court of competent jurisdiction.  This indemnification provision shall survive
termination of this Agreement and all Letters of Credit.

 

(g)                                  The liability of Issuing Bank (or any other
Letter of Credit Related Person) under, in connection with or arising out of any
Letter of Credit (or pre-advice), regardless of the form or legal grounds of the
action or proceeding, shall be limited to direct damages suffered by Borrowers
that are caused directly by Issuing Bank’s gross negligence, bad faith or
willful

 

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misconduct in (i) honoring a presentation under a Letter of Credit that on its
face does not at least substantially comply with the terms and conditions of
such Letter of Credit, (ii) failing to honor a presentation under a Letter of
Credit that strictly complies with the terms and conditions of such Letter of
Credit or (iii) retaining Drawing Documents presented under a Letter of Credit. 
Issuing Bank shall be deemed to have acted with due diligence and reasonable
care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit
Practice or in accordance with this Agreement.  Borrowers’ aggregate remedies
against Issuing Bank and any Letter of Credit Related Person for wrongfully
honoring a presentation under any Letter of Credit or wrongfully retaining
honored Drawing Documents shall in no event exceed the aggregate amount paid by
Borrowers to Issuing Bank in respect of the honored presentation in connection
with such Letter of Credit under Section 2.11(d), plus interest at the rate then
applicable to Base Rate Loans hereunder.  Borrowers shall take action to avoid
and mitigate the amount of any damages claimed against Issuing Bank or any other
Letter of Credit Related Person, including by enforcing its rights against the
beneficiaries of the Letters of Credit.  Any claim by Borrowers under or in
connection with any Letter of Credit shall be reduced by an amount equal to the
sum of (x) the amount (if any) saved by Borrowers as a result of the breach or
alleged wrongful conduct complained of; and (y) the amount (if any) of the loss
that would have been avoided had Borrowers taken all reasonable steps to
mitigate any loss, and in case of a claim of wrongful dishonor, by specifically
and timely authorizing Issuing Bank to effect a cure.

 

(h)                                 Borrowers are responsible for the final text
of the Letter of Credit as issued by Issuing Bank, irrespective of any
assistance Issuing Bank may provide such as drafting or recommending text or by
Issuing Bank’s use or refusal to use text submitted by Borrowers.  Borrowers
understand that the final form of any Letter of Credit may be subject to such
revisions and changes as are deemed necessary or appropriate by Issuing Bank,
and Borrowers hereby consent to such revisions and changes not materially
different from the application executed in connection therewith. Borrowers are
solely responsible for the suitability of the Letter of Credit for Borrowers’
purposes.  If Borrowers request Issuing Bank to issue a Letter of Credit for an
affiliated or unaffiliated third party (an “Account Party”), (i) such Account
Party shall have no rights against Issuing Bank; (ii) Borrowers shall be
responsible for the application and obligations under this Agreement; and
(iii) communications (including notices) related to the respective Letter of
Credit shall be among Issuing Bank and Borrowers.  Borrowers will examine the
copy of the Letter of Credit and any other documents sent by Issuing Bank in
connection therewith and shall promptly notify Issuing Bank (not later than
three (3) Business Days following Borrowers’ receipt of documents from Issuing
Bank) of any non-compliance with Borrowers’ instructions and of any discrepancy
in any document under any presentment or other irregularity.  Borrowers
understand and agree that Issuing Bank is not required to extend the expiration
date of any Letter of Credit for any reason.  With respect to any Letter of
Credit containing an “automatic amendment” to extend the expiration date of such
Letter of Credit, Issuing Bank, in its sole and absolute discretion, may give
notice of nonrenewal of such Letter of Credit and, if Borrowers do not at any
time want the then current expiration date of such Letter of Credit to be
extended, Borrowers will so notify Agent and Issuing Bank at least 30
calendar days before Issuing Bank is required to notify the beneficiary of such
Letter of Credit or any advising bank of such non-extension pursuant to the
terms of such Letter of Credit.

 

(i)                                     Borrowers’ reimbursement and payment
obligations under this Section 2.11 are absolute, unconditional and irrevocable
and shall be performed strictly in

 

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accordance with the terms of this Agreement under any and all circumstances
whatsoever, provided, however, that subject to Section 2.11(g) above, the
foregoing shall not release Issuing Bank from such liability to Borrowers as may
be finally determined in a final, non-appealable judgment of a court of
competent jurisdiction against Issuing Bank following reimbursement or payment
of the obligations and liabilities, including reimbursement and other payment
obligations, of Borrowers to Issuing Bank arising under, or in connection with,
this Section 2.11 or any Letter of Credit.

 

(j)                                    Without limiting any other provision of
this Agreement, Issuing Bank and each other Letter of Credit Related Person (if
applicable) shall not be responsible to Borrowers for, and Issuing Bank’s rights
and remedies against Borrowers and the obligation of Borrowers to reimburse
Issuing Bank for each drawing under each Letter of Credit shall not be impaired
by:

 

(i)                                     honor of a presentation under any Letter
of Credit that on its face substantially complies with the terms and conditions
of such Letter of Credit, even if the Letter of Credit requires strict
compliance by the beneficiary;

 

(ii)                                  honor of a presentation of any Drawing
Document that appears on its face to have been signed, presented or issued
(A) by any purported successor or transferee of any beneficiary or other Person
required to sign, present or issue such Drawing Document or (B) under a new name
of the beneficiary;

 

(iii)                               acceptance as a draft of any written or
electronic demand or request for payment under a Letter of Credit, even if
nonnegotiable or not in the form of a draft or notwithstanding any requirement
that such draft, demand or request bear any or adequate reference to the Letter
of Credit;

 

(iv)                              the identity or authority of any presenter or
signer of any Drawing Document or the form, accuracy, genuineness or legal
effect of any Drawing Document (other than Issuing Bank’s determination that
such Drawing Document appears on its face substantially to comply with the terms
and conditions of the Letter of Credit);

 

(v)                                 acting upon any instruction or request
relative to a Letter of Credit or requested Letter of Credit that Issuing Bank
in good faith believes to have been given by a Person authorized to give such
instruction or request;

 

(vi)                              any errors, omissions, interruptions or delays
in transmission or delivery of any message, advice or document (regardless of
how sent or transmitted) or for errors in interpretation of technical terms or
in translation or any delay in giving or failing to give notice to Borrowers;

 

(vii)                           any acts, omissions or fraud by, or the
insolvency of, any beneficiary, any nominated person or entity or any other
Person or any breach of contract between any beneficiary and any Borrower or any
of the parties to the underlying transaction to which the Letter of Credit
relates;

 

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(viii)                        assertion or waiver of any provision of the ISP or
UCP that primarily benefits an issuer of a letter of credit, including any
requirement that any Drawing Document be presented to it at a particular hour or
place;

 

(ix)                              payment to any paying or negotiating bank
(designated or permitted by the terms of the applicable Letter of Credit)
claiming that it rightfully honored or is entitled to reimbursement or indemnity
under Standard Letter of Credit Practice applicable to it;

 

(x)                                 acting or failing to act as required or
permitted under Standard Letter of Credit Practice applicable to where Issuing
Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the
case may be;

 

(xi)                              honor of a presentation after the expiration
date of any Letter of Credit notwithstanding that a presentation was made prior
to such expiration date and dishonored by Issuing Bank if subsequently Issuing
Bank or any court or other finder of fact determines such presentation should
have been honored;

 

(xii)                           dishonor of any presentation that does not
strictly comply or that is fraudulent, forged or otherwise not entitled to
honor; or

 

(xiii)                        honor of a presentation that is subsequently
determined by Issuing Bank to have been made in violation of international,
federal, state or local restrictions on the transaction of business with certain
prohibited Persons.

 

(k)                                 Borrowers shall pay immediately upon demand
to Agent for the account of Issuing Bank as non-refundable fees, commissions,
and charges (it being acknowledged and agreed that any charging of such fees,
commissions, and charges to the Loan Account pursuant to the provisions of
Section 2.6(d) shall be deemed to constitute a demand for payment thereof for
the purposes of this Section 2.11(k)):  (i) a fronting fee which shall be
imposed by Issuing Bank upon the issuance of each Letter of Credit of .125% per
annum times the average amount of the Letter of Credit Usage during the
immediately preceding quarter (or if an Event of Default has occurred, month),
plus (ii) any and all other customary commissions, fees and charges then in
effect imposed by, and any and all expenses incurred by, Issuing Bank, or by any
adviser, confirming institution or entity or other nominated person, relating to
Letters of Credit, at the time of issuance of any Letter of Credit and upon the
occurrence of any other activity with respect to any Letter of Credit (including
transfers, assignments of proceeds, amendments, drawings, renewals or
cancellations).

 

(l)                                     If by reason of (x) any Change in Law,
or (y) compliance by Issuing Bank or any other member of the Lender Group with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Board of Governors as from time to time in effect (and any
successor thereto):

 

(i)                                     any reserve, deposit, or similar
requirement is or shall be imposed or modified in respect of any Letter of
Credit issued or caused to be issued hereunder or hereby, or

 

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(ii)                                  there shall be imposed on Issuing Bank or
any other member of the Lender Group any other condition regarding any Letter of
Credit,

 

and the result of the foregoing is to increase, directly or indirectly, the cost
(other than Taxes) to Issuing Bank or any other member of the Lender Group of
issuing, making, participating in, or maintaining any Letter of Credit or to
reduce the amount receivable in respect thereof, then, and in any such case,
Agent may, at any time within a reasonable period after such additional cost is
incurred or the amount received is reduced, notify Borrowers, and Borrowers
shall pay within 30 days after demand therefor, such amounts as Agent may
specify to be necessary to compensate Issuing Bank or any other member of the
Lender Group for such additional cost or reduced receipt, together with interest
on such amount from the date of such demand until payment in full thereof at the
rate then applicable to Base Rate Loans hereunder; provided, that (A) Borrowers
shall not be required to provide any compensation pursuant to this
Section 2.11(l) for any such amounts incurred more than 180 days prior to the
date on which the demand for payment of such amounts is first made to Borrowers,
and (B) if an event or circumstance giving rise to such amounts is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.  The determination by Agent of any amount
due pursuant to this Section 2.11(l), as set forth in a certificate setting
forth the calculation thereof in reasonable detail, shall, in the absence of
manifest or demonstrable error, be final and conclusive and binding on all of
the parties hereto.

 

(m)                             Each standby Letter of Credit shall expire not
later than the date that is 12 months after the date of the issuance of such
Letter of Credit; provided, that any standby Letter of Credit may provide for
the automatic extension thereof for any number of additional periods each of up
to one year in duration; provided further, that with respect to any Letter of
Credit which extends beyond the Maturity Date, Letter of Credit
Collateralization shall be provided therefor on or before the date that is five
Business Days prior to the Maturity Date.  Each commercial Letter of Credit
shall expire on the earlier of (i) 120 days after the date of the issuance of
such commercial Letter of Credit and (ii) five Business Days prior to the
Maturity Date.

 

(n)                                 Unless otherwise expressly agreed by Issuing
Bank and Borrowers when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP
and the UCP shall apply to each standby Letter of Credit, and (ii) the rules of
the UCP shall apply to each commercial Letter of Credit.

 

(o)                                 In the event of a direct conflict between
the provisions of this Section 2.11 and any provision contained in any Issuer
Document, it is the intention of the parties hereto that such provisions be read
together and construed, to the fullest extent possible, to be in concert with
each other.  In the event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of this Section 2.11 shall
control and govern.

 

(p)                                 At Borrowers’ cost and expense, Borrowers
shall execute and deliver to Issuing Bank such additional certificates,
instruments and/or documents and take such additional action as may be
reasonably requested by Issuing Bank to enable Issuing Bank to issue any Letter
of Credit pursuant to this Agreement and related Issuer Document, to protect,
exercise and/or enforce Issuing Bank’s rights and interests under this Agreement
or to give effect to the

 

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terms and provisions of this Agreement or any Issuer Document. Each Borrower
irrevocably appoints Issuing Bank as its attorney-in-fact and authorizes Issuing
Bank, without notice to Borrowers, to execute and deliver ancillary documents
and letters customary in the letter of credit business that may include but are
not limited to advisements, indemnities, checks, bills of exchange and issuance
documents. The power of attorney granted by the Borrowers is limited solely to
such actions related to the issuance or confirmation of any Letter of Credit and
to ancillary documents or letters customary in the letter of credit business.
This appointment is coupled with an interest.

 

(q)                                 The provisions of this Section 2.11 shall
survive the termination of this Agreement and the repayment in full of the
Obligations with respect to any Letters of Credit that remain outstanding.

 

2.12                        LIBOR Option.

 

(a)                                 Interest and Interest Payment Dates.  In
lieu of having interest charged at the rate based upon the Base Rate, Borrowers
shall have the option, subject to Section 2.12(b) below (the “LIBOR Option”) to
have interest on all or a portion of the Revolving Loans be charged (whether at
the time when made (unless otherwise provided herein), upon conversion from a
Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan
as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate.  Interest
on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto; provided, that, subject to the following
clauses (ii) and (iii), in the case of any Interest Period greater than 3 months
in duration, interest shall be payable at 3 month intervals after the
commencement of the applicable Interest Period and on the last day of such
Interest Period), (ii) the date on which all or any portion of the Obligations
are accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof.  On the last day of each
applicable Interest Period, unless Borrowers have properly exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder.  At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request
that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

 

(b)                                 LIBOR Election.

 

(i)                                     Borrowers may, at any time and from time
to time, so long as no Event of Default has occurred and is continuing, elect to
exercise the LIBOR Option by notifying Agent prior to 12:00 p.m. (noon) at least
3 Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”).  Notice of Borrowers’ election of the LIBOR Option for a
permitted portion of the Revolving Loans and an Interest Period pursuant to this
Section shall be made by delivery to Agent of a LIBOR Notice received by Agent
before the LIBOR Deadline.  Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the affected Lenders.

 

(ii)                                  Each LIBOR Notice shall be irrevocable and
binding on Borrowers.  In connection with each LIBOR Rate Loan, each Borrower
shall indemnify, defend,

 

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and hold Agent and the Lenders harmless against any loss, cost, or expense
actually incurred by Agent or any Lender as a result of (A) the payment or
required assignment of any principal of any LIBOR Rate Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the
last day of the Interest Period applicable thereto, or (C) the failure to
borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in
any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
“Funding Losses”).  A certificate of Agent or a Lender delivered to Borrowers
setting forth in reasonable detail any amount or amounts that Agent or such
Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive
absent manifest error.  Borrowers shall pay such amount to Agent or the Lender,
as applicable, within 30 days of the date of its receipt of such certificate. 
If a payment of a LIBOR Rate Loan on a day other than the last day of the
applicable Interest Period would result in a Funding Loss, Agent may, in its
sole discretion at the request of Borrowers, hold the amount of such payment as
cash collateral in support of the Obligations until the last day of such
Interest Period and apply such amounts to the payment of the applicable LIBOR
Rate Loan on such last day, it being agreed that Agent has no obligation to so
defer the application of payments to any LIBOR Rate Loan and that, in the event
that Agent does not defer such application, Borrowers shall be obligated to pay
any resulting Funding Losses.

 

(iii)                               Unless Agent, in its sole discretion, agrees
otherwise, Borrowers shall have not more than 8 LIBOR Rate Loans in effect at
any given time.  Borrowers may only exercise the LIBOR Option for proposed LIBOR
Rate Loans of at least $1,000,000.

 

(c)                                  Conversion.  Borrowers may convert LIBOR
Rate Loans to Base Rate Loans or prepay LIBOR Rate Loans at any time; provided,
that in the event that LIBOR Rate Loans are converted or prepaid on any date
that is not the last day of the Interest Period applicable thereto, including as
a result of any prepayment through the required application by Agent of any
payments or proceeds of Collateral in accordance with Section 2.4(b) or for any
other reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders
and their Participants harmless against any and all Funding Losses in accordance
with Section 2.12 (b)(ii).

 

(d)                                 Special Provisions Applicable to LIBOR Rate.

 

(i)                                     The LIBOR Rate may be adjusted by Agent
with respect to any Lender on a prospective basis to take into account any
additional or increased costs (other than Taxes) to such Lender of maintaining
or obtaining any eurodollar deposits or increased costs (other than Taxes), in
each case, due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including any Changes in
Law (including any changes in tax laws (except changes in laws with respect to
Excluded Taxes)) and changes in the reserve requirements imposed by the Board of
Governors, which additional or increased costs would increase the cost of
funding or maintaining loans bearing interest at the LIBOR Rate. In any such
event, the affected Lender shall give Borrowers and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
Borrowers may, by notice to such affected Lender (A) require such Lender to
furnish to Borrowers a statement setting forth in

 

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reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of
such Lender with respect to which such adjustment is made (together with any
amounts due under Section 2.12(b)(ii)).

 

(ii)                                  In the event that any change in market
conditions or any Change in Law shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and Borrowers
and Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.

 

(e)                                  No Requirement of Matched Funding. 
Anything to the contrary contained herein notwithstanding, neither Agent, nor
any Lender, nor any of their Participants, is required actually to acquire
eurodollar deposits to fund or otherwise match fund any Obligation as to which
interest accrues at the LIBOR Rate.

 

2.13                        Capital Requirements.

 

(a)                                 Capital Requirements.  If, after the date
hereof, Issuing Bank or any Lender determines that (i) any Change in Law
regarding capital, liquidity or reserve requirements for banks or bank holding
companies, or (ii) compliance by Issuing Bank or such Lender, or their
respective parent bank holding companies, with any guideline, request or
directive of any Governmental Authority regarding capital adequacy or liquidity
requirements (whether or not having the force of law), has the effect of
reducing the return on Issuing Bank’s, such Lender’s, or such holding companies’
capital or liquidity as a consequence of Issuing Bank’s or such Lender’s
commitments, Loans, participations, Letters of Credit or other obligations
hereunder to a level below that which Issuing Bank, such Lender, or such holding
companies could have achieved but for such Change in Law or compliance (taking
into consideration Issuing Bank’s, such Lender’s, or such holding companies’
then existing policies with respect to capital adequacy or liquidity
requirements and assuming the full utilization of such entity’s capital) by any
amount deemed by Issuing Bank or such Lender to be material, then Issuing Bank
or such Lender may notify Borrowers and Agent thereof.  Following receipt of
such notice, Borrowers agree to pay Issuing Bank or such Lender on demand the
amount of such reduction of return of capital as and when such reduction is
determined, payable within 30 days after presentation by Issuing Bank or such
Lender of a statement in the amount and setting forth in reasonable detail
Issuing Bank’s or such Lender’s calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error).  In determining such amount, Issuing Bank or
such Lender may use any reasonable averaging and attribution methods.

 

(b)                                 Delay in Requests.  Failure or delay on the
part of Issuing Bank or any Lender to demand compensation pursuant to
Section 2.11(l), Section 2.12(d), Section 2.13(a) or

 

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Section 2.16 shall not constitute a waiver of Issuing Bank’s or such Lender’s
right to demand such compensation; provided that Borrowers shall not be required
to compensate Issuing Bank or any Lender pursuant to Section 2.11(l),
Section 2.12(d), Section 2.13(a) or Section 2.16 for any increased costs
incurred or reductions suffered more than 180 days prior to the date that
Issuing Bank or such Lender, as the case may be, notifies Borrowers of the
Change in Law giving rise to such increased costs or reductions, and of Issuing
Bank’s or such Lender’s intention to claim compensation therefor (except that if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof).

 

(c)                                  If Issuing Bank or any Lender requests
additional or increased costs referred to in Section 2.11(l), Section 2.12(d)(i)
or Section 2.16 or amounts under Section 2.13(a) or Section 16 or sends a notice
under Section 2.12(d)(ii) relative to changed circumstances (such Issuing Bank
or Lender, an “Affected Lender”), then such Affected Lender shall use reasonable
efforts to promptly designate a different one of its lending offices or to
assign its rights and obligations hereunder to another of its offices or
branches, if (i) in the reasonable judgment of such Affected Lender, such
designation or assignment would eliminate or reduce amounts payable pursuant to
Section 2.11(l), Section 2.12(d)(i), Section 2.13(a), Section 2.16, or
Section 16, as applicable, or would eliminate the illegality or impracticality
of funding or maintaining LIBOR Rate Loans and (ii) in the reasonable judgment
of such Affected Lender, such designation or assignment would not subject it to
any material unreimbursed cost or expense and would not otherwise be materially
disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket
costs and expenses incurred by such Affected Lender in connection with any such
designation or assignment.  If, after such reasonable efforts, such Affected
Lender does not so designate a different one of its lending offices or assign
its rights to another of its offices or branches so as to eliminate Borrowers’
obligation to pay any future amounts to such Affected Lender pursuant to
Section 2.11(l), Section 2.12(d)(i), Section 2.13(a), or Section 2.16, as
applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers
(without prejudice to any amounts then due to such Affected Lender under
Section 2.11(l), Section 2.12(d)(i), Section 2.13(a), or Section 2.16, as
applicable) may, unless prior to the effective date of any such assignment the
Affected Lender withdraws its request for such additional amounts under
Section 2.11(l), Section 2.12(d)(i), Section 2.13(a), or Section 2.16, as
applicable, or indicates that it is no longer unlawful or impractical to fund or
maintain LIBOR Rate Loans, may designate a different Issuing Bank or substitute
a Lender, in each case, reasonably acceptable to Agent to purchase the
Obligations owed to such Affected Lender and such Affected Lender’s Commitments
hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to
such purchase, such Affected Lender shall assign to the Replacement Lender its
Obligations and Commitments, and upon such purchase by the Replacement Lender,
which such Replacement Lender shall be deemed to be “Issuing Bank” or a “Lender”
(as the case may be) for purposes of this Agreement and such Affected Lender
shall cease to be “Issuing Bank” or a “Lender” (as the case may be) for purposes
of this Agreement, provided that the provisions of Section 17.9 shall continue
to apply to such Affected Lender after such assignment.

 

(d)                                 Notwithstanding anything herein to the
contrary, the protection of Sections 2.11(l), 2.12(d), 2.13 and 2.16 shall be
available to Issuing Bank and each Lender (as applicable) regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, judicial ruling, judgment, guideline, treaty or other change or
condition which

 

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shall have occurred or been imposed, so long as it shall be customary for
issuing banks or lenders affected thereby to comply therewith.  Notwithstanding
any other provision herein, neither Issuing Bank nor any Lender shall demand
compensation pursuant to this Section 2.13 if it shall not at the time be the
general policy or practice of Issuing Bank or such Lender (as the case may be)
to demand such compensation in similar circumstances under comparable provisions
of other credit agreements, if any.

 

2.14                        Accordion.

 

(a)                                 At any time during the period from and after
the Closing Date through but excluding the date that is 180 days prior to the
Maturity Date, at the option of Borrowers (but subject to the conditions set
forth in clause (b) below), the Revolver Commitments and the Maximum Revolver
Amount may be increased by an amount in the aggregate for all such increases of
the Revolver Commitments and the Maximum Revolver Amount not to exceed the
Available Increase Amount (each such increase, an “Increase”).  Agent shall
invite each Lender to increase its Revolver Commitments (it being understood
that no Lender shall be obligated to increase its Revolver Commitments) in
connection with a proposed Increase at the interest margin proposed by
Borrowers, and if sufficient Lenders do not agree to increase their Revolver
Commitments in connection with such proposed Increase, then Agent or Borrowers
may invite any prospective lender who is reasonably satisfactory to Agent and
Borrowers to become a Lender in connection with a proposed Increase.  Any
Increase shall be in an amount of at least $10,000,000 and integral multiples of
$5,000,000 in excess thereof.  In no event may the Revolver Commitments and the
Maximum Revolver Amount be increased pursuant to this Section 2.14 on more than
three (3) occasions in the aggregate for all such Increases.

 

(b)                                 Each of the following shall be conditions
precedent to any Increase of the Revolver Commitments and the Maximum Revolver
Amount:

 

(i)                                     Agent or Borrowers have obtained the
commitment of one or more Lenders (or other prospective lenders) reasonably
satisfactory to Agent and Borrowers to provide the applicable Increase and any
such Lenders (or prospective lenders), Borrowers, and Agent have signed a
joinder agreement to this Agreement (an “Increase Joinder”), in form and
substance reasonably satisfactory to Agent, to which such Lenders (or
prospective lenders), Borrowers, and Agent are party,

 

(ii)                                  each of the conditions precedent set forth
in Section 3.2 are satisfied, and Borrowers shall have delivered to Agent (A) an
officers’ certificate dated as of the proposed date of such Increase certifying
to such effect, and (B) any and all agreements, instruments and other documents
reasonably requested by the Agent in connection with the Increase, each in form
and substance reasonably satisfactory to the Agent, and

 

(iii)                               Borrowers shall have reached agreement with
the Lenders (or prospective lenders) agreeing to the increased Revolver
Commitments (the date of the effectiveness of any increased Revolver Commitments
and the updated Maximum Revolver Amount, an “Increase Date”)).  Any Increase
Joinder may, with the consent of Agent, Borrowers and the Lenders or prospective
lenders agreeing to the proposed Increase, effect such

 

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amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate to effectuate the provisions of this Section 2.14.

 

(c)                                  Any Increase shall have the same terms as
the existing Revolver Commitments.

 

(d)                                 Unless otherwise specifically provided
herein, all references in this Agreement and any other Loan Document to
Revolving Loans shall be deemed, unless the context otherwise requires, to
include Revolving Loans made pursuant to the increased Revolver Commitments and
Maximum Revolver Amount pursuant to this Section 2.14.

 

(e)                                  Each of the Lenders having a Revolver
Commitment prior to the Increase Date (the “Pre-Increase Revolver Lenders”)
shall assign to any Lender which is acquiring a new or additional Revolver
Commitment on the Increase Date (the “Post-Increase Revolver Lenders”), and such
Post-Increase Revolver Lenders shall purchase from each Pre-Increase Revolver
Lender, at the principal amount thereof, such interests in the Revolving Loans
and participation interests in Letters of Credit on such Increase Date as shall
be necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans and participation interests in Letters of Credit
will be held by Pre-Increase Revolver Lenders and Post-Increase Revolver Lenders
ratably in accordance with their Pro Rata Share after giving effect to such
increased Revolver Commitments.

 

(f)                                   The Revolving Loans, Revolver Commitments,
and Maximum Revolver Amount established pursuant to this Section 2.14 shall
constitute Revolving Loans, Revolver Commitments, and Maximum Revolver Amount
under, and shall be entitled to all the benefits afforded by, this Agreement and
the other Loan Documents, and shall, without limiting the foregoing, benefit
equally and ratably from any guarantees and the security interests created by
the Loan Documents.  Borrowers shall take any actions reasonably required by
Agent to ensure and demonstrate that the Liens and security interests granted by
the Loan Documents continue to be perfected under the Code or otherwise after
giving effect to the establishment of any such new Revolver Commitments and
Maximum Revolver Amount.

 

2.15                        Joint and Several Liability of Borrowers.

 

(a)                                 Each Borrower is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Lender Group under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations; provided, however, that each Borrower
shall only be liable under this Section for the maximum amount of such liability
that can be hereby incurred without rendering this Section, as it relates to
such Borrower, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer, and not for any greater amount.

 

(b)                                 Each Borrower, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including any Obligations
arising under this Section 2.15), it being the intention of the parties

 

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hereto that all the Obligations shall be the joint and several obligations of
each Borrower without preferences or distinction among them. Accordingly, each
Borrower hereby waives any and all suretyship defenses that would otherwise be
available to such Borrower under applicable law (other than the defense of prior
payment or satisfaction).

 

(c)                                  If and to the extent that any Borrower
shall fail to make any payment with respect to any of the Obligations as and
when due, whether upon maturity, acceleration, or otherwise, or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation until such time as all of the Obligations are paid in full, and
without the need for demand, protest, or any other notice or formality.

 

(d)                                 The Obligations of each Borrower under the
provisions of this Section 2.15 constitute the absolute and unconditional, full
recourse Obligations of each Borrower enforceable against each Borrower to the
full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of the provisions of this Agreement (other than
this Section 2.15(d)) or any other circumstances whatsoever.

 

(e)                                  Except as otherwise expressly provided in
this Agreement, each Borrower hereby waives notice of acceptance of its joint
and several liability, notice of any Revolving Loans or Letters of Credit issued
under or pursuant to this Agreement, notice of the occurrence of any Default,
Event of Default, or of any demand for any payment under this Agreement, notice
of any action at any time taken or omitted by Agent or Lenders under or in
respect of any of the Obligations, any requirement of diligence or to mitigate
damages and, generally, to the extent permitted by applicable law, all demands,
notices and other formalities of every kind in connection with this Agreement
(except as otherwise provided in this Agreement).  Each Borrower hereby assents
to, and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by Agent or Lenders at any time or times in
respect of any default by any Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower.  Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this
Section 2.15, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of each Borrower
under this Section 2.15 shall not be discharged except by performance and then
only to the extent of such performance.  The Obligations of each Borrower under
this Section 2.15 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any other Borrower or any Agent or Lender.

 

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(f)                                   Each Borrower represents and warrants to
Agent and Lenders that such Borrower is currently informed of the financial
condition of Borrowers and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. 
Each Borrower further represents and warrants to Agent and Lenders that such
Borrower has read and understands the terms and conditions of the Loan
Documents.  Each Borrower hereby covenants that such Borrower will continue to
keep informed of Borrowers’ financial condition and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g)                                  The provisions of this Section 2.15 are
made for the benefit of Agent, each member of the Lender Group, each Bank
Product Provider, and their respective successors and assigns, and may be
enforced by it or them from time to time against any or all Borrowers as often
as occasion therefor may arise and without requirement on the part of Agent, any
member of the Lender Group, any Bank Product Provider, or any of their
successors or assigns first to marshal any of its or their claims or to exercise
any of its or their rights against any Borrower or to exhaust any remedies
available to it or them against any Borrower or to resort to any other source or
means of obtaining payment of any of the Obligations hereunder or to elect any
other remedy.  The provisions of this Section 2.15 shall remain in effect until
all of the Obligations shall have been paid in full or otherwise fully
satisfied.  If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or returned
by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any
Borrower, or otherwise, the provisions of this Section 2.15 will forthwith be
reinstated in effect, as though such payment had not been made.

 

(h)                                 Each Borrower hereby agrees that it will not
enforce any of its rights of contribution or subrogation against any other
Borrower with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to Agent or Lenders with
respect to any of the Obligations or any collateral security therefor until such
time as all of the Obligations have been paid in full in cash.  Any claim which
any Borrower may have against any other Borrower with respect to any payments to
any Agent or any member of the Lender Group hereunder or under any of the Bank
Product Agreements are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the prior payment in full in cash of the Obligations
and, in the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceeding under the laws of any jurisdiction
relating to any Borrower, its debts or its assets, whether voluntary or
involuntary, all such Obligations shall be paid in full in cash before any
payment or distribution of any character, whether in cash, securities or other
property, shall be made to any other Borrower therefor.

 

(i)                                     Each Borrower hereby agrees that after
the occurrence and during the continuance of any Default or Event of Default,
such Borrower will not demand, sue for or otherwise attempt to collect any
indebtedness of any other Borrower owing to such Borrower until the Obligations
shall have been paid in full in cash.  If, notwithstanding the foregoing
sentence, such Borrower shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
such Borrower as trustee for Agent, and such Borrower shall deliver any such
amounts to Agent for application to the Obligations in accordance with
Section 2.4(b).

 

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2.16                        Increased Costs.  If any Change in Law shall:

 

(a)                                 impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in the LIBOR Rate) or any Issuing Bank;

 

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

 

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

 

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

 

3.                                      CONDITIONS; TERM OF AGREEMENT.

 

3.1                               Conditions Precedent to the Initial Extension
of Credit.  The obligation of each Lender to make the initial extensions of
credit provided for hereunder is subject to the fulfillment, to the satisfaction
of Agent and each Lender, of each of the conditions precedent set forth on
Schedule 3.1 (the making of such initial extensions of credit by a Lender being
conclusively deemed to be its satisfaction or waiver of the conditions
precedent).

 

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

 

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

 

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materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date); and

 

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

 

3.3                               Maturity.  This Agreement shall continue in
full force and effect for a term ending on the Maturity Date (unless terminated
earlier in accordance with the terms hereof).

 

3.4                               Effect of Maturity.  On the Maturity Date, all
Commitments shall automatically be terminated and all of the outstanding
Obligations (other than Bank Product Obligations not yet due and payable and
contingent indemnification and reimbursement Obligations for which no claim has
been made in accordance with the Loan Documents (collectively, “Contingent
Surviving Obligations”)) immediately shall become due and payable without notice
or demand and Borrowers shall be required to repay all of the outstanding
Obligations (other than Contingent Surviving Obligations) in full.  No
termination of the obligations of the Lender Group (other than payment in full
of the Obligations (other than Contingent Surviving Obligations) and termination
of the Commitments) shall relieve or discharge any Loan Party of its duties,
obligations, or covenants hereunder or under any other Loan Document and Agent’s
Liens in the Collateral shall continue to secure the Obligations (other than
Contingent Surviving Obligations) and shall remain in effect until all
Obligations (other than Contingent Surviving Obligations) have been paid in full
and the Commitments have been terminated.  When all of the Obligations (other
than Contingent Surviving Obligations)  have been paid in full and the Lender
Group’s obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrowers’ sole expense, promptly
execute and deliver any termination statements, lien releases, discharges of
security interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, Agent’s Liens and all notices of security interests and liens previously
filed by Agent.

 

3.5                               Early Termination by Borrowers.  Borrowers
have the option, at any time upon 3 Business Days prior written notice to Agent,
to terminate this Agreement and terminate all Commitments hereunder by repaying
to Agent all of the Obligations (other than Contingent Surviving Obligations) in
full.  The foregoing notwithstanding, (a) Borrowers may rescind termination
notices relative to proposed payments in full of such Obligations with the
proceeds of third party Indebtedness if the closing for such issuance or
incurrence does not happen on or before the date of the proposed termination (in
which case, a new notice shall be required to be sent in connection with any
subsequent termination), and (b) Borrowers may extend the date of termination at
any time with the consent of Agent (which consent shall not be unreasonably
withheld or delayed).

 

4.                                      REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by

 

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materiality in the text thereof), as of the Closing Date, and shall be true,
correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
date of the making of each Revolving Loan (or other extension of credit pursuant
thereto) made thereafter, as though made on and as of the date of such Revolving
Loan (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
such representations and warranties shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

4.1                               Due Organization and Qualification;
Subsidiaries.

 

(a)                                 Each Loan Party (i) is duly organized and
existing and in good standing (to the extent such concept is applicable in the
relevant jurisdiction) under the laws of the jurisdiction of its organization,
(ii) is qualified to do business in each jurisdiction where the failure to be so
qualified could reasonably be expected to result in a Material Adverse Effect,
and (iii) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted, to enter into the Loan
Documents to which it is a party and to carry out the transactions contemplated
thereby.

 

(b)                                 [Reserved].

 

(c)                                  Set forth on Schedule 4.1(c) (as such
Schedule may be updated from time to time to reflect changes resulting from
transactions permitted under this Agreement), is a complete and accurate list of
the Subsidiaries of Parent Borrower, showing:  (i) the number of shares of each
class of common and preferred (if applicable) Equity Interests authorized for
each of such Subsidiaries, and (ii) the number and the percentage of the
outstanding shares of each such class owned directly or indirectly by Parent
Borrower and the other Subsidiaries and, if such percentage is not 100%
(excluding directors’ qualifying shares as required by law), a description of
each class issued and outstanding.  All of the outstanding Equity Interests of
each such Subsidiary has been validly issued and is fully paid and
non-assessable (to the extent such concepts are applicable in the relevant
jurisdiction) and all such shares and other equity interests indicated on
Schedule 4.1(c) as owned by Parent Borrower or another Subsidiary are owned,
beneficially and of record, by Parent Borrower or any Subsidiary free and clear
of all Liens, other than Permitted Liens and Liens created under the Loan
Documents.

 

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

 

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4.2                               Due Authorization; No Conflict.

 

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

 

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

 

4.3                               Governmental Consents.  The execution,
delivery, and performance by each Loan Party of the Loan Documents to which such
Loan Party is a party and the consummation of the transactions contemplated by
the Loan Documents do not and will not, except, in each case, where the failure
would not reasonably be expected to have a Material Adverse Effect, require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority, other than registrations, consents,
approvals, notices, or other actions that have been obtained and that are still
in force and effect and except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Agent for filing or
recordation, as of the Closing Date.

 

4.4                               Binding Obligations; Perfected Liens.

 

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

 

(b)                                 Agent’s Liens in the ABL Collateral are
validly created and perfected (other than (i) money, (ii) letter-of-credit
rights (other than supporting obligations), (iii) commercial tort claims (other
than those that, by the terms of the Guaranty and Security Agreement, are
required to be perfected), and (iv) any Deposit Accounts and Securities Accounts
not subject to a Control Agreement as permitted by Section 7(k)(iv) of the
Guaranty and Security Agreement, and subject only to the filing of financing
statements, in each case, in the appropriate filing offices), and first priority
Liens, subject only to Permitted Liens.

 

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(c)                                  Agent’s Liens on the Notes Collateral are
validly created and perfected second priority Liens, subject only to Permitted
Liens.

 

4.5                               No Encumbrances.  All assets of the Loan
Parties and its Restricted Subsidiaries are free and clear of Liens except for
Permitted Liens.

 

4.6                               Litigation.  There are no actions, suits, or
proceedings pending or, to the knowledge of any Borrower, threatened in writing
against a Loan Party or any Restricted Subsidiary that either individually or in
the aggregate would reasonably be expected to result in a Material Adverse
Effect.

 

4.7                               Compliance with Laws.  No Loan Party nor any
Restricted Subsidiary (a) is in violation of any applicable laws, rules,
regulations, executive orders, or codes (including Environmental Laws and ERISA)
that, individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect, or (b) is subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.

 

4.8                               No Material Adverse Effect.  The consolidated
financial statements of Parent Borrower and its Subsidiaries as of and for the
fiscal year ended December 31, 2016 and the nine-month period ended
September 30, 2017 that have been delivered by Borrowers to Agent have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Parent Borrower and
its Subsidiaries’ consolidated financial position as of the date thereof and
results of operations for the period covered thereby.  Since December 31, 2016,
no event, circumstance, or change has occurred that has had, or would reasonably
be expected to result in, a Material Adverse Effect.

 

4.9                               Solvency.

 

(a)                                 The Loan Parties on a consolidated basis are
Solvent.

 

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

 

4.10                        Employee Benefits.  No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, would
reasonably be expected to result in a Material Adverse Effect.  Except as would
not reasonably be expected to have a Material Adverse Effect, (i) each Employee
Plan complies with, and has been operated in accordance with, all applicable
laws, including ERISA and the IRC, and the terms of such Employee Plan, (ii) no
Loan Party has any liability for a fine, penalty, damage, or excise tax with
respect to an Employee Plan and no Loan Party has received notice from a
Governmental Authority, plan administrator, or participant (or any participant’s
agent) that any such fine, penalty, damage or excise tax may be owing by such

 

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Loan Party and (iii) each Employee Plan intended by a Loan Party to be qualified
under Section 401 of the IRC is so qualified.

 

4.11                        Environmental Condition.  Except as set forth on
Schedule 4.11, or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect:

 

(a)                                 to its knowledge, the properties owned,
leased or operated by each Loan Party and each Subsidiary thereof now or in the
past do not contain, and have not previously contained, any Hazardous Materials
in amounts or concentrations which constitute or constituted a violation of
applicable Environmental Laws;

 

(b)                                 to its knowledge, each Loan Party and each
Subsidiary thereof and such properties and all operations conducted in
connection therewith are in compliance, and have been in compliance, with all
applicable Environmental Laws, and there is no contamination by Hazardous
Materials at, under or about such properties or such operations which could
interfere with the continued operation of such properties or impair the fair
saleable value thereof;

 

(c)                                  no Loan Party nor any Subsidiary thereof
has received any unresolved notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters, Hazardous Materials, or compliance with Environmental Laws;

 

(d)                                 to its knowledge, Hazardous Materials have
not been transported or disposed of to or from the properties owned, leased or
operated by any Loan Party or any Subsidiary thereof in violation of, or in a
manner or to a location which would reasonably be expected to give rise to
liability under, Environmental Laws, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of such properties
in violation of, or in a manner that would reasonably be expected to give rise
to liability under, any applicable Environmental Laws;

 

(e)                                  no judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of Parent Borrower,
threatened, under any Environmental Law to which any Loan Party or any
Subsidiary thereof is or, to the knowledge of Parent Borrower, will be named as
a potentially responsible party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any applicable
Environmental Law with respect to any Loan Party or any Subsidiary thereof; and

 

(f)                                   to its knowledge, there has been no
release or threat of release, of Hazardous Materials at or from properties
owned, leased or operated by any Loan Party or any Subsidiary, now or in the
past, in violation of or in amounts or in a manner that could give rise to
liability under applicable Environmental Laws.

