Exhibit 10.1

 

Execution Version

 

 

 

$100,000,000

 

REVOLVING CREDIT AND SECURITY AGREEMENT

 

EMERGE ENERGY SERVICES LP,
as Parent Guarantor,

 

EMERGE ENERGY SERVICES OPERATING LLC,
SUPERIOR SILICA SANDS LLC, AND
EMERGE ENERGY SERVICES FINANCE CORPORATION,
as Borrowers,

 

HPS INVESTMENT PARTNERS, LLC,
as Administrative Agent and Collateral Agent,

 

and

 

THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,

as Lenders

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December 20, 2019

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

I.

DEFINITIONS

2

 

 

 

 

1.1.

Accounting Terms

2

 

1.2.

General Terms

2

 

1.3.

Uniform Commercial Code Terms

39

 

1.4.

Certain Matters of Construction

39

 

1.5.

Accounting for Derivatives

41

 

 

 

 

II.

ADVANCES; PAYMENTS

41

 

 

 

 

2.1.

Revolving Advances

41

 

2.2.

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

42

 

2.3.

Disbursement of Advance Proceeds

44

 

2.4.

[Reserved]

44

 

2.5.

Repayment of Advances

44

 

2.6.

Repayment of Excess Revolving Facility Usage

45

 

2.7.

Statement of Account

45

 

2.8.

Letters of Credit

45

 

2.9.

Additional Payments

51

 

2.10.

Making and Settlement of Advances

51

 

2.11.

Reduction of Maximum Revolving Advance Amount

52

 

2.12.

Use of Proceeds

52

 

2.13.

Defaulting Lender

53

 

2.14.

[Reserved]

55

 

2.15.

Prepayment Premium

55

 

2.16.

Protective Advances

55

 

2.17.

Mandatory Prepayments

56

 

 

 

 

III.

INTEREST AND FEES

57

 

 

 

 

3.1.

Interest

57

 

3.2.

Letter of Credit Fees

58

 

3.3.

Commitment Fee

59

 

3.4.

Fee Letter

59

 

3.5.

Computation of Interest and Fees

59

 

3.6.

Maximum Charges

59

 

3.7.

Increased Costs

60

 

3.8.

Effect of Benchmark Transition Event

60

 

3.9.

Capital Adequacy

63

 

3.10.

Taxes

64

 

3.11.

Replacement of Lenders

67

 

 

 

 

IV.

COLLATERAL: GENERAL TERMS

67

 

 

 

 

4.1.

Security Interest in the Collateral

67

 

4.2.

Perfection of Security Interest

68

 

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4.3.

Protection of Collateral

68

 

4.4.

Preservation of Collateral

68

 

4.5.

Ownership of Collateral

68

 

4.6.

Defense of Agent’s and Lenders’ Interests

69

 

4.7.

Books and Records

69

 

4.8.

Compliance with Laws

70

 

4.9.

Access to Premises

70

 

4.10.

Insurance

70

 

4.11.

Failure to Pay Insurance

71

 

4.12.

Payment of Taxes

71

 

4.13.

Payment of Leasehold Obligations

71

 

4.14.

Receivables

72

 

4.15.

Inventory

74

 

4.16.

Maintenance of Equipment

74

 

4.17.

Exculpation of Liability

74

 

4.18.

Environmental Matters

75

 

4.19.

Financing Statements

76

 

4.20.

Voting Rights in Respect of Subsidiary Stock

76

 

4.21.

Dividend and Distribution Rights in Respect of Subsidiary Shares

76

 

 

 

 

V.

REPRESENTATIONS AND WARRANTIES

77

 

 

 

 

5.1.

Authority

77

 

5.2.

Formation and Qualification

77

 

5.3.

Survival of Representations and Warranties

78

 

5.4.

Tax Returns

78

 

5.5.

Financial Statements

78

 

5.6.

Entity Names

79

 

5.7.

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

79

 

5.8.

Solvency

79

 

5.9.

Litigation

80

 

5.10.

Compliance with Laws; ERISA

80

 

5.11.

Patents, Trademarks, Copyrights and Licenses

81

 

5.12.

Licenses and Permits

81

 

5.13.

No Burdensome Restrictions

81

 

5.14.

No Labor Disputes

81

 

5.15.

Margin Regulations

82

 

5.16.

Investment Company Act

82

 

5.17.

Disclosure

82

 

5.18.

Perfection of Security Interest in Collateral

82

 

5.19.

Swaps

82

 

5.20.

Application of Certain Laws and Regulations

82

 

5.21.

No Brokers or Agents

83

 

5.22.

Commercial Tort Claims

83

 

5.23.

Letter of Credit Rights

83

 

5.24.

Deposit Accounts

83

 

5.25.

Use of Proceeds

83

 

5.26.

[Reserved]

83

 

5.27.

Personal Properties

83

 

5.28.

Reserved

83

 

5.29.

Real Property

83

 

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VI.

AFFIRMATIVE COVENANTS

84

 

 

 

 

6.1.

Payment of Fees

84

 

6.2.

Conduct of Business and Maintenance of Existence and Assets

84

 

6.3.

Violations

84

 

6.4.

Government Receivables

84

 

6.5.

Financial Covenants

84

 

6.6.

Perfection; Further Assurances

85

 

6.7.

Payment of Obligations

87

 

6.8.

Standards of Financial Statements

87

 

6.9.

[Reserved]

87

 

6.10.

Keepwell

87

 

6.11.

Post-Closing Deliveries

87

 

6.12.

Compliance with Laws; Anti-Terrorism Law; International Trade Law Compliance

87

 

6.13.

Information Regarding Collateral

88

 

6.14.

Flood Insurance

88

 

 

 

 

VII.

NEGATIVE COVENANTS

88

 

 

 

 

7.1.

Merger, Consolidation, Acquisition and Sale of Assets

88

 

7.2.

Creation of Liens

90

 

7.3.

Guarantees

90

 

7.4.

Investments

90

 

7.5.

Dividends and Distributions

91

 

7.6.

Indebtedness

91

 

7.7.

Nature of Business

92

 

7.8.

Transactions with Affiliates

92

 

7.9.

Subsidiaries

92

 

7.10.

Fiscal Year and Accounting Changes

93

 

7.11.

Pledge of Credit

93

 

7.12.

Amendment of Certain Documents

93

 

7.13.

Compliance with ERISA

93

 

7.14.

Prepayment of Indebtedness and Certain Other Obligations

94

 

7.15.

[Reserved]

94

 

7.16.

Bank Accounts

94

 

7.17.

Passive Holding Company

94

 

 

 

 

VIII.

CONDITIONS PRECEDENT

94

 

 

 

 

8.1.

Conditions to Initial Advances

94

 

8.2.

Conditions to Each Advance

97

 

 

 

 

IX.

INFORMATION AS TO CREDIT PARTIES

98

 

 

 

 

9.1.

Disclosure of Material Matters

98

 

9.2.

Borrowing Base Certificate; Schedules

98

 

9.3.

Compliance Certificate

99

 

9.4.

Litigation

99

 

9.5.

Material Occurrences

99

 

9.6.

Government Receivables

99

 

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9.7.

Annual Financial Statements

99

 

9.8.

Quarterly and Monthly Reporting

100

 

9.9.

Additional Information

100

 

9.10.

Projected Operating Budget

100

 

9.11.

[Reserved]

101

 

9.12.

Notice of Suits, Adverse Events

101

 

9.13.

ERISA Notices and Requests

101

 

9.14.

Notice of Leases

102

 

9.15.

[Reserved]

102

 

9.16.

Reserve Reports

102

 

9.17.

SEC Filings

102

 

9.18.

Additional Documents

102

 

 

 

 

X.

EVENTS OF DEFAULT

102

 

 

 

 

10.1.

Nonpayment

102

 

10.2.

Breach of Representation

103

 

10.3.

Financial Information

103

 

10.4.

Judicial Actions

103

 

10.5.

Noncompliance

103

 

10.6.

Judgments

103

 

10.7.

Bankruptcy

103

 

10.8.

Inability to Pay

103

 

10.9.

Cash Management Liabilities and Hedge Liabilities

103

 

10.10.

Lien Priority

104

 

10.11.

Cross Default

104

 

10.12.

Breach of Guaranty, Security Agreement or Pledge Agreement

104

 

10.13.

Change of Control

104

 

10.14.

Invalidity

104

 

10.15.

Licenses

104

 

10.16.

Pension Plans

104

 

10.17.

Reportable Compliance Event

104

 

10.18.

SEC

104

 

 

 

 

XI.

LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT

105

 

 

 

 

11.1.

Rights and Remedies

105

 

11.2.

Agent’s Discretion

107

 

11.3.

Setoff

107

 

11.4.

Rights and Remedies not Exclusive

107

 

11.5.

Allocation of Payments After Event of Default

107

 

 

 

 

XII.

WAIVERS AND JUDICIAL PROCEEDINGS

109

 

 

 

 

12.1.

Waiver of Notice

109

 

12.2.

Delay

109

 

12.3.

Jury Waiver

109

 

 

 

 

XIII.

EFFECTIVE DATE AND TERMINATION

109

 

 

 

 

13.1.

Term

109

 

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13.2.

Termination

109

 

 

 

 

XIV.

REGARDING AGENT

110

 

 

 

 

14.1.

Appointment

110

 

14.2.

Nature of Duties

110

 

14.3.

Lack of Reliance on Agent and Resignation

111

 

14.4.

Certain Rights of Agent

112

 

14.5.

Reliance

112

 

14.6.

Notice of Default

112

 

14.7.

Indemnification

112

 

14.8.

Agent in its Individual Capacity

113

 

14.9.

Delivery of Documents

113

 

14.10.

Borrowers’ Undertaking to Agent

113

 

14.11.

No Reliance on Agent’s Customer Identification Program

113

 

14.12.

Other Documents

113

 

14.13.

Withholding Tax

113

 

14.14.

Collateral and Guaranty Matters

114

 

 

 

 

XV.

BORROWING AGENCY

114

 

 

 

 

15.1.

Borrowing Agency Provisions

114

 

15.2.

Waiver of Subrogation

116

 

 

 

 

XVI.

MISCELLANEOUS

116

 

 

 

 

16.1.

Governing Law

116

 

16.2.

Entire Understanding; Amendments; No Waiver by Course of Conduct

117

 

16.3.

Successors and Assigns; Participations

118

 

16.4.

Application of Payments

121

 

16.5.

Indemnity

121

 

16.6.

Notice

122

 

16.7.

Survival

124

 

16.8.

Severability

124

 

16.9.

Expenses

125

 

16.10.

Injunctive Relief

125

 

16.11.

Consequential Damages

125

 

16.12.

Captions

125

 

16.13.

Counterparts; Facsimile Signatures

125

 

16.14.

Construction

125

 

16.15.

Confidentiality; Sharing Information

126

 

16.16.

Publicity

126

 

16.17.

Certifications From Banks and Participants; USA PATRIOT Act

126

 

16.18.

Anti-Terrorism Laws

127

 

16.19.

Concerning Joint and Several Liability of Borrowers

127

 

16.20.

Non-Applicability of Chapter 346

129

 

16.21.

BORROWERS’ WAIVER OF RIGHTS UNDER TEXAS DECEPTIVE TRADE PRACTICES ACT

129

 

16.22.

[Reserved]

129

 

16.23.

Acknowledgment and Consent to Bail-In of EEA Financial Institutions

129

 

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

Exhibit 1.2(a)

Compliance Certificate

Exhibit 1.2(b)

Guaranty

Exhibit 1.2(c)

Pledge Agreement

Exhibit 1.2(d)

Borrowing Notice

Exhibit 1.2(e)

Notice of Conversion/Continuation

Exhibit 1.2(f)

Intellectual Property Security Agreement

Exhibit 2.1(a)

Note

Exhibits 3.10-1-4

Non-Bank Tax Certificates

Exhibit 8.1(f)

Financial Condition Certificate

Exhibit 16.3

Commitment Transfer Supplement

 

 

Schedules

 

 

 

Schedule 1.2(a)

Commitments

Schedule 1.2(c)

Permitted Encumbrances

Schedule 5.5(c)(ii)

Material Adverse Effect

Schedule 5.9

Litigation

Schedule 5.10(b)

Plans

Schedule 5.12

Licenses and Permits

Schedule 5.13

No Burdensome Restrictions

Schedule 5.14

Labor Disputes

Schedule 6.11

Post-Closing Deliveries

Schedule 7.4

Existing Investments

Schedule 7.6

Existing Indebtedness

 

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REVOLVING CREDIT AND SECURITY AGREEMENT

 

This Revolving Credit and Security Agreement, dated as of December 20, 2019,
among EMERGE ENERGY SERVICES LP, a Delaware limited partnership (“Parent
Guarantor”), EMERGE ENERGY SERVICES OPERATING LLC, a Delaware limited liability
company (“Emerge”), SUPERIOR SILICA SANDS LLC, a Texas limited liability company
(“SSS”), EMERGE ENERGY SERVICES FINANCE CORPORATION, a Delaware corporation
(“FinanceCo” and together with Emerge, SSS and each Person joined hereto as a
borrower from time to time, collectively, the “Borrowers,” and each individually
a “Borrower”), the financial institutions which are now or which hereafter
become a party hereto (collectively, the “Lenders” and each individually a
“Lender”), and HPS INVESTMENT PARTNERS, LLC (“HPS”), as administrative agent for
the Lenders and collateral agent for the Secured Parties (in such capacities,
the “Agent”).

 

WHEREAS, on July 15, 2019 (the “Petition Date”), each of the Borrowers and
Emerge Energy Services GP LLC, a Delaware limited liability company (the
“Existing General Partner” and, together with the Parent Guarantor and the
Borrowers, the “Debtors” and each individually a “Debtor”) commenced cases
(collectively, the “Cases” and each individually, a “Case”) under chapter 11 of
Title 11 of the United States Code (the “Bankruptcy Code”) by the filing of
voluntary petitions with the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”), captioned In re Emerge Energy Services LP, et
al., case no. 19-11563 (KBO) and being jointly administered for procedural
purposes;

 

WHEREAS, in connection with the Cases, the Parent Guarantor, the Borrowers, the
lenders party thereto (the “DIP Lenders”) and HPS as administrative agent for
the lenders and collateral agent for the secured parties entered into that
certain Senior Secured Priming and Superpriority Debtor-In-Possession Credit and
Security Agreement (as amended, supplemented or otherwise modified from time to
time prior to the date of this Agreement, the “DIP Credit Agreement”), dated as
of July 19, 2019 (the “DIP Closing Date”), pursuant to which the DIP Lenders
provided (i) new-money loans in an aggregate principal amount of up to
$35,000,000 and (ii) roll-up loans in an aggregate principal amount equal to the
proceeds of Collateral (as defined in the DIP Credit Agreement) received on and
from the DIP Closing Date to and including August 30, 2019, in each case,
pursuant to the terms and conditions of the DIP Credit Agreement;

 

WHEREAS, on July 25, 2019, the Debtors filed the Debtors’ Joint Plan of
Reorganization for Emerge Energy Services LP and its Affiliate Debtors Under
Chapter 11 of the Bankruptcy Code (the “Initial Plan of Reorganization”).  On
August 29, 2019, the Debtors amended the Initial Plan of Reorganization by
filing the First Amended Joint Plan of Reorganization for Emerge Energy Services
LP and its Affiliate Debtors Under Chapter 11 of the Bankruptcy Code (as
amended, supplemented or otherwise modified from time to time, the “Plan of
Reorganization”), which was confirmed by order of the Bankruptcy Court entered
on December 18, 2019 (the “Confirmation Order”), which Confirmation Order, inter
alia, confirmed the Parent Guarantor’s and the Borrowers’ entry into and
performance under this Agreement; and

 

WHEREAS, the Parent Guarantor, the Borrowers, the Lenders and the Agent have
agreed to enter into this Agreement, pursuant to which (i) the Lenders will
extend credit in the form of Revolving Advances in a maximum aggregate principal
amount at any time outstanding not to exceed $100,000,000 and (ii) the Issuers
(if any) will issue Letters of Credit to the Borrowers, in each case, subject to
the terms and conditions of this Agreement.

 

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants
and agreements hereinafter set forth and intending to be legally bound hereby,
covenant and agree as follows:

 

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I.                                        DEFINITIONS.

 

1.1.                            Accounting Terms.  As used in this Agreement,
the Other Documents or any certificate, report or other document made or
delivered pursuant to this Agreement, all accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, except as otherwise specifically prescribed herein.  If at any time
(i) any change in GAAP or (ii) any change in the application of GAAP concurred
by the Credit Parties’ independent public accountants, would affect the
computation of any financial ratio, requirements or covenants set forth in this
Agreement or any Other Document, including, without limitation, any change as to
whether leases are required to be capitalized for financial reporting purposes,
and either the Borrowing Agent or the Required Lenders shall so request, Agent,
Lenders and the Credit Parties shall negotiate in good faith to amend such ratio
or requirement, including, without limitation, the Indebtedness negative
covenant, to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, such ratio or requirement shall continue to be computed in accordance
with GAAP prior to such change therein.

 

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

 

“Accountants” shall mean an independent certified public accounting firm
selected by Parent Guarantor and reasonably acceptable to Agent.

 

“Acquisition” shall mean a transaction or series of transactions resulting,
directly or indirectly, in (a) acquisition of a business, division, or
substantially all assets of a Person; (b) record or beneficial ownership of 50%
or more of the Equity Interests of a Person; or (c) merger, consolidation or
combination of a Credit Party or any Subsidiary thereof with another Person that
is not a Credit Party.

 

“Activation Notice” shall have the meaning set forth in Section 4.14(g) hereof.

 

“Advance Rates” shall mean the Receivables Advance Rate and the Inventory
Advance Rates.

 

“Advances” shall mean all advances made under this Agreement, including
Revolving Advances and Letters of Credit.

 

“Affected Lender” shall have the meaning set forth in Section 3.11 hereof.

 

“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, managing member, general
partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or
(iii) of any Person described in clause (a) above.  For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (x) to
vote fifteen percent (15%) or more of the Equity Interests having ordinary
voting power for the election of directors of such Person or other Persons
performing similar functions for any such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by ownership of
Equity Interests, contract or otherwise.

 

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

 

“Agreement” shall mean this Revolving Credit and Security Agreement.

 

2

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“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds
Effective Rate in effect on such day plus one half of one-percent (1/2 of 1%),
and (iii) the sum of the LIBOR Rate with a one (1) month interest period plus
one percent (1.0%), so long as a LIBOR Rate is offered, ascertainable and not
unlawful.

 

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering, bribery or
corruption, including, without limitation, any sanctions imposed by the U.S.
Government (including, without limitation, the Office of Foreign Assets
Control), the United Nations Security Council, the European Union, and Her
Majesty’s Treasury.

 

“Applicable Law” shall mean all Laws applicable to the Person, conduct,
transaction, covenant, Other Document or contract in question, including as to
any Collateral located in Canada, the PPSA.

 

“Applicable Margin” shall mean an amount equal to (i) 4.50% per annum for
Advances consisting of Domestic Rate Loans and (ii) 5.50% per annum for Advances
consisting of LIBOR Rate Loans.

 

“Applicable Number” shall mean (a) with respect to Field Examinations and
appraisals of Inventory no more than one (1) for any period of four fiscal
quarters; provided, however that (i) if Excess Availability is less than the
lesser of (I) $30,000,000 and (II) 30.0% of the Line Cap at any time during any
four (4) fiscal quarter period, the Applicable Number shall not be more than two
(2) for any period of four fiscal quarters, and (ii) if an Event of Default has
occurred and is continuing, the Applicable Number shall not be more than four
(4) and (b) with respect to appraisals of Sand Reserves, no more than one
(1) above ground appraisal and one (1) discounted cash flow appraisal for any
period of four fiscal quarters; provided, however if an Event of Default has
occurred and is continuing, the Applicable Number shall not be more than one
(1) for each fiscal quarter.

 

“Authority” shall have the meaning set forth in Section 4.18(b) hereof.

 

“Authorized Officer” of any Person shall mean the Chairman, Chief Financial
Officer, Chief Executive Officer, Vice President, or other authorized officer of
such Person designated by Borrowing Agent.

 

“Availability Deficit” shall have the meaning set forth in Section 2.17(c).

 

“Average Life” shall mean, as of the date of determination, with respect to any
Indebtedness, 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.

 

“Bail-In Action” shall mean 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” shall mean, 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.

 

“Bankruptcy Code” shall have the meaning set forth in the preamble hereto.

 

3

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“Bankruptcy Court” shall have the meaning set forth in the preamble hereto.

 

“Benefited Lender” shall have the meaning set forth in Section 2.10(e) hereof.

 

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

 

“Borrowers’ Account” shall have the meaning set forth in Section 2.7 hereof.

 

“Borrowing Agent” shall mean Emerge.

 

“Borrowing Base Certificate” shall mean a certificate in form reasonably
satisfactory to the Agent duly executed by an Authorized Officer of the
Borrowing Agent reasonably acceptable to Agent and delivered to Agent,
appropriately completed, by which such officer shall certify to Agent the
Formula Amount and calculation thereof as of either (a) the end of the month
ending immediately prior to the date on which the certificate is delivered or
(b) subject to Section 9.2, as of the end of the week ending immediately prior
to the date on which the certificate is delivered, as applicable.

 

“Borrowing Notice” shall mean a notice by the Borrowing Agent in accordance with
the terms of Section 2.2 and substantially in the form of Exhibit 1.2(d) to this
Agreement (or another form reasonably satisfactory to the Agent).

 

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

 

“Canadian Dollars” shall mean the lawful currency of Canada.

 

“Capital Expenditures” shall mean, for any period, with respect to any Person,
the aggregate of all expenditures by such Person for the demolition,
construction and/or reconstruction of any operating facilities or the
acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which are required to be capitalized under GAAP
on a consolidated balance sheet of such Person, other than expenditures made
utilizing the proceeds of insurance, as permitted under this Agreement, in order
to replace the assets giving rise to such proceeds.

 

“Capital Lease” shall mean a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP but in any case shall
exclude any operating leases that are recharacterized as a Capital Leases in
conformity with GAAP after giving effect to the adoption of ASU No. 2016-02
“Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”.

 

“Capital Stock” shall mean (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other equity interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

 

“Capitalized Lease Obligation” shall mean any Indebtedness of Parent Guarantor
and its applicable Subsidiaries, on a consolidated basis, represented by
obligations under Capital Leases.

 

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“Cases” shall have the meaning set forth in the preamble hereto.

 

“Cash Collateralize” shall mean to pledge and deposit with or deliver to Agent,
for the benefit of each applicable Issuer, as collateral for the Letter of
Credit Obligations, cash or deposit account balances pursuant to documentation
reasonably satisfactory to Agent, each applicable Issuer and the Borrowing Agent
(which documents are hereby consented to by the Lenders).  Such cash collateral
shall be maintained in blocked deposit accounts at the Agent.  Agent will invest
such Cash Collateral (less applicable reserves) in such short-term money-market
items as to which Agent and Borrowing Agent mutually agree and the net return on
such investments shall be credited to such account and constitute additional
Cash Collateral.  At the option of the applicable Issuer, in lieu of cash
collateral, the applicable Letter of Credit Obligations may be supported by one
or more back-to-back letters of credit in form and from institutions reasonably
satisfactory to such Issuer, and such arrangement shall be within the meaning of
Cash Collateralize.  The term “Cash Collateral” shall have a correlative
meaning.

 

“Cash Equivalents” shall have the meaning set forth in Section 7.4 hereof.

 

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

 

“Cash Management Products and Services” shall mean agreements or other
arrangements to provide any of the following products or services to any of any
of the Credit Parties:  (a) credit cards; (b) credit card processing services;
(c) debit cards and stored value cards; (d) purchase cards; (e) ACH
transactions; (f) cash management and treasury management services and products,
including controlled disbursement accounts or services, lockboxes, automated
clearinghouse transactions, overdrafts, interstate depository network services;
or (g) foreign currency exchange and foreign currency swaps and hedges.  The
indebtedness, obligations and liabilities of any Credit Party to the provider of
any Cash Management Products and Services that was Agent or a Lender or an
Affiliate of Agent or a Lender at the date of entering into such Cash Management
Products and Services (including all obligations and liabilities owing to such
provider in respect of any returned items deposited with such provider) (the
“Cash Management Liabilities”) shall be “Obligations” hereunder, guaranteed
obligations under the Guaranty and secured obligations under the Security
Agreements, as applicable, and otherwise treated as Obligations for purposes of
each of the Other Documents (other than any Lender-Provided Hedge).  The Liens
securing the Cash Management Products and Services shall be pari passu (without
regard to control of remedies) with the Liens securing all other Obligations
under this Agreement and the Other Documents, subject to the express provisions
of Section 11.5.

 

“CEA” shall mean the Commodity Exchange Act (7 U.S.C.§ 1 et seq.).

 

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

 

“CFTC” shall mean the Commodity Futures Trading Commission.

 

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

 

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promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities (whether or not having the force of Law), in
each case pursuant to Basel III, shall in each case be deemed to be a Change in
Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

“Change of Control” shall mean:  (a) any Person or “group” (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) (other than any Permitted
Holder) shall have acquired (i) beneficial ownership of 50% or more on a fully
diluted basis of the voting or economic Equity Interests of the General Partner
in the aggregate, or (ii) the power (whether or not exercised) to elect a
majority of the members of the board of directors (or similar governing body) of
the General Partner; (b) [reserved]; (c) the General Partner shall cease to be
the sole general partner of the Parent Guarantor; (d) (i) the Parent Guarantor
shall cease to beneficially own and control, directly, 100% on a fully diluted
basis, of the economic and voting interest in the Equity Interests of Emerge or
(ii) except as permitted by Section 7.1(a), the Parent Guarantor shall cease to
beneficially own and control, directly or indirectly, 100%, on a fully diluted
basis, of the economic and voting interest in the Equity Interests of each
Borrower (other than Emerge); or (e) a “change of control” (or similarly defined
event) as defined in the documentation governing any other Indebtedness of the
Parent Guarantor or any of its Subsidiaries of more than $5,000,000 in principal
amount shall occur.

 

“CIP Regulations” shall have the meaning set forth in Section 14.11 hereof.

 

“Closing Date” shall mean December 20, 2019.

 

“Closing Date Refinancing” shall mean the termination of commitments to make
extensions of credit under the DIP Credit Agreement and the Pre-Petition Credit
Agreements and the repayment in full, or deemed satisfaction, as applicable, of
all obligations thereunder.

 

“Code” shall mean the Internal Revenue Code of 1986.

 

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

 

(a)                                 all Receivables;

 

(b)                                 all Equipment;

 

(c)                                  all General Intangibles;

 

(d)                                 all Inventory;

 

(e)                                  all Investment Property;

 

(f)                                   all Subsidiary Stock;

 

(g)                                  all Intellectual Property;

 

(h)                                 all Real Property that is, or is required to
be under the terms of this Agreement, subject to a Mortgage;

 

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(i)                                     all Leasehold Interests that are, or are
required to be under the terms of this Agreement, subject to a Mortgage;

 

(j)                                    all Cash and Cash Equivalents;

 

(k)                                 all of each Credit Party’s right, title and
interest in and to, whether now owned or hereafter acquired and wherever
located, (i) its respective goods and other property including, but not limited
to, all merchandise returned or rejected by Customers, relating to or securing
any of the Receivables; (ii) all of each Credit Party’s rights as a consignor, a
consignee, an unpaid vendor, mechanic, artisan, or other lienor, including
stoppage in transit, setoff, detinue, replevin, reclamation and repurchase;
(iii) all additional amounts due to any Credit Party from any Customer relating
to the Receivables; (iv) other property, including warranty claims, relating to
any goods securing the Obligations; (v) all of each Credit Party’s contract
rights, rights of payment which have been earned under a contract right,
instruments (including promissory notes), documents, chattel paper (including
electronic chattel paper), warehouse receipts, deposit accounts, letters of
credit, money, fixtures and as-extracted collateral; (vi) each commercial tort
claim described on Schedule 12 to the Perfection Certificate (including those
described on any updates to such Schedule delivered with any Compliance
Certificate) or in which a security interest is otherwise hereafter granted to
Agent by a Credit Party, whether pursuant to the provision of Section 4.1 or
otherwise; (vii) if and when obtained by any Credit Party, all real and personal
property of third parties in which such Credit Party has been granted a lien or
security interest as security for the payment or enforcement of Receivables;
(viii) all letter of credit rights (whether or not the respective letter of
credit is evidenced by a writing); (ix) all supporting obligations; (x) all
insurance policies and proceeds thereof (including, without limitation, business
interruption insurance policies and proceeds); and (xi) any other goods,
personal property or real property now owned or hereafter acquired in which any
Credit Party has expressly granted a security interest or may in the future
grant a security interest to Agent hereunder, or in any amendment or supplement
hereto or thereto, or under any other agreement between Agent and any Credit
Party;

 

(l)                                     all of each Credit Party’s ledger
sheets, ledger cards, files, correspondence, records, books of account, business
papers, computers, computer software (owned by any Credit Party or in which it
has an interest), computer programs, tapes, disks and documents relating to (a),
(b), (c), (d), (e), (f), (g), (h), (i), (j) or (k) above; and

 

(m)                             all proceeds and products of (a), (b), (c), (d),
(e), (f), (g), (h), (i), (j), (k) or (l) above in whatever form, including, but
not limited to:  cash, Cash Equivalents, deposit accounts (whether or not
comprised solely of proceeds), certificates of deposit, insurance proceeds
(including hazard, flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds;

 

but excluding for all purposes any Excluded Collateral.

 

“Collection Accounts” shall have the meaning set forth in
Section 4.14(g) hereof.

 

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

 

“Commitment Amount” shall mean as to any Lender, as of the Closing Date, the
Commitment Amount (if any) set forth across such Lender’s name on Schedule
1.2(a) hereto (or, in the case of any Lender that became party to this Agreement
after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the Commitment
Amount (if any) of such Lender as set forth in the applicable Commitment
Transfer

 

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Supplement), as the same may be adjusted or any assignment by or to such Lender
pursuant to Section 16.3(c) or (d) hereof.

 

“Commitment Percentage” shall mean, as to any Lender, the Commitment Amount of
such Lender divided by the Maximum Revolving Advance Amount, expressed as a
percentage to four (4) decimal places.  The initial Commitment Percentage of
each Lender as of the Closing Date is set forth across such Lender’s name on
Schedule 1.2(a) hereto.

 

“Commitment Transfer Supplement” shall mean a document in the form of
Exhibit 16.3 hereto, properly completed and otherwise in form and substance
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.

 

“Compliance Certificate” shall mean a compliance certificate substantially in
the form attached hereto as Exhibit 1.2(a) to be signed by an Authorized Officer
of Parent Guarantor, which (a) shall state that, based on an examination
sufficient to permit such officer to make an informed statement, no Default or
Event of Default exists, or if such is not the case, shall specify such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by the applicable Credit Parties with respect to such
default and, such certificate shall have appended thereto calculations which set
forth the Credit Parties’ compliance with the requirements or restrictions
imposed by Section 6.5 and (b) shall include any updates to Schedule 5.10(b),
5.12 and 5.14 hereto and a supplement to the Perfection Certificate in the form
attached as Annex 6.13(b) to the Compliance Certificate (the “Perfection
Certificate Supplement”).

 

“Confirmation Order” shall have the meaning set forth in the preamble hereto.

 

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

 

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

 

“Consigned Inventory” shall mean Inventory of any Borrower that is in the
possession of another Person on a consignment, sale or return, or other basis
that does not constitute a final sale and acceptance of such Inventory.

 

“Consolidated” or “consolidated” with reference to any term defined herein,
shall mean that term as applied to the accounts of Parent Guarantor and all of
its consolidated Subsidiaries or its consolidated Restricted Subsidiaries, as
indicated in such reference, in each case, consolidated in accordance with GAAP.

 

“Consolidated Cash Interest Expense” shall mean for any Test Period interest
expense of Parent Guarantor and its Restricted Subsidiaries, to the extent paid
or payable for such period in cash, as determined in accordance with GAAP,
including, without limitation, commitment fees, charges and related expenses in
connection with Funded Indebtedness and interest attributable to Capitalized
Lease Obligations.

 

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“Consolidated EBITDA” shall mean, for any Test Period, for Parent Guarantor and
its Restricted Subsidiaries on a consolidated basis, the sum of (a) Consolidated
Net Income for such period plus (b) without duplication and to the extent
deducted in determining Consolidated Net Income, the sum of (i) depreciation,
depletion and amortization for such period, (ii) all Consolidated Interest
Expense (net of interest income) for such period, (iii) provision for Taxes
based on income for such period, (iv) non-cash charges (including non-cash
compensation charges resulting from stock, equity option and related grants or
any other long-term incentive arrangement, non-cash impairment charges, non-cash
losses as a result of changes in the fair value of derivatives and non-cash
charges as a result of Equity Investments and any warrants issued in connection
therewith) for such period, (v) non-capitalized fees and expenses paid during
such period which were incurred in connection with the Transactions,
(vi) extraordinary charges for such period, (vii) non-recurring charges for such
period, (viii) all non-capitalized transaction expenses paid in such period
related to or resulting from each Permitted Acquisition and each Investment
permitted under Section 7.4, not to exceed 3% of the aggregate cash
consideration paid for such Permitted Acquisition or Investment, and in each
case, paid on or within ninety (90) days of the applicable closing date of such
Permitted Acquisition or Investment, (ix) all non-capitalized transaction
expenses paid in such period related to or resulting from each issuance of
Indebtedness permitted under Section 7.6, not to exceed 1.5% of the gross amount
of such Indebtedness, and in each case, paid on or within ninety (90) days of
the applicable closing date of such issuance, (x) all non-capitalized
transaction expenses paid in such period related to or resulting from each
equity issuance, not to exceed 3.5% of the gross amount of the proceeds of such
equity issuance, and in each case, paid on or within ninety (90) days of the
applicable closing date of such equity issuance, (xi) [reserved], and
(xii) solely for purposes of Section 6.5, non-cash expenses in respect of such
period for Railcar Leases and Transload Facilities; provided, that the aggregate
amount of all charges and expenses pursuant to clauses (v), (vi), (vii), (viii),
(ix) and (x) shall not exceed $7,500,000 in any Test Period, minus (c) (i) to
the extent included in determining Consolidated Net Income for such period,
(A) Tax benefits for such period, (B) extraordinary or non-recurring gains for
such period and (C) non-cash items of income for such period and (ii) solely for
purposes of Section 6.5, cash payments made in respect of such period under
Railcar Leases and Transload Facilities in excess of the amount of expenses in
respect of such Railcar Leases and Transload Facilities already included in
determining Consolidated Net Income for such period.

 

“Consolidated Fixed Charges” shall mean, for any Test Period, the sum (without
duplication) of (a) Consolidated Cash Interest Expense paid during such Test
Period (other than commitment fees paid pursuant to this Agreement); and (b) all
scheduled principal payments made in respect of Funded Indebtedness (other than
in respect of any Revolving Advances to the extent there is not an equivalent
permanent reduction in the Commitment Amount) during such Test Period.

 

“Consolidated Interest Expense” shall mean for any Test Period interest expense
of Parent Guarantor and its Restricted Subsidiaries as determined in accordance
with GAAP, including, without limitation, commitment fees, charges and related
expenses in connection with Funded Indebtedness and interest attributable to
Capitalized Lease Obligations.

 

“Consolidated Net Income” shall mean for any Test Period, the consolidated net
income (or loss) of Parent Guarantor and its Restricted Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any such Subsidiary accrued prior to the
date it becomes a Restricted Subsidiary of Parent Guarantor or is merged into or
consolidated with Parent Guarantor or any of its Restricted Subsidiaries except
to the extent included for any calculation of Consolidated EBITDA on a Pro Forma
Basis, (b) the net income (or deficit) of any Person (other than a Restricted
Subsidiary of Parent Guarantor) in which Parent Guarantor or any of its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by Parent Guarantor or such Restricted
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any such Restricted Subsidiary of Parent Guarantor
(other than a Credit Party) to the extent that

 

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the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is at the time prohibited by the terms of any agreement to
which such Person is a party or by which it or any of its property is bound, any
of such Person’s organizational documents or other legal proceedings binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

 

“Controlled Group” shall mean, at any time, each Credit Party and all members of
a controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Credit Party, are treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Sections 412 and 430 of the Code and
Title IV of ERISA, is treated as a single employer under Sections 414(m) and
(o) of the Code.

 

“Controlled Investment Affiliates” means, with respect to any Person, any fund
or investment vehicle that is organized by such Person or an Affiliate of such
Person for the purpose of, or in connection with, making investments in one or
more companies, and is controlled by such Person or an Affiliate of such Person
or has the same principal fund advisor as such Person or an Affiliate of such
Person. For purposes of this definition “control” means the power to direct or
cause the direction of management and policies of a Person, whether by contract
or otherwise.

 

“Covered Entity” shall mean (a) each Credit Party, each Credit Party’s
Subsidiaries and each pledgor of Collateral, and (b) to the knowledge of the
Credit Parties, each Person which, directly or indirectly, is in control of, a
Person described in clause (a) above.  For purposes of this definition, control
of a Person shall mean the direct or indirect, ownership, or power (x) to vote
25% or more of the Equity Interests having ordinary voting power for the
election of directors of such Person or other Persons performing similar
functions for any such Person, or (y) the direct or indirect power to direct or
cause the direction of the management and policies of such Person whether by
ownership of Equity Interests, contract or otherwise; provided that no owner of
the Equity Interests of the Parent Guarantor shall be deemed to have control of
the Parent Guarantor unless such owner is considered to have control of the
Parent Guarantor pursuant to clause (y).

 

“Credit Parties” shall mean the Borrowers and the Guarantors, and “Credit Party”
shall mean any of them.

 

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

 

“Debtor” and “Debtors” shall have the meaning set forth in the preamble hereto.