 

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

 

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furnished), and all other such factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about Borrowers’ industry) hereafter
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent or any Lender will be, true and accurate, in all material respects, on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole
after giving effect to any updates provided) not misleading in any material
respect at such time in light of the circumstances under which such information
was provided, it being understood that financial statements only contain such
disclosures as are required by GAAP.  The Projections delivered to Agent on
November 9, 2017 represent, and as of the date on which any other Projections
are delivered to Agent, such additional Projections represent, Borrowers’ good
faith estimate, on the date such Projections are delivered, of the Loan Parties’
and their Restricted Subsidiaries’ future performance for the periods covered
thereby based upon assumptions believed by Borrowers to be reasonable at the
time of the delivery thereof to Agent (it being understood that such Projections
are subject to significant uncertainties and contingencies, many of which are
beyond the control of the Loan Parties and their Restricted Subsidiaries, and no
assurances can be given that such Projections will be realized, and although
reflecting Borrowers’ good faith estimate, projections or forecasts based on
methods and assumptions which Borrowers believed to be reasonable at the time
such Projections were prepared, are not to be viewed as facts, and that actual
results during the period or periods covered by the Projections may differ
materially from projected or estimated results).

 

4.13                        Patriot Act.  To the extent applicable, each Loan
Party, each of its Subsidiaries and, to their knowledge, each of their Related
Parties is in compliance, in all material respects, with the (a) Trading with
the Enemy Act, as amended, and each of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any other enabling legislation or executive order relating thereto,
and (b) Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the
“Patriot Act”).

 

4.14                        [Reserved].

 

4.15                        Payment of Taxes.  Except as otherwise permitted
under Section 5.5, all Tax returns of each Loan Party and each Restricted
Subsidiary required to be filed by any of them have been timely filed (except
for extensions duly obtained), and each Loan Party and Restricted Subsidiary has
paid all Taxes shown on such Tax returns to be due and payable and all Taxes
otherwise imposed upon a Loan Party and its Restricted Subsidiaries and upon
their respective assets, income, businesses and franchises to the extent due and
payable, except (a) Taxes that are subject to a Permitted Protest or (b) to the
extent that the failure to do so would not reasonably be expected to result in a
Material Adverse Effect.

 

4.16                        Margin Stock.  Neither any Loan Party nor any of its
Subsidiaries owns any Margin Stock or is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.  No part of the proceeds of the Loans
made to Borrowers will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock or for any

 

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purpose that violates the provisions of Regulation T, U or X of the Board of
Governors.  Neither any Loan Party nor any of its Subsidiaries expects to
acquire any Margin Stock.

 

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

 

4.18                        OFAC; Sanctions; Anti-Corruption Laws; Anti-Money
Laundering Laws.  No Loan Party or any of its Subsidiaries is in violation of
any applicable Sanctions.  No Loan Party nor any of its Subsidiaries nor, to the
knowledge of such Loan Party, any director, officer, employee, agent or
Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a
Sanctioned Entity, (b) has any assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities.  Each of the Loan Parties and its Subsidiaries
has implemented and maintains in effect policies and procedures designed to
ensure compliance with all applicable Sanctions, Anti-Corruption Laws and
Anti-Money Laundering Laws.  Each of the Loan Parties and its Subsidiaries, and
to the knowledge of each such Loan Party, each director, officer, employee,
agent and Affiliate of each such Loan Party and each such Subsidiary, is in
compliance with all applicable Sanctions, Anti-Corruption Laws and Anti-Money
Laundering Laws.  No proceeds of any Loan made or Letter of Credit issued
hereunder will be used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity, or otherwise used in any manner that would result in a violation of any
applicable Sanction, Anti-Corruption Law or Anti-Money Laundering Law by any
Person (including any Lender, Bank Product Provider, or other individual or
entity participating in any transaction).

 

4.19                        [Reserved].

 

4.20                        [Reserved].

 

4.21                        [Reserved].

 

4.22                        Eligible Accounts.  As to each Account that is
identified by a Borrower as an Eligible Account or Eligible Unbilled Account in
a Borrowing Base Certificate submitted to Agent, such Account is not excluded as
ineligible by virtue of one or more of the excluding criteria (other than any
Agent-discretionary criteria) set forth in the definition of Eligible Accounts
or Eligible Unbilled Accounts, as applicable.

 

4.23                        Eligible Inventory.  As to each item of Inventory
that is identified by a Borrower as Eligible Inventory or Eligible In-Transit
Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is
not excluded as ineligible by virtue of one or more of the excluding criteria
(other than any Agent-discretionary criteria) set forth in the definition of
Eligible Inventory (in the case of Eligible In-Transit Inventory, after giving
effect to any exclusions therefrom specified in the definition of Eligible
In-Transit Inventory), except if or with respect to

 

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any such Eligible Inventory that (a) is located at a customer site or at a site
for which Agent has established a Landlord Reserve, (b) is out for repair,
(c) is at a rail yard, (d) is on consignment or in the possession of lessees in
the ordinary course of business, or (e) has been sold or disposed of in
accordance with the terms of the Loan Documents since the date of such Borrowing
Base Certificate.

 

4.24                        Location of Inventory.  As to any Inventory that is
identified by a Borrower as Eligible Inventory in the most recent Borrowing Base
Certificate delivered pursuant hereto, such Eligible Inventory of Borrowers is
not stored with a bailee, warehouseman, or similar party, except at locations
for which Agent has received a Collateral Access Agreement or established a
Landlord Reserve, and is located only at, or in-transit between, the locations
identified on Schedule 4.24 (as such Schedule may be updated pursuant to
Section 5.14), or otherwise constitutes Eligible In-Transit Inventory, except if
or with respect to any such Eligible Inventory that (a) is out for repair,
(b) is at a rail yard, (c) is on consignment or in the possession of lessees in
the ordinary course of business, or (d) has been sold or disposed of in
accordance with the terms of the Loan Documents since the date of such Borrowing
Base Certificate.

 

4.25                        Inventory Records.  Each Borrower keeps correct and
accurate records itemizing and describing the type, quality, and quantity of its
Inventory and the book value thereof.

 

5.                                      AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations (other than Contingent
Surviving Obligations):

 

5.1                               Financial Statements, Reports, Certificates. 
Borrowers (a) will deliver to Agent, with copies to each Lender, each of the
financial statements, reports, and other items set forth on Schedule 5.1 no
later than the times specified therein, (b) agree that no Subsidiary of Parent
Borrower that is consolidated in accordance with GAAP with Parent Borrower will
have a fiscal year different from that of Administrative Borrower, and (c) agree
to maintain a system of accounting that enables Parent Borrower to produce
financial statements in accordance with GAAP.

 

Documents required to be delivered pursuant to this Section 5.1 (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 Parent Borrower posts such documents, or
provides a link thereto on the Parent Borrower’s website on the Internet at the
website address listed in Section 11, if any; or (ii) on which such documents
are posted on the Parent Borrower’s behalf on an Internet or intranet website,
if any, to which each Lender and Agent have access (whether a commercial,
third-party website or whether sponsored by the Agent) or posted on the website
of the SEC at http://www.sec.gov/; provided that: (i) Parent Borrower shall
deliver paper copies of such documents to the Agent or any Lender that requests
the Parent Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Agent or such Lender and
(ii) Parent Borrower shall notify (which may be by facsimile, by customary
electronic or internet postings, or by an e-mail communication identifying such
documents and containing a hyperlink to electronic versions of such documents)
the Agent. The Agent shall

 

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have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Parent Borrower with any such request for delivery,
and each Lender shall be solely responsible for timely accessing posted
documents or requesting delivery to it or maintaining its copies of such
documents.

 

5.2                               Reporting.  Borrowers will deliver to Agent
(and if so requested by Agent, with copies for each Lender) each of the reports
set forth on Schedule 5.2 at the times specified therein.

 

5.3                               Existence.  Except as otherwise permitted
under Section 6.3 or Section 6.4, Parent Borrower will, and will cause each of
its Restricted Subsidiaries to, at all times preserve and keep in full force and
effect such Person’s valid existence and good standing (to the extent such
concept is applicable in the relevant jurisdiction) in its jurisdiction of
organization and, except as would not reasonably be expected to result in a
Material Adverse Effect, (a) good standing (to the extent such concept is
applicable in the relevant jurisdiction) with respect to all other jurisdictions
in which it is qualified to do business and (b) any rights, franchises, permits,
licenses, accreditations, authorizations, or other approvals necessary to the
conduct of the business of Parent Borrower and its Restricted Subsidiaries taken
as a whole.

 

5.4                               Maintenance of Properties.  Parent Borrower
will, and will cause each of its Restricted Subsidiaries to, maintain and
preserve all of its assets that are necessary in and material to the conduct of
its business in good working order and condition, ordinary wear, tear, casualty,
and condemnation and Permitted Dispositions excepted (and except where the
failure to so maintain and preserve assets would not reasonably be expected to
result in a Material Adverse Effect).

 

5.5                               Taxes.  Parent Borrower will, and will cause
each of its Restricted Subsidiaries to, pay in full before delinquency or before
the expiration of any extension period all material governmental assessments and
taxes imposed, levied, or assessed against it, or any of its assets or in
respect of any of its income, businesses, or franchises, except (a) to the
extent that the validity of such governmental assessment or Tax is the subject
of a Permitted Protest or (b) where the failure to pay such governmental
assessment or Tax would not reasonably be expected to result in a Material
Adverse Effect.

 

5.6                               Insurance.  Parent Borrower will, and will
cause each of its Restricted Subsidiaries to, at Parent Borrower’s expense,
(a) maintain insurance respecting each of Parent Borrower’s and its Restricted
Subsidiaries’ assets wherever located, covering liabilities, losses or damages
as are customarily are insured against by other Persons engaged in same or
similar businesses and similarly situated and located.  All such policies of
insurance shall be with financially sound and reputable insurance companies
reasonably acceptable to Agent (it being agreed that the insurance companies in
place as of the Closing Date are acceptable to Agent) and in such amounts as are
carried generally in accordance with sound business practice by companies in
similar businesses similarly situated and located and, in any event, in amount,
adequacy, and scope reasonably satisfactory to Agent (it being agreed that the
amount, adequacy, and scope of the policies of insurance of Parent Borrower and
its Restricted Subsidiaries in effect as of the Closing Date are satisfactory to
Agent).  Subject to the Intercreditor Agreement, all

 

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property insurance policies covering the Collateral are to be made payable to
Agent for the benefit of Agent and the Lenders, as their interests may appear,
in case of loss, pursuant to a standard loss payable endorsement with a standard
non-contributory “lender” or “secured party” clause and are to contain such
other provisions as Agent may reasonably require to fully protect the Lenders’
interest in the Collateral and to any payments to be made under such policies. 
All certificates of property and general liability insurance are to be delivered
to Agent, with the loss payable (but only in respect of Collateral) and
additional insured endorsements in favor of Agent and shall provide for not less
than 30 days (10 days in the case of non-payment) prior written notice to Agent
of the exercise of any right of cancellation, unless the applicable insurer does
not routinely provide an endorsement regarding such notice.  If Parent Borrower
or its Restricted Subsidiaries fails to maintain such insurance, Agent may
arrange for such insurance, but at Parent Borrower’s expense and without any
responsibility on Agent’s part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of claims. 
Upon the occurrence and during the continuance of an Event of Default, subject
to the Intercreditor Agreement, Agent shall have the sole right to file claims
under any property and general liability insurance policies in respect of the
Collateral, to receive, receipt and give acquittance for any payments that may
be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any such
insurance policies.  Notwithstanding the foregoing and anything to the contrary
in any Loan Document, the Loan Parties may self-insure against such risks and in
such amounts as are customary in Borrowers’ industry, in which case no such
insurance certificates and endorsements otherwise required by the Loan Documents
will be required.

 

5.7                               Inspection.

 

(a)                                 Subject to Sections 2.10(c) and 5.7(b),
Parent Borrower will, and will cause each other Loan Party to, permit Agent,
accompanied by any Lender, and Agent’s duly authorized representatives or agents
(accompanied by any Lender) to visit any of its properties and inspect any of
its assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees (provided an authorized
representative of Parent Borrower shall be allowed to be present) with no less
than 5 Business Days prior written notice to Parent Borrower and during regular
business hours of such Loan Party.

 

(b)                                 Parent Borrower will, and will cause each
other Borrower to, permit Agent and each of its duly authorized representatives
or agents to conduct field exams and inventory appraisals, in each case, subject
to the restrictions on costs and frequency contained in Section 2.10(c).  So
long as no Default or Event of Default has occurred and is continuing, Agent
agrees to provide Borrowers with a copy of the report for any such inventory
appraisal, provided that the appraiser consents to the Borrowers being provided
a copy of such report.

 

5.8                               Compliance with Laws.  Parent Borrower will,
and will cause each of its Restricted Subsidiaries to, comply with the
requirements of all applicable laws, rules, regulations, and orders of any
Governmental Authority (including Environmental Laws and ERISA), other than
laws, rules, regulations, and orders the non-compliance with which,

 

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individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.

 

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

 

(a)                                 keep any property either owned or operated
by Parent Borrower or its Restricted Subsidiaries free of any Environmental
Liens or post bonds or other financial assurances sufficient to satisfy the
obligations or liability evidenced by such Environmental Liens, in each case,
other than Permitted Liens,

 

(b)                                 comply with Environmental Laws applicable to
Parent Borrower and its Restricted Subsidiaries, except if the failure to so
comply would not reasonably be expected to result in a Material Adverse Effect,

 

(c)                                  promptly, but in any event within 5
Business Days after Parent Borrower has knowledge thereof, notify Agent of any
release of which Parent Borrower has knowledge of a Hazardous Material in any
reportable quantity from or onto property owned or operated by Parent Borrower
or its Restricted Subsidiaries and take any Remedial Actions required to abate
said release pursuant to applicable Environmental Law, except if the failure to
take such Remedial Actions would not reasonably be expected to result in a
Material Adverse Effect, and

 

(d)                                 promptly, but in any event within 5 Business
Days after its receipt thereof, provide Agent with written notice of any of the
following:  (i) notice that an Environmental Lien has been filed against any of
the real or personal property of Parent Borrower or its Restricted Subsidiaries,
(ii) commencement of any Environmental Action (or written notice that an
Environmental Action will be) filed against Parent Borrower or its Restricted
Subsidiaries, and (iii) written notice of a violation, citation, or other
administrative order to Parent Borrower or any Restricted Subsidiary from a
Governmental Authority pursuant to applicable Environmental Laws, in each case
of clauses (ii) and (iii), that has resulted in, or could result in,
Environmental Liabilities that could reasonably be expected to result in a
Material Adverse Effect.

 

5.10                        Disclosure Updates.  Parent Borrower will, promptly
and in no event later than 5 Business Days after obtaining knowledge thereof,
notify Agent if any written information, exhibit, or report furnished to Agent
or the Lenders pursuant to the Loan Documents contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein (taken as a
whole) not misleading in any material respect in light of the circumstances in
which made, it being understood that financial statements contain only such
disclosures as are required by GAAP.  The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.

 

5.11                        Formation of Subsidiaries.

 

(a)                                 Parent Borrower will, promptly after (x) the
creation or acquisition of any (i) Wholly Owned Subsidiary that is a Domestic
Subsidiary (other than an Excluded Subsidiary)

 

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or upon a wholly owned domestic Unrestricted Subsidiary (other than an Excluded
Subsidiary) being designated as a Restricted Subsidiary and (y) any Restricted
Subsidiary (except for any Excluded Subsidiary) that is not already a Guarantor
guarantees or becomes an obligor of any other Indebtedness of any Loan Party
with an aggregate principal amount of $5,000,000 or more, in each case, cause
such Subsidiary to (i) if such Subsidiary is a Domestic Subsidiary and
Administrative Borrower requests, subject to the consent of Agent (not to be
unreasonably withheld, delayed or conditioned), that such Domestic Subsidiary be
joined as a Borrower hereunder, provide to Agent a duly executed joinder to this
Agreement substantially in the form of Exhibit J-1, (ii) become a Guarantor by
delivering to the Agent a duly executed joinder to the Guaranty and Security
Agreement or such other document as the Agent shall deem appropriate for such
purpose, (iii) grant a security interest in all Collateral specified in the
Guaranty and Security Agreement (subject to the exceptions specified in the
Guaranty and Security Agreement, including with respect to Excluded Assets)
owned by such Subsidiary by delivering to the Agent a duly executed joinder to
the Guaranty and Security Agreement, together with such other security documents
and financing statements as the Agent shall reasonably deem appropriate for such
purpose and comply with the terms of each applicable security document, (iv) 
deliver to the Agent a duly executed joinder to the Intercreditor Agreement, (v)
to deliver to the Agent such opinions, documents and certificates referred to in
Section 3.1 as may be reasonably requested by the Agent, (vi) if the Equity
Interests of such Subsidiary constitute Collateral and are certificated,
deliver, subject to the Intercreditor Agreement, to the Agent such original
certificated Equity Interests or other certificates and stock or other transfer
powers evidencing the Equity Interests of such Subsidiary and (vii) deliver to
the Agent such updated Schedules to the Loan Documents as requested by the Agent
with respect to such Person.

 

(b)                                 Parent Borrower will notify the Agent
promptly after any Loan Party creates or acquires a First-Tier Foreign
Subsidiary, and promptly thereafter (and, in any event, within 45 days after
such notification, as such time period may be extended by the Agent in its sole
discretion), cause (i) the applicable Loan Party to deliver to the Agent a
pledge agreement, an addendum to the Guaranty and Security Agreement, and/or
other security documents pledging, solely to the extent that the following does
not constitute Excluded Assets, Equity Interests of any such new First-Tier
Foreign Subsidiary and, if reasonably requested by Agent, a consent thereto
executed by such new First-Tier Foreign Subsidiary (including, without
limitation, if applicable, original certificated Equity Interests (or the
equivalent thereof pursuant to the applicable laws and practices of any relevant
foreign jurisdiction) evidencing the Equity Interests to be pledged of such new
First-Tier Foreign Subsidiary, together with an appropriate undated stock or
other transfer power for each certificate duly executed in blank by the
registered owner thereof), (ii) such Person to deliver to the Agent such
opinions, documents and certificates referred to in Section 3.1 as may be
reasonably requested by the Agent, (iii) such Person to deliver to the Agent
such updated Schedules to the Loan Documents as requested by the Agent with
regard to such Person and (iv) such Person to deliver to the Agent such other
documents as may be reasonably requested by the Agent, all in form, content and
scope reasonably satisfactory to the Agent.

 

(c)                                  Any document, agreement, or instrument
executed or issued pursuant to this Section 5.11 shall constitute a Loan
Document.  For purposes of this Section 5.11 and any other provision of any Loan
Document, compliance with applicable foreign laws with respect to

 

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the grant, creation and perfection of Liens on and security interests in the
Collateral will not be required.

 

5.12                        Further Assurances.  Each Borrower will, and will
cause each of the other Loan Parties to, at any time upon the reasonable request
of Agent, execute or deliver to Agent any and all financing statements, fixture
filings, security agreements, pledges, assignments, opinions of counsel, and all
other documents (the “Additional Documents”) that Agent may reasonably request
in form and substance reasonably satisfactory to Agent, to create, perfect, and
continue perfected Agent’s Liens in all of the assets constituting Collateral,
subject to the provisions of Section 5.11 and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan Documents.  To
the maximum extent permitted by applicable law, if any Borrower or any other
Loan Party refuses or fails to execute or deliver any reasonably requested
Additional Documents within a reasonable period of time following the request to
do so, each Borrower and each other Loan Party hereby authorizes Agent to
execute any such Additional Documents in the applicable Loan Party’s name and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office.  In furtherance of, and not in limitation of, the foregoing,
except to the extent not required by any Loan Document, each Loan Party shall
take such actions as Agent may reasonably request from time to time to ensure
that the Obligations are guaranteed by the Guarantors and are secured by the
Collateral.  For purposes of this Section 5.12 and any other provision of any
Loan Document, compliance with applicable foreign laws with respect to the
grant, creation and perfection of Liens on and security interests in the
Collateral will not be required.

 

5.13                        Lender Meetings.  Parent Borrower will, within 90
days after the close of each fiscal year of Administrative Borrower (commencing
with the fiscal year ending December 31, 2017), at the request of Agent or of
the Required Lenders and upon reasonable prior written notice, hold a meeting
(at a mutually agreeable location and time or, at the option of Agent, by
conference call) with all Lenders who choose to attend such meeting at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of Parent Borrower and its Restricted Subsidiaries and
the projections presented for the current fiscal year of Administrative
Borrower.

 

5.14                        Location of Inventory.  As to any Inventory that is
identified by a Borrower as Eligible Inventory in the most recent Borrowing Base
Certificate delivered pursuant hereto, each Borrower will keep such Eligible
Inventory only at the locations identified on Schedule 4.24, except if or with
respect to any such Eligible Inventory that (a) is Eligible In-Transit Inventory
or for which Agent has established a Landlord Reserve, (b) is out for repair,
(c) is at a rail yard, (d) is on consignment or in the possession of lessees in
the ordinary course of business, or (e) has been sold or disposed of in
accordance with the terms of the Loan Documents since the date of such Borrowing
Base Certificate; provided, that Borrowers may amend Schedule 4.24 so long as
such amendment occurs by written notice to Agent not less than 5 days prior to
the date on which such Inventory is moved to such new location is relocated and
so long as such new location is within the continental United States.

 

5.15                        OFAC; Sanctions; Anti-Corruption Laws; Anti-Money
Laundering Laws.  Each Loan Party will, and will cause each of its Subsidiaries
to, comply with all applicable Sanctions, Anti-Corruption Laws and Anti-Money
Laundering Laws. Each of the Loan Parties

 

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and its Subsidiaries shall implement and maintain in effect policies and
procedures designed to ensure compliance by the Loan Parties and their
Subsidiaries and their respective directors, officers, employees, agents and
Affiliates with all applicable Sanctions, Anti-Corruption Laws and Anti-Money
Laundering Laws.

 

6.                                      NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations (other than Contingent
Surviving Obligations):

 

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

 

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

 

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

 

(a)                                 other than in order to consummate a
Permitted Acquisition, enter into any merger, consolidation, or
recapitalization, or reclassify its Equity Interests, except for (i) any merger
between or among Loan Parties, provided, that if the transaction involves a
Borrower, a Borrower must be the surviving entity of any such merger to which it
is a party, (ii) any merger between a Loan Party and a Subsidiary of such Loan
Party that is not a Loan Party so long as such Loan Party is the surviving
entity of any such merger, (iii) any merger between Restricted Subsidiaries of
Parent Borrower that are not Loan Parties, and (iv) any distribution of assets
(including Equity Interests of any Subsidiary) by Parent Borrower or any
Restricted Subsidiary to any other Restricted Subsidiary or Parent Borrower,
provided that if any such assets (or Equity Interests) are to be distributed by
a Loan Party, such assets (or Equity Interests) must be distributed to another
Loan Party (except to the extent permitted by Section 6.9), or

 

(b)                                 liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), except for (i) the liquidation or
dissolution of non-operating Restricted Subsidiaries of Parent Borrower with
nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a
Loan Party (other than a Borrower) so long as (except to the extent permitted by
Section 6.9) all of the assets (including any interest in any Equity Interests)
of such liquidating or dissolving Loan are transferred to a Loan Party that is
not liquidating or dissolving, or (iii) the liquidation or dissolution of a
Restricted Subsidiary of Parent Borrower that is not a Loan Party (other than
any such Restricted Subsidiary the Equity Interests of which (or any portion
thereof) is subject to a Lien in favor of Agent) so long as (except to the
extent permitted by Section 6.9) all of the assets of such liquidating or
dissolving Restricted Subsidiary are transferred to a Restricted Subsidiary of
Parent Borrower that is not liquidating or dissolving.

 

6.4                               Disposal of Assets.  Other than Permitted
Dispositions or transactions expressly permitted by Sections 6.3 or 6.9, Parent
Borrower will not, and will not permit any of its

 

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Restricted Subsidiaries to convey, sell, lease, license, assign, transfer, or
otherwise dispose of any of its or their assets.

 

6.5                               Nature of Business.  Parent Borrower will not,
and will not permit any of its Restricted Subsidiaries to engage in any business
other than a Permitted Business, except to such extent as would not be material
to Parent Borrower and its Restricted Subsidiaries, taken as a whole.

 

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

 

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

 

(i)                                     optionally prepay, redeem, defease,
purchase, or otherwise acquire any Indebtedness of Parent Borrower or any of its
Restricted Subsidiaries, other than (A) the Obligations, (B) Permitted
Intercompany Advances, (C) in connection with the sale of Inventory in the
ordinary course of business and consistent with past practices, and
(D) payments, redemptions, defeasance, purchases or other acquisitions of
Indebtedness outstanding under the Term Loan Facility or the Senior Notes
expressly permitted by Section 6.6(a)(iii), in each case, together with all
interest, fees, premiums and other amounts required by the Term Loan Facility
Documents or the Senior Notes or Senior Notes Indenture required to be paid in
connection therewith,

 

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

 

(iii)                               make any payment of principal in respect of
the Term Loan Facility or the Senior Notes, other than

 

(A)                               regularly scheduled payments of principal,
including at the maturity thereof,

 

(B)                               payments made with the proceeds of any sale,
transfer or other disposition of assets (including by casualty or condemnation)
other than ABL Collateral which are, by the terms of the Term Loan Facility
Credit Agreement or the Senior Notes Indenture, in each case, required to be
paid to the Term Loan Facility Agent for application to the Term Loans or to the
Senior Notes Trustee for application to the Senior Notes, as the case may be,
and

 

(C)                               optional prepayments, redemptions, defeasance,
purchases or other acquisitions of Indebtedness outstanding under the Term Loan
Facility Credit Agreement or any of the Senior Notes so long as (I) no Event of
Default exists or would exist immediately before or after giving effect to such
prepayment, redemption, defeasance, purchase or other acquisition and (II) on a
pro forma basis, after giving effect to each such prepayment, redemption,
defeasance, purchase or other acquisition and any Revolving Loans made in
connection therewith, either (A) Excess Availability shall not be less than the
greater of (x)

 

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22.5% of the Line Cap and (y) $30,000,000 at any time during the period from the
30th day prior to the date of such prepayment through and including the date of
such prepayment, redemption, defeasance, purchase or other acquisition (measured
as if such prepayment, redemption, defeasance, purchase or other acquisition and
any Revolving Loans made in connection therewith had been made on the first day
of such 30 day period), or (B)(1) Excess Availability shall not be less than the
greater of (x) 17.5% of the Line Cap and (y) $25,000,000 at any time during the
period from the 30th day prior to the date of such prepayment, redemption,
defeasance, purchase or other acquisition through and including the date of such
prepayment, redemption, defeasance, purchase or other acquisition (measured as
if such prepayment, redemption, defeasance, purchase or other acquisition and
any Revolving Loans made in connection therewith had been made on the first day
of such 30 day period), and (2) the Fixed Charge Coverage Ratio for the most
recent 12 fiscal month period for which Parent Borrower’s financial statements
are then required to have been delivered pursuant to Section 5.1 is at least 1.0
to 1.0, as calculated on a pro forma basis as if such prepayment, redemption,
defeasance, purchase or other acquisition and any Revolving Loans made in
connection therewith were made on the first day of such period, or

 

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

 

(i)                                     except in connection with Refinancing
Indebtedness permitted by Section 6.1, any agreement, instrument, document,
indenture, or other writing evidencing Permitted Indebtedness described in
clauses (b) and (c) of the definition thereof other than any amendment,
modification, or change would not (A) shorten or hasten the maturity date of the
Term Loan Facility or the Senior Notes (in each case, as in effect on the
Closing Date), (B) increase the principal amount of the Term Loan Facility
except to the extent constituting “Permitted Indebtedness” under clause (b) or
(c) of the definition of “Permitted Indebtedness,” respectively, (C) shorten or
hasten the date scheduled for any principal payment thereunder, or (D) increase
the amount of any required principal payment thereunder (or change the
methodology by which any such principal amount is determined, unless the same
shall have in all cases the effect of reducing the amount of any required
principal payment thereunder or extending the date on which such required
principal payment becomes due) (with it being agreed that nothing in this
clause (i) shall prohibit the making of any payment otherwise permitted under
Section 6.6(a)(iii)), or

 

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

 

6.7                               Restricted Payments.  Parent Borrower will
not, and will not permit any of its Restricted Subsidiaries to make any
Restricted Payment; provided, that, so long as it is permitted by applicable
law, and so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom,

 

(a)                                 any purchase, repurchase, redemption,
defeasance or other acquisition or retirement of Disqualified Equity Interests
of Parent Borrower or a Restricted Subsidiary made by exchange for or out of the
proceeds of the substantially concurrent sale of Disqualified Equity

 

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Interests of Parent Borrower or such Restricted Subsidiary, as the case may be,
that, in each case, is permitted to be incurred pursuant to Section 6.1 hereof
and that in each case constitutes Refinancing Indebtedness,

 

(b)                                 the payment of any dividend or redemption
payment or the making of any distribution (in each case, other than a payment or
distribution permitted by Section 6.7(a) of the Agreement) within 60 days after
the date of declaration thereof, if at such date of declaration such dividend
would have complied with the provisions of this Agreement, or any dividend or
similar distribution by a Restricted Subsidiary to the holders of its Equity
Interests on a pro rata basis,

 

(c)                                  the purchase, redemption or other
acquisition, cancellation or retirement for value of Equity Interests of Parent
Borrower or any Restricted Subsidiary held by any existing or former employees,
officers, managers, partners, directors or holders of Equity Interests of
Administrative Borrower or any Restricted Subsidiary of Parent Borrower or their
assigns, estates or heirs, in each case, in connection with the repurchase
provisions under employee stock option, restricted stock units or stock purchase
agreements or other agreements; provided that such redemptions or repurchases
pursuant to this clause will not exceed $1.5 million in the aggregate during any
calendar year (with any unused amounts in any calendar year being carried over
to the immediately succeeding calendar year subject to a maximum of $3.0 million
in any calendar year), plus the amount of any capital contributions to Parent
Borrower as a result of sales of Equity Interests of Parent Borrower to such
persons, plus the net cash proceeds of any “key-man” life insurance policies,
and

 

(d)                                 loans or advances to employees, officers or
directors of Parent Borrower or any Subsidiary of Parent Borrower, the proceeds
of which are used to purchase Equity Interests of Parent Borrower, in an
aggregate amount not in excess of $2.0 million at any one time outstanding
(without giving effect to the forgiveness of any such loan);

 

(e)                                  repurchases of Equity Interests deemed to
occur upon the vesting or settlement of restricted stock units, exercise of
stock options, warrants, other rights to purchase Equity Interests or other
convertible securities or similar securities if such Equity Interests represent
a portion of the exercise price thereof (or withholding, purchases or deemed
purchases of Equity Interests to satisfy related withholding Taxes with regard
to the exercise of such stock options, warrants or other rights to purchase
Equity Interests or the vesting or settlement of any such restricted stock,
restricted stock units, deferred stock units or any similar securities);

 

(f)                                   payments or distributions to dissenting
stockholders pursuant to applicable law in connection with a merger or
consolidation that complies with Section 6.3 hereof;

 

(g)                                  cash payment in lieu of issuance of
fractional shares in connection with the exercise of warrants, options or other
securities convertible into or exchangeable for the Equity Interests of Parent
Borrower or a Restricted Subsidiary; provided, that such payment shall not be
for the purpose of evading the limitations of this covenant (as determined by
the Board of Directors of Parent Borrower in good faith);

 

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(h)                                 Parent Borrower and its Restricted
Subsidiaries may make Restricted Payments in an amount not to exceed the
Available Amount Basket;

 

(i)                                     Parent Borrower and its Restricted
Subsidiaries may make other Restricted Payments so long as (i) each such
Restricted Payment is permitted by law, (ii) on a pro forma basis, after giving
effect to each such Restricted Payment and any Revolving Loans made in
connection therewith, either (A) Excess Availability shall not be less than the
greater of (x) 22.5% of the Line Cap and (y) $30,000,000 at any time during the
period from the 30th day prior to the date of such Restricted Payment through
and including the date of such Restricted Payment (measured as if such
Restricted Payment and any Revolving Loans made in connection therewith had been
made on the first day of such 30 day period), or (B)(1) Excess Availability
shall not be less than the greater of (x) 17.5% of the Line Cap and
(y) $25,000,000 at any time during the period from the 30th day prior to the
date of such Restricted Payment through and including the date of such
Restricted Payment (measured as if such Restricted Payment and any Revolving
Loans made in connection therewith had been made on the first day of such 30 day
period), and (2) the Fixed Charge Coverage Ratio for the most recent 12 fiscal
month period for which Parent Borrower’s interim financial statements are then
required to have been delivered pursuant to Section 5.1 is at least 1.0 to 1.0,
as calculated on a pro forma basis as if such Restricted Payment and any
Revolving Loans made in connection therewith were made on the first day of such
period, and (iii) on or prior to the date of each such Restricted Payment,
Borrowers shall have delivered to Agent an officer’s certificate from an
Authorized Person as to the satisfaction of all conditions set forth above in
this clause (i); and

 

(j)                                    Parent Borrower and its Restricted
Subsidiaries may make any other Restricted Payments in an aggregate amount not
to exceed $20,000,000 during the term of this Agreement.

 

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

 

6.9                               Investments.  Parent Borrower will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
make or acquire any Investment except for Permitted Investments.

 

6.10                        Transactions with Affiliates.  Parent Borrower will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction with any Affiliate of
Parent Borrower or any of its Restricted Subsidiaries involving aggregate
consideration in excess of $1,000,000 unless:

 

(a)                                 such transaction is on terms that are no
less favorable to Parent Borrower or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable arm’s-length transaction by
Parent Borrower or such Restricted Subsidiary with an unaffiliated party; and

 

(b)                                 with respect to any transaction or series of
related transactions involving aggregate consideration in excess of $20,000,000,
the terms of such transaction shall have been

 

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approved by a majority of the members of the Board of Directors of Parent
Borrower and by a majority of the Disinterested Members (or, if there is only
one Disinterested Member, such Disinterested Member), if any, and Parent
Borrower delivers to the Agent a resolution adopted by such majority or
majorities, as the case may be, of the Board of Directors of Parent Borrower
approving such transaction and resolving that such transaction complies with
clause (a) above.

 

The foregoing limitations do not limit, and shall not apply to:

 

(i)                                     payment of reasonable and customary fees
and expenses to, and reasonable and customary indemnification arrangements and
similar arrangements and payments on behalf of, directors of Parent Borrower or
any Subsidiary of Parent Borrower;

 

(ii)                                  any employment, consulting, service or
termination agreement, or reasonable and customary indemnification arrangements,
entered into by Parent Borrower or any Restricted Subsidiary with officers and
employees of Parent Borrower or any Subsidiary thereof and the payment of
compensation to officers and employees of Parent Borrower or any Subsidiary
thereof (including amounts paid pursuant to employee benefit plans, employee
stock option or similar plans), so long as such agreement or payment has been
approved by a majority of the Disinterested Members (or, if there is only one
Disinterested Member, such Disinterested Member);

 

(iii)                               transactions permitted by Section 6.3,
Section 6.4, Section 6.6, Section 6.7, or Section 6.9, or any Permitted
Intercompany Advance;

 

(iv)                              any sale or other issuance of Equity Interests
(other than Disqualified Equity Interests) of Parent Borrower to, or receipt of
a capital contribution from, an Affiliate (or a Person that becomes an
Affiliate) of Parent Borrower;

 

(v)                                 loans or advances to employees, officers or
directors of Parent Borrower or any of its Restricted Subsidiaries in an
aggregate amount not in excess of $5,000,000 at any one time outstanding;

 

(vi)                              transactions with customers, clients,
suppliers or purchasers or sellers of goods or services, in each case, in the
ordinary course of the business of Parent Borrower or any of its Restricted
Subsidiaries and otherwise in compliance with the terms of this Agreement;
provided that in the reasonable determination of the members of the Board of
Directors or senior management of Parent Borrower, such transactions are on
terms that are no less favorable to Parent Borrower or any of its Restricted
Subsidiaries than those that would have been obtained in a comparable
Transaction by Parent Borrower or any of its Restricted Subsidiaries with an
unrelated Person;

 

(vii)                           direct or indirect sales of equipment, supplies,
products and services by Parent Borrower or any of its Restricted Subsidiaries
to any direct or indirect joint venture of Parent Borrower or any of its
Restricted Subsidiaries at or above Cost;

 

(viii)                        transactions in which Parent Borrower or any of
its Restricted Subsidiaries delivers to the Agent a letter from an independent
financial advisor stating that such

 

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transaction is fair to Parent Borrower or the applicable Restricted Subsidiary,
as the case may be, from a financial point of view;

 

(ix)                              transactions described on Schedule 6.10, or
any amendment, modification or supplement thereto or replacement thereof so long
as such agreement, as so amended, modified, supplemented or replaced, taken as a
whole, is not materially adverse to the Lenders;

 

(x)                                 transactions among Parent Borrower and/or
the Restricted Subsidiaries; and

 

(xi)                              any issuance or sale of Equity Interests
(other than Disqualified Equity Interests) of Parent Borrower.

 

6.11                        Use of Proceeds.  Each Borrower will not, and will
not permit any of its Restricted Subsidiaries to use the proceeds of any Loan
made hereunder for any purpose other than (a) on the Closing Date, to pay the
fees, costs, and expenses incurred in connection with this Agreement, the other
Loan Documents, and the transactions contemplated hereby and thereby, in each
case, as set forth in the Funds Flow Agreement, and (b) consistent with the
terms and conditions hereof, for their lawful and permitted purposes (including
that no part of the proceeds of the loans made to Borrowers will be used for any
purpose that violates the provisions of Regulation T, U or X of the Board of
Governors); provided (1) Loans made to Parent Borrower may be used only to fund
working capital and general corporate purposes of Parent Borrower and its
Subsidiaries (other than OpCo Borrower and its Subsidiaries) and (2) Loans made
to OpCo Borrower may be used for working capital and general corporate purposes.

 

7.                                      FINANCIAL COVENANT.

 

7.1                               Fixed Charge Coverage Ratio.  Parent Borrower
covenants and agrees that, until termination of all of the Commitments and
payment in full of the Obligations (other than Contingent Surviving
Obligations), upon the occurrence and during the continuance of a Covenant
Testing Period, Borrowers will maintain a Fixed Charge Coverage Ratio, measured
on a fiscal quarter-end basis of at least 1.0:1.0 for the trailing twelve (12)
month period ended as of the last day of each such quarter or month, as
applicable, commencing with the most recent period for which financial
statements were, or were required to be, delivered hereunder prior to the
applicable Covenant Testing Period.