 

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

 

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

 

“Defaulting Lender” shall mean any Lender that:  (a) has failed, within two
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Commitment Percentage of Advances, (ii) if applicable, fund any portion
of its Participation Commitment in Letters of Credit or (iii) pay over to the
Agent, the Issuer or any Lender any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Lender notifies the
Agent and the Borrowing Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including a particular Default or Event of Default,
if any) has not been satisfied; (b) has

 

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notified the Borrowing Agent or the Agent in writing, or has made a public
statement to the effect, that it does not intend or expect to comply with any of
its funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Lender’s good faith
determination that a condition precedent (specifically identified and including
a particular Default or Event of Default, if any) to funding Advances under this
Agreement cannot be satisfied) or generally under other agreements in which it
commits to extend credit; (c) has failed, within two Business Days after request
by the Agent or the Borrowing Agent, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Advances and, if applicable, participations in then
outstanding Letters of Credit under this Agreement; provided that such Lender
shall cease to be a Defaulting Lender pursuant to this clause (c) upon the
Agent’s and Borrowing Agent’s receipt of such certification in form and
substance satisfactory to the Agent; (d) has become the subject of an Insolvency
Event; or (e) has failed at any time to comply with the provisions of
Section 2.10(e) with respect to purchasing participations from the other
Lenders, whereby such Lender’s share of any payment received, whether by setoff
or otherwise, is in excess of its Pro Rata Share of such payments due and
payable to all of the Lenders.

 

“Deposit Account Control Agreements” shall mean the deposit account control
agreements or blocked account agreements in a form that is reasonably
satisfactory to the Agent to be executed by each institution maintaining a
deposit account or securities account for any of the Credit Parties, in favor of
Agent, for the benefit of Secured Parties, as security for the Obligations to
the extent required by Section 4.14(g) or any other provision of this Agreement
or any Other Document.

 

“DIP Closing Date” shall have the meaning set forth in the preamble hereto.

 

“DIP Credit Agreement” shall have the meaning set forth in the preamble hereto.

 

“DIP Lenders” shall have the meaning set forth in the preamble hereto.

 

“Disposition” shall have the meaning set forth in Section 7.1(b) hereof.

 

“Disqualified Stock” shall mean any Equity Interests of a Person that by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable, in either case at the option of the holder thereof) or
otherwise (a) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (b) is or may become redeemable or repurchaseable at
the option of the holder thereof, in whole or in part or (c) is convertible or
exchangeable at the option of the holder thereof for Indebtedness or
Disqualified Stock, on or prior to the earlier of, in the case of clause (a),
(b) or (c), (i) 91 days after the Maturity Date hereunder as in effect at the
time of issuance and (ii) upon payment in full of the Obligations (provided that
only the portion of Equity Interests which is mandatorily redeemable or matures
or is redeemable at the option of the holder thereof prior to such date will be
deemed to be Disqualified Stock), in each case other than in exchange for Equity
Interests of the Borrowers (other than Disqualified Stock).

 

Notwithstanding the preceding sentence:

 

(a)           any Equity Interests issued to any plan for the benefit of
employees of the Credit Parties or any of their Subsidiaries or by any such plan
to such employees shall not constitute Disqualified Stock solely because such
Equity Interests may be required to be repurchased by the Credit Parties or
their Subsidiaries in order to satisfy applicable statutory or regulatory
obligations; and

 

(b)           any Equity Interests held by any future, current or former
employee, director, manager or consultant (or their respective trusts, estates,
investment funds, investment vehicles or immediate family

 

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members) of the Credit Parties or any of their Subsidiaries, in each case upon
the termination of employment or death of such person pursuant to any stock
option plan or any other management or employee benefit plan or agreement, shall
not constitute Disqualified Stock solely because such Equity Interests may be
required to be repurchased by the Credit Parties or their Subsidiaries.

 

“Documents” shall have the meaning set forth in Section 8.1(i) hereof.

 

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

 

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

 

“Domestic Subsidiaries” shall mean, with respect to any Person, any Subsidiary
of such Person which is incorporated or organized under the laws of any state of
the United States or the District of Columbia other than any such Subsidiary
that is owned directly or indirectly by an entity that is not incorporated or
organized under the laws of any state of the United States or the District of
Columbia.

 

“Dominion Event” shall mean, as of any date of determination, (a) an Event of
Default has occurred and is continuing or (b) the sum of Excess Availability and
Liquidity as of such date is less than $3,000,000; provided, that for the
purposes of Section 4.14(g) only, clause (b) above shall not apply until
delivery of the Initial Borrowing Base Certificate.

 

“Dominion Period” shall mean each period commencing upon the occurrence of a
Dominion Event and ending on the first date thereafter on which either (a) if
such Dominion Event was the occurrence of an Event of Default, such Event of
Default (i) is no longer continuing or (ii) has been waived in writing in
accordance with the terms of this Agreement or (b) in all other cases, the
average of the sum of Excess Availability and Liquidity for thirty (30)
consecutive days following the occurrence (or re-occurrence) of any event
described in clause (b) of the definition of “Dominion Event,” is greater than
or equal to $3,000,000.

 

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

 

“EEA Financial Institution” shall mean (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” shall mean any member state of the European Union, Iceland,
Liechtenstein and Norway or any other state that is a member of the European
Economic Area.

 

“EEA Resolution Authority” shall mean 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.

 

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

 

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

 

“Eligible In-Transit Fuel Inventory” shall mean all Eligible Inventory of a
Borrower consisting of petroleum fuel products (including, without limitation,
Blendstock) (a) which is in-transit to a facility of a Borrower, (b) for which a
Borrower has retained title or title has passed to a Borrower, (c) which is
insured to the full value thereof in accordance with the provisions of this
Agreement and the Other Documents and (d) if such Inventory has been acquired
pursuant to a Permitted Acquisition, Agent has completed its due diligence with
respect thereto, the results of which are satisfactory to it in its Permitted
Discretion.

 

“Eligible In-Transit Inventory” shall mean Eligible In-Transit Sand Inventory.

 

“Eligible In-Transit Sand Inventory” shall mean all Eligible Inventory of a
Borrower consisting of sand (a) which is in-transit to a facility of a Borrower,
(b) for which a Borrower has retained title or title has passed to a Borrower,
(c) which is insured to the full value thereof and (d) if such Inventory has
been acquired pursuant to a Permitted Acquisition, Agent has completed its due
diligence with respect thereto, the results of which are satisfactory to it in
its Permitted Discretion.

 

“Eligible Inventory” shall mean and include sand Inventory with respect to each
Borrower, valued at the lower of cost (on a weighted average basis) or current
market value, which is not obsolete, slow moving or unmerchantable and which
Agent, in its Permitted Discretion, shall not deem ineligible Inventory, based
on such considerations as Agent may from time to time deem appropriate
including, without limitation, whether the Agent has completed due diligence
satisfactory to it in its Permitted Discretion with respect to any new Inventory
acquired pursuant to a Permitted Acquisition.  In addition, Inventory shall not
be Eligible Inventory if it (i) is not subject to a perfected, first priority
security interest in favor of Agent and any other Lien (other than a Permitted
Encumbrance) exists on such Inventory, (ii) does not conform in all material
respects to all standards imposed by any Governmental Body which has regulatory
authority over such goods or the use, transport or sale thereof; (iii) except
for Eligible In-Transit Inventory, is in transit; (iv) is located outside the
continental United States or Alberta, Canada (or any other province in Canada
with respect to which Agent has perfected its Lien on any Inventory located
there under the PPSA) or at a location that is not otherwise in compliance with
this Agreement; (v) constitutes Consigned Inventory; or (vi) is subject to an
agreement that limits, conditions or restricts any Borrower’s or Agent’s right
to sell or otherwise dispose of such Inventory.

 

“Eligible Receivables” shall mean and include with respect to each Borrower,
each Receivable of such Borrower arising in the ordinary course of business and
which Agent, in its Permitted Discretion, shall deem to be an Eligible
Receivable, based on such considerations as Agent may from time to time deem
appropriate in its Permitted Discretion, including without limitation,
completion of due diligence satisfactory to it in its Permitted Discretion with
respect to any new Receivables acquired pursuant to a Permitted Acquisition.  A
Receivable shall not be deemed eligible unless such Receivable is subject to
Agent’s first priority perfected security interest and no other Lien (other than
Permitted Encumbrances) exists on such Receivable, and is evidenced by an
invoice or other documentary evidence satisfactory to Agent in its Permitted
Discretion.  In addition, no Receivable shall be an Eligible Receivable if:

 

(a)           it arises out of a sale made by any Borrower to an Affiliate of
any Borrower or to a Person controlled by an Affiliate of any Borrower (other
than any operating portfolio company of any holder of Equity Interests in the
General Partner or the Parent Guarantor);

 

(b)           it is due or unpaid more than ninety (90) days after the original
invoice date or sixty (60) days after the original due date;

 

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(c)           fifty percent (50%) or more of the Receivables from such Customer
are not deemed Eligible Receivables under clause (b) hereunder;

 

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

 

(e)           an Insolvency Event shall have occurred with respect to such
Customer;

 

(f)            the sale is not payable in Dollars or Canadian Dollars or is to a
Customer outside the United States of America or a province of Canada (other
than Quebec or any other province or territory thereof that has not adopted the
PPSA), unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Agent in its Permitted Discretion;

 

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

 

(h)           the Customer is the United States of America, Canada, any state,
province or territory thereof or any department, agency or instrumentality of
any of them, unless the applicable Borrower assigns its right to payment, if the
Receivable is subject to such an assignment, of such Receivable to Agent
pursuant to the Assignment of Claims Act of 1940 (31 U.S.C. § 3727 et seq. and
41 U.S.C. § 15 et seq.) or has otherwise complied with other similar applicable
statutes or ordinances, but only to the extent the aggregate amount of all such
Receivables not subject to such an assignment exceeds 10% of the Formula Amount
as of any date of determination;

 

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

 

(j)            the aggregate amount of outstanding Receivables of the Customer
exceeds twenty-five (25%) of all Eligible Receivables, to the extent such
Receivable exceeds such limit;

 

(k)           the Receivable is subject to any offset, deduction, defense,
dispute or counterclaim or is contingent in any respect (including by virtue of
the Customer also being a creditor or supplier of Borrower) with respect to the
Receivable, but only to the extent of the maximum potential amount of such
offset, deduction, defense, dispute, counterclaim or contingency against the
applicable Receivable;

 

(l)            the applicable Borrower has made any agreement with any Customer
for any deduction therefrom, except for discounts, deductions, allowances or
sales rebates made in the ordinary course of business for prompt payment, all of
which discounts or allowances or sales rebates are reflected in the calculation
of the face value of each respective invoice related thereto, but, with respect
to a Receivable subject to discounts, deductions, allowances or sales rebates,
only to the extent of the maximum potential amount of such discount or allowance
against the applicable Receivables are reflected in Borrowers’ calculation of
the Formula Amount;

 

(m)          any return, rejection or repossession of the merchandise has
occurred or the rendition of services has been disputed;

 

(n)           such Receivable is not payable to the applicable Borrower; or

 

(o)           such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its Permitted Discretion.

 

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“Emerge” shall have the meaning set forth in the preamble hereto.

 

“Environmental Complaint” shall have the meaning set forth in
Section 4.18(b) hereof.

 

“Environmental Indemnity Agreements” shall mean any and all environmental
indemnity agreements provided by any Credit Party to Agent, for the benefit of
the Secured Parties, with respect to Real Property subject to a Mortgage.

 

“Environmental Laws” shall mean all applicable federal, state and local
environmental, land use, chemical use, mining, safety and sanitation laws,
statutes, ordinances and codes relating to the protection of the environment or
natural resources governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, legally binding policies, guidelines,
interpretations, decisions, orders and directives of federal, state and local
governmental agencies and authorities with respect thereto (including, for the
avoidance of doubt, the Mine Safety and Health Act, 30 U.S.C. §§ 801 et seq. and
the Surface Mining Control and Reclamation Act 30 U.S.C. §§ 1201 et seq).

 

“Equipment” shall mean and include, as to each Credit Party, all “equipment,” as
such term is defined in the Uniform Commercial Code, of such Credit Party, and,
in any event, shall include all of such Credit Party’s goods (other than
Inventory) whether now owned or hereafter acquired and wherever located,
including all equipment, machinery, apparatus, fittings, furniture, furnishings,
fixtures, parts, accessories and all replacements and substitutions therefor or
accessions thereto.

 

“Equity Interests” shall mean, with respect to any Person, any and all Capital
Stock and all rights to purchase, options, warrants, participation or other
equivalents of or interest in (regardless of how designated) equity of such
Capital Stock, but excluding debt securities exchangeable for or convertible
into Capital Stock.  For purposes of the definition of “Change of Control,”
Equity Interests include all of the following rights relating to such Equity
Interests, whether arising under the Organizational Documents of the Person
issuing such Equity Interests (the “issuer”) or under the Applicable Laws of
such issuer’s jurisdiction of organization relating to the formation, existence
and governance of corporations, limited liability companies or partnerships or
business trusts or other legal entities, as the case may be:  (i) all economic
rights (including all rights to receive dividends and distributions) relating to
such Equity Interests; (ii) all voting rights and rights to consent to any
particular action(s) by the applicable issuer; (iii) all management rights with
respect to such issuer; (iv) in the case of any Equity Interests consisting of a
general partner interest in a partnership, all powers and rights as a general
partner with respect to the management, operations and control of the business
and affairs of the applicable issuer; (v) in the case of any Equity Interests
consisting of the membership/limited liability company interests of a managing
member in a limited liability company, all powers and rights as a managing
member with respect to the management, operations and control of the business
and affairs of the applicable issuer; (vi) all rights to designate or appoint or
vote for or remove any officers, directors, manager(s), general partner(s) or
managing member(s) of such issuer and/or any members of any board of
members/managers/partners/directors that may at any time have any rights to
manage and direct the business and affairs of the applicable issuer under its
Organizational Documents as in effect from time to time or under Applicable Law;
(vii) all rights to amend the Organizational Documents of such issuer, (viii) in
the case of any Equity Interests in a partnership or limited liability company,
the status of the holder of such Equity Interests as a “partner,” general or
limited, or “member” (as applicable) under the applicable Organizational
Documents and/or Applicable Law; and (ix) all certificates evidencing such
Equity Interests, but in any case, excluding debt securities convertible into or
exchangeable for Equity Interests.

 

“Equity Investments” shall mean an issuance of Equity Interests (other than
Disqualified Stock) by, or a contribution to the common equity capital of, the
Parent Guarantor.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

 

“EU Bail-In Legislation Schedule” shall mean 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” shall have the meaning set forth in Article X hereof.

 

“Excess Availability” shall mean, as of any date of determination, (a) the Line
Cap minus (b) the Revolving Facility Usage.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Excluded Collateral” shall mean (i) all motor vehicles and other rolling stock
and goods covered by a certificate of title, (ii) Excluded Deposit Accounts
described in clauses (b) and (c) of the definition thereof, (iii) Equipment
owned by any Credit Party that is subject to a Lien permitted pursuant to clause
(g) of the definition of “Permitted Encumbrances” (but only to the extent that
and only for so long as such Permitted Purchase Money Indebtedness restricts the
granting of a Lien therein to Agent), (iv) any lease, license, contract,
property right or agreement (or any Credit Party’s rights or interests
thereunder) if and to the extent that the grant of the security interest shall
constitute or result in (A) the abandonment, invalidation or unenforceability of
any right, title or interest of any Credit Party therein, or any legally
effective option to purchase or similar right of a third party (other than
another Credit Party) thereunder, under any lease, license, contract, or
agreement giving rise thereto, or (B) a breach or termination pursuant to the
terms of, or a default under, or a violation of any legally enforceable
provision requiring consent (which has not been obtained) of another party
(other than a Credit Party) to any such lease, license, contract, property right
or agreement, (v) any intent-to-use trademark or service mark applications for
which (1) no statement of use or amendment to allege use has been filed and
(2) the grant of a security interest in any such application would impair
validity or enforceability of any registration that issues therefrom and
(vi) any stock of any Person that does not constitute Subsidiary Stock, to the
extent and for so long as the granting of security interests in such stock would
be prohibited by an agreement governing such stock, in the case of clauses
(iii), (iv) and (vi), after giving effect to applicable anti-non-assignment
provisions of the Uniform Commercial Code or any other Applicable Law; provided
that the exclusion in such clauses shall not apply to proceeds and receivables
of the applicable assets, the assignment of which is expressly deemed effective
under the Uniform Commercial Code or other Applicable Law notwithstanding such
prohibition.

 

“Excluded Deposit Accounts” shall mean (a) those deposit accounts identified as
“Excluded Deposit Accounts” on Schedule 5(a) to the Perfection Certificate and
any other deposit accounts established after the Closing Date, so long as (i) at
any time the balance in any such “Excluded Deposit Account” or other deposit
account established after the Closing Date does not exceed $50,000 and the
aggregate balance in all such “Excluded Deposit Accounts” or other deposit
accounts established after the Closing Date does not exceed $100,000 and
(ii) such deposit account does not receive remittances from Customers or other
proceeds of Receivables and is not an operating account; (b) other deposit
accounts established solely as, and containing no funds other than in respect
of, payroll, employee benefits, health care reimbursement and other zero balance
accounts; and (c) deposit accounts maintained in bank accounts outside of the
United States for Foreign Subsidiaries.

 

“Excluded Hedge Liabilities” shall mean, with respect to each Credit Party, each
of its Swap Obligations if, and to the extent that, all or any portion of this
Agreement or any Other Document that relates to such Swap Obligation (or the
guaranty of such Swap Obligation, or the grant by such Credit Party of a
security interest in the Collateral to secure such Swap Obligation) is or
becomes illegal under the CEA, or any rule, regulation or order of the CFTC, by
virtue of such Credit Party’s failure to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap.  Notwithstanding anything to
the contrary

 

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

 

“Excluded Taxes” shall mean, with respect to any Recipient, any of the following
Taxes imposed on or with respect to any payment to be made to such Recipient by
or on account of any Obligations:  (a) Taxes imposed on or measured by its net
income (however denominated), franchise Taxes and branch profits Taxes, in each
case, (i) imposed by the jurisdiction (or any political subdivision thereof)
under the laws of which such Recipient is organized or in which its principal
office is located or, in the case of any Lender or Issuer, in which its
applicable lending office is located or (ii) that are Other Connection Taxes,
(b) in the case of any Lender or Issuer, any U.S. federal withholding Tax that
is imposed on amounts payable to or for the account of such Recipient pursuant
to a law in effect at the time such Recipient becomes a party hereto (other than
pursuant to an assignment request under Section 3.11) or acquires a
participation (or designates a new lending office), except, in each case, to the
extent that such Recipient (or its assignor or seller of a participation, if
any) was entitled, at the time of designation of a new lending office (or
assignment or sale of a participation), to receive additional amounts with
respect to such withholding Tax pursuant to Section 3.10(a), (c) Taxes
attributable to such Recipient’s failure to comply with Section 3.10(e), or
(d) any withholding Taxes imposed under FATCA.

 

“Existing General Partner” shall have the meaning set forth in the preamble
hereto.

 

“Extraordinary Receipt” means (a) litigation receipts not received as
reimbursements for cash or property losses or payments to third parties
previously made or incurred (or reasonably expected to be made or incurred) by
Parent Guarantor or any Subsidiary thereof, (b) settlement proceeds to the
extent not received as reimbursement for cash losses or payments to third
parties previously made or incurred (or reasonably expected to be made or
incurred) by Parent Guarantor or any Subsidiary thereof, in the case of clause
(a) and (b), net of (x) any income Taxes paid or reasonably expected to be
payable in respect of such receipts and (y) costs and expenses incurred in
connection with the collection of such receipts, but only to the extent actually
paid or payable to a Person that is not an Affiliate of Parent Guarantor or such
Subsidiary and properly attributable to such event and (c) any refunds of Taxes
paid in the current or any prior fiscal year.

 

“Fair Market Value” means with respect to any asset or group of assets on any
date of determination, the fair market value thereof as determined in good faith
by an Authorized Officer or by the board of directors (or similar governing
body) of the Parent Guarantor, in each case as such Person has the appropriate
authority as permitted by the corporate policies of the Parent Guarantor or,
with respect to any transaction in respect of any asset or group of assets with
a value in excess of $1,000,000, such determination shall be made by the board
of directors (or similar governing body) of the Parent Guarantor.

 

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“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the Closing
Date (or any amended or successor version that is substantively comparable and
not materially more onerous to comply with), any current or future regulations
thereunder or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, as of the Closing Date (or any
amended or successor version as described above), and any applicable
intergovernmental agreements entered into with respect thereto (together with
any law implementing such agreements).

 

“Federal Funds Effective Rate” for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions on the previous trading day, as computed and
announced by such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the “Federal Funds Effective Rate” as of the Closing
Date; provided that, if such Federal Reserve Bank (or its successor) does not
announce such rate on any day, the “Federal Funds Effective Rate” for such day
shall be the Federal Funds Effective Rate for the last day on which such rate
was announced; provided, that, if no such rate is published the Federal Funds
Effective Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions by three (3) federal funds brokers of recognized
standing as determined by the Agent. Notwithstanding anything to the contrary,
if the Federal Funds Effective Rate determined pursuant to the foregoing would
be less than 0.00% on any day, the Federal Funds Effective Rate shall be deemed
to be 0.00% on such day.

 

“Fee Letter” shall mean the fee letter dated as of the Closing Date among the
Parent Guarantor, each Borrower and HPS.

 

“Field Examinations” shall mean, whether as to any one Borrower or all Borrowers
and whether in one visit or a series of related visits, the audit, inspection
and review by Agent or its agents of any Borrower’s (a) books, records, audits,
correspondence and all other papers relating to the Collateral, (b) the
operations of such Borrower and/or (c) the Collateral.

 

“FinanceCo” shall have the meaning set forth in the preamble hereto.

 

“Financial Condition Certificate” shall have the meaning set forth in
Section 8.1(f) hereof.

 

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

 

“Fixed Charge Coverage Ratio” shall mean, for any Test Period, the ratio of
(a) (i) Consolidated EBITDA minus (ii) the sum of (A) Unfinanced Capital
Expenditures, (B) the cash portion of Tax expense paid during such Test Period,
(C) Restricted Payments pursuant to Section 7.5 paid during such Test Period,
each for such Test Period, and (D) commitment fees paid pursuant to Section 3.3
to (b) Consolidated Fixed Charges for such Test Period.

 

“Flood Laws” shall mean, collectively, (i) the National Flood Insurance Act of
1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto, (iv) the Flood
Insurance Reform Act of 2004 as now or hereafter in effect or any successor
statute thereto, (v) Biggert-Waters Flood Insurance Reform Act of 2012 as now or
hereafter in effect or any successor statute thereto, and (vi) any other
regulations or requirements that are associated with the National Flood
Insurance Program.

 

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

 

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“Foreign Subsidiary” of any Person shall mean any Subsidiary of such Person that
is not a Domestic Subsidiary of such Person.

 

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

 

“Fraudulent Transfer Laws” shall have the meaning set forth in
Section 15.1(d) hereof.

 

“Funded Indebtedness” means, as of any date of determination, all Indebtedness
for borrowed money or letters of credit of Parent Guarantor and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP,
including, in any event, but without duplication, the Revolving Facility Usage
(calculated on a daily average basis for such period), the amount of Capitalized
Lease Obligations, Purchase Money Indebtedness and obligations (including
earn-outs once accrued) in respect of the deferred purchase price of property or
services (other than current unsecured trade accounts payable which arise in the
ordinary course of business and that are not overdue more than 120 days unless
the same are being Properly Contested).

 

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

 

“General Intangibles” shall mean and include as to each Credit Party all of such
Credit Party’s “general intangibles,” as such term is defined in the Uniform
Commercial Code, whether now owned or hereafter acquired, including all payment
intangibles, all choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trade names,
trademarks, trademark applications, service marks, trade secrets, goodwill,
copyrights, design rights, software, computer information, source codes, codes,
records and updates, registrations, licenses, franchises, customer lists, Tax
refunds, Tax refund claims, computer programs, all claims under guaranties,
security interests or other security held by or granted to such Credit Party to
secure payment of any of the Receivables by a Customer (other than to the extent
covered by Receivables) all rights of indemnification and all other intangible
property of every kind and nature (other than Receivables).

 

“General Partner” shall mean EES GP, LLC, a Delaware limited liability company,
as appointed pursuant to the Plan of Reorganization.

 

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

 

“Guarantor” shall mean Parent Guarantor, each Borrower (other than with respect
to its direct Obligations as a primary obligor under this Agreement and the
Other Documents) and any other Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations and “Guarantors” shall
mean collectively all such Persons.

 

“Guaranty” shall mean (a) that certain Guaranty and Suretyship Agreement, dated
as of the Closing Date, by Parent Guarantor and each Borrower (and any other
Guarantor joined as a party thereto) in favor of Agent for its benefit and for
the ratable benefit of Lenders, substantially in the form of
Exhibit 1.2(b) attached hereto and (b) any other guaranty of the Obligations
executed by a Guarantor in favor of Agent

 

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for its benefit and for the ratable benefit of Lenders, in form and substance
satisfactory to Agent in its Permitted Discretion.

 

“Hazardous Discharge” shall have the meaning set forth in
Section 4.18(b) hereof.

 

“Hazardous Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
or any other substance, material or waste defined as “hazardous,” “toxic,” a
“pollutant,” a “contaminant” or words of similar meaning or regulatory effect as
defined in CERCLA, the Hazardous Materials Transportation Act (49 U.S.C.
Sections 5101, et seq.), RCRA or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.

 

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

 

“Hedge” shall mean an interest rate, currency or commodity exchange, collar,
cap, swap, floor, adjustable strike cap, adjustable strike corridor or similar
agreements entered into by any Credit Party in order to provide protection to,
or minimize the impact upon, such Credit Party and/or its respective
Subsidiaries of changes in interest rates, currency exchange rates or commodity
prices; provided that such agreement is entered into for hedging (rather than
speculative purposes).

 

“Hedge Liabilities” shall have the meaning provided in the definition of
“Lender-Provided Hedge”.

 

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

 

“HPS” shall have the meaning set forth in the preamble hereto and shall extend
to all of its successors and assigns.

 

“Inactive Subsidiary” shall mean any Subsidiary that does not (a) conduct any
business operations (including the operations of a holding company), (b) have
any assets or (c) own any Capital Stock of any Credit Party or any other
Subsidiary (except another Inactive Subsidiary) of any Credit Party; provided,
that it is acknowledged and agreed by the parties hereto that FinanceCo shall
not be an Inactive Subsidiary.

 

“Indebtedness” shall mean, with respect to any Person, as of the date of
determination thereof (without duplication), (i) all obligations of such Person
for borrowed money,  (ii) all obligations evidenced by any note, debenture, bond
or other instrument, (iii) all obligations of such Person to pay the deferred
purchase price of property or services (other than current unsecured trade
accounts payable which arise in the ordinary course of business and that are not
overdue more than 120 days unless the same are being Properly Contested),
(iv) all Capitalized Lease Obligations, (v) the then outstanding amount of
withdrawal or termination liability incurred under ERISA, (vi) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (vii) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right to be secured by) a Lien on any asset of such Person whether or not the
Indebtedness is assumed by such Person, provided that for the purpose of
determining the amount of Indebtedness of the type described in this clause
(vii), if recourse with respect to such Indebtedness is limited to the assets of
such Person, then the amount of Indebtedness shall be limited to the Fair Market
Value of such assets, (viii) all obligations of such Person in respect of
letters of credit, bankers acceptances, surety bonds or similar instruments
issued or accepted by banks or other financial institutions for the

 

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account of such Person, (ix) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
long-term liability on the consolidated balance sheet of such Person, (x) all
obligations of such Person under hedging agreements or arrangements therefor,
(xi) all guarantees by such Person of Indebtedness of others, (xii) [reserved],
(xiii) all obligations in respect of Disqualified Stock and (xiv) all earn-outs
(once accrued), seller notes and similar obligations; provided that
(x) operating leases shall not be considered Indebtedness, and (y) any Equity
Investments and warrants to purchase Equity Interests issued in connection
therewith shall not be considered Indebtedness so long as such investment does
not constitute Disqualified Stock.  For purposes of this definition, the
“principal amount” of the obligations of any Person in respect of any hedging
agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such
hedging agreement were terminated at such time.

 

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

 

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

 

“Initial Borrowing Base Certificate” shall have the meaning set forth in
Section 9.2(a).

 

“Initial Plan of Reorganization” shall have the meaning set forth in the
preamble hereto.

 

“Insolvency Event” shall mean, with respect to any Person, including without
limitation any Lender, such Person or such Person’s direct or indirect parent
company (a) becomes the subject of a bankruptcy or insolvency proceeding
(including any proceeding under Title 11 of the United States Code), or
regulatory restrictions, (b) has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it or has called a meeting of its creditors, (c) admits in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (d) with respect to a Lender, such Lender is
unable to perform hereunder due to the application of Applicable Law, or (e) in
the good faith determination of the Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment of a type described in clause (a) or (b), provided
that an Insolvency Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person or such
Person’s direct or indirect parent company by a Governmental Body or
instrumentality thereof if, and only if, such ownership interest does not result
in or provide such Person with immunity from the jurisdiction of courts within
the United States or from the enforcement of judgments or writs of attachment on
its assets or permit such Person (or such Governmental Body or instrumentality)
to reject, repudiate, disavow or disaffirm any contracts or agreements made by
such Person.

 

“Intellectual Property” shall mean property constituting under any Applicable
Law a patent, patent application, copyright, copyright application, trademark,
trademark application, service mark, service mark application, corporate and
trade names, mask work or trade secret, in each case whether registered or
unregistered, and any right or license to use any of the foregoing and all
goodwill of any Credit Party’s business connected with the use thereof and
symbolized thereby, together with any and all, as applicable, (i) rights and
privileges arising under Applicable Law with respect to any Credit Party’s use
of any of the foregoing, (ii) inventions and improvements described and claimed
therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements, misappropriations, dilutions, violations or
impairments thereof, (v) rights to sue for past, present or future

 

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infringement, misappropriation, dilution, violation or impairment thereof and
(vi) rights corresponding thereto throughout the world.

 

“Intellectual Property Security Agreement(s)” shall mean any one or more
intellectual property security agreements executed by a Credit Party in favor of
Agent for its benefit and for the benefit of each Secured Party, substantially
in the form of Exhibit 1.2(f).

 

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

 

“Inventory” shall mean and include as to each Credit Party all “inventory,” as
such term is defined in the Uniform Commercial Code, of such Credit Party, and,
in any event, shall include all of such Credit Party’s now owned or hereafter
acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for
sale or lease, all raw materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are or might be used or
consumed in such Credit Party’s business or used in selling or furnishing such
goods, merchandise and other personal property, and all documents of title or
other documents representing them.

 

“Inventory Advance Rates” shall mean the Sand Inventory Advance Rate, the NOLV
Advance Rate and the Sand Reserve Advance Rate.

 

“Investment” shall mean, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, guaranty or assumption of debt of, or purchase or other
acquisition of any other debt or interest in, another Person, (c) the purchase
or other acquisition of all or substantially all of the property and assets or
business of another Person or assets constituting a business unit, line of
business or division of such Person, or (d) otherwise, other than (i) the
acquisition of inventory in the ordinary course of business, including through
bulk purchases, (ii) [reserved] and (iii) acquisition or investment in equipment
in the ordinary course of business. For purposes of covenant compliance, the
amount of any Investment shall be (i) the amount actually invested (measured at
the time made), without adjustment for subsequent increases or decreases in the
value of such Investment minus (ii) the amount of any return of capital and any
payment of principal received in respect of such Investment that in each case is
received in cash or Cash Equivalents.  For the purpose of clarity, a Hedge shall
not be considered an Investment.

 

“Investment Property” shall mean and include as to each Credit Party, all
“investment property,” as such term is defined in the Uniform Commercial Code,
of such Credit Party, and, in any event, shall include all of such Credit
Party’s now owned or hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts, commodities
contracts, commodities accounts and financial assets.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Issuer” shall mean a Person(s) selected by the Borrowing Agent and acceptable
to the Agent and the Required Lenders in their respective sole discretion, that
agrees to issue, and issues a Letter of Credit, in its capacity as such
hereunder.  If there is one more than one Issuer, references to the Issuer shall
be to the applicable Issuer(s).

 

“Law(s)” shall mean any law(s) (including common law and equitable principles),
federal, state and foreign constitutions, statute, treaty, regulation, rule,
ordinance, opinion, issued guidance, release,

 

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ruling, order, executive order, injunction, writ, decree, judgment,
authorization or approval, lien or award of or any settlement arrangement with
any Governmental Body or arbitrator, directives and orders of any Governmental
Body, in each case, whether, foreign or domestic, state, federal or local.

 

“LC Disbursement” shall mean a payment made by the Issuer pursuant to a Letter
of Credit.

 

“Leasehold Interests” shall mean all of each Credit Party’s right, title and
interest in and to, and as lessee of, any real property on which any Credit
Party conducts mining operations, including, without limitation, the premises
identified as Leasehold Interests on Schedule 11(b) to the Perfection
Certificate.

 

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

 

“Lender-Provided Hedge” shall mean a Hedge which at the date of entering into
such Hedge was provided by Agent, any Lender or Affiliate of Agent or any Lender
and with respect to which Agent confirms meets the following requirements:  such
Hedge (i) is documented in a standard International Swap Dealer Association
Agreement or other customary agreement reasonably satisfactory to Agent,
(ii) provides for the method of calculating the reimbursable amount of the
provider’s credit exposure in a reasonable and customary manner, and (iii) is
entered into for hedging (rather than speculative) purposes.  The indebtedness,
obligations and liabilities to the provider of any Lender-Provided Hedge that
was Agent or a Lender or an Affiliate of Agent or a Lender at the date of
entering into such Lender-Provided Hedge (the “Hedge Liabilities”) of the Credit
Party or Subsidiary thereof that is party to such Lender-Provided Hedge shall,
for purposes of this Agreement and all Other Documents be “Obligations” of such
Person and of each other Credit Party except to the extent constituting Excluded
Hedge Liabilities of such Person (subject to the final sentence of the
definition of “Excluded Hedge Liabilities”).  The Liens securing the Hedge
Liabilities shall be pari passu (without regard to control of remedies) with the
Liens securing all other Obligations under this Agreement and the Other
Documents, subject to the express provisions of Section 11.5 hereof.

 

“Letter of Credit” shall have the meaning set forth in Section 2.8(a) hereof.

 

“Letter of Credit Borrowing” shall have the meaning set forth in
Section 2.8(b)(iii) hereof.

 

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

 

“Letter of Credit Maturity Date” shall mean the date which is 5 Business Days
prior to the Maturity Date.

 

“Letter of Credit Obligations” shall mean, as of any date of determination, the
Maximum Face Amount of all outstanding Letters of Credit plus the aggregate
outstanding Reimbursement Obligations and Letter of Credit Borrowings on such
date.  The Letter of Credit Obligations of any Lender at any time shall be its
Commitment Percentage of the total Letter of Credit Obligations at such time.

 

“Letter of Credit Sublimit” shall mean (i) prior to designation of an Issuer in
accordance with the terms of the definition thereof, $0 and (ii) thereafter, an
amount agreed between the Agent and the Required Lenders (in their respective
sole discretion) and the Borrowing Agent.

 

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

 

LIBOR Rate =

Average of London interbank offered rates quoted by Bloomberg or appropriate
successor as shown on the applicable Bloomberg Page or appropriate substitute
Bloomberg page or Alternate Source

1.00 – Reserve Percentage

 

The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of
such effective date.  Agent shall give prompt notice to the Borrowing Agent of
the LIBOR Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.  Notwithstanding
anything to the contrary, the LIBOR Rate shall not be less than 1.00% for any
period.

 

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

 

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

 

“Line Cap” shall mean an amount equal to (i) until delivery of the projected
operating budget for the fiscal year ending December 31, 2020 (in accordance
with Section 9.1), such budget (1) having been approved by the board of
directors (or similar governing body) of the Parent Guarantor and (2) being
satisfactory in all respects to the Agent and the Required Lenders in their sole
discretion, $51,303,000, (ii) thereafter and until delivery of the Initial
Borrowing Base Certificate, $66,303,000 and (iii) thereafter, the lesser of
(x) $100,000,000 as such amount may, as of any date of determination, be
decreased pursuant to Section 2.11 hereof at such time and (y) the Formula
Amount at such time.

 

“Liquidity” shall mean the aggregate amount of all Unrestricted Cash.

 

“Material Acquisition/Disposition” shall mean any Investment, Permitted
Acquisition or Disposition that involves (a) an Investment, or an Acquisition or
Disposition of assets, the Fair Market

 

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Value of which assets, exceeds $25,000,000 or (b) a change in Consolidated
EBITDA that exceeds $25,000,000 per four fiscal quarter period.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
financial condition, operations, assets, business or liabilities of the Credit
Parties taken as a whole, (b) any Credit Party’s ability to perform its
non-monetary Obligations in accordance with the terms of this Agreement or the
Other Documents (as applicable) or the ability of the Credit Parties taken as a
whole to pay or perform the Obligations in accordance with the terms of this
Agreement or the Other Documents (as applicable), (c) the value of a material
portion of the Collateral, or Agent’s Liens on a material portion of the
Collateral or the priority of any such Lien or (d) Agent’s and each Lender’s
rights and remedies under this Agreement and the Other Documents.

 

“Material Contract” shall mean any agreement, document, instrument, contract or
other arrangement to which a Credit Party or any of its Restricted Subsidiaries
is a party (other than this Agreement and the Other Documents (a) which accounts
for more than 10.0% of the consolidated gross revenues of the Parent Guarantor
and its Subsidiaries, (b) that is a “material contract” as defined in Item
601(b)(10) of Regulation S-K of the Securities Exchange Act of 1934, as amended
or (c) for which the nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect).

 

“Maturity Date” shall mean the third anniversary of the Closing Date.

 

“Maximum Face Amount” shall mean, with respect to any outstanding Letter of
Credit, the face amount of such Letter of Credit including all automatic
increases provided for in such Letter of Credit, whether or not any such
automatic increase has become effective.

 

“Maximum Revolving Advance Amount” shall mean $100,000,000 as such amount may,
as of any date of determination, be decreased pursuant to Section 2.11 hereof.

 

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

 

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

 

“Mortgages” shall mean any and all mortgages or deeds of trust on any of the
Real Property securing the Obligations.

 

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

 

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

 

“Net Cash Proceeds” shall mean, with respect to any event described in
Section 2.17, proceeds received by any Credit Party or any Restricted Subsidiary
from or in respect of such event, less (i) any foreign, federal, state or local
income Taxes paid or payable in respect of such event, (ii) any customary

 

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and reasonable transaction fees and expenses incurred in connection with such
event (including financial advisory fees, legal fees and accountants’ fees), and
(iii) the amount of any reasonable reserve established in accordance with GAAP
against any liabilities associated with the assets that are the subject of such
event and retained by any Credit Party or any Restricted Subsidiary thereof.

 

“Non-Bank Tax Certificate” shall have the meaning set forth in
Section 3.10(e) hereof.

 

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

 

“Non-Qualifying Party” shall mean any Credit Party that fails for any reason to
qualify as an Eligible Contract Participant.

 

“Note” shall mean, collectively, the promissory notes referred to in Section 2.1
hereof.

 

“Notice of Conversion/Continuation” shall have the meaning set forth in
Section 2.2(d) hereof.

 

“Obligations” shall mean and include (a) any and all loans (including without
limitation, all Advances), advances, debts, liabilities, obligations (including
without limitation all reimbursement obligations and cash collateralization
obligations with respect to Letters of Credit issued hereunder), Prepayment
Premium, covenants and duties owing by any Credit Party to any Secured Party of
any kind or nature, present or future (including any interest or other amounts
accruing thereon, any fees accruing under or in connection therewith, any costs
and expenses of any Person payable by any Credit Party under the terms of this
Agreement or any Other Document and any indemnification obligations payable by
any Credit Party arising or payable after maturity, or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding relating to any Credit Party, whether or not a claim for
post-filing or post-petition interest, fees or other amounts is allowable or
allowed in such proceeding), whether or not for the payment of money, whether
arising by reason of an extension of credit, opening or issuance of a letter of
credit, loan, establishment of any purchase card or similar facility or
guarantee, under any interest or currency swap, future, option or other similar
agreement, or in any other manner, whether arising out of overdrafts or deposit
or other accounts or electronic funds transfers (whether through automated
clearing houses or otherwise) or out of the Agent’s or any Lender’s non-receipt
of or inability to collect funds or otherwise not being made whole in connection
with depository transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise or by what agreement or instrument they
may be evidenced or whether evidenced by any agreement or instrument, in any
such case to the extent advanced to or owing by any Credit Party or any
Subsidiary of any Credit Party under, in each case, arising under or out of
and/or related to (i) this Agreement, the Other Documents and any amendments,
extensions, renewals or increases thereto, including, subject to Section 16.9,
all costs and expenses of Agent, Issuer and any Lender incurred in the
documentation, negotiation, modification, enforcement, collection or otherwise
in connection with any of the foregoing (including but not limited to reasonable
attorneys’ fees and expenses) and all obligations of any Credit Party to
Agent, Issuer or Lenders to perform acts or refrain from taking any action and
(b) all Hedge Liabilities and all Cash Management Liabilities.  Notwithstanding
anything to the contrary contained in the foregoing (but subject to the final
sentence of the definition of “Excluded Hedge Liabilities”), as to each Credit
Party, the Obligations shall not include any Excluded Hedge Liabilities of such
Person.

 

“Organizational Documents” shall mean (i) with respect to any corporation, its
certificate or articles of incorporation or organization and its by-laws,
(ii) with respect to any limited partnership, its certificate of limited
partnership and its partnership agreement, (iii) with respect to any general
partnership, its

 

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partnership agreement and (iv) with respect to any limited liability company,
its articles of organization and its operating agreement.  In the event any term
or condition of this Agreement or any Other Document requires any Organizational
Document to be certified by a secretary of state or similar governmental
official, the reference to any such “Organizational Document” shall only be to a
document of a type customarily certified by such governmental official.

 

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

 

“Other Documents” shall mean the Notes, the Perfection Certificates, the
Guaranty, the Security Documents, the Environmental Indemnity Agreements, any
Lender-Provided Hedge, any and all other agreements, instruments, certificates,
statements and documents, including any acknowledgment and waivers,
intercreditor agreements, guaranties, pledges, powers of attorney, consents,
interest or currency swap agreements or other similar agreements and all other
writings heretofore, now or hereafter executed or provided by any Credit Party
and/or delivered to Agent or any Lender in respect of the transactions
contemplated by this Agreement.

 

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording or filing Taxes or any other excise or property Taxes,
charges or similar levies arising from any payment made hereunder or under any
Other Document or from the execution, delivery, registration or enforcement of,
from the receipt or perfection of a security interest under, or otherwise with
respect to, this Agreement or any Other Document, but excluding any and all such
Taxes that are Other Connection Taxes imposed with respect to any assignment
(other than an assignment made pursuant to Section 3.11) by any Recipient of an
interest in its Commitment or any Advances, this Agreement or any Other
Document.

 

“Overadvance” shall mean the existence of any Revolving Advance or Letter of
Credit, or the making of any Revolving Advance or the issuance, renewal or
amendment of a Letter of Credit, which causes Excess Availability to be less
than zero.

 

“Parent Guarantor” shall have the meaning set forth in the preamble hereto.
“Participant” shall mean each Person who pursuant to Section 16.3(b) shall be
granted the right by any Lender to participate in any of the Advances and who
shall have entered into a participation agreement in form and substance
satisfactory to such Lender.

 

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

 

“Participation Advance” shall have the meaning set forth in
Section 2.8(b)(iii) hereof.

 

“Participation Commitment” shall mean each Lender’s obligation to buy a
participation in the Letters of Credit issued hereunder.

 

“Partnership Agreement” shall mean that certain Second Amended and Restated
Agreement of Limited Partnership of Parent Guarantor (as amended, supplemented
or otherwise modified from time to time).

 

“Payment Office” shall mean such office or account of Agent, if any, which it
may designate by written notice to Borrowing Agent and to each Lender to be the
Payment Office.

 

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

 

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

 

“Perfection Certificate Supplement” shall have the meaning set forth in the
definition of “Compliance Certificate.”

 

“Perfection Certificates” shall mean collectively, the Perfection
Certificate(s) and the responses thereto provided by each Credit Party and
delivered to Agent on the Closing Date, as amended or supplemented by each
Perfection Certificate Supplement.

 

“Permitted Acquisition” shall mean any Acquisition by a Credit Party which is
consented to by Agent and the Required Lenders.

 

“Permitted Discretion” shall mean, a determination made by Agent in good faith
in the exercise of its reasonable business judgment based on how a lender with
similar rights providing a secured credit facility of the type set forth herein
would act, in the circumstances then applicable to the Credit Parties at the
time with the information then available to it.

 

“Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit
of Agent and the other Secured Parties; (b) Liens for Taxes, assessments or
other governmental charges which are not delinquent or are being Properly
Contested; (c) deposits or pledges to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance,
in each case, in the ordinary course of business and under operation of law;
(d) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the ordinary course of
business; (e) Liens arising by virtue of the rendition, entry or issuance
against any Credit Party or any Subsidiary, or any property of any Credit Party
or any Subsidiary, of any judgment, writ, order, or decree which have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Credit Parties
shall at the time in good faith be prosecuting an appeal or proceedings for
review and in respect of which a stay of execution shall have been obtained
pending such appeal or review; (f) mechanics’, workers’, materialmen’s,
carrier’s, repairmens’ or other like Liens arising in the ordinary course of
business with respect to obligations which are not yet due and payable or which
are being Properly Contested; (g) Liens securing Capitalized Lease Obligations
permitted by Section 7.6(b) or Permitted Purchase Money Indebtedness, provided
that (i) such Liens were created substantially simultaneously with the
acquisition of the asset financed with such Indebtedness (or substantially
simultaneously with the incurrence of the Capitalized Lease Obligation or
Permitted Purchase Money Indebtedness, if later), (ii) such Liens do not at any
time encumber any property other than the property financed by such Indebtedness
and (iii) the principal amount of Indebtedness secured by any such Lien shall at
no time exceed 100% of the original purchase price of such property; (h) Liens
on insurance policies and the proceeds thereof securing the financing of the
premiums with respect thereto incurred in the ordinary course of business;
(i) Liens disclosed on Schedule 1.2(c), provided that such Liens shall secure
only those obligations which they secure on the Closing Date (and Permitted
Refinancing in respect thereof) and shall not subsequently apply to any other
property or assets of any Credit Party (except as to any after-acquired property
expressly provided for in the agreements creating such liens), (j) Liens on Real
Property (i) which

 

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is subject to a Mortgage as of the Closing Date and which are disclosed on any
title commitments and surveys provided to Agent with respect to such Mortgage,
(ii) which consist of easements, rights-of-way, covenants, zoning, building, and
land-use laws, rules and restrictions, or other restrictions on the use of real
property which do not (individually or in the aggregate) materially affect the
value of the assets encumbered thereby or materially impair the ability of any
Credit Party to use such assets in its business, and none of which is violated
in any material aspect by existing or proposed structures or land use or
(iii) in favor of Dairy State Bank to secure an aggregate principal amount not
greater than $140,000, (k) statutory Liens in favor of landlords, warehousemen,
processors and bailees arising in the ordinary course of business, (l) other
Liens incidental to the conduct of any Credit Party’s business or the ownership
of its property and assets which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit, and which do not in
the aggregate materially detract from Agent’s or the other Secured Parties’
rights in and to the Collateral or the value of any Credit Party’s or any
Subsidiary’s property or assets or which do not materially impair the use
thereof in the operation of any Credit Party’s or any Subsidiary’s business or
otherwise impair the Liens granted thereon to Agent for the benefit of the
Secured Parties, (m) licenses or sublicenses of patents, trademarks and other
Intellectual Property granted by any Credit Party or any of its Subsidiaries in
the ordinary course of business and not (i) interfering in any respect with the
ordinary course of business of such Credit Party or Subsidiary or (ii) securing
Indebtedness, (n) Liens arising from precautionary UCC financing statements or
similar filings made in respect of operating leases, bailment arrangements and
consignment arrangements entered into by any Credit Party and not prohibited by
this Agreement or any Other Document, (o) Liens (including the right of set-off)
in favor of a bank or other depository institution arising as a matter of law,
(p) other Liens not specifically listed above securing obligations not to exceed
$1,000,000 in the aggregate outstanding at any one time, so long as such Liens
do not attach to any portion of Eligible Inventory or Eligible Receivables and
(q) Liens to renew, extend, refinance or refund a Lien referred to in clauses
(g) and (p) above; provided that (i) such new Lien shall be limited to all or
part of the same property (including future improvements thereon and accessions
thereto) subject to the original Lien and (ii) the Indebtedness secured by such
Lien at such time is not increased to any amount greater than the amount
necessary to effect a Permitted Refinancing of such Indebtedness.

 

“Permitted Holders” shall mean any of (a) (i) MP III Offshore Mezzanine
Investments, L.P., Mezzanine Partners III, L.P., AP Mezzanine Partners III,
L.P., OC II LVS III LP, OHA-CDP ESCF, L.P., OHA BCSS SSD, L.P., OHA MPS SSD,
L.P., The Coca-Cola Company Master Retirement Trust, OHA Enhanced Credit
Strategies Master Fund, L.P., Future Fund Board of Guardians, Indiana Public
Retirement System, Lerner Enterprises, LLC, OCA OHA Credit Fund LLC, OHA Centre
Street Partnership, L.P., Oregon Public Employees Retirement Fund, OHA AD
Customized Credit Fund (International), L.P., Master SIF SICAV-SIF, and OHA
Finlandia Credit Fund, L.P. and/or (ii) any of their Controlled Investment
Affiliates and (b) any person holding Equity Interests in the Parent Guarantor
on the Closing Date.

 

“Permitted Purchase Money Indebtedness” shall mean Purchase Money Indebtedness
of any Credit Party or any Subsidiary thereof which is incurred after the
Closing Date and which is secured by no Lien or only by a Lien permitted by
clause (g) of the definition of “Permitted Encumbrance” as defined herein;
provided that such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed.

 

“Permitted Refinancing” shall mean Indebtedness incurred to Refinance other
Indebtedness; provided that (i) the principal amount (or accreted value, if
applicable) of the Permitted Refinancing shall not exceed the sum of the
principal amount (or accreted value, if applicable) of the Indebtedness being
Refinanced plus accrued and unpaid interest thereon, any stated premium thereon
due upon such Refinancing pursuant to the terms of the documentation governing
such Indebtedness and fees and expenses reasonably incurred in connection with
such Refinancing, (ii) the terms and conditions of any such Permitted
Refinancing, taken as a whole, shall not be materially more restrictive on the
Credit Parties than the Indebtedness being Refinanced, (iii) the Permitted
Refinancing shall not be guaranteed by any Person that is not a guarantor of, or
be secured by any assets that are not securing, the Indebtedness being

 

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Refinanced, (iv) if the Indebtedness being Refinanced is subordinated in right
of payment to the Obligations, such Permitted Refinancing shall be subordinated
in right of payment to the Obligations on terms taken as a whole at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being Refinanced, and (v) except with respect to Indebtedness
incurred pursuant to Sections 7.6(b) and (c), such Permitted Refinancing shall
have (A) a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, and (B) an Average Life at the time such
Permitted Refinancing is incurred that is equal to or greater than the Average
Life of the Indebtedness being Refinanced.

 

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

 

“Petition Date” shall have the meaning set forth in the preamble hereto.

 

“Plan” shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA which is a Pension Benefit Plan, a Multiemployer Plan or a
Welfare Plan (as defined in Section 3(2) of ERISA) which provides self-insured
benefits and which is maintained by any Credit Party or any member of the
Controlled Group or to which any Credit Party or any member of the Controlled
Group is required to contribute.

 

“Plan of Reorganization” shall have the meaning set forth in the preamble
hereto.

 

“Pledge Agreement” shall mean, collectively, (a) that certain Pledge Agreement,
dated as of the Closing Date, among the Parent Guarantor, the Borrowers, each
other Guarantor from time to time party thereto and Agent, substantially in the
form of Exhibit 1.2(c) attached hereto and (b) any other pledge agreements
executed subsequent to the Closing Date by any other Person to secure the
Obligations.

 

“PPSA” shall mean the Personal Property Security Act (Alberta) or similar
personal property security legislation as in effect from time to time in any
province or territory of Canada applicable to any Collateral. References to
sections of the PPSA shall be construed to also refer to any successor sections.

 

“Pre-Petition Credit Agreements” shall mean (i) that certain Second Amended and
Restated Revolving Credit and Security Agreement, dated as of January 5, 2018,
by and among the Parent Guarantor, certain of the Borrowers, the financial
institutions party thereto from time to time and HPS (as successor to PNC Bank,
National Association) as Administrative Agent and Collateral Agent thereunder
and (ii) that certain Second Lien Note Purchase Agreement, dated as of
January 5, 2018, by and among the Parent Guarantor, certain of the Borrowers,
the noteholders party thereto from time to time and HPS as Notes Agent and
Collateral Agent thereunder, as the case may be.

 

“Preferred Interests” shall mean the “Preferred Interests” of Parent Guarantor
issued from time to time pursuant to (and as defined in) the Partnership
Agreement.

 

“Prepayment Premium” shall have the meaning set forth in Section 2.15 hereof.

 

“Prime Rate” shall mean for any day, the rate of interest in effect for such day
as published in the “Money Rates” section of The Wall Street Journal as being
the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then
the highest of such rates). The Prime Rate will change as of the date of
publication in The Wall Street Journal of a Prime Rate that is different from
that published on the preceding

 

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Business Day. In the event that The Wall Street Journal shall, for any reason,
fail or cease to publish the Prime Rate, the Agent shall choose a reasonable
comparable index or source to use as the basis for the Prime Rate with the
consent of the Borrower (not to be unreasonably withheld or delayed).

 

“Priority Payables” shall mean, as of any date of determination:  (a) the full
amount of the liabilities of any Borrower at such time which, except for
liabilities associated with Permitted Encumbrances (i) have a trust, deemed
trust or statutory lien imposed to provide for payment or a security interest,
pledge, hypothec, charge or other Lien ranking or capable of ranking senior to
or pari passu with the Liens granted to Agent on the Collateral under federal,
provincial, municipal or local law in Canada or (ii) have a right imposed to
provide for payment ranking or capable of ranking senior to or pari passu with
such Obligations under local or federal law, regulation or directive, including,
but not limited to, claims for unremitted and/or accelerated rents, taxes
(including sales tax, goods and services taxes, harmonized sales taxes and
withholding taxes), wages, withholding taxes, VAT and other amounts payable to
an insolvency administrator, employee withholdings or deductions and vacation
pay, severance and termination pay, workers’ compensation obligations,
government royalties, pension fund obligations or any amounts representing any
unfunded liability (whether or not due), solvency deficiency or wind up
deficiency with respect to any defined benefit plan for Canadian employees which
could become subject to a trust, deemed trust or statutory lien, in each case,
to the extent such trust, deemed trust, statutory lien, security interest,
hypothec, charge or other Lien has been or could reasonably be expected to be
imposed as determined by Agent in its sole discretion; and (b) the amount equal
to the percentage applicable to Inventory located in Canada that is part of the
Formula Amount which Agent, in its Permitted Discretion, considers as being, or
is reasonably likely to become, subject to retention of title by a supplier or a
right of a supplier to recover possession thereof, where such supplier’s right
has priority over Agent’s Liens securing such Obligations, including, without
limitation, Eligible Inventory subject to a right of a supplier to repossess
goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act (Canada) or
any applicable laws granting revendication or similar rights to unpaid suppliers
or any similar laws of Canada or any other applicable jurisdiction.

 

“Pro Forma Basis” shall mean:

 

(a)                                 any Material Acquisition/Disposition and any
dividend or distribution on, or repurchases or redemptions of, Capital Stock of
the Borrowers made or to be made by the Borrowers or any Restricted Subsidiary
during the applicable reference period or subsequent to such reference period
and on or prior to the date of determination will be given pro forma effect as
if it had occurred on the first day of the applicable reference period;

 

(b)                                 any Person that is a Restricted Subsidiary
on the date of determination will be deemed to have been a Restricted Subsidiary
at all times during such reference period;

 

(c)                                  any Person that is not a Restricted
Subsidiary on the date of determination will be deemed not to have been a
Restricted Subsidiary at any time during such reference period;

 

(d)                                 Total Leverage Ratio shall be calculated
after giving pro forma effect to incurrences and repayments of Indebtedness
(other than ordinary course working capital borrowings and repayments under
revolving credit facilities unless accompanied by a permanent reduction of the
commitments with respect thereto) during the applicable reference period or
subsequent to such reference period and on or prior to the date of determination
to the extent in connection with any transaction referred to in clause
(a) above, as if they had occurred on the first day of the applicable reference
period;

 

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(e)                                  Consolidated Cash Interest Expense for
purposes of calculating the Fixed Charge Coverage Ratio shall not give pro forma
effect to incurrences and repayments of Indebtedness during the applicable
reference period or subsequent to such reference period and on or prior to the
date of determination; and

 

(f)                                   if any Indebtedness bears a floating rate
of interest, the interest expense on such Indebtedness will be calculated as if
the rate in effect on the calculation date had been the applicable rate for the
entire period (taking into account the effect on such interest rate of any
Lender-Provided Hedge applicable to such Indebtedness).

 

For purposes of this definition, whenever pro forma effect is given to a
transaction, the pro forma calculations shall be made in good faith by an
Authorized Officer of the Borrowing Agent and in a manner consistent with
Article 11 of Regulation S-X of the Securities Act, as set forth in a
certificate of an Authorized Officer of the Borrowing Agent (with supporting
calculations) and reasonably acceptable to the Agent, which for purposes of the
pro forma calculations made in connection with a Restricted Payment pursuant to
Section 7.5, may be included in the Compliance Certificate.  Interest on a
Capital Lease shall be deemed to accrue at an interest rate reasonably
determined by an Authorized Officer of the Borrowing Agent to be the rate of
interest implicit in such Capital Lease in accordance with GAAP.  For purposes
of making the computation referred to above, interest on any Indebtedness under
a revolving credit facility (to the extent required to be computed on a pro
forma basis) shall be computed based upon the average daily balance of such
Indebtedness during the applicable period.  Interest on Indebtedness that may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Borrowing Agent may designate. 
Notwithstanding anything to the contrary contained herein, when calculating the
Fixed Charge Coverage Ratio and Consolidated EBITDA for purposes of determining
actual compliance and not pro forma compliance (or compliance on a Pro Forma
Basis) with any covenant pursuant to Section 6.5, the events described in this
definition that occurred after the last day of the most recently completed
reference period shall not be given pro forma effect.

 

“Pro Rata Share” shall have the meaning set forth in Section 16.19(h) hereof.

 

“Properly Contested” shall mean, in the case of any Indebtedness, obligation or
Lien, as applicable, of any Person (including any Taxes) that is not paid as and
when due and payable by reason of such Person’s bona fide dispute concerning its
liability to pay same or concerning the amount thereof; provided, that: 
(i) such Indebtedness or Lien, as applicable, is being properly contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted; (ii) such Person has established appropriate reserves as shall be
required in conformity with GAAP; (iii) the non-payment of such Indebtedness
will not have a Material Adverse Effect; (iv) no Lien is imposed upon any of
such Person’s assets with respect to such Indebtedness unless (a) such Lien is
at all times junior and subordinate in priority to the Liens in favor of Agent
(except only with respect to Liens that have priority as a matter of applicable
state law) and enforcement of such Lien is stayed during the period prior to the
final resolution or disposition of such dispute or (b) such Lien is permitted
pursuant to the Confirmation Order; (v) if such Indebtedness or Lien, as
applicable, results from, or is determined by the entry, rendition or issuance
against a Person or any of its assets of a judgment, writ, order or decree,
enforcement of such judgment, writ, order or decree is stayed pending a timely
appeal or other judicial review; and (vi) if such contest is abandoned, settled
or determined adversely (in whole or in part) to such Person, such Person
forthwith pays such Indebtedness and all penalties, interest and other amounts
due in connection therewith.

 

“Protective Advance” shall mean an Advance that is made, or is permitted to
remain outstanding, by the Agent, in its Permitted Discretion, to: 
(a) maintain, protect or preserve the Collateral and/or the Secured Parties’
rights under this Agreement and the Other Documents or which is otherwise for
the benefit of the Secured Parties; or (b) enhance the likelihood of, or
maximize the amount of, repayment of any

 

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Obligation; or (c) pay any other amount chargeable to the Borrowers under this
Agreement and the Other Documents.

 

“Published Rate” shall mean the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published in another publication
selected by Agent).

 

“Purchase Money Indebtedness” shall mean and include (i) Indebtedness (other
than the Obligations) of any Credit Party or Subsidiary thereof for the payment
of all or any part of the purchase price of any Equipment, real property or
other fixed assets, (ii) any Indebtedness (other than the Obligations) of any
Borrower incurred at the time of or within thirty (30) days prior to or thirty
(30) days after the acquisition of any Equipment, real property or other fixed
assets for the purpose of financing all or any part of the purchase price
thereof (whether by means of a loan agreement, capitalized lease or otherwise),
and (iii) any Permitted Refinancing thereof outstanding at the time, in each
case of the foregoing, incurred in the ordinary course of business.

 

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

 

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

 

“Qualified ECP Credit Party” shall mean each Credit Party that (a) has total
assets exceeding $10,000,000 on the Eligibility Date, or (b) such other Person
as is qualified to give a “letter of credit or keepwell, support, or other
agreement” for purposes of Section 1a(18)(A)(v)(II) of the CEA.

 

“Railcar Lease and Transload Facilities” shall mean an operating lease of
railcars or with respect to transloading facilities in the ordinary course of
business of the Borrowers, including any such operating lease of railcars that
is recharacterized as a Capital Lease in conformity with GAAP after giving
effect to the adoption of ASU No. 2016-02 “Leases (Topic 842)” and ASU
No. 2018-11 “Leases (Topic 842)”.

 

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

 

“Real Property” shall mean all real property (including fixtures and
improvements thereon) owned or leased by any Credit Party.

 

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

 

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

 

“Recipient” shall mean the Agent, any Lender, a Participant or Issuer.

 

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“Refinance” shall mean, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, replace, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness. 
“Refinanced” and “Refinancing” shall have correlative meanings.

 

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

 

“Reimbursement Obligation” shall have the meaning set forth in
Section 2.8(b)(i) hereof.

 

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

 

“Replacement Notice” shall have the meaning set forth in Section 3.11 hereof.

 

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

 

“Reportable Event” shall mean a reportable event described in Section 4043(c) of
ERISA or the regulations promulgated thereunder (other than an event for which
the 30-day notice period has been waived by regulation).

 

“Required Lenders” shall mean Lenders (not including any Defaulting Lender)
holding fifty-one percent (51%) or more of either (a) the aggregate of the
Commitment Amounts of all Lenders (excluding any Defaulting Lender), or
(b) after the termination of all Commitments of the Lenders hereunder, the sum
of (i) the outstanding Revolving Advances and (ii) the aggregate of the Maximum
Undrawn Amount of all outstanding Letters of Credit (in each case, excluding any
such Obligations held by a Defaulting Lender).

 

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

 

“Restricted Payment” shall have the meaning set forth in Section 7.5.

 

“Restricted Payment Conditions” shall have the meaning set forth in
Section 7.5(a) hereof.

 

“Restricted Subsidiaries” shall mean each Subsidiary of the Parent Guarantor.

 

“Restructuring Support Agreement” shall mean that certain Restructuring Support
Agreement dated as of April 18, 2019 by and among the Debtors, certain direct
and indirect equity holders of the Existing General Partner party thereto and
the creditors party thereto.

 

“Revolving Advances” shall mean Advances made other than Letters of Credit.

 

“Revolving Exposure” shall mean, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender’s Revolving Advances and its
Letter of Credit Obligations at such time.

 

“Revolving Facility Usage” shall mean at any time the sum of the outstanding
Revolving Advances and the Letter of Credit Obligations.

 

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

 

“San Antonio Facility” shall mean a mine, wet plant and dry plant located in
Pleasanton, Texas.  The San Antonio Facility has nameplate capacity of 4 million
tons per year with 39.3 million tons of provable reserves owned by SSS.

 

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

 

“Sanctioned Person” shall mean any Person, group, regime, entity or thing
(a) listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred Person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law,
(b) located, organized or resident in a Sanctioned Country, or (c) owned or
controlled by any Person or Persons referenced in the foregoing clause (a) or
(b).

 

“Sand Reserve Advance Rate” shall mean twenty-five percent (25%).

 

“Sand Reserve Appraisal” shall have the meaning set forth in Section 9.16
hereof.

 

“Sand Reserve Value” shall mean, as of any date of determination, the “DCF/NPV”
(as defined in the most recent Sand Reserve Appraisal delivered to Agent) of the
Sand Reserves less the working capital adjustment provided for in the most
recent Sand Reserve Appraisal delivered to Agent so long as the locations of
such Sand Reserves are (a) subject to Mortgages providing for a first-priority
Lien in favor of Agent, subject only to Permitted Encumbrances that have
priority as a matter of Applicable Law, and for which Agent has received all
documentation required under Section 6.6(a) and (b) permitted pursuant to all
applicable Consents to conduct any current or future mining operations thereon.

 

“Sand Reserves” shall mean, as of any date of determination, the sand reserve
position of the Borrowers as set forth in the third party reports referenced in
the most recent Sand Reserve Appraisal delivered to Agent.

 

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

 

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

 

“Securities Act” shall mean the Securities Act of 1933.

 

“Security Agreement” shall mean the provisions of Article IV hereof and any
other security agreement in form and substance reasonably satisfactory to Agent
executed and delivered by a Credit Party in favor of Agent pursuant to this
Agreement or any Other Document.

 

“Security Documents” shall mean the Security Agreement, the Pledge Agreement,
the Mortgages, any Deposit Account Control Agreements, Intellectual Property
Security Agreements, and each other agreement, security document or pledge
agreement delivered in accordance with applicable local Law to grant a valid,
perfected security interest in any property as Collateral for the Obligations,
and all UCC or other financing statements or instruments of perfection required
by this Agreement or any other such

 

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security document or pledge agreement to be filed with respect to the security
interests in property and fixtures created pursuant to any document or
instrument utilized to pledge or grant or purport to pledge or grant a security
interest or lien on any property as Collateral for the Obligations, and
amendments, supplements or joinders to the foregoing.

 

“Specified Event of Default” shall mean an Event of Default occurring under
Section 10.1 or Section 10.7 hereof.

 

“SSS” shall have the meaning set forth in the preamble hereto.

 

“Stated Maturity” shall mean, with respect to any security or other
Indebtedness, the date specified in such security or the documents governing
such Indebtedness as the fixed date on which the final payment of principal of
such security or other Indebtedness is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security or other Indebtedness at the option of the
holder thereof upon the happening of any contingency unless such contingency has
occurred).

 

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

 

“Subsidiary Stock” shall mean:

 

(a)                                 all of the issued and outstanding Equity
Interests of each issuer at any time owned or otherwise acquired by any Credit
Party, in each case together with the certificates (or other agreements or
instruments), if any, representing such Equity Interests, and all options and
other rights, contractual or otherwise, with respect thereto, including, but not
limited to, the following; provided that, in the case of any issuer that is a
Foreign Subsidiary of a Credit Party, and only to the extent a pledge in excess
of 65% would result in material adverse tax consequences, such Equity Interests
shall be limited to sixty-five percent (65%) of each class of the issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) (“Voting Equity”) and one hundred percent (100%) of each
class of the issued and outstanding Equity Interests not entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (“Non-Voting Equity”)
of each such Foreign Subsidiary of a Credit Party (but only to the extent that
the pledge of such Non-Voting Equity would not cause the Obligations to be
treated as “United States property” of such Foreign Subsidiary within the
meaning of Treas. Reg. Section 1.956-2) (collectively, the “Pledged Capital
Stock”):

 

i.                  subject to the percentage restrictions described above, all
shares, securities, membership interests or other equity interests representing
a dividend on any of the Pledged Capital Stock, or representing a distribution
or return of capital upon or in respect of the Pledged Capital Stock, or
resulting from a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Capital Stock; and

 

ii.               without affecting the obligations of the Credit Parties under
any provision prohibiting such action hereunder, in the event of any
consolidation or merger involving the issuer of any Pledged Capital Stock and in
which such issuer is not the surviving entity, all shares of each class of the
Equity Interests of the successor entity formed by or resulting from such
consolidation or merger;

 

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(b)                                 subject to the percentage restrictions
described above, any and all other Equity Interests owned by any Credit Party in
any Domestic Subsidiary or any Foreign Subsidiary; and

 

(c)                                  all proceeds and products of the foregoing,
however and whenever acquired and in whatever form.

 

“Supermajority Lenders” shall mean Lenders (not including any Defaulting Lender)
holding 662/3% or more of either (a) the aggregate of the Commitment Amounts of
all Lenders (excluding any Defaulting Lender), or (b) after the termination of
all Commitments of the Lenders hereunder, the sum of (i) the outstanding
Revolving Advances and (ii) the aggregate of the Maximum Undrawn Amount of all
outstanding Letters of Credit (in each case, excluding any such Obligations held
by a Defaulting Lender).

 

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

 

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

 

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

 

“Termination Date” shall mean the date on which (a) all of the Obligations
(excluding contingent indemnification obligations with respect to which no
claims have been made) have been paid in full in cash and all Letters of Credit
have been terminated or Cash Collateralized, (b) all Commitments have been
terminated and (c) all agreements under which Cash Management Products and
Services or Lender-Provided Hedges are provided have been terminated unless, at
the option of the Secured Party providing such Obligations, either Obligations
under such agreement have been cash collateralized pursuant to arrangements
satisfactory to such Secured Party or other arrangements satisfactory to such
Secured Party have been made; provided, however, 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 any Lender upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
Termination Date shall be deemed to have not occurred.

 

“Termination Event” shall mean (i) a Reportable Event with respect to any
Pension Benefit Plan; (ii) the withdrawal of any Credit Party or any member of
the Controlled Group from a Pension Benefit Plan during a plan year in which
such Person was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (iii) the providing of notice of intent to terminate a
Pension Benefit Plan in a distress termination described in Section 4041(c) of
ERISA or any termination under Section 4042 of ERISA, or of the appointment of a
trustee to administer a Pension Benefit Plan, and with respect to which any
Credit Party has liability (including liability in its capacity as a member of
the Controlled Group of another entity); (iv) the termination of a Multiemployer
Plan pursuant to Section 4041A or 4042 of ERISA, which termination could
reasonably result in material liability to any Credit Party (including liability
in its capacity as a member of the Controlled Group of another entity); (v) the
partial or complete withdrawal within the meaning of Section 4203 or 4205 of
ERISA, of any Credit Party or any member of the Controlled Group from a
Multiemployer Plan, which withdrawal could reasonably result in liability of any
Credit Party (including liability in its capacity as a member of the Controlled
Group of another entity); (vi) notice that a Multiemployer Plan is subject to
Section 4245 of ERISA; or (vii) the imposition of any liability under Title

 

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IV of ERISA, other than for PBGC premiums due but not delinquent, upon any
Borrower or any member of the Controlled Group.

 

“Test Period” shall mean, as of any date of determination, the period of four
consecutive fiscal quarters of the Parent Guarantor most recently ended on or
prior to such date for which financial statements have been or are required to
be delivered pursuant to Sections 9.7 or 9.8; provided, that for purposes of
calculating the Fixed Charge Coverage Ratio and the Total Leverage Ratio,
(a) Consolidated EBITDA for the Test Period ending June 30, 2020 shall be equal
to Consolidated EBITDA for the fiscal quarter period ending June 30, 2020
multiplied by 4, (b) Consolidated EBITDA for the Test Period ending
September 30, 2020 shall be equal to Consolidated EBITDA for the two fiscal
quarter period ending September 30, 2020 multiplied by 2, and (c) Consolidated
EBITDA for the Test Period ending December 31, 2020 shall be equal to
Consolidated EBITDA for the three fiscal quarter period ending December 31, 2020
multiplied by 4/3.

 

“Total Leverage Ratio” shall mean, as of any date, the ratio of (a) all
Indebtedness of the type described in clauses (i), (ii), (iv), (vii), (viii) (to
the extent constituting unreimbursed amounts in respect of drawings thereunder),
(xi) (to the extent the underlying Indebtedness is of the foregoing described
types) and (xii) of the definition “Indebtedness” of the Parent Guarantor and
its consolidated Restricted Subsidiaries as of such date to (b) Consolidated
EBITDA for the most recently ended Test Period.

 

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

 

“Transaction Costs” shall mean all fees and expenses incurred by any Credit
Party in connection with implementing the Plan of Reorganization and
consummating the Transactions, including, without limitation, fees and expenses
incurred in connection with the Cases and the fees and expenses of Ankura
Consulting Group, LLC and Nexus PMG LLC.

 

“Transactions” shall mean (a) the entering into this Agreement, (b) the
borrowing of Advances hereunder on the Closing Date, (c) the granting of Liens
to secure the Obligations, (d) the consummation of the Closing Date Refinancing,
(e) the consummation of the Plan of Reorganization, (f) the issuance by Parent
Guarantor of the Preferred Interests, (g) the consummation of any other
transactions in connection with the foregoing and (h) the payment of the
Transaction Costs.

 

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

 

“Unfinanced Capital Expenditures” means, for any Test Period, Capital
Expenditures made during such Test Period which are not financed from the
proceeds of any Indebtedness (other than Revolving Advances that are repaid
within 30 days of the initial advance thereof).

 

“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof; provided, however, that, at any time, if by reason of mandatory
provisions of law, any or all of the perfection or priority of Agent’s and the
Secured Parties’ security interest in any item or portion of the Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term “Uniform Commercial Code” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction
for purposes of the provisions hereof, any Security Agreement and any Other
Document relating to such perfection or priority and for purposes of definitions
relating to such provisions.

 

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“Unrestricted Cash” shall mean the aggregate amount of all cash or Cash
Equivalents on the consolidated balance sheet of the Parent Guarantor and its
Restricted Subsidiaries that is not “restricted” for purposes of GAAP, and is
pledged to secure the Obligations and subject to a Deposit Account Control
Agreement.

 

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

 

“Write-Down and Conversion Powers” shall mean, 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.

 

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

 

1.4.                            Certain Matters of Construction.

 

(a)                                 The following rules of construction shall
apply in this Agreement and the Other Documents:

 

(i)                                     The terms “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.

 

(ii)                                  All references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement.

 

(iii)                               Any pronoun used shall be deemed to cover
all genders.

 

(iv)                              Wherever appropriate in the context, terms
used herein in the singular also include the plural and vice versa.

 

(v)                                 All references to Laws shall include any
amendments of same and any successor Laws.

 

(vi)                              Unless otherwise provided, all references to
any instruments or agreements, including references to this Agreement or any of
the Other Documents, shall include any and all modifications or amendments
thereto, and any and all restatements,

 

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amendment and restatements, extensions or renewals thereof, in each case, in
accordance therewith and herewith.

 

(vii)                           All references herein to the time of day shall
mean the time in New York, New York.

 

(viii)                        Unless otherwise provided, all calculations shall
be performed with Inventory valued at the lower of cost (on a weighted average
basis) or current market value.

 

(ix)                              All amounts which constitute any portion of
the Formula Amount and are originated in Canadian Dollars shall be converted, in
accordance with Agent’s normal banking procedures to Dollars for purposes of any
calculation hereunder.

 

(x)                                 Whenever the words “including” or “include”
shall be used, such words shall be understood to mean “including, without
limitation” or “include, without limitation”.

 

(xi)                              A Default or Event of Default shall be deemed
to exist at all times during the period commencing on the date that such Default
or Event of Default occurs to the date on which such Default or Event of Default
is waived in writing pursuant to this Agreement or, in the case of a Default, is
cured within any period of cure expressly provided for in this Agreement; and an
Event of Default shall “continue” or be “continuing” until such Event of Default
has been waived in writing by the Required Lenders or cured to the satisfaction
of the Required Lenders.

 

(xii)                           Any Lien referred to in this Agreement or any of
the Other Documents as having been created in favor of Agent, any agreement
entered into by Agent pursuant to this Agreement or any of the Other Documents,
any payment made by or to or funds received by Agent pursuant to or as
contemplated by this Agreement or any of the Other Documents, or any act taken
or omitted to be taken by Agent, shall, unless otherwise expressly provided, be
created, entered into, made or received, or taken or omitted, for the benefit or
account of Agent and Secured Parties.