 

8.                                      EVENTS OF DEFAULT.

 

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

 

8.1                               Payments.  If Borrowers fail to pay when due
and payable, or when declared due and payable, (a) all or any portion of the
Obligations consisting of interest, fees, or charges due the Lender Group,
reimbursement of Lender Group Expenses, Indemnified Taxes payable pursuant to
Section 16, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a

 

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claim in any such Insolvency Proceeding), and such failure continues for a
period of 3 Business Days, (b) all or any portion of the principal of the Loans,
or (c) any amount payable to Issuing Bank in reimbursement of any drawing under
a Letter of Credit;

 

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

 

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

 

(b)                                 fails to perform or observe any covenant or
other agreement contained in any of Sections 5.3 (other than if any Borrower is
not in good standing in its jurisdiction of organization), 5.5, 5.8, 5.10, 5.12
and 5.14 of this Agreement or any clause of Section 7 of the Guaranty and
Security Agreement not listed in Section 8.2(a), and such failure continues for
a period of 10 days after the earlier of (i) the date on which such failure
shall first become known to any officer of any Borrower or (ii) the date on
which written notice thereof is given to Borrowers by Agent; or

 

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

 

8.3                               Judgments.  If one or more final judgments,
orders, or awards for the payment of money involving an aggregate amount of
$30,000,000, or more (except to the extent fully covered (other than to the
extent of customary deductibles) by insurance pursuant to which the insurer has
not denied coverage or valid third party indemnifications for which the
indemnifying party thereof has been notified of such claim and has not
challenged such indemnification) is entered or filed against a Loan Party or any
of its Restricted Subsidiaries, or with respect to any of their respective
assets, and there is a period of 60 consecutive days at any time after the entry
of any such judgment, order, or award during which (a) the same is not
discharged, satisfied, vacated, or bonded pending appeal, or (b) a stay of
enforcement thereof is not in effect;

 

8.4                               Voluntary Bankruptcy, etc.  If an Insolvency
Proceeding with respect to a Loan Party or any Restricted Subsidiary is
commenced by a Loan Party or a Restricted Subsidiary;

 

8.5                               Involuntary Bankruptcy, etc.  If an Insolvency
Proceeding is commenced against a Loan Party or any of its Restricted
Subsidiaries and any of the following events occur:  (a) such Loan Party or such
Restricted Subsidiary consents to the institution of such Insolvency

 

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Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 60 calendar days of the date of the filing thereof,
(d) an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party or its Restricted Subsidiary, or
(e) an order for relief shall have been issued or entered therein;

 

8.6                               Default Under Other Agreements.  If there is a
default in one or more agreements to which a Loan Party or any of its Restricted
Subsidiaries is a party with one or more third Persons relative to a Loan
Party’s or any of its Restricted Subsidiaries’ Indebtedness involving an
aggregate amount of $30,000,000 or more, and such default (after giving effect
to any applicable grace or cure period with respect thereto) (a) occurs at the
final maturity of the obligations thereunder, or (b) results in a right by such
third Person, irrespective of whether exercised, to accelerate the maturity of
such Loan Party’s or its Restricted Subsidiary’s obligations thereunder;

 

8.7                               Representations, etc.  If any warranty or
representation made by any Loan Party herein or in any other Loan Document
proves to be untrue in any material respect (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) as of the
date when made;

 

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

 

8.9                               Collateral.  Unless all of the Collateral has
been released from the Liens in accordance with the provisions of the Loan
Documents, (a) the liens and security interests on assets or collections of
assets constituting Collateral having a fair market value in excess of
$30,000,000 shall cease to be perfected, or shall fail to have the priority
contemplated hereby, in each case, subject to Permitted Liens, and the same
shall continue for a period in excess of 30 consecutive days following written
notice from Agent, or (b) the determination in a judicial proceeding that the
Loan Documents are unenforceable or invalid against any Loan Party party thereto
for any reason with respect to any Collateral, individually or in the aggregate,
having a fair market value in excess of $30,000,000; provided that such default,
repudiation, disaffirmation or determination is not rescinded, stayed, or waived
by the Persons having such authority pursuant to the Loan Documents or otherwise
cured within 60 days after Borrowers receive written notice thereof specifying
such occurrence from Agent or the Required Lenders and demanding that such
default be remedied;

 

8.10                        Loan Documents.  The validity or enforceability of
any Loan Document shall at any time for any reason (other than solely as the
result of an action or failure to act on the part of Agent or as expressly
permitted by a Loan Document) be declared by a Governmental Authority with valid
jurisdiction over such matter to be null and void, or a proceeding before a
Governmental Authority shall be commenced by a Loan Party or its Restricted
Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan
Party or its Restricted Subsidiaries, in each case, seeking to establish the
invalidity or unenforceability of any such Loan Document, or a Loan Party or its
Restricted Subsidiaries shall deny in writing that such

 

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Loan Party or its Restricted Subsidiaries has any Indebtedness outstanding under
any Loan Document; or

 

8.11                        Change of Control.  A Change of Control shall occur,
whether directly or indirectly.

 

9.                                      RIGHTS AND REMEDIES.

 

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

 

(a)                                 (i) declare the principal of, and any and
all accrued and unpaid interest and fees in respect of, the Loans and all other
Obligations (other than Contingent Surviving Obligations), whether evidenced by
this Agreement or by any of the other Loan Documents to be immediately due and
payable, whereupon the same shall become and be immediately due and payable and
Borrowers shall be obligated to repay all of such Obligations in full, without
presentment, demand, protest, or further notice or other requirements of any
kind, all of which are hereby expressly waived by each Borrower, and (ii) direct
Borrowers to provide (and Borrowers agree that upon receipt of such notice
Borrowers will provide) Letter of Credit Collateralization to Agent to be held
as security for Borrowers’ reimbursement obligations for drawings that may
subsequently occur under issued and outstanding Letters of Credit;

 

(b)                                 declare the Commitments terminated,
whereupon the Commitments shall immediately be terminated together with (i) any
obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation
of the Swing Lender to make Swing Loans, and (iii) the obligation of Issuing
Bank to issue Letters of Credit; and

 

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

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than Contingent Surviving Obligations), inclusive of the
principal of, and any and all accrued and unpaid interest and fees in respect
of, the Loans and all other Obligations (other than Contingent Surviving
Obligations), whether evidenced by this Agreement or by any of the other Loan
Documents, shall automatically become and be immediately due and payable and
Borrowers shall automatically be obligated to repay all of such Obligations in
full (including Borrowers being obligated to provide (and Borrowers agree that
they will provide) (1) Letter of Credit Collateralization to Agent to be held as
security for Borrowers’ reimbursement obligations in respect of drawings that
may subsequently occur under issued and outstanding Letters of Credit and
(2) Bank Product Collateralization to be held as security for Borrowers’ or
their Restricted Subsidiaries’ obligations in respect of outstanding Bank
Products), without presentment, demand, protest, or

 

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notice or other requirements of any kind, all of which are expressly waived by
Borrowers.  If any amount remains on deposit as Letter of Credit
Collateralization after all Letters of Credit have either been fully drawn or
expired, terminated, cancelled or returned, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth in
Section 2.4(b)(ii).

 

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

 

10.                               WAIVERS; INDEMNIFICATION.

 

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

 

10.2                        The Lender Group’s Liability for Collateral.  Each
Borrower hereby agrees that:  (a) so long as Agent complies with its
obligations, if any, under the Code, the Lender Group shall not in any way or
manner be liable or responsible for:  (i) the safekeeping of the Collateral,
(ii) any loss or damage thereto occurring or arising in any manner or fashion
from any cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other
Person, and (b) all risk of loss, damage, or destruction of the Collateral shall
be borne by Borrowers, except, in each case, to the extent such loss, damage or
destruction is determined by a final non-appealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence, bad faith or
willful misconduct of a member of the Lender Group.

 

10.3                        Indemnification.  Each Borrower shall pay,
indemnify, defend, and hold the Agent-Related Persons and the Lender-Related
Persons (each, an “Indemnified Person”) harmless (to the fullest extent
permitted by applicable law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, liabilities, fines, costs,
penalties, and damages, and all reasonable, documented fees and disbursements of
attorneys (limited to one firm of counsel for the Indemnified Persons, taken as
a whole, (plus any local counsel or regulatory counsel (if the applicable
Indemnified Person or Indemnified Persons reasonably determine that local or
regulatory counsel is necessary) or any additional counsel reasonably necessary
as a result of an actual conflict of interest or a reasonable likelihood of a
conflict of interest of any Indemnified Person, which, in the case of local
counsel, shall be limited to one firm of counsel for each applicable
jurisdiction, in the case of regulatory counsel, shall be limited to one firm of
such counsel for all Indemnified Persons, and in the case of a conflict of
interest, shall be limited to one firm of counsel for all Indemnified Persons
similarly situated)), experts, or consultants and all other reasonable,
documented out-of-pocket costs and expenses actually incurred in connection
therewith or in connection with the enforcement of this indemnification

 

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(as and when they are incurred and irrespective of whether suit is brought), at
any time asserted against, imposed upon, or incurred by any of them (a) in
connection with or as a result of or related to the execution and delivery
(provided that Borrowers shall not be liable for costs and expenses (including
attorneys’ fees) of any Lender (other than Wells Fargo) incurred in advising,
structuring, drafting, reviewing, administering or syndicating the Loan
Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Borrowers’ and their Restricted Subsidiaries’ compliance with the
terms of the Loan Documents (provided, that, notwithstanding anything to the
contrary in any Loan Document, the indemnification in this clause (a), and any
other indemnification requirements in the Loan Documents, in each case, shall
not extend to (i) disputes solely between or among the Lenders that do not
involve any acts or omissions of any Loan Party, or (ii) disputes solely between
or among any Lender-Related Persons that do not involve any acts or omissions of
any Loan Party; it being understood and agreed that the indemnification in this
clause (a) shall extend to Agent (but not the Lenders if within the limitations
provided above) relative to disputes between or among Agent on the one hand, and
one or more Lenders, or one or more of their Affiliates, on the other hand, or
(iii) any Taxes or any costs attributable to Taxes, except for Taxes arising
from a non-Tax claim pursuant to this Section 10.3), (b) with respect to
any actual or prospective investigation, litigation, or proceeding related to
this Agreement, any other Loan Document, the making of any Loans or issuance of
any Letters of Credit hereunder, or the use of the proceeds of the Loans or the
Letters of Credit provided hereunder (irrespective of whether any Indemnified
Person or a Loan Party is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto, and (c) in connection with or
arising out of any presence or release of Hazardous Materials at, on, under, to
or from any assets or properties owned, leased or operated by any Borrower or
any of its Restricted Subsidiaries, or any Environmental Actions, Environmental
Liabilities or Remedial Actions related in any way to any such assets or
properties of any Borrower or any of its Restricted Subsidiaries (each and all
of the foregoing, the “Indemnified Liabilities”).  The foregoing to the contrary
notwithstanding, no Borrower shall have any obligation to any Indemnified Person
under this Section 10.3 with respect to any Indemnified Liability that a court
of competent jurisdiction finally determines to have resulted from the gross
negligence, bad faith or willful misconduct of such Indemnified Person or its
officers, directors, employees, attorneys, or agents.  This provision shall
survive the termination of this Agreement and the repayment in full of the
Obligations.  If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.

 

11.                               NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements

 

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and other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as a party may designate in accordance herewith), or
telefacsimile.  In the case of notices or demands to any Borrower or Agent, as
the case may be, they shall be sent to the respective address set forth below:

 

If to any Borrower:

c/o Administrative Borrower
777 Main Street
Suite 2900
Fort Worth, TX 76102
Attn: Lance Turner
Fax No. 817-339-3697
Email address:  Lance.Turner@FTSI.com
Website: http://www.ftsi.com/investor-relations/default.aspx

 

 

with copies to:

Jennifer Keefe
777 Main Street
Suite 2900
Fort Worth, TX 76102
Fax No. 817-339-3641
Email address:  Jennifer.Keefe@FTSI.com
Website: http://www.ftsi.com/investor-relations/default.aspx

 

 

If to Agent:

WELLS FARGO BANK, NATIONAL
ASSOCIATION
14241 Dallas Parkway, Suite 900
Dallas, TX 75254
Attn:  Mark M. Galovic Jr.
Fax No.:  866-494-6028
Email address:  Mark.galovic@wellsfargo.com

 

 

with copies to:

Goldberg Kohn Ltd.
55 East Monroe, Suite 3300
Chicago, IL 60603
Attn:  Jessica L. DeBruin, Esq.
Fax No.:  312-863-7857
Email address:  jessica.debruin@goldbergkohn.com

 

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received,
(b) notices by facsimile shall be deemed to have been given when sent (except
that, if not given during

 

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normal business hours for the recipient, shall be deemed to have been given at
the opening of business on the next Business Day for the recipient) and
(c) notices by electronic mail shall be deemed received upon the sender’s
receipt of an acknowledgment from the intended recipient (such as by the “return
receipt requested” function, as available, return email or other written
acknowledgment).

 

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

 

(a)                                 THE VALIDITY OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF
THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR
DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

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

 

(c)                                  TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE
THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY,
DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF
ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”).  EACH BORROWER AND EACH
MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND

 

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VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

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

 

(e)                                  NO CLAIM MAY BE MADE BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE,
COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
THEREWITH, AND EACH PARTY HERETO HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE
UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR. IT BEING UNDERSTOOD THAT THE FOREGOING DOES
NOT LIMIT THE LOAN PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.3.

 

13.                               ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1                        Assignments and Participations.

 

(a)                                 (i) Subject to the conditions set forth in
clause (a)(ii) below, any Lender may assign and delegate all or any portion of
its rights and duties under the Loan Documents (including the Obligations owed
to it and its Commitments) to one or more assignees so long as such prospective
assignee is an Eligible Transferee (each, an “Assignee”), with the prior written
consent (such consent not be unreasonably withheld or delayed) of:

 

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(A)                               Borrowers; provided, that no consent of
Borrowers shall be required (1) if an Event of Default has occurred and is
continuing, and (2) in connection with an assignment to a Person that is a
Lender or an Affiliate (other than natural persons) of a Lender; provided, that
Borrowers shall be deemed to have consented to a proposed assignment unless they
object thereto by written notice to Agent within five Business Days after having
received notice thereof; and

 

(B)                               Agent, Swing Lender, and Issuing Bank.

 

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

 

(A)                               no assignment may be made (i) so long as no
Event of Default has occurred and is continuing, to a Competitor, or (ii) to a
natural person,

 

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

 

(C)                               the amount of the Commitments and the other
rights and obligations of the assigning Lender hereunder and under the other
Loan Documents subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to Agent)
shall be in a minimum amount (unless waived by Agent and, so long as no Event of
Default has occurred and is continuing, the Borrowers) of $10,000,000 (except
such minimum amount shall not apply to (I) an assignment or delegation by any
Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of
such Lender or (II) a group of new Lenders, each of which is an Affiliate of
each other or a Related Fund of such new Lender to the extent that the aggregate
amount to be assigned to all such new Lenders is at least $10,000,000),

 

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

 

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

 

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

 

(G)                               the assignee, if it is not a Lender, shall
deliver to Agent an Administrative Questionnaire in a form approved by Agent
(the “Administrative Questionnaire”) and any Tax forms or documentation required
to be delivered pursuant to Section 16.7.

 

(b)                                 From and after the date that Agent receives
the executed Assignment and Acceptance and, if applicable, payment of the
required processing fee, (i) the Assignee

 

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

 

(c)                                  By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as follows: 
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or the performance or observance by any
Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto, (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such Assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (v) such Assignee appoints and
authorizes Agent to take such actions and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to Agent, by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto, and (vi) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

 

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

 

(e)                                  Any Lender may at any time sell to one or
more commercial banks, financial institutions, or other Persons (a
“Participant”) participating interests in all or any portion of its Obligations,
its Commitment, and the other rights and interests of that Lender (the
“Originating Lender”) hereunder and under the other Loan Documents; provided,
that (i) the Originating Lender shall remain a “Lender” for all purposes of this
Agreement and the other

 

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Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, (v) no participation shall be sold to a
natural person, (vi) no participation shall be sold to a Loan Party or an
Affiliate of a Loan Party, and (vii) all amounts payable by Borrowers hereunder
shall be determined as if such Lender had not sold such participation, except
that, if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of set
off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement.  The Borrowers agree that
each Participant shall be entitled to the benefits of Section 16 (subject to the
requirements and limitations therein, including the requirements under
Section 16.7 (it being understood that the documentation required under
Section 16.7 shall be delivered to the participating Lender)) to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
this Section 13.1; provided that such Participant (A) agrees to be subject to
the provisions of Sections 2.13(c), Section 14.2 and Section 17.9 as if it were
an assignee (without duplication of any such benefits that would otherwise be
owed to the Lender with respect to the Loans subject to such participation) and
(B) shall not be entitled to receive any greater payment under Section 16 with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
such participation.  Each Lender that sells a participation agrees, at
Borrowers’ request and expense, to use reasonable efforts to cooperate with
Borrowers to effectuate the provisions of Section 2.13(c) (to the extent such
section addresses designation of or assignment to a Replacement Lender),
Section 14.2 and Section 17.9 with respect to any Participant.  The rights of
any Participant only shall be derivative through the Originating Lender with
whom such Participant participates and no Participant shall have any rights
under this Agreement or the other Loan Documents or any direct rights as to the
other Lenders, Agent, Borrowers, the Collateral, or otherwise in respect of the
Obligations.  No

 

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Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.

 

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

 

(g)                                  Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest to secure
obligations of such Lender, including any pledge in this Agreement in favor of
any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law; provided, that no such pledge shall release such Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

(h)                                 Agent (as a non-fiduciary agent on behalf of
Borrowers) shall maintain, or cause to be maintained, a register (the
“Register”) on which it enters the name and address of each Lender as the
registered owner of the Loans (and the principal amount thereof and stated
interest thereon) held by such Lender (each, a “Registered Loan”).  A Registered
Loan (and the registered note, if any, evidencing the same) may be assigned only
by registration of such assignment on the Register (and each registered note
shall expressly so provide) and any assignment of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment on the Register, together with the surrender of
the registered note, if any, evidencing the same duly endorsed by (or
accompanied by a written instrument of assignment duly executed by) the holder
of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s).  The entries in the Register shall be conclusive, absent manifest
error.  Prior to the registration of assignment of any Registered Loan (and the
registered note, if any evidencing the same), Borrowers, Agent and the Lenders
shall treat the Person in whose name such Registered Loan (and the registered
note, if any, evidencing the same) is registered as the owner thereof for the
purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary. The parties intend that the Register be
maintained such that the Loans are in “registered form” for the purposes of the
IRC.

 

(i)                                     In the event that a Lender sells
participations in the Registered Loan, such Lender, as a non-fiduciary agent on
behalf of Borrowers, shall maintain (or cause to be maintained) a register on
which it enters the name of all participants in the Registered Loans held by it
(and the principal amount (and stated interest thereon) of the portion of such
Registered Loans that is subject to such participations) (the “Participant
Register”).  A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide).  No Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any other
obligations under any Loan Document)

 

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to any Person except to the extent that such disclosure is necessary to
establish that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations.  The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.  For the avoidance
of doubt, the Agent (in its capacity as Agent) shall have no responsibility for
maintaining a Participant Register.

 

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

 

13.2                        Successors.  This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, that no Borrower may assign this Agreement or any rights or duties
hereunder without the Lenders’ prior written consent and any prohibited
assignment shall be absolutely void ab initio.  No consent to assignment by the
Lenders shall release any Borrower from its Obligations.  A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 13.1 and, except as expressly required
pursuant to Section 13.1, no consent or approval by any Borrower is required in
connection with any such assignment.

 

14.                               AMENDMENTS; WAIVERS.

 

14.1                        Amendments and Waivers.

 

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

 

(i)                                     increase the amount of or extend the
expiration date of any Commitment of any Lender or amend, modify, or eliminate
the last sentence of Section 2.4(c)  (for purposes of clarification, consent of
all Lenders is not required in connection with the exercise of Borrowers’ rights
under Section 2.14),

 

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

 

(iii)                               reduce the principal of, or the rate of
interest on, any loan or other extension of credit hereunder, or reduce any fees
or other amounts payable hereunder or under

 

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any other Loan Document (except (y) in connection with the waiver of
applicability of Section 2.6(c) (which waiver shall be effective with the
written consent of the Required Lenders)), and (z) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii),

 

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

 

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

 

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

 

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

 

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

 

(ix)                              contractually subordinate any of Agent’s Liens
(except as set forth in the last sentence of Section 15.11(a)),

 

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

 

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

 

(xii)                           amend or modify any of the terms or provisions
of the Intercreditor Agreement in a manner that increases the obligations of any
Lender thereunder, or add any additional terms or provisions to the
Intercreditor Agreement that impose any obligation on any Lender.

 

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

 

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

 

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

 

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(c)                                  No amendment, waiver, modification,
elimination, or consent shall amend, without written consent of Agent, Borrowers
and the Supermajority Lenders, modify, or eliminate the definition of Borrowing
Base or any of the defined terms (including the definitions of Eligible
Accounts, Eligible Unbilled Accounts, Eligible In-Transit Inventory and Eligible
Inventory) that are used in such definition to the extent that any such change
results in more credit being made available to Borrowers based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount,
or change Section 2.1(c);

 

(d)                                 No amendment, waiver, modification,
elimination, or consent shall amend, modify, or waive any provision of this
Agreement or the other Loan Documents pertaining to Issuing Bank, or any other
rights or duties of Issuing Bank under this Agreement or the other Loan
Documents, without the written consent of Issuing Bank, Agent, Borrowers, and
the Required Lenders;

 

(e)                                  No amendment, waiver, modification,
elimination, or consent shall amend, modify, or waive any provision of this
Agreement or the other Loan Documents pertaining to Swing Lender, or any other
rights or duties of Swing Lender under this Agreement or the other Loan
Documents, without the written consent of Swing Lender, Agent, Borrowers, and
the Required Lenders; and

 

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

 

(g)                                  Anything in this Section 14.1 to the
contrary notwithstanding, any amendment or modification with respect to any
provision of this Agreement or any other Loan Document to evidence and provide
for the designation of a Guarantor as a Borrower under the Agreement at any time
or from time to time (and any related changes that are necessary in the
determination of Agent and Borrowers, such as to the required use of proceeds of
Loans), may be entered into with the consent of Borrowers and Agent, and shall
not require consent by or the agreement of any Lender, provided (i) that the
Lenders are notified in writing of such designation and amendment not less than
5 days before the effective date thereof, and (ii) Agent and each Lender shall
have received all documentation and other information required by bank
regulatory authorities under applicable “know-your-customer” and anti-money
laundering rules and regulations, including the Patriot Act and anti-corruption
rules and regulations, including OFAC, requested by it with respect to the
proposed new Borrower prior to the effective date of such amendment.

 

14.2                        Replacement of Certain Lenders.

 

(a)                                 If (i) any action to be taken by the Lender
Group or Agent hereunder requires the consent, authorization, or agreement of
all Lenders or all Lenders affected thereby,

 

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

 

(b)                                 Prior to the effective date of such
replacement, the Non-Consenting Lender, Tax Lender or Defaulting Lender, as
applicable, and each Replacement Lender shall execute and deliver an Assignment
and Acceptance, subject only to the Non-Consenting Lender, Tax Lender or
Defaulting Lender, as applicable, being repaid in full its share of the
outstanding Obligations (without any premium or penalty of any kind whatsoever,
but including (i) all interest, fees and other amounts that may be due in
payable in respect thereof, and (ii) an assumption of its Pro Rata Share of
participations in the Letters of Credit).  If the Non-Consenting Lender, Tax
Lender or Defaulting Lender, as applicable, shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such
replacement, Agent may, but shall not be required to, execute and deliver such
Assignment and Acceptance in the name or and on behalf of the Non-Consenting
Lender, Tax Lender or Defaulting Lender, as applicable, and irrespective of
whether Agent executes and delivers such Assignment and Acceptance, the
Non-Consenting Lender, Tax Lender or Defaulting Lender, as applicable, shall be
deemed to have executed and delivered such Assignment and Acceptance.  The
replacement of any Non-Consenting Lender, Tax Lender or Defaulting Lender, as
applicable, shall be made in accordance with the terms of Section 13.1.  Until
such time as one or more Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of the
Non-Consenting Lender, Tax Lender or Defaulting Lender, as applicable, hereunder
and under the other Loan Documents, the Non-Consenting Lender, Tax Lender or
Defaulting Lender, as applicable, shall remain obligated to make the
Non-Consenting Lender’s, Tax Lender’s or Defaulting Lender’s, as applicable, Pro
Rata Share of Revolving Loans and to purchase a participation in each Letter of
Credit, in an amount equal to its Pro Rata Share of participations in such
Letters of Credit.  Notwithstanding any other provision herein, the provisions
of Section 17.9 shall continue to apply to each Non-Consenting Lender after
replacement of such Non-Consenting Lender.

 

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

 

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15.                               AGENT; THE LENDER GROUP.

 

15.1                        Appointment and Authorization of Agent.  Each Lender
hereby designates and appoints Wells Fargo as its agent under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to designate, appoint, and authorize) Agent to execute and deliver each
of the other Loan Documents on its behalf and to take such other action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
Agent by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Agent agrees to act as agent
for and on behalf of the Lenders (and the Bank Product Providers) on the
conditions contained in this Section 15.  Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein or in the other Loan Documents, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender (or Bank
Product Provider), and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against Agent.  Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement or
the other Loan Documents with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only a representative
relationship between independent contracting parties.  Each Lender hereby
further authorizes (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to authorize) Agent to act as the secured party
under each of the Loan Documents that create a Lien on any item of Collateral. 
Except as expressly otherwise provided in this Agreement, Agent shall have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights or taking or refraining from taking any
actions that Agent expressly is entitled to take or assert under or pursuant to
this Agreement and the other Loan Documents.  Without limiting the generality of
the foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect: 
(a) maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, payments and
proceeds of Collateral, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, or to take any other action with respect to
any Collateral or Loan Documents which may be necessary to perfect, and maintain
perfected, the security interests and Liens upon Collateral pursuant to the Loan
Documents, (c) make Revolving Loans, for itself or on behalf of Lenders, as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
payments and proceeds of the Collateral as provided in the Loan Documents,
(e) open and maintain such bank accounts and cash management arrangements as
Agent deems necessary and appropriate in accordance with the Loan Documents for
the foregoing purposes, (f) perform, exercise, and enforce any and all other
rights and remedies of the Lender Group with respect to any Borrower or any
Guarantor, the Obligations, the Collateral, or otherwise related to any of same
as provided in the Loan Documents, and (g) incur and pay any such Indemnified
Taxes and

 

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(h) incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.

 

15.2                        Delegation of Duties.  Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact
that it selects as long as such selection was made without gross negligence, bad
faith or willful misconduct.

 

15.3                        Liability of Agent.  None of the Agent-Related
Persons shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence, bad
faith or willful misconduct), or (b) be responsible in any manner to any of the
Lenders (or Bank Product Providers) for any recital, statement, representation
or warranty made by any Borrower or any of its Restricted Subsidiaries or
Affiliates, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Borrower or any Guarantor or
any other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Agent-Related Person shall be under any obligation to any
Lenders (or Bank Product Providers) to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the books and
records or properties of any Borrower or any Guarantor.  No Agent-Related Person
shall have any liability to any Lender, any Loan Party or any of their
respective Affiliates if any request for a Loan, Letter of Credit or other
extension of credit was not authorized by the applicable Borrower.  Agent shall
not be required to take any action that, in its opinion or in the opinion of its
counsel, may expose it to liability or that is contrary to any Loan Document or
applicable law or regulation.

 

15.4                        Reliance by Agent.  Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telefacsimile or other
electronic method of transmission, telex or telephone message, statement or
other document or conversation believed by it in good faith to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including an opinion of counsel
to Borrowers or advice of counsel to any Lender), independent accountants and
other experts selected by Agent.  Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or concurrence of the Lenders as it
deems appropriate and until such instructions are received, Agent shall act, or
refrain from acting, as it deems advisable.  If Agent so requests, it shall
first be indemnified to its reasonable satisfaction by the Lenders (and, if it
so elects, the Bank Product Providers) against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.  Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Required Lenders (or Supermajority Lenders or all
Lenders, as required by Section 14.1) and such request

 

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and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders (and Bank Product Providers).

 

15.5                        Notice of Default or Event of Default.  Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the payment of principal,
interest, fees, and expenses required to be paid to Agent for the account of the
Lenders and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Borrowers referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.”  Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge.  If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable.

 

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

 

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to provide such Lender (or Bank Product Provider) with any credit or other
information with respect to any Borrower, its Affiliates or any of their
respective business, legal, financial or other affairs, and irrespective of
whether such information came into Agent’s or its Affiliates’ or
representatives’ possession before or after the date on which such Lender became
a party to this Agreement (or such Bank Product Provider entered into a Bank
Product Agreement).

 

15.7                        Costs and Expenses; Indemnification.  Agent may
incur and pay Lender Group Expenses and Indemnified Taxes to the extent Agent
reasonably deems necessary or appropriate for the performance and fulfillment of
its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys’ fees and expenses, fees and expenses of financial
accountants, advisors, consultants, and appraisers, costs of collection by
outside collection agencies, auctioneer fees and expenses, and costs of security
guards or insurance premiums paid to maintain the Collateral, whether or not
Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant
to this Agreement or otherwise.  Agent is authorized and directed to deduct and
retain sufficient amounts from payments or proceeds of the Collateral received
by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to
the distribution of any amounts to Lenders (or Bank Product Providers).  In the
event Agent is not reimbursed for such costs and expenses by Borrowers or their
Restricted Subsidiaries, each Lender hereby agrees that it is and shall be
obligated to pay to Agent such Lender’s ratable thereof.  Whether or not the
transactions contemplated hereby are consummated, each of the Lenders, on a
ratable basis, shall indemnify and defend the Agent-Related Persons (to the
extent not reimbursed by or on behalf of Borrowers and without limiting the
obligation of Borrowers to do so) from and against any and all Indemnified
Liabilities; provided, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities resulting
solely from such Person’s gross negligence or willful misconduct nor shall any
Lender be liable for the obligations of any Defaulting Lender in failing to make
a Revolving Loan or other extension of credit hereunder.  Without limitation of
the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s
ratable share of any costs or out-of-pocket expenses (including attorneys,
accountants, advisors, and consultants fees and expenses) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any other Loan Document to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. 
Notwithstanding anything herein to the contrary, Lenders shall be liable and
indemnify Agent-Related Persons only for Indemnified Liabilities and other costs
and expenses that relate to or arise from an Agent-Related Person acting as or
for Agent (in its capacity as Agent).  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.

 

15.8                        Agent in Individual Capacity.  Wells Fargo and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, provide Bank Products to, acquire Equity Interests in, and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with any Borrower and its Restricted
Subsidiaries and Affiliates and any other Person party to any Loan Document as
though Wells Fargo were not Agent hereunder, and, in each case, without notice
to or consent of the other members of the Lender Group.  The other members of
the Lender Group acknowledge (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to acknowledge) that,

 

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pursuant to such activities, Wells Fargo or its Affiliates may receive
information regarding a Borrower or its Affiliates or any other Person party to
any Loan Documents that is subject to confidentiality obligations in favor of
such Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them.  The terms “Lender” and
“Lenders” include Wells Fargo in its individual capacity.

 

15.9                        Successor Agent.  Agent may resign as Agent upon
30 days (10 days if an Event of Default has occurred and is continuing) prior
written notice to the Lenders (unless such notice is waived by the Required
Lenders) and Borrowers (unless such notice is waived by Borrowers) and without
any notice to the Bank Product Providers.  If Agent resigns under this
Agreement, the Required Lenders shall be entitled, with (so long as no Event of
Default has occurred and is continuing) the consent of Borrowers (such consent
not to be unreasonably withheld, delayed, or conditioned), appoint a successor
Agent for the Lenders (and the Bank Product Providers).  If, at the time that
Agent’s resignation is effective, it is acting as Issuing Bank or the Swing
Lender, such resignation shall also operate to effectuate its resignation as
Issuing Bank or the Swing Lender, as applicable, and it shall automatically be
relieved of any further obligation to issue Letters of Credit, or to make Swing
Loans.  If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Lenders and
Borrowers, a successor Agent.  If Agent has materially breached or failed to
perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders with (so long as no Event of Default has
occurred and is continuing) the consent of Borrowers (such consent not to be
unreasonably withheld, delayed, or conditioned).  In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated provided that the
retiring Agent’s obligations under Section 17.9 shall survive.  After any
retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 15 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.  If no successor Agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and the Required Lenders shall perform
all of the duties of Agent hereunder until such time, if any, as the Required
Lenders appoint a successor Agent as provided for above; provided that in such
circumstance, the Required Lenders shall designate a single Lender for purposes
of giving to or receiving from Borrowers any notices, documents, certificates,
schedules, updates or other information, written or otherwise, until a successor
agent shall have been appointed pursuant to the terms hereof, and each
obligation of Borrowers to deliver notices, documents, certificates, schedules,
updates or other information to Agent shall be deemed satisfied when delivered
by Borrowers to such designated Lender for such period of time.

 

15.10                 Lender in Individual Capacity.  Any Lender and its
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, provide Bank

 

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Products to, acquire Equity Interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with any
Borrower and its Restricted Subsidiaries and Affiliates and any other Person
party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the Lender Group (or the
Bank Product Providers).  The other members of the Lender Group acknowledge (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to acknowledge) that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding a Borrower or its
Affiliates or any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of such Borrower or such other Person and
that prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances, such
Lender shall not be under any obligation to provide such information to them.

 

15.11                 Collateral and Guarantee Matters.

 

(a)                                 Subject to the terms of the Intercreditor
Agreement, the Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral and such Liens on the Collateral
securing the Obligations will be automatically and unconditionally released,
(i) upon the termination of the Commitments and payment and satisfaction in full
by Borrowers of all of the Obligations (other than Contingent Surviving
Obligations), (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrowers certify to
Agent that the sale or disposition is permitted under Section 6.4 (and Agent may
rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Borrower or Guarantor owned any interest
at the time Agent’s Lien was granted nor at any time thereafter,
(iv) constituting property leased or licensed to a Borrower or Guarantor under a
lease or license that has expired or is terminated in a transaction permitted
under this Agreement, (v) in connection with a credit bid or purchase authorized
under this Section 15.11, (vi) as to the pledge of Equity Interests of
First-Tier Foreign Subsidiaries, in connection with a reorganization, change or
modification of the direct or indirect ownership of such First-Tier Foreign
Subsidiaries by a Borrower or a Guarantor, as applicable, in compliance with
this Agreement, a release may be obtained as to such Equity Interests in
connection with the substitution of a pledge of 65% of the voting Equity
Interests (and 100% of the non-voting Equity Interests, if any) of any one or
more new or replacement First-Tier Foreign Subsidiaries pursuant to valid
security documents, or (vii) with respect to and to the extent of the Collateral
pledged by a Guarantor, upon the release of the Guarantee of such Guarantor
pursuant to this Section 15.11.  The Loan Parties and the Lenders hereby
irrevocably authorize (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to authorize) Agent, based upon the instruction
of the Required Lenders, to (i) consent to, credit bid or purchase (either
directly or indirectly through one or more entities) all or any portion of the
Collateral at any sale thereof conducted under the provisions of the Bankruptcy
Code, including Section 363 of the Bankruptcy Code, (ii) credit bid or purchase
(either directly or indirectly through one or more entities) all or any portion
of the Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (iii) credit bid or purchase (either directly or indirectly through one
or more entities) all or any portion of the Collateral at any other sale or
foreclosure conducted or

 

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consented to by Agent in accordance with applicable law in any judicial action
or proceeding or by the exercise of any legal or equitable remedy.  In
connection with any such credit bid or purchase, (i) the Obligations owed to the
Lenders and the Bank Product Providers shall be entitled to be, and shall be,
credit bid on a ratable basis (with Obligations with respect to contingent or
unliquidated claims being estimated for such purpose if the fixing or
liquidation thereof would not impair or unduly delay the ability of Agent to
credit bid or purchase at such sale or other disposition of the Collateral and,
if such contingent or unliquidated claims cannot be estimated without impairing
or unduly delaying the ability of Agent to credit bid at such sale or other
disposition, then such claims shall be disregarded, not credit bid, and not
entitled to any interest in the Collateral that is the subject of such credit
bid or purchase) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) in the Collateral that is the subject of
such credit bid or purchase (or in the Equity Interests of the any entities that
are used to consummate such credit bid or purchase), and (ii) Agent, based upon
the instruction of the Required Lenders, may accept non-cash consideration,
including debt and equity securities issued by any entities used to consummate
such credit bid or purchase and in connection therewith Agent may reduce the
Obligations owed to the Lenders and the Bank Product Providers (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) based upon the value of such non-cash
consideration.  Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers).  Upon request by Agent or Borrowers at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, that (1) anything to the
contrary contained in any of the Loan Documents notwithstanding, Agent shall not
be required to execute any document or take any action necessary to evidence
such release on terms that, in Agent’s opinion, could expose Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly released) upon (or obligations of Borrowers in
respect of) any and all interests retained by any Borrower, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.  Each Lender further hereby irrevocably authorize (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
irrevocably authorize) Agent, at its option and in its sole discretion, to
subordinate any Lien granted to or held by Agent under any Loan Document to the
holder of any Permitted Lien on such property if such Permitted Lien secures
Permitted Purchase Money Indebtedness.

 

(b)                                 Agent shall have no obligation whatsoever to
any of the Lenders (or the Bank Product Providers) (i) to verify or assure that
the Collateral exists or is owned by Borrowers or their Restricted Subsidiaries
or is cared for, protected, or insured or has been encumbered, (ii) to verify or
assure that Agent’s Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any particular
priority, (iii) to verify or assure that any particular items of Collateral meet
the eligibility criteria applicable in respect thereof, (iv) to impose,
maintain, increase, reduce, implement, or eliminate any particular

 

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reserve hereunder or to determine whether the amount of any reserve is
appropriate or not, or (v) to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising, any
of the rights, authorities and powers granted or available to Agent pursuant to
any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender (or Bank Product Provider) as to any of the
foregoing, except as otherwise expressly provided herein.

 

(c)                                  A Guarantee of a Guarantor will be
automatically and unconditionally released (and thereupon shall terminate and be
discharged and be of no further force and effect):

 

(i)                                     in connection with any sale or other
disposition (including by merger or otherwise) of Equity Interests of the
Guarantor after which such Guarantor is no longer a Restricted Subsidiary, if
the sale or disposition of such Equity Interests of that Guarantor complies with
Section 6.4 of this Agreement;

 

(ii)                                  in connection with any sale or other
disposition of all or substantially all of the assets of that Guarantor
(including by way of merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) Parent Borrower or a
Restricted Subsidiary, if the sale or other disposition does not violate
Section 6.4 of this Agreement;

 

(iii)                               in connection with an enforcement action
with respect to the Collateral as provided by the Intercreditor Agreement;

 

(iv)                              if Parent Borrower properly designates the
Guarantor as an Unrestricted Subsidiary under this Agreement;

 

(v)                                 in the case of a Guarantee entered into
because a Person has guaranteed other Indebtedness of a Loan Party, upon the
release or discharge of the guarantee that resulted in the creation of such
Guarantee pursuant to Section 5.11 of this Agreement or a payment of the
Indebtedness supported by such Guarantee; and

 

(vi)                              upon the Guarantor becoming an Excluded
Subsidiary.

 

Except as provided above, Agent will not execute and deliver a release of any
Guarantee without the prior written authorization of (y) if the release is of
all or substantially all of the Guarantees, all of the Lenders (without
requiring the authorization of the Bank Product Providers), or (z) otherwise,
the Required Lenders (without requiring the authorization of the Bank Product
Providers).  Upon any occurrence giving rise to a release of a Guarantee as
specified above, Agent shall execute any documents reasonably required in order
to evidence or effect such release, suspension, discharge and termination in
respect of such Guarantee.

 

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15.12                 Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                 Each of the Lenders agrees that it shall
not, without the express written consent of Agent, set off against the
Obligations, any amounts owing by such Lender to any Loan Party or any deposit
accounts of any Loan Party now or hereafter maintained with such Lender.  Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by Agent, take or cause to be taken any action, including,
the commencement of any legal or equitable proceedings to enforce any Loan
Document against any Borrower or any Guarantor or to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.

 

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

 

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

 

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

 

15.15                 Concerning the Collateral and Related Loan Documents. 
Each member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents.  Each member of the Lender Group agrees
(and by entering into a Bank Product

 

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Agreement, each Bank Product Provider shall be deemed to agree) that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders (and such Bank
Product Provider).

 

15.16                 Field Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information.  By becoming a party to this Agreement,
each Lender:

 

(a)                                 is deemed to have requested that Agent
furnish such Lender, promptly after it becomes available, a copy of each field
examination report respecting any Loan Party (each, a “Report”) prepared by or
at the request of Agent, and Agent shall so furnish each Lender with such
Reports,

 

(b)                                 expressly agrees and acknowledges that Agent
does not (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall not be liable for any information contained in any
Report,

 

(c)                                  expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of Borrowers’ personnel,

 

(d)                                 agrees to keep all Reports and other
material, non-public information regarding the Loan Parties, their Subsidiaries
and their respective operations, assets, and existing and contemplated business
plans in a confidential manner in accordance with Section 17.9, and

 

(e)                                  without limiting the generality of any
other indemnification provision contained in this Agreement, agrees:  (i) to
hold Agent and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrowers, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect,
and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys’ fees and costs)
incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who obtain, directly or indirectly, all or
part of any Report through the indemnifying Lender.

 

(f)                                   In addition to the foregoing,  (x) any
Lender may from time to time request of Agent in writing that Agent provide to
such Lender a copy of any report or document provided by any Borrower or its
Restricted Subsidiaries to Agent that has not been contemporaneously provided by
such Borrower or such Restricted Subsidiary to such Lender, and, upon receipt of
such request, Agent promptly shall provide a copy of same to such Lender, (y) to
the extent that Agent is entitled, under any provision of the Loan Documents, to
request

 

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additional reports or information from any Borrower or its Restricted
Subsidiaries, any Lender may, from time to time, reasonably request Agent to
exercise such right as specified in such Lender’s notice to Agent, whereupon
Agent promptly shall request of Borrowers the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from such
Borrower or such Restricted Subsidiary, Agent promptly shall provide a copy of
same to such Lender, and (z) any time that Agent renders to Borrowers a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.

 

15.17                 Several Obligations; No Liability.  Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group.  No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender (or Bank Product Provider) to fulfill its obligations to
make credit available hereunder, nor to advance for such Lender (or Bank Product
Provider) or on its behalf, nor to take any other action on behalf of such
Lender (or Bank Product Provider) hereunder or in connection with the financing
contemplated herein.

 

15.18                 Lead Arranger and Book Runner.  Each of the Lead Arranger
and the Book Runner, in such capacities, shall not have any right, power,
obligation, liability, responsibility, or duty under this Agreement other than
those applicable to it in its capacity as a Lender, as Agent, as Swing Lender,
or as Issuing Bank.  Without limiting the foregoing, each of the Lead Arranger
and the Book Runner, in such capacities, shall not have or be deemed to have any
fiduciary relationship with any Lender or any Loan Party.  Each Lender, Agent,
Swing Lender, the Issuing Bank, and each Loan Party acknowledges that it has not
relied, and will not rely, on the Lead Arranger and the Book Runner in deciding
to enter into this Agreement or in taking or not taking action hereunder.  Each
of the Lead Arranger and Book Runner, in such capacities, shall be entitled to
resign at any time by giving notice to Agent and Borrowers.

 

16.                               TAXES.

 

16.1                        Defined Terms.  For purposes of this Section 16, all
references to “applicable law” shall include FATCA.