 

(xiii)                        Wherever the phrase “to the best of Credit
Parties’ knowledge” or words of similar import relating to the knowledge or the
awareness of any Borrower are used in this Agreement or Other Documents, such
phrase shall mean and refer to (x) the actual knowledge of an Authorized Officer
of any Credit Party or (y) the knowledge that an Authorized Officer would have
obtained if he had engaged in good faith and diligent performance of his duties.

 

(b)                                 All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default if such action is taken or condition exists.

 

(c)                                  All representations and warranties
hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.  Notwithstanding the foregoing, with
respect to any covenant or any representation and warranty relating to ERISA and
environmental matters, such covenant and representation and warranty shall

 

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control over any non-specific compliance with law covenant or representation to
the extent that there is a direct conflict. All references to filing,
registering or recording financing statements or other required documents under
the Uniform Commercial Code shall be deemed to include filings and registrations
under the PPSA.

 

1.5.                            Accounting for Derivatives.  In making any
computation pursuant to Section 6.5 by reference to any item appearing on the
balance sheet or other financial statement of Parent Guarantor and its
Subsidiaries, all adjustments to such computation resulting from the application
of Statement of Financial Accounting Standards No. 133 shall be disregarded,
except to the extent a gain or loss is actually realized with respect to any
such item.

 

II.                                   ADVANCES; PAYMENTS.

 

2.1.                            Revolving Advances.  Subject to the terms and
conditions set forth in this Agreement including this Section 2.1, each Lender,
severally and not jointly, will make Revolving Advances to Borrowers; provided
that, after giving effect to any Revolving Advance, (i) such Lender’s Revolving
Exposure shall not exceed such Lender’s Commitment Amount and (ii) the Revolving
Facility Usage (other than as a result of any Protective Advance) does not
exceed the lesser of (a) the Maximum Revolving Advance Amount and (b) an amount
equal to (x) until delivery of the projected operating budget for the fiscal
year ending December 31, 2020 (in accordance with Section 9.1), such budget
(1) having been approved by the board of directors (or similar governing body)
of the Parent Guarantor and (2) being satisfactory in all respects to the Agent
and the Required Lenders in their sole discretion, $51,303,000, (y) thereafter
and until delivery of the Initial Borrowing Base Certificate, $66,303,000  and
(z) thereafter, the sum of:

 

(i)                                     85%, subject to the provisions of this
Section 2.1 (“Receivables Advance Rate”), of Eligible Receivables; plus

 

(ii)                                  the lesser of (A) 65%, subject to the
provisions of this Section 2.1 (the “Sand Inventory Advance Rate”), of the value
of Eligible Inventory consisting of sand and or (B) 85%, subject to the
provisions of this Section 2.1 (the “NOLV Advance Rate”), of the net orderly
liquidation value (as evidenced by the most recent appraisal accepted by Agent
in its Permitted Discretion) of Eligible Inventory consisting of sand; plus

 

(iii)                               with respect to Sand Reserves, the lesser of
(A) the Sand Reserve Advance Rate, subject to the provisions of this
Section 2.1, multiplied by the Sand Reserve Value and (B) thirty-five percent
(35%) of the Maximum Revolving Advance Amount; minus

 

(iv)                              such reserves as Agent may reasonably deem
proper and necessary from time to time in the exercise of its Permitted
Discretion, including without limitation (A) a dilution reserve in connection
with any write-downs or write-offs, discounts, returns, promotions, credits,
credit memos and other dilutive items with respect to Receivables (B) as to Cash
Management Liabilities and Hedge Liabilities with respect to which the provider
thereof has requested that a reserve be implemented against the Formula Amount
and (C) if Borrower maintains any operations or has any employees in Canada,
amounts for applicable Priority Payables; provided, however, that reserves shall
not be required for processing, transportation or other bailee fees or costs
related to Eligible In-Transit Inventory or for absence of lien waiver
agreements from pipeline owners or landlords.

 

The amount derived from the sum of (x) Sections 2.1(b)(i) — (iii) minus
(y) Section 2.1(b)(iv) at any time and from time to time shall be referred to as
the “Formula Amount.”  The Formula Amount

 

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applicable at any time shall be calculated as set forth in the Borrowing Base
Certificate delivered pursuant to Section 9.2 and approved by Agent in its
Permitted Discretion.

 

The Revolving Advances shall be evidenced, if requested by such Lender, by one
or more promissory notes (collectively, the “Note”) substantially in the form
attached hereto as Exhibit 2.1(a).

 

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

 

(a)                                 [Reserved].

 

(b)                                 In the event any Borrower desires to obtain
an Advance hereunder, Borrowing Agent shall give Agent a Borrowing Notice by no
later than 10:00 a.m. (New York time) on the day which is ten (10) Business Days
prior to the date such Advance is to be borrowed (or such shorter period as
Agent may agree in its sole discretion), specifying (i) the date of the proposed
borrowing (which shall be a Business Day), (ii) the type of borrowing and the
amount on the date of such Advance to be borrowed, which amount shall be in an
aggregate principal amount that is not less than $7,500,000 and in integral
multiples of $100,000 in excess thereof thereafter, (iii) whether the Advance is
to be a LIBOR Rate Loan or a Domestic Rate Loan, (iv) if applicable, the
duration of the first Interest Period therefor and (v) the applicable Borrower’s
wire instructions; provided, that no more than five (5) Borrowing Notices in the
aggregate (or such additional Borrowing Notices as the Agent may agree in its
sole discretion) may be delivered by the Borrowing Agent after the Closing Date
and on or prior to the Termination Date.  Interest Periods for LIBOR Rate Loans
shall be for one, two or three months; provided, (A) if an Interest Period would
end on a day that is not a Business Day, it shall end on the next succeeding
Business Day unless such day falls in the next succeeding calendar month in
which case the Interest Period shall end on the next preceding Business Day,
(B) any 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) shall end on the last Business Day of
the last calendar month of such Interest Period and (C) no Interest Period shall
extend beyond the Maturity Date.  At the election of Agent or the Required
Lenders, no Advance shall be made available to any Borrower during the
continuance of a Default or an Event of Default.  After giving effect to each
requested LIBOR Rate Loan, including those which are converted from a Domestic
Rate Loan under Section 2.2(e), there shall not be outstanding more than six
(6) LIBOR Rate Loans, in the aggregate.

 

(c)                                  Each Interest Period of a LIBOR Rate Loan
shall commence on the date such LIBOR Rate Loan is made and shall end on such
date as Borrowing Agent may elect as set forth in subsection (b)(iii) above or
subsection (e) below.

 

(d)                                 Borrowing Agent shall elect the initial
Interest Period applicable to a LIBOR Rate Loan in the Borrowing Notice given to
Agent pursuant to Section 2.2(b) or by providing Agent with a notice in the form
of Exhibit 1.2(e) (a “Notice of Conversion/Continuation”) pursuant to
Section 2.2(e), as the case may be.  Borrowing Agent shall elect the duration of
each succeeding Interest Period by giving irrevocable written notice to Agent of
such duration not later than 10:00 a.m. (New York time) on the day which is
three (3) Business Days prior to the last day of the then current Interest
Period applicable to such LIBOR Rate Loan.  If Agent (i) does not receive a
timely Notice of Conversion/Continuation of the Interest Period elected by
Borrowing Agent or (ii) does receive a timely Notice of Conversion/Continuation
but such Notice of Conversion/Continuation fails to specify an Interest Period,
Borrowing Agent shall be deemed to have elected to convert to a Domestic Rate
Loan subject to Section 2.2(e) below.

 

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(e)                                  Provided that no Event of Default shall
have occurred and be continuing with respect to which Agent or the Required
Lenders have elected to suspend Borrower’s ability to incur LIBOR Rate Loans,
Borrowing Agent may, with respect to any Advance, on the last Business Day of
the then current Interest Period applicable to any outstanding LIBOR Rate Loan,
or on any Business Day with respect to Domestic Rate Loans, convert any such
loan into a loan of another type in the same aggregate principal amount;
provided that any conversion of a LIBOR Rate Loan shall be made only on the last
Business Day of the then current Interest Period applicable to such LIBOR Rate
Loan.  If Borrowing Agent desires to convert a loan, Borrowing Agent shall give
Agent written notice by no later than 10:00 a.m. (New York time) (i) on the day
which is three (3) Business Days’ prior to the date on which such conversion is
to occur with respect to a conversion from a Domestic Rate Loan to a LIBOR Rate
Loan, or (ii) on the day which is one (1) Business Day prior to the date on
which such conversion is to occur with respect to a conversion from a LIBOR Rate
Loan to a Domestic Rate Loan, specifying, in each case, the date of such
conversion, the loans to be converted and if the conversion is from a Domestic
Rate Loan to any other type of loan, the duration of the first Interest Period
therefor.

 

(f)                                   At its option and upon written notice
given prior to 10:00 a.m. (New York time) at least three (3) Business Days’
prior to the date of such prepayment, any Borrower may prepay the LIBOR Rate
Loans in whole at any time or in part from time to time with accrued interest on
the principal being prepaid to the date of such repayment.  Borrowing Agent
shall specify the date of prepayment of Advances which are LIBOR Rate Loans and
the amount of such prepayment.  In the event that any prepayment of a LIBOR Rate
Loan is required or permitted on a date other than the last Business Day of the
then current Interest Period with respect thereto, such Borrower shall indemnify
Agent and Lenders therefor in accordance with Section 2.2(g) hereof.

 

(g)                                  Each Borrower shall indemnify Agent and
Lenders and hold Agent and Lenders harmless from and against any and all actual
losses or expenses (including, without limitation, any loss or expense arising
from the reemployment of funds obtained by Agent or any Lender or from fees
payable to terminate the deposits from which such funds were obtained) that
Agent and Lenders may sustain or incur as a consequence of any prepayment
(whether voluntary, as a result of acceleration or otherwise), conversion of or
to, continuation of, or any default by any Borrower in the payment of the
principal of or interest on any LIBOR Rate Loan or failure by any Borrower to
complete a borrowing of, a prepayment of or conversion of or to, or continuation
of a LIBOR Rate Loan on a day which is not the last day of an Interest Period
with respect thereto, including, but not limited to, any interest payable by
Agent or Lenders to lenders of funds obtained by it in order to make or maintain
its LIBOR Rate Loans hereunder, or after notice thereof has been given.  A
certificate in reasonable detail as to any additional amounts payable pursuant
to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent
shall be conclusive absent manifest error.  Failure or delay on the part of
Agent or any Lender to demand compensation pursuant to this section shall not
constitute a waiver of Agent’s or such Lender’s right to demand such
compensation.

 

(h)                                 Notwithstanding any other provision hereof,
if any Applicable Law, treaty, regulation or directive, or any change therein or
in the interpretation or application thereof, including without limitation any
Change in Law, shall make it unlawful for Lenders or any Lender (for purposes of
this subsection (h), the term “Lender” shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any LIBOR Rate Loans) to make or maintain its LIBOR Rate
Loans, the obligation of Lenders to make LIBOR Rate Loans hereunder shall
forthwith be cancelled and Borrowers shall, if any affected LIBOR Rate Loans are
then outstanding either pay all such affected LIBOR Rate Loans or convert such
affected LIBOR Rate Loans into loans of another type (either on the last day of
the

 

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Interest Period therefor, if Lenders may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if Lenders may not lawfully
continue to maintain such LIBOR Rate Loans).  If any such payment or conversion
of any LIBOR Rate Loan is made on a day that is not the last day of the Interest
Period applicable to such LIBOR Rate Loan, Borrowers shall pay Agent such amount
or amounts as may be necessary to compensate Lenders for any actual loss or
expense sustained or incurred by Lenders in respect of such LIBOR Rate Loan as a
result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by
Lenders in order to make or maintain such LIBOR Rate Loan.  A certificate in
reasonable detail as to any additional amounts payable pursuant to the foregoing
sentence submitted by Lenders to Borrowing Agent shall be conclusive absent
manifest error.  Failure or delay on the part of Agent or any Lender to demand
compensation pursuant to this section shall not constitute a waiver of Agent’s
or such Lender’s right to demand such compensation.  A certificate as to any
amounts that a Lender is entitled to receive under this Section 2.2 submitted by
such Lender, through Agent, to Borrowing Agent shall be conclusive in the
absence of clearly demonstrable error and all such amounts shall be paid by
Borrowers promptly upon demand by such Lender.  This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.

 

2.3.                            Disbursement of Advance Proceeds.  All Advances
shall be disbursed from whichever office or other place Agent may designate from
time to time and, together with any and all other Obligations of Borrowers to
Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s books. 
Prior to the Maturity Date, Borrowers may use the Revolving Advances by
borrowing, prepaying and reborrowing, all in accordance with the terms and
conditions hereof.  The proceeds of each Revolving Advance requested by
Borrowing Agent on behalf of any Borrower shall, with respect to requested
Revolving Advances to the extent Lenders make such Revolving Advances, be made
available to the applicable Borrower on the day specified in the Borrowing
Notice by way of wire transfer to such Borrower’s operating account at such bank
as Borrowing Agent may designate following notification to Agent, in immediately
available federal funds or other immediately available funds or, with respect to
Revolving Advances deemed to have been requested by any Borrower, be disbursed
to Agent to be applied to the outstanding Obligations giving rise to such deemed
request.

 

2.4.                            [Reserved].

 

2.5.                            Repayment of Advances.

 

(a)                                 The Revolving Advances shall be due and
payable in full on the Maturity Date subject to earlier prepayment as herein
provided.

 

(b)                                 [Reserved].

 

(c)                                  All payments of principal, interest and
other amounts payable hereunder, or under any of the Other Documents shall be
made to Agent at the Payment Office for the account of the Lenders not later
than 1:00 P.M. (New York time) on the due date therefor in lawful money of the
United States of America in federal funds or other funds immediately available
to Agent.  Agent shall have the right to effectuate payment of any and all
Obligations due and owing hereunder by charging Borrowers’ Account or by making
Advances as provided in Section 2.2 hereof. For purposes of computing interest
and fees, funds received by the Agent after 1:00 P.M. (New York time) on such
due date may, in Agent’s discretion, be deemed to have been paid by the
Borrowers on the next succeeding Business Day.

 

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(d)                                 Borrowers, jointly and severally, shall pay
principal, interest, and all other amounts payable hereunder, or under any Other
Document, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.

 

2.6.                            Repayment of Excess Revolving Facility Usage. 
If at any time the Revolving Facility Usage exceeds the Line Cap (other than as
a result of a Protective Advance), including (for the avoidance of doubt) as a
result of the reduction of the Maximum Revolving Advance Amount pursuant to
Section 2.11 or pursuant to the definition of Maximum Revolving Advance Amount,
the Borrower shall (i) first, repay Revolving Advances and (ii) second, Cash
Collateralize any outstanding Letters of Credit (consistent with the procedures
set forth in Section 2.8(j)) to eliminate such excess.  Such amounts shall be
immediately due and payable, without the necessity of any demand, at the Payment
Office.

 

2.7.                            Statement of Account.  Agent shall maintain, in
accordance with its customary procedures, a loan account (“Borrowers’ Account”)
in the name of Borrowers in which shall be recorded the date and amount of each
Advance made by Agent and the date and amount of each payment in respect
thereof; provided, however, the failure by Agent to record the date and amount
of any Advance shall not adversely affect Agent or any Lender.  The records of
Agent with respect to the loan account shall be conclusive evidence absent
manifest error of the amounts of Advances and other charges thereto and of
payments applicable thereto.

 

2.8.                            Letters of Credit.

 

(a)                                 Issuance of Letters of Credit.  To the
extent that an Issuer has been designated by the Borrowing Agent and such Issuer
has become a party to this Agreement in its capacity as such, the Borrowing
Agent may at any time prior to the Maturity Date request the issuance of a
standby or trade letter of credit denominated in Dollars (each, a “Letter of
Credit”), for its own account or the account of another Credit Party, or the
amendment or extension of an existing Letter of Credit, by delivering or
transmitting electronically, or having such other Credit Party deliver or
transmit electronically to the Issuer (with a copy to the Agent) a completed
application for letter of credit, or request for such amendment or extension, as
applicable, in such form as the Issuer may specify from time to time by no later
than 10:00 a.m. at least five (5) Business Days, or such shorter period as may
be agreed to by the Issuer, in advance of the proposed date of issuance,
amendment or extension.  The Borrowing Agent shall authorize and direct such
Issuer to name such Credit Party as the “Applicant” or “Account Party” of such
Letter of Credit.  Promptly after receipt of any letter of credit application,
the Issuer shall confirm with the Agent (in writing) that the Agent has received
a copy of such Letter of Credit application and if not, such Issuer will provide
the Agent with a copy thereof.

 

(i)                  Unless the Issuer has received notice from any Lender, the
Agent or any Credit Party, at least one day prior to the requested date of
issuance, amendment or extension of the applicable Letter of Credit, that one or
more applicable conditions in Section 8.2 is not satisfied, then, subject to the
terms and conditions hereof and in reliance on the agreements of the other
Lenders set forth in this Section 2.8(a), the Issuer or any of the Issuer’s
Affiliates will issue the proposed Letter of Credit or agree to such amendment
or extension; provided that each Letter of Credit shall not expire later than
(A) twelve (12) months from the date of issuance, or (B)  the Letter of Credit
Maturity Date; provided further that (x) in no event shall the Letter of Credit
Obligations exceed, at any one time, the Letter of Credit Sublimit or (y) the
Revolving Facility Usage exceed, at any one time, the Maximum Revolving Advance
Amount.  Each request by the Borrowing Agent for the issuance, amendment or
extension of a Letter of Credit shall be deemed to be a representation by the
Borrowing Agent that they are in compliance with the preceding sentence and with
Section 8.2 after giving effect to the requested issuance, amendment or
extension of such Letter of Credit.  Promptly after its delivery of any Letter
of Credit or any amendment or extension

 

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to a Letter of Credit to the beneficiary thereof, the applicable Issuer will
also deliver to the Borrowing Agent and the Agent a true and complete copy of
such Letter of Credit or amendment.

 

(ii)               Notwithstanding Section 2.8(a)(i), no Issuer shall be under
any obligation to issue any Letter of Credit if (i) any order, judgment or
decree of any Governmental Body or arbitrator shall by its terms purport to
enjoin or restrain such Issuer from issuing such Letter of Credit, or any Law
applicable to such Issuer or any request or directive (whether or not having the
force of law) from any Governmental Body with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or the Letter of Credit in particular or shall
impose upon such Issuer with respect to the Letter of Credit any restriction,
reserve or capital requirement (for which such Issuer is not otherwise
compensated under Section 3.9) not in effect on the Closing Date, or shall
impose upon such Issuer any unreimbursed loss, cost or expense (for which such
Issuer is not otherwise compensated under Section 3.7) which was not applicable
on the Closing Date and which such Issuer in good faith deems material to it, or
(ii) the issuance of the Letter of Credit would violate one or more policies of
such Issuer applicable to letters of credit generally.

 

(b)                                 Disbursements, Reimbursement.

 

(i)                  In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuer will promptly notify
the Borrowing Agent and the Agent thereof.  Provided that the Borrowing Agent
shall have received such notice, the Borrowers shall reimburse (such obligation
to reimburse the Issuer shall sometimes be referred to as a “Reimbursement
Obligation”) the Issuer prior to 12:00 noon on each date that an amount is paid
by the Issuer under any Letter of Credit (each such date, a “Drawing Date”) by
paying to the Agent for the account of the Issuer an amount equal to the amount
so paid by the Issuer.  In the event the Borrowers fail to reimburse the Issuer
(through the Agent) for the full amount of any drawing under any Letter of
Credit by 12:00 noon on the Drawing Date, the Agent will promptly notify each
Lender thereof, and the Borrowing Agent shall be deemed to have requested that a
Revolving Advance maintained as a Domestic Rate Loan be made by the Lenders to
be disbursed on the Drawing Date under such Letter of Credit, subject to the
amount of the unutilized portion of the Line Cap and subject to, other than any
notice requirement, Section 8.2 hereof.  Any notice given by the Agent or Issuer
pursuant to this Section 2.8(b)(i) may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii)               Each Lender shall, within ten (10) Business Days of any
notice pursuant to Section 2.8(b)(i), and subject to satisfaction of the
conditions set forth in Section 8.2 (other than any notice requirement), make
available to the Agent for the account of the Issuer an amount in immediately
available funds equal to its Commitment Percentage of the amount of the drawing,
whereupon the participating Lenders shall (subject to Section 2.8(b)(i)) be
deemed to have made a Revolving Advance maintained as a Domestic Rate Loan to
the applicable Borrower in that amount.  If any Lender so notified fails to make
available to the Agent for the account of the Issuer the amount of such Lender’s
Commitment Percentage of such amount by no later than 2:00 p.m. ten
(10) Business Days after the Drawing Date, then interest shall accrue on such
Lender’s obligation to make such payment, from the date that is ten
(10) Business Days after the Drawing Date to the date on which such Lender makes
such payment (i) at a rate per annum equal to the Federal Funds Effective Rate
during the first three (3) days following the date that is ten (10) Business
Days after the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Revolving Advances maintained as Domestic Rate Loans on and after
the fourth day that is ten (10) Business Days following the Drawing Date.  The
Agent and the Issuer will promptly give notice (as described in

 

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Section 2.8(b)(i) above) of the occurrence of the Drawing Date, but failure of
the Agent or the Issuer to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligation under this Section 2.8(b)(ii).

 

(iii)            With respect to any unreimbursed drawing that is not converted
into Revolving Advances maintained as Domestic Rate Loans to the Borrowers in
whole or in part as contemplated by Section 2.8(b)(i), because of a Borrower’s
failure to satisfy the conditions set forth in Section 8.2 other than any notice
requirements, or for any other reason, the applicable Borrower shall be deemed
to have incurred from the Issuer a borrowing (each a “Letter of Credit
Borrowing”) in the amount of such drawing.  Such Letter of Credit Borrowing
shall be due and payable in accordance with the terms of this Agreement
(together with interest) and shall bear interest at the rate per annum
applicable to the Revolving Advances maintained as Domestic Rate Loans.  Each
Lender’s payment to the Agent for the account of the Issuer pursuant to
Section 2.8(b)(ii) shall be a “Participation Advance”.

 

(c)                                  Repayment of Participation Advances.

 

(i)                  Upon (and only upon) receipt by the Agent for the account
of the Issuer of immediately available funds from a Borrower (i) in
reimbursement of any payment made by the Issuer under the Letter of Credit with
respect to which any Lender has made a Participation Advance to the Agent, or
(ii) in payment of interest on such a payment made by the Issuer under such a
Letter of Credit, the Agent on behalf of the Issuer will pay to each Lender, in
the same funds as those received by the Agent, the amount of such Lender’s
Commitment Percentage of such funds (and to the extent that any of the other
Lenders have funded any portion of such Defaulting Lender’s Participation
Advance in accordance with the provisions of Section 2.13, Agent will pay over
to such Non-Defaulting Lenders a pro rata portion of the funds so withheld from
such Defaulting Lender), except the Agent shall retain for the account of the
Issuer the amount of the Commitment Percentage of such funds of any Lender that
did not make a Participation Advance in respect of such payment by the Issuer.

 

(ii)               If the Agent is required at any time to return to any Credit
Party, or to a trustee, receiver, liquidator, custodian, or any official in any
insolvency proceeding, any portion of any payment made by any Credit Party to
the Agent for the account of the Issuer pursuant to this Section in
reimbursement of a payment made under any Letter of Credit or interest or fees
thereon, each Lender shall, on demand of the Agent, forthwith return to the
Agent for the account of the Issuer the amount of its Commitment Percentage of
any amounts so returned by the Agent plus interest thereon from the date such
demand is made to the date such amounts are returned by such Lender to the
Agent, at a rate per annum equal to the Federal Funds Effective Rate in effect
from time to time.

 

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

 

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(e)                                  Determinations to Honor Drawing Requests. 
In determining whether to honor any request for drawing under any Letter of
Credit by the beneficiary thereof, the Issuer shall be responsible only to
determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.

 

(f)                                   Nature of Participation and Reimbursement
Obligations.  Each Lender’s obligation in accordance with this Agreement to make
the Revolving Advances or Participation Advances, as contemplated by
Section 2.8(b), as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrowers to reimburse the Issuer upon a draw under a Letter
of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.8 (and
Section 3.2) under all circumstances, including the following circumstances:

 

(i)                  any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuer or any of its Affiliates,
the Credit Parties or any other Person for any reason whatsoever, or which any
Credit Party may have against the Issuer or any of its Affiliates, any Lender or
any other Person for any reason whatsoever;

 

(ii)               the failure of any Credit Party or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in Sections 2.1, 2.2 or 8.2 or as otherwise set forth in this Agreement
for the making of a Revolving Advances, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Advances under
Section 2.8(b);

 

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

 

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

 

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

 

(vi)           payment by the Issuer or any of its Affiliates under any Letter
of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit;

 

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

 

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

 

(ix)           any Material Adverse Effect;

 

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

 

(xi)           the occurrence or continuance of an Insolvency Event with respect
to any Credit Party;

 

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

 

(xiii)     the fact that the Maturity Date shall have passed or this Agreement
or the Commitments hereunder shall have been terminated; and

 

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

 

(g)                                  Indemnity.  In addition to the amounts
payable as provided in Section 16.5, each Borrower hereby agrees to protect,
indemnify, pay and save harmless the Issuer and any of its Affiliates that has
issued a Letter of Credit from and against any and all claims, demands,
liabilities, damages, taxes, penalties, interest, judgments, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel) which the Issuer or any of its Affiliates may incur or be subject to as
a consequence, direct or indirect, of the issuance of any Letter of Credit,
other than as a result of the gross negligence or willful misconduct of the
Issuer as determined by a final non-appealable judgment of a court of competent
jurisdiction.

 

(h)                                 Liability for Acts and Omissions.  As
between any Credit Party and the Issuer, or the Issuer’s Affiliates, such Credit
Party assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit by, the respective beneficiaries of such Letters of Credit, other than
as a result of the gross negligence or willful misconduct of the Issuer as
determined by a final non-appealable judgment of a court of competent
jurisdiction.  In furtherance and not in limitation of the foregoing, the Issuer
shall not be responsible for any of the following, including any losses or
damages to any Credit Party or other Person or property relating therefrom: 
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if the Issuer or its Affiliates shall have been notified thereof);
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Credit Party against
any beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Credit Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, facsimile, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of

 

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the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of the Issuer or its
Affiliates, as applicable, including any act or omission of any Governmental
Body, and none of the above shall affect or impair, or prevent the vesting of,
any of the Issuer’s or its Affiliates rights or powers hereunder.  Nothing in
the preceding sentence shall relieve an Issuer from liability for such Issuer’s
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment) in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence.  In no
event shall an Issuer or its Affiliates be liable to any Credit Party for any
indirect, consequential, incidental, punitive, exemplary or special damages or
expenses (including attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.

 

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

 

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Issuer or its Affiliates
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put the Issuer or its Affiliates under any resulting liability to the
Borrowers or any Lender.

 

(i)                                     Issuer Reporting Requirements.  Each
Issuer shall, on the first Business Day of each month, provide to Agent and
Borrowing Agent a schedule of the Letters of Credit issued by it, in form and
substance satisfactory to Agent, showing the date of issuance of each Letter of
Credit, the account party, the original face amount (if any), and the expiration
date of any Letter of Credit outstanding at any time during the preceding month,
and any other information relating to such Letter of Credit that the Agent may
request.

 

(j)                                    Cash Collateral.  If any Borrower
requests the issuance, extension or renewal of any Letter of Credit and such
Letter of Credit would have an expiration date which is after the Letter of
Credit Maturity Date, no Issuer shall be required to issue, extend or renew such
Letter of Credit, but may elect to do so if the requirements of this
Section 2.8(j) are satisfied.  Such Borrower shall, on or before the issuance,
extension or renewal of such Letter of Credit, deposit and pledge Cash
Collateral for each such Letter of Credit in an amount equal to 105% of the
Maximum Undrawn Amount of such outstanding Letter of Credit.  Such Cash
Collateral shall be deposited pursuant to documentation reasonably satisfactory
to the Agent and such Issuer and the Borrowing Agent and shall be maintained in
blocked deposit accounts at such Issuer.  Each Borrower hereby grants to each
Issuer a security interest in all Cash Collateral pledged to such Issuer
pursuant to this Section or otherwise under this Agreement.  The Cash Collateral
related to a particular

 

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Letter of Credit shall be released by the applicable Issuer upon termination or
expiration of such Letter of Credit and the reimbursement by the Borrowers of
all amounts drawn thereon and the payment in full of all fees accrued thereon
through the date of such expiration or termination.  After the Maturity Date,
the Borrowing Agent shall pay any and all fees associated with any such Letter
of Credit with an expiration date that extends beyond the Maturity Date directly
to the applicable Issuer.

 

2.9.                            Additional Payments.  Any sums expended by Agent
or any Lender due to any Borrower’s failure to perform or comply with its
obligations under this Agreement or any Other Document including any Borrower’s
obligations under Sections 4.2, 4.4, 4.9, 4.11, 4.12, 4.13, 4.14(d) and 6.1
hereof, may be charged to Borrowers’ Account as a Revolving Advance and added to
the Obligations.

 

2.10.                     Making and Settlement of Advances.

 

(a)                                 Each borrowing of Revolving Advances shall
be advanced according to the applicable Commitment Percentages of the Lenders
holding the Commitments (subject to any contrary terms of Section 2.13).

 

(b)                                 Promptly after receipt by Agent of a
Borrowing Notice or a deemed request for a Revolving Advance pursuant to
Section 2.8(b), Agent shall notify the Lenders holding the Commitments of its
receipt of such request specifying the information provided by Borrowing Agent
and the apportionment among Lenders of the requested Revolving Advance as
determined by Agent in accordance with the terms hereof.  Each Lender shall
remit the principal amount of each Revolving Advance to Agent such that Agent is
able to, and Agent shall, upon receipt of all requested funds, to the extent the
applicable Lenders have made funds available to it for such purpose and subject
to Section 8.2, fund such Revolving Advance to Borrowers in U.S. Dollars and
immediately available funds to the applicable Borrower’s account set forth in
the applicable Borrowing Notice (or as otherwise advised) prior to the close of
business, on the day specified in the Borrowing Notice or the day that is ten
(10) Business Days after the Drawing Date, as applicable; provided that if any
applicable Lender fails to remit such funds to Agent in a timely manner, Agent
may elect in its sole discretion to fund with its own funds the Revolving
Advance of such Lender on such borrowing date, and such Lender shall be subject
to the repayment obligation in Section 2.10(c) hereof.

 

(c)                                  Unless Agent shall have received prior
written notice by any Lender holding a Commitment that such Lender will not make
the amount which would constitute its applicable Commitment Percentage of the
requested Revolving Advance available to Agent, Agent may (but shall not be
obligated to) assume that such Lender has made such amount available to Agent on
such date in accordance with Section 2.10(b) and may, in reliance upon such
assumption, make available to Borrowers a corresponding amount.  In such event,
if a Lender has not in fact made its applicable Commitment Percentage of the
requested Revolving Advance available to Agent, then the applicable Lender and
Borrowers severally agree to pay to Agent on demand such corresponding amount
with interest thereon, for each day from and including the date such amount is
made available to Borrowers through but excluding the date of payment to Agent,
at (i) in the case of a payment to be made by such Lender, the greater of
(A) (x) the daily average Federal Funds Effective Rate (computed on the basis of
a year of 360 days) during such period as quoted by Agent, times (y) such amount
or (B) a rate determined by Agent in accordance with banking industry rules on
interbank compensation, and (ii) in the case of a payment to be made by the
Borrower, the Revolving Interest Rate for Revolving Advances that are Domestic
Rate Loans.  If such Lender pays its share of the applicable Revolving Advance
to Agent, then the amount so paid shall constitute such Lender’s Revolving
Advance.  Any payment by Borrowers shall be without prejudice to any claim the
Borrowers may have against a Lender that shall have failed to make such

 

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payment to Agent.  A certificate of Agent submitted to any Lender or Borrower
with respect to any amounts owing under this paragraph (c) shall be conclusive,
in the absence of manifest error.

 

(d)                                 [Reserved].

 

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

 

2.11.                     Reduction of Maximum Revolving Advance Amount.

 

(a)                                 Borrowing Agent may, on at least three
(3) Business Days’ prior written notice received by Agent (which shall promptly
advise each Lender thereof) permanently reduce the Maximum Revolving Advance
Amount, in minimum increments of $10,000,000 to an amount not less than the then
Revolving Facility Usage; provided that, upon any such permanent reduction, the
Borrower shall pay to the Agent for the benefit of the Lenders the Prepayment
Premium on such amount so permanently reduced to the extent required pursuant to
Section 2.15.

 

(b)                                 [Reserved].

 

(c)                                  Upon the prepayment of Advances pursuant to
Section 2.17, the Maximum Revolving Advance Amount shall be reduced in
accordance with Section 2.17(f).

 

(d)                                 All reductions of the Maximum Revolving
Advance Amount shall be applied ratably among the Lenders according to their
respective Commitment Amounts.

 

2.12.                     Use of Proceeds.

 

(a)                                 Credit Parties shall apply the proceeds of
Advances to (i) consummate the Transactions and (ii) provide for the Borrowers’
general business purposes, including working capital requirements, making
capital expenditures, making Permitted Acquisitions, making debt payments when
due and making distributions and dividends, in each case, to the extent not
prohibited under this Agreement.

 

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(b)                                 Without limiting the generality of
Section 2.12(a) above, neither a Credit Party nor any other Person which may in
the future become party to this Agreement or the Other Documents as a Credit
Party, intends to use nor shall they use any portion of the proceeds of the
Advances, directly or indirectly, for any purpose in violation of Anti-Terrorism
Laws.

 

2.13.                     Defaulting Lender.

 

(a)                                 Notwithstanding anything to the contrary
contained herein, in the event any Lender is a Defaulting Lender, all rights and
obligations hereunder of such Defaulting Lender and of the other parties hereto
shall be modified to the extent of the express provisions of this Section 2.13
so long as such Lender is a Defaulting Lender.

 

(b)                                 (i)                                    
Except as otherwise expressly provided for in this Section 2.13, Revolving
Advances shall be made pro rata from Lenders holding Commitments which are not
Defaulting Lenders based on their respective Commitment Percentages, and no
Commitment Percentage of any Lender or any Pro Rata Share of any Revolving
Advances required to be advanced by any Lender shall be increased as a result of
any Lender being a Defaulting Lender.  Amounts received in respect of principal
of any type of Revolving Advances shall be applied to reduce such type of
Revolving Advances of each Lender (other than any Defaulting Lender) holding a
Commitment in accordance with their Commitment Percentages; provided that Agent
shall not be obligated to transfer to a Defaulting Lender any payments received
by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal,
interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent.  Agent may hold and, in its discretion, re-lend to
Borrowers the amount of such payments received or retained by it for the account
of such Defaulting Lender.

 

(ii)                                  Fees pursuant to Section 3.3 hereof shall
cease to accrue in favor of such Defaulting Lender while such Person is a
Defaulting Lender.

 

(iii)                               If any Letter of Credit Obligations (or
drawings under any Letter of Credit for which the Issuer has not been
reimbursed) are outstanding or exist at the time any such Lender holding a
Commitment becomes a Defaulting Lender, then:

 

(A)                               the Defaulting Lender’s Participation
Commitment in the Maximum Undrawn Amount of all outstanding Letters of Credit
shall be reallocated among the Non-Defaulting Lenders holding Commitments in
proportion to the respective Commitment Percentages of such Non-Defaulting
Lenders to the extent (but only to the extent) that (x) such reallocation does
not cause the aggregate sum of outstanding Revolving Advances made by any such
Non-Defaulting Lender holding a Commitment plus such Lender’s reallocated
Participation Commitment in the aggregate Maximum Undrawn Amount of all
outstanding Letters of Credit to exceed the Commitment Amount of any such
Non-Defaulting Lender, and (y) the conditions in Section 8.2 would be met;

 

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

 

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

 

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

 

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

 

(iv)                              so long as any Lender holding a Commitment is
a Defaulting Lender, the Issuer shall not be required to issue, amend or
increase any Letter of Credit, unless such Issuer is satisfied that the related
exposure and the Defaulting Lender’s Participation Commitment in the Maximum
Undrawn Amount of all Letters of Credit (after giving effect to any such
issuance, amendment or increase) will be fully allocated to the Non-Defaulting
Lenders holding Commitments and/or Cash Collateral for such Letters of Credit
will be provided by the Borrowers in accordance with clause (A) and (B) above,
and participating interests in any newly issued or increased Letter of Credit
shall be allocated among the Non-Defaulting Lenders in a manner consistent with
Section 2.13(b)(iii)(A) above (and such Defaulting Lender shall not participate
therein).

 

(c)                                  A Defaulting Lender shall not be entitled
to give instructions to Agent or to approve, disapprove, consent to or vote on
any matters relating to this Agreement and the Other Documents, and all
amendments, waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and, for purposes of
the definition of “Required Lenders,” a Defaulting Lender shall not be deemed to
be a Lender, to have any outstanding Advances or a Commitment Percentage;
provided, that this clause (c) shall not apply to the vote of a Defaulting
Lender in the case of an amendment, waiver or other modification described in
Section 16.2(b)(i).

 

(d)                                 Other than as expressly set forth in this
Section 2.13, the rights and obligations of a Defaulting Lender (including the
obligation to indemnify Agent) and the other parties hereto shall remain
unchanged.  Nothing in this Section 2.13 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Other
Documents, shall alter such obligations, shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice

 

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any rights which any Borrower, Agent or any Lender may have against any
Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.

 

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

 

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

 

2.14.                     [Reserved].

 

2.15.                     Prepayment Premium.

 

(a)                                 Without duplication, any (i) termination or
permanent reduction of the Commitments pursuant to Section 2.11(a) and/or
11.1(a) and (ii) permanent reduction of the Commitments pursuant to
Section 2.17(b) and/or (e), shall, in each case, be subject to payment of a
premium (the “Prepayment Premium”) of five percent (5.0%) of the aggregate
principal amount of the Commitments so terminated or permanently reduced
(regardless of the aggregate amount of outstanding Advances at the time of such
termination or reduction).

 

(b)                                 The Credit Parties expressly agree that
(i) the Prepayment Premium is reasonable and is the product of an arm’s length
transaction between sophisticated business people, ably represented by counsel,
(ii) the Prepayment Premium shall be payable notwithstanding the then prevailing
market rates at the time payment is made, (iii) there has been a course of
conduct between Lenders and the Credit Parties giving specific consideration in
this transaction for such agreement to pay the Prepayment Premium, (iv) the
Credit Parties shall be estopped hereafter from claiming differently than as
agreed to in this Section 2.15, (v) their agreement to pay the Prepayment
Premium is a material inducement to the Lenders to make the Advances, and
(vi) the Prepayment Premium represents a good faith, reasonable estimate and
calculation of the lost profits or damages of the Lenders and that it would be
impractical and extremely difficult to ascertain the actual amount of damages to
the Lenders or profits lost by the Lenders as a result of any early optional
repayment, mandatory prepayment or early repayment due to acceleration of the
Advances, as the case may be.

 

2.16.                     Protective Advances.

 

(a)                                 Notwithstanding anything to the contrary
contained in this Agreement, if the Borrowing Agent shall request that the
Lenders make, or permit to remain outstanding, any Revolving Advance or Letters
of Credit which shall cause an Overadvance or an Advance during a Default or
Event of Default, the Agent may, in its sole discretion (subject to the proviso
to Section 8.2(b)), elect to make, or permit to remain outstanding, such
Overadvance or Advance to the extent such Overadvance or Advance constitutes a
Protective Advance.  If a Protective Advance is made,

 

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or permitted to remain outstanding, pursuant to the preceding sentence, then all
Lenders shall be bound to make, or permit to remain outstanding, such Protective
Advance based upon their Commitment Percentage in accordance with the terms of
this Agreement, regardless of whether the conditions to lending set forth in
Section 8.2 have been met.  A Protective Advance may be made as a Revolving
Advance or as an issuance, extension or renewal of a Letter of Credit and each
Lender and each Issuer, as applicable, agrees to make any such requested
Revolving Advance or Letter of Credit available to the Borrowers.  The
obligation of each Lender and each Issuer, as applicable, to participate in each
Protective Advance shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right which such Person may have against any other Credit Party, the
Borrowers or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default, or (iii) any other occurrence, event or condition. 
The making of any such Protective Advance on any one occasion shall not obligate
the Agent or any Lender to make or permit any Protective Advance on any other
occasion.  No funding of a Protective Advance or sufferance of an Overadvance
shall constitute a waiver by Agent or the Lenders of any Default or Event of
Default.  In no event shall any Borrower or other Credit Party be deemed a
beneficiary of this Section 2.16 nor authorized to enforce any of its terms.

 

(b)                                 No Protective Advance shall modify or
abrogate any of the provisions of Section 2.8(b) regarding the Lenders’
obligations to purchase participations with respect to LC Disbursements or to
reimburse any LC Disbursement.  Notwithstanding anything herein to the contrary,
no event or circumstance shall result in any claim or liability against the
Agent (regardless of the amount of any Overadvances or Protective Advances) for
any Overadvances or Protective Advances.

 

(c)                                  All Protective Advances shall be payable by
the Borrowers on demand by Agent or the Required Lenders.  All other
Overadvances (other than Protective Advances) shall be payable in accordance
with the requirements of Section 2.6.  All Protective Advances and other
Overadvances shall constitute Obligations secured by the Collateral and entitled
to all benefits of this Agreement and the Other Documents.

 

2.17.                     Mandatory Prepayments.

 

(a)                                 Subject to Section 7.1 hereof, when any
Borrower sells or otherwise disposes of any Collateral described in
Section 7(b)(v), (xiv) and/or (xv) (including pursuant to a sale and leaseback
transaction), Borrowers shall repay the Advances in an amount equal to the Net
Cash Proceeds of such Dispositions, such repayments to be made promptly but in
no event more than three (3) Business Days following receipt of such Net Cash
Proceeds, and until the date of payment, such proceeds shall be deposited into a
Collection Account.  The foregoing shall not be deemed to be implied consent to
any such sale otherwise prohibited by the terms and conditions hereof.  Such
repayments shall be applied to the outstanding Advances (including cash
collateralization of all Obligations relating to any outstanding Letters of
Credit in accordance with the provisions of Section 3.2(b)) in such order as
Agent may determine, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof.

 

(b)                                 In the event of any issuance or other
incurrence of Indebtedness (other than Indebtedness permitted by Section 7.6),
Borrowers shall, no later than one (1) Business Day after the receipt by
Borrowers of the Net Cash Proceeds from any such incurrence of Indebtedness,
repay the Advances in an amount equal to the cash proceeds of such incurrence of
Indebtedness, plus the Prepayment Premium on such amount to the extent required
pursuant to Section 2.15.  Such repayments will be applied in the same manner as
set forth in Section 2.17(a) hereof.

 

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(c)                                  All Net Cash Proceeds received by Borrowers
or Agent in respect of any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any
Borrower’s property or asset (including all Net Cash Proceeds of business
interruption insurance), shall, no later than three (3) Business Days after the
receipt thereof, prepay the Advances and be applied as set forth in
Section 2.17(a) hereof; provided, that to the extent that, as of the date of
receipt of such Net Cash Proceeds, the sum of Liquidity and Excess Availability
is less than $5,000,000 (the amount of such difference, the “Availability
Deficit”), on a Pro Forma Basis before giving effect to any prepayment required
by this clause (c), the amount of Net Cash Proceeds required to be paid pursuant
to this clause (c) shall be equal to 100% of such Net Cash Proceeds less the
Availability Deficit; provided, further, that the Agent may, in its sole
discretion, waive all or a portion of the mandatory prepayments required by this
clause (c).

 

(d)                                 The receipt by any Credit Party of any
Extraordinary Receipt the Borrowers shall, no later than three (3) Business Days
after the receipt thereof, prepay the Advances and be applied as set forth in
Section 2.17(a) hereof.

 

(e)                                  No later than three (3) Business Days
following the date of receipt by any Credit Party or any of its Restricted
Subsidiaries of Net Cash Proceeds arising from the issuance or Disposition by
Parent Guarantor or the Borrowers of its own Equity Interests, the Borrowers
shall pay or cause to be paid to the Lenders an amount equal to 100% of such Net
Cash Proceeds, plus the Prepayment Premium on such amount to the extent required
pursuant to Section 2.15 and be applied as set forth in Section 2.17(a) hereof.

 

(f)                                   Upon the prepayment of Advances under this
Section 2.17, the Maximum Revolving Advance Amount shall be permanently reduced
by an amount equal to such prepayment; provided that in the case of a prepayment
pursuant to Sections 2.17(a), (c) or (d), such prepayment of Advances and
corresponding permanent reduction in the Maximum Revolving Advance Amount shall
be applied only to the extent such Net Cash Proceeds are not reinvested (which
investment may include the repair, restoration or replacement of the affected
assets or reimbursement of the Credit Parties for amounts already expended in
connection with such Disposition, condemnation or similar proceeding or
Extraordinary Receipt, as applicable) within one hundred eighty (180) days
following the receipt of such Net Cash Proceeds.

 

(g)                                  Upon the prepayment of Advances under this
Section 2.17, the Borrowing Agent shall deliver to the Agent a certificate of an
Authorized Officer of the Borrowing Agent notifying the Agent of any prepayment
under this Section 2.17 and demonstrating the calculation of the amount of the
applicable prepayment.

 

III.                              INTEREST AND FEES.

 

3.1.                            Interest.  Advances shall bear interest as
either LIBOR Rate Loans or Domestic Rate Loans.  Interest on Advances shall be
payable in arrears on (a) the first Business Day of each month with respect to
Domestic Rate Loans, (b) at the end of each Interest Period with respect to
LIBOR Rate Loans and (c) in each case, on the Termination Date.  Interest
charges shall be computed on the actual principal amount of Advances outstanding
during the month preceding the payment date in the case of Domestic Rate Loans
and during the Interest Period in the case of LIBOR Rate Loans at a rate per
annum equal to the applicable Revolving Interest Rate.  Whenever, subsequent to
the date of this Agreement, the Alternate Base Rate is increased or decreased,
the applicable Revolving Interest Rate for Domestic Rate Loans shall be
similarly changed without notice or demand of any kind by an amount equal to the
amount of such change in the Alternate Base Rate during the time such change or
changes remain in effect.  The LIBOR Rate shall be

 

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adjusted with respect to LIBOR Rate Loans without notice or demand of any kind
on the effective date of any change in the Reserve Percentage as of such
effective date.  Automatically upon the occurrence of a Specified Event of
Default, or upon written notice to the Borrowing Agent at the option of the
Agent or direction of the Required Lenders upon the occurrence of any Event of
Default, and during the continuation thereof, the Obligations shall bear
interest at the applicable Revolving Interest Rate plus two (2%) percent per
annum (the “Default Rate”); provided, that other than with respect to any
Default Rate that is imposed as a result of a Specified Event of Default, the
Default Rate shall apply to the Obligations on and from the date of the
occurrence of the underlying Event of Default regardless of whether the Agent
gave notice at a time that was after the occurrence of such Event of Default. 
Agent shall notify Borrowers of any accrual of interest at the Default Rate,
provided, that, any failure to notify shall not impact or affect any of Agent’s
rights and remedies hereunder.

 

3.2.                            Letter of Credit Fees.

 

(a)                                 Borrowers shall pay (x) to Agent, for the
ratable benefit of Lenders, fees for each Letter of Credit for the period from
and excluding the date of issuance of same to and including the date of
expiration or termination, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by the then Applicable Margin for LIBOR
Rate Loans, and (y) to the applicable Issuer, a fronting fee, together with any
and all customary administrative, issuance, amendment, payment and negotiation
charges with respect to Letters of Credit, including in connection with the
opening, amendment or renewal of any such Letter of Credit and any acceptances
created thereunder, in the case of each of the foregoing fees and charges in
this clause (y), in an amount to be agreed between such Issuer, the Borrowing
Agent and acceptable to the Agent and the Required Lenders in their respective
sole discretion, and shall reimburse Agent for any and all reasonable and
documented out-of-pocket fees and expenses, if any, paid by Agent to the Issuer
(all of the foregoing fees, the “Letter of Credit Fees”).  All such charges
shall be due and payable quarterly in arrears on the first Business Day of each
calendar quarter and on the Maturity Date or earlier termination of the
Commitments, be deemed earned in full on the date when the same are due and
payable hereunder and shall not be subject to rebate or pro-ration upon the
termination of this Agreement for any reason.  Any such charge in effect at the
time of a particular transaction shall be the charge for that transaction,
notwithstanding any subsequent change in the Issuer’s prevailing charges for
that type of transaction.  All Letter of Credit Fees payable hereunder shall be
deemed earned in full on the date when the same are due and payable hereunder
and shall not be subject to rebate or pro-ration upon the termination of this
Agreement for any reason.  Automatically upon the occurrence of a Specified
Event of Default, or upon written notice to the Borrowing Agent at the option of
the Agent or direction of the Required Lenders upon the occurrence of any Event
of Default, and during the continuation thereof, the Letter of Credit Fees
described in clause (x) of this Section 3.2(a) shall be increased by the Default
Rate; provided, that, other than with respect to a Default Rate imposed as a
result of a Specified Event of Default, the Default Rate shall apply to the
Letter of Credit Fees described in clause (x) of this Section 3.2(a) on and from
the date of the occurrence of the underlying Event of Default regardless of
whether the Agent gave notice at a time that was after the occurrence of such
Event of Default.

 

(b)                                 On demand after the occurrence and during
the continuation of an Event of Default, Borrowers will cause cash to be
deposited and maintained in an account with Agent, as Cash Collateral, in an
amount equal to one hundred and two percent (102%) of the Maximum Undrawn Amount
of all outstanding Letters of Credit.  Borrowers hereby irrevocably authorize
Agent, in its discretion, on Borrowers’ behalf and in Borrowers’ names, to open
such an account and to make and maintain deposits therein, or in an account
opened by Borrowers, in the amounts required to be made by Borrowers, out of the
proceeds of Receivables or other Collateral or out of any other funds of
Borrowers coming into any Lender’s possession at any time.  Agent will invest

 

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such Cash Collateral (less applicable reserves) in such short-term money-market
items as to which Agent and Borrowers mutually agree and the net return on such
investments shall be credited to such account and constitute additional Cash
Collateral.  Such Cash Collateral shall be returned to the Borrowing Agent upon
the earliest to occur of (i) expiration of the Letters of Credit so Cash
Collateralized, or (ii) the applicable Events of Default are waived in
accordance with the terms of this Agreement.

 

3.3.                            Commitment Fee.  If, for any calendar quarter
prior to the Maturity Date, the average daily unpaid balance of the Revolving
Advances plus the Maximum Undrawn Amount of all outstanding Letters of Credit
for each day of such calendar quarter does not equal the Line Cap, then
Borrowers shall pay to Agent for the ratable benefit of Lenders a fee at a rate
equal to 0.375% per annum on the amount by which the Line Cap exceeds such
average daily unpaid balance of the Revolving Advances plus the Maximum Undrawn
Amount of all outstanding Letters of Credit for each day of such calendar
quarter.  Such fee shall be payable to Agent in arrears on the first Business
Day of each calendar quarter with respect to the previous calendar quarter.

 

3.4.                            Fee Letter.  Borrowers shall pay the amounts
required to be paid in the Fee Letter in the manner and at the times required by
the Fee Letter.

 

3.5.                            Computation of Interest and Fees.  Interest
hereunder computed at the Alternate Base Rate shall be computed on the basis of
a year of 365 or 366 (as applicable) days and for the actual number of days
elapsed.  All other fees and interest hereunder shall be computed on the bases
of a year of 360 days and for the actual number of days elapsed.  If any payment
to be made hereunder becomes due and payable on a day other than a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and
interest thereon shall be payable at the applicable Revolving Interest Rate
during such extension.

 

3.6.                            Maximum Charges.  It is the intention of the
parties to comply strictly with applicable usury laws.  Accordingly, no rate
change shall be put into effect that would result in a rate greater than the
highest rate permitted by law.  Notwithstanding anything to the contrary
contained in this Agreement or in any Other Document, all agreements which
either now are or which shall become agreements among Borrowers, Agent and
Lenders are hereby limited so that in no contingency or event whatsoever shall
the total liability for payments in the nature of interest, additional interest
and other charges exceed the applicable limits imposed by any applicable usury
laws.  If any payments in the nature of interest, additional interest and other
charges made under this Agreement or any Other Document are held to be in excess
of the limits imposed by any applicable usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal hereunder,
and the indebtedness evidenced hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest, additional interest
and other charges shall not exceed the applicable limits imposed by any
applicable usury laws, in compliance with the desires of Borrowers and Agent. 
This provision shall never be superseded or waived and shall control every other
provision of this Agreement or any Other Document and all agreements among
Borrowers, Agent and Lenders, or their respective successors and assigns. 
Unless preempted by federal law or as permitted under the sentence immediately
following this sentence, the applicable Revolving Interest Rate from time to
time in effect under this Agreement may not exceed the “weekly ceiling” from
time to time in effect under Chapter 303 of the Texas Finance Code (the “Texas
Finance Code”).  If the applicable state or federal law is amended in the future
to allow a greater rate of interest to be charged under this Agreement than is
presently allowed by applicable state or federal law, then the limitation of
interest hereunder shall be increased to the maximum rate of interest allowed by
applicable state or federal law as amended, which increase shall be effective
hereunder on the effective date of such amendment, and all interest charges
owing to Lenders by reason thereof shall be payable in accordance with
Section 2.5 hereof.  If by operation of this provision, Borrowers would be
entitled to a refund of interest paid pursuant to this Agreement, each Lender
agrees that it shall pay to Borrowing Agent, upon Agent’s request, such Lender’s
Commitment

 

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Percentage of such interest to be refunded, as determined by Agent.  As provided
in Section 16.1 hereof, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to conflict of
law provisions.  The provisions of this Section 3.6 with respect to the Texas
Finance Code are included solely out of an abundance of caution and shall not be
construed to mean that any provisions of Texas law are in any way applicable to
this Agreement, the Other Documents or any of the Obligations.

 

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

 

(a)                                 subject Agent, any Lender or Issuer to any
Tax of any kind whatsoever with respect to this Agreement or any Other Document,
any Letter of Credit, any participation in a Letter of Credit or any LIBOR Rate
Loan, or change the basis of taxation of payments to Agent, such Lender or
Issuer in respect thereof (except for (i) Indemnified Taxes or Other Taxes
indemnified under Section 3.10, (ii) any Taxes described in clauses (b) through
(d) of the definition of Excluded Tax and (iii) Connection Income Taxes);

 

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

 

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

 

and the result of any of the foregoing is to increase the cost to Agent, any
Lender or Issuer of making, converting to, continuing, renewing or maintaining
its Advances hereunder by an amount that Agent, such Lender or Issuer deems to
be material or to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of the Advances by an amount that
Agent, such Lender or Issuer deems to be material, then, in any case Borrowers
shall promptly pay Agent, such Lender or Issuer, upon its demand, such
additional amount as will compensate Agent, such Lender or Issuer for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the LIBOR
Rate.  Agent, such Lender or Issuer shall certify the amount of such additional
cost or reduced amount to Borrowing Agent, and such certification shall be
conclusive absent manifest error.  Failure or delay on the part of Agent, Issuer
or any Lender to demand compensation pursuant to this section shall not
constitute a waiver of such Person’s right to demand such compensation.

 

3.8.                            Effect of Benchmark Transition Event.

 

(a)                                 Notwithstanding anything to the contrary
herein or in any Other Document, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, the Agent and the Borrowing
Agent may amend this Agreement to replace LIBOR Rate with a Benchmark
Replacement.  Any such amendment with respect to a Benchmark Transition Event
will become effective at 5:00 p.m. on the fifth (5th) Business Day after the
Agent has posted such proposed amendment to all Lenders and the Borrowing Agent
so long as the Agent has not received,

 

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by such time, written notice of objection to such amendment from Lenders
comprising the Required Lenders.  Any such amendment with respect to an Early
Opt-in Election will become effective on the date that Lenders comprising the
Required Lenders have delivered to the Agent written notice that such Required
Lenders accept such amendment.  No replacement of LIBOR Rate with a Benchmark
Replacement pursuant to this Section titled “Effect of Benchmark Transition
Event” will occur prior to the applicable Benchmark Transition Start Date.

 

(b)                                 In connection with the implementation of a
Benchmark Replacement, the Agent will have the right to make Benchmark
Replacement Conforming Changes from time to time and, notwithstanding anything
to the contrary herein or in any Other Document, any amendments implementing
such Benchmark Replacement Conforming Changes will become effective without any
further action or consent of any other party to this Agreement.

 

(c)                                  The Agent will promptly notify the
Borrowing Agent and the Lenders of (i) any occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, and its related Benchmark
Replacement Date and Benchmark Transition Start Date, (ii) the implementation of
any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement
Conforming Changes and (iv) the commencement or conclusion of any Benchmark
Unavailability Period.  Any determination, decision or election that may be made
by the Agent or Lenders pursuant to this Section titled “Effect of Benchmark
Transition Event,” including any determination with respect to a tenor, rate or
adjustment or of the occurrence or non-occurrence of an event, circumstance or
date and any decision to take or refrain from taking any action, will be
conclusive and binding absent manifest error and may be made in its or their
sole discretion and without consent from any other party hereto, except, in each
case, as expressly required pursuant to this Section titled “Effect of Benchmark
Transition Event.”

 

(d)                                 Upon the Borrowing Agent’s receipt of notice
of the commencement of a Benchmark Unavailability Period, the applicable
Borrower may revoke any request for a borrowing of Advances in LIBOR Rate,
conversion to or continuation of LIBOR Rate Loans to be made, converted or
continued during any Benchmark Unavailability Period and, failing that, the
Borrower will be deemed to have converted any such request into a request for a
borrowing of or conversion to Domestic Rate Loans.  During any Benchmark
Unavailability Period, the component of Alternate Base Rate based upon LIBOR
Rate will not be used in any determination of Alternate Base Rate.

 

(e)                                  As used in this Section titled “Effect of
Benchmark Transition Event”:

 

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by the Agent and the
Borrowing Agent giving due consideration to (i) any selection or recommendation
of a replacement rate or the mechanism for determining such a rate by the
Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a rate of interest as a replacement to LIBOR Rate for
U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than zero, the Benchmark Replacement will be deemed to
be zero for the purposes of this Agreement.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of
LIBOR Rate with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has
been selected by the Agent and the Borrowing Agent giving due consideration to
(i) any selection or recommendation of a spread adjustment, or method for
calculating or determining such spread

 

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adjustment, for the replacement of LIBOR Rate with the applicable Unadjusted
Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
LIBOR Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar
denominated syndicated credit facilities at such time.

 

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Alternate Base Rate,” the definition of “Interest
Period,” timing and frequency of determining rates and making payments of
interest and other administrative matters) that the Agent decides may be
appropriate to reflect the adoption and implementation of such Benchmark
Replacement and to permit the administration thereof by the Agent in a manner
substantially consistent with market practice (or, if the Agent decides that
adoption of any portion of such market practice is not administratively feasible
or if the Agent determines that no market practice for the administration of the
Benchmark Replacement exists, in such other manner of administration as the
Agent decides is reasonably necessary in connection with the administration of
this Agreement).

 

“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to LIBOR Rate: (1) in the case of clause (1) or (2) of the
definition of “Benchmark Transition Event,” the later of (a) the date of the
public statement or publication of information referenced therein and (b) the
date on which the administrator of LIBOR Rate permanently or indefinitely ceases
to provide LIBOR Rate; or (2) in the case of clause (3) of the definition of
“Benchmark Transition Event,” the date of the public statement or publication of
information referenced therein.

 

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to LIBOR Rate: (1) a public statement or
publication of information by or on behalf of the administrator of LIBOR Rate
announcing that such administrator has ceased or will cease to provide LIBOR
Rate, permanently or indefinitely, provided that, at the time of such statement
or publication, there is no successor administrator that will continue to
provide LIBOR Rate; (2) a public statement or publication of information by the
regulatory supervisor for the administrator of LIBOR Rate, the U.S. Federal
Reserve System, an insolvency official with jurisdiction over the administrator
for LIBOR Rate, a resolution authority with jurisdiction over the administrator
for LIBOR Rate or a court or an entity with similar insolvency or resolution
authority over the administrator for LIBOR Rate, which states that the
administrator of LIBOR Rate has ceased or will cease to provide LIBOR Rate
permanently or indefinitely, provided that, at the time of such statement or
publication, there is no successor administrator that will continue to provide
LIBOR Rate; or (3) a public statement or publication of information by the
regulatory supervisor for the administrator of LIBOR Rate announcing that LIBOR
Rate is no longer representative.

 

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Agent or the
Required Lenders, as applicable, by notice to the Borrowing Agent, the Agent (in
the case of such notice by the Required Lenders) and the Lenders.

 

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to LIBOR Rate and
solely to the extent that LIBOR Rate has not been replaced with a Benchmark
Replacement, the period (x) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has

 

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replaced LIBOR Rate for all purposes hereunder in accordance with the
Section titled “Effect of Benchmark Transition Event” and (y) ending at the time
that a Benchmark Replacement has replaced LIBOR Rate for all purposes hereunder
pursuant to the Section titled “Effect of Benchmark Transition Event.”

 

“Early Opt-in Election” means the occurrence of: (1) (i) a determination by the
Agent or (ii) a notification by the Required Lenders to the Agent (with a copy
to the Borrowing Agent) that the Required Lenders have determined that U.S.
dollar-denominated syndicated credit facilities being executed at such time, or
that include language similar to that contained in this Section titled “Effect
of Benchmark Transition Event,” are being executed or amended, as applicable, to
incorporate or adopt a new benchmark interest rate to replace LIBOR Rate, and
(2) (i) the election by the Agent or (ii) the election by the Required Lenders
to declare that an Early Opt-in Election has occurred and the provision, as
applicable, by the Agent of written notice of such election to the Borrowing
Agent and the Lenders or by the Required Lenders of written notice of such
election to the Agent.

 

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

 

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

 

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

 

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

 

3.9.                            Capital Adequacy.

 

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

 

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of any possible contention of invalidity or inapplicability with respect to the
Applicable Law, rule, regulation, guideline or condition.

 

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

 

(c)                                  If Agent or any Lender requests
compensation under Section 3.7 or Section 3.9 or if Borrowers are required to
pay any additional amount to Agent or any Lender pursuant to Section 3.7 or
Section 3.9, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Advances hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the reasonable judgment of Agent or such Lender, such
designation or assignment (i) would eliminate or reduce materially amounts
payable pursuant to Section 3.7 or Section 3.9, as the case may be, in the
future, (ii) would not subject Agent or such Lender to any unreimbursed cost or
expense, (iii) would not require Agent or such Lender to take any action
inconsistent with its internal policies or legal or regulatory restrictions, and
(iv) would not otherwise be disadvantageous to Agent or such Lender.

 

3.10.                     Taxes.

 

(a)                                 Any and all payments by or on account of any
Obligations hereunder or under any Other Document shall be made free and clear
of and without reduction or withholding for any Taxes except to the extent
required by Applicable Law; provided that if any Credit Party or any applicable
withholding agent shall be required by Applicable Law to deduct any Taxes from
such payments, then (i) if such Taxes are Indemnified Taxes, the sum payable
shall be increased as necessary so that after making all required deductions for
Indemnified Taxes (including deductions for Indemnified Taxes applicable to
additional sums payable under this Section 3.10) the applicable Recipient
receives an amount equal to the sum it would have received had no such
deductions for Indemnified Taxes been made, (ii) the applicable withholding
agent shall make such deductions and (iii) the applicable withholding agent
shall timely pay the full amount deducted to the relevant Governmental Body in
accordance with Applicable Law.

 

(b)                                 Without limiting the provisions of
Section 3.10(a) above, the Borrowers shall timely pay, or at the option of the
Agent timely reimburse it for the payment of, any Other Taxes to the relevant
Governmental Body in accordance with Applicable Law.

 

(c)                                  The Borrowers shall indemnify each
Recipient, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this
Section 3.10) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Body.  A certificate as to the amount of
such payment or liability delivered to the Borrowers by a Lender (with a copy to
Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

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

 

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(e)                                  Any Lender that is entitled to an exemption
from or reduction of any withholding Tax with respect to payments hereunder or
under any Other Document shall deliver to the Borrowers (with a copy to Agent),
at the time or times prescribed by Applicable Law or reasonably requested by the
Borrowers or Agent, such properly completed and executed documentation
prescribed by Applicable Law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if
requested by the Borrowers or Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrowers or Agent
as will enable the Borrowers or Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

 

Without limiting the generality of the foregoing, each Lender shall deliver to
the Borrowers and Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the request of the
Borrowers or the Agent), whichever of the following is applicable:

 

(i)                                     in the case of a Foreign Lender claiming
the benefits of an income tax treaty to which the United States is a party, two
(2) duly completed valid originals of IRS Form W-8BEN or IRS Form W-8BEN-E
establishing an exemption from, or reduction of, United States federal
withholding Tax pursuant to the “interest” article of such tax treaty,

 

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

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit 3.10-1 (together
with Exhibits 3.10-2, 3.10-3 and 3.10-4, each a “Non-Bank Tax Certificate”) to
the effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of section 871(h)(3)(B) of the Code, or (C) a “controlled
foreign corporation” related to any Borrower described in section
881(c)(3)(C) of the Code and (y) two duly completed valid originals of IRS
Form W-8BEN or IRS Form W-8BEN-E,

 

(iv)                              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 certificate substantially in
the form of Exhibit 3.10-2 or Exhibit 3.10-3, 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 certificate substantially in the form of
Exhibit 3.10-4 on behalf of each such direct and indirect partner,

 

(v)                                 any other form prescribed by Applicable Law
as a basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by Applicable Law to permit the Borrowers to determine the
withholding or deduction required to be made; provided, that the completion,
execution and submission of such documentation (other than such documentation
set forth in Sections 3.10(e)(i)-(iv), 3.10(e)(vi) and 3.10(f)) 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, or

 

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(vi)                              in the case of a Lender that is a United
States person within the meaning of section 7701(a)(30) of the Code, two duly
completed valid (2) originals of an IRS Form W-9 certifying that such Lender is
exempt from United States federal backup withholding tax.

 

Notwithstanding any other provisions of this Section 3.10(e), a Lender shall not
be required to deliver any form or other documentation that such Lender is not
legally eligible to deliver.

 

(f)                                   If a payment made to a Lender under this
Agreement or any Other Document would be subject to U.S. Federal withholding Tax
imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Recipient shall deliver to the Agent
and the Borrowers at the time or times prescribed by Applicable Law or
reasonably requested by the Borrowers or Agent such documentation prescribed by
Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such other documentation reasonably requested by the Agent or any Borrower
sufficient for Agent and the Borrowers to comply with their obligations under
FATCA and to determine whether such Lender has complied with its obligations
under FATCA or to determine the amount to deduct and withhold from such
payment.  Solely for purposes of this clause (f), “FATCA” shall include any
amendments made to FATCA after the Closing Date.

 

(g)                                  Each Recipient agrees that if any form or
certification it previously delivered pursuant to clauses (e) or (f) above
expires or becomes inaccurate in any respect, it shall update such form or
certification or promptly notify the Borrowing Agent and the Agent in writing of
its legal ineligibility to so.

 

(h)                                 [Reserved].

 

(i)                                     If a Recipient determines, in its sole
discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified by the Borrowers or with respect to
which the Borrowers have paid additional amounts pursuant to this Section 3.10,
it shall pay to the Borrowers an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrowers
under this Section 3.10 with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund); net of all out-of-pocket expenses (including Taxes)
of such Recipient and without interest (other than any interest paid by the
relevant Governmental Body with respect to such refund), provided that the
Borrowers, upon the request of such Recipient, agree to repay the amount paid
over to the Borrowers (plus any penalties, interest or other charges imposed by
the relevant Governmental Body) to such Recipient in the event such Recipient is
required to repay such refund to such Governmental Body.  Notwithstanding
anything to the contrary in this clause (i), in no event will a Recipient be
required to pay any amount to the Borrowers pursuant to this clause (i) the
payment of which would place the Recipient in a less favorable net after-Tax
position than the Recipient 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.

 

(j)                                    Each Recipient agrees that, upon the
occurrence of any event giving rise to the operation of Section 3.10(a) or
(c) with respect to such Recipient, it will, if requested by the Borrowers in
writing, use commercially reasonable efforts (subject to legal and regulatory
restrictions) to mitigate the effect of any such event by designating another
lending office for any Commitment or Advance affected by such event if that
would reduce or eliminate any amount of

 

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Indemnified Taxes or Other Taxes required to be deducted or withheld or paid,
provided that doing so would not subject such Recipient to any unreimbursed cost
or expense or be otherwise be prejudicial to such Recipient, in such Recipient’s
reasonable discretion.  The Borrowers hereby agree to pay all reasonable costs
and expenses incurred by any Recipient in connection with any such designation.

 

(k)                                 For purposes of this Section 3.10, the term
“Lender” shall include any Issuer.

 

(l)                                     The agreements in this Section 3.10
shall survive the termination of this Agreement and the Commitments and the
payment of all amounts payable hereunder and under any Other Document.

 

3.11.                     Replacement of Lenders.  If any Lender (an “Affected
Lender”) (a) makes demand upon Borrowers for (or if Borrowers are otherwise
required to pay) amounts pursuant to Section 3.7, 3.9 or 3.10 hereof, (b) is
unable to make or maintain LIBOR Rate Loans as a result of a condition described
in Section 2.2(h) hereof, (c) is a Defaulting Lender, or (d) denies any consent
for a supplemental agreement referred to in the proviso of
Section 16.2(b) hereof and for which the consent of the Required Lenders has
been obtained, the Borrowers may, within ninety (90) days of receipt of such
demand, notice (or the occurrence of such other event causing Borrowers to be
required to pay such compensation or causing Section 2.2(h) hereof to be
applicable), or such Lender becoming a Defaulting Lender or denial of a request
for a consent to a supplemental agreement pursuant to the proviso of
Section 16.2(b) hereof, as the case may be, by notice (a “Replacement Notice”)
in writing to the Agent and such Affected Lender (i) request the Affected Lender
to cooperate with Borrowers in obtaining a replacement Lender satisfactory to
the Agent and Borrowers (the “Replacement Lender”); (ii) request the
non-Affected Lenders to acquire and assume all of the Affected Lender’s Advances
and its Commitment Percentage, as provided herein, but none of such Lenders
shall be under any obligation to do so; or (iii) propose a Replacement Lender
subject to approval by the Agent in its good faith business judgment.  If any
satisfactory Replacement Lender shall be obtained, and/or if any one or more of
the non-Affected Lenders shall agree to acquire and assume all of the Affected
Lender’s Advances and its Commitment Percentage, then such Affected Lender shall
assign, in accordance with Section 16.3 hereof, all of its Advances and its
Commitment Percentage, and other rights and obligations under this Agreement and
the Other Documents to such Replacement Lender or non-Affected Lenders, as the
case may be, in exchange for payment of the principal amount so assigned and all
interest and fees accrued on the amount so assigned, plus all other Obligations
then due and payable to the Affected Lender.  If any Affected Lender does not
execute an assignment in accordance with Section 16.3 within five (5) Business
Days after receipt of notice to do so by Agent or Borrowing Agent, then such
assignment shall become effective for purposes of Section 16.3 and this
Agreement upon execution by Agent and Borrowing Agent.

 

IV.                               COLLATERAL:  GENERAL TERMS.

 

4.1.                            Security Interest in the Collateral.  To secure
the prompt payment and performance to Agent and each Secured Party of the
Obligations (other than any Obligations under Environmental Indemnity Agreements
which by their terms are unsecured), each Credit Party hereby assigns, pledges
and grants to Agent for its benefit and for the benefit of each Secured Party a
continuing security interest in and to and Lien on all of its Collateral,
whether now owned or existing or hereafter acquired or arising and wheresoever
located.  Each Credit Party shall mark its books and records as may be necessary
or appropriate to evidence, protect and perfect Agent’s security interest. 
Contemporaneously with the delivery of the financial statements required by
Section 9.7 or 9.8(a), each Borrower shall identify all commercial tort claims
with a value in excess of $1,000,000 in the Compliance Certificate for such
period, and Borrowers shall include the case title together with the applicable
court and a brief description of the claim(s).  Upon delivery of each such
Compliance Certificate, such Credit Party shall be deemed to hereby grant to
Agent

 

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a security interest and lien in and to such commercial tort claims described
therein and all proceeds thereof.  The Liens securing the Obligations shall be
first priority perfected Liens subject only to Permitted Encumbrances that have
priority as a matter of Applicable Law.

 

4.2.                            Perfection of Security Interest.  Each Credit
Party hereby authorizes Agent to file against such Credit Party, and Agent may
file, one or more financing, continuation or amendment statements pursuant to
the Uniform Commercial Code, the PPSA and other Applicable Laws in form and
substance satisfactory to Agent in its Permitted Discretion (which statements
may have a description of collateral which is broader than that set forth
herein, including “all assets now owned or hereafter acquired by the Credit
Party or in which Credit Party otherwise has rights”).  Each Credit Party hereby
further authorizes Agent to file with the United States Patent and Trademark
Office and/or United States Copyright Office (or any successor office), as
applicable, Intellectual Property Security Agreements and to file with any
similar office in any applicable foreign jurisdiction such other documents
executed and delivered hereunder by such Credit Party for the purpose of, in
each case, evidencing, creating, preserving, protecting or perfecting Agent’s
security interest granted by such Credit Party hereunder in such Intellectual
Property (including non-U.S. Intellectual Property registrations and
applications).

 

4.3.                            Protection of Collateral.  No Credit Party shall
sell, lease, transfer or otherwise dispose of any Collateral, except as
permitted in Section 7.1 hereof.

 

4.4.                            Preservation of Collateral.  Each Credit Party
will safeguard and protect all Collateral for Agent’s and the other Secured
Parties’ general account.  In addition to the rights and remedies set forth in
Section 11.1 hereof, Agent:  (a) may at any time take such steps as Agent deems
necessary in the exercise of its Permitted Discretion to protect the Secured
Parties’ interest in and to preserve the Collateral, including upon the
occurrence and during the continuance of an Event of Default, the hiring of such
security guards or the placing of other security protection measures as Agent
may deem appropriate; (b) upon the occurrence and during the continuance of an
Event of Default, may employ and maintain at any of each Credit Party’s premises
a custodian who shall have full authority to do all acts necessary to protect
Agent’s interests in the Collateral; (c) upon the occurrence and during the
continuance of an Event of Default, may lease warehouse facilities to which
Agent may move all or part of the Collateral; (d) upon the occurrence and during
the continuance of an Event of Default, may use any Credit Party’s owned or
leased lifts, hoists, trucks and other facilities or equipment for handling or
removing the Collateral; and (e) shall have, and is hereby granted, a right of
ingress and egress to the places where the Collateral is located, and may
proceed over and through any of Credit Parties’ owned or leased property,
subject to the rights of the landlords of any leased Real Property.  Subject to
the other provisions of this Agreement regarding Credit Parties’ maintenance of
Collateral, each Credit Party shall cooperate with all of Agent’s efforts to
preserve the Collateral and will take such actions to preserve the Collateral as
Agent may direct in its Permitted Discretion.  Subject to Section 16.9, all of
Agent’s expenses of preserving the Collateral, including any expenses relating
to the bonding of a custodian, shall be charged to Borrowers’ Account as a
Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations.

 

4.5.                            Ownership of Collateral.

 

(a)                                 With respect to the Collateral, at the time
the Collateral becomes subject to Agent’s security interest:  (i) each Credit
Party is, and shall remain the sole owner of and fully authorized and able to
sell, transfer, pledge and/or grant a first priority security interest (subject
only to Permitted Encumbrances that have priority as a matter of Applicable Law)
in each and every item of its respective Collateral; (ii) except for Permitted
Encumbrances, the Collateral shall be free and clear of all Liens; and
(iii) each Credit Party’s Equipment and Inventory shall be located as set forth
on Schedule 15 to the Perfection Certificate and shall not be removed from such
location(s) without the prior written consent of Agent, except (1) as may be
moved from one location on such schedule

 

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to another location on such schedule, (2) Inventory in-transit, (3) Equipment
out for repair in the ordinary course of business, (4) the sale, transfer or
disposition of assets permitted under this Agreement to a Person that is not a
Credit Party and (5) as may be located at locations not set forth on Schedule 15
to the Perfection Certificate to the extent the aggregate value of Equipment and
Inventory at such locations does not exceed $10,000,000 for any one location or
$25,000,000 in the aggregate for all such locations.