 

16.2                        Payments Free of Taxes.  Any and all payments by or
on account of any obligation of any Loan Party under any Loan Document shall be
made without deduction or withholding for any Taxes, except as required by
applicable law.  If any applicable law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the

 

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deduction or withholding of any Tax from any such payment by a Withholding
Agent, then the applicable Withholding Agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that, after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 16), the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

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

 

16.4                        Indemnification by the Loan Parties.  The Loan
Parties shall jointly and severally indemnify each Recipient, within ten
(10) days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 16) payable or paid by such Recipient or required to
be withheld or deducted from a payment to such Recipient and any reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided, however, that the Loan Parties shall not be
obligated to make payment to a Recipient pursuant to this Section 16.4 in
respect of penalties, interest and other similar liabilities attributable to any
Indemnified Taxes required to be withheld or deducted from a payment to such
Recipient or payable or paid by such Recipient, if written demand therefor has
not been made by such Recipient within 180 days from the date on which it
received written notice of the imposition of Indemnified Taxes by the relevant
Governmental Authority (but only to the extent that making such demand after
such 180-day period gave rise to such penalties, interest and other similar
liabilities); provided further that, if the Indemnified Taxes imposed or
asserted giving rise to such claims are retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof. A certificate as to the amount of such payment or liability delivered
to Borrowers by a Recipient (with a copy to Agent), or by Agent on its own
behalf or on behalf of a Recipient, shall be conclusive absent manifest error.

 

16.5                        Indemnification by the Lenders.  Each Lender shall
severally indemnify Agent, within ten (10) days after demand therefor, for
(a) any Indemnified Taxes attributable to such Lender (but only to the extent
that any Loan Party has not already indemnified Agent for such Indemnified Taxes
and without limiting the obligation of the Loan Parties to do so), (b) any Taxes
attributable to such Lender’s failure to comply with the provisions of
Section 13.1(i)) relating to the maintenance of a Participant Register and
(c) any Excluded Taxes attributable to such Lender, in each case, that are
payable or paid by Agent in connection with any Loan Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such payment or
liability delivered to any Lender by Agent shall be conclusive absent manifest
error.  Each Lender hereby authorizes Agent to set off and apply any and all
amounts at any time owing to such Lender under any Loan Document or otherwise
payable by Agent to the Lender from any other source against any amount due to
Agent under this Section 16.5.

 

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16.6                        Evidence of Payments.  As soon as practicable after
any payment of Taxes by any Loan Party to a Governmental Authority pursuant to
this Section 16, such Loan Party shall deliver to Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to Agent.

 

16.7                        Status of Lenders.

 

(a)                                 Any Lender that is entitled to an exemption
from or reduction of withholding Tax with respect to payments made under any
Loan Document shall deliver to Borrowers and Agent, at the time or times
reasonably requested by Borrowers or Agent, such properly completed and executed
documentation reasonably requested by Borrowers or Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding.  In
addition, any Lender, if reasonably requested by Borrowers or Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Borrowers or Agent as will enable Borrowers or Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.  Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 16.7(b)(i),
(b)(ii) and (b)(iv) below) shall not be required if in the Lender’s reasonable
judgment such completion, execution or submission would subject such Lender to
any material unreimbursed cost or expense or would materially prejudice the
legal or commercial position of such Lender

 

(b)                                 Without limiting the generality of the
foregoing:

 

(i)                                     Any Lender that is a U.S. Person shall
deliver to Borrowers and Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrowers or Agent), executed originals of IRS Form W-9
certifying that such Lender is exempt from United States federal backup
withholding Tax;

 

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

 

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

 

(B)                               executed originals of IRS Form W-8ECI;

 

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

 

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

 

(iii)                               any Foreign Lender shall, to the extent it
is legally entitled to do so, deliver to Borrowers and Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrowers or Agent), executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit Borrowers or Agent to determine the withholding or
deduction required to be made; and

 

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

 

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

 

16.8                        Treatment of Certain Refunds.  If any party
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Taxes as to which it has been indemnified pursuant to this
Section 16 (including by the payment of additional amounts pursuant to this
Section 16), it shall pay to the indemnifying party an amount equal to such

 

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refund (but only to the extent of indemnity payments made under this
Section 16 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund).  Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this Section 16.8 (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority.  Notwithstanding anything to the contrary in this Section 16.8, in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 16.8 the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid.  This Section 16.8 shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

 

16.9                        Survival.  Each party’s obligations under this
Section 16 shall survive the resignation or replacement of Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

 

17.                               GENERAL PROVISIONS.

 

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

 

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

 

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

 

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

 

17.5                        Bank Product Providers.  Each Bank Product Provider
in its capacity as such shall be deemed a third party beneficiary hereof and of
the provisions of the other Loan Documents for purposes of any reference in a
Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to
act as agent for such Bank Product Providers and, by virtue of entering into a
Bank Product Agreement, the applicable Bank Product Provider shall be

 

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automatically deemed to have appointed Agent as its agent and to have accepted
the benefits of the Loan Documents.  It is understood and agreed that the rights
and benefits of each Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider’s being a beneficiary of the Liens and
security interests (and, if applicable, guarantees) granted to Agent and the
right to share in payments and collections out of the Collateral as more fully
set forth herein.  In addition, each Bank Product Provider, by virtue of
entering into a Bank Product Agreement, shall be automatically deemed to have
agreed that Agent shall have the right, but shall have no obligation, to
establish, maintain, relax, or release reserves in respect of the Bank Product
Obligations and that if reserves are established there is no obligation on the
part of Agent to determine or insure whether the amount of any such reserve is
appropriate or not.  In connection with any such distribution of payments or
proceeds of Collateral, Agent shall be entitled to assume no amounts are due or
owing to any Bank Product Provider unless such Bank Product Provider has
provided a written certification (setting forth a reasonably detailed
calculation) to Agent as to the amounts that are due and owing to it and such
written certification is received by Agent a reasonable period of time prior to
the making of such distribution.  Agent shall have no obligation to calculate
the amount due and payable with respect to any Bank Products, but may rely upon
the written certification of the amount due and payable from the applicable Bank
Product Provider.  In the absence of an updated certification, Agent shall be
entitled to assume that the amount due and payable to the applicable Bank
Product Provider is the amount last certified to Agent by such Bank Product
Provider as being due and payable (less any distributions made to such Bank
Product Provider on account thereof).  Borrowers may obtain Bank Products from
any Bank Product Provider, although Borrowers are not required to do so.  Each
Borrower acknowledges and agrees that no Bank Product Provider has committed to
provide any Bank Products and that the providing of Bank Products by any Bank
Product Provider is in the sole and absolute discretion of such Bank Product
Provider.  Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, no provider or holder of any Bank Product shall have any
voting or approval rights hereunder (or be deemed a Lender) solely by virtue of
its status as the provider or holder of such agreements or products or the
Obligations owing thereunder, nor shall the consent of any such provider or
holder be required (other than in their capacities as Lenders, to the extent
applicable) for any matter hereunder or under any of the other Loan Documents,
including as to any matter relating to the Collateral or the release of
Collateral or Guarantors.

 

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

 

17.7                        Counterparts; Electronic Execution.  This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering

 

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an executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement. 
The foregoing shall apply to each other Loan Document mutatis mutandis.

 

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

 

17.9                        Confidentiality.

 

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

 

(b)                                 Anything in this Agreement to the contrary
notwithstanding, Agent may disclose information concerning the terms and
conditions of this Agreement and the other Loan Documents to loan syndication
and pricing reporting services or in its marketing or promotional materials,
with such information to consist of deal terms and other information customarily
found in such publications or marketing or promotional materials and may
otherwise use the

 

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name, logos, and other insignia of any Borrower or the other Loan Parties and
the Commitments provided hereunder in any “tombstone” or other advertisements,
on its website or in other marketing materials.

 

(c)                                  The Loan Parties hereby acknowledge that
Agent or its Affiliates may make available to the Lenders materials or
information provided by or on behalf of Borrowers hereunder (collectively,
“Borrower Materials”) by posting Borrower Materials on IntraLinks, SyndTrak or
another similar electronic system (the “Platform”).  The Platform is provided
“as is” and “as available.”  Agent does not warrant the accuracy or completeness
of the Borrower Materials, or the adequacy of the Platform and expressly
disclaims liability for errors or omissions in the communications.  No warranty
of any kind, express, implied or statutory, including, without limitation, any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third party rights or freedom from viruses or other code defects, is made by
Agent in connection with the Borrower Materials or the Platform.  In no event
shall Agent or any of the Agent-Related Persons have any liability to the Loan
Parties, any Lender or any other person for damages of any kind, including
direct or indirect, special, incidental or consequential damages, losses or
expenses (whether in tort, contract or otherwise) arising out of any Loan
Party’s or Agent’s transmission of communications through the Internet, except
to the extent the liability of such person is found in a final non-appealable
judgement by a court of competent jurisdiction to have resulted from such
person’s gross negligence or willful misconduct.  Each Loan Party further agrees
that certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do
not wish to receive material non-public information with respect to the Loan
Parties or their securities) (each, a “Public Lender”).  The Loan Parties shall
be deemed to have authorized Agent and its Affiliates and the Lenders to treat
Borrower Materials marked “PUBLIC” or otherwise at any time filed with the SEC
as not containing any material non-public information (although it may be
sensitive and proprietary) with respect to the Loan Parties or their securities
for purposes of United States federal and state securities laws; provided,
however, that to the extent such Borrower Materials constitute Confidential
Information, they shall be treated as set forth in Section 17.9(a).  The Loan
Parties hereby agrees that they will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to the
Public Lenders and that all such Borrower Materials shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC”
shall appear prominently on the first page thereof.  All Borrower Materials
marked “PUBLIC” by the Loan Parties are permitted to be made available through a
portion of the Platform designated as “Public Investor” (or another similar
term).  Agent and its Affiliates and the Lenders shall treat any Borrower
Materials that are not marked “PUBLIC” or that are not at any time filed with
the SEC as being suitable only for posting on a portion of the Platform not
marked as “Public Investor” (or such other similar term).  Notwithstanding the
foregoing, the Loan Parties shall be under no obligation to mark any Borrower
Materials “PUBLIC”.

 

17.10                 Survival.  All representations and warranties made by the
Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that Agent, Issuing Bank, or any Lender may have had notice or knowledge of any
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Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding or unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or been
terminated.

 

17.11                 Patriot Act; Due Diligence.  Each Lender that is subject
to the requirements of the Patriot Act hereby notifies the Loan Parties that
pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies each Loan Party, which information
includes the name and address of each Loan Party and other information that will
allow such Lender to identify each Loan Party in accordance with the Patriot
Act.  In addition, Agent and each Lender shall have the right to periodically
conduct due diligence on all Loan Parties, their senior management and key
principals and legal and beneficial owners.  Each Loan Party agrees to cooperate
in respect of the conduct of such due diligence and further agrees that the
reasonable costs and charges for any such due diligence by Agent shall
constitute Lender Group Expenses hereunder and be for the account of Borrowers.

 

17.12                 Integration.  This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.  The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.

 

17.13                 Parent Borrower as Agent for Borrowers.  (a)  Each
Borrower hereby irrevocably appoints Parent Borrower as the borrowing agent and
attorney-in-fact for all Borrowers (the “Administrative Borrower”) which
appointment shall remain in full force and effect unless and until Agent shall
have received prior written notice signed by each Borrower that such appointment
has been revoked and that another Borrower has been appointed Administrative
Borrower.  Parent Borrower accepts such appointment and designation and agrees
to act in such capacity.  Without limiting the foregoing, each Borrower
authorizes and directs Administrative Borrower, on behalf of Borrowers, or any
of them, to deliver and receive notices and other communications, prepare and
deliver Borrowing Base Certificates and financial and Collateral reporting,
request Loans and Letters of Credit, and receive and disburse proceeds of Loans,
pay Obligations, execute and deliver any documents, instruments, and
certificates contemplated by the Loan Documents, and carry on all other dealings
with Agent and the Lender Group under the Loan Documents, in each case, on
behalf of Borrowers.

 

(b)                                 Any action, notice, certification,
agreement, direction, consent or other action which would otherwise be effective
if given or taken by Borrowers, or any of them, shall be valid and effective if
given or taken by Administrative Borrower, whether or not any other Borrower
joins therein.  Agent and Lenders, in their discretion, may direct or deliver to
Administrative Borrower, on behalf of Borrowers, any notice or communication to
or with Borrowers, or any of them, and any such notice or communication shall be
deemed valid and received by Borrowers upon receipt by Administrative Borrower. 
Agent and Lenders shall be

 

93

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

 

entitled to rely upon Administrative Borrower in connection with its authority
under this Section 17.13 and shall have no duty or obligation to make further
inquiry with respect to such authority.

 

(c)                                  It is understood that the handling of the
Loan Account and Collateral in a combined fashion, as more fully set forth
herein, is done solely as an accommodation to Borrowers in order to utilize the
collective borrowing powers of Borrowers in the most efficient and economical
manner and at their request, and that Lender Group shall not incur liability to
any Borrower as a result hereof.  Each Borrower expects to derive benefit,
directly or indirectly, from the handling of the Loan Account and the Collateral
in a combined fashion since the successful operation of each Borrower is
dependent on the continued successful performance of the integrated group.  To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(i) the handling of the Loan Account and Collateral of Borrowers as herein
provided, or (ii) the Lender Group’s relying on any instructions of the
Administrative Borrower, except that Borrowers will have no liability to the
relevant Agent-Related Person or Lender-Related Person under this Section 17.13
with respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence, bad
faith or willful misconduct (or material breach of any Loan Documents by any) of
such Agent-Related Person or Lender-Related Person, as the case may be.

 

17.14                 Intercreditor Agreement.  Each Lender, by becoming a party
to this Agreement, acknowledges that it shall be bound by all of the terms and
provisions of the Intercreditor Agreement applicable to it and, without limiting
anything else contained herein, authorizes Agent to enter into the Intercreditor
Agreement and any other intercreditor or subordination agreement (and any
amendments, amendments and restatements, restatements or waivers of or
supplements to or other modifications to, any of the foregoing) and to take all
actions (and execute all documents) required (or otherwise deemed advisable by
Agent) in connection with the incurrence by any Loan Party of any Indebtedness
permitted hereunder, in order to permit such Indebtedness to be secured by a
valid, perfected Lien (if permitted hereunder) and/or to have the priority
contemplated hereby and each Lender acknowledges that any such intercreditor or
subordination agreement will be binding upon it.

 

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

 

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

 

94

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

 

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

 

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

 

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

 

[Signature pages to follow.]

 

95

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

 

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

 

BORROWERS:

FTS INTERNATIONAL, INC.

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Lance Turner

 

Name: Lance Turner

 

Title: Chief Financial Officer and Treasurer

 

 

 

 

 

FTS INTERNATIONAL SERVICES, LLC

 

a Texas limited liability company

 

 

 

 

 

By:

/s/ Lance Turner

 

Name: Lance Turner

 

Title: Chief Financial Officer and Treasurer

 

 

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

a national banking association, as Agent, as Lead Arranger, as Book Runner, and
as a Lender

 

 

 

 

 

By:

/s/ Heath Israel

 

 

 

 

Name:

Heath Israel

 

 

Its Authorized Signatory

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

 

MORGAN STANLEY BANK, N.A.,

 

as a Lender

 

 

 

 

 

By:

/s/ Michael King

 

 

 

 

Name:

Michael King

 

 

Its Authorized Signatory

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

 

Citibank, N.A.,

 

as a Lender

 

 

 

 

 

By:

/s/ Saqeeb Ludhi

 

 

 

 

Name:

Saqeeb Ludhi

 

 

 

 

Title:

Vice President

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Nupur Kumar

 

 

 

 

Name:

Nupur Kumar

 

 

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

By:

/s/ Christopher Zybrick

 

 

 

 

Name:

Christopher Zybrick

 

 

 

 

Title:

Authorized Signatory

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

 

BARCLAYS BANK PLC,

 

as a Lender

 

 

 

 

 

By:

/s/ Sydney G. Dennis

 

 

 

 

Name:

Sydney G. Dennis

 

 

 

 

Title:

Director

 

FTS — ABL Credit Agreement — Signature Page

 

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

 

EXHIBIT A-1

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

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

 

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

 

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

 

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

 

4.                                      Following the execution of this
Assignment Agreement by the Assignor and Assignee, the Assignor will deliver
this Assignment Agreement to the Agent for recording by the Agent.

 

Exhibit A-1 - 1

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

 

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

 

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

 

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

 

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

 

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

 

Exhibit A-1 - 2

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

 

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

 

 

[NAME OF ASSIGNOR]

 

 

 

as Assignor

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF ASSIGNEE]

 

 

 

as Assignee

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

 

ACCEPTED THIS      DAY OF

 

 

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
Agent, as Swing Lender and as Issuing Bank

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[[                          ], [as Swing Lender] [and] [as Issuing Bank]

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

[FTS INTERNATIONAL, INC., a Delaware corporation, as Administrative Borrower, on
behalf of the Borrowers

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:]

 

 

[Signature Page to Assignment and Acceptance Agreement]

 

Exhibit A-1 - 3

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

 

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

 

ANNEX I

 

1.

Borrowers: FTS International, Inc. and FTS International Services, LLC, and its
Subsidiaries from time to time party to the Credit Agreement

 

 

2.

Name and Date of Credit Agreement:

 

Credit Agreement dated as of February 22, 2018 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”)
by and among FTS International, Inc., as parent borrower (“Parent Borrower”),
FTS International Services, LLC, as borrower (“OpCo Borrower,” together with
Parent Borrower and those additional entities that become parties thereto as
Borrowers in accordance with the terms thereof by executing the form of Joinder
attached thereto as Exhibit J-1, each, a “Borrower” and individually and
collectively, jointly and severally, the “Borrowers”), the lenders identified on
the signature pages thereto (each of such lenders, together with its successors
and permitted assigns, a “Lender”), and Wells Fargo Bank, National Association,
a national banking association (“Wells Fargo”), as administrative agent for each
member of the Lender Group and the Bank Product Providers.

 

3.

Date of Assignment Agreement:

 

 

4.

Amounts:

 

 

 

a.

Assigned Amount of Revolver Commitment

$

 

 

 

 

 

b.

Assigned Amount of Revolving Loans

$

 

 

 

 

5.

Settlement Date:

 

 

 

 

6.

Purchase Price:

$

 

 

 

7.

Notice and Payment Instructions, etc.

 

 

 

 

Assignee:

 

Assignor:

 

 

 

 

 

 

 

 

 

 

 

 

 

[Annex I to Assignment and Acceptance Agreement]

 

Exhibit A-1 - 4

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

 

Exhibit B-1

 

Form of Borrowing Base Certificate

 

(see attached)

 

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

 

Summary Page Borrowing Base Certificate Date Name FTS International, Inc. A/R As
of: Accounts Receivable Balance per Aging Report Assigned To Wells Fargo Capital
Finance Less Ineligibles (detailed on page 2) Eligible Accounts Receivable
Accounts Receivable Availability before Sublimit(s) Net Available Accounts
Receivable after Sublimit(s) Reserves P Card Reserve Total Reserves Calculated
before the Credit Line Total Collateral Availability Suppressed Availability
Availability before Reserves Total Credit Line 250,000,000.00 Reserves Total
Reserves Calculated after the Credit Line Total Availability after Reserves
before Loan Balance and LCs Letter of Credit Balance Loan Ledger Balance As of:
As of: Net Availability Authorized Signer Additionally, the undersigned hereby
certifies and represents and warrants to the Lender Group on behalf of the
Borrowers that (i) as of the date hereof, each representation or warranty
contained in or pursuant to any Loan Document, and as of the effective date of
any advance, continuation or conversion requested above is true and correct in
all material respects (except to the extent any representation or warranty
expressly related to an earlier date), (ii) no Default or Event of Default has
occurred and is continuing on the date hereof, nor will any thereof occur
immediately after giving effect to the request above, and (iii) all of the
foregoing is true and correct as of the effective date of the calculations set
forth above and that such calculations have been made in accordance with the
requirements of the Credit Agreement. Summary & Other Assets Accounts Receivable
The undersigned, (“Parent Borrower”), pursuant to that certain Credit Agreement
dated as of (as amended, restated, modified, supplemented, refinanced, renewed,
or extended from time to time, the “Credit Agreement”), entered into among
Parent Borrower, the other borrowers party thereto from time to time (together
with the Parent Borrower, the "Borrowers"), the lenders signatory thereto from
time to time and Wells Fargo Bank, N.A. as the arranger and administrative agent
(in such capacity, together with its successors and assigns, if any, in such
capacity, “Agent”), hereby certifies on behalf of the Borrowers to Agent that
the following items, calculated in accordance with the terms and definitions set
forth in the Credit Agreement for such items are true and correct, and that the
Borrowers are in compliance with and, after giving effect to any currently
requested Advances, will be in compliance with, the terms, conditions, and
provisions of the Credit Agreement.

GRAPHIC [g65201ki21ci001.gif]

 

 

EXHIBIT C-1

 

FORM OF COMPLIANCE CERTIFICATE

 

[on Parent Borrower’s letterhead]

 

To:                             Wells Fargo Bank, National Association

2450 Colorado Avenue, Suite 3000 West

Santa Monica, California 90404

Attn:

 

Re:                             Compliance Certificate dated                , 20

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement dated as of February 22, 2018
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among FTS International, Inc., as borrower
(“Parent Borrower” and, acting in its capacity as agent for OpCo Borrower,
“Administrative Borrower”), FTS International Services, LLC, as borrower (“OpCo
Borrower” together with Parent Borrower and those additional entities that
become parties thereto as Borrowers in accordance with the terms thereof by
executing the form of Joinder attached thereto as Exhibit J-1, each, a
“Borrower” and individually and collectively, jointly and severally, the
“Borrowers”), the lenders identified on the signature pages thereto (each of
such lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”), and Wells Fargo Bank, National Association, a
national banking association (“Wells Fargo”), as administrative agent for each
member of the Lender Group and the Bank Product Providers (in such capacity,
together with its successors and assigns in such capacity, the “Agent”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.

 

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

 

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

 

2.                                      Such officer has reviewed the terms of
the Credit Agreement and has made, or caused to be made under their supervision,
a review in reasonable detail of the transactions and financial condition of
Parent Borrower and its Subsidiaries during the accounting period covered by the
financial statements attached hereto.

 

3.                                      Such review has not disclosed the
existence on and as of the date hereof, and the undersigned does not have
knowledge of the existence as of the date hereof, of any Default or Event of
Default, except for such Defaults or Events of Default listed on Schedule 2
attached hereto, in each case

 

Exhibit C-1 - 1

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

 

specifying the nature and the period of existence thereof and what action
Borrowers and/or its Subsidiaries have taken, are taking, or propose to take
with respect thereto.

 

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

 

5.                                      [Schedule 4 hereof reflects the
calculation of the Fixed Charge Coverage Ratio as of the date of the
consolidated balance sheet of Parent Borrower and its Subsidiaries furnished in
Schedule 1 attached hereto [, and as of the date hereof, Borrowers are in
compliance with the covenant contained in Section 7 of the Credit Agreement as
demonstrated on Schedule 4 hereof](1).

 

[Signature page follows.]

 

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

(1) Bracketed text to be included if a Covenant Testing Period has occurred and
is continuing and a Covenant Testing Reversion Date with respect thereto has not
occurred.

 

Exhibit C-1 - 2

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

 

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this           day of                , 20  .

 

 

FTS INTERNATIONAL, INC.,

 

a Delaware corporation, as Administrative Borrower, on behalf of the Borrowers

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Compliance Certificate]

 

Exhibit C-1 - 3

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

 

SCHEDULE 1

 

Financial Statements

 

[Schedule 1 to Compliance Certificate]

 

Exhibit C-1 - 4

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

 

SCHEDULE 2

 

Default or Event of Default

 

[Schedule 2 to Compliance Certificate]

 

Exhibit C-1 - 5

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

 

SCHEDULE 3

 

Representations and Warranties

 

[Schedule 3 to Compliance Certificate]

 

Exhibit C-1 - 6

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

 

SCHEDULE 4

 

Financial Covenant

 

1.                                      Fixed Charge Coverage Ratio.

 

Parent Borrower and its Restricted Subsidiaries’ Fixed Charge Coverage Ratio,
measured on a fiscal quarter-end basis, for the 12 month period ended
             , 20   , is    :1.0 [To be included if a Covenant Testing Period
has occurred and is continuing and a Covenant Testing Reversion Date with
respect thereto has not occurred: , which ratio [is/is not] greater than or
equal to the ratio set forth in Section 7.1 of the Credit Agreement for the
corresponding period.]

 

[Schedule 4 to Compliance Certificate]

 

Exhibit C-1 - 7

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

 

EXHIBIT J-1

 

[FORM OF] JOINDER AGREEMENT

 

This JOINDER AGREEMENT (this “Agreement”), is entered into as of         , 20  ,
by and among      , a       (“New Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association (“Wells Fargo”), as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of February 22,
2018 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among the lenders identified on the
signature pages thereto (each of such lenders, together with its successors and
permitted assigns, a “Lender”), Agent, FTS International, Inc., as borrower,
(“Parent Borrower”), FTS International Services, LLC, as borrower (“OpCo
Borrower”) together with Parent Borrower and those additional Persons that are
joined as a party to the Credit Agreement by executing the form of Joinder
attached thereto as Exhibit J-1, each, a “Borrower” and individually and
collectively, jointly and severally, the “Borrowers”), the Lender Group has
agreed to make or issue Loans, Letters of Credit and other certain financial
accommodations thereunder;

 

WHEREAS, initially capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement;

 

WHEREAS, pursuant to that certain Fee Letter, dated as of February 22, 2018 (as
amended, restated, supplemented or otherwise modified from time to the, the “Fee
Letter”), by and among Borrowers and Agent, each Borrower has agreed to pay
certain fees to Agent on the terms set forth therein; and

 

WHEREAS, New Borrower has determined that the execution, delivery and
performance of this Agreement directly benefit, and are within the corporate or
limited liability company, as applicable, purposes and in the best interests of,
New Borrower, by virtue of the financial accommodations available to New
Borrower from time to time pursuant to the terms and conditions of the Credit
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the parties hereto hereby
agrees as follow:

 

1.                                      Joinder of New Borrower to the Credit
Agreement. By its execution of this Agreement, New Borrower hereby (a) agrees
that from and after the date of this Agreement it shall be a party to the Credit
Agreement as a “Borrower” and shall be bound by all of the terms, conditions,
covenants, agreements and obligations set forth in the Credit Agreement,
(b) accepts joint and several liability for the Obligations pursuant to the
terms of the Loan Documents, and (c) confirms that, after giving effect to the
supplement to the Schedules to the Credit Agreement provided for in Section 2
below, the representations and warranties contained in Section 4 of the Credit
Agreement are true and correct as they relate to New Borrower as of the date of
this Agreement. New Borrower hereby agrees that each reference to a “Borrower”
or the “Borrowers” in the Credit Agreement and the other Loan Documents shall
include

 

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

 

New Borrower. New Borrower acknowledges that it has received a copy of the
Credit Agreement and the other Loan Documents and that it has read and
understands the terms thereof.

 

2.                                      Updated Schedules. Attached as Exhibit A
hereto is an updated copy of Schedule 4.1(c) to the Credit Agreement revised to
include all information required to be provided therein including information
with respect to New Borrower. Such Schedule shall be attached to the Credit
Agreement, and on and after the date hereof all references in any Loan Document
to such Schedule to the Credit Agreement shall mean such Schedule as so amended;
provided, that any use of the term “as of the date hereof” or any term of
similar import, in any provision of the Credit Agreement relating to New
Borrower or any of the information amended by such Schedule hereby, shall be
deemed to refer to the date of this Agreement.

 

3.                                      Joinder of New Borrower to the Fee
Letter. By its execution of this Agreement, New Borrower hereby (a) agrees that
from and after the date of this Agreement it shall be a “Borrower” party to the
Fee Letter as if it were a signatory thereto and shall be bound by all of the
provisions thereof, and (b) agrees that it shall comply with and be subject to
all of the terms, conditions, covenants, agreements and obligations set forth in
the Fee Letter applicable to Borrowers. New Borrower hereby agrees that each
reference to “Borrower” or “Borrowers” in the Fee Letter shall include New
Borrower. New Borrower acknowledges that it has received a copy of the Fee
Letter and that it has read and understands the terms thereof.

 

4.                                      Representations and Warranties of New
Borrower. New Borrower hereby represents and warrants to Agent for the benefit
of the Lender Group and the Bank Product Providers as follows:

 

(a)                                 It (i) is duly organized and existing and in
good standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified could
reasonably be expected to result in a Material Adverse Effect, and (iii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted, to enter into this Agreement and the other Loan
Documents to which it is made a party and to carry out the transactions
contemplated hereby and thereby.

 

(b)                                 The execution, delivery, and performance by
it of this Agreement and any other Loan Document to which New Borrower is made a
party (i) have been duly authorized by all necessary action on the part of New
Borrower and (ii) do not and will not (A) violate any material provision of
federal, state, or local law or regulation applicable to New Borrower or its
Restricted Subsidiaries or the Governing Documents of New Borrower, (B) violate
any order, judgment, or decree of any court or other Governmental Authority
binding on New Borrower or its Restricted Subsidiaries, where any such violation
would individually or in the aggregate reasonably be expected to have a Material
Adverse Effect, (C) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material agreement of
New Borrower where any such conflict, breach or default could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect,
(D) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any assets of New Borrower, other than Permitted Liens,
(E) require the approval of any holder of Equity Interests of New Borrower,
other than consents or approvals that have been obtained and that are still in
force and effect, or (F) except, in each case, where the failure would not
reasonably be expected to have a Material Adverse Effect, require any
registration with, consent, or approval of, or notice to or other action with or
by, any Governmental Authority, other than registrations, consents, approvals,
notices, or other actions that have been obtained and that are still in force
and effect, and except for filings and recordings with respect to the Collateral
to be made, or otherwise delivered to Agent for filing or recordation, as of the
date hereof.

 

Exhibit J-1 - 2

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

 

(c)                                  This Agreement and each Loan Document to
which New Borrower is a party is the legally valid and binding obligation of New
Borrower, enforceable against New Borrower in accordance with its respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally and requirements of reasonableness, good
faith and fair dealing.

 

(d)                                 Each other representation and warranty
applicable to New Borrower as a Borrower under the Loan Documents is true,
correct and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date).

 

5.                                      Additional Requirements. Concurrent with
the execution and delivery of this Agreement, Agent shall have received the
following, each in form and substance satisfactory to Agent:

 

(a)                                 a Joinder No.    to the Guaranty and
Security Agreement, dated as of the date hereof, by and among New Borrower and
Agent (“Joinder No.   ”), together with the original Equity Interest
certificates, if any, representing all of the Equity Interests of the
Subsidiaries of New Borrower required to be pledged under the Guaranty and
Security Agreement and any original promissory notes payable to New Borrower
required to be pledged under the Guaranty and Security Agreement, accompanied by
undated Equity Interest powers/transfer forms executed in blank, and the same
shall be in full force and effect;

 

(b)                                 a Pledged Interests Addendum by        ,
a      , dated as of the date hereof, with respect to the pledge of Equity
Interest of New Borrower, owned by          , together with the original stock
certificates, if any, representing all of the Equity Interests of New Borrower
held by          , accompanied by undated stock powers executed in blank and
other proper instruments of transfer, and the same shall be in full force and
effect;

 

(c)                                  appropriate financing statement to be filed
in the office of the        Secretary of State against New Borrower to perfect
the Agent’s Liens in and to the Collateral of New Borrower;

 

(d)                                 a certificate from the Secretary of New
Borrower, dated as of the date hereof, (i) attesting to the resolutions of New
Borrower’s [Board of Directors][Managers] authorizing its execution, delivery,
and performance of this Agreement and the other Loan Documents to which New
Borrower is or will become a party, (ii) authorizing officers of New Borrower to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of New Borrower;

 

(e)                                  a certificate of status with respect to New
Borrower, dated as of a recent date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of New Borrower, which
certificate shall indicate that New Borrower is in good standing in such
jurisdiction;

 

(f)                                   certificates of status with respect to New
Borrower, dated as of a recent date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of
organization of New Borrower) in which the failure to be duly qualified or
licensed would constitute a Material Adverse Effect, which certificates shall
indicate that New Borrower is in good standing in such jurisdictions;

 

(g)                                  copies of New Borrower’s Governing
Documents, as amended, modified or supplemented to the date hereof, certified by
the Secretary of New Borrower; and

 

Exhibit J-1 - 3

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

 

(h)                                 evidence that New Borrower has been added to
the Loan Parties’ existing insurance policies required by Section 5.6 of the
Credit Agreement;

 

(i)                                     a customary opinion of counsel regarding
such matters as to New Borrower as Agent or its counsel may reasonably request,
and which is otherwise in form and substance reasonably satisfactory to Agent
(it being understood that such opinion shall be limited to this Agreement, and
the documents executed or delivered in connection herewith (including the
financing statement filed against New Borrower); and

 

(j)                                    such  other  agreements,  instruments, 
approvals  or  other  documents reasonably requested by Agent prior to the date
hereof in order to create, perfect and establish the priority of, or otherwise
protect, any Lien purported to be covered by any Loan Document or otherwise to
effect the intent that New Borrower shall become bound by all of the terms,
covenants and agreements contained in the Loan Documents and that, to the extent
set forth in the Credit Agreement and the Guaranty and Security Agreement, all
property and assets constituting Collateral of New Borrower shall become
Collateral for the Obligations.

 

6.                                      Further Assurances. At any time upon the
reasonable request of Agent, New Borrower shall promptly execute and deliver to
Agent such Additional Documents as Agent shall reasonably request pursuant to
the Credit Agreement and the other Loan Documents, in each case in form and
substance reasonably satisfactory to Agent.

 

7.                                      Notices. Notices to New Borrower shall
be given in the manner set forth for Borrowers in Section 11 of the Credit
Agreement.

 

8.                                      Choice of Law and Venue; Jury Trial
Waiver; Judicial Reference. THIS AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS
REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET
FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE
INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

9.                                      Binding Effect. This Agreement shall be
binding upon New Borrower and the other Loan Parties and shall inure to the
benefit of the Agent and the Lenders, together with their respective successors
and permitted assigns.

 

10.                               Effect on Loan Documents.

 

(a)                                 Except as contemplated to be supplemented
hereby, the Credit Agreement, the Fee Letter and each other Loan Document shall
continue to be, and shall remain, in full force and effect. Except as expressly
contemplated hereby, this Agreement shall not be deemed (i) to be a waiver of,
or consent to, or a modification or amendment of any other term or condition of
the Credit Agreement, the Fee Letter, or any of the instruments or agreements
referred to therein, as the same may be amended or modified from time to time.

 

(b)                                 Each reference in the Credit Agreement and
the other Loan Documents to “Borrower” or words of like import referring to a
Borrower shall include and refer to New Borrower and (b) each reference in the
Credit Agreement, the Fee Letter, or any other Loan Document to this
“Agreement”, “hereunder”, “herein”, “hereof”, “thereunder”, “therein”,
“thereof”, or words of like import referring to the Credit Agreement, the Fee
Letter or any other Loan Document shall mean and refer to such agreement as
supplemented by this Agreement.

 

Exhibit J-1 - 4

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

 

11.                               Miscellaneous

 

(a)                                 This Agreement is a Loan Document. This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, taken together, shall constitute but
one and the same Agreement. Delivery of an executed counterpart of this
Agreement by telefacsimile or other electronic image scan transmission (e.g.,
“PDF” or “tif” via email) shall be equally effective as delivery of an original
executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile or other electronic image scan
transmission also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.

 

(b)                                 Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

 

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

 

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

 

(e)                                  The pronouns used herein shall include,
when appropriate, either gender and both singular and plural, and the
grammatical construction of sentences shall conform thereto.

 

(f)                                   This Agreement shall be subject to the
rules of construction set forth in Section 1.4 of the Credit Agreement, and such
rules of construction are incorporated herein by this reference, mutatis
mutandis.

 

[remainder of this page intentionally left blank].

 

Exhibit J-1 - 5

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

 

IN WITNESS WHEREOF, New Borrower and Agent have caused this Agreement to be duly
executed by its authorized officer as of the day and year first above written.

 

 

NEW BORROWER:

         ,

 

a       

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Joinder Agreement]

 

Exhibit J-1 - 6

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

 

AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

a national banking association, as Agent, as Swing Lender and as Issuing Bank

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Joinder Agreement]

 

Exhibit J-1 - 7

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

 

Exhibit A

 

(SEE ATTACHED)

 

[Exhibit A to Joinder Agreement]

 

Exhibit J-1 - 8

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

 

EXHIBIT L-1

FORM OF LIBOR NOTICE

 

Wells Fargo Bank, National Association, as Agent

under the below referenced Credit Agreement

2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Credit Agreement dated as of February
22, 2018 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among FTS International, Inc., as borrower
(“Parent Borrower” and, acting in its capacity as agent for OpCo Borrower,
“Administrative Borrower”), FTS International Services, LLC, as borrower (“OpCo
Borrower” together with Parent Borrower and those additional entities that
become parties thereto as Borrowers in accordance with the terms thereof by
executing the form of Joinder attached thereto as Exhibit J-1, each, a
“Borrower” and individually and collectively, jointly and severally, the
“Borrowers”), the lenders identified on the signature pages thereto (each of
such lenders, together with its successors and permitted assigns, as a “Lender”
and, collectively, the “Lenders”), and Wells Fargo Bank, National Association, a
national banking association (“Wells Fargo”), as administrative agent for each
member of the Lender Group and the Bank Product Providers (in such capacity,
together with its successors and assigns in such capacity, the “Agent”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with
respect to outstanding Revolving Loans in the amount of $                   
(the “LIBOR Rate Advance”) [, and is a written confirmation of the telephonic
notice of such election given to Agent].

 

The LIBOR Rate Advance will have an Interest Period of [1, 2, 3 or 6]
month(s) commencing on                       .

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of
determining the rate of interest based on the LIBOR Rate under the Credit
Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Administrative Borrower, on behalf of the Borrowers, represents and warrants
that (i) as of the date hereof, each representation and warranty contained in
the Credit Agreement and in the other Loan Documents are true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of the date hereof, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
such representations and warranties shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date)), (ii) each of the
covenants and agreements contained in any Loan Document have been performed (to
the extent required to be performed on or before the date hereof or each such
effective date), and (iii) no Default or Event of

 

Exhibit L-1 - 1

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

 

Default has occurred and is continuing on the date hereof, nor will any thereof
occur after giving effect to the request above.

 

 

 

Dated:

 

 

 

 

 

 

FTS INTERNATIONAL, INC., a Delaware
corporation, as Administrative Borrower, on behalf of
the Borrowers

 

 

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

 

Acknowledged by:

 

 

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking
association, as Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

[Signature Page to LIBOR Notice]

 

Exhibit L-1 - 2

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

 

EXHIBIT P-1

 

FORM OF PERFECTION CERTIFICATE

 

[                            ], 201 [     ]

 

Reference is hereby made to:

 

(a) that certain Credit Agreement dated as of February 22, 2018 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Credit
Agreement”) by and among FTS INTERNATIONAL, INC., as borrower (the “Company”),
FTS INTERNATIONAL SERVICES, LLC, as borrower (“OpCo” and, together with the
Company and those additional entities that become parties thereto as Borrowers
in accordance with the terms thereof by executing the form of Joinder attached
thereto as Exhibit J-1, each, a “Borrower” and individually and collectively,
jointly and severally, the “Borrowers”), the lenders identified on the signature
pages thereto (each of such lenders, together with its successors and permitted
assigns, is referred to hereinafter as a “Lender” and collectively, the
“Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association (“Wells Fargo”), as administrative agent for each member of the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and (b) that certain Guaranty
and Security Agreement dated as of February 22, 2018 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Guaranty and
Security Agreement”) by and among the Borrowers, the Subsidiaries of the
Borrowers parties thereto (each, a “Grantor” and collectively, the “Grantors”)
and the Agent for each member of the Lender Group and the Bank Product
Providers,

 

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

 

The undersigned, the Senior Vice President — Finance and Treasurer of the
Company, hereby certifies (in my capacity as Senior Vice President — Finance and
Treasurer and not in my individual capacity) to the Agent, each of the other
members of the Lending Group and the Bank Product Providers, as follows as of
February 22, 2018:

 

1.                                      Names.

 

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

 

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

 

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

 

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

 

2.                                 Chief Executive Offices. The chief executive
office of each Loan Party is located at the address set forth in Schedule 2
hereto.

 

3.                                 Extraordinary Transactions. Except for those
purchases, mergers, acquisitions, consolidations, and other transactions
described on Schedule 3 attached hereto, all of the Collateral has been
originated by each Loan Party in the ordinary course of business or consists of
goods which have been acquired by such Loan Party in the ordinary course of
business from a person in the business of selling goods of that kind.

 

4.                                 File Search Reports. Attached hereto as
Schedule 4 is a true and accurate summary of certified file search reports from
the Uniform Commercial Code filing offices (a) in each jurisdiction of formation
identified in Section 1(a) and in each location identified Section 2 with
respect to each legal name set forth in Section 1 and (b) in each jurisdiction
described in Schedule 1(c) relating to any of the transactions described in
Schedule 1(c) or Schedule 3 with respect to each legal name of the person or
entity from which each Loan Party purchased or otherwise acquired any assets.