 

(b)                                 (i) Schedule 15 to the Perfection
Certificate contains a correct and complete list, as of the Closing Date, of the
legal names and addresses of each warehouse at which Inventory having a value in
excess of $10,000,000 of any Credit Party is stored; none of the receipts
received by any Credit Party from any warehouse states that the goods covered
thereby are to be delivered to bearer or to the order of a named Person or to a
named Person and such named Person’s assigns and (ii) Section 3 to the
Perfection Certificate sets forth a correct and complete list as of the Closing
Date of (A) each place of business of each Credit Party and (B) the chief
executive office of each Credit Party.

 

4.6.                            Defense of Agent’s and Lenders’ Interests. 
Until the Termination Date, Agent’s security interests in the Collateral shall
continue in full force and effect.  Each Credit Party shall use all commercially
reasonable efforts to defend Agent’s interests in the Collateral against any and
all Persons whatsoever.  At any time following demand by Agent for payment of
all Obligations upon the occurrence of and during the continuance of an Event of
Default, Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained, including: 
labels, stationery, documents, instruments and advertising materials.  If Agent
exercises this right to take possession of the Collateral, upon the occurrence
of and during the continuance of an Event of Default, Credit Parties shall, upon
demand, assemble it in the best manner possible and make it available to Agent
at a place reasonably convenient to Agent.  In addition, with respect to all
Collateral, Agent and each other Secured Parties shall be entitled to all of the
rights and remedies set forth herein and further provided to a secured party on
default by the Uniform Commercial Code, the PPSA or other Applicable Law.  Each
Credit Party shall, and Agent may, at its option upon the occurrence and during
the continuance of an Event of Default, instruct all suppliers, carriers,
forwarders, warehousers or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest to deliver
same to Agent and/or subject to Agent’s order and if they shall come into any
Credit Party’s possession, they, and each of them, shall be held by such Credit
Party in trust as Agent’s trustee, and such Credit Party will immediately
deliver them to Agent in their original form together with any necessary
endorsement.  For the purpose of enabling Agent, during the continuance of an
Event of Default, to exercise rights and remedies under this Agreement and each
Other Document (including for the purpose of completing the manufacturing of,
marketing, advertising for sale and selling or otherwise disposing of Inventory
included in the Collateral) at such time as Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Credit Party
hereby grants to Agent, to the extent such Credit Party is permitted to do so
under any applicable agreements with third parties, an irrevocable,
non-exclusive license, subject, in the case of trademarks and service marks, to
sufficient rights to quality control and inspection in favor of such Credit
Party to avoid the risk of invalidation of such trademark and/or service mark,
to use, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by such Credit Party, wherever the same may be located.  Such
license shall include access to all media in which any of the licensed items may
be recorded or stored and to all computer programs used for the compilation or
printout hereof; provided, however that any license, sublicense or other
transaction entered into by the Agent in accordance herewith shall be binding
upon each Credit Party notwithstanding any subsequent cure of an Event of
Default.

 

4.7.                            Books and Records.  Each Credit Party shall keep
proper books of record and account in which full, true and correct entries will
be made of all dealings or transactions of or in relation to its business and
affairs in accordance with GAAP.

 

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4.8.                            Compliance with Laws.  Each Credit Party shall
comply with all Applicable Laws with respect to the Collateral or any part
thereof or to the operation of such Credit Party’s business the non-compliance
with which could reasonably be expected to have a Material Adverse Effect.  Each
Credit Party may, however, if applicable, Properly Contest any Lien or
obligation arising under Applicable Law.

 

4.9.                            Access to Premises.  Without limiting Agent’s
rights with respect to appraisals as set forth herein and without limiting
Agent’s rights under Section 4.4, during normal business hours and upon
reasonable notice and mutual agreement (except that, upon the occurrence and
continuance of an Event of Default, no notice shall be required and Agent may
exercise such right during any hours), Agent and its agents may conduct Field
Examinations and in connection therewith (i) enter upon any premises of any
Credit Party and access any tangible assets, (ii) access and make abstracts and
copies from each Credit Party’s books, records, audits, correspondence and all
other papers relating to the Collateral and (iii) discuss the affairs, finances
and business of Credit Parties with any officer, employee or director thereof or
with their Accountants or auditors, all of whom are hereby authorized to
disclose to Agent all financial statements and other information relating to
such affairs, finances or business; provided, however, that unless an Event of
Default has occurred and is then continuing, Borrowers shall have the
opportunity to be present at all such meetings.  At the sole cost of Borrowers
and upon reasonable notice to Borrowing Agent, Agent will conduct no more than
the Applicable Number of Field Examinations and require no more than the
Applicable Number of appraisals of the Sand Reserves (including discounted cash
flow analyses) and no more than the Applicable Number of appraisals of
Borrowers’ Inventory (in each case, at such times as shall be mutually agreed
among the Agent and the Borrowing Agent and in any event not to be within the
two week period prior to the date in which the Parent Guarantor is required to
file an annual report on Form 10-K or a quarterly report on Form 10-Q with the
SEC).

 

4.10.                     Insurance.  The assets and properties of each Credit
Party at all times shall be maintained in accordance with the requirements of
all insurance carriers which provide insurance with respect to the assets and
properties of such Credit Party so that such insurance shall remain in full
force and effect.  Each Credit Party shall bear the full risk of any loss of any
nature whatsoever with respect to the Collateral.  At each Credit Party’s own
cost and expense in amounts and with licensed and reputable carriers, each
Credit Party shall (a) keep all its insurable properties and properties in which
such Credit Party has an interest insured against the hazards of fire, flood,
sprinkler leakage, those hazards covered by extended coverage insurance and such
other hazards, and for such amounts, as is customary in the case of companies
engaged in businesses similar to such Credit Party’s including business
interruption insurance for Credit Parties that are operating companies;
(b) maintain public and product liability and casualty insurance against claims
for personal injury, death or property damage suffered by others; (c) maintain
all such worker’s compensation or similar insurance as may be required under the
laws of any state or jurisdiction in which such Credit Party is engaged in
business; and (d) furnish Agent with (i) certificates therefor that are
reasonably satisfactory to Agent and evidence of the maintenance of such
policies by the renewal thereof at least thirty (30) days before any expiration
date, and (ii) appropriate lender loss payable endorsements in form and
substance reasonably satisfactory to Agent in its Permitted Discretion, naming
Agent as an additional insured, lender loss payee or mortgagee, as applicable,
as its interests may appear with respect to all insurance coverage referred to
in clauses (a) and (b) above, and providing (A) that all proceeds relating to
Collateral thereunder shall be payable to Agent upon the occurrence and during
the continuation of an Event of Default, (B) no such insurance shall be affected
by any act or neglect of the insured or owner of the property described in such
policy, and (C) that such policy and loss payable clauses may not be cancelled,
amended or terminated unless at least thirty (30) days’ prior written notice is
endeavored to be given to Agent (but only if the applicable carrier provides
such written notice to its customers’ lenders generally, and, to the extent it
does not, Credit Parties shall promptly (but in any event within three
(3) Business Days) provide Agent with written notice of any cancellation,
amendment or termination after an Authorized Officer of the Borrowing Agent
obtains knowledge thereof from such carrier).  In the event of any loss relating
to the Collateral upon the occurrence and during the continuation of an Event of
Default, the carriers

 

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named therein hereby are directed by Agent and the applicable Credit Party to
make payment for such loss to Credit Parties and Agent jointly; provided,
however, for the avoidance of doubt, proceeds of business interruption insurance
shall be deposited into Borrowing Agent’s operating account with Agent, rather
than applied to the Obligations, so long as the Advances outstanding hereunder
do not exceed the Line Cap.  If any insurance losses relating to Collateral are
paid by check, draft or other instrument payable to any Credit Party and Agent
jointly, Agent may, upon the occurrence and during the continuation of an Event
of Default, endorse such Credit Party’s name thereon and do such other things as
Agent may deem advisable to reduce the same to cash.  Upon the occurrence and
during the continuance of an Event of Default, Agent is hereby authorized to
adjust and compromise claims under insurance coverage referred to in
clauses (a) and (b) above.  Each Credit Party shall take all actions required
under the Flood Laws and/or requested by Agent to assist in ensuring that each
Lender is in compliance with the Flood Laws applicable to the Collateral (if
any), including, but not limited to, providing Agent with the address and/or GPS
coordinates of each structure on any Real Property that will be subject to a
Mortgage in favor of Agent, for the benefit of the Secured Parties, and, to the
extent required, obtaining flood insurance for such property, structures and
contents prior to such property, structures and contents becoming Collateral,
and thereafter maintaining such flood insurance in full force and effect for so
long as required by the Flood Laws.

 

4.11.                     Failure to Pay Insurance.  If any Credit Party fails
to obtain insurance as hereinabove provided, or to keep the same in force,
Agent, if Agent so elects, may obtain such insurance and pay the premium (but
only after first providing Borrowing Agent with notice and one (1) Business Day
to cure the same) therefor on behalf of such Credit Party, and charge Borrowers’
Account therefor as a Revolving Advance of a Domestic Rate Loan and such
expenses so paid shall be part of the Obligations.  Failure or delay on the part
of Agent to provide notice pursuant to this section shall not constitute a
waiver of Agent’s rights and remedies hereunder, other than as qualified in this
Section 4.11.

 

4.12.                     Payment of Taxes.  Each Credit Party will pay, when
due and payable, (i) all federal income taxes and all other material federal,
state, local and foreign (if applicable) Taxes, including without limitation all
material franchise, income, employment, social security benefits, withholding
and sales Taxes, lawfully levied or assessed upon such Credit Party or any of
the Collateral including real and personal property Taxes unless the same are
being Properly Contested, and (ii) all other Taxes lawfully levied or assessed
upon any Credit Party or any of the Collateral, unless the same are being
Properly Contested or failure to pay could not reasonably be expected to result
in a Material Adverse Effect, an Event of Default or material liability to any
Credit Party.  If any Taxes are delinquent, or if any claim shall be made which
creates a valid Lien on the Collateral (other than Permitted Encumbrances),
Agent may (after first providing notice to such Credit Party and a reasonable
opportunity to cure the same), but shall not be required to, pay the Taxes and
each Credit Party hereby indemnifies and holds Agent and each Lender harmless in
respect thereof.  Agent will not pay any Taxes to the extent that any applicable
Credit Party has Properly Contested such Taxes and provided notice of same to
Agent.  The amount of any payment by Agent under this Section 4.12 shall be
charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic
Rate Loan and added to the Obligations and, until Credit Parties shall furnish
Agent with an indemnity therefor (or supply Agent with evidence satisfactory to
Agent in its Permitted Discretion that due provision for the payment thereof has
been made), Agent may hold without interest any balance standing to Credit
Parties’ credit and Agent shall retain its security interest in and Lien on any
and all Collateral held by Agent.  Failure or delay on the part of Agent to
provide notice pursuant to this section shall not constitute a waiver of Agent’s
rights and remedies hereunder, other than as qualified in this Section 4.12.

 

4.13.                     Payment of Leasehold Obligations.  Each Borrower shall
at all times pay, when and as due and payable, its rental obligations under all
Leasehold Interests, and shall otherwise comply, in all material respects, with
all other terms of such leases and keep all such leases in full force and effect
(unless it would be prudent not to keep such leases in full force and effect in
the exercise of Borrower’s reasonable business judgment).

 

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4.14.                     Receivables.

 

(a)                                 Nature of Receivables.  Each of the
Receivables at any time reported to Agent (whether pursuant to Section 9.2 or
otherwise) shall, except as noted therein, be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum (subject to customary discounts or reductions permitted in the
ordinary course of business and in accordance with past practices) as set forth
in the invoice relating thereto (provided immaterial or unintentional invoice
errors shall not be deemed to be a breach hereof) with respect to an absolute
sale or lease and delivery of goods upon stated terms of a Credit Party, or
work, labor or services theretofore rendered by a Credit Party as of the date
each Receivable is created.  Same shall be due and owing in accordance with the
applicable Credit Party’s standard terms of sale without dispute, setoff or
counterclaim except as may be stated on the accounts receivable schedules
delivered by the Credit Parties to Agent.

 

(b)                                 Location of Credit Parties.  Each Credit
Party’s chief executive office address are as set forth on Section 3 to the
Perfection Certificate and each other location of books and records pertaining
to Receivables are as set forth on Schedules 1, 3 or 11 to the Perfection
Certificate.

 

(c)                                  Collection of Receivables.  Until any
Credit Party’s authority to do so is terminated by Agent, during a Dominion
Period, each Credit Party will, at such Credit Party’s sole cost and expense,
but on Agent’s behalf and for Agent’s account, collect as Agent’s property and
in trust for Agent all amounts received on Receivables, and shall not commingle
such collections with any Credit Party’s funds or use the same except to pay
Obligations.  Each Credit Party shall deposit in the Collection Accounts or,
upon request by Agent, deliver to Agent, in original form and on the date of
receipt thereof, all checks, drafts, notes, money orders, acceptances, cash and
other evidences of Receivables.

 

(d)                                 Notification of Assignment of Receivables. 
At any time upon the occurrence and during the continuation of an Event of
Default, Agent shall have the right to send notice of the assignment of, and
Agent’s security interest in and Lien on, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral.  Thereafter, Agent shall have the sole right to collect the
Receivables, take possession of the Collateral, or both.  Upon the occurrence
and during the continuance of an Event of Default, Agent’s actual collection
expenses, including, but not limited to, stationery and postage, telephone and
telegraph, secretarial and clerical expenses and the salaries of any collection
personnel used for collection, may be charged to the Credit Parties’ account and
added to the Obligations.

 

(e)                                  Power of Agent to Act on Credit Parties’
Behalf.  Upon and during the continuance of an Event of Default, Agent shall
have the right to receive, endorse, assign and/or deliver in the name of Agent
or any Credit Party any and all checks, drafts and other instruments for the
payment of money relating to the Receivables, and each Credit Party hereby
waives notice of presentment, protest and non-payment of any instrument so
endorsed.  Each Credit Party hereby constitutes Agent or Agent’s designee as
such Credit Party’s attorney with power (i) to endorse such Credit Party’s name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral upon and during the continuance of an Event of Default;
(ii) to sign such Credit Party’s name on any invoice or bill of lading relating
to any of the Receivables, drafts against Customers, and assignments of
Receivables, upon and during the continuance of an Event of Default; (iii) to
send verifications of Receivables to any Customer (provided, that, so long as no
Event of Default has occurred and is continuing, Agent shall only conduct
verifications of Receivables over the phone with participation from Credit
Parties or with Credit Parties being present); (iv) to sign such Credit Party’s
name on any documents or instruments deemed necessary

 

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or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the
Collateral and to file same upon and during the continuance of an Event of
Default; (v) to demand payment of the Receivables upon and during the
continuance of an Event of Default; (vi) to enforce payment of the Receivables
by legal proceedings or otherwise upon and during the continuance of an Event of
Default; (vii) to exercise all of such Credit Party’s rights and remedies with
respect to the collection of the Receivables and any other Collateral upon and
during the continuance of an Event of Default; (viii) to settle, adjust,
compromise, extend or renew the Receivables upon and during the continuance of
an Event of Default; (ix) to settle, adjust or compromise any legal proceedings
brought to collect Receivables upon and during the continuance of an Event of
Default; (x) to prepare, file and sign such Credit Party’s name on a proof of
claim in bankruptcy or similar document against any Customer upon and during the
continuance of an Event of Default; (xi) to prepare, file and sign such Credit
Party’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables upon and during the
continuance of an Event of Default; (xii) to receive, open and dispose of all
mail addressed to any Credit Party to the extent such actions are taken in
connection with operation and administration of Credit Parties’ lockboxes or
otherwise in connection with treasury management services during a Dominion
Period; and (xiii) upon and during the continuance of an Event of Default, to do
all other acts and things necessary to carry out this Agreement.  All acts of
said attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for any
error of judgment or mistake of fact or of law, unless constituting willful
misconduct or gross negligence (as determined by a court of competent
jurisdiction in a final non-appealable judgment); this power being coupled with
an interest is irrevocable while any of the Commitments or Obligations remain
outstanding.  Agent shall have the right at any time following the occurrence
and during the continuation of an Event of Default, to change the address for
delivery of mail addressed to any Credit Party to such address as Agent may
designate and to receive, open and dispose of all mail addressed to any Credit
Party.

 

(f)                                   No Liability.  Neither Agent nor any
Lender shall, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof, or for any damage resulting therefrom, except for
the gross negligence or willful misconduct of the Agent as determined by a final
and non-appealable judgment of a court of competent jurisdiction.  Upon the
occurrence and during the continuation of an Event of Default, Agent may,
without notice or consent from any Credit Party, sue upon or otherwise collect,
extend the time of payment of, compromise or settle for cash, credit or upon any
terms any of the Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof.  Agent is authorized and
empowered to accept, upon the occurrence and during the continuation of an Event
of Default, the return of the goods represented by any of the Receivables,
without notice to or consent by any Credit Party, all without discharging or in
any way affecting any Credit Party’s liability hereunder.

 

(g)                                  Cash Management.

 

(i)                                     All proceeds of assets of the Credit
Parties and any other amounts payable to any Credit Party at any time, shall,
subject to Section 2.17, be deposited by such Credit Parties into one or more
collection accounts established at a bank reasonably satisfactory to Agent (all
such accounts, the “Collection Accounts”).  Subject to Schedule 6.11, each
Credit Party shall deliver to Agent on the Closing Date a Deposit Account
Control Agreement, in form and substance satisfactory to Agent in its Permitted
Discretion, with respect to each Collection Account which shall be in
“springing” form permitting Credit Parties to access and use such Collection
Accounts unless and until a “notice of sole

 

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control” (such notice, or any similar notice described in any applicable Deposit
Account Control Agreement an “Activation Notice”) is issued by Agent to the bank
at which such Collection Account is maintained; provided, that, Agent shall not
issue such an Activation Notice except during a Dominion Period or upon the
occurrence and continuance of an Event of Default and shall revoke such
Activation Notice if, subsequent thereto, the Dominion Period shall have ended
or such Event of Default has been waived, as applicable.  Upon issuance of an
Activation Notice, such Deposit Account Control Agreements shall provide that
all available funds in each Collection Account will be transferred, on each
Business Day, to Agent, either to any account maintained by Agent at such bank
or by wire transfer to appropriate account(s) of Agent, and otherwise be in form
and substance (including as to the extent of offset and statutory lien rights)
reasonably satisfactory to Agent.  All funds deposited in such Collection
Accounts during a Dominion Period shall immediately become the property of Agent
and be applied to the outstanding Advances.  Neither Agent nor any Lender
assumes any responsibility for such collection account arrangement, including
any claim of accord and satisfaction or release with respect to deposits
accepted by any bank maintaining a Collection Account.

 

(ii)                                  Notwithstanding anything to the contrary
herein or in any Other Document, Credit Parties shall ensure that Agent does not
receive, whether by deposit to the Collection Accounts or otherwise, any funds
from any Customer located in a Sanctioned Country.

 

(h)                                 Adjustments.  No Credit Party will, without
Agent’s consent, compromise or adjust any material amount of the Receivables (or
extend the time for payment thereof) or accept any material returns of
merchandise or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts, credits and
allowances as have been granted in the ordinary course of business of such
Borrower.

 

4.15.                     Inventory.  To the extent Inventory held for sale or
lease has been produced by any Borrower, it has been and will be produced, in
all material respects, by such Borrower in accordance with the Federal Fair
Labor Standards Act of 1938.

 

4.16.                     Maintenance of Equipment.  The Equipment useful and
necessary to Credit Parties’ business shall be maintained in good operating
condition and repair (reasonable wear and tear and casualty excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and preserved
consistent with industry standards; provided that the same shall not be required
if not necessary for the continued operation of the Credit Parties’ business. 
No Credit Party shall use or operate the Equipment in violation of any
Applicable Law to the extent such use or operation could reasonably be expected
to materially and adversely affect the operation of its business as currently
conducted.

 

4.17.                     Exculpation of Liability.  Nothing herein contained
shall be construed to constitute Agent or any Lender as any Borrower’s agent for
any purpose whatsoever, nor shall Agent or any Lender be responsible or liable
for any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause thereof,
except for the gross negligence or willful misconduct of the Agent as determined
by a final and non-appealable judgment of a court of competent jurisdiction. 
Neither Agent nor any Lender, whether by anything herein or in any assignment or
otherwise, assume any of any Borrower’s obligations under any contract or
agreement assigned to Agent or such Lender, and neither Agent nor any Lender
shall be responsible in any way for the performance by any Borrower of any of
the terms and conditions thereof.

 

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4.18.                     Environmental Matters.

 

(a)                                 Except for any deviations, individually or
in the aggregate, that could not reasonably be expected to have a Material
Adverse Effect:

 

(i)                                     Borrowers shall maintain the Real
Property owned or leased by a Borrower in compliance with all Environmental Laws
and the Borrowers shall not place or permit to be placed any amount of Hazardous
Substances on any Real Property except as permitted by Applicable Law or any
permits issued thereunder;

 

(ii)                                  Borrowers shall comply with all applicable
Environmental Laws which shall include periodic reviews of such compliance;

 

(iii)                               Borrowers shall dispose of any and all
Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws; and

 

(iv)                              Borrowers shall use commercially reasonable
efforts to obtain certificates of disposal, such as hazardous waste manifest
receipts, from all treatment, transport, storage or disposal facilities or
operators employed by Borrowers in connection with the transport or disposal of
any Hazardous Waste generated at the Real Property as required by Environmental
Laws.

 

(b)                                 In the event any Credit Party or any of
their respective Subsidiaries obtains, gives or receives written notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a “Hazardous Discharge”) or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice, in each case, with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or such Borrower’s interest therein that could reasonably be expect to
have a Material Adverse Effect (any of the foregoing received by any Borrower is
referred to herein as an “Environmental Complaint”) from any Person, including
any state agency responsible in whole or in part for environmental matters in
the state in which the Real Property is located or the United States
Environmental Protection Agency (any such person or entity hereinafter the
“Authority”), then such Borrower shall, within five (5) Business Days, give
written notice of same to Agent detailing facts and circumstances of which such
Borrower is aware giving rise to the Hazardous Discharge or Environmental
Complaint.  Such information is to be provided to allow Agent to protect its
security interest in and Lien on the Real Property and the Collateral and is not
intended to create nor shall it create any obligation upon Agent or any Lender
with respect thereto.

 

(c)                                  Borrowers shall respond promptly in
accordance with Environmental Laws to any material Hazardous Discharge or
Environmental Complaint and, with respect to same, shall take all actions
required by applicable Environmental Law to protect the health and safety of
Persons and the environment and to avoid subjecting the Collateral or Real
Property to any Lien other than Permitted Encumbrances.  If any Borrower shall
fail to respond in all material respects promptly to any Hazardous Discharge or
Environmental Complaint or any Borrower shall fail to comply with any of the
material requirements of any Environmental Laws, Agent on behalf of Lenders may,
but without the obligation to do so, for the sole purpose of protecting Agent’s
interest in the Collateral:  (i) give such notices as may be required by
Environmental Laws or (ii) enter onto the Real Property (or authorize third
parties to enter onto the Real Property) and take such actions as Agent (or such

 

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third parties as directed by Agent) deems reasonably necessary, to clean up,
remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint; provided, however, that prior to taking any such action
set forth on subpart (i) or (ii), Agent shall provide five (5) Business Days
advance written notice to Borrowing Agent and a reasonable time to cure or
address such Hazardous Discharge or Environmental Complaint.  All reasonable
costs and expenses incurred by Agent and Lenders (or such third parties) in the
exercise of any such rights, including any sums paid in connection with any
judicial or administrative investigation or proceedings, fines and penalties,
together with interest thereon from the date expended at the Default Rate for
Domestic Rate Loans constituting Revolving Advances shall be paid upon demand by
Borrowers, and until paid shall be added to and become a part of the Obligations
secured by the Liens created by the terms of this Agreement or any other
agreement between Agent, any Lender and any Borrower.

 

(d)                                 Borrowers shall defend and indemnify Agent
and Lenders and hold Agent, Lenders and their respective employees, agents,
directors and officers harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney’s fees, actually
suffered or incurred by Agent or Lenders under or on account of any
Environmental Laws, including the assertion of any Lien thereunder, with respect
to any Hazardous Discharge, the presence of any Hazardous Substances affecting
the Real Property, whether or not the same originates or emerges from the Real
Property or any contiguous real estate, including any loss of value of the Real
Property as a result of the foregoing except to the extent such loss, liability,
damage and expense is attributable to (A) any Hazardous Discharge resulting from
actions on the part of Agent or any Lender or (B) any act or inaction of Agent
or any Lender that constitutes gross negligence or willful misconduct. 
Borrowers’ obligations under this Section 4.18(d) shall arise upon the discovery
of the presence of any Hazardous Substances at the Real Property, whether or not
any Governmental Body has taken or threatened any action in connection with the
presence of any Hazardous Substances.  Borrowers’ obligation and the
indemnifications hereunder shall survive the termination of this Agreement.

 

(e)                                  For purposes of Section 4.18 and 5.7, all
references to Real Property shall be deemed to include all of each Borrower’s
right, title and interest in and to its owned and leased premises.

 

4.19.                     Financing Statements.  Except with respect to the
financing statements naming Agent as secured party, and after the Closing Date,
those pertaining to Permitted Encumbrances, no financing statement covering any
of the Collateral or any proceeds thereof is on file in any public office.

 

4.20.                     Voting Rights in Respect of Subsidiary Stock.  Upon
the occurrence and during the continuance of an Event of Default and following
written notice by Agent to Borrowing Agent, all rights of a Credit Party to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise shall cease and all such rights shall thereupon become
vested in Agent which shall then have the sole right to exercise such voting and
other consensual rights.

 

4.21.                     Dividend and Distribution Rights in Respect of
Subsidiary Shares.  Upon the occurrence and during the continuation of an Event
of Default and following written notice by Agent to Borrowing Agent:

 

(a)                                 all rights of a Credit Party to receive
dividends, distributions and interest payments shall cease and all such rights
shall thereupon be vested in Agent which shall then have the sole right to
receive and hold such dividends, distributions and interest payments; provided,
however, that any and all such dividends, distributions and interest payments
consisting of rights or interests

 

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in the form of securities shall be forthwith delivered to Agent to hold as
Collateral and shall, if received by any Credit Party, be received in trust for
the benefit of Agent, be segregated from the other property or funds of such
Credit Party and be promptly (but in any event within five days after receipt
thereof) delivered to Agent as Collateral in the same form as so received (with
any necessary endorsement); and

 

(b)                                 all dividends, distributions and interest
payments which are received by a Credit Party contrary to the provisions of
clause (a) shall be received in trust for the benefit of Agent, shall be
segregated from other property or funds of such Credit Party, and shall be
forthwith paid over to Agent as Collateral in the exact form received, to be
held by Agent as Collateral and as further collateral security for the
Obligations.

 

V.                                    REPRESENTATIONS AND WARRANTIES.

 

Each Credit Party represents and warrants as follows:

 

5.1.                            Authority.  Such Credit Party has full power,
authority and legal right to enter into this Agreement and the Other Documents
and to perform all its respective Obligations hereunder and thereunder.  This
Agreement and the Other Documents to which any Credit Party is a party have been
duly executed and delivered by the Credit Parties party thereto, and this
Agreement and the Other Documents constitute the legal, valid and binding
obligation of the Credit Parties party thereto enforceable in accordance with
their terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
generally.  The execution, delivery and performance of this Agreement and of the
Other Documents to which any Credit Party is party (a) are within each Credit
Party’s corporate, limited liability company, limited partnership, partnership
or other applicable powers, have been duly authorized by all necessary
corporate, limited liability company, limited partnership, partnership or other
applicable action, are not in contravention of the terms of each Credit Party’s
Organizational Documents or other applicable documents relating to such Credit
Party’s formation or to the conduct of such Credit Party’s business, (b) will
not conflict with or violate (i) any Applicable Law, or (ii) any Material
Contract, (c) will not require the Consent of any Governmental Body or any other
Person as of the Closing Date, all of which will have been duly obtained, made
or compiled prior to the Closing Date and which are in full force and effect and
(d) will not result in the creation of any Lien except Permitted Encumbrances
upon any asset of such Credit Party under the provisions of any Applicable Law,
Organizational Document or Material Contract to which such Credit Party is a
party or by which it or its property is a party or by which it may be bound.

 

5.2.                            Formation and Qualification.

 

(a)                                 On the Closing Date, each Credit Party is
duly incorporated or formed, as applicable and in good standing under the laws
of the state listed on Schedule 1 to the Perfection Certificate and is qualified
to do business and is in good standing in the states listed on Schedule 1 to the
Perfection Certificate.  Each Credit Party is in good standing and is qualified
to do business in the states in which qualification and good standing are
necessary for such Credit Party to conduct its business and own its property and
where the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.

 

(b)                                 As of the Closing Date, all of the
Subsidiaries of Parent Guarantor are listed on Schedule 9 to the Perfection
Certificate.  As of the Closing Date, the Persons identified on Schedule 9 to
the Perfection Certificate are the record and beneficial owners of all of the
shares of Capital Stock of each of the Subsidiaries listed on Schedule 9 to the
Perfection Certificate as being owned thereby, there are no proxies, irrevocable
or otherwise, with respect to such shares, and no

 

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equity securities of any of such Persons are or may become required to be issued
by reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any Capital Stock of any such
Person, and there are no contracts, commitments, understandings or arrangements
by which any such Person is or may become bound to issue additional shares of
its Capital Stock or securities convertible into or exchangeable for such
shares.  All of the shares owned by the Credit Parties are owned free and clear
of any Liens other than Permitted Encumbrances.

 

5.3.                            Survival of Representations and Warranties.  All
representations and warranties of the Credit Parties contained in this Agreement
and the Other Documents shall, at the time of such Credit Party’s execution of
this Agreement and the Other Documents, be true and correct in all material
respects (or, if such representation and warranty is, by its terms, limited by
materiality (including a Material Adverse Effect), then such representation and
warranty shall be true in all respects) and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.

 

5.4.                            Tax Returns.  The federal taxpayer
identification number of each Credit Party that is a Credit Party as of the
Closing Date is set forth on Schedule 1 to the Perfection Certificate.  The
Credit Parties have filed all federal and state income Tax returns and all other
material federal, state and local Tax returns and other reports they are
required by law to file and have paid all material Taxes that are due and
payable.  The provision for Taxes on the books of the Credit Parties have been
made in accordance with GAAP and the Credit Parties have no knowledge of any
deficiency or additional assessment in connection therewith not provided for on
its books.

 

5.5.                            Financial Statements.

 

(a)                                 Historical Statements.  The Parent Guarantor
and its Subsidiaries have delivered to the Agent copies of (i) its audited
consolidated and unaudited consolidating year-end financial statements as of
December 31, 2018 and for the fiscal year then ended and (ii) its unaudited
balance sheet, statements of income and stockholders’ equity and cash flows on a
consolidated and consolidating basis as of March 31, 2019 (the “Historical
Statements”).  The Historical Statements were compiled from the books and
records maintained by management of the Parent Guarantor and its Subsidiaries,
are correct and complete in all material respects and fairly represent the
consolidated and consolidating financial condition of the Parent Guarantor and
its Subsidiaries as of their dates and their results of operations and cash
flows for the fiscal periods specified and have been prepared in accordance with
GAAP consistently applied, except that the unaudited financial statements are
subject to normal year-end adjustments.

 

(b)                                 Financial Projections.  The Parent Guarantor
and its Subsidiaries have delivered to the Agent financial projections
(including balance sheets and statements of operation and cash flows) for the
period 2019 through 2021 derived from various assumptions of the Parent
Guarantor’s management (the “Financial Projections”).  The Financial Projections
have been prepared based upon good faith estimates and stated assumptions
believed to be reasonable and fair as of the date made in light of conditions
and facts then known and, as of such date, reflect good faith, reasonable and
fair estimates of the information projected for the periods set forth therein;
it being understood that such Financial Projections are subject to significant
uncertainties and contingencies, many of which are beyond the Parent Guarantor’s
control, and that actual results may vary from such projections and that such
variances may be material.

 

(c)                                  No Material Adverse Effect.  Since
December 31, 2018, there has been no change, occurrence or development which
could reasonably be expected to have a Material Adverse Effect,

 

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other than (i) the filing of the Cases and (ii) as described on Schedule
5.5(c)(ii).

 

5.6.                            Entity Names.  As of the Closing Date, except as
set forth on Schedule 1 to the Perfection Certificate, no Credit Party (i) has
been known by any other corporate or trade name in the past five years,
(ii) sells Inventory under any other name nor (iii) has been the surviving
corporation or company of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five
(5) years.

 

5.7.                            O.S.H.A.; Environmental Compliance; Flood Laws. 
Except as could, individually or in the aggregate, not reasonably be expected to
have a Material Adverse Effect:

 

(a)                                 The Credit Parties are and have been in
compliance with, and their facilities, business, assets, property, leaseholds,
Real Property and Equipment are and have been in compliance with, the provisions
of the Federal Occupational Safety and Health Act, RCRA, the Federal
Occupational Safety and Health Act, the Federal Mine Safety and Health Act,
Flood Laws and all other Environmental Laws, including, without limitation, any
provisions relating to financial assurance, reclamation or decommissioning
obligations, and, to the knowledge of the Credit Parties, the obligations of the
Credit Parties to maintain compliance with the Federal Occupational Safety and
Health Act and all Environmental Laws will not have a Material Adverse Effect.

 

(b)                                 The Credit Parties have been issued or
obtained all required federal, state and local licenses, certificates or permits
relating to all applicable Environmental Laws.

 

(c)                                  (i) There have been no releases, spills,
discharges, leaks or disposal (collectively referred to as “Releases”) of
Hazardous Substances (as defined at the time of the representation) at, upon,
under or within any Real Property, except as authorized by any permit or
certificate issued pursuant to Environmental Law; (ii) there are no underground
storage tanks or polychlorinated biphenyls on the Real Property except those
kept in amounts and under circumstances in compliance with Environmental Laws
(in effect at the time of the representation); (iii) the Real Property has never
been used as a treatment, storage or disposal facility of Hazardous Substances,
except as previously disclosed to Agent; and (iv) no Hazardous Substances (as
defined at the time of the representation) are handled or stored on the Real
Property, excepting such quantities as are handled in accordance with all
applicable governmental regulations and in proper storage containers as required
by Environmental Laws and as are necessary for the operation of the business of
any Credit Party or of its tenants.

 

(d)                                 The Credit Parties have not received any
Environmental Complaint that has not been fully resolved.

 

(e)                                  All Real Property owned by Credit Parties
is insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each such Credit Party in accordance with prudent business practice in the
industry of such Credit Party.

 

5.8.                            Solvency.  Taking into account rights of
contribution and subrogation under Applicable Laws, and after giving effect to
the Transactions, (x) the Parent Guarantor and its Subsidiaries, taken as a
whole, are and will continue to be solvent, able to pay their debts and
liabilities, contingent liabilities and other commitments as they mature in the
ordinary course of business, and have and will have capital sufficient to carry
on their business and all businesses in which they are about to engage and
(y) the fair present saleable value of their assets and property, calculated on
a going concern basis, are in excess of the

 

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amount of their liabilities, including contingent liabilities and will continue
to be in excess of the amount of their liabilities.

 

5.9.                            Litigation.  Except as set forth on Schedule
5.9, no Credit Party has any pending against, or to the knowledge of the Credit
Parties, threatened litigation, arbitration, actions or proceedings which (i)
purport to affect or pertain to this Agreement or any Other Document or any of
the Transactions or (ii) other than the filing of the Cases, could reasonably be
expected to have a Material Adverse Effect, result in an Event of Default,
result in material liability to such Credit Party or materially and adversely
affect such Credit Party’s ability to conduct its business as currently
conducted, or (iii) any liabilities or indebtedness for borrowed money other
than the Obligations and Indebtedness permitted by Section 7.6.

 

5.10.                     Compliance with Laws; ERISA.

 

(a)                                 No Credit Party is in violation of any
applicable statute, law, rule, regulation or ordinance in any respect which
could reasonably be expected to have a Material Adverse Effect, nor is any
Credit Party in violation of any order of any court, Governmental Body or
arbitration board or tribunal which could reasonably be expected to have a
Material Adverse Effect.  The Borrowers have implemented and maintained in
effect policies and procedures designed to ensure compliance by the Borrowers,
their Subsidiaries and their respective directors, officers, employees and
agents with applicable Anti-Terrorism Laws, anti-corruption laws and anti-money
laundering laws.