 

5.                                 UCC Filings. The financing statements,
including the indications of the collateral, attached as Schedule 5 relating to
the Guaranty and Security Agreement, are in the appropriate forms for filing in
the filing offices in the jurisdictions identified in Schedule 6 hereof.

 

6.                                 Schedule of Filings. Set forth on Schedule 6
is a complete and correct list of each filing office in which the financing
statements attached as Schedule 5 is to be filed.

 

7.                                 Termination Statements. Attached hereto as
Schedule 7 are the termination statements in the appropriate form for filing in
each applicable jurisdiction identified in Schedule 4 hereto with respect to
each Lien described therein.

 

8.                                 Stock Ownership and Other Equity Interests.
Attached hereto as Schedule 8(a) is a true and correct list of each of all of
the authorized, and the issued and outstanding, Equity Interests of each Loan
Party and its Subsidiaries and the record and beneficial owners of such Equity
Interests. Also set forth on Schedule 8(a) is each equity investment of each
Loan Party that represents 50% or less of the equity of the entity in which such
investment was made. Attached hereto as Schedule 8(b) is a true and correct
organizational chart of the Company and its Subsidiaries.

 

9.                                 Instruments and Chattel Paper. Attached
hereto as Schedule 9 is a true and correct list of all promissory notes,
instruments (other than checks to be deposited in the ordinary course of
business), tangible chattel paper, electronic chattel paper and other evidence
of Indebtedness held by each Loan Party as of February 22, 2018, in each case,
relating to the Collateral, having an aggregate value or face amount in excess
of $3,000,000 including all intercompany notes between or among any two or more
Loan Parties or any of their Subsidiaries.

 

Exhibit P-1 - 2

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

 

10.                               Intellectual Property.

 

(a)                                 Schedule 10(a) provides a complete and
correct list of all registered Trademarks (as defined in the Guaranty and
Security Agreement) owned by any Loan Party, all applications for registration
of Trademarks owned by any Loan Party, and all other Trademarks owned by any
Loan Party and material to the conduct of the business of any Loan Party.

 

(b)                                 Schedule 10(b) provides a complete and
correct list of all Intellectual Property Licenses (as defined in the Guaranty
and Security Agreement) entered into by any Loan Party pursuant to which (i) any
Loan Party has provided any license or other rights in Intellectual Property (as
defined in the Guaranty and Security Agreement) owned or controlled by such Loan
Party to any other Person (other than non-exclusive software licenses granted in
the ordinary course of business) or (ii) any Person has granted to any Loan
Party any license or other rights in Intellectual Property owned or controlled
by such Person that is material to the business of such Loan Party, including
any Intellectual Property that is incorporated in any Inventory, software, or
other product marketed, sold, licensed, or distributed by such Loan Party.

 

(c)                                  Attached hereto as Schedule 10(c) in proper
form for filing with the United States Patent and Trademark Office are the
filings necessary to preserve, protect and perfect the security interests in the
United States Trademarks set forth on Schedule 10(a), including duly signed
copies of the Trademark Security Agreement.

 

11.                               Commercial Tort Claims. Attached hereto as
Schedule 11 is a true and correct list of all commercial tort claims that exceed
$3,000,000 held by each Loan Party and relating to the Collateral, including a
brief description thereof.

 

12.                               Deposit Accounts and Securities Accounts.
Attached hereto as Schedule 12 is a true and complete list of all Deposit
Accounts and Securities Accounts (each as defined in the Guaranty and Security
Agreement) maintained by each Loan Party, including the name of each institution
where each such account is held, the name of each such account and the name of
each entity that holds each account.

 

13.                               Letter-of-Credit Rights. Attached hereto as
Schedule 13 is a true and correct list of all letters of credit issued in favor
of any Loan Party, as beneficiary thereunder, having an aggregate value or face
amount in excess of $3,000,000.

 

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

 

Exhibit P-1 - 3

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

 

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
the date first set forth above.

 

 

 

FTS INTERNATIONAL, INC., as Borrower

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

FTS INTERNATIONAL SERVICES, LLC, as
Borrower

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

FTS INTERNATIONAL MANUFACTURING, LLC,
as Grantor

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

[Signature Page to Perfection Certificate]

 

Exhibit P-1 - 4

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

 

Schedule 1(a)

 

Legal Names, Etc.

 

Legal Name

 

Type of Entity

 

Registered
Organization
(Yes/No)

 

Organizational
Number(1)

 

Federal Taxpayer
Identification Number

 

Jurisdiction
of
Formation

 

States
Where
Qualified to
do Business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(1)                                 If none, so state.

 

[Schedule 1(a) to Perfection Certificate]

 

Exhibit P-1 - 5

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

 

Schedule 1(b)

 

Prior Names

 

Loan Party/Subsidiary

 

Prior Name

 

Date of Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 1(b) to Perfection Certificate]

 

Exhibit P-1 - 6

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

 

Schedule 1(c)

 

Changes in Corporate Identity; Other Names

 

Loan
Party/Subsidiary

 

Name of Entity

 

Action

 

Date of
Action

 

State of
Formation

 

List of All Other
Names Used on Any
Filings with the
Internal Revenue
Service During Past
Five Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

[Schedule 1(c) to Perfection Certificate]

 

Exhibit P-1 - 7

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

 

Schedule 2

 

Chief Executive Offices

 

Loan
Party/Subsidiary

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 2 to Perfection Certificate]

 

Exhibit P-1 - 8

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

 

Schedule 3

 

Transactions Other Than in the Ordinary Course of Business

 

 

Loan Party/Subsidiary

 

Description of Transaction Including Parties
Thereto

 

Date of
Transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 3 to Perfection Certificate]

 

Exhibit P-1 - 9

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

 

Schedule 4

 

Summary of Certified UCC File Search Reports

 

[Schedule 4 to Perfection Certificate]

 

Exhibit P-1 - 10

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

 

Schedule 5

 

Financing Statements

(See Attached)

 

[Schedule 5 to Perfection Certificate]

 

Exhibit P-1 - 11

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

 

Schedule 6

 

Filing Offices

 

[Schedule 6 to Perfection Certificate]

 

Exhibit P-1 - 12

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

 

Schedule 7

 

Termination Statements

 

(See Attached)

 

[Schedule 7 to Perfection Certificate]

 

Exhibit P-1 - 13

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

 

Schedule 8(a)

 

(a) Equity Interests of Loan Parties and Subsidiaries

 

Current Legal
Entities Owned

 

Record Owner

 

Certificate No.

 

No. Shares/Interest

 

Percent
Pledged

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Other Equity Interests

 

[Schedule 8(a) to Perfection Certificate]

 

Exhibit P-1 - 14

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

 

Schedule 8(b)

 

Organizational Chart

 

[Schedule 8(b) to Perfection Certificate]

 

Exhibit P-1 - 15

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

 

Schedule 9

 

Instruments and Chattel Paper

 

1.             Promissory Notes:

 

Entity

 

Principal
Amount

 

Date of Issuance

 

Interest Rate

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.             Chattel Paper:

 

[Schedule 9 to Perfection Certificate]

 

Exhibit P-1 - 16

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

 

Schedule 10(a)

 

Trademarks

 

UNITED STATES TRADEMARKS:

 

Registrations:

 

 

 

REGISTRATION

 

 

 

OWNER

 

NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

 

 

APPLICATION

 

 

 

OWNER

 

NUMBER

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER TRADEMARKS:

 

Registrations:

 

 

 

REGISTRATION

 

 

 

 

 

OWNER

 

NUMBER

 

COUNTRY/STATE

 

 TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications:

 

 

 

APPLICATION

 

 

 

 

 

OWNER

 

NUMBER

 

COUNTRY/STATE

 

TRADEMARK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 10(a) to Perfection Certificate]

 

Exhibit P-1 - 17

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

 

Schedule 10(b)

 

Intellectual Property Licenses

 

 

 

 

 

 

 

REGISTRATION/

 

 

 

 

 

 

 

 

 

APPLICATION

 

 

 

 

 

 

 

 

 

NUMBER, IF

 

 

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

ANY

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 10(b) to Perfection Certificate]

 

Exhibit P-1 - 18

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

 

Schedule 10(c)

 

Intellectual Property Filings

 

[Schedule 10(c) to Perfection Certificate]

 

Exhibit P-1 - 19

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

 

Schedule 11

 

Commercial Tort Claims

 

[Schedule 11 to Perfection Certificate]

 

Exhibit P-1 - 20

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

 

Schedule 12

 

Deposit Accounts and Securities Accounts

 

Owner

 

Type of Account

 

Bank or Intermediary

 

Account Numbers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule 12 to Perfection Certificate]

 

Exhibit P-1 - 21

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

 

Schedule 13

 

Letter of Credit Rights

 

[Schedule 13 to Perfection Certificate]

 

Exhibit P-1 - 22

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

 

Exhibit T-1

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 22, 2018
(as amended, restated, supplemented or otherwise modified, the “ABL Credit
Agreement”), by and among the lenders identified on the signature pages thereof
(each of such lenders, together with its successors and permitted assigns, is
referred to hereinafter as a “Lender” and, collectively, the “Lenders”), Wells
Fargo Bank, National Association, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity “Agent”), FTS International Services, LLC, a Texas limited liability
company (the “OpCo Borrower”), and FTS International, Inc., a Delaware
corporation (the “Parent Borrower,” together with the OpCo Borrower and those
additional entities that become parties thereto as Borrowers in accordance with
the terms thereof by executing the form of Joinder attached thereto as
Exhibit J-1, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the ABL Credit Agreement.

 

Pursuant to the provisions of Section 16 of the ABL Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the Loan(s) (as well as any note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (b) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (c) it is not a ten percent (10%)
shareholder of any Borrower within the meaning of Section 881(c)(3)(B) of the
Code and (d) it is not a controlled foreign corporation related to any Borrower
as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Borrowers with a certificate of
its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as
applicable. By executing this certificate, the undersigned agrees that (a) if
the information provided on this certificate changes, the undersigned shall
promptly so inform the Borrowers and the Agent and (b) the undersigned shall
have at all times furnished the Borrowers and the Agent with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
(2) calendar years preceding such payments.

 

[NAME OF LENDER]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

                          , 20   

 

 

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

 

Exhibit T-2

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 22, 2018
(as amended, restated, supplemented or otherwise modified, the “ABL Credit
Agreement”), by and among the lenders identified on the signature pages thereof
(each of such lenders, together with its successors and permitted assigns, is
referred to hereinafter as a “Lender” and, collectively, the “Lenders”), Wells
Fargo Bank, National Association, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity “Agent”), FTS International Services, LLC, a Texas limited liability
company (the “OpCo Borrower”), and FTS International, Inc., a Delaware
corporation (the “Parent Borrower,” together with the OpCo Borrower and those
additional entities that become parties thereto as Borrowers in accordance with
the terms thereof by executing the form of Joinder attached thereto as
Exhibit J-1, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the ABL Credit Agreement.

 

Pursuant to the provisions of Section 16 of the ABL Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(b) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(c) it is not a ten percent (10%) shareholder of any Borrower within the meaning
of Section 881(c)(3)(B) of the Code and (d) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable.
By executing this certificate, the undersigned agrees that (a) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender in writing and (b) the undersigned shall have at all times
furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two (2) calendar years preceding such
payments.

 

[NAME OF PARTICIPANT]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

                          , 20   

 

 

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

 

Exhibit T-3

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 22, 2018
(as amended, restated, supplemented or otherwise modified, the “ABL Credit
Agreement”), by and among the lenders identified on the signature pages thereof
(each of such lenders, together with its successors and permitted assigns, is
referred to hereinafter as a “Lender” and, collectively, the “Lenders”), Wells
Fargo Bank, National Association, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity “Agent”), FTS International Services, LLC, a Texas limited liability
company (the “OpCo Borrower”), and FTS International, Inc., a Delaware
corporation (the “Parent Borrower,” together with the OpCo Borrower and those
additional entities that become parties thereto as Borrowers in accordance with
the terms thereof by executing the form of Joinder attached thereto as
Exhibit J-1, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the ABL Credit Agreement.

 

Pursuant to the provisions of Section 16 of the ABL Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the
participation in respect of which it is providing this certificate, (b) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (c) with respect such participation, neither the undersigned nor
any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its
direct or indirect partners/members is a ten percent (10%) shareholder of any
Borrower within the meaning of Section 881(c)(3)(B) of the Code and (e) none of
its direct or indirect partners/members is a controlled foreign corporation
related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (a) an IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, or (b) an IRS Form W-8IMY accompanied by an IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (i) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (ii) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two (2) calendar years preceding such payments.

 

[NAME OF PARTICIPANT]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

                          , 20   

 

 

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

 

Exhibit T-4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 22, 2018
(as amended, restated, supplemented or otherwise modified, the “ABL Credit
Agreement”), by and among the lenders identified on the signature pages thereof
(each of such lenders, together with its successors and permitted assigns, is
referred to hereinafter as a “Lender” and, collectively, the “Lenders”), Wells
Fargo Bank, National Association, a national banking association, as
administrative agent for each member of the Lender Group and the Bank Product
Providers (in such capacity, together with its successors and assigns in such
capacity “Agent”), FTS International Services, LLC, a Texas limited liability
company (the “OpCo Borrower”), and FTS International, Inc., a Delaware
corporation (the “Parent Borrower,” together with the OpCo Borrower and those
additional entities that become parties thereto as Borrowers in accordance with
the terms thereof by executing the form of Joinder attached thereto as
Exhibit J-1, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the ABL Credit Agreement.

 

Pursuant to the provisions of Section 16 of the ABL Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the
Loan(s) (as well as any note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (b) its direct or indirect partners/members are
the sole beneficial owners of such Loan(s) (as well as any note(s) evidencing
such Loan(s)), (c) with respect to the extension of credit pursuant to this ABL
Credit Agreement or any other Loan Document, neither the undersigned nor any of
its direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its direct
or indirect partners/members is a ten percent (10%) shareholder of any Borrower
within the meaning of Section 881(c)(3)(B) of the Code and (e) none of its
direct or indirect partners/members is a controlled foreign corporation related
to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Borrowers with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (a) an IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, or (b) an IRS Form W-8IMY accompanied by an IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (i) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrowers and the Agent and (ii) the undersigned shall have at all
times furnished the Borrowers and the Agent with a properly completed and
currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two (2) calendar
years preceding such payments.

 

[NAME OF LENDER]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

                          , 20   

 

 

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

 

Schedule A-1

 

Agent’s Account

 

An account at a bank designated by Agent from time to time as the account into
which Borrower shall make all payments to Agent for the benefit of the Lender
Group and into which the Lender Group shall make all payments to Agent under
this Agreement and the other Loan Documents; unless and until Agent notifies
Administrative Borrower and the Lender Group to the contrary, Agent’s Account
shall be that certain deposit account bearing account number 4124923723,
reference FTS International Services, LLC, and maintained by Agent with Wells
Fargo Bank, N.A., 420 Montgomery Street, San Francisco, CA, ABA  #121-000-248.

 

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

 

Schedule A-2

 

Authorized Persons

 

Michael J. Doss

 

Lance D. Turner

 

James T. Sutton

 

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

 

Schedule C-1

 

Commitments

 

Lender

 

Total Commitment

Wells Fargo Bank, National Association

 

$

90,000,000.00

Credit Suisse AG, Cayman Islands Branch

 

$

50,000,000.00

Morgan Stanley Bank, N.A.

 

$

47,000,000.00

Barclays Bank PLC

 

$

38,000,000.00

Citibank, N.A.

 

$

25,000,000.00

All Lenders

 

$

250,000,000.00

 

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

 

Schedule D-1

 

Designated Account

 

Depository

 

Address and Contact of Depository

 

Grantor

 

Account
Number

Wells Fargo Bank, National Association

 

1000 Louisiana Street
9th Floor
Houston, Texas 77002

Contact:
XXX
XXX
XXX

 

FTS International, Inc.

 

XXXXXXXX

 

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

 

Schedule P-1

 

Permitted Investments

 

1.              Those Investments set forth on Schedule 4.1(c)

2.              FTS International Netherlands B.V. owns 45% of the Equity
Interests of SinoFTS Petroleum Services Ltd.

 

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

 

Schedule P-2

 

Permitted Liens

 

1.              Liens on Wells Fargo Money Market — Restricted Cash Account #
4358342780, and the cash contained in such account, related to the cash
collateralization of the standby letters of credit issued by Wells Fargo Bank,
National Association described on Schedule 2.11.(1)

 

2.              Liens set forth in the table below.

 

Loan Party

 

Secured Party

 

File No. and
Date of Filing

FTS INTERNATIONAL SERVICES, LLC

 

PNC Equipment Finance, LLC

 

12-0019156499

6/15/2012

 

 

Wells Fargo Bank

 

14-0005239822

2/19/14

 

 

Wells Fargo Bank

 

14-0005240854

2/19/14

 

 

Wells Fargo Bank

 

14-0005273840

2/19/14

 

 

Wells Fargo Bank

 

14-0005276994

2/19/14

 

 

Wells Fargo Bank

 

14-0005277521

2/19/14

 

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

(1)  Such Liens relate to Existing Letters of Credit and are Permitted Liens
pursuant to this Schedule P-2 only until such time the Issuing Bank releases
such Liens after the Closing Date.

 

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

 

Schedule U-1

 

Unrestricted Subsidiaries

 

1.              FTS International Ventures I, LLC

 

2.              FTS International Ventures II, LLC

 

3.              FTS International Netherlands I C.V.

 

4.              FTS International Netherlands II C.V.

 

5.              FTS International Netherlands, LLC

 

6.              FTS International Netherlands Coöperatief U.A.

 

7.              FTS International Netherlands B.V.

 

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

 

Schedule 1.1

 

As used in the Agreement, the following terms shall have the following
definitions:

 

“2014 Closing Date” means April 16, 2014.

 

“ABL Collateral” has the meaning specified therefor in the Intercreditor
Agreement.

 

“Acceptable Appraisal” means, with respect to an appraisal of Inventory, the
most recent appraisal of such property received by Agent (a) from an appraisal
company satisfactory to Agent,  (b) the scope and methodology (including, to the
extent relevant, any sampling procedure employed by such appraisal company) of
which are satisfactory to Agent, and (c) the results of which are satisfactory
to Agent, in each case, in Agent’s Permitted Discretion.

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board (or successor thereto or any agency with similar
functions).

 

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by Parent Borrower or any of its Restricted Subsidiaries
in a Permitted Acquisition; provided, that such Indebtedness (a) was in
existence prior to the date of such Permitted Acquisition and (b) was not
incurred in connection with, or in contemplation of, such Permitted Acquisition.

 

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

 

“Activation Instruction” has the meaning specified therefor in the Guaranty and
Security Agreement.

 

“Additional Documents” has the meaning specified therefor in Section 5.12 of the
Agreement.

 

“Administrative Borrower” has the meaning specified therefor in Section 17.13 of
the Agreement.

 

“Administrative Questionnaire” has the meaning specified therefor in
Section 13.1(a) of the Agreement.

 

“Affected Lender” has the meaning specified therefor in Section 2.13(c) of the
Agreement.

 

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

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person.  For purposes of this definition, “control,”
as used with respect to any Person, will mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.  For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” will have
correlative meanings.

 

“Agent” has the meaning specified therefor in the preamble to the Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1
to this Agreement (or such other Deposit Account of Agent that has been
designated as such, in writing, by Agent to Borrowers and the Lenders).

 

“Agent’s Liens” means the Liens granted by each Borrower or its Subsidiaries to
Agent under the Loan Documents and securing the Obligations.

 

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

 

“Anti-Corruption Laws” means the FCPA and all other applicable laws and
regulations or ordinances concerning or relating to bribery, money laundering or
corruption in any jurisdiction in which any Loan Party or any of its
Subsidiaries or Affiliates is located or is doing business.

 

“Anti-Money Laundering Laws” means the applicable laws or regulations in any
jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is
located or is doing business that relates to money laundering, any predicate
crime to money laundering, or any financial record keeping and reporting
requirements related thereto.

 

“Applicable Margin” means, as of any date of determination and with respect to
Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin per
annum set forth in the following table that corresponds to the Average Excess
Availability of Borrowers for the then most recently ended quarter; provided,
that for the period from the Closing Date through and including March 31, 2018,
the Applicable Margin shall be set at the margin in the row styled “Level II”;
provided further, that any time an Event of Default has occurred and is
continuing, the Applicable Margin shall be set at the margin in the row styled
“Level II”:

 

Level

 

Average Excess
Availability

 

Applicable Margin
Relative to Base Rate
Loans (the “Base Rate
Margin”)

 

Applicable
Margin Relative
to LIBOR Rate
Loans (the
“LIBOR Rate
Margin”)

 

I

 

> $125,000,000

 

0.75

%

1.75

%

II

 

< $125,000,000

 

1.00

%

2.00

%

 

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

 

The Applicable Margin shall be re-determined as of the first day of each fiscal
quarter of Borrowers.

 

“Applicable Unused Line Fee Percentage” means 0.375%; provided, that if the
Average Revolver Usage is greater than 50% of the Maximum Revolver Amount for
any fiscal quarter, such Applicable Unused Line Fee Percentage shall be 0.25%
for such fiscal quarter.

 

“Application Event” means (a) the occurrence of a failure by Borrowers to repay
all of the Obligations (other than Contingent Surviving Obligations) in full on
the Maturity Date, or (b) the occurrence and continuance of an Event of Default
and the election by Agent or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the
Agreement.

 

“Assignee” has the meaning specified therefor in Section 13.1(a) of the
Agreement.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1 to the Agreement.

 

“Authorized Person” means any one of the individuals identified as an officer of
a Borrower on Schedule A-2 to this Agreement, or any other individual identified
by Administrative Borrower as an authorized person and authenticated through
Agent’s electronic platform or portal in accordance with its procedures for such
authentication.

 

“Available Amount Basket” means the aggregate amount of capital contributions to
Borrowers made in Cash Equivalents and/or other properties (other than
Disqualified Equity Interests) since the Closing Date.  The Available Amount
Basket shall be available if on a pro forma basis, after giving effect to the
use of any amount available under the Available Amount Basket, the Fixed Charge
Coverage Ratio for the most recent 12 fiscal month period for which Parent
Borrower’s interim financial statements are then required to have been delivered
pursuant to Section 5.1 is at least 1.0 to 1.0, as calculated as if such use of
the Available Amount Basket was made on the first day of such period.  The
amount available under the Available Amount Basket shall immediately be reduced
on a dollar for dollar basis upon the actual use of any amount thereunder or the
entry into an agreement permitted hereunder pursuant to which an amount under
such Available Amount Basket shall be utilized, in each case, without
duplication of any other reduction of the Available Amount Basket in accordance
with the terms of this definition.

 

“Available Increase Amount” means, as of any date of determination, an amount
equal to the result of (a) $100,000,000 minus (b) the aggregate principal amount
of Increases to the Revolver Commitments previously made pursuant to
Section 2.14 of the Agreement.

 

“Average Excess Availability” means, with respect to any period, the sum of the
aggregate amount of Excess Availability for each day in such period (calculated
as of the end of each respective day) divided by the number of days in such
period.

 

“Average Revolver Usage” means, with respect to any period, the sum of the
aggregate amount of Revolver Usage for each day in such period (calculated as of
the end of each respective day) divided by the number of days in such period.

 

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

 

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

 

“Bank Product” means any one or more of the following financial products or
accommodations extended to a Borrower or a Guarantor by a Bank Product
Provider:  (a) credit cards (including commercial cards (including so-called
“purchase cards”, “procurement cards” or “p-cards”)), (b) payment card
processing services, (c) debit cards, (d) stored value cards, (e) Cash
Management Services, or (f) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time
by a Borrower or a Guarantor with a Bank Product Provider in connection with the
obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure, operational risk or processing risk with respect to the then
existing Bank Product Obligations (other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by the Loan Parties to any Bank Product
Provider pursuant to or evidenced by a Bank Product Agreement and irrespective
of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, (b) all
Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to
pay to a Bank Product Provider as a result of Agent or such Lender purchasing
participations from, or executing guarantees or indemnities or reimbursement
obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to a Loan Party; provided that (i) in
order for any item described in clauses (a), (b), or (c) above, as applicable,
to constitute “Bank Product Obligations”, if the applicable Bank Product
Provider is any Person other than Wells Fargo or its Affiliates, then the
applicable Bank Product must have been provided on or after the Closing Date and
Agent shall have received a Bank Product Provider Agreement within 10 days after
the date of the provision of the applicable Bank Product to  a Borrower or its
Subsidiaries, and (ii) notwithstanding the foregoing and anything to the
contrary in any Loan Document, the Bank Product Obligations of a Loan Party
shall not include its Excluded Hedge Obligations.

 

“Bank Product Provider” means any Lender or any of its Affiliates, including
each of the foregoing in its capacity, if applicable, as a Hedge Provider;
provided, that no such Person (other than Wells Fargo or its Affiliates) shall
constitute a Bank Product Provider with respect to a Bank Product unless and
until Agent receives a Bank Product Provider Agreement from such Person and with
respect to the applicable Bank Product within 10 days after the provision of
such Bank Product to a Loan Party.

 

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

 

“Bank Product Provider Agreement” means an agreement in substantially the form
attached hereto as Exhibit B-2 to the Agreement, in form and substance
reasonably satisfactory to Agent and Borrowers, duly executed by the applicable
Bank Product Provider, Borrowers, and Agent.

 

“Bank Product Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in the exercise of its Permitted
Discretion, to establish (based upon the Bank Product Providers’ determination
of the liabilities and obligations of each Borrower and its Subsidiaries in
respect of Bank Product Obligations) in respect of Bank Products then provided
or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

 

“Base Rate” means a per annum rate equal to the greatest of (a) the Federal
Funds Rate plus ½%, (b) the LIBOR Rate (which rate shall be calculated based
upon an Interest Period of 1 month and shall be determined on a daily basis),
plus 1 percentage point, and (c) the rate of interest announced, from time to
time, within Wells Fargo at its principal office in San Francisco as its “prime
rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base
rates (not necessarily the lowest of such rates) and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Wells Fargo may designate (and, if
any such announced rate is below zero, then the rate determined pursuant to this
clause (c) shall be deemed to be zero); provided that clause (b) shall not be
applicable during any period in which the LIBOR Rate is unascertainable.

 

“Base Rate Loan” means each portion of the Revolving Loans that bears interest
at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.  The terms “Beneficially Owns” and “Beneficially Owned” will have a
corresponding meaning.

 

“Board of Directors” means (a) with respect to a corporation, the board of
directors of such corporation or, except in the context of the definitions of
“Change of Control” and “Continuing Directors,” any duly authorized committee
thereof; and (b) with respect to any other entity, the board of directors or
similar body of the general partner of such entity or the managers of such
entity, any duly authorized committee thereof or any Person, board or committee
serving a similar function.

 

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

 

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

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to the Agreement.

 

“Borrower Election Date” means the date specified by Administrative Borrower in
a Borrower Election Notice given in accordance with clause (b) of Section 1.2 of
the Agreement, which, in each case, such date must be on or after the Lease
Accounting Change Effective Date.

 

“Borrower Election Notice” has the meaning specified therefor in clause (b) of
Section 1.2 of the Agreement.

 

“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of
the Agreement.

 

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a
Swing Loan, or by Agent in the case of an Extraordinary Advance.

 

“Borrowing Base” means, as of any date of determination, the result of:

 

(a)           85% of the amount of Eligible Accounts, less the amount, if any,
of the Dilution Reserve, plus

 

(b)           75% of the amount of Eligible Unbilled Accounts, plus

 

(c)           after the delivery of a field exam and inventory appraisal, each
in form and substance reasonably satisfactory to the Agent, the lesser of
(i) 70% of the lower of cost or fair market value (determined on a
first-in/first-out basis) of Eligible Inventory and (ii) 85% of the product of
(x) the Net Recovery Percentage identified in the most recent Acceptable
Appraisal of Inventory multiplied by (y) Eligible Inventory, minus

 

(d)           the aggregate amount of reserves, if any, established by Agent
under Section 2.1(c) of the Agreement;

 

provided, that (i) no more than 15% of the Borrowing Base may be comprised of
Eligible Inventory and any amount of Eligible Inventory that would cause
Eligible Inventory to exceed 15% of the Borrowing Base shall be excluded from
the calculation thereof and (ii) no more than 15% of the Borrowing Base may be
comprised of Eligible Unbilled Accounts and any amount of Eligible Unbilled
Accounts that would cause Eligible Unbilled Accounts to exceed 15% of the
Borrowing Base shall be excluded from the calculation thereof.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the states of New York or
Texas, except that, if a determination of a Business Day shall relate to a LIBOR
Rate Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.

 

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“Capital Expenditures” means, with respect to any Person for any period, the
amount of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed, but excluding, without
duplication (a) expenditures made during such period in connection with the
replacement, substitution, or restoration of assets or properties pursuant to
Section 2.4(e)(ii) of the Agreement, (b) with respect to the purchase price of
assets that are purchased substantially contemporaneously with the trade-in of
existing assets during such period, the amount that the gross amount of such
purchase price is reduced by the credit granted by the seller of such assets for
the assets being traded in at such time, (c) expenditures made during such
period to consummate one or more Permitted Acquisitions, (d) capitalized
software development costs to the extent such costs are deducted from net
earnings under the definition of EBITDA for such period, (e) expenditures during
such period that, pursuant to a written agreement, are reimbursed by a third
Person (excluding  any Borrower or any of its Affiliates), and (f) expenditures
during such period that are made using the Available Amount Basket.

 

“Capital Lease” means (a) prior to the Borrower Election Date, any lease of
Parent Borrower or any of the Restricted Subsidiaries that is (or would have
been prior to the Lease Accounting Change Effective Date) required to be
capitalized and recorded as a liability on the balance sheet of Parent Borrower
for financial reporting purposes in accordance with GAAP as in effect on the
Closing Date, and (b) on and after the Borrower Election Date, any lease of
Parent Borrower or any of the Restricted Subsidiaries that is classified as a
“finance lease” (as defined in the Financial Accounting Standards Board’s
Accounting Standards Codification Topic 842-10-25-2) and recorded as a liability
on the balance sheet of Parent Borrower for financial reporting purposes in
accordance with GAAP as in effect on the Lease Accounting Change Effective Date.

 

“Capitalized Lease Obligation” means an obligation that constitutes a Capital
Lease; and the amount of Indebtedness represented thereby at any time shall be
the amount of the liability in respect thereof that would be required to be
capitalized on a balance sheet of Parent Borrower at such time in accordance
with (a) prior to the Borrower Election Date, GAAP as in effect on the Closing
Date, and (b) on and after the Borrower Election Date, GAAP as in effect on the
Lease Accounting Change Effective Date.

 

“Cash Equivalents” means:

 

(a)           United States dollars and such local currencies held by Parent
Borrower or any Restricted Subsidiary from time to time in the ordinary course
of business;

 

(b)           securities issued or directly and fully Guaranteed or insured by
the United States government or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof), maturing, unless such securities are deposited to defease any
Indebtedness, not more than 365 days from the date of acquisition;

 

(c)           deposits, certificates of deposit and time deposits, money market
accounts, bankers’ acceptances with maturities not exceeding 365 days and
overnight bank deposits, in each case, with any commercial bank organized under
the laws of the United States or any state, commonwealth or territory thereof or
Canada or any province or territory thereof having capital

 

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

 

and surplus in excess of $500,000,000 and a rating at the time of acquisition
thereof of P-1 or better from Moody’s or A-1 or better from S&P or a Thomson
Bank Watch Rating of “B” or better;

 

(d)           repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in clause (c) above;

 

(e)           commercial paper having one of the two highest ratings obtainable
from Moody’s or S&P and, in each case, maturing within nine months after the
date of acquisition;

 

(f)            securities issued and fully guaranteed by any state, commonwealth
or territory of the United States of America, or by any political subdivision or
taxing authority thereof, rated at least “A” by Moody’s or S&P and having
maturities of not more than 365 days from the date of acquisition; and

 

(g)           money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (a) through (f) of this
definition.

 

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement,  merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

 

“CFC” means a controlled foreign corporation (as that term is defined in the
IRC) in which any Loan Party is a “United States shareholder” within the meaning
of Section 951(b) of the IRC.

 

“Change in Law” means the occurrence, after the date of the Agreement, of any of
the following:  (a) the adoption or taking effect of any law, rule, regulation,
judicial ruling, judgment or treaty, (b) any change in any law, rule,
regulation, judicial ruling, judgment or treaty or in the administration,
interpretation, implementation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, rule, guideline or
directive (whether or not having the force of law, but if not having the force
of law, with respect to any Person, being of a type with which such Person
customarily complies) in respect of any law, rule, regulation, judicial ruling,
judgment or treaty by any Governmental Authority; provided that notwithstanding
anything in the Agreement or any Loan Document 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 or issued.

 

“Change of Control” means the occurrence of any of the following:

 

(a)           the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in any Transactions,
of all or substantially all of the properties or

 

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

 

assets of Parent Borrower and the Restricted Subsidiaries, taken as a whole, to
any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
other than the Permitted Holders;

 

(b)           the adoption of a plan relating to the liquidation or dissolution
of Parent Borrower other than in a Transaction that complies with the provisions
described in Section 6.3;

 

(c)           any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than the Permitted Holders, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the voting
power of the voting Equity Interests of Parent Borrower; and

 

(d)           the first day on which a majority of the members of the Board of
Directors of Parent Borrower are not Continuing Directors.

 

“Chesapeake” means Chesapeake Energy Corporation and each of its controlled
Affiliates.

 

“Closing Date” means the date of the making of the initial Revolving Loan (or
other extension of credit) under the Agreement.

 

“Code” means the New York Uniform Commercial Code, as in effect from time to
time.

 

“Collateral” means property subject, or purported to be subject, from time to
time to a Lien pursuant to any of the Loan Documents.  For the avoidance of
doubt, the Collateral shall not include the Excluded Assets.

 

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Borrower’s books and records, or Inventory, in each case, in form and
substance reasonably satisfactory to Agent.

 

“Collateral Reporting Trigger Event” means the occurrence of (a) a Default or
Event of Default or (ii) Excess Availability is less than the greater of
(1) $20,000,000 and (2) 15.0% of the Line Cap; provided that a Collateral
Reporting Trigger Event shall end at such time thereafter when no Default or
Event of Default exists and Excess Availability exceeds the greater of
(1) $20,000,000 and (2) 15.0% of the Line Cap for a sixty (60) consecutive day
period.

 

“Commitment” means, with respect to each Lender, its Revolver Commitment and,
with respect to all Lenders, their Revolver Commitments, in each case, as such
Dollar amounts are set forth beside such Lender’s name under the applicable
heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance
pursuant to which such Lender became a Lender under the Agreement, as such
amounts may be reduced or increased from time to time pursuant to
(x) assignments made in accordance with the provisions of Section 13.1 of the
Agreement and (y) Sections 2.4(c) or 2.14 of the Agreement.

 

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

 

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

 

“Competitor” means any Person which is a direct competitor of Borrowers or any
of their Subsidiaries and identified from time to time in writing to the Agent;
provided, that in connection with any assignment or participation, the Assignee
or Participant with respect to such proposed assignment or participation that is
an investment bank, a commercial bank, a finance company, a fund, or other
Person which merely has an economic (but not a controlling) interest in any such
direct competitor, and is not itself such a direct competitor of Borrowers or
their Subsidiaries, shall not be deemed to be a direct competitor for the
purposes of this definition.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 to the Agreement delivered by the chief financial officer of 
Administrative Borrower to Agent.

 

“Confidential Information” has the meaning specified therefor in
Section 17.9(a) of the Agreement.

 

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

 

“Consolidated Cash Flow” means, for any period, the Consolidated Net Income of
Parent Borrower for such period plus, without duplication:

 

(a)           provision for taxes based on income or profits of Parent Borrower
and its Restricted Subsidiaries for such period, to the extent that such amounts
were deducted in computing such Consolidated Net Income; plus

 

(b)           Interest Expense of Parent Borrower and its Restricted
Subsidiaries for such period, to the extent that any such Interest Expense was
deducted in computing such Consolidated Net Income; plus

 

(c)           depreciation, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of Parent Borrower and the Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; minus or plus, as the case
may be

 

(d)           any net gain or loss realized by such Person or any of its
Restricted Subsidiaries in connection with any sale or disposition of assets
outside the ordinary course of business, to the extent such gains or losses were
added or deducted in computing Consolidated Net Income; minus or plus, as the
case may be

 

(e)           all extraordinary, unusual or non-recurring items of gain (loss)
or expense to the extent added or deducted in computing Consolidated Net Income;
minus or plus, as the case may be

 

(f)            non-cash items increasing or decreasing such Consolidated Net
Income for such period, other than the accrual of revenue or expense in the
ordinary course of business; plus

 

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(g)           any expenses or charges, to the extent deducted in computing
Consolidated Net Income, related to any offering of Equity Interests, Permitted
Investment, acquisition, disposition, recapitalization or the incurrence of
Indebtedness pursuant to (or permitted to be incurred by) the Term Loan Facility
or the Senior Notes Indenture including a refinancing thereof (whether or not
successful) and any amendment or modification to the terms of any such
transactions,

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, the Fixed Charges of and the depreciation and amortization and other
non-cash expenses of, a Restricted Subsidiary will be added to Consolidated Net
Income to compute Consolidated Cash Flow of Parent Borrower (i) in the same
proportion that the Consolidated Net Income of such Restricted Subsidiary was
added to compute such Consolidated Net Income of Parent Borrower and (ii) only
to the extent that a corresponding amount would be permitted at the date of
determination to be dividended or distributed to Parent Borrower by such
Restricted Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter or any agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders. Notwithstanding anything to the contrary herein, Consolidated
Cash Flow of Parent Borrower and its Restricted Subsidiaries for fiscal quarters
ended on March 31, 2017, June 30, 2017, and September 30, 2017 shall be $19.1
million, $86.6 million and $128.4 million respectively.

 

“Consolidated Net Income” means, for any period, the aggregate of the net income
(loss) of Parent Borrower and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that, without
duplication:

 

(a)           the net income/loss of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or distributions paid in
cash to Parent Borrower or a Restricted Subsidiary (subject, in the case of
dividends or distributions paid to a Restricted Subsidiary, to the limitations
contained in clause (b) below);

 

(b)           the net income (but not the net loss) of any Restricted Subsidiary
will be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that net income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its equity holders (other than any restrictions existing by reason
of, or any governmental approvals necessary pursuant to, any law, rule,
regulation, order or decree that is generally applicable to all Persons
operating in any jurisdiction in which any Restricted Subsidiary is conducting
business so long as there is in effect no specific order, decree or other
prohibition pursuant to any such law, rule or regulation in such jurisdiction
limiting the payment of a dividend or similar distribution by such Restricted
Subsidiary);

 

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(c)           the net income (loss) of any Person acquired during the specified
period for any period prior to the date of such acquisition will be excluded;

 

(d)           any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with:  (i) any sale or disposition of
assets outside the ordinary course of business of Parent Borrower or any
Restricted Subsidiary; or (ii) the disposition of any securities by Parent
Borrower or any Restricted Subsidiary or the extinguishment of any Indebtedness
of Parent Borrower or any Restricted Subsidiary, will be excluded;

 

(e)           the effect of any non-cash items resulting from any depreciation,
amortization, write-up, write-down or write-off of assets (including intangible
assets, goodwill and deferred financing costs but excluding inventory) in
connection with any acquisition, merger, consolidation or similar transaction or
any other non-cash impairment charges incurred, in each case, prior or
subsequent to the Closing Date (excluding any such non-cash item to the extent
that it represents an accrual of or reserve for cash expenditures in any future
period except to the extent such item is subsequently reversed) will be
excluded;

 

(f)            any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss, will be excluded;

 

(g)           any unrealized gain or loss included in net income due to marking
Hedge Obligations to market will be excluded;

 

(h)           any non-cash compensation expense realized for grants of
restricted stock units, restricted stock, performance shares, stock options or
other similar rights to officers, directors and employees of Parent Borrower and
any Restricted Subsidiary will be excluded; provided that such restricted stock
units, restricted stock, performance shares, stock options or other similar
rights can be redeemed, if at all, at the option of the holder only for Equity
Interests (other than Disqualified Equity Interests) of Parent Borrower;

 

(i)            the cumulative effect of a change in accounting principles will
be excluded;

 

(j)            to the extent deducted in the calculation of net income, any
non-recurring charges associated with any premium or penalty paid, write-offs of
deferred financing costs or other financial recapitalization charges in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity will be added back to arrive at Consolidated Net Income;

 

(k)           any net income (loss) from the early extinguishment of
Indebtedness or Hedge Obligations or other derivative instruments shall be
excluded;

 

(l)            any unrealized net gain or loss (but not any realized gain or
loss) resulting in such period from currency translation gains or losses related
to currency remeasurements of Indebtedness, including intercompany indebtedness,
shall be excluded; and

 

(m)          to the extent deducted in the calculation of net income, any
restructuring or other unusual, non-operating or non-recurring loss will be
added back to arrive at Consolidated Net Income.