 

(b)                                 As of the Closing Date and as of the end of
each fiscal quarter thereafter, no Credit Party or any member of the Controlled
Group maintains or is required to contribute to any Plan other than those listed
on Schedule 5.10(b) hereto with respect to which any Credit Party or any member
of the Controlled Group has incurred or may incur any material liability.  Each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Applicable Law.  Except as could not reasonably result
in Material Adverse Effect or an Event of Default or result in material
liability to any Credit Party:  (i) each Borrower and each member of the
Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA and Section 412 of the Code in respect of each Plan and
each Plan is in compliance with Sections 412, 430 and 436 of the Code and
Sections 206(g), 302 and 303 of ERISA, without regard to waivers and variances;
(ii) each Plan which is intended to be a qualified plan under Section 401(a) of
the Code as currently in effect has been determined by the IRS to be qualified
under Section 401(a) of the Code and the trust related thereto is exempt from
federal income Tax under Section 501(a) of the Code or an application for such a
determination is currently being processed by the IRS; (iii) neither any Credit
Party nor any member of the Controlled Group has incurred any liability to the
PBGC other than for the payment of premiums, and there are no premium payments
which have become due which are unpaid; (iv) no Plan has been terminated by the
plan administrator thereof nor by the PBGC, and there is no occurrence which
would cause the PBGC to institute proceedings under Title IV of ERISA to
terminate any Plan; (v) the current value of the assets of each Plan exceeds the
present value of the accrued benefits and other liabilities of such Plan and
neither any Credit Party nor any member of the Controlled Group knows of any
facts or circumstances which would change the value of such assets and accrued
benefits and other liabilities; (vi) neither any Credit Party nor any member of
the Controlled Group has breached any of the responsibilities, obligations or
duties imposed on it by ERISA with respect to any Plan; (vii) neither any Credit
Party nor any member of the Controlled Group has incurred any liability for any
excise Tax arising under Section 4971, 4972 or 4980B of the Code, and no fact
exists which could give rise to any such liability; (viii) neither any Credit
Party nor any member of the Controlled Group nor any fiduciary of, nor any
trustee to, any Plan, has engaged in a “prohibited transaction” described in
Section 406 of ERISA or Section 4975 of the Code nor taken any action which
would

 

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constitute or result in a Termination Event with respect to any such Plan which
is subject to ERISA; (ix) no Termination Event has occurred or is reasonably
expected to occur; (x) there exists no Reportable Event; (xi) neither any Credit
Party nor any member of the Controlled Group has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA; (xii) neither any Credit
Party nor any member of the Controlled Group maintains or is required to
contribute to any Plan which provides health, accident or life insurance
benefits to former employees, their spouses or dependents, other than in
accordance with Section 4980B of the Code; (xiii) neither any Credit Party nor
any member of the Controlled Group has withdrawn, completely or partially,
within the meaning of Section 4203 or 4205 of ERISA, from any Multiemployer Plan
so as to incur liability under the Multiemployer Pension Plan Amendments Act of
1980 and there exists no fact which would reasonably be expected to result in
any such liability; and (xiv) no Plan fiduciary (as defined in Section 3(21) of
ERISA) has any liability for breach of fiduciary duty or for any failure in
connection with the administration or investment of the assets of a Plan.

 

5.11.                     Patents, Trademarks, Copyrights and Licenses.  All
registered trademarks, trademark applications, patents, patent applications,
copyright and copyright applications and all licenses for Intellectual Property
held on the Closing Date by any Credit Party which are material to the conduct
of any Borrower’s business are set forth on Schedule 7 to the Perfection
Certificate.  All of the owned or, to the knowledge of the Credit Parties,
licensed, Intellectual Property set forth on Schedule 7 to the Perfection
Certificate (a) is valid and enforceable by the Credit Party claiming ownership
thereof, (b) with respect to such owned Intellectual Property, have been duly
registered or filed with all appropriate Governmental Bodies and (c) constitute
all of the Intellectual Property which are material to the conduct of each
Borrower’s business as presently conducted or anticipated to be conducted.  To
the knowledge of any Authorized Officer of any Credit Party there is no written
objection or pending challenge to the validity of any such Intellectual Property
and there are no grounds for any such challenge, except, in each case, as could
not reasonably be expected to have a Material Adverse Effect or an Event of
Default, result in material liability to such Credit Party or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted.

 

5.12.                     Licenses and Permits.  Except as set forth in Schedule
5.12, each Credit Party (a) is in compliance with and (b) has procured and is
now in possession of, all material licenses or permits required by any
Applicable Law for the operation of its business in each jurisdiction wherein it
is now conducting or proposes to conduct business, except, in the cases of both
(a) and (b) where the failure to procure such licenses or permits would not
reasonably be expected to have a Material Adverse Effect or an Event of Default,
result in material liability to such Credit Party or materially and adversely
affect such Credit Party’s ability to conduct its business as currently
conducted.

 

5.13.                     No Burdensome Restrictions.  No Credit Party is a
party to any contract or agreement the performance of which could reasonably be
expected to have a Material Adverse Effect or materially and adversely affect
such Credit Party’s ability to comply with the terms of this Agreement.  All
Material Contracts as of the Closing Date are set forth on Schedule 13 to the
Perfection Certificate, and the Credit Parties have heretofore delivered to
Agent true and complete copies of all such Material Contracts to which any of
them are a party or to which any of them or any of their properties is subject. 
Except as set forth on Schedule 5.13, all Material Contracts are in full force
and effect and no material defaults by any Borrower and, to the knowledge of the
Borrowers, by any other party thereto, currently exist thereunder.  No Credit
Party has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.

 

5.14.                     No Labor Disputes.  No Credit Party is involved in any
labor dispute; there are no strikes or walkouts or union organization of any
Credit Party’s employees threatened or in existence and no labor

 

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contract is scheduled to expire prior to the Maturity Date other than as set
forth on Schedule 5.14 hereto, which, in each case, could reasonably be expected
to result in a Material Adverse Effect or an Event of Default or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted.

 

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

 

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

 

5.17.                     Disclosure.  No representation or warranty made by any
Credit Party in this Agreement or in any financial statement, report,
certificate or any other document furnished in connection herewith or therewith,
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not materially
misleading in light of the circumstances under which the statements were made;
provided that with respect to projected financial information, and information
of an industry specific or general economic nature, the Credit Parties represent
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time in light of conditions and facts then
known; it being understood that (i) such projections are subject to significant
uncertainties and contingencies, many of which are beyond the Parent Guarantor’s
control, and (ii) actual results may vary from such projections and that such
variances may be material.  There is no fact known to any Credit Party or which
reasonably should be known to such Credit Party which such Credit Party has not
disclosed to Agent in writing with respect to the Transactions which could
reasonably be expected to have a Material Adverse Effect.

 

5.18.                     Perfection of Security Interest in Collateral.  The
provisions of this Agreement and of each other applicable Other Document and
Security Document are effective to create in favor of the Agent, for the benefit
of itself and the other Secured Parties, a legal, valid and enforceable first
priority security interest in all right, title and interest of the Credit
Parties in each item of Collateral, except (i) in the case of any Permitted
Encumbrances, to the extent that any such Permitted Encumbrance would have
priority over the security interest in favor of Agent pursuant to any Applicable
Law and (ii) Liens perfected only by possession or control (within the meaning
of the Uniform Commercial Code) to the extent Agent has not obtained or does not
maintain possession or control of such Collateral (provided that such possession
or control of such Collateral shall be given to Agent to the extent such
possession or control is required by the terms of this Agreement or any Other
Document or Security Document).

 

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

 

5.20.                     Application of Certain Laws and Regulations.  Neither
any Credit Party nor any Subsidiary of any Credit Party is subject to any Law
which regulates the incurrence of any Indebtedness, including Laws relative to
common or interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.

 

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5.21.                     No Brokers or Agents.  No Credit Party or Subsidiary
thereof uses any brokers or other agents acting in any capacity for such Credit
Party or Subsidiary in connection with the Obligations.

 

5.22.                     Commercial Tort Claims.  As of the Closing Date and as
of the end of any fiscal quarter thereafter, none of the Credit Parties has any
commercial tort claims in excess of $1,000,000, except as set forth on Schedule
12 to the Perfection Certificate.

 

5.23.                     Letter of Credit Rights.  As of the Closing Date and
as of the end of any fiscal quarter thereafter, no Credit Party has any letter
of credit rights in excess of $1,000,000, except as set forth on Schedule
5(b) to the Perfection Certificate.

 

5.24.                     Deposit Accounts.  All deposit accounts and securities
accounts of the Credit Parties as of the Closing Date are set forth on
Schedule 5(a) to the Perfection Certificate.

 

5.25.                     Use of Proceeds.  The Borrowers are using the proceeds
of the Advances in accordance with Section 2.12.

 

5.26.                     [Reserved].

 

5.27.                     Personal Properties.  The Parent Guarantor and each
Restricted Subsidiary has good title to, or valid leasehold interests in, all
such personal property material to its business, except for (i) minor defects in
title that do not, in the aggregate, interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes and (ii) Permitted Encumbrances.

 

5.28.                     Reserved.

 

5.29.                     Real Property.  Each Credit Party has good, valid and
marketable fee simple title to all owned Real Property material to its business,
or that constitutes (or is required pursuant to the terms hereof to constitute)
Collateral, and a valid, binding and enforceable leasehold interest in each
Leasehold Interest material to its business, or that constitutes (or is required
pursuant to the terms hereof to constitute) Collateral, except for (i) minor
defects in title that do not, in the aggregate, interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes and (ii) Permitted Encumbrances. All Real Property and
all other property material to its business, or that constitutes (or is required
pursuant to the terms hereof to constitute) Collateral, is in good operating
condition and repair for the use for which they are currently employed (normal
wear and tear and casualty excepted and except as may be disposed of in
accordance with the terms of this Agreement) and has been maintained in
accordance with industry standards and in conformity in all material respects
with all Applicable Laws, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect. No subleases, licenses or other
occupancy agreements exist whereby any person other than any Credit Party uses
or occupies or has a right to use or occupy or to acquire any Real Property (or
interest in Real Property) set forth on Schedule 11 of the Perfection
Certificate, including, but not limited to, rights of first refusal, rights of
first offer or any option. Each Credit Party has substantially performed all of
their obligations under any Real Property agreement or other occupancy
agreement. There is no Default or event that has occurred which, with the
passage of time, would ripen into an Event of Default and the Credit Parties
have not received any notice (whether written or verbal) of any such Default.
There are no pending or, to the knowledge of any Credit Party, threatened
condemnation or eminent domain proceedings relating to any such Real Property
material to its business, or that constitutes (or is required pursuant to the
terms hereof to constitute) Collateral. Each Real Property as currently used,
held or occupied, and the conduct of the business thereon, as currently
conducted, complies in all material respects with all deed restrictions and
Applicable Laws including building codes, zoning, subdivision or other land use
or similar Applicable Laws, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

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VI.                               AFFIRMATIVE COVENANTS.

 

Credit Parties (or Borrowers if otherwise indicated) shall, and shall cause
their Restricted Subsidiaries (or, if indicated, all of their Subsidiaries) to,
until the Termination Date:

 

6.1.                            Payment of Fees.  Borrowers shall pay to Agent
on demand all usual and customary fees and expenses which Agent incurs in
connection with (a) the forwarding of Advance proceeds and (b) the establishment
and maintenance of any Collection Accounts as provided for in Section 4.14(g). 
Agent may, without making demand, charge Borrowers’ Account for all such
reasonable and documented fees and expenses.

 

6.2.                            Conduct of Business and Maintenance of Existence
and Assets.  (a) Conduct continuously and operate actively their business
according to good business practices and maintain all of their properties
(including each Real Property) useful or necessary in their business in good
working order and condition in accordance with industry standards (reasonable
wear and tear and casualty excepted and except as may be disposed of in
accordance with the terms of this Agreement), including all material licenses,
patents, copyrights, design rights, tradenames, domain names, trade secrets,
trademarks, leases and occupancy agreements, and take all actions reasonably
necessary to enforce and protect the validity of any material Intellectual
Property or other material right included in the Collateral; (b) keep in full
force and effect their existence and comply in all material respects with the
Applicable Laws governing the conduct of their business where the failure to do
so could reasonably be expected to have a Material Adverse Effect, result in an
Event of Default, result in material liability to such Credit Party or
materially and adversely affect such Credit Party’s ability to conduct its
business as currently conducted; and (c) make all such reports and timely pay
all such franchise and other Taxes and license fees and do all such other acts
and things as may be lawfully required to maintain their rights, licenses,
leases, powers and franchises under the laws of the United States or any
political subdivision thereof where the failure to do so could reasonably be
expected to have a Material Adverse Effect, result in an Event of Default or
result in material liability to such Credit Party or Restricted Subsidiary. 
Each Credit Party will perform all of their obligations under any Real Property
agreement, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

6.3.                            Violations.  Promptly after becoming aware
thereof, notify Agent in writing of any violation of any Applicable Law
applicable to any Credit Party or any of its Restricted Subsidiaries or the
Transactions which could reasonably be expected to have a Material Adverse
Effect.

 

6.4.                            Government Receivables.  At the reasonable
request of Agent, take all steps necessary to protect Agent’s interest in the
Collateral under the Federal Assignment of Claims Act, the Uniform Commercial
Code and all other Applicable Laws with respect to contracts providing for
payments in excess of $10,000,000 in the aggregate, and deliver to Agent,
appropriately endorsed, all instruments or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them; provided
that the delivery requirement shall not apply to such instruments and chattel
paper of up to $5,000,000 in the aggregate.

 

6.5.                            Financial Covenants.

 

(a)                                 Fixed Charge Coverage Ratio.  Commencing
with (i) the fiscal quarter ending June 30, 2020 for the Test Period then
ending, maintain a Fixed Charge Coverage Ratio of not less than 0.90 to 1.00,
and (ii) the fiscal quarter ending September 30, 2020, and the last day of each
fiscal quarter thereafter, for the Test Period then ending, maintain a Fixed
Charge Coverage Ratio of not less than 1.15 to 1.00.

 

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(b)                                 Total Leverage Ratio.  Commencing with the
fiscal quarter ending June 30, 2020 and the last day of each fiscal quarter
thereafter, maintain, when measured as of the last day of each Test Period
ending with the fiscal quarter set forth in the table below, a Total Leverage
Ratio not more than the Total Leverage Ratio set forth below opposite the period
set forth in the table:

 

Fiscal Quarter Ending

 

Maximum Total Leverage Ratio

June 30, 2020

 

6.00 to 1.00

September 30, 2020

 

5.00 to 1.00

December 31, 2020

 

4.00 to 1.00

March 31, 2021

 

3.50 to 1.00

June 30, 2021

 

3.00 to 1.00

September 30, 2021 and the last day of each fiscal quarter thereafter

 

2.50 to 1.00

 

6.6.                            Perfection;  Further Assurances.

 

(a)                                 Take all action that may be reasonably
necessary or desirable, or that Agent may reasonably request, so as at all times
to maintain the validity, perfection, enforceability and priority of Agent’s
security interest in and Lien on the Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to (and in each case without otherwise affecting Agent’s ability to
implement a reserve against the Formula Amount during the pendency of such
action), (i) promptly discharging all Liens other than Permitted Encumbrances,
(ii) subject to any express exclusion or limitations in this Agreement or any
Other Document, promptly (but in any event on the Closing Date or within 30 days
after the receipt thereof if after the Closing Date and notify Agent of the
receipt thereof if after the Closing Date within such 30-day period) delivering
to Agent, endorsed or accompanied by such instruments of assignment as Agent may
specify, and stamping or marking, in such manner as Agent may specify, any and
all certificates, agreements or instruments representing or evidencing
Subsidiary Stock and chattel paper, instruments, letters of credit and advices
thereof and documents evidencing or forming a part of the Collateral,
(iii) entering into lockbox, blocked account or other such arrangements as
required under Section 4.14(g) and Section 6.6(b) or any other applicable
provision of this Agreement or any Other Document, (iv) subject to any express
exclusion or limitations in this Agreement or any Other Document, executing and
delivering financing statements, Intellectual Property Security Agreements,
control agreements, instruments of pledge, mortgages, notices and assignments
(including filings with the United States Patent and Trademark Office within
three (3) months after execution thereof, as applicable, and United States
Copyright Office within one (1) month after execution thereof, as applicable),
in each case in form and substance satisfactory to Agent in its Permitted
Discretion, relating to the creation, validity, perfection, maintenance or
continuation of Agent’s security interest in and Lien on assets of the Credit
Parties under the Uniform Commercial Code, the PPSA or other Applicable Law,
(v) providing Mortgages, surveys, title policies (and other documentation, such
as owner affidavits associated with obtaining title policies and other similar
requests from a title company), appraisals, zoning reports, opinions of counsel,
environmental reports and Environmental Indemnity Agreements (in each case,
consistent

 

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with the requirements for the Mortgages delivered as of the Closing Date) with
respect to all (A) Leasehold Interests containing Sand Reserves that are
included in the Formula Amount within sixty (60) days (or such later date in
Agent’s discretion) after such Leasehold Interest was acquired by a Credit
Party, (B) Real Property owned in fee having a Fair Market Value in excess of
$5,000,000 which is not subject to a Lien (other than a Permitted Encumbrance)
securing Permitted Purchase Money Indebtedness the terms of which would prohibit
such Mortgage, in the case of this clause (B), within sixty (60) days (or, such
later date in Agent’s discretion) after such Real Property owned in fee is
acquired by a Credit Party or exceeds $5,000,000 in Fair Market Value (provided
that such Fair Market Value shall be measured only as of the end of any fiscal
year or upon the “substantial completion” of any improvements constructed
thereon, as reasonably determined by the Borrowers in consultation with the
Agent) and (C) at the request of the Agent, Real Property used in, or acquired
for the purpose of, the operation of the business of any Credit Party; and
(vi) otherwise providing such other documents and instruments as Agent may
request, in order that the full intent of this Agreement may be carried into
effect; provided, however, perfection of Agent’s Liens on assets of the Credit
Parties shall not be required where the benefits of obtaining such perfection is
outweighed by the costs or burdens of providing the same, as determined by
Agent.  If any Credit Party shall at any time after Closing Date (i) obtain any
rights to any additional Intellectual Property or (ii) become entitled to the
benefit of any additional Intellectual Property or any renewal or extension
thereof, including any reissue, division, continuation, or continuation-in-part
of any Intellectual Property, or any improvement on any Intellectual Property,
or if any intent-to-use trademark or service mark application is no longer
subject to clause (v) of the definition of “Excluded Collateral,” the provisions
hereof shall automatically apply thereto and any such item enumerated in the
preceding clause (i) or (ii) shall automatically constitute Intellectual
Property and Collateral under this Agreement and each Other Document as if such
would have constituted Intellectual Property at the time of execution hereof and
be subject to the Lien and security interest created by this Agreement without
further action by any party.  Each Credit Party shall take all actions necessary
or reasonably requested by the Agent to maintain and pursue each Intellectual
Property application, to obtain the relevant registration and to maintain the
registration of each item of Intellectual Property (now or hereafter existing)
where failure to do so could reasonably be expected to result in a Material
Adverse Effect on the business of the Credit Parties, taken as a whole, or
except as otherwise permitted under this Agreement, including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability
and, if consistent with good business judgment, to initiate opposition and
interference and cancellation proceedings against third parties.  In the event
that, since the delivery of the prior Compliance Certificate (or since the
Closing Date), a Credit Party files an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any relevant office or agency in any
applicable foreign jurisdiction, or acquires any such application or
registration by purchase or assignment (in each case, other than any
intent-to-use trademark or service mark application subject to clause (v) of the
definition of “Excluded Collateral”), or in the event any intent-to-use
trademark or service mark application becomes no longer subject to clause (v) of
the definition of “Excluded Collateral”, each applicable Credit Party shall
provide to Agent written notice of any of the foregoing since the delivery of
the prior Compliance Certificate (or since the Closing Date) pursuant to a
Compliance Certificate delivered pursuant to Section 9.3 and on the date of
delivery of such Compliance Certificate confirm the attachment of the Lien and
security interest created by this Agreement to such additional filed, purchased
or assigned Intellectual Property by delivery of one or more Intellectual
Property Security Agreements and the filing thereof with the United States
Patent and Trademark Office within three (3) months of such acquisition or
filing, and/or the United States Copyright Office within one (1) month of such
acquisition or filing, as applicable, or, with respect to any such Intellectual
Property registered, issued or filed outside the United States, any other
instruments or statements as the Agent shall

 

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reasonably require in its Permitted Discretion to evidence, create, preserve,
protect or perfect Agent’s security interest in such Intellectual Property.

 

(b)                                 Ensure that at all times on and after the
Closing Date (subject to Schedule 6.11), Agent shall have received Deposit
Account Control Agreements, in form and substance satisfactory to Agent in its
Permitted Discretion, with respect to all accounts listed on Schedule 5(a) to
the Perfection Certificate, other than Excluded Deposit Accounts.

 

6.7.                            Payment of Obligations.  Pay, discharge or
otherwise satisfy at or before maturity (subject, where applicable, to specified
grace periods and, in the case of the trade payables, to normal payment
practices) all their obligations and liabilities of whatever nature, except when
the failure to do so could not reasonably be expected to have a Material Adverse
Effect or when the amount or validity thereof is currently being Properly
Contested, subject at all times to any applicable subordination arrangement in
favor of Agent and/or the Lenders.

 

6.8.                            Standards of Financial Statements.  Cause all
financial statements referred to in this Agreement as to which GAAP is
applicable to be complete and correct in all material respects (subject, in the
case of interim financial statements, to normal year-end audit adjustments) and
to be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as concurred in by
such reporting accountants or officer, as the case may be, and disclosed
therein).

 

6.9.                            [Reserved].

 

6.10.                     Keepwell.  If it is a Qualified ECP Credit Party, then
jointly and severally, together with each other Qualified ECP Credit Party,
hereby absolutely unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by any Non-Qualifying
Party to honor all of such Non-Qualifying Party’s obligations under this
Agreement or any Other Document in respect of Swap Obligations (provided,
however, that each Qualified ECP Credit Party shall only be liable under this
Section 6.10 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 6.10, or otherwise
under this Agreement or any Other Document, voidable under applicable law,
including applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount).  The obligations of each Qualified
ECP Credit Party under this Section 6.10 shall remain in full force and effect
until the Termination Date.  Each Qualified ECP Credit Party intends that this
Section 6.10 constitute, and this Section 6.10 shall be deemed to constitute, a
guarantee of the obligations of, and a “keepwell, support, or other agreement”
for the benefit of each other Credit Party for all purposes of
Section 1a(18)(A)(v)(II) of the CEA.

 

6.11.                     Post-Closing Deliveries.  Borrowers shall satisfy the
requirements set forth on Schedule 6.11 on or before the applicable date
therefor (or such later date as Agent may agree).

 

6.12.                     Compliance with Laws; Anti-Terrorism Law;
International Trade Law Compliance.

 

(a)                                 Comply with all requirements of all Laws
(including applicable anti-money laundering Laws, anti-corruption Laws and
Sanctions) and all orders, writs, injunctions and decrees of any Governmental
Body applicable to it or to its business or property except if the failure to
comply therewith would not reasonably be expected individually or in the
aggregate to have a Material Adverse Effect.

 

(b)                                 (a) No Covered Entity (i) will become a
Sanctioned Person, either in its own right or through any third party; (ii) will
have any of its assets in a Sanctioned Country or in the

 

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possession, custody or control of a Sanctioned Person or do business in or with,
or derive any of its income from investments in or transactions with, any
Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law;
(iii) will engage in any dealings or transactions prohibited by any
Anti-Terrorism Law; (iv) will use the Advances to fund any operations in,
finance any investments or activities in, or, make any payments to, a Sanctioned
Country or Sanctioned Person in any manner that would cause a violation of any
Anti-Terrorism Law by any party to this Agreement; or (v) has engaged, done
business with or derived income from any Sanctioned Person or Sanctioned Country
in violation of any Anti-Terrorism Laws; (b) the funds and proceeds from the
Advances used to repay the Obligations will not be derived from any unlawful
activity; (c) each Covered Entity shall comply with all Anti-Terrorism Laws and
(d) each Credit Party shall immediately notify the Agent in writing upon the
occurrence of a Reportable Compliance Event.

 

6.13.                     Information Regarding Collateral.

 

(a)                                 Not effect any change (i) in any Credit
Party’s legal name, (ii) in the location of any Credit Party’s chief executive
office, (iii) in any Credit Party’s identity or organizational structure,
(iv) in any Credit Party’s Federal Taxpayer Identification Number or
organizational identification number, if any, or (v) in any Credit Party’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given Agent not
less than 30 days’ prior written notice (in the form of a certificate executed
by any Authorized Officer of the Borrowing Agent), or such lesser notice period
agreed to by Agent, of its intention so to do, clearly describing such change
and providing such other information in connection therewith as Agent may
reasonably request, (B) it shall have filed with the applicable office of the
jurisdiction of formation or organization of such Credit Party a copy of such
amendment and (C) it shall have taken all necessary action to maintain the
perfection and priority of the security interest of Agent for the benefit of the
Secured Parties in the Collateral (including the filing of financing
statements), if applicable, including any necessary action so requested by
Agent.  Each Credit Party agrees to promptly provide Agent with certified
Organizational Documents reflecting any of the changes described in the
preceding sentence.

 

(b)                                 Concurrently with the delivery of the
Compliance Certificate pursuant to Section 9.3, deliver to Agent a supplement to
the Perfection Certificate (or Perfection Certificate Supplement) most recently
delivered in the form of Annex 6.13(b) to the Compliance Certificate.

 

6.14.                     Flood Insurance.  The Credit Parties hereby
acknowledge that if any portion of any Real Property that is subject to a
mortgage is located in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards and in which flood insurance has
been made available under the Flood Laws, then such Credit Party shall maintain,
or cause to be maintained, with a financially sound and reputable insurer, flood
insurance in an amount sufficient to comply with all applicable rules and
regulations promulgated pursuant to such Flood Laws.

 

VII.                          NEGATIVE COVENANTS.

 

Credit Parties (or Borrowers if otherwise indicated) shall not, and shall not
permit their Restricted Subsidiaries (or, if indicated, any of their
Subsidiaries) to, until the Termination Date:

 

7.1.                            Merger, Consolidation, Acquisition and Sale of
Assets.

 

(a)                                 Enter into any merger, consolidation or
other reorganization with or into any other Person or acquire all or a
substantial portion of the assets or Equity Interests of any Person or permit

 

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any other Person to consolidate with or merge with it, except (i) any Restricted
Subsidiary (including a Borrower) may merge or be consolidated into a Borrower
(provided that (x) such Borrower is the continuing or surviving Person or (y) in
the case of a merger or consolidation involving Emerge, Emerge is the continuing
or surviving Person), (ii) any Guarantor (other than Parent Guarantor) or
Inactive Subsidiary may merge or be consolidated into any other Guarantor or any
Borrower (provided that, in the case of a Guarantor or Inactive Subsidiary
merging or consolidating into any Borrower, such Borrower shall be the
continuing or surviving Person) and (iii) any Permitted Acquisition.

 

(b)                                 Sell, lease, sublease, license, transfer.
assign or otherwise dispose (collectively, “Dispositions”) of any of their
properties or assets, or, except with respect to the Parent Guarantor, issue
their own Equity Interests, except (i) Dispositions of Inventory and used,
surplus or obsolete Equipment or reserves in the ordinary course of business,
(ii) Dispositions to the Parent Guarantor or a Restricted Subsidiary, provided
that any such Dispositions shall be treated as an Investment and shall comply
with Section 7.4 and no Dispositions of assets which make up the Formula Amount
may be Disposed of to any Person that is not a Borrower, (iii) subleases or
assignments with respect to any leased Real Property (other than Leasehold
Interests containing Sand Reserves), to the extent the subject Real Property is
not being actively used in the conduct of Borrowers’ business, (iv) Dispositions
to a Credit Party of all (but not less than all) of the assets of an Inactive
Subsidiary in connection with the winding down or liquidation of such Inactive
Subsidiary, (v) Dispositions of surface rights and termination of mining leases
after the completion of mining and reclamation and termination or abandonment of
water rights no longer needed for mining so long as no portion thereof provides
any portion of the Sand Reserve Value, (vi) use of cash or Cash Equivalents in
any manner not otherwise prohibited by this Agreement, (vii) licensing and
cross-licensing arrangements involving any technology or other Intellectual
Property of the Parent Guarantor or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; provided, however, that any
such license or cross-license of technology or other Intellectual Property shall
be on a non-exclusive basis, (viii) Dispositions permitted under Section 7.1(a),
Section 7.2, Section 7.4, or Section 7.5, (ix) the unwinding of any interest,
commodity or currency swap agreements or other similar agreements, (x) the
surrender, modification, release, termination or waiver of contract rights
(including under leases, subleases and licenses of real property not
constituting Leasehold Interests containing Sand Reserves) or the settlement,
release, modification, waiver or surrender of contract, tort or other claims of
any kind in the ordinary course of business, (xi) the issuance of Equity
Interests in any Restricted Subsidiary to the extent consisting of directors’
qualifying shares or shares required by applicable law to be held by a Person
other than the Parent Guarantor or a Restricted Subsidiary, (xii) the issuance
or sale of Equity Interests by a Restricted Subsidiary to the Parent Guarantor
or to another Restricted Subsidiary; provided, that the proportion of Equity
Interests held by a Credit Party does not change as a result of such issuance,
(xiii) Dispositions made pursuant to the Confirmation Order, (xiv) subleases of
leases for Real Property (other than Leasehold Interests containing Sand
Reserves that are included in the Formula Amount) to the extent made in the
ordinary course of business and not materially and adversely affecting the
operations of any Borrower or Agent’s access to any Collateral and (xv) other
sales, leases, transfers or dispositions of assets having a Fair Market Value
not in excess of (A) $2,000,000 in the aggregate following the Closing Date and
(B) $1,000,000 for any individual sale, lease, transfer or disposition during
any fiscal year; provided, that (x) no Event of Default shall have occurred and
be continuing and (y) at least 75% of the consideration received in respect of
such Disposition shall be in the form of cash of Cash Equivalents.  To the
extent the Required Lenders waive the provisions of this Section 7.1 or property
is sold, leased, transferred or otherwise disposed of as permitted by this
Section 7.1 to a Person that is not a Credit Party, such property will be sold
free and clear or any Liens in favor of Agent and Secured Parties, and the Agent
shall take all actions reasonably requested by the Credit Parties to effect the
foregoing subject to Agent’s

 

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receipt of certifications as to compliance with this Section in form and
substance reasonably satisfactory to Agent.

 

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

 

7.3.                            Guarantees.  Except as otherwise agreed to in
writing in advance by Agent, become liable upon the obligations or liabilities
of any Person by assumption, endorsement or guarantee thereof or otherwise
(other than to Lenders) except (a) guarantees of Indebtedness that is permitted
pursuant to Section 7.6, or other obligations (not constituting Indebtedness)
which are not prohibited by this Agreement, of another Credit Party or
Restricted Subsidiary (provided that guarantees of Indebtedness or other
obligations of Subsidiaries that are not Credit Parties shall otherwise be
permitted under Section 7.4(h)(iii)), and (b) the endorsement of checks in the
ordinary course of business.

 

7.4.                            Investments.  Make any Investments, except
(a) obligations issued or guaranteed by the United States of America or any
agency thereof that mature within one year of acquisition thereof,
(b) commercial paper with maturities of not more than one hundred eighty (180)
days and a published rating of not less than A-1 or P-1 (or the equivalent
rating), (c) certificates of time deposit and bankers’ acceptances having
maturities of not more than one hundred eighty (180) days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, (d) United States money market funds at
least 95% of the assets consists of Investments described in the foregoing
clauses (a) through (c) (each of clauses (a) through (d), “Cash Equivalents”),
(e) investments in respect of Hedges, (f) extensions of commercial trade credit
to Customers in the ordinary course of business, (g) payroll, travel and other
loan and advances to officers and employees of it or of Parent Guarantor made in
the ordinary course of business not to exceed the aggregate amount of $250,000
at any time outstanding, (h) Investments (i) between Credit Parties (including
any existing Restricted Subsidiary that becomes a Credit Party immediately after
giving effect to and as a result of such Investment), (ii) by any Restricted
Subsidiary that is not a Credit Party in any other existing Restricted
Subsidiary that is not a Credit Party, and (iii) Investments by any Credit Party
in any Restricted Subsidiary that is not a Credit Party, in the case of this
clause (iii) in an aggregate amount not to exceed $1,000,000 at any time
outstanding, (i) [reserved], (j) Investments existing on the Closing Date and
identified on Schedule 7.4 (including any extensions, refinancings,
restructurings or recharacterizations thereof that do not increase the original
amount of such investments), (k) the Investments of the Credit Parties in their
Subsidiaries on or prior to the Closing Date and as otherwise permitted by
Section 7.1, (l) Investments made in compliance with Section 7.1(a), including
Permitted Acquisitions, (m) [reserved], (n) Investments received as non-cash
consideration in a Disposition permitted by Section 7.1(b) to the extent such
non-cash consideration does not exceed 25% of the aggregate consideration
received or to be received in connection with such Disposition,
(o) (i) Receivables owing to the Parent Guarantor or any Restricted Subsidiary
if created or acquired in the ordinary course of business, (ii) endorsements for
collection or deposit in the ordinary course of business, (iii) securities,
instruments or other obligations received in compromise or settlement of
Receivables created in the ordinary course of business or loans permitted to be
made under Section 7.4, or whether by reason of a composition or readjustment of
debts or bankruptcy or reorganization of another Person, or in satisfaction
claims and judgments and (iv) any asset received by way of foreclosure by the
Parent Guarantor or any of its Restricted Subsidiaries with respect to any
secured investment or other transfer of title with respect to any secured
investment in default, (p) Investments consisting of deposits permitted under
clauses (c), (d) and (h) of the definition of “Permitted Encumbrances”,
(q) Investments consisting of customary indemnification obligations in respect
of any Permitted Acquisition, (r) deposits received from Customers in the
ordinary course of business, (s) any Investments owned by a Person at the time
it is acquired pursuant to a Permitted Acquisition to the extent not made in
contemplation of such

 

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acquisition, (t) guarantees to the extent permitted by Section 7.3,
(u) [reserved], (v) other Investments made by Credit Parties and their
Restricted Subsidiaries not to exceed $1,000,000 in the aggregate since the
Closing Date, and (w) loans made by any Subsidiary that is not a Credit Party to
any Credit Party so long as such loan is subordinated to the Obligations
pursuant to an agreement reasonably satisfactory to Agent.

 

7.5.                            Dividends and Distributions.  Declare, pay or
make any dividend or distribution on any of its Equity Interests or apply any of
its funds, property or assets to the purchase, redemption or other retirement of
any of its Equity Interests, or of any options to purchase or acquire any Equity
Interests of any Credit Party or Subsidiary thereof (each a “Restricted
Payment”), except:

 

(a)                                 the Borrowers may make dividends and
distributions (a) to Parent Guarantor in order to permit Parent Guarantor to
make the Restricted Payments set forth in clause (b); provided, that, as of the
date such Restricted Payment is made (A) no Default or Event of Default shall
have occurred or be continuing or shall be caused thereby, (B) on a Pro Forma
Basis after giving effect to such Restricted Payment, the Credit Parties are in
compliance with the financial covenants set forth in Section 6.5 and (C) on a
Pro Forma Basis after giving effect to such Restricted Payment, Liquidity is not
less than $5,000,000 (clauses (A), (B) and (C), the “Restricted Payment
Conditions”);

 

(b)                                 Parent Guarantor may (A) repurchase, and
make quarterly cash distributions on, the common units representing limited
partner interests in Parent Guarantor (if any) so long as, with respect to such
quarterly cash distributions, (i) such distributions are made in accordance with
the cash distribution policy adopted by the board of directors of the General
Partner pursuant to the Partnership Agreement, (ii) on the date such
distributions are declared by the Parent Guarantor, each of the Restricted
Payment Conditions shall be satisfied and (iii) such distributions are made
within sixty (60) days after the declaration thereof and (B) make distributions
in respect of the Preferred Interests in accordance with the Partnership
Agreement;

 

(c)                                  Subsidiaries of any Borrower may declare
and pay dividends and distributions to any Borrower;

 

(d)                                 any Credit Party may declare and pay
dividends with respect to its Equity Interests payable solely in additional
Equity Interests (other than Disqualified Stock); and

 

(e)                                  Parent Guarantor and its Subsidiaries may,
directly or indirectly, make dividends and distributions to the General Partner
at such times and in such amounts as are necessary to permit the General Partner
to pay (or to make a payment to any Person that owns a direct Equity Interest in
the General Partner to enable it to pay) such entities’ operating expenses
incurred in the ordinary course of business and other corporate overhead costs
and expenses (including, without limitation, administrative, legal, accounting,
payroll and similar expenses provided by third parties), which are reasonable
and customary and incurred in the ordinary course of business, to the extent
such expenses are directly attributable to the ownership or operation of the
Borrowers and their Subsidiaries; provided, that, unless such expenses are
detailed in the financial statements received by Agent pursuant to Sections 9.7
or 9.8, Agent shall have received, on a quarterly basis, a report detailing such
expenses.

 

7.6.                            Indebtedness.  Create, incur, assume or suffer
to exist any Indebtedness except in respect of (a) the Obligations;
(b) Capitalized Lease Obligations in an aggregate amount at any time outstanding
not to exceed $1,000,000; (c) Permitted Purchase Money Indebtedness in an
aggregate amount at any time outstanding not to exceed $1,000,000;
(d) Indebtedness under any Hedge so long as such Indebtedness (except to the
extent constituting Hedge Liabilities) is unsecured; (e) Indebtedness owing to
any other Credit

 

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Party or Restricted Subsidiary thereof so long as (i) any such Indebtedness
owing to any Restricted Subsidiary that is not a Credit Party is subordinated
pursuant to an agreement reasonably satisfactory to Agent and (ii) any such
Indebtedness owing by a Restricted Subsidiary that is not a Credit Party, shall
be permitted pursuant to Section 7.4(h)(iii); (f) guarantees permitted under
Section 7.3; (g) to the extent not otherwise described in this
Section 7.6, Indebtedness set forth on Schedule 7.6 and any Permitted
Refinancing in respect thereof; (h) Indebtedness in respect of workers’
compensation claims, property, casualty or liability insurance, and
self-insurance obligations, in each case in the ordinary course of business;
(i) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, (j) Indebtedness of the Parent
Guarantor or any Restricted Subsidiary consisting of the financing of insurance
premiums, (k) Indebtedness arising from agreements of the Parent Guarantor or
any Restricted Subsidiaries providing for indemnification, adjustment of
purchase price, earnouts or similar obligations, in each case, incurred or
assumed in connection with a Disposition permitted under Section 7.1(b) or a
Permitted Acquisition and (l) Indebtedness of the Parent Guarantor or any
Restricted Subsidiary in connection with performance bonds, bid bonds, appeal
bonds, bankers acceptances, insurance obligations, workers’ compensation claims,
health or other types of social security benefits, surety bonds, completion
guarantees or other similar bonds and obligations, including self-bonding
arrangements, issued by the Parent Guarantor or a Restricted Subsidiary in the
ordinary course of business or pursuant to self-insurance obligations and in
each case not in connection with the borrowing of money or the obtaining of
advances.

 

7.7.                            Nature of Business.  Engage in any businesses
other than the businesses engaged by the Credit Parties and their Restricted
Subsidiaries on the Closing Date and businesses that are reasonably related or
ancillary thereto or reasonable extensions of such businesses or any other
business or activity in the energy sector that produces “qualifying income” as
such term is defined in Section 7704(d) of the Code.

 

7.8.                            Transactions with Affiliates.  Directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or
lease any property to, make any payment (including payments of management or
consulting fees) to, or enter into any transaction or arrangement with, or
otherwise deal with, any Affiliate, except, in each case to the extent not
otherwise prohibited under this Agreement or any Other Document: 
(a) transactions which are in the ordinary course of business, on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate, (b) transactions among Credit Parties not involving any other
Affiliates, (c) dividends or distributions permitted by Section 7.5,
Indebtedness permitted by Section 7.6 and Investments permitted by
Section 7.4(g), (h), (i), (k), (o)(i) and (w), (d) any issuance of Capital Stock
(other than Disqualified Stock) of the Parent Guarantor; (e) [Reserved],
(f) arrangements with respect to the procurement of services of directors,
officers, independent contractors, consultants or employees in the ordinary
course of business and the payment of customary compensation (including bonuses)
and other benefits (including retirement, health, stock option and other benefit
plans) and reasonable reimbursement arrangements in connection therewith,
(g) the payment of fees, expenses and indemnities to directors, officers,
consultants and employees of the General Partner, the Parent Guarantor and the
Restricted Subsidiaries in the ordinary course of business; (h) the payment of
fees and expenses relating to the Transactions on the Closing Date;
(i) transactions with any Affiliate in its capacity as a holder of Indebtedness
or Capital Stock of the Parent Guarantor; provided that such Affiliate is
treated the same as other such holders of Indebtedness or Capital Stock; and
(j) the issuance by Parent Guarantor of the Preferred Interests.

 

7.9.                            Subsidiaries.  Form or acquire any Restricted
Subsidiary unless (other than with respect to any Inactive Subsidiary) within
ten (10) Business Days (or such longer period as Agent may consent to) after
formation or acquisition, as applicable, (i) if such Restricted Subsidiary is a
Domestic Subsidiary either (A)(1) such Domestic Subsidiary expressly joins in
this Agreement as a “Borrower” and becomes jointly and severally liable for the
Obligations hereunder, under the Notes, and under any other agreement among

 

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any Borrower, Agent or Lenders and (2) becomes a “Guarantor” by executing a
Guaranty and joinders to the applicable Pledge Agreements and Security
Agreements and each applicable Other Document and takes all other actions
necessary or advisable in the opinion of Agent to grant a first priority
perfected Lien in all of its assets to the extent required by the terms of this
Agreement and each applicable Other Document or (B) becomes a “Guarantor” by
executing a Guaranty and joinders to the applicable Pledge Agreements and
Security Agreements and each applicable Other Document and takes all other
actions necessary or advisable in the opinion of Agent to grant a first priority
perfected Lien on all of its assets to the extent required by the terms of this
Agreement and each applicable Other Document, (ii) the Equity Interests of such
Restricted Subsidiary are pledged to Agent to the extent constituting
“Subsidiary Stock” and all certificates representing such Equity Interests,
together with undated stock powers executed in blank, are delivered to Agent and
(iii) in the case of clauses (i) and (ii), Agent shall have received all
documents, including, without limitation, legal opinions and appraisals, it may
reasonably require in connection therewith.  In addition, if any Restricted
Subsidiary that was an Inactive Subsidiary ceases to be an Inactive Subsidiary,
the foregoing requirements shall be complied with respect to such Restricted
Subsidiary within ten Business Days (or such longer period as Agent may consent
to) after such Restricted Subsidiary ceases to be an Inactive Subsidiary.

 

7.10.                     Fiscal Year and Accounting Changes.  Change its fiscal
year from December 31 or make any significant change (i) in financial accounting
treatment and reporting except as required by GAAP or in the application of GAAP
concurred by the Credit Parties’ Accountants, (ii) in Tax accounting method
except as required by Applicable Law.

 

7.11.                     Pledge of Credit.  Now or hereafter pledge Agent’s or
any Lender’s credit on any purchases or for any purpose whatsoever.

 

7.12.                     Amendment of Certain Documents.  Amend, modify or
waive any term or provision of its Organizational Documents (including the
Partnership Agreement) or any Material Contract in a manner material and adverse
to Agent or any Lender (for the avoidance of doubt, unless prior written consent
of Agent is obtained, any amendment, modification or other change in the
Partnership Agreement that would result in an increase in dividends or
distributions payable thereunder is hereby deemed material and adverse to Agent
and the Lenders); provided, however, a Credit Party may amend its Organizational
Documents to change its legal name in compliance with Section 6.13(a).

 

7.13.                     Compliance with ERISA.  (i) (x) Maintain, or permit
any member of the Controlled Group to maintain, or (y) become obligated to
contribute, or permit any member of the Controlled Group to become obligated to
contribute, to any Plan, other than those Plans disclosed on Schedule
5.10(b) for which there could reasonably be material liability, which may be
updated from time to time with the consent of the Agent, which consent shall not
be unreasonably withheld, (ii) engage, or permit any member of the Controlled
Group to engage, in any non-exempt “prohibited transaction”, as that term is
defined in Section 406 of ERISA or Section 4975 of the Code, (iii) terminate, or
permit any member of the Controlled Group to terminate, any Plan where such
event could result in any material liability of any Credit Party or any member
of the Controlled Group or the imposition of a lien on the property of any
Credit Party or any member of the Controlled Group pursuant to Section 4068 of
ERISA, (iv) incur, or permit any member of the Controlled Group to incur, any
material withdrawal liability to any Multiemployer Plan; (v) fail promptly to
notify Agent of the occurrence of any Termination Event, (vi) fail to comply, or
permit a member of the Controlled Group to fail to comply, with the requirements
of ERISA or the Code or other Applicable Laws in respect of any Plan and such
failure to comply could reasonable result in material liability to any Credit
Party or any members of the Controlled Group, (vii) fail to meet, permit any
member of the Controlled Group to fail to meet, or permit any Plan to fail to
meet all minimum funding requirements under ERISA and the Code, without regard
to any waivers or variances, or postpone or delay or allow any member of the
Controlled Group to postpone or delay any funding requirement with respect to
any Plan, or

 

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(viii) cause, or permit any member of the Controlled Group to cause, a
representation or warranty in Section 5.10(b) to cease to be true and correct.

 

7.14.                     Prepayment of Indebtedness and Certain Other
Obligations.  At any time, directly or indirectly, prepay or repurchase, redeem,
retire or otherwise acquire, any Indebtedness permitted under Section 7.6 or any
other Indebtedness that is subordinated to the Obligations in right of payment
or Liens.

 

7.15.                     [Reserved].

 

7.16.                     Bank Accounts.  Establish or otherwise acquire any
deposit accounts or securities accounts, other than Excluded Deposit Accounts,
without first providing to Agent an updated Schedule 5(a) to the Perfection
Certificate and a Deposit Account Control Agreement with respect thereto in form
and substance satisfactory to Agent in its Permitted Discretion.

 

7.17.                     Passive Holding Company.  With respect to Parent
Guarantor, notwithstanding anything herein to the contrary, (a) engage in any
business or activity other than (i) owning the Equity Interests of the
Borrowers, (ii) activities incidental or related thereto or the maintenance of
the existence of Parent Guarantor or compliance with Applicable Law and legal,
tax and accounting matters related thereto and activities relating to the
General Partner and its employees, and (iii) the making and receipt of
Restricted Payments permitted pursuant to Section 7.5, (b) hold any assets other
than the Equity Interests of the Borrowers, (c) have any material liabilities
other than (i) Indebtedness and Guarantees of such Indebtedness under this
Agreement and the Other Documents, (ii) tax liabilities in the ordinary course
of business, (iii) state and federal securities and tax filings, (iv) guarantees
of Indebtedness permitted by Section 7.3, (v) obligations with respect to its
Equity Interests and (vi) non-consensual obligations imposed by operation of
law.

 

VIII.                     CONDITIONS PRECEDENT.

 

8.1.                            Conditions to Initial Advances.  The
effectiveness of this Agreement and the occurrence of the Closing Date is
subject to the satisfaction, or waiver by Agent of the following conditions
precedent, which satisfaction or waiver shall, in the case of any Advance made
on the Closing Date, be immediately prior to or concurrently with the making of
such Advances on the Closing Date, subject to Schedule 6.11 hereof:

 

(a)                                 Documents. Agent shall have received, in
form and substance reasonably satisfactory to the Agent, copies of (i) this
Agreement and (ii) the Notes, if requested, each duly executed and delivered by
an Authorized Officer of each Credit Party party thereto, with the original
Notes to be delivered to the applicable Lender within two (2) Business Days of
the Closing Date;

 

(b)                                 Filings, Registrations and Recordings.  Each
document (including any Uniform Commercial Code financing statements and PPSA
registrations) required by this Agreement, any Security Document, any related
agreement or under law or reasonably requested by Agent to be filed, registered
or recorded in order to create, in favor of Agent, a perfected security interest
in or lien upon the Collateral (except as provided in Section 4.2) shall have
been, or substantially simultaneously with the making of the Advances on the
Closing Date will be, properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received (i) an acknowledgment copy,
or other evidence satisfactory to it, of each such filing, registration or
recordation, (ii) satisfactory evidence of the payment of any necessary fee, Tax
or expense relating thereto and (iii) satisfactory evidence

 

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that no Liens other than Permitted Encumbrances will exist with respect to the
Collateral after giving effect to the Advances made on the Closing Date;

 

(c)                                  Other Documents.  Agent shall have
received, each duly executed by each Credit Party party thereto and in form and
substance satisfactory to Agent, (i) the Perfection Certificates, (ii) Mortgages
with respect to the locations listed on Schedules 11(a) and (b) to the
Perfection Certificate, (iii) the Environmental Indemnity Agreements, (iv) the
Guaranty, (v) the Pledge Agreement, (vi) the Fee Letter and (vii) the Other
Documents and Security Documents contemplated to be delivered as of the Closing
Date, subject to any express exclusion or limitations in this Agreement or any
Other Document, together with all certificates, agreements or instruments
necessary to perfect the Agent’s security interest under this Agreement or any
other Security Document in all Investment Property, Tangible Chattel Paper and
Instruments of each Credit Party, together with duly executed instruments of
transfer or assignment in blank in form and substance reasonably satisfactory to
the Agent;

 

(d)                                 Title Insurance.  Agent shall have received
fully paid mortgagee title insurance policies (or binding commitments to issue
title insurance policies, marked to Agent’s satisfaction to evidence the form of
such policies to be delivered with respect to the Mortgages), in standard ALTA
form (or other form reasonably satisfactory to Agent), issued by a title
insurance company reasonably satisfactory to Agent, each in an amount equal to
not less than the Fair Market Value of the Real Property subject to the
Mortgages, insuring that each Mortgage creates a valid Lien on the Real Property
described therein with no exceptions which Agent shall not have approved in
writing and no survey exceptions;

 

(e)                                  Closing Date Refinancing.  The Closing Date
Refinancing shall have been or, substantially concurrently with the
effectiveness of this Agreement hereunder shall be, consummated.

 

(f)                                   Financial Condition Certificate.  Agent
shall have received an executed certificate in the form of Exhibit 8.1(f) (the
“Financial Condition Certificate”);

 

(g)                                  Closing Certificate.  Agent shall have
received a closing certificate signed by an Authorized Officer of each Credit
Party dated as of the Closing Date stating that each of the conditions specified
in this Section 8.1 and Section 8.2 have been satisfied, including specific
certifications that (i) each of the representations and warranties made by any
Credit Party in or pursuant to this Agreement or the Other Documents are true
and correct in all material respects (or, if such representation and warranty
is, by its terms, limited by materiality (including a Material Adverse Effect),
then such representation and warranty shall be true in all respects) on and as
of such date as if made on and as of such date (except to the extent any such
representation or warranty specifically relates to a certain prior date), and
(ii) on such date no Default or Event of Default has occurred or is continuing;

 

(h)                                 Bank Accounts.  Agent shall have received
duly executed Deposit Account Control Agreements with respect to all Collection
Accounts and other deposit accounts and securities accounts as required under
Section 4.14(g);

 

(i)                                     Proceedings of Credit Parties.  Agent
shall have received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, of the board of directors, management committee, managing
member, manager or general partner, as applicable, of each Credit Party
authorizing (as applicable) (i) the execution, delivery and performance of this
Agreement, the Notes, the Guaranty, the Pledge Agreements, the Security
Agreements and any Other Documents

 

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contemplated to be delivered on the Closing Date (collectively, the “Documents”)
and (ii) the granting by each Credit Party of the security interests in and
liens upon the Collateral in each case certified by an Authorized Officer of
each Credit Party as of the Closing Date; and, such certificate shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;

 

(j)                                    Incumbency Certificates of Credit
Parties.  Agent shall have received a certificate of an Authorized Officer of
each Credit Party, dated the Closing Date, as to the incumbency and signature of
the officers of each Credit Party, as applicable, executing the Documents, any
certificate or other documents to be delivered by it pursuant hereto, together
with evidence of the incumbency of such Authorized Officer;

 

(k)                                 Organizational Documents.  Agent shall have
received a copy of (i) the Organizational Documents of each Credit Party as in
effect on the Closing Date certified by the Secretary of State or other
appropriate official of its jurisdiction of incorporation or formation, as
applicable and (ii) all agreements of each Credit Party’s shareholders or
members, as applicable, and, in each case, certified by an Authorized Officer of
such Credit Party as accurate and complete and having not been amended,
modified, revoked or rescinded as of the Closing Date;

 

(l)                                     Good Standing Certificates.  Agent shall
have received good standing certificates for each Credit Party dated as of a
recent date and in any event not more than five (5) days prior to the Closing
Date, issued by the Secretary of State or other appropriate official of each
Credit Party’s jurisdiction of incorporation or formation and each jurisdiction
where the conduct of each Credit Party’s business activities or the ownership of
its properties necessitates qualification;

 

(m)                             Legal Opinion.  Agent shall have received the
executed legal opinions, each in form and substance satisfactory to Agent and
addressed to Agent and each Lender, of Latham & Watkins, LLP, which shall cover
such matters incident to the transactions contemplated by the Documents as Agent
may reasonably require, and the Credit Parties hereby authorize and direct such
counsel to deliver such opinions to Agent and Lenders;

 

(n)                                 No Litigation.  (i) Other than in connection
with the Cases, no litigation, investigation, arbitration, action or proceeding
shall be continuing, or to the knowledge of the Credit Parties, threatened
against any Credit Party or against the officers or directors of any Credit
Party which would reasonably be expected to (x) have a Material Adverse Effect,
(y) materially and adversely affect such Credit Party’s ability to conduct its
business as currently conducted or, (z) other than as set forth on Schedule 5.9,
result in a material liability to such Credit Party; and (ii) no injunction,
writ, restraining order or other order of any nature materially adverse to the
Credit Parties as a whole or the conduct of their business or inconsistent with
the due consummation of the Transactions shall have been issued by any
Governmental Body;

 

(o)                                 Fees and Expenses.  Agent shall have
received all reasonable and documented out-of-pocket fees and expenses payable
to Agent and Lenders, including those set forth in the Fee Letter, on or prior
to the Closing Date hereunder, including pursuant to Article III hereof;

 

(p)                                 Insurance.  Agent shall have received in
form and substance reasonably satisfactory to Agent, certificates evidencing the
Credit Parties’ property, casualty and liability insurance policies and any
certificates evidencing flood insurance coverage, together with additional
insured and lender loss payee endorsements for each of the foregoing
certificates;

 

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(q)                                 Payment Instructions.  Agent shall have
received written instructions from Borrowing Agent directing the application of
proceeds of the Advances made on the Closing Date pursuant to this Agreement;

 

(r)                                    Consents.  Agent shall have received any
and all Consents necessary to permit the effectuation of the Transactions;

 

(s)                                   Know Your Customer.  Agent shall have
received such documentation and information, including but not limited to each
Borrowers’ IRS Form W-9 (or such other applicable tax form), as is reasonably
requested in writing at least five days prior to the Closing Date by the Agent
about the Credit Parties to the extent the Agent and Parent Guarantor in good
faith mutually agree is required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including,
without limitation, the USA PATRIOT Act;

 

(t)                                    Payoff Letters and Termination Documents.
Agent shall have received duly executed payoff letters (if applicable) and
applicable lien termination documents with respect to the DIP Credit Agreement
and the Pre-Petition Credit Agreements;

 

(u)                                 Financial Projections.  Agent shall have
received the Financial Projections;

 

(v)                                 Preferred Interests.  On or before the
Closing Date, Parent Guarantor shall have issued the Preferred Interests in
accordance with the terms of the Restructuring Support Agreement and the
documents contemplated thereby;

 

(w)                               Confirmation Order.  The Bankruptcy Court
shall have entered the Confirmation Order which shall (i) approve, among other
things, the Transactions, (ii) be in form and substance reasonably acceptable to
the Agent and the Required Lenders and consistent in all respects with the
Restructuring Support Agreement, (iii) not be subject to any stay or be
reversed, vacated, amended or otherwise modified in any respect and (iv) all
covenants and conditions of the Plan of reorganization (other than the
effectiveness of this Agreement) shall have been satisfied or waived in
accordance with the terms thereof;

 

(x)                                 Restructuring Support Agreement.  The
Restructuring Support Agreement shall not have been terminated and remains in
full force and effect; and

 

(y)                                 Other.  All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
Transactions shall be satisfactory in form and substance to Agent and its
counsel in the exercise of its Permitted Discretion.

 

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

 

(a)                                 Representations and Warranties.  Each of the
representations and warranties made by any Credit Party in or pursuant to this
Agreement or the Other Documents shall be true and correct in all material
respects (or, if such representation and warranty is, by its terms, limited by
materiality (including a Material Adverse Effect), then such representation and
warranty shall be true in all respects) on and as of such date as if made on and
as of such date (except to the extent any such representation or warranty
specifically relates to a certain prior date, in which case such representation
or warranty shall be true and correct in all material respects (or in all
respects, if applicable) as of such earlier date);

 

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

 

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

 

(d)                                 Revolving Facility Usage.  After giving
effect to such Advance, the Revolving Facility Usage shall not exceed the Line
Cap (other than as a result of a Protective Advance);

 

(e)                                  Financial Covenants.  After giving effect
to such Advance, the Credit Parties shall be in compliance on a Pro Forma Basis
with the financial covenants set forth in Section 6.5; and

 

(f)                                   Notice of Borrowing.  The applicable
Borrower (or the Borrowing Agent on such Borrower’s behalf) shall have delivered
a Borrowing Notice in accordance with Section 2.2 hereof.

 

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

 

IX.                               INFORMATION AS TO CREDIT PARTIES.

 

Each Credit Party shall, or (except with respect to Section 9.9) shall cause
Borrowing Agent on its behalf to, until the Termination Date:

 

9.1.                            Disclosure of Material Matters.  Promptly,
following an Authorized Officer of any Borrower obtaining knowledge, report to
Agent all matters materially affecting the value, enforceability or
collectability of any portion of the Collateral, including any Borrower’s
reclamation or repossession of, or the return to any Borrower of, a material
amount of goods or material claims or disputes asserted by any Customer or other
obligor.

 

9.2.                            Borrowing Base Certificate; Schedules.  Deliver
to Agent:

 

(a)                                 (x) On the day that is 180 days after the
Closing Date (or such later date as is acceptable to the Agent in its sole
discretion) and (y) thereafter, on or before the twentieth (20th) day of each
calendar month, in each case, as and for the prior month:  (i) accounts
receivable ageings inclusive of reconciliations to the general ledger, (ii) an
account rollforward with supporting detail, (iii) accounts payable schedules
inclusive of reconciliations to the general ledger in electronic format,
(iv) detailed Inventory perpetual in electronic format, (v) a Borrowing Base
Certificate in form and substance satisfactory to Agent (which shall be
calculated as of (1) the day that is 180 days after the Closing Date or (2) the
last day of the prior month (or week, as applicable), as applicable, and which
shall not be binding upon Agent or restrictive of Agent’s rights under this
Agreement) (such Borrowing Base Certificate delivered pursuant to (x) above, the
“Initial Borrowing Base Certificate”) and (vi) a cash collection report;
provided that, (x) Borrowers may elect to deliver a Borrowing Base Certificate
weekly, in which case a Borrowing Base Certificate shall thereafter be delivered
weekly for a period of no less than eight (8) consecutive weeks and
(y) Borrowers shall deliver a Borrowing Base Certificate to Agent upon any
non-ordinary course disposition or acquisition of Receivables or Inventory;

 

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(b)                                 at such intervals as Agent may require in
its Permitted Discretion:  (i) confirmatory assignment schedules, (ii) copies of
Customer’s invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may require including trial balances and test verifications; and

 

(c)                                  promptly upon Agent’s request therefor
(i) all new Material Contracts, (ii) notice of termination of any Material
Contract, (iii) copies of any customer agreements, sand processing or transport
agreements or fuel transport agreements and (iv) to the extent not otherwise
covered by information delivered by Borrowers to Agent, a report of all
modified, developed or newly acquired material Intellectual Property.

 

Agent shall have the right to confirm and verify all Receivables (provided,
that, so long as no Event of Default has occurred and is continuing, Agent shall
only conduct verifications of Receivables over the phone with participation from
Borrowers or with Borrowers being present).  The items to be provided under this
Section 9.2 are to be in form reasonably satisfactory to Agent and executed by
Borrowers and delivered to Agent from time to time solely for Agent’s
convenience in maintaining records of the Collateral, and Borrowers’ failure to
deliver any of such items to Agent shall not affect, terminate, modify or
otherwise limit Agent’s Lien with respect to the Collateral.

 

9.3.                            Compliance Certificate.  Furnish Agent,
concurrently with the delivery of the financial statements referred to in
Sections 9.7 and 9.8(a), with a Compliance Certificate.

 

9.4.                            Litigation.  Promptly, following an Authorized
Officer of any Borrower obtaining knowledge, notify Agent in writing of any
claim, litigation, suit or administrative proceeding affecting any Credit Party,
whether or not the claim is covered by insurance, and of any litigation, suit or
administrative proceeding, which in any such case affects the Collateral or
which could reasonably be expected to have a Material Adverse Effect, result in
an Event of Default, result in material liability to such Credit Party or
materially and adversely affect such Credit Party’s ability to conduct its
business as currently conducted.

 

9.5.                            Material Occurrences.  Promptly, following an
Authorized Officer of any Borrower obtaining knowledge, notify Agent in writing
upon the occurrence of (a) any Event of Default or Default; (b) any event,
development or circumstance whereby any financial statements or other reports
furnished to Agent fail in any material respect to present fairly, in accordance
with GAAP consistently applied, the financial condition or operating results of
Parent Guarantor and its Subsidiaries as of the date of such statements; (c) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Code, could subject any Credit Party to a Tax imposed by Section 4971 of
the Code; (d) a breach by a Credit Party of any Material Contract; and (e) any
other development in the business or affairs of any Credit Party, which could
reasonably be expected to have a Material Adverse Effect; in each case
describing the nature thereof and the action such Credit Party proposes to take
with respect thereto.

 

9.6.                            Government Receivables.  Identify in each
Borrowing Base Certificate delivered pursuant to Section 9.2 hereof, any
Receivables arising from contracts between any Borrower and the United States,
any state, or any department, agency or instrumentality of any of them under
which the aggregate amount payable is more than $10,000,000.

 

9.7.                            Annual Financial Statements.  Furnish Agent (for
distribution to the Lenders) (i) within one hundred twenty (120) days after the
end of the fiscal year of Parent Guarantor for the fiscal year ending
December 31, 2019 and (ii) within ninety (90) days after the end of each fiscal
year of Parent Guarantor for each subsequent fiscal year thereafter, audited
consolidated and unaudited consolidating financial statements of Parent
Guarantor and its Subsidiaries including, but not limited to, statements of
income and

 

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stockholders’ equity and cash flow from the beginning of the current fiscal year
to the end of such fiscal year and the balance sheet as at the end of such
fiscal year, all prepared in accordance with GAAP applied on a basis consistent
with prior practices, and in reasonable detail and accompanied by a report and
opinion (which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern” or
like assumption, qualification or exception as to the scope of the audit) of the
Accountants.

 

9.8.                            Quarterly and Monthly Reporting.

 

(a)                                 Furnish Agent (for distribution to the
Lenders) (i) for the fiscal quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019 and the fiscal quarter ending December 31, 2019, as soon as
available and in any event on or prior to April 30, 2020, (ii) for each fiscal
quarter of the fiscal year ending December 31, 2020, within sixty (60) days
after the end of each such fiscal quarter and (iii) for each fiscal quarter
thereafter, within forty-five (45) days after the end of each such fiscal
quarter of each fiscal year, in each case, an unaudited balance sheet of Parent
Guarantor and its Subsidiaries on a consolidated and consolidating basis and
unaudited statements of income and stockholders’ equity and cash flow of Parent
Guarantor and its Subsidiaries on a consolidated and consolidating basis
reflecting results of operations from the beginning of the fiscal year to the
end of such quarter and for such quarter, and a comparison against the balance
sheet and the statements of income for (i) the period from the beginning of
prior fiscal year to the end of the equivalent quarter in such prior fiscal year
and for such equivalent quarter in the prior fiscal year, and (ii) for
statements of income only, the equivalent quarter in the Financial Projections,
in each case, prepared internally on a basis consistent with prior practices and
complete and correct in all material respects, subject to normal and recurring
year-end adjustments that are disclosed to Agent and the Lenders if, in the
aggregate, they are material to Borrowers’ business.

 

(b)                                 Furnish Agent (for distribution to the
Lenders) within 30 days after the end of each of the first two months of each
fiscal quarter, commencing with the month ending November 30, 2019, an unaudited
balance sheet of Parent Guarantor and its Subsidiaries on a consolidated and
consolidating basis and unaudited statements of income and stockholders’ equity
and cash flow of Parent Guarantor and its Subsidiaries on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such month and for such month, and a comparison
against the balance sheet and the statements of income for the period from the
beginning of prior fiscal year to the end of the equivalent month in such prior
fiscal year and for such equivalent month in the prior fiscal year, in each
case, prepared internally on a basis consistent with prior practices and
complete and correct in all material respects, subject to normal and recurring
year-end adjustments that are disclosed to Agent and the Lenders if, in the
aggregate, they are material to Borrowers’ business.

 

(c)                                  Furnish Agent (for distribution to the
Lenders) for the fiscal quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019, in each case, on or prior to April 30, 2020 (or such later
date as is acceptable to the Agent in its sole discretion), Form 10-Q for such
fiscal quarter filed by the Parent Guarantor with the SEC.

 

9.9.                            Additional Information.  Furnish Agent promptly
upon an Authorized Officer of any Credit Party’s obtaining knowledge thereof,
notice of any material labor dispute to which such Credit Party may become a
party, any strikes or walkouts relating to any of its plants or other
facilities, and the expiration of any material labor contract to which any
Credit Party is a party or by which any Credit Party is bound.

 

9.10.                     Projected Operating Budget.  Furnish Agent, no later
than thirty (30) days after the end of Parent Guarantor’s fiscal year commencing
with the fiscal year ending December 31, 2019, a month by

 

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month projected operating budget and cash flow of Parent Guarantor and its
Subsidiaries on a consolidated and consolidating basis for the forthcoming
fiscal year (including an income statement for each month and a balance sheet as
at the end of the last month in each fiscal quarter), such projections to be
accompanied by a certificate signed by an Authorized Officer of Parent Guarantor
to the effect that such projections have been prepared based upon good faith
estimates and stated assumptions believed to be reasonable and fair as of the
date made in light of conditions and facts then known and, as of such date,
reflect good faith, reasonable and fair estimates of the information projected
for the periods set forth therein; it being understood that (i) actual results
may vary from such projections and that such variances may be material and
(ii) no representation is made with respect to information of an industry
specific or general economic nature.

 

9.11.                     [Reserved].

 

9.12.                     Notice of Suits, Adverse Events.  Furnish Agent
written notice, within 5 Business Days of (i) an Authorized Officer of any
Credit Party having knowledge thereof, any lapse or other termination of any
material Consent issued to any Credit Party by any Governmental Body or any
other Person that is material to the operation of such Credit Party’s business,
(ii) an Authorized Officer of any Credit Party having knowledge thereof, any
refusal by any Governmental Body or any other Person to renew or extend any such
material Consent; and (iii) filing by any Credit Party with any Governmental
Body or Person, copies of any material periodic or special reports, if such
reports indicate the occurrence of a Material Adverse Effect and (iv) an
Authorized Officer of any Credit Party having knowledge thereof, copies of any
notices and other communications from any Governmental Body or Person which
specifically relate to any Credit Party and are material and adverse to a Credit
Party.

 

9.13.                     ERISA Notices and Requests.  Furnish Agent with
immediate written notice in the event that (i) any Credit Party or any member of
the Controlled Group knows or has reason to know that a Termination Event has
occurred, together with a written statement describing such Termination Event
and the action, if any, which such Credit Party or any member of the Controlled
Group has taken, is taking, or proposes to take with respect thereto and, when
known, any action taken or threatened by the IRS, Department of Labor or PBGC
with respect thereto, (ii) any Credit Party or any member of the Controlled
Group knows or has reason to know that a prohibited transaction (as defined in
Section 406 of ERISA or 4975 of the Code) has occurred that is reasonably likely
to result in a material liability to any Credit Party together with a written
statement describing such transaction and the action which such Credit Party or
any member of the Controlled Group has taken, is taking or proposes to take with
respect thereto, (iii) a funding waiver request has been filed with respect to
any Plan together with all communications received by any Credit Party or any
member of the Controlled Group with respect to such request, (iv) any material
increase in the benefits of any existing Plan or the establishment of any new
Plan or the commencement of contributions to any Plan to which any Credit Party
or any member of the Controlled Group was not previously contributing, and for
which it is reasonably likely that any Credit Party may have any material
liability, shall occur, (v) any Credit Party or any member of the Controlled
Group shall receive from the PBGC a notice of intention to terminate a Plan or
to have a trustee appointed to administer a Plan, together with copies of each
such notice, (vi) any Credit Party or any member of the Controlled Group shall
receive any unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code pursuant to which any
Credit Party has material liability, together with copies of each such letter;
(vii) any Credit Party or any member of the Controlled Group shall receive a
notice regarding the imposition of withdrawal liability, together with copies of
each such notice; (viii) any Credit Party or any member of the Controlled Group
shall fail to make a required installment or any other required payment under
the Code or ERISA on or before the due date for such installment or payment; or
(ix) any Credit Party or any member of the Controlled Group knows that (A) a
Multiemployer Plan has been terminated, (B) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, (C) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a

 

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Multiemployer Plan or (D) a Multiemployer Plan is subject to Section 432 of the
Code or Section 305 of ERISA.

 

9.14.                     Notice of Leases.  Furnish Agent, within 15 Business
Days of the effectiveness thereof, copies of any new lease for real property or
other occupancy agreement upon which any Inventory or Sand Reserves intended to
be part of the Formula Amount is to be located or any material books and records
of a Borrower are to be located.

 

9.15.                     [Reserved].

 

9.16.                     Reserve Reports.  Furnish Agent (i) prior to, but no
earlier than 30 days prior to, delivery of the Initial Borrowing Base
Certificate and (ii) thereafter, as soon as available and in any event by
April 30 of each fiscal year, beginning April 30, 2021 (or, in each case, such
later date as is acceptable to the Agent in its sole discretion), a discounted
cash flow appraisal of the Borrowers’ mining locations by a third party
appraiser acceptable to the Agent in its sole discretion, in form, scope and
methodology acceptable to the Agent in its sole discretion (each such appraisal,
a “Sand Reserve Appraisal”).

 

9.17.                     SEC Filings.  Promptly after the same are publicly
available, copies of all annual, regular, periodic and special reports, proxy
statements and registration statements which Parent Guarantor, any Borrower or
any Subsidiary files with the SEC or with any national securities exchange, as
the case may be (other than amendments to any registration statement (to the
extent such registration statement, in the form it became effective, is
delivered to the Agent), exhibits to any registration statement and, if
applicable, any registration statement on Form S-8), and in any case not
otherwise required to be delivered to the Agent pursuant to any other Section of
this Article IX.

 

9.18.                     Additional Documents.  Execute and deliver to Agent,
upon request, such documents and agreements as Agent may, from time to time,
reasonably request (including, documents relating to the Collateral) to carry
out the purposes, terms or conditions of this Agreement but excluding any month
end presentation prepared by the Borrowers.

 

X.                                    EVENTS OF DEFAULT.

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default”:

 

10.1.                     Nonpayment.

 

(a)                                 Failure by any Borrower to pay when due any
principal on the Obligations (including without limitation (i) any Prepayment
Premium and (ii) pursuant to Section 2.8) other than Cash Management Liabilities
or Hedge Liabilities on the date due;

 

(b)                                 Failure by any Borrower to pay when due any
interest on the Obligations (including without limitation pursuant to
Section 2.8) other than Cash Management Liabilities or Hedge Liabilities within
three (3) Business Days after such interest becomes due; and

 

(c)                                  Failure by any Borrower to pay when due any
other fee, charge, amount or liability (other than Cash Management Liabilities
or Hedge Liabilities) provided for herein (specifically excluding principal and
interest which are addressed in subparagraphs (a) and (b) above) or in any Other
Document, within the time period specified herein or therein and, if no time
period is specified, then within three (3) Business Days after a demand or
notice has been provided to the Borrowing Agent requesting payment of such
amount;

 

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10.2.                     Breach of Representation.  Any representation or
warranty made or deemed made by any Credit Party in this Agreement, any Other
Document or any related agreement or any certificate, document or financial or
other statement furnished at any time in connection herewith or therewith shall
prove to have been misleading in any material respect on the date when made or
deemed to have been made;

 

10.3.                     Financial Information.  Failure by any Borrower to
(i) furnish financial, collateral or other information when due under Article IX
hereof, or if no due date is specified herein, within five (5) days after
requested by Agent or (ii) permit the inspection of its books or records in
accordance with this Agreement;

 

10.4.                     Judicial Actions.  Issuance of any Lien, levy,
assessment, injunction or attachment against any Credit Party’s Inventory or
Receivables with an aggregate value in excess of $2,500,000 (for all such
Inventory or Receivables) or against a material portion of any Credit Party’s
other property that is not a Permitted Encumbrance which is not stayed or lifted
within sixty (60) days;

 

10.5.                     Noncompliance.  Except as otherwise provided for in
Sections 10.1, 10.3, 10.9, 10.12 or 10.17:  (i) except as set forth in
Section 10.5(iii) below, failure or neglect of any Credit Party to perform, keep
or observe any term, provision, condition, covenant contained in Article IV,
Article VI or Article VII of this Agreement, (ii) failure or neglect of any
Credit Party to perform, keep or observe any term, provision, condition,
covenant contained in any Other Document (other than this Agreement) which is
not cured within five (5) days from the earlier of (A) receipt by Borrowing
Agent of written notice from Agent or the Lenders of such failure or neglect and
(B) the time at which an Authorized Officer had knowledge of such failure or
neglect, or (iii) failure or neglect of (A) any Credit Party to perform, keep or
observe any term, provision, condition or covenant, contained in Sections 4.5,
4.6, 4.7, 4.8, 4.13, 4.14(c), 4.18, 6.3, 6.4, 6.10, 6.11 or 7.9 hereof or
(B) any other term, provision, condition or covenant of this Agreement to the
extent not addressed in clause (i) hereof, in each case, which is not cured
within five (5) days from the earlier of (X) receipt by Borrowing Agent of
written notice from Agent or the Lenders of such failure or neglect and (Y) the
time at which an Authorized Officer had knowledge of such failure or neglect;

 

10.6.                     Judgments.  Any judgment or judgments are rendered
against any Credit Party for an aggregate amount in excess of $2,500,000 (for
all such judgments), in each case to the extent not fully covered by a third
party insurer and (i) enforcement proceedings shall have been commenced by a
creditor upon such judgment, (ii) there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, shall not be in effect, or (iii) any such
judgment results in the creation of a Lien upon any of the Collateral (other
than a Permitted Encumbrance);

 

10.7.                     Bankruptcy.  Any Credit Party shall (i) apply for,
consent to or suffer the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (ii) make a general assignment for
the benefit of creditors, (iii) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing;

 

10.8.                     Inability to Pay.  Any Credit Party shall admit in
writing its inability, or be generally unable, to pay its debts as they become
due or cease operations of its present business;

 

10.9.                     Cash Management Liabilities and Hedge Liabilities. 
Any default or event of default under any documents or agreements governing Cash
Management Products and Services or Lender-Provided

 

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Hedges which results in monetary liability to any Credit Party (or Credit
Parties) in excess of $5,000,000 in the aggregate;

 

10.10.              Lien Priority.  Any Lien on assets in excess of $10,000,000
in the aggregate created hereunder or any Other Document or provided for hereby
or under any Other Document for any reason ceases to be or is not a valid and
perfected first priority Lien in favor of the Agent for the benefit of the
Secured Parties (subject to only to Permitted Encumbrances);

 

10.11.              Cross Default.  Any “event of default” under any
Indebtedness (other than the Obligations) of any Credit Party with a
then-outstanding principal balance (or, in the case of any Indebtedness not so
denominated, with a then-outstanding total obligation amount) of $1,000,000 or
more (in the aggregate for all such Indebtedness as to which an event or
circumstance under this Section 10.11 has occurred), or any other event or
circumstance which would permit the holder of any such Indebtedness to
accelerate such Indebtedness (and/or the obligations of any Credit Party
thereunder) prior to the scheduled maturity or termination thereof, shall occur
(regardless of whether the holder of such Indebtedness shall actually
accelerate, terminate or otherwise exercise any rights or remedies with respect
to such Indebtedness);

 

10.12.              Breach of Guaranty, Security Agreement or Pledge Agreement. 
(i) Termination of any Guaranty, Security Agreement, Pledge Agreement or similar
agreement executed and delivered to Agent in connection with the Obligations of
any Borrower, or if any Credit Party attempts to terminate, challenges in
writing the validity of, or its liability under, any such Guaranty, Security
Agreement, Pledge Agreement or similar agreement, or (ii) if any breach of the
terms of any such agreement occurs (other than termination in clause (i) above
or termination in accordance with its terms), which, in the cause of this clause
(ii) is not remedied within twenty (20) days after the occurrence thereof;

 

10.13.              Change of Control.  Any Change of Control shall occur;

 

10.14.              Invalidity.  Any