 

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“Consolidated Tangible Assets” means, with respect to any Person, the
consolidated total assets of such Person and its Restricted Subsidiaries less
all goodwill, trade names, trademarks, patents, unamortized debt issuance costs
and other similar intangibles properly classified as intangibles in accordance
with GAAP, all as shown on the most recent balance sheet delivered to the Agent
pursuant to Schedule 5.1 to the Agreement as of the end of a fiscal quarter of
such Person and computed in accordance with GAAP.

 

“Contingent Obligation” shall mean, as to any Person, any obligation, agreement,
understanding or arrangement of such person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor; (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect
to bankers’ acceptances and letters of credit, until a reimbursement obligation
arises (which obligation shall constitute Indebtedness); or (e) otherwise to
assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term “Contingent Obligation” shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business or any product warranties for deposit or collection
in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which such
person may be liable, whether severally or jointly, pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such person is required to perform thereunder) as determined by such
person in good faith.

 

“Contingent Surviving Obligations” has the meaning specified therefor in
Section 3.4 of the Agreement.

 

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of Parent Borrower who:  (a) was a member of such Board of
Directors on the Closing Date; or (b) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors at the time of such
nomination or election, but excluding any such individual originally proposed
for election in opposition to the Board of Directors in office at the Closing
Date in an actual or threatened election contest relating to the election of the
directors (or comparable managers) of Parent Borrower and whose initial
assumption of office resulted from such contest or the settlement thereof.

 

“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by  a Borrower or a Guarantor,
Agent, and the applicable securities intermediary (with respect to a Securities
Account) or bank (with respect to a Deposit Account or blocked Deposit Account).

 

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“Cost” means with respect to equipment, supplies and products, Parent Borrower’s
good faith, reasonable estimate of the all-in cost to Parent Borrower or its
applicable Restricted Subsidiary to procure or manufacture such equipment,
supplies or products and, with respect to services, Parent Borrower’s good
faith, reasonable estimate of the all-in cost to Parent Borrower or its
applicable Restricted Subsidiaries of the cost of providing such services.

 

“Covenant Testing Period” means the period commencing on any date on which
(a) Excess Availability is less than the greater of (1) $12,500,000 and
(2) 10.0% of the Line Cap or (b) an Event of Default shall occur, and, in each
case, ending upon a Covenant Testing Reversion Date.

 

“Covenant Testing Reversion Date” means, following the commencement of a
Covenant Testing Period, (a) with respect to clause (a) of the definition of
Covenant Testing Period, the last date of a sixty (60) consecutive day period
during which Excess Availability is equal to or greater than the greater of
(1) $12,500,000 and (2) 10.0% of the Line Cap for such sixty (60)
consecutive days, and (b) with respect to clause (b) of the definition of
Covenant Testing Period, the date upon which such Event of Default is cured or
waived or otherwise ceases to exist.

 

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies Agent and
Administrative Borrower in writing that such failure is the result of such
Lender’s determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable Default or Event of
Default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to Agent, Issuing Bank, or any other Lender any other
amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit) within two Business Days of the date when
due, (b) has notified any Borrower, Agent or Issuing Bank in writing that it
does not intend to comply with its funding obligations hereunder, or has made a
public statement to that effect (unless such writing or public statement relates
to such Lender’s obligation to fund a Loan hereunder and states that such
position is based on such Lender’s determination that a condition precedent to
funding (which condition precedent, together with any applicable Default or
Event of Default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by Agent or Administrative Borrower, to confirm in writing
to Agent and Administrative Borrower that it will comply with its prospective
funding obligations hereunder (provided, that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written
confirmation by Agent and Administrative Borrower), or (d) has, or has a direct
or indirect parent company that has, (i) become the subject of any Insolvency
Proceeding, (ii) had appointed for it a receiver, custodian, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or assets, including
the Federal Deposit Insurance Corporation or any other state or federal
regulatory authority acting in such a capacity, or (iii) become the subject of a
Bail-in Action; provided, that a Lender shall not be a Defaulting Lender solely
by virtue of the ownership or acquisition of any equity interest in that Lender
or any direct or indirect parent company thereof by a Governmental Authority so
long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States or from the

 

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enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender.  Any determination
by Agent that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender upon delivery of written
notice of such determination to Administrative Borrower, Issuing Bank, and each
Lender.

 

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).

 

“Deposit Account” means any deposit account (as that term is defined in the
Code).

 

“Designated Account” means the Deposit Account of Administrative Borrower
identified on Schedule D-1 to the Agreement (or such other Deposit Account of
Administrative Borrower located at Designated Account Bank that has been
designated as such, in writing, by Borrowers to Agent).

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 to
the Agreement (or such other bank that is located within the United States that
has been designated as such, in writing, by Borrowers to Agent).

 

“Designated Non-cash Consideration” means the Fair Market Value of any non-Cash
Equivalent consideration received by Parent Borrower or one of its Restricted
Subsidiaries in connection with a Permitted Disposition that is designated as
Designated Non-cash Consideration pursuant to an officers’ certificate.  Any
particular item of Designated Non-cash Consideration will cease to be considered
to be outstanding once it has been sold for Cash Equivalents (which shall be
considered Net Cash Proceeds when received).

 

“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the twelve-month period ending as of the last day of the
immediately preceding fiscal month, that is the result of dividing the Dollar
amount of (a) bad debt write-downs, discounts, advertising allowances, credits,
or other dilutive items with respect to Borrowers’ Accounts during such period,
by (b) Borrowers’ billings with respect to Accounts during such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.

 

“Disinterested Member” means, with respect to any Transaction, a member of
Parent Borrower’s Board of Directors:  (a) who does not have any material direct
or indirect financial interest (other than as an owner of Equity Interests in
Parent Borrower or as an officer, manager or employee of Parent Borrower or any
Restricted Subsidiary) in or with respect to such Transaction, and (b) is not an
Affiliate, or an officer, director, member of a supervisory, executive or
management board or employee, of any Person (other than Parent Borrower or a
Restricted Subsidiary), who has any direct or indirect financial interest in or
with respect to such Transaction.

 

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“Disqualified Equity Interests” means any Equity Interests that, that, by its
terms, by the terms of any security into which it is convertible, or for which
it is exchangeable, or by contract or otherwise, is, or upon the happening of
any event or passage of time would be, required to be redeemed on or prior to
the date that is one year after the Maturity Date, or is redeemable at the
option of the holder thereof, or is convertible into or exchangeable for debt
securities in any such case on or prior to such date.  The term “Disqualified
Equity Interests” will also include any options, warrants or other rights that
are convertible into Disqualified Equity Interests or that are redeemable at the
option of the holder, or required to be redeemed, prior to the date that is one
year after the Maturity Date.

 

“Dollars” or “$” means United States dollars.

 

“Domestic Subsidiary” means any Restricted Subsidiary organized under the laws
of any political subdivision of the United States that is not a Subsidiary of a
Foreign Subsidiary.

 

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit, including by electronic
transmission such as SWIFT, electronic mail, facsimile or computer generated
communication.

 

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

 

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

 

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

 

“Eligible Accounts” means those Accounts (including Eligible Unbilled Accounts)
created by a Borrower in the ordinary course of its business, that arise out of
such Borrower’s sale of goods or rendition of services, that comply with each of
the representations and warranties respecting Eligible Accounts made in the Loan
Documents, and that are not excluded as ineligible by virtue of one or more of
the excluding criteria set forth below; provided, that such criteria may be
revised from time to time by Agent in Agent’s Permitted Discretion to address
the results of any field examination performed by (or on behalf of) Agent from
time to time after the Closing Date.  In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits, unapplied cash,
taxes, finance charges, service charges, discounts, credits, allowances, and
rebates.  Eligible Accounts shall not include the following:

 

(a)           Accounts that the Account Debtor has failed to pay within 60 days
of original due date or Accounts for which the scheduled due date is more than
90 days after the original invoice date therefor,

 

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(b)           Accounts owed by an Account Debtor (or its Affiliates) where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above,

 

(c)           Accounts with respect to which the Account Debtor is an Affiliate
of any Borrower or an employee or agent of any Borrower or any Affiliate of any
Borrower, provided, however, Accounts owed to any Borrower or its Restricted
Subsidiaries by Chesapeake shall be deemed Eligible Accounts so long as they
arise in connection with an arms’-length commercial transaction and satisfy all
other criteria set forth in clauses (a) and (b) and (d) through (p) hereof,

 

(d)           Accounts (i) arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional, or (ii) with respect to which the
payment terms are “C.O.D.”, cash on delivery or other similar terms,

 

(e)           Accounts that are not payable in Dollars,

 

(f)            Accounts with respect to which the Account Debtor either (i) does
not maintain its chief executive office in the United States or Canada, or
(ii) is not organized under the laws of the United States or Canada or any state
or province thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other
instrumentality thereof, unless (A) the Account is supported by an irrevocable
letter of credit reasonably satisfactory to Agent (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Agent and is
directly drawable by Agent, or (B) the Account is covered by credit insurance in
form, substance, and amount, and by an insurer, reasonably satisfactory to
Agent, or (C) Agent’s Lien in the Account is perfected to its reasonable
satisfaction,

 

(g)           Accounts with respect to which the Account Debtor is either
(i) the United States or any department, agency, or instrumentality of the
United States (exclusive, however, of Accounts with respect to which Borrowers
have complied, to the reasonable satisfaction of Agent, with the Assignment of
Claims Act, 31 USC §3727), or (ii) any state of the United States or any other
Governmental Authority,

 

(h)           Accounts with respect to which the Account Debtor is a creditor of
a Borrower, has or has asserted a right of recoupment or setoff, or has disputed
its obligation to pay all or any portion of the Account, to the extent of such
claim, right of recoupment or setoff, or dispute,

 

(i)            Accounts with respect to an Account Debtor whose Eligible
Accounts and Eligible Unbilled Accounts, collectively, owing to the Borrowers
exceed 25% (such percentage, as applied to a particular Account Debtor, being
subject to reduction by Agent in its Permitted Discretion if the
creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts
and Eligible Unbilled Accounts, collectively, to the extent of the obligations
owing by such Account Debtor in excess of such percentage; provided, that, in
each case, the amount of Eligible Accounts that are excluded because they exceed
the foregoing percentage shall be determined by Agent based on all of the
otherwise Eligible Accounts prior to giving effect to any eliminations based
upon the foregoing concentration limit,

 

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(j)            Accounts with respect to which the Account Debtor is subject to
an Insolvency Proceeding, is not Solvent, has gone out of business, or as to
which any Borrower has received notice of an imminent Insolvency Proceeding of
such Account Debtor,

 

(k)           Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful, including by reason of the Account Debtor’s
financial condition,

 

(l)            Accounts that are not subject to a valid and perfected first
priority Agent’s Lien,

 

(m)          Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,

 

(n)           Accounts with respect to which the Account Debtor is a Sanctioned
Person or Sanctioned Country,

 

(o)           Accounts that represent the right to receive progress payments or
other advance billings that are due prior to the completion of performance by
the applicable Borrower of the subject contract for goods or services, or

 

(p)           Accounts owned by a target acquired in connection with a Permitted
Acquisition, until the completion of a field examination with respect to such
target, in each case, reasonably satisfactory to Agent (which a field
examination may be conducted prior to the closing of such Permitted
Acquisition).

 

“Eligible Inventory” means Inventory of a Borrower that complies with each of
the representations and warranties respecting Eligible Inventory made in the
Loan Documents, and that is not excluded as ineligible by virtue of one or more
of the excluding criteria set forth below; provided, that such criteria may be
revised from time to time by Agent in Agent’s Permitted Discretion to address
the results of any field examination or appraisal performed by Agent from time
to time after the Closing Date.  An item of Inventory shall not be included in
Eligible Inventory if:

 

(a)           a Borrower does not have good, valid, and marketable title
thereto,

 

(b)           a Borrower does not have actual and exclusive possession thereof
(either directly or through a bailee or agent of a Borrower), unless (i) such
bailee or agent has delivered to the Agent a Collateral Access Agreement in form
and substance reasonably satisfactory to the Agent, (ii) the Agent has applied a
Landlord Reserve in respect of such Inventory, or (iii) such Inventory is
located at the site of a Guarantor or a Restricted Subsidiary,

 

(c)           it is not located at one of the locations in the continental
United States set forth on Schedule 4.24 to the Agreement, in each case, except
for (i) Eligible In-Transit Inventory or (ii) if such Inventory is located at
the site of a Guarantor or a Restricted Subsidiary,

 

(d)           it is in-transit to or from a location of a Borrower, a Guarantor,
or a Restricted Subsidiary, except for Eligible In-Transit Inventory,

 

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(e)           it is located on real property leased by a Borrower, a Guarantor,
or a Restricted Subsidiary, or in a contract warehouse, in each case, unless it
is subject to a Collateral Access Agreement executed by the lessor or
warehouseman, as the case may be, and unless it is segregated or otherwise
separately identifiable from goods of others, if any, stored on the premises,

 

(f)            it is the subject of a document of title within the meaning of
the Code,

 

(g)           it is not subject to a valid and perfected first priority Agent’s
Lien,

 

(h)           it consists of goods returned or rejected by a Borrower’s
customers,

 

(i)            it consists of goods that are obsolete or slow moving,
restrictive or custom items, work-in-process, raw materials, or goods that
constitute spare parts, packaging and shipping materials, supplies used or
consumed in Borrowers’ business, bill and hold goods, defective goods,
“seconds,” or Inventory acquired on consignment (it being agreed, for the
avoidance of doubt, that raw materials do not include proppants and chemicals
used in the hydraulic fracturing process),

 

(j)            the aggregate amount of such Inventory does not exceed $100,000
at any location at any time, or

 

(k)           it was acquired in connection with a Permitted Acquisition, until
the completion of an appraisal and field examination of such Inventory, in each
case, reasonably satisfactory to Agent (which appraisal and field examination
may be conducted prior to the closing of such Permitted Acquisition).

 

“Eligible In-Transit Inventory” means those items of Inventory that would not
otherwise qualify as Eligible Inventory solely because they are not located in
the United States or they are in transit with a common carrier from vendors or
suppliers, but as to which:

 

(a)           title and risk of loss to such Inventory has passed to a Borrower,

 

(b)           such Inventory is in the possession and control of a third-party
shipping company that is independent of the sellers thereof,

 

(c)           such Inventory is insured against types of loss, damage, hazards
and risks, and in amounts satisfactory to Agent in its Permitted Discretion, and
Agent has been named as loss payee with respect to such insurance pursuant to a
loss payable endorsement acceptable to Agent in its Permitted Discretion,

 

(d)           the vendor or supplier of such Inventory is an Eligible Vendor,

 

(e)           such Inventory either:

 

(i)            is the subject of a negotiable bill of lading (x) that is
consigned to Agent or one of its agents (either directly or by means of
endorsements), (y) that was issued by the carrier respecting the subject
Inventory, and (z) that is in the possession of Agent or a customs broker (in
each case in the continental United States) acting for Agent, or

 

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(ii)           is the subject of a negotiable cargo receipt and is not the
subject of a bill of lading (other than a negotiable bill of lading consigned
to, and in the possession of, a consolidator Agent, or their respective agents)
and such negotiable cargo receipt (x) is consigned to Agent or one of its agents
(either directly or by means of endorsements), (y) was issued by a consolidator
respecting the subject Inventory, and (z) is in the possession of Agent or a
customs broker (in each case in the continental United States) acting for Agent,

 

(f)            the Borrowers know of no reason why such Inventory would not be
accepted by it when it arrives and the shipment as evidenced by the documents
materially conforms to the related order documents, and

 

(g)           such Inventory is in transit to a location in the United States
that meets the requirements for Eligible Inventory.

 

“Eligible Transferee” means (a) any Lender (other than a Defaulting Lender), any
Affiliate of any Lender and any Related Fund of any Lender; (b) (i) a commercial
bank organized under the laws of the United States or any state thereof, and
having total assets in excess of $1,000,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof, and having total assets in excess of $1,000,000,000; (iii) a
commercial bank organized under the laws of any other country or a political
subdivision thereof; provided that (A) (x) such bank is acting through a branch
or agency located in the United States or (y) such bank is organized under the
laws of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country, and (B) such bank
has total assets in excess of $1,000,000,000; (c) any other entity (other than a
natural person) that is an “accredited investor” (as defined in Regulation D
under the Securities Act) that extends credit or buys loans as one of its
businesses including insurance companies, investment or mutual funds and lease
financing companies, and having total assets in excess of $1,000,000,000; and
(d) during the continuation of an Event of Default, any other Person approved by
Agent.

 

“Eligible Unbilled Accounts” means Accounts of a Borrower arising from the
shipment of goods or provision of services to the applicable Account Debtor that
qualify as Eligible Accounts except that such Accounts have not yet been billed
to the applicable Account Debtor, so long as such Accounts relate to a shipment
of goods or provision of services that has been completed in full and billed on
or prior to the earlier of (i) the date of the delivery to Agent of the first
Borrowing Base Certificate reflecting such Accounts as Eligible Unbilled
Accounts and (ii) 20 days after the last day of the month to be reported on such
Borrowing Base Certificate; provided that, notwithstanding the foregoing, in the
case of a Collateral Reporting Trigger Event, (x) such Accounts shall have been
completed in full and billed on or prior to 20 days after the last day of the
prior month to be reported on such Borrowing Base and (y) such Accounts not
permitted by clause (x) of this proviso shall be calculated monthly; provided
further that, an Account shall cease to be an Eligible Unbilled Account upon the
date such Account is billed to the applicable Account Debtor, at which time such
Account shall be deemed to be an Eligible Account. In determining the amount to
be included, Eligible Unbilled Accounts shall be calculated as of the last day
of the month or week, as applicable, reported on such Borrowing Base
Certificate, and net of customer deposits and unapplied cash.

 

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“Eligible Vendor” means a vendor (other than an Affiliate of Parent Borrower or
of a Restricted Subsidiary) of Inventory which (a) has received timely payment
or performance of all liabilities and other obligations at any time owed to it
by Parent Borrower and the Restricted Subsidiaries that are then due and payable
in accordance with the regular payment terms between Parent Borrower and the
Restricted Subsidiaries and such vendor, and (b) has not asserted (and has no
right to assert) any reclamation, repossession, diversion, stoppage in transit,
Lien or title retention rights in respect of such Inventory.

 

“Employee Benefit Plan” means (a) any employee pension benefit plan within the
meaning of Section 3(2) of ERISA that is maintained for employees of any Loan
Party or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that
has at any time within the preceding seven (7) years been maintained, funded or
administered for the employees of any Loan Party or any current or former ERISA
Affiliate.

 

“Employee Plan” means an “employee benefit plan” within the meaning of
Section 3(3) of ERISA which any Loan Party establishes for the benefit of its
employees or for which any Loan Party has liability to make a contribution.

 

“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials giving rise to liability under
Environmental Laws (a) from any assets, properties, or businesses of any
Borrower, any Restricted Subsidiary of any Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials generated by
any Borrower, any Restricted Subsidiary of any Borrower, or any of their
predecessors in interest.

 

“Environmental Law” means any and all federal, foreign, state, provincial and
local laws, statutes, ordinances, codes, rules, standards and regulations,
permits, licenses and binding orders of courts or Governmental Authorities,
relating to the protection of public health (with respect to Hazardous
Materials) or the environment, including, but not limited to, such requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

 

“Equipment” means equipment (as that term is defined in the Code).

 

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“Equity Interest” of any Person means any and all shares, interests (including
general or limited partnership interests, limited liability company or
membership interests or limited liability partnership interests), participations
or other equivalents of or interests in (however designated) equity of such
Person, including any Preferred Stock; provided, however, that equity-based
compensation awards that by their terms may only be settled in cash will not be
deemed to be Equity Interests.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with Parent Borrower or any Subsidiary, is treated as a single
employer under Section 414(b) or (c) of the IRC (and Sections 414(m) and (o) of
the IRC for purposes of provisions relating to Section 412 or 430 of the IRC or
Section 302 or 303 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 Pension Plan
(other than an event for which the 30-day notice period is waived); (b) the
failure to satisfy the “minimum funding standard” (as defined in Section 412 of
the IRC or Section 302 of ERISA), whether or not waived, with respect to any
Pension Plan; (c) the filing pursuant to Section 412(c) of the IRC or
Section 302(c) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Pension Plan; (d) the incurrence by Parent Borrower
or any ERISA Affiliate of any liability under Title IV of ERISA with respect to
the termination of any Pension Plan; (e) the receipt by Parent Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer any Pension Plan; (f) the incurrence by Parent Borrower or
any ERISA Affiliate of any liability with respect to the withdrawal or partial
withdrawal of Parent Borrower or any ERISA Affiliate from any Pension Plan or
Multiemployer Plan; or (g) the receipt by Parent Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from Parent Borrower or
any ERISA Affiliate of any notice, concerning the imposition upon Parent
Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of
Title IV of ERISA.

 

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

 

“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.

 

“Excess Availability” means, as of any date of determination, the amount that
Borrowers are entitled to borrow as Revolving Loans under Section 2.1 of the
Agreement as of such date (after giving effect to the then outstanding Revolver
Usage).

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

 

“Excluded Assets” has the meaning specified therefor in the Guaranty and
Security Agreement.

 

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“Excluded Hedge Obligation” means, with respect to any Loan Party, any Hedge
Obligation constituting a Swap Obligation if, and to the extent that, all or a
portion of the guaranty of such Loan Party of, or the grant by such Loan Party
of a security interest to secure, such Hedge Obligation (or any guarantee
thereof) is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such Loan
Party’s failure for any reason to constitute an “eligible contract participant”
as defined in the Commodity Exchange Act and the regulations thereunder at the
time the guaranty of such Loan Party or the grant of such security interest
becomes effective with respect to such Hedge Obligation. If any Hedge Obligation
constituting a Swap Obligation arises under a master agreement governing more
than one such Hedge Obligation, such exclusion shall apply only to the portion
of such Hedge Obligation that is attributable to swaps for which such guaranty
or security interest is or becomes illegal.

 

“Excluded Subsidiary” means any of the following: (a) each Immaterial
Subsidiary; (b) each Domestic Subsidiary that is not a Wholly Owned Subsidiary
(for so long as such Subsidiary remains a non-Wholly Owned Subsidiary), (c) each
Domestic Subsidiary that is prohibited from guaranteeing the Obligations by any
applicable law or that would require consent, approval, license or authorization
of a Governmental Authority to guarantee the Obligations that cannot be obtained
after use of commercially reasonable efforts (unless such consent, approval,
license or authorization has been received); (d) each Domestic Subsidiary that
is prohibited by any applicable contractual requirement from guaranteeing the
Obligations on the Closing Date or at the time such Subsidiary becomes a
Subsidiary, so long as such requirement was not entered into in contemplation of
the acquisition of such Subsidiary (and for so long as such restriction or any
replacement or renewal thereof is in effect); (e) any CFC (or any Subsidiary
thereof); (f) any Foreign Subsidiary Holdco (or any Subsidiary thereof); and
(g) each Unrestricted Subsidiary.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, United States
federal withholding Taxes imposed on amounts payable to or for the account of
such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Commitment (other than pursuant to an assignment request
by Borrowers under Section 2.13(c) or Section 14.2) or (ii) such Lender changes
its lending office, except in each case to the extent that, pursuant to
Section 16, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 16.7 and (d) any
United States federal withholding Taxes imposed under FATCA.

 

“Existing Letters of Credit” means any of the Letters of Credit listed on
Schedule 2.11.

 

“Extraordinary Advances” has the meaning specified therefor in
Section 2.3(d)(iii) of the Agreement.

 

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“Fair Market Value” means, with respect to any asset or property, the sale value
that would be obtained in an arm’s-length free-market Transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by (a) in
the case of an asset or property with an estimated value of $20,000,000 or more,
the Board of Directors of Parent Borrower, which determination will be
conclusive if evidenced by a resolution or a written consent of the Board of
Directors of Parent Borrower and (b) in the case of an asset or property with an
estimated value of less than $20,000,000, the principal executive officer, the
principal financial officer or the principal accounting officer of Parent
Borrower, which determination will be conclusive if evidenced by an officer’s
certificate thereof.

 

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and (a) any current or future
regulations or official interpretations thereof, (b) any agreements entered into
pursuant to Section 1471(b)(1) of the IRC, and (c) any intergovernmental
agreement entered into by the United States (or any fiscal or regulatory
legislation, rules, or practices adopted pursuant to any such intergovernmental
agreement entered into in connection therewith).

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it (and, if any such rate is below zero, then the rate
determined pursuant to this definition shall be deemed to be zero).

 

“Fee Letter” means that certain fee letter, dated as of even date with the
Agreement, among Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.

 

“First-Tier Foreign Subsidiary” means any CFC the Equity Interests of which are
owned directly by any Loan Party.

 

“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with
respect to Parent Borrower and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP, the ratio of (a) Consolidated Cash
Flow for such period minus Unfinanced Capital Expenditures made (to the extent
not already incurred in a prior period) or incurred during such period, to
(b) Fixed Charges for such period.

 

For purposes of calculating the Fixed Charge Coverage Ratio:

 

(a)           in the event that Parent Borrower or any Restricted Subsidiary
incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases
or redeems Preferred Stock subsequent to the commencement of the period for
which the Fixed Charge Coverage Ratio is

 

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being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”),
then (subject to the remaining clauses of this definition) the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of Preferred Stock, and the use of the proceeds
therefrom as if the same had occurred at the beginning of such period;

 

(b)           acquisitions and dispositions of business entities or property and
assets constituting a division or line of business of any Person that have been
made by Parent Borrower or any Restricted Subsidiary (or by any Person that has
subsequently become a Restricted Subsidiary or has subsequently merged or
consolidated with or into a Borrower or any Restricted Subsidiary), including
through mergers or consolidations, and the designation or redesignation of an
Unrestricted Subsidiary, in each case, during such period or subsequent to such
period and on or prior to the Calculation Date will be given pro forma effect as
if they had occurred on the first day of such period and Consolidated Cash Flow
for such period will be calculated on a pro forma basis, but without giving
effect to clause (c) of the proviso set forth in the definition of Consolidated
Net Income;

 

(c)           the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, will be excluded;

 

(d)           the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, will be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be obligations
of Parent Borrower or any Restricted Subsidiary following the Calculation Date;

 

(e)           whenever pro forma effect is to be given to an acquisition or
disposition, the amount of Consolidated Cash Flow relating thereto and the
amount of Fixed Charges associated with any Indebtedness incurred in connection
therewith, unless otherwise specified, the pro forma calculations will be
determined in good faith by a responsible financial or accounting officer of
Parent Borrower;

 

(f)            Fixed Charges attributable to interest on any Indebtedness
(whether existing or being incurred) computed on a pro forma basis and bearing a
floating interest rate will be computed as if the rate in effect on the
Calculation Date (taking into account any interest rate option, swap, cap or
similar agreement applicable to such Indebtedness if such agreement has a
remaining term in excess of 12 months or, if shorter, at least equal to the
remaining term of such Indebtedness) had been the applicable rate for the entire
period; and

 

(g)           Fixed Charges attributable to interest on any Indebtedness
incurred under a revolving credit facility (including the Agreement) computed on
a pro forma basis will be calculated based on the average daily balance of such
Indebtedness for such period subject to the pro forma calculation.

 

“Fixed Charges” means, with respect to any fiscal period and with respect to
Parent Borrower and its Restricted Subsidiaries determined on a consolidated
basis in accordance with GAAP, the sum, without duplication, of (a) Interest
Expense accrued (other than interest

 

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paid-in-kind, amortization of financing fees, and other non-cash Interest
Expense) during such period, (b) principal payments in respect of Indebtedness
that are required to be paid during such period, (c) all federal, state, and
local income taxes paid in cash during such period, and (d) all Restricted
Payments paid (whether in cash or other property, other than common Equity
Interests) by Parent Borrower or any Restricted Subsidiary (but only to the
extent that any Restricted Payment by a Restricted Subsidiary is not made to
another Restricted Subsidiary or Parent Borrower) during such period.

 

“Flow of Funds Agreement” means a flow of funds agreement, dated as of even date
herewith, in form and substance reasonably satisfactory to Agent, executed and
delivered by each Loan Party and Agent.

 

“Foreign Lender” means any Lender or Participant that is not a U.S. Person.

 

“Foreign Subsidiary” means any Restricted Subsidiary of Parent Borrower that is
not a Domestic Subsidiary.

 

“Foreign Subsidiary Holdco” means a Restricted Subsidiary all or substantially
all of the assets of which consist of Equity Interests of one or more CFCs
and/or other Foreign Subsidiary Holdcos; provided that, for the avoidance of
doubt and notwithstanding anything to the contrary in this definition, OpCo
Borrower shall not be considered to be a Foreign Subsidiary Holdco.

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.

 

“GAAP” means generally accepted accounting principles in the United States,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements (including the Accounting
Standards Codification) of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States.

 

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

 

“Governmental Approvals” means all authorizations, consents, approvals, permits,
licenses and exemptions of, and all registrations and filings with or issued by,
any Governmental Authorities.

 

“Governmental Authority” means the government of any nation or any political
subdivision thereof, whether at the national, state, territorial, provincial,
municipal or any other level, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of, or pertaining to, government (including any supra-national bodies such as
the European Union or the European Central Bank).

 

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“Guarantee” means, as applied to any Indebtedness of another Person, (a) a
guarantee (other than by endorsement of negotiable instruments for collection in
the normal course of business), direct or indirect, in any manner, of any part
or all of such Indebtedness, (b) any direct or indirect obligation, contingent
or otherwise, of a Person guaranteeing or having the effect of guaranteeing the
Indebtedness of any other Person in any manner and (c) an agreement of a Person,
direct or indirect, contingent or otherwise, the practical effect of which is to
assure in any way the payment (or payment of damages in the event of
non-payment) of all or any part of such Indebtedness of another Person (and
“Guaranteed” and “Guaranteeing” shall have meanings that correspond to the
foregoing).

 

“Guarantor” means (a) all of the Domestic Subsidiaries other than Excluded
Subsidiaries as of the Closing Date and (b) each other Person that becomes a
guarantor after the Closing Date pursuant to Section 5.11 of the Agreement and
their respective successors and assigns until released from their obligations
under the Guaranty and Security Agreement pursuant to and in accordance with the
terms of Section 15.11 of the Agreement.

 

“Guaranty and Security Agreement” means a guaranty and security agreement, dated
as of even date with the Agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by each of the Borrowers and each
of the Guarantors to Agent.

 

“Hazardous Materials” means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants or
toxic substances under any Environmental Law, (b) which are toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise harmful to public health or the environment and are or become
regulated by any Governmental Authority, (c) the presence of which require
investigation or remediation under any Environmental Law, (d) the discharge or
emission or release of which requires a permit or license under any
Environmental Law or other Governmental Approval, or (e) which contain, without
limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedge Agreement” means a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code.

 

“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of each Borrower and its Restricted Subsidiaries arising under, owing pursuant
to, or existing in respect of Hedge Agreements entered into with one or more of
the Hedge Providers.

 

“Hedge Provider” means any Lender or any of its Affiliates; provided, that no
such Person (other than Wells Fargo or its Affiliates) shall constitute a Hedge
Provider unless and until Agent receives a Bank Product Provider Agreement from
such Person and with respect to the applicable Hedge Agreement within 10 days
after the execution and delivery of such Hedge Agreement with  a Borrower or its
Subsidiaries; provided further, that if, at any time, a Lender ceases to be a
Lender under the Agreement, then, from and after the date on which it ceases to
be a Lender thereunder, neither it nor any of its Affiliates shall constitute
Hedge Providers and the obligations with respect to Hedge Agreements entered
into with such former Lender or any of its Affiliates shall no longer

 

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constitute Hedge Obligations, except to the extent that the Hedge Agreement
underlying such obligations was provided by a Person who was a Lender (or an
Affiliate of a Lender) at the time such Hedge Agreement was entered into.

 

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose
total assets, as of that date, are less than $100,000 or whose total revenues
for the most recent 12-month period do not exceed $100,000.

 

“Increase” has the meaning specified therefor in Section 2.14.

 

“Increase Date” has the meaning specified therefor in Section 2.14.

 

“Increase Joinder” has the meaning specified therefor in Section 2.14.

 

“Indebtedness” means, with respect to any specified Person, without duplication:

 

(a)           all indebtedness of such Person in respect of borrowed money;

 

(b)           all obligations of such Person evidenced by bonds, notes,
debentures or similar instruments;

 

(c)           all reimbursement obligations of such Person in respect of
banker’s acceptances, letters of credit or similar instruments;

 

(d)           all Capitalized Lease Obligations of such Person;

 

(e)           all obligations of such Person in respect of the deferred and
unpaid balance of the purchase price of any property or services, due more than
6 months after such property is acquired or such services are completed except
any such balance that constitutes an expense or trade payable, whether such
balance arises directly with a vendor or indirectly under corporate credit card,
purchasing card or gas card arrangements;

 

(f)            all net Hedge Obligations of such Person;

 

(g)           all Disqualified Equity Interests issued by such Person, valued at
the greater of its voluntary or involuntary liquidation preference and its
maximum fixed repurchase price plus accrued dividends;

 

(h)           all Preferred Stock issued by a Subsidiary of such Person, valued
at the greater of its voluntary or involuntary liquidation preference and its
maximum fixed repurchase price plus accrued dividends;

 

(i)            all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person), provided that the amount of such Indebtedness will be the lesser of
(A) the Fair Market Value of such asset at such date of determination and
(B) the amount of such Indebtedness; and

 

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(j)            to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person,

 

in each case, other than clauses (c) and (f), if and to the extent that any of
the foregoing would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP.

 

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Equity Interests or Preferred Stock which does not have a fixed repurchase price
will be calculated in accordance with the terms of such Disqualified Equity
Interests or Preferred Stock, as applicable, as if such Disqualified Equity
Interests or Preferred Stock were repurchased on any date on which Indebtedness
will be required to be determined pursuant to the Agreement.

 

Notwithstanding the foregoing, Indebtedness shall not include any indebtedness
that has been defeased in accordance with GAAP or defeased pursuant to the
deposit of U.S. government obligations and Cash Equivalents (sufficient to
satisfy all obligations relating thereto at maturity or redemption, as
applicable) in a trust or account created or pledged for the sole benefit of the
holders of such indebtedness, in accordance with the terms of the instruments
governing such indebtedness.

 

The amount of any Indebtedness outstanding as of any date will be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation.  The amount of
any Indebtedness described in clauses (a) and (b) above will be:

 

(x)           the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and

 

(y)           the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.

 

For purposes of determining any particular amount of Indebtedness, Guarantees,
Liens or obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not be
included.

 

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.

 

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

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria,

 

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compositions, extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement (as
amended, supplemented, modified, extended, restructured, renewed, restated or
replaced in whole or in part from time to time, including in connection with any
Refinancing Indebtedness), dated as of April 16, 2014 between Agent (on its own
behalf and on behalf of the Lenders), Wells Fargo, as administrative agent under
the Term Loan Facility Credit Agreement (on its own behalf and on behalf of the
lenders under the Term Loan Credit Facility), U.S. Bank National Association, as
collateral agent for the Senior Notes (on its own behalf and on behalf of the
trustee under the Senior Notes Indenture and the holders of the Senior Notes),
Parent Borrower, OpCo Borrower, and the Guarantors.

 

“Interest Expense” means, for any period,

 

(a)           the consolidated interest expense of Parent Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP,
whether paid or accrued (without duplication), including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capitalized Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers’ acceptance financings, and net of the
effect of all payments made or received pursuant to Hedge Obligations relating
to interest rates and excluding any non-cash interest expense imputed on any
convertible debt securities in accordance with ASC 470-20; plus

 

(b)           the consolidated interest of Parent Borrower and its Restricted
Subsidiaries that was capitalized during such period determined in accordance
with GAAP; plus

 

(c)           any interest expense on Indebtedness of another Person that is
Guaranteed by Parent Borrower or one of its Restricted Subsidiaries or secured
by a Lien on assets of Parent Borrower or a Restricted Subsidiary, whether or
not such Guarantee or Lien is called upon.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter; provided, that
(a) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (b) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (c) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 3 or 6 months
after the date on which the Interest Period began, as applicable, and
(d) Borrowers may not elect an Interest Period which will end after the Maturity
Date.

 

“Inventory” means inventory (as that term is defined in the Code).

 

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“Inventory Reserves” means, as of any date of determination, (a) Landlord
Reserves,  (b) those reserves that Agent deems necessary or appropriate, in its
Permitted Discretion and subject to Section 2.1(c), to establish and maintain
(including reserves for slow moving Inventory and Inventory shrinkage) with
respect to Eligible Inventory or the Maximum Revolver Amount, and (c) with
respect to Eligible In-Transit Inventory, those reserves that Agent deems
necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain with respect to Eligible In-Transit
Inventory or the Maximum Revolver Amount (i) for the estimated costs relating to
unpaid freight charges, warehousing or storage charges, taxes, duties, and other
similar unpaid costs associated with the acquisition of such Eligible In-Transit
Inventory, plus (ii) for the estimated reclamation claims of unpaid sellers of
such Eligible In-Transit Inventory.

 

“Investment” means, with respect to any Person, all direct or indirect
investments in such Person in the form of loans or other extensions of credit
(including Guarantees), advances, capital contributions (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities issued by
such Person, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.

 

If Parent Borrower or any Restricted Subsidiary sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary such that,
after giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary, Parent Borrower will be deemed to have made an Investment
on the date of any such sale or disposition equal to the Fair Market Value of
the Investment in such Subsidiary not sold or disposed of.  The acquisition by
Parent Borrower or any Restricted Subsidiary of a Person that becomes a
Restricted Subsidiary and holds an Investment in a third Person will be deemed
to be an Investment by Parent Borrower or such Restricted Subsidiary in such
third Person in an amount equal to the Fair Market Value of the Investment held
by the acquired Person in such third Person at the time such Person becomes a
Restricted Subsidiary unless such Investment in such third party was not made in
anticipation or contemplation of the Investment by Parent Borrower or such
Restricted Subsidiary and such third party Investment is incidental to the
primary business of such Person in whom the Parent Borrower or such Restricted
Subsidiary is making such Investment.

 

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
version or revision thereof accepted by the Issuing Bank for use.

 

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by a Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

 

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“Issuing Bank” means Wells Fargo, any other Lender (or an Affiliate thereof) or,
upon notice to the Agent, any other Person that, at the request of Borrowers
agrees, in such Lender’s (or such Affiliate’s) sole discretion, to become an
Issuing Bank under Section 2.11 of the Agreement.

 

“Book Runner” means Wells Fargo Bank, National Association, in its capacity as
book runner.

 

“Joint Marketing Arrangement” means any joint venture, partnership, lease, joint
marketing agreement, operating agreement or other arrangement (which may or may
not include joint ownership of any Person) pursuant to which Parent Borrower or
one of its Restricted Subsidiaries arrange for the marketing, lease or sale of
products and services constituting a Permitted Business and share in the profits
therefrom.

 

“Landlord Reserve” means, as to each location at which a Borrower has Inventory
or books and records located and as to which a Collateral Access Agreement has
not been received by Agent, a reserve in an amount equal to 3 months’ rent under
the lease relative to such location.

 

“Lead Arranger” means Wells Fargo Bank, National Association, in its capacity as
sole lead arranger.

 

“Lease Accounting Change” means an Accounting Change that requires all leases of
Parent Borrower and the Restricted Subsidiaries (regardless of type) to be
recorded as a liability on the balance sheet of Parent Borrower for financial
reporting purposes in accordance with GAAP.

 

“Lease Accounting Change Effective Date” means the effective date of the Lease
Accounting Change as prescribed by the Financial Accounting Standards Board,
which date for purposes of Parent Borrower is anticipated as of the Closing Date
to be January 1, 2019 (but remains subject to change).

 

“Lender” has the meaning set forth in the preamble to the Agreement, shall
include Issuing Bank and the Swing Lender, and shall also include any other
Person made a party to the Agreement pursuant to the provisions of Section 13.1
of the Agreement and “Lenders” means each of the Lenders or any one or more of
them.

 

“Lender Group” means each of the Lenders (including Issuing Bank and the Swing
Lender) and Agent, or any one or more of them.

 

“Lender Group Expenses” means (a) all costs or expenses (including insurance
premiums) required to be paid by any Borrower or any of the other Loan Parties
under any of the Loan Documents that are paid, advanced, or incurred by the
Lender Group (other than those Taxes that are governed by Section 16),
(b) reasonable, documented out-of-pocket fees or charges paid or incurred by
Agent in connection with the Lender Group’s transactions with each Borrower and
the other Loan Parties under any of the Loan Documents, including, photocopying,
notarization, couriers and messengers, telecommunication, public record
searches, filing fees, recording fees, publication, real estate surveys, real
estate title policies and endorsements, and environmental audits, (c) Agent’s
customary fees and charges imposed or incurred in connection with any background
checks or OFAC/PEP searches related to any Borrower or any of the other Loan
Parties, (d) Agent’s customary fees and charges (as adjusted from time to time)
with respect to the

 

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disbursement of funds (or the receipt of funds) to or for the account of any
Borrower (whether by wire transfer or otherwise), together with any
out-of-pocket costs and expenses incurred in connection therewith, (e) customary
charges imposed or incurred by Agent resulting from the dishonor of checks
payable by or to any Loan Party, (f) reasonable, documented out-of-pocket costs
and expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or during the continuance of an
Event of Default, in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (g) field examination, appraisal, and valuation fees and expenses
of Agent related to any field examinations, appraisals, or valuation to the
extent of the fees and charges (and up to the amount of any limitation) provided
in Section 2.10 of the Agreement, (h) Agent’s reasonable, documented
out-of-pocket costs and expenses (including the reasonable and documented fees,
charges and disbursements of two firms of counsel for the Agent and the Lenders,
taken as a whole, and one firm of external local counsel for the Agent in any
applicable jurisdiction as to which the Agent reasonably determined local
counsel is necessary) relative to third party claims or any other lawsuit or
adverse proceeding paid or incurred, whether in enforcing or defending the Loan
Documents or otherwise in connection with the transactions contemplated by the
Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s
relationship with any Borrower or any of the other Loan Parties, (i) Agent’s
reasonable, documented out-of-pocket costs and expenses (including the
reasonable and documented fees, charges and disbursements of two firms of
counsel for the Agent and the Lenders, taken as a whole, and one firm of
external local counsel for the Agent in any applicable jurisdiction as to which
the Agent reasonably determined local counsel is necessary) and due diligence
expenses incurred in advising, structuring, drafting, reviewing, administering
(including travel, meals, and lodging), syndicating (including reasonable costs
and expenses relative to the rating of the Loans, CUSIP, DXSyndicate™, SyndTrak
or other communication costs incurred in connection with a syndication of the
loan facilities), or amending, waiving, or modifying the Loan Documents, and
(j) Agent’s and each Lender’s reasonable and documented costs and expenses
(including reasonable and documented attorneys, accountants, consultants, and
other advisors fees and expenses) incurred in terminating, enforcing (including
attorneys, accountants, consultants, and other advisors fees and expenses
incurred in connection with a “workout,” a “restructuring,” or an Insolvency
Proceeding concerning any Borrower or any of the other Loan Parties or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether a lawsuit or other adverse proceeding is
brought, or in taking any enforcement action or any Remedial Action with respect
to the Collateral.

 

“Lender Group Representatives” has the meaning specified therefor in
Section 17.9 of the Agreement.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by Issuing Bank (including any Existing Letter of Credit).

 

“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit Fees and all commissions,
fees, charges and expenses provided for in Section 2.11(k) of

 

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the Agreement (including any fronting fees) will continue to accrue while the
Letters of Credit are outstanding) to be held by Agent for the benefit of the
Revolving Lenders in an amount equal to 105% of the then existing Letter of
Credit Usage, (b) delivering to Agent documentation executed by all
beneficiaries under the Letters of Credit, in form and substance reasonably
satisfactory to Agent and Issuing Bank, terminating all of such beneficiaries’
rights under the Letters of Credit, or (c) providing Agent with a standby letter
of credit, in form and substance reasonably satisfactory to Agent, from a
commercial bank acceptable to Agent (in its sole discretion) in an amount equal
to 105% of the then existing Letter of Credit Usage (it being understood that
the Letter of Credit Fee and all fronting fees set forth in the Agreement will
continue to accrue while the Letters of Credit are outstanding and that any such
fees that accrue must be an amount that can be drawn under any such standby
letter of credit).

 

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

 

“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on
such date.

 

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of
the Agreement.

 

“Letter of Credit Indemnified Costs” has the meaning specified therefor in
Section 2.11(f) of the Agreement.

 

“Letter of Credit Related Person” has the meaning specified therefor in
Section 2.11(f) of the Agreement.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement.

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1 to the
Agreement.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the
Agreement.

 

“LIBOR Rate” means the rate per annum as published by ICE Benchmark
Administration Limited (or any successor page or other commercially available
source as the Agent may designate from time to time) as of 11:00 a.m., London
time, two Business Days prior to the commencement of the requested Interest
Period, for a term, and in an amount, comparable to the Interest Period and the
amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan
or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan
to a LIBOR Rate Loan) by Borrowers in accordance with this Agreement (and, if
any such published rate is below zero, then the rate determined pursuant to this
clause (b) shall be deemed to be zero). Each determination of the LIBOR Rate
shall be made by the Agent and shall be conclusive in the absence of manifest
error.

 

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

 

“LIBOR Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Code
(or equivalent statutes) of any jurisdiction.

 

“Line Cap” means, at any time of determination, the lesser of (a) the Maximum
Revolver Amount and (b) the Borrowing Base, in each case, as of such date of
determination.

 

“Liquid Securities” means securities (a) of an issuer that is not an Affiliate
of Parent Borrower, (b) that are publicly traded on the New York Stock Exchange
or the Nasdaq Global Select Market with a minimum market capitalization of
$500.0 million at the time of acquisition and (c) as to which Parent Borrower is
not subject to any restrictions on sale or transfer (including any volume
restrictions under Rule 144 under the Securities Act or any other restrictions
imposed by the Securities Act) or as to which a registration statement under the
Securities Act covering the resale thereof is in effect for as long as the
securities are held; provided that securities meeting the requirements of
clauses (a), (b) and (c) above shall be treated as Liquid Securities from the
date of receipt thereof until and only until the earlier of (i) the date on
which such securities are sold or exchanged for cash or Cash Equivalents and
(ii) 180 days following the date of receipt of such securities.  If such
securities are not sold or exchanged for cash or Cash Equivalents within
180 days of receipt thereof, for purposes of determining whether the transaction
pursuant to which Parent Borrower or a Restricted Subsidiary received the
securities was in compliance with the provisions of Section 6.4, such securities
shall be deemed not to have been Liquid Securities at any time.

 

“Loan” means any Revolving Loan, Swing Loan or Extraordinary Advance made (or to
be made) hereunder.

 

“Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.

 

“Loan Documents” means the Agreement, the Control Agreements, the Copyright
Security Agreement, any Borrowing Base Certificate, the Fee Letter, the Guaranty
and Security Agreement, any Issuer Documents, the Letters of Credit, the
Trademark Security Agreement, any note or notes executed by Borrowers in
connection with the Agreement and payable to any member of the Lender Group, and
any other instrument or agreement entered into, now or in the future, by  any
Borrower or any of its Subsidiaries and any member of the Lender Group in
connection with the Agreement.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect
from time to time.

 

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“Material Adverse Effect” means (a) a material adverse effect on the business,
assets, results of operations or financial condition of Parent Borrower and its
Restricted Subsidiaries taken as a whole or that would materially adversely
affect the ability of the Loan Parties, taken as a whole, to perform their
material obligations under the Loan Documents, (b) a material impairment of the
Lender Group’s ability to enforce the Obligations or realize upon the Collateral
(other than as a result of as a result of an action taken or not taken that is
solely in the control of Agent), or (c) a material impairment of the
enforceability or priority of Agent’s Liens with respect to all or a material
portion of the Collateral.

 

“Maturity Date” means, as of any date of determination the earlier of (a) five
years after the Closing Date, (b) 90 days prior to the stated maturity date of
the Term Loan Facility as in effect at such date and (c) 90 days prior to the
stated maturity date of the Senior Notes as in effect at such date.

 

“Maximum Revolver Amount” means $250,000,000, decreased by the amount of
reductions in the Revolver Commitments made in accordance with Section 2.4(c) of
the Agreement or increased by the amount of Increases made in accordance with
Section 2.14 of the Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating
agency business.

 

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

 

“Net Cash Proceeds” means the aggregate proceeds, including payments in respect
of deferred payment obligations (to the extent corresponding to the principal,
but not the interest component, thereof), received in Cash Equivalents by Parent
Borrower or any Restricted Subsidiary in respect of any sale or disposition by
Parent Borrower or any Restricted Subsidiary of assets (including, without
limitation, any Cash Equivalents received upon the sale or other disposition of
any non-cash consideration received in any sale or disposition of assets), net
of (a) the direct costs relating to such sale or disposition of assets,
including, without limitation, legal, accounting, investment banking and
brokerage fees, and sales commissions, and any relocation expenses incurred as a
result thereof, (b) Taxes paid or reasonably estimated to be payable as a result
thereof, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (c) in the case of any sale or
disposition of assets by a Restricted Subsidiary, payments to holders of Equity
Interests in such Restricted Subsidiary in such capacity (other than such Equity
Interests held by Parent Borrower or any Restricted Subsidiary) to the extent
that such payment is required to permit the distribution of such proceeds in
respect of the Equity Interests in such Restricted Subsidiary held by Parent
Borrower or any Restricted Subsidiary and (d) appropriate amounts to be provided
by Parent Borrower or the Restricted Subsidiaries as a reserve against
liabilities associated with such sale or disposition of assets, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such sale or disposition of assets,
all as determined in accordance with GAAP, provided that (i) excess amounts set
aside for payment of Taxes pursuant to clause (b) above remaining after

 

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such Taxes have been paid in full or the statute of limitations therefor has
expired and (ii) amounts initially held in reserve pursuant to clause (d) no
longer so held, will, in the case of each of subclause (i) and (ii), at that
time become Net Cash Proceeds.

 

(a)           with respect to the issuance or incurrence of any Indebtedness by
Parent Borrower or any of its Restricted Subsidiaries, or the issuance by Parent
Borrower or any of its Restricted Subsidiaries of any Equity Interests, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of Parent Borrower or such Restricted
Subsidiary in connection with such issuance or incurrence, after deducting
therefrom only (i) reasonable and customary out-of-pocket legal, underwriting
and other fees and expenses incurred in connection therewith, (ii) Taxes paid or
reasonably estimated to be payable by Parent Borrower or any of its Restricted
Subsidiaries as a result thereof in each case, after taking into account any
available tax credits or deductions and any tax sharing arrangements, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid or payable to a Person that is
not an Affiliate of Parent Borrower or any of its Restricted Subsidiaries, and
are properly attributable to such transaction.

 

“Net Recovery Percentage” means, as of any date of determination, the percentage
of the book value of Borrowers’ Eligible Inventory that is estimated to be
recoverable in an orderly liquidation of such Inventory net of all associated
costs and expenses of such liquidation, such percentage to be determined as to
each category of Inventory and to be as specified in the most recent appraisal
received by Agent from an appraisal company selected by Agent.

 

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of
the Agreement.

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Notes Collateral” has the meaning specified therefor in the Intercreditor
Agreement.

 

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Letters of Credit (irrespective of whether contingent), premiums,
liabilities (including all amounts charged to the Loan Account pursuant to the
Agreement), obligations (including indemnification obligations), fees (including
the fees provided for in the Fee Letter), Lender Group Expenses (including any
fees or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), guaranties, and all covenants and duties of any
other kind and description owing by any Loan Party arising out of, under,
pursuant to, in connection with, or evidenced by the Agreement or any of the
other Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all other expenses or other amounts that Borrowers are required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents,

 

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and (b) all Bank Product Obligations; provided that, anything to the contrary
contained in the foregoing notwithstanding, the Obligations shall exclude any
Excluded Hedge Obligation.  Without limiting the generality of the foregoing,
the Obligations of Borrowers under the Loan Documents include the obligation to
pay (a) the principal of the Revolving Loans, (b) interest accrued on the
Revolving Loans, (c) the amount necessary to reimburse Issuing Bank for amounts
paid or payable pursuant to Letters of Credit, (d) Letter of Credit commissions,
fees (including fronting fees) and charges, (e) Lender Group Expenses, (f) fees
payable under the Agreement or any of the other Loan Documents, and
(g) indemnities and other amounts payable by any Loan Party under any Loan
Document; provided that, in each case, notwithstanding the foregoing and
anything to the contrary in any Loan Document, the Obligations of any Loan Party
shall not include its Excluded Hedge Obligations.  Any reference in the
Agreement or in the Loan Documents to the Obligations shall include all or any
portion thereof and any extensions, modifications, renewals, or alterations
thereof, both prior and subsequent to any Insolvency Proceeding.

 

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

 

“OpCo Borrower” has the meaning specified therefor in the preamble to the
Agreement.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.

 

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

 

“Other Taxes” means all present or future stamp, court, documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.13(c) or Section 14.2).

 

“Overadvance” means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11.

 

“Parent Borrower” has the meaning specified therefor in the preamble to the
Agreement.

 

“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.

 

“Participant Register” has the meaning set forth in Section 13.1(i) of the
Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.13 of the
Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

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“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
IRC and which (a) is maintained, funded or administered for the employees of any
Loan Party or any ERISA Affiliate or (b) has at any time within the preceding
seven (7) years been maintained, funded or administered for the employees of any
Loan Party or any current or former ERISA Affiliates.

 

“Perfection Certificate” means a certificate in the form of Exhibit P-1 to the
Agreement.

 

“Permitted Acquisition” means any Acquisition so long as:

 

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

 

(b)           no Indebtedness will be incurred, assumed, or would exist with
respect to Parent  Borrower or its Restricted Subsidiaries as a result of such
Acquisition, other than Permitted Indebtedness and no Liens will be incurred,
assumed, or would exist with respect to the assets of Parent Borrower or its
Restricted Subsidiaries as a result of such Acquisition other than Permitted
Liens,

 

(c)           Borrowers have provided Agent with written notice of the proposed
Acquisition at least 10 days prior to the anticipated closing date of the
proposed Acquisition and, not later than 2 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and other material documents relative to the proposed Acquisition,
which agreement and documents must be reasonably acceptable to Agent,

 

(d)           the assets being acquired (other than a de minimis amount of
assets in relation to Parent Borrower’s and its Restricted Subsidiaries’ total
assets), or the Person whose Equity Interests are being acquired, are useful in
or engaged in, as applicable, a Permitted Business,

 

(e)           the subject assets or Equity Interests, as applicable, are being
acquired directly by a Borrower or one of its Restricted Subsidiaries, and, in
connection therewith, the applicable Loan Party shall have complied with
Section 5.11 or 5.12 of the Agreement, as applicable, of the Agreement and, in
the case of an acquisition of Equity Interests, the applicable Loan Party or
Restricted Subsidiary shall have demonstrated to Agent that any new Loan Parties
(if any) have received consideration sufficient to make the joinder documents
binding and enforceable against such new Loan Parties (if any); and

 

(f)            on a pro forma basis, after giving effect to each such
acquisition and any Revolving Loans made in connection therewith, either
(A) Excess Availability shall not be less than the greater of (1) 20% of the
Line Cap and (2) $25,000,000 at any time during the period from the 30th day
prior to and including the date of the closing of the acquisition (measured as
if such Investment and any Revolving Loans made in connection therewith had been
made on the first day of such 30 day period) or (B) (x) Excess Availability
shall not be less than the greater of (1) 15% of the Line Cap and
(2) $20,000,000 at any time during the period from the 30th day prior to and
including the date of the closing of the acquisition (measured as if such
Investment and any Revolving Loans made in connection therewith had been made on
the first day of such 30 day period) and (y) the Fixed Charge Coverage Ratio for
the most recent 12 fiscal month period for which Parent Borrower’s interim
financial statements are then required to have been delivered pursuant to

 

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Section 5.1 is at least 1.0 to 1.0, as calculated on a pro forma basis as if
such Investment and any Revolving Loans made in connection therewith were made
on the first day of such period.

 

“Permitted Business” means any business conducted or proposed to be conducted by
Parent Borrower and the Restricted Subsidiaries on the Closing Date, any other
business or businesses in the oilfield services industry and other businesses
reasonably related or ancillary thereto or that are reasonable extensions
thereof.

 

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Dispositions” means:

 

(a)           sales, abandonment, or other dispositions of Equipment that is
substantially worn, damaged, or obsolete or no longer used or useful in the
ordinary course of business and leases or subleases of Real Property not useful
in the conduct of the business of Parent Borrower and its Restricted
Subsidiaries,

 

(b)           sales of Inventory to buyers or other sales or dispositions of
assets in the ordinary course of business,

 

(c)           the use or transfer of Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents,

 

(d)           the licensing, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business,

 

(e)           the granting of Permitted Liens,

 

(f)            the sale or discount, in each case without recourse, of accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof,

 

(g)           any involuntary loss, damage or destruction of property,

 

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

 

(i)            the leasing or subleasing of assets of Parent Borrower or its
Restricted Subsidiaries in the ordinary course of business,

 

(j)            the sale or issuance of Equity Interests (other than Disqualified
Equity Interests) of  Parent Borrower,

 

(k)           (i) the lapse of registered patents, trademarks, copyrights and
other intellectual property of Parent Borrower or any of its Restricted
Subsidiaries to the extent not economically desirable in the conduct of its
business or (ii) the abandonment of patents, trademarks, copyrights, or other
intellectual property rights in the ordinary course of business so long as (in
each case

 

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under subclauses (i) and (ii)), (A) with respect to copyrights, such copyrights
are not material revenue generating copyrights, and (B) such lapse is not
materially adverse to the interests of the Lender Group,

 

(l)            the making of Restricted Payments that are expressly permitted to
be made pursuant to the Agreement,

 

(m)          the making of payments that are expressly permitted to be made
pursuant to Section 6.6 of the Agreement,

 

(n)           the making of Permitted Investments,

 

(o)           sales, transfers or dispositions of assets not constituting ABL
Collateral by Parent Borrower or any of its Restricted Subsidiaries to any other
Restricted Subsidiaries or Parent Borrower,

 

(p)           dispositions of assets acquired by Parent Borrower and its
Restricted Subsidiaries pursuant to a Permitted Acquisition consummated within
12 months of the date of the proposed disposition so long as (i) the
consideration received for the assets to be so disposed is at least equal to the
fair market value of such assets, (ii) the assets to be so disposed are not
necessary or economically desirable in connection with the business of Parent
Borrower and its Restricted Subsidiaries, and (iii) the assets to be so disposed
are readily identifiable as assets acquired pursuant to the subject Permitted
Acquisition,

 

(q)           any surrender or waiver of contract rights or the settlement,
release or surrender of any contract, tort or other claim of any kind,

 

(r)            any disposition of an asset manufactured or constructed by Parent
Borrower or a Restricted Subsidiary for sale to a third party (including a
direct or indirect joint venture of Parent Borrower or one or more Restricted
Subsidiary) within 90 days of the completion of such manufacture or
construction, if (i) Parent Borrower or any Restricted Subsidiary receives value
equal to the Fair Market Value of the asset and (ii) the asset is then leased
back by Parent Borrower or any Restricted Subsidiary for use in a Permitted
Business,

 

(s)            direct or indirect sales of equipment, products and services by
Parent Borrower or any of its Restricted Subsidiaries to any direct or indirect
joint venture of Parent Borrower or one of its Restricted Subsidiaries at or
above the lower of Cost or Fair Market Value;

 

(t)            sales, transfers or dispositions of assets (other than ABL
Collateral) not otherwise permitted in clauses (a) through (s) above so long as:

 

(i)            Parent Borrower (or such Restricted Subsidiary, as the case may
be) receives consideration at the time of such sale or at least equal to the
Fair Market Value of the assets or Equity Interests issued or sold or otherwise
disposed of; and

 

(ii)           at least 75% of the consideration therefor received by Parent
Borrower or such Restricted Subsidiary is in the form of:

 

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(A)          Cash Equivalents (including any Cash Equivalents received from the
conversion within 60 days of such sale, transfer or disposition of any
securities, notes or other obligations received in consideration of such sale,
transfer or disposition) or Liquid Securities;

 

(B)          Replacement Assets;

 

(C)          any liabilities of Parent Borrower or any Restricted Subsidiary as
shown on the most recent balance sheet of Parent Borrower or such Restricted
Subsidiary (other than contingent liabilities, Indebtedness that is by its terms
subordinated in right of payment to the Loans and liabilities to the extent owed
to Parent Borrower or any Affiliate of Parent Borrower) that are assumed by the
transferee of any such assets or Equity Interests and for which Parent Borrower
and all of the Restricted Subsidiaries have been validly released by all
creditors in writing;

 

(D)          any Designated Non-cash Consideration received by Parent Borrower
or any of its Restricted Subsidiaries in such sale, transfer or disposition
having an aggregate Fair Market Value, taken together with all other Designated
Non-cash Consideration received since the Closing Date does not exceed 10.0% of
Consolidated Total Assets at the time of the receipt of such Designated Non-cash
Consideration (with the Fair Market Value of each item of Designated Non-cash
Consideration being measured at the time received and without giving effect to
subsequent changes in value); and/or

 

(E)           any combination of the consideration specified in clauses (A)-(D);
and

 

(u)           sales, transfers or dispositions of assets constituting ABL
Collateral not otherwise permitted in clauses (a) through (t) above in an
aggregate amount not to exceed $10,000,000 for each calendar year.

 

“Permitted Holder” means Temasek and Chesapeake.

 

“Permitted Indebtedness” means:

 

(a)           Indebtedness evidenced by the Agreement or the other Loan
Documents,

 

(b)           (i) Indebtedness incurred by Parent Borrower under the Term Loan
Facility on the 2014 Closing Date in an aggregate principal amount of
$550,000,000 and the related Guarantees by the relevant guarantors thereof,
(ii) additional Indebtedness incurred by Parent Borrower in the form of one or
more Incremental Term Loans (as such term is defined and used in the Term Loan
Facility) under the Term Loan Facility and the related Guarantees by the
relevant guarantors thereof; provided, that, with respect to the incurrence of
each such Incremental Term Loan, (A) the aggregate original principal amount of
such Incremental Term Loan, when added to the original principal amount of all
other Incremental Term Loans, shall not exceed $300,000,000 unless, at the time
such Incremental Term Loan is incurred, the Senior Secured Net Leverage Ratio
(determined on a pro forma basis for the most recently ended four fiscal quarter
period ending at

 

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least 45 days before the date such Incremental Term Loan is incurred and giving
effect to such Incremental Term Loan as if it were incurred on the last day of
such period) is less than or equal to 4.00 to 1.00; (B) such Incremental Term
Loan is incurred in accordance with the terms and provisions of the Term Loan
Facility Credit Agreement; and (C) such Incremental Term Loan is subject to the
Intercreditor Agreement to the same extent and manner as the original loans made
under the Term Loan Facility and (iii) Refinancing Indebtedness in respect of
the Indebtedness in subclauses (i) and (ii) of this clause (b) whether in a
single tranche or multiple tranches of Refinancing Indebtedness,

 

(c)           Indebtedness under the Senior Notes and the Senior Notes Indenture
incurred by Parent Borrower and the related Guarantees by the relevant
guarantors thereof, in each case incurred under and in accordance with the
provisions of the Senior Notes Indenture, so long as (i) the aggregate principal
amount of the Senior Notes does not exceed (A) the $500,000,000 aggregate
principal amount of Senior Notes issued on the 2014 Closing Date plus (B) an
unlimited additional amount of Senior Notes, so long as, on the date of
issuance, the Senior Secured Net Leverage Ratio (determined on a pro forma basis
for the most recently ended four fiscal quarter period ending at least 45 days
before the date such additional Senior Notes are issued and giving effect to
such additional Senior Notes as if they were incurred on the last day of such
period) is less than or equal to 4.00 to 1.00 and (ii) all such Senior Notes are
subject to the Intercreditor Agreement to the same extent and manner as the
original Senior Notes issued on the 2014 Closing Date, and Refinancing
Indebtedness in respect of all such Indebtedness described in this clause
(c) whether in a single tranche or multiple tranches of Refinancing
Indebtedness,

 

(d)           Indebtedness of each Loan Party and each of its Restricted
Subsidiaries outstanding immediately prior to the Closing Date that is to remain
outstanding immediately after giving effect to the closing hereunder on the
Closing Date and set forth on Schedule 6.1 to the Agreement, and any Refinancing
Indebtedness in respect of such Indebtedness,

 

(e)           Permitted Purchase Money Indebtedness and any Refinancing
Indebtedness in respect of such Indebtedness, in an aggregate outstanding
principal amount not to exceed the greater of (i) $100,000,000 or (ii) 5.0% of
Consolidated Tangible Assets of Parent Borrower at the time of the incurrence of
such Indebtedness, provided, that the aggregate outstanding principal amount of
Indebtedness incurred under this clause (e), when taken together with the
principal amount of all other Indebtedness incurred under clause (p) of this
definition then outstanding, shall not exceed the greater of (x) $125,000,000 or
(y) 5.0% of Consolidated Tangible Assets of Parent Borrower at the time of the
incurrence of such Indebtedness,

 

(f)            endorsement of instruments or other payment items for deposit in
the ordinary course of business,

 

(g)           Indebtedness in respect of workers’ compensation claims,
self-insurance obligations or the financing of insurance premiums or
participation in insurance pools, or in respect of performance, surety,
completion, and similar bonds and guarantees in the ordinary course of business,
and appeal and similar bonds and guarantees provided or obtained by Parent
Borrower or a Restricted Subsidiary in connection with its business,

 

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(h)           Indebtedness arising from agreements of Parent Borrower or a
Restricted Subsidiary providing for indemnification, earn-outs, adjustment of
purchase price or similar obligations (including Indebtedness in respect of
letters of credit or bonds securing the foregoing), in each case, Incurred or
assumed in connection with a Permitted Acquisition or Permitted Disposition with
respect to a Restricted Subsidiary (other than Guarantees of Indebtedness
incurred by any person acquiring all or any portion of such business, assets or
Equity Interests of a Restricted Subsidiary for the purpose of financing such
acquisition); provided that, in the case of a disposition, the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by Parent Borrower and its Restricted Subsidiaries in
connection with such disposition,

 

(i)            Indebtedness consisting of unsecured guarantees with respect to
Indebtedness of any Borrower or one of its Subsidiaries, to the extent that the
Person that is obligated under such guaranty could have incurred such underlying
Indebtedness,

 

(j)            Acquired Indebtedness; provided, however, that at the time such
Person is acquired in a Permitted Acquisition, either:

 

(i)            Parent Borrower would have been able to incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 9.1 of the
Term Loan Facility Credit Agreement as in effect on the Closing Date after
giving effect to the incurrence or such Indebtedness pursuant to this
clause (j), or

 

(ii)           the Fixed Charge Coverage Ratio of Parent Borrower and its
Restricted Subsidiaries after giving effect to the incurrence of such
Indebtedness pursuant to this clause (j) would have been higher than such ratio
immediately prior to such Permitted Acquisition,

 

(k)           Indebtedness for Hedge Obligations that are entered into for the
purpose of fixing, hedging or swapping interest rate risk, commodity price or
basis risk, or foreign currency exchange rate risk (or to reverse or amend any
such agreements previously made for such purpose) and not for speculative
purposes; provided that in the case of Hedge Obligations relating to interest
rates, (i) such Hedge Obligations relate to payment obligations on Indebtedness
otherwise permitted to be incurred under this definition, and (ii) the notional
principal amount of such Hedge Obligations at the time incurred does not exceed
the principal amount of the Indebtedness to which such Hedge Obligations relate,

 

(l)            Indebtedness incurred in the ordinary course of business in
respect of credit cards, credit card processing services, debit cards, stored
value cards, commercial cards (including so-called “purchase cards”,
“procurement cards” or “p-cards”), or Cash Management Services,

 

(m)          Indebtedness comprising Permitted Investments,

 

(n)           Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five business days after incurrence,

 

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(o)           Indebtedness constituting reimbursement obligations with respect
to letters of credit; provided that such obligations under any letter of credit
are reimbursed within 30 days after the drawing of such letter of credit,

 

(p)           Indebtedness not secured by a Lien on ABL Collateral incurred by
Parent Borrower or any of its Restricted Subsidiaries in an aggregate
outstanding principal amount not to exceed the greater of (i) $100,000,000 or
(ii) 5.0% of Consolidated Tangible Assets of Parent Borrower at the time of the
incurrence of such Indebtedness, provided, that the aggregate outstanding
principal amount of Indebtedness incurred under this clause (p), when taken
together with the principal amount of all other Indebtedness incurred under
clause (e) of this definition then outstanding, shall not exceed the greater of
(x) $125,000,000 or (y) 5.0% of Consolidated Tangible Assets of Parent Borrower
at the time of the incurrence of such Indebtedness,

 

(q)           other Indebtedness (not secured by a Lien on ABL Collateral) not
described in the foregoing clauses (a) through (p) and (r) through (t), so long
as (i) no Default or Event of Default exists at the time such Indebtedness is
incurred or after giving effect thereto; (ii) the stated maturity date of such
Indebtedness is at least 181 days after the Maturity Date stated in the
Agreement on the date such Indebtedness was incurred; (iii) such Indebtedness
has nominal amortization (similar to the amortization of the original
Indebtedness incurred under the Term Loan Facility and otherwise acceptable to
the Agent) through the period ending with the date which is 181 days after the
Maturity Date stated in the Agreement on the date such Indebtedness was
incurred; (iv) no Persons are obligated with respect to such Indebtedness
(whether as a co-borrower, a guarantor, a grantor or pledgor, or otherwise),
unless such Persons become (substantially simultaneously with such Person’s
becoming so obligated with respect to such Indebtedness or at such a later time
as Agent may permit in its sole discretion) obligated with respect to the
Obligations in the same manner in which such Person is obligated with respect to
such Indebtedness or in such other manner and to such extent as Agent may
require; (v) the terms and provisions relating to such Indebtedness are, on the
whole, no more restrictive than the terms and provisions of the Agreement and
the other Loan Documents (as applicable); and (vi) Parent Borrower would have
been able to incur at least $1.00 of additional Indebtedness pursuant to the
first paragraph of Section 9.1 of the Term Loan Facility Credit Agreement as in
effect on the Closing Date after giving effect to the incurrence or such
Indebtedness pursuant to this clause (q);

 

(r)            Indebtedness, including Guarantees, incurred by Foreign
Subsidiaries to fund working capital requirements in an aggregate principal
amount that when taken together with the principal amount of all other
Indebtedness, including all Permitted Refinancing Indebtedness incurred to
Refinance any Indebtedness incurred pursuant to this clause (r), will not exceed
10.0% of Consolidated Tangible Assets attributable to Foreign Subsidiaries;

 

(s)            Indebtedness of Parent Borrower owing to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and
held by Parent Borrower or any other Restricted Subsidiary; provided, however,
that:

 

(i)            if a Borrower is the obligor on such Indebtedness, such
Indebtedness is unsecured and expressly subordinated to the prior payment in
full of all Obligations;

 

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(ii)           if a Guarantor is the obligor on such Indebtedness and a Borrower
or a Guarantor is not the obligee, such Indebtedness is unsecured and
subordinated in right of payment to the prior payment in full in cash of all
Obligations; and

 

(iii)          any event that results in any such Indebtedness being held by a
Person other than Parent Borrower or a Restricted Subsidiary (except for any
pledgee of Indebtedness whose Lien is a Permitted Lien until the pledgee
commences action to foreclose on such Indebtedness) will be deemed to constitute
an Incurrence of such Indebtedness by Parent Borrower or such Restricted
Subsidiary, as the case may be, that is not permitted by this clause (s); and

 

(t)            Contingent Obligations of Parent Borrower and the Restricted
Subsidiaries in respect of Indebtedness otherwise permitted under clauses
(a) through (s).

 

“Permitted Intercompany Advances” means loans made by a Loan Party or any
Restricted Subsidiary to another Loan Party or any Restricted Subsidiary.

 

“Permitted Investments” means:

 

(a)           Investments in Cash Equivalents,

 

(b)           Investments in negotiable instruments deposited or to be deposited
for collection in the ordinary course of business,

 

(c)           advances made in connection with purchases of goods or services in
the ordinary course of business,

 

(d)           Investments received in settlement of amounts due to any Loan
Party or any of its Subsidiaries effected in the ordinary course of business or
owing to any Loan Party or any of its Subsidiaries as a result of Insolvency
Proceedings involving an account debtor or upon the foreclosure or enforcement
of any Lien in favor of a Loan Party or its Subsidiaries,

 

(e)           Investments owned by any Loan Party or any of its Subsidiaries on
the Closing Date and set forth on Schedule P-1 to the Agreement, and any
Investment that replaces, refinances or refunds any existing Investment,
provided that the new Investment is in an amount that does not exceed the amount
replaced, refinanced or refunded, and is made in the same Person as the
Investment being replaced, financed or refunded,

 

(f)            Guarantees permitted under the definition of Permitted
Indebtedness,

 

(g)           Permitted Intercompany Advances,

 

(h)           Equity Interests or other securities acquired in connection with
the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,

 

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(i)            deposits of Cash Equivalents made in the ordinary course of
business to secure performance of operating leases,

 

(j)            (i) non-cash loans and advances to employees, officers, and
directors of  Parent Borrower or any of its Restricted Subsidiaries for the
purpose of purchasing Equity Interests in  Parent Borrower so long as the
proceeds of such loans are used in their entirety to purchase such Equity
Interests in  Parent Borrower, and (ii) loans and advances to employees and
officers of Parent Borrower or any of its Restricted Subsidiaries in the
ordinary course of business for any other business purpose,

 

(k)           Permitted Acquisitions,

 

(l)            Investments in the form of capital contributions and the
acquisition of Equity Interests made by any Loan Party or any Restricted
Subsidiary in any other Loan Party or other Restricted Subsidiary (other than
capital contributions to or the acquisition of Equity Interests of Parent
Borrower),

 

(m)          Investments resulting from entering into (i) Bank Product
Agreements, or (ii) agreements relative to Indebtedness that is permitted under
clause (k) of the definition of Permitted Indebtedness,

 

(n)           Investments held by a Person acquired in a Permitted Acquisition
to the extent that such Investments were not made in contemplation of or in
connection with such Permitted Acquisition and were in existence on the date of
such Permitted Acquisition,

 

(o)           Permitted Joint Venture Investments and Joint Marketing
Arrangements entered into by Parent Borrower and its Restricted Subsidiaries in
an aggregate amount (measured on the date on which each such Investment was made
and without giving effect to subsequent changes of value) that, when taken
together with all other Investments pursuant to this clause (o), do not exceed
$50,000,000 outstanding at any time,

 

(p)           Investments acquired in exchange for, or out of the proceeds from
the issuance or sale of, Equity Interests in Parent Borrower (excluding
Disqualified Equity Interests),

 

(q)           any Investment made as a result of the receipt of non-cash
consideration from a Permitted Disposition,

 

(r)            Investments consisting of advances or deposits in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable, prepaid expenses or deposits on the balance sheet of Parent Borrower
or any of the Restricted Subsidiaries and endorsements for collection or deposit
arising in the ordinary course of business,

 

(s)            other Investments, so long as (i) each such Investment is
permitted by law and no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (ii) on a pro forma basis, after giving
effect to each such Investment and any Revolving Loans made in connection
therewith, either (A) Excess Availability shall not be less than the greater of
(x) $25,000,000 and (y) 20.0% of the Line Cap at any time during the period from
the 30th day prior to the making of such Investment through and including the
date of the making of such Investment

 

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(measured as if such Investment and any Revolving Loans made in connection
therewith had been made on the first day of such 30 day period), or
(B)(1) Excess Availability shall not be less than the greater of (x) $20,000,000
and (y) 15.0% of the Line Cap at any time during the period from the 30th day
prior to the making of such Investment through and including the date of the
making of such Investment (measured as if such Investment and any Revolving
Loans made in connection therewith had been made on the first day of such 30 day
period), and (2) the Fixed Charge Coverage Ratio for the most recent 12 fiscal
month period for which Parent Borrower’s interim financial statements are then
required to have been delivered pursuant to Section 5.1 is at least 1.0 to 1.0,
as calculated on a pro forma basis as if such Investment and any Revolving Loans
made in connection therewith were made on the first day of such period, and
(iii) on or prior to the date of each such Investment, Borrowers shall have
delivered to Agent an officer’s certificate from an Authorized Person as to the
satisfaction of all conditions set forth above, and

 

(t)            so long as no Event of Default has occurred and is continuing or
would result therefrom, in each case, at the time such Investment is made, any
other Investments in an aggregate amount not to exceed $25,000,000 outstanding
at any time.

 

“Permitted Joint Venture Investment” means a direct or indirect Investment by
Parent Borrower or a Restricted Subsidiary in any other Person engaged in a
Permitted Business (a) over which Parent Borrower or a Restricted Subsidiary is
responsible (either directly or indirectly through Unrestricted Subsidiaries or
a services agreement) for day-to-day operations or otherwise has operational and
managerial control of such Permitted Business, or veto power over significant
management decisions affecting such Permitted Business, and (b) of which at
least 30% of the outstanding Equity Interests of such other Person are at the
time owned directly or indirectly by Parent Borrower or a Restricted Subsidiary.

 

“Permitted Liens” means:

 

(a)           Liens granted to, or for the benefit of, Agent to secure the
Obligations,

 

(b)           Liens securing Indebtedness permitted to be incurred pursuant to
clauses (b) and (c) of the definition of “Permitted Indebtedness” and
Refinancing Indebtedness in respect thereof; provided that any such Indebtedness
secured by a Lien on Collateral must be expressly subject to the terms of the
Intercreditor Agreement to the same extent and manner as the original loans made
under the Term Loan Facility or Senior Notes made under the Senior Notes
Indenture or another intercreditor agreement on terms satisfactory to the Agent
in its Permitted Discretion,

 

(c)           Liens for unpaid Taxes, assessments, or other governmental charges
or levies that either (i) are not yet delinquent or (ii) are the subject of
Permitted Protests,

 

(d)           judgment Liens arising solely as a result of the existence of
judgments, orders, or awards that do not constitute an Event of Default under
Section 8.3 of the Agreement and notices of lis pendens and associated rights
related to litigation being contested in good faith by appropriate proceedings
and for which adequate reserves have been made,

 

(e)           Liens set forth on Schedule P-2 to the Agreement; provided, that
to qualify as a Permitted Lien, any such Lien described on Schedule P-2 to the
Agreement shall only secure the

 

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Indebtedness that it secures on the Closing Date and any Refinancing
Indebtedness in respect thereof,

 

(f)            leases, licenses, subleases and sublicenses of assets (including,
without limitation, real property, mineral rights and intellectual property
rights) which do not materially interfere with the ordinary conduct of the
business of Parent Borrower or any of its Restricted Subsidiaries, and Liens
created by Persons who are lessors of property to Parent Borrower or any of its
Restricted Subsidiaries,

 

(g)           purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as (i) such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, and (ii) such Lien only secures
the Indebtedness that was incurred to acquire the asset purchased or acquired or
any Refinancing Indebtedness in respect thereof,

 

(h)           Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests,

 

(i)            Liens on amounts deposited to secure Parent Borrower’s and its
Restricted Subsidiaries’ obligations in connection with worker’s compensation or
other unemployment insurance,

 

(j)            Liens on amounts deposited to secure Parent Borrower’s and its
Restricted Subsidiaries’ obligations in connection with the making or entering
into of bids, tenders, or leases in the ordinary course of business and not in
connection with the borrowing of money,

 

(k)           Liens on amounts deposited to secure Parent Borrower’s and its
Restricted Subsidiaries’ reimbursement obligations with respect to surety or
appeal bonds obtained in the ordinary course of business,

 

(l)            with respect to any Real Property, survey exceptions,
encumbrances, ground leases, easements or reservations of, or rights of others
for, licenses, rights of way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning, building codes or other
restrictions (including, without limitation, minor defects or irregularities in
title and similar encumbrances) as to the use of real properties or Liens
incidental to the conduct of the business of such Person or to the ownership of
its properties which do not individually or in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person,

 

(m)          Liens that are replacements of Permitted Liens to the extent that
the original Indebtedness is the subject of permitted Refinancing Indebtedness
and so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

 

(n)           rights of setoff or bankers’ liens upon deposits of funds in favor
of banks or other depository institutions, solely to the extent incurred in
connection with the maintenance of such Deposit Accounts in the ordinary course
of business,

 

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

 

(p)           Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods,

 

(q)           Liens solely on any cash earnest money deposits made by  Parent
Borrower or any of its Restricted Subsidiaries in connection with any letter of
intent or purchase agreement with respect to a Permitted Acquisition,

 

(r)            Liens securing Indebtedness permitted to be incurred pursuant to
clause (k) of the definition of Permitted Indebtedness,

 

(s)            Liens arising from Code financing statement filings regarding
operating leases, bailments and other transactions that do not involve security
interests or that are not intended to perfect a security interest securing any
Indebtedness,

 

(t)            Liens securing Indebtedness or other obligations of Parent
Borrower or a Restricted Subsidiary owing to a Loan Party,

 

(u)           Liens on the Equity Interests of Unrestricted Subsidiaries,

 

(v)           any encumbrance or restriction (including put and call
arrangements) with respect to Equity Interests of any joint venture or similar
arrangement pursuant to any joint venture or similar agreement,

 

(w)          Liens securing reimbursement obligations with respect to commercial
letters of credit that encumber documents and other property or assets relating
to such letters of credit and products and proceeds thereof,

 

(x)           Environmental Liens that are subject of Permitted Protests,

 

(y)           Liens assumed by Parent Borrower or its Restricted Subsidiaries in
connection with a Permitted Acquisition that secure Acquired Indebtedness in an
aggregate principal amount outstanding at any one time not to exceed
$50,000,000; provided, that such Liens are not first-priority Liens on assets
constituting ABL Collateral, and

 

(z)           Liens on assets not constituting ABL Collateral securing
Indebtedness in an aggregate principal amount outstanding at any one time not to
exceed the greater of (i) $50,000,000 and (ii) 5.0% of Consolidated Tangible
Assets of Parent Borrower (with the Fair Market Value of each item of designated
non-cash consideration being measured at the time received and without giving
effect to subsequent changes in value).

 

“Permitted Protest” means the right of Parent Borrower or any of its Restricted
Subsidiaries to protest any Lien (other than any Lien that secures the
Obligations), Taxes, or rental payment, provided that (a) a reserve with respect
to such obligation is established on Parent Borrower’s or its Restricted
Subsidiaries’ books and records in such amount as is required under GAAP,
(b) any

 

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such protest is conducted through appropriate proceedings by Parent Borrower or
such Restricted Subsidiary, as applicable, in good faith, and (c) Agent is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of Agent’s Liens on the ABL
Collateral.

 

“Permitted Purchase Money Indebtedness” means, as of any date of
determination, Indebtedness (other than the Obligations, but including
Capitalized Lease Obligations), incurred at the time of, or within 20 days
after, the acquisition of any fixed assets for the purpose of financing all or
any part of the acquisition cost thereof.

 

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

 

“Platform” has the meaning specified therefor in Section 17.9(c) of the
Agreement.

 

“Post-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.14 of the Agreement.

 

“Pre-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.14 of the Agreement.

 

“Preferred Stock” means, with respect to any Person, any Equity Interests of
such Person that has preferential rights to any other Equity Interests of such
Person with respect to dividends or redemptions upon liquidation.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)           with respect to a Lender’s obligation to make all or a portion of
the Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the Revolving Loans, and with
respect to all other computations and other matters related to the Revolver
Commitments or the Revolving Loans, the percentage obtained by dividing (i) the
Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan
Exposure of all Lenders,

 

(b)           with respect to a Lender’s obligation to participate in the
Letters of Credit, with respect to such Lender’s obligation to reimburse Issuing
Bank, and with respect to such Lender’s right to receive payments of Letter of
Credit Fees, and with respect to all other computations and other matters
related to the Letters of Credit, the percentage obtained by dividing (i) the
Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan
Exposure of all Lenders; provided, that if all of the Revolving Loans have been
repaid in full and all Revolver Commitments have been terminated, but Letters of
Credit remain outstanding, Pro Rata Share under this clause shall be the
percentage obtained by dividing (A) the Letter of Credit Exposure of such
Lender, by (B) the Letter of Credit Exposure of all Lenders, and

 

(c)           with respect to all other matters and for all other matters as to
a particular Lender (including the indemnification obligations arising under
Section 15.7 of this Agreement), the

 

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percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender,
by (ii) the aggregate Revolving Loan Exposure of all Lenders, in any such case
as the applicable percentage may be adjusted by assignments permitted pursuant
to Section 13.1; provided, that if all of the Loans have been repaid in full and
all Commitments have been terminated, Pro Rata Share under this clause shall be
the percentage obtained by dividing (A) the Letter of Credit Exposure of such
Lender, by (B) the Letter of Credit Exposure of all Lenders.

 

“Projections” means Parent Borrower’s forecasted consolidated (a) balance
sheets, (b) income statements, and (c) cash flow statements, all prepared on a
basis consistent with Parent Borrower’s historical financial statements,
together with appropriate supporting details and a statement of underlying
assumptions.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of
the Agreement.

 

“Public Lender” has the meaning specified therefor in Section 17.9(c) of the
Agreement.

 

“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
Fair Market Value of any Equity Interests of Parent Borrower issued in
connection with such Acquisition and including the maximum amount of earn-outs),
paid or delivered by a Borrower or one of its Restricted Subsidiaries in
connection with such Acquisition (whether paid at the closing thereof or payable
thereafter and whether fixed or contingent), but excluding therefrom (a) any
cash of the seller and its Affiliates used to fund any portion of such
consideration and (b) any Cash Equivalents acquired in connection with such
Acquisition.

 

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted, domestic cash of the Loan Parties that is in Deposit Accounts and
which such Deposit Account is the subject of a Control Agreement and is
maintained by a branch office of the Agent located within the United States.

 

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by  any Borrower or one of its Restricted Subsidiaries and
the improvements thereto.

 

“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(c), to establish and maintain (including reserves for
rebates, discounts, warranty claims, and returns) with respect to the Eligible
Accounts, Eligible Unbilled Accounts or the Maximum Revolver Amount.

 

“Recipient” means (a) Agent, (b) any Lender, (c) any Issuing Bank, and (d) any
Swing Lender, as applicable.

 

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew,
refund, replace, repay, prepay, purchase, redeem, defease or retire, or to issue
other Indebtedness in

 

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exchange or replacement for, such Indebtedness.  “Refinanced” and “Refinancing”
shall have correlative meanings.

 

“Refinancing Indebtedness” means any Indebtedness of Parent Borrower or any
Restricted Subsidiary issued in exchange for, or the net cash proceeds of which
are used to Refinance other Indebtedness of Parent Borrower or any Restricted
Subsidiary (other than Indebtedness owed to the Issuer or to any Subsidiary of
the Issuer); provided that:

 

(a)           the amount of such Refinancing Indebtedness does not exceed the
amount of the Indebtedness so Refinanced (plus all accrued and unpaid interest
thereon and the amount of any reasonably determined premium necessary to
accomplish such Refinancing and such reasonable expenses incurred in connection
therewith);

 

(b)           such Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being
Refinanced;

 

(c)           if the Indebtedness being Refinanced is subordinated in right of
payment to the Obligations, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Obligations on terms at least as
favorable, taken as a whole, to the Lender Group as those contained in the
documentation governing the Indebtedness being Refinanced;

 

(d)           such Indebtedness is incurred by either (i) the Restricted
Subsidiary that is the obligor on the Indebtedness being Refinanced or (ii) a
Borrower or a Guarantor; and

 

(e)           if the Indebtedness being Refinanced is secured by a Lien on the
Collateral, such Refinancing Indebtedness is secured by a Lien that is equal to
or junior in priority to the Lien on the Collateral securing the Indebtedness
being Refinanced.

 

“Register” has the meaning set forth in Section 13.1(h) of the Agreement.

 

“Registered Loan” has the meaning set forth in Section 13.1(h) of the Agreement.

 

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

 

“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.

 

“Remedial Action” means all actions required by Environmental Laws to (a) clean
up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) restore or reclaim natural resources or

 

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the environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials.

 

“Replacement Assets” means (a) assets (other than Cash Equivalents and
securities) that will be used or useful in a Permitted Business,
(b) substantially all the assets of a Permitted Business, or (c) a majority of
the voting Equity Interests of any Person engaged in a Permitted Business that
will become on the date of acquisition thereof a Restricted Subsidiary.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(c) of
the Agreement.

 

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.

 

“Required Lenders” means, at any time, Lenders having or holding, collectively,
more than 50% of the aggregate Revolving Loan Exposure of all Lenders; provided,
that (a) the Revolving Loan Exposure of any Defaulting Lender shall be
disregarded in the determination of the Required Lenders and (b) at any time
there are 2 or more Lenders, “Required Lenders” must include at least 2 Lenders
(who are not Affiliates of one another).

 

“Rescission” has the meaning specified therefor in the Guaranty and Security
Agreement.

 

“Reserves” means, as of any date of determination, those reserves (other than
Receivable Reserves, Bank Product Reserves, and Inventory Reserves) that Agent
deems necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain with respect to the Borrowing Base or
the Maximum Revolver Amount (including, but not limited to, reserves with
respect to (a) sums that any Borrower are required to pay under any Section of
the Agreement or any other Loan Document (such as Taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and has failed to pay, (b) amounts owing by any Borrower to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than a Permitted Lien), which Lien or trust, in the Permitted Discretion
of Agent likely would have a priority superior to the Agent’s Liens (such as
Liens or trusts in favor of landlords, warehousemen, carriers, mechanics,
materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise,
sales, or other Taxes where given priority under applicable law) in and to such
item of the Collateral, and (c) any other factors that change in any material
respect the credit risk of lending to Borrowers on the security of the Eligible
Accounts, Eligible Unbilled Accounts and Eligible Inventory).

 

“Restricted Payment” means to:

 

(a)                                 declare or pay any dividend or make any
other payment or distribution with respect to any of the Equity Interests of
Parent Borrower or the Restricted Subsidiaries (including, without limitation,
any payment in connection with any merger or consolidation involving Parent
Borrower or any Restricted Subsidiary) or to the direct or indirect holders of
the Equity Interests of Parent Borrower or the Restricted Subsidiaries in their
capacity as such (other than dividends, payments or distributions (i) payable in
Equity Interests (other than Disqualified Equity Interests) of Parent Borrower,
(ii) to Parent Borrower or a Restricted Subsidiary or (iii) made by a Restricted
Subsidiary on a pro-rata basis to holders of Equity Interests in such Restricted
Subsidiary), or

 

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(b)                                 purchase, redeem or otherwise acquire or
retire for value (including, without limitation, in connection with any merger
or consolidation involving Parent Borrower or any Restricted Subsidiary) any
Equity Interests of Parent Borrower held by any Person (other than by Parent
Borrower or a Restricted Subsidiary) or any Equity Interests of any Restricted
Subsidiary held by any Person other than by Parent Borrower or another
Restricted Subsidiary.

 

“Restricted Subsidiary” means any Subsidiary of Parent Borrower that has not
been designated as an “Unrestricted Subsidiary” in accordance with this
Agreement.

 

“Revolver Commitment” means, with respect to each Revolving Lender, its Revolver
Commitment, and, with respect to all Revolving Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Revolving Lender’s name under the applicable heading on Schedule C-1 to the
Agreement or in the Assignment and Acceptance pursuant to which such Revolving
Lender became a Revolving Lender under the Agreement, as such amounts may be
reduced or increased from time to time pursuant to (x) assignments made in
accordance with the provisions of Section 13.1 of the Agreement and (y) Sections
2.4 or 2.14 of the Agreement.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective
Advances), plus (b) the amount of the Letter of Credit Usage.

 

“Revolving Lender” means a Lender that has a Revolving Loan Commitment, an
outstanding Revolving Loan or Letter of Credit Exposure.

 

“Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any
date of determination (a) prior to the termination of the Revolver Commitments,
the amount of such Lender’s Revolver Commitment, and (b) after the termination
of the Revolver Commitments, the aggregate outstanding principal amount of the
Revolving Loans of such Lender.

 

“Revolving Loans” has the meaning specified therefor in Section 2.1(a) of the
Agreement.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a Person resident
in or determined to be resident in a country, in each case of clauses
(a) through (d) that is a target of Sanctions, including a target of any country
sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC, OFAC’s
consolidated Non-SDN list or any other Sanctions-related list maintained by any
Governmental Authority, (b) a Person or legal entity that is a target of
Sanctions, (c) any Person operating, organized or resident in a Sanctioned
Entity, or (d) any Person directly or indirectly owned or controlled
(individually or in the aggregate) by or acting on behalf of any such Person or
Persons described in clauses (a) through (c) above.

 

“Sanctions” means individually and collectively, respectively, any and all
economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions
laws, regulations or embargoes, including those

 

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imposed, administered or enforced from time to time by:  (a) the United States
of America, including those administered by OFAC, the U.S. Department of State,
the U.S. Department of Commerce, or through any existing or future executive
order, (b) the United Nations Security Council, (c) the European Union or any
European Union member state, (d) Her Majesty’s Treasury of the United Kingdom,
or (e) any other Governmental Authority with jurisdiction over any member of
Lender Group or any Loan Party or any of their respective Subsidiaries or
Affiliates.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of McGraw
Hill Financial, Inc. and any successor thereto.

 

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the
Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Senior Notes” means the 6.250% Senior Notes due 2022 (including any “Additional
Notes” as defined in the Senior Notes Indenture) issued by Parent Borrower
pursuant to the Senior Notes Indenture or any supplemental indenture thereto.

 

“Senior Notes Indenture” means the Indenture dated as of April 16, 2014 among
Parent Borrower, as issuer, the guarantors party thereto, and US Bank National
Association, as indenture trustee.

 

“Senior Secured Net Leverage Ratio” means, with respect to any Person, as of the
date of any determination, the ratio of (i)(a) senior Indebtedness of such
Person and its Restricted Subsidiaries that is secured by a Lien as of such date
of determination (determined in accordance with GAAP) minus (b) cash and cash
equivalents of such Person and its Restricted Subsidiaries up to a maximum of
$50,000,000 to (ii) Consolidated Cash Flow of such Person for the four full
fiscal quarters for which Parent Borrower’s internal financial statements are
available immediately preceding such date of determination.  In the event that
Parent Borrower or any of its Restricted Subsidiaries incurs, repays,
repurchases or redeems any senior Indebtedness that is secured by a Lien
subsequent to the commencement of the period for which the Senior Secured Net
Leverage Ratio is being calculated but prior to the event for which the
calculation of the Senior Secured Net Leverage Ratio is made, then the Senior
Secured Net Leverage Ratio shall be calculated giving pro forma effect to such
incurrence, repayment, repurchase or redemption of senior Indebtedness secured
by a Lien.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

 

“Solvent” means, with respect to any Person on any date of determination, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person, (b) the present fair salable value of the assets of

 

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such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or
foreign law or letter of credit practices applicable in the city in which
Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person.  Unless otherwise indicated,
when used herein the term “Subsidiary” shall refer to a Subsidiary of Parent
Borrower.

 

“Supermajority Lenders” means, at any time, Lenders having or holding more than
66 2/3% of the aggregate Revolving Loan Exposure of all Lenders; provided, that
(a) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in
the determination of the Required Lenders, and (b) at any time there are 2 or
more Lenders, “Supermajority Lenders” must include at least 2 Lenders (who are
not Affiliates of one another).

 

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

 

“Swing Lender” means Wells Fargo.

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.

 

“Swing Loan Exposure” means, as of any date of determination with respect to any
Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.

 

“Taxes” means all present or future taxes, levies, imposts, duties, fees,
deductions, withholdings (including backup withholding), assessments or other
charges of whatever nature

 

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now or hereafter imposed by any Governmental Authority, including any interest,
fines, additions to tax or penalties applicable thereto.

 

“Temasek” means Temasek Holdings (Private) Limited and each of its Affiliates
but not including any of its portfolio companies.

 

“Term Loan Facility” means the term loans made pursuant to the Term Loan
Facility Credit Agreement.

 

“Term Loan Facility Credit Agreement” means the Term Loan Agreement, dated as of
April 16, 2014, by and among, Parent Borrower, as borrower, the lenders from
time to time a party thereto, Wells Fargo Bank, National Association, as sole
administrative agent, together with the related documents thereto (including the
term loans thereunder, any guarantees and security documents), as amended,
extended, renewed, restated, supplemented, refunded, replaced, refinanced or
otherwise modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time by one or
more credit facilities, and any agreement (and related document) entered into in
substitution for any credit agreement, in which case, the credit agreement or
similar agreement together with all other documents and instruments related
thereto shall constitute the “Term Loan Facility,” whether with the same or any
other agent, lender or group of lenders.

 

“Term Loan Facility Documents” means the Term Loan Facility Credit Agreement and
other documents evidencing or governing the Term Loan Facility Credit Agreement
or providing for any Guarantee or other right in respect thereof.

 

“Trademark Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

 

“Transaction” means any transaction; provided that if such transaction is part
of a series of related transactions, “Transaction” refers to such related
transactions as a whole.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any version or revision thereof accepted by
Issuing Bank for use.

 

“Unfinanced Capital Expenditures” means, with respect to the Loan Parties for
any period, Capital Expenditures made during such period that are not financed
with the proceeds of Indebtedness (other than Loans).

 

“United States” means the United States of America.

 

“Unrestricted Subsidiary” means, a Subsidiary designated as an Unrestricted
Subsidiary pursuant to this definition, in each case, until such Person ceases
to be Unrestricted Subsidiary in accordance with this definition or ceases to be
a Subsidiary.  Notwithstanding the foregoing, in no event shall any Borrower be
designated as an Unrestricted Subsidiary.  As of the Closing Date,
notwithstanding the provisions below of this definition, the Subsidiaries of
Parent Borrower set forth on Schedule U-1 are hereby designated as Unrestricted
Subsidiaries.

 

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The Board of Directors of Parent Borrower may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary; provided that:

 

(a)                                 any Guarantee by Parent Borrower or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
will be deemed to be an Incurrence of Indebtedness by Parent Borrower or such
Restricted Subsidiary, as the case may be, at the time of such designation, and
such incurrence of Indebtedness would be permitted under Section 6.1 of the
Agreement

 

(b)                                 the aggregate Fair Market Value of all
outstanding Investments owned by Parent Borrower and other Restricted
Subsidiaries in the Subsidiary being so designated (including any Guarantee by
Parent Borrower or any Restricted Subsidiary of any Indebtedness of such
Subsidiary) will be deemed to be an Investment made as of the time of such
designation, and such Investment would be permitted under Section 6.9 of the
Agreement;

 

(c)                                  such Subsidiary does not hold any Equity
Interests or Indebtedness of, or own or hold any Lien on any property or assets
of, or have any Investment in, Parent Borrower or any Restricted Subsidiary that
is not simultaneously being designated an Unrestricted Subsidiary;

 

(d)                                 the Subsidiary being so designated:

 

(i)                                     is not party to any agreement, contract,
arrangement or understanding with Parent Borrower or any Restricted Subsidiary
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to Parent Borrower or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not Affiliates of
the Issuer (or, if this condition is not satisfied, the value of such agreement,
contract, arrangement or understanding to such Unrestricted Subsidiary shall be
deemed to be, and must be permitted as, a Restricted Payment); and

 

(ii)                                  is a Person with respect to which neither
Parent Borrower nor any Restricted Subsidiary has any direct or indirect
obligation (i) to subscribe for additional Equity Interests or (ii) to maintain
or preserve such Person’s financial condition or to cause such Person to achieve
any specified levels of operating results; and

 

(iii)                               has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of Parent Borrower or
any Restricted Subsidiary, except to the extent such Guarantee or credit support
would be released upon such designation;

 

(e)                                  on a pro forma basis, after giving effect
to such designation and any Incurrence of Indebtedness or Investment made in
connection therewith, (i) Excess Availability shall not be less than 20.0% of
the Line Cap at any time during the period from the 30th day prior to and
including the date of the such designation (measured as if such
designation, Incurrence of Indebtedness, and Investment had been made on the
first day of such 30 day period), and (ii) the Fixed Charge Coverage Ratio for
the most recent 12 fiscal month period for which Parent Borrower’s interim
financial statements are then required to have been delivered pursuant to
Section 5.1 is at least 1.0 to 1.0; and

 

(f)                                   no Default or Event of Default would be in
existence following such designation.

 

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Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall
be evidenced to the Agent by filing with the Agent the Board Resolution giving
effect to such designation and an officers’ certificate certifying that such
designation complied with the preceding conditions and was permitted by the
Agreement.

 

For purposes of the foregoing, the designation of a Subsidiary of Parent
Borrower as an Unrestricted Subsidiary shall be deemed to be the designation of
all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries.  Unless
so designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of Parent Borrower will be classified as a Restricted Subsidiary.

 

The Board of Directors of Parent Borrower may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

 

(a)                                 such designation will be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if the incurrence of such Indebtedness is permitted under Section 6.1
of the Agreement at the date when such Unrestricted Subsidiary is designated as
a Restricted Subsidiary;

 

(b)                                 all outstanding Investments owned by such
Unrestricted Subsidiary shall be deemed to be made as of the time of such
designation and such designation shall only be permitted if such Investments
would be permitted under Section 6.7 of the Agreement at the date when such
Unrestricted Subsidiary is designated as a Restricted Subsidiary;

 

(c)                                  all Liens upon property or assets of such
Unrestricted Subsidiary existing at the time of such designation shall be deemed
to be incurred at the date of such designation and at such date would be
permitted under Section 6.2 of the Agreement; and

 

(d)                                 no Default or Event of Default would be in
existence immediately following such designation.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of the
Agreement.

 

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the IRC.

 

“U.S. Tax Compliance Certificate” has the meaning assigned thereto in
Section 16.7.

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.

 

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

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:

 

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

 

(a)                                 the sum of the products obtained by
multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment; by

 

(b)                                 the then outstanding principal amount of
such Indebtedness.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

 

“Wholly Owned Subsidiary” means, with respect to any specified Person, a
Restricted Subsidiary of such Person all of the outstanding Equity Interests or
other ownership interests of which (other than directors’ qualifying shares) are
owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

 

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

 

“Withholding Agent” means any Loan Party and Agent.

 

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Schedule 2.11

 

Existing Letters of Credit

 

Applicant

 

Beneficiary

 

Bank

 

Amount

 

FTS International Services, LLC

 

Liberty Mutual Insurance Company

 

Wells Fargo Bank, National Association

 

$

5,400,000.00

 

FTS International Services, LLC

 

Argonaut Insurance

 

Wells Fargo Bank, National Association

 

$

150,000.00

 

FTS International Services, LLC

 

WEX Bank

 

Wells Fargo Bank, National Association

 

$

300,000.00

 

 

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Schedule 3.1

 

The obligation of each Lender to make its initial extension of credit provided
for in the Agreement is subject to the fulfillment, to the satisfaction of each
Lender (the making of such initial extension of credit by any Lender being
conclusively deemed to be its satisfaction or waiver of the following), of each
of the following conditions precedent (capitalized terms used herein without
definition have the meanings set forth in the Agreement to which this Schedule
is attached):

 

(a)                                 [Reserved.]

 

(b)                                 Agent shall have received copies of
appropriate UCC-1 financing statements to be filed on the Closing Date in such
office or offices as may be necessary or, in the Permitted Discretion of Agent,
desirable to perfect the Agent’s Liens in and to the Collateral under the UCC,
and Agent shall have received searches reflecting the financing statements of
each Loan Party;

 

(c)                                  Agent shall have received each of the
following documents, in form and substance reasonably satisfactory to Agent,
duly executed and delivered, and each such document shall be in full force and
effect:

 

(i)                           a completed Borrowing Base Certificate as of
December 31, 2017;

 

(ii)                        the Amendments to Control Agreements,

 

(iii)                     the Fee Letter,

 

(iv)                    the Flow of Funds Agreement,

 

(v)                       the Guaranty and Security Agreement,

 

(vi)                    a completed Perfection Certificate for the Loan Parties,

 

(vii)                 the Trademark Security Agreement,

 

(viii)              the Joinder to Intercreditor Agreement;

 

(d)                                 Agent shall have received a certificate from
the Secretary or Vice Secretary of each Loan Party (i) attesting to the
resolutions of such Loan Party’s Board of Directors authorizing its execution,
delivery, and performance of the Loan Documents to which it is a party,
(ii) authorizing specific officers of such Loan Party to execute the same, and
(iii) attesting to the incumbency and signatures of such specific officers of
such Loan Party;

 

(e)                                  Agent shall have received copies of each
Loan Party’s Governing Documents, as amended, modified, or supplemented to the
Closing Date, which Governing Documents shall be (i) certified by the Secretary
or Vice Secretary of such Loan Party, and (ii) with respect to Governing
Documents that are charter documents, certified as of a recent date (not more
than 30 days prior to the Closing Date) by the appropriate governmental
official;

 

(f)                                   Agent shall have received a certificate of
status with respect to each Loan Party, dated within 10 days of the Closing
Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of such Loan Party, which certificate shall
indicate that such Loan Party is in good standing in such jurisdiction;

 

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(g)                                  Agent shall have received certificates of
status with respect to each Loan Party, each dated within 30 days of the Closing
Date, such certificates to be issued by the appropriate officer of the
jurisdictions (other than the jurisdiction of organization of such Loan Party)
in which its failure to be duly qualified or licensed would constitute a
Material Adverse Effect, which certificates shall indicate that such Loan Party
is in good standing in such jurisdictions;

 

(h)                                 Agent shall have received certificates of
insurance, together with the endorsements thereto, as are required by
Section 5.6 of the Agreement, the form and substance of which shall be
reasonably satisfactory to Agent;

 

(i)                                     Agent shall have received an opinion of
Jones Day, counsel to the Loan Parties, in form and substance reasonably
satisfactory to Agent;

 

(j)                                    Administrative Borrower shall have
certified (which certification may be included as part of the Borrowing Base
Certificate specified in clause (d)(i) hereof) that Excess Availability plus
Qualified Cash as of the Closing Date, after giving effect to the initial use of
proceeds of the Loans and the Letters of Credit and the payment of all fees,
costs and expenses to occur on the Closing Date (including the payment of all
fees and expenses required to be paid by the Borrowers on the Closing Date under
the Agreement or the other Loan Documents), is not less than $100,000,000;

 

(k)                                 Agent shall have completed its business,
legal, and collateral due diligence, including (i) a collateral audit and review
of Parent Borrower’s and its Restricted Subsidiaries’ books and records and
verification of Borrowers’ representations and warranties to Lender Group, and
(ii) a review of Parent Borrower’s and its Restricted Subsidiaries’ material
agreements, in each case, the results of which shall be satisfactory to Agent;

 

(l)                                     Agent shall have completed (i) Patriot
Act searches and OFAC/PEP searches and customary individual background checks
for each Loan Party, and (ii) OFAC/PEP searches and customary individual
background searches for each Loan Party’s senior management and key principals, 
the results of which shall be reasonably satisfactory to Agent;

 

(m)                             Agent shall have received an appraisal of the
Net Liquidation Percentage applicable to Borrowers and its Restricted
Subsidiaries, the results of which shall be satisfactory to Agent;

 

(n)                                 Agent shall have received a set of
Projections of Parent Borrower and its Subsidiaries, on a consolidated basis,
for the four fiscal quarter period following the Closing Date (on a quarter by
quarter basis) and on an annual basis for each year thereafter through 2021,
giving effect to the transactions contemplated by the Loan Documents to occur on
the Closing Date prepared by management of Parent Borrower, including balance
sheets, income statements and cash flow statements, in form and substance
(including as to scope and underlying assumptions) reasonably satisfactory to
Agent;

 

(o)                                 Borrowers shall have paid or will pay on the
Closing Date all Lender Group Expenses incurred in connection with the
transactions evidenced by the Agreement and the other Loan Documents;

 

(p)                                 Agent shall have received a solvency
certificate, in form and substance reasonably satisfactory to it, certifying as
to the solvency of the Loan Parties taken as a whole after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents to
occur on the Closing Date;

 

(q)                                 Immediately after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents on the
Closing Date, Parent Borrower and its Restricted Subsidiaries shall

 

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

 

have outstanding no Indebtedness other than (a) Indebtedness outstanding under
this Agreement, (b) the Term Loan Facility, (c) Senior Notes and the Senior
Notes Indenture, (d) Indebtedness set forth on Schedule 6.1 and (e) Indebtedness
permitted by Section 6.1;

 

(r)                                    Lenders shall have received audited
financial statements with respect to Parent Borrower’s fiscal years ended
December 31, 2014, 2015 and 2016;

 

(s)                                   No Material Adverse Effect shall have
occurred since December 31, 2016;

 

(t)                                    The Borrowers and each of their
Restricted Subsidiaries shall have received all governmental and third party
approvals (including shareholder approvals, landlords’ consents and other
consents) necessary or, in the reasonable opinion of Agent, advisable in
connection with the Agreement or the transactions contemplated by the Loan
Documents, which shall all be in full force and effect, and all applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
materially adverse conditions on the Credit Agreement or the transactions
contemplated by the Loan Documents; and there shall not be any pending or
threatened litigation, governmental, administrative or judicial action that
could reasonably be expected to restrain, prevent or otherwise impose materially
adverse conditions on the transactions contemplated by the Loan Documents. 
Parent Borrower and each of its Restricted Subsidiaries shall have received all
licenses, approvals or evidence of other actions required by any Governmental
Authority in connection with the execution and delivery by Parent Borrower or
its Restricted Subsidiaries of the Loan Documents or with the consummation of
the transactions contemplated thereby;

 

(u)                                 Agent shall have received a certificate,
dated the Closing Date and signed by an officer of Parent Borrower on behalf of
the Borrowers, confirming compliance with the conditions precedent in this
Schedule 3.1, to the extent compliance with any such condition precedent is
within the determination of Borrowers; and

 

(v)                                 All other documents and legal matters in
connection with the transactions contemplated by the Agreement and reasonably
requested by Agent shall have been delivered, executed, or recorded and shall be
in form and substance reasonably satisfactory to Agent.

 

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Schedule 4.1(c)

 

Capitalization of Parent Borrower’s Subsidiaries

 

Entity

 

Owner

 

Authorized
Shares

 

Outstanding
Shares

 

Percentage
Ownership

FTS International Services, LLC

 

FTS International, Inc.

 

N/A

 

N/A

 

100%

FTS International Manufacturing, LLC

 

FTS International Services, LLC

 

N/A

 

N/A

 

100%

FTS International Ventures I, LLC

 

FTS International, Inc.

 

N/A

 

N/A

 

100%

FTS International Ventures II, LLC

 

FTS International, Inc.

 

N/A

 

N/A

 

100%

FTS International Netherlands I C.V.

 

FTS International Ventures I, LLC

 

N/A

 

N/A

 

99%
General Partner

 

FTS International Ventures II, LLC

 

 

N/A

 

1%
Limited Partner

FTS International Netherlands II C.V.

 

FTS International Netherlands I C.V.

 

N/A

 

N/A

 

99%
General Partner

 

FTS International Ventures II, LLC

 

 

N/A

 

1%
Limited Partner

FTS International Netherlands, LLC

 

FTS International Netherlands II C.V.

 

N/A

 

N/A

 

100%

FTS International Netherlands Coöperatief U.A.

 

FTS International Netherlands II C.V.

 

N/A

 

N/A

 

99%

 

FTS International Netherlands, LLC

 

 

N/A

 

1%

FTS International Netherlands B.V.

 

FTS International Netherlands Coöperatief U.A.

 

N/A

 

N/A

 

100%

 

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

 

Schedule 4.1(d)

 

Subscriptions, Options, Warrants, Calls

 

None.

 

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Schedule 4.11

 

Environmental Matters

 

1.                             Odessa, Texas Facility — Impact to soil from
historic chemical use or storage

 

As a result of an environmental site assessment, soil and groundwater
contamination was discovered at the Odessa, Texas facility that is unrelated to
operations performed by FTSI at that facility.  The impacts are contained within
the property boundary and are not likely to migrate from the property.  In 2013,
FTSI was accepted into a voluntary clean-up program administered by the Texas
Commission on Environmental Quality (“TCEQ”).  FTSI is currently awaiting TCEQ
approval on a proposed remediation plan.

 

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Schedule 4.24

 

Location of Inventory

 

FTS INTERNATIONAL SERVICES, LLC

 

117 Nu Energy Road, Aledo, TX 76008

119 Nu Energy Road, Aledo, TX 76008

906 S. Eastern, Elk City, OK 73644

1704 E. Whaley Street, Longview, TX 75601

986 S. Maurice Street, Odessa, TX 79763

3201 W. Murphy Street, Odessa, TX 79763

602 S. Highway 163, Ozona, TX 76943

3195 Coughran Road, Pleasanton, TX 78064

6921 F.M. 1784, Pleasanton, TX 78064

2459 F.M. 190, Asherton, TX 78827

7248 John Petterway Jr. Blvd, Shreveport, LA 71129

1432 Route 519, Eighty Four, PA 15330

 

FTS INTERNATIONAL MANUFACTURING, LLC

 

117 Nu Energy Road, Aledo, TX 76008

119 Nu Energy Road, Aledo, TX 76008

4700 S. Edgewood Terrace, Fort Worth, TX 76119

4651 S. Edgewood Terrace, Fort Worth, TX 76119

4608 Fairlane, Fort Worth, TX 76109

 

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Schedule 5.1

 

Deliver to Agent (and if so requested by Agent, with copies for each Lender)
each of the financial statements, reports, or other items set forth below at the
following times listed opposite each such item (if applicable) in form
reasonably satisfactory to Agent (capitalized terms used herein without
definition have the meanings set forth in the Agreement to which this Schedule
is attached):

 

Deadline

 

Deliverable

 

 

 

within 45 days after the end of each of the first three fiscal quarters during
each of Parent Borrower’s fiscal years, commencing with the fiscal quarter ended
March 31, 2018,

 

(b) an unaudited consolidated balance sheet of Parent Borrower and its
Subsidiaries as of the close of such fiscal quarter and unaudited consolidated
statements of income, retained earnings and cash flows for such fiscal quarter
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 Parent
Borrower 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 period, and
certified by an Authorized Person of Parent Borrower to present fairly in all
material respects the financial condition of Parent Borrower and its
Subsidiaries on a consolidated basis as of their respective dates and the
results of operations of Parent Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year-end adjustments and the absence of
footnotes, and

 

(c) a Compliance Certificate along with the underlying calculations, including
the calculations to arrive at Consolidated Cash Flow, the Fixed Charge Coverage
Ratio, and, if a Covenant Testing Period has occurred and is continuing,
demonstrating compliance with the covenant set forth in Section 7.1 of the
Agreement;

 

 

 

within 90 days after the end of each of Parent Borrower’s fiscal years,
commencing with the fiscal year ended December 31, 2017,

 

(d) an audited consolidated balance sheet of Parent Borrower and its
Subsidiaries as of the close of such fiscal year and audited consolidated
statements of income, retained earnings and cash flows for such fiscal year and
a report containing management’s discussion and analysis of such financial
statements for such fiscal year, 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 Grant Thornton LLP or any other independent certified public accounting firm
of recognized national standing reasonably acceptable to Agent, 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
qualifications (including any (i) “going concern” or like qualification or
exception, (ii) qualification or exception as to the scope of such audit, or
(iii) qualification which relates to the treatment or classification of any item
and which, as a condition to the removal of such

 

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

 

 

 

qualification, would require an adjustment to, such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7) or
exception or any qualification as to the scope of such audit, and

 

(e) a Compliance Certificate along with the underlying calculations, including
the calculations to arrive at Consolidated Cash Flow, the Fixed Charge Coverage
Ratio, and, if a Covenant Testing Period has occurred and is continuing,
demonstrating compliance with the covenant set forth in Section 7.1 of the
Agreement;

 

 

 

within 60 days after the end of each of Parent Borrower’s fiscal years,

 

(f) copies of Parent’s Borrowers’ Projections, in form and substance (including
as to scope and underlying assumptions) satisfactory to Agent, in its Permitted
Discretion, for the forthcoming three years, year by year, and for the
forthcoming fiscal year, fiscal quarter by fiscal quarter;

 

 

 

if filed by any Loan Party with the SEC after the Closing Date, promptly after
the same becomes publicly available or Parent Borrower notifies the Agent of the
filing or public availability thereof,

 

(g) copies of any Form 10-Q quarterly reports, Form 10-K annual reports, and
Form 8-K current reports of any Loan Party, and

 

(h) copies of any other filings made by Parent Borrower with the SEC after the
Closing Date;

 

 

 

promptly, but in any event within 5 Business Days, after any Loan Party has
knowledge that a Default or an Event of Default has occurred and is continuing,

 

(i) notice of such Default or Event of Default and a statement of any action
that the Borrowers propose to take with respect thereto;

 

 

 

promptly after the commencement thereof, but in any event within 5 Business Days
after any Authorized Person has knowledge of the filing or commencement thereof,
or the service of process with respect thereto on a Loan Party or any of its
Restricted Subsidiaries, in each case, after the Closing Date,

 

(j) the filing or commencement of any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, against any Loan Party
or a Restricted Subsidiary thereof that would reasonably be expected to result
in a Material Adverse Effect;

 

 

 

promptly after an Authorized Person obtains knowledge thereof,

 

(k) any notice of any violation received by any Loan Party or any Restricted
Subsidiary thereof from any Governmental Authority including, without
limitation,

 

 

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

 

 

 

any notice of violation of Environmental Laws, which, in each case would
reasonably be expected to have a Material Adverse Effect, and

 

(l) any development that has resulted in, or would reasonably be expected to
result in, a Material Adverse Effect;

 

 

 

promptly after the request therefor by Agent or any Lender after the Closing
Date,

 

(m) such other information and documentation required by bank regulatory
authorities under applicable “know your customer” and Anti-Money Laundering Laws
(including, without limitation, the Patriot Act); and

 

 

 

from time to time, within a reasonable time period after the reasonable request
therefor by Agent or any Lender after the Closing Date,

 

(n) other information regarding the operations, business affairs and financial
condition of any Loan Party or any Restricted Subsidiary thereof.

 

If Parent Borrower has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
this Schedule 5.1 will include a reasonably detailed presentation, either on the
face of the financial statements or in the footnotes thereto, and in the
accompanying management’s discussion and analysis, of the financial condition
and results of operations of Parent Borrower and its Restricted Subsidiaries
separate from the financial condition and results of operations of the
Unrestricted Subsidiaries of Parent Borrower; provided, however, that no such
information will be required to the extent any Unrestricted Subsidiaries
collectively meet the definition of “minor” under Rule 3-10 of Regulation S-X,
using 6% instead of 3%.

 

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Schedule 5.2

 

Provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the documents set forth below at the following times in form reasonably
satisfactory to Agent (capitalized terms used herein without definition have the
meanings set forth in the Agreement to which this Schedule is attached):

 

Timing

 

Quarterly (no later than the 25th day after the end of each fiscal quarter of
Parent Borrower, commencing with the fiscal quarter ending December 31, 2017,
prepared as of the end of such fiscal quarter), so long as no Loans are
outstanding and otherwise the Revolver Usage is less than $25,000,000, or

 

Monthly (no later than the 25th day after the end of each fiscal month, prepared
as of the end of such fiscal month), if either (x) any Loans are outstanding or
(y) Revolver Usage is greater than or equal to $25,000,000, or

 

Weekly (no later than the 5th Business Day after the end of each week), if a
Collateral Reporting Trigger Event has occurred and is continuing,

 

(a)           Deliverable

 

(b)                                 (a) an executed Borrowing Base Certificate,

 

(c)                                  (b) a detailed aging, by total, of the
Borrowers’ Accounts included in the Borrowing Base reflected in the then most
recent Borrowing Base Certificate delivered to Agent (delivered electronically
in a format acceptable to Agent in the exercise of its Permitted Discretion, if
Parent Borrower has implemented electronic reporting),

(d)                                 (c) a detailed Inventory report with regard
to Inventory included in the Borrowing Base reflected in the then most recent
Borrowing Base Certificate delivered to Agent (delivered electronically in a
format acceptable to Agent in the exercise of its Permitted Discretion, if
Parent Borrower has implemented electronic reporting),

 

(e)                                  (d) a summary aging, by vendor, of each
Borrower’s accounts payable and any book overdraft (delivered electronically in
a format acceptable to Agent in the exercise of its Permitted Discretion, if
Parent Borrower has implemented electronic reporting) and an aging, by vendor,
of any held checks,

 

(f)                                   (e) [Reserved],

 

(g)                                  (f) [Reserved],

 

(h)                                 (g) a detailed report of the Borrowers’
Accounts that are Eligible Unbilled Accounts; and

 

(i)                                     provided that for so long as any monthly
or weekly, if applicable, reports and deliverables required to be delivered
(x) are not delivered when required or (y) do not, with respect to a Borrowing
Base Certificate, include the items of information specified in Exhibit B-1 to
the Agreement (with such changes, if any, agreed to by Agent in its Permitted
Discretion) or in the preceding clauses (b), (c) and (g), in each case, for such
month or week, if applicable, for Accounts and/or Inventory included in the
Borrowing Base, Agent shall have the

 

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

 

 

 

right to establish such Reserves that it deems appropriate in its Permitted
Discretion.

 

(j)                                    The Borrowers may, at their election,
deliver Borrowing Base Certificates and the other reports set forth in items
(a) through (g) hereof on a more frequent basis than the periods required above.

 

 

 

Annually (to be delivered when Parent Borrower delivers the financial statements
required by clause (c) of Schedule 5.1 to the Agreement to which this Schedule
is attached),

 

(k)                                 (h) a Perfection Certificate or a supplement
to a previously-delivered Perfection Certificate, as Parent Borrower may elect,
and

 

(l)                                     (i) a detailed list of each Borrower’s
customers, with address and contact information, the Accounts of which are
included in the then most recent Borrowing Base Certificate delivered to Agent.

 

 

 

Within a reasonable period of time after reasonable request by Agent,

 

(m)                             (j) copies of purchase orders and invoices for
Inventory included in the then most recent Borrowing Base Certificate delivered
to Agent, and

 

(n)                                 (k) such other reports regarding the
Collateral as Agent may reasonably request.

 

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

 

Schedule 6.1

 

Permitted Indebtedness

 

1.              Indebtedness related to the cash collateralization of the
standby letters of credit issued by Wells Fargo Bank, National Association
described on Schedule 2.11.(2)

2.              Indebtedness related to the liens set forth on Part 2 of
Schedule P-2.

 

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

(2)  Such Indebtedness is pursuant to Existing Letters of Credit and is
Permitted Indebtedness pursuant to this Schedule 6.1 only until such time the
Issuing Bank releases such Indebtedness after the Closing Date.

 

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

 

Schedule 6.10

 

Transactions with Affiliates

 

1.              Master Service Agreement, dated as of July 9, 2012, between
Chesapeake Operating, Inc. and FTS International Services, LLC.

2.              Master Commercial Agreement, dated as of December 19, 2016,
between Chesapeake Operating, L.L.C. and FTS International Services, LLC.

 

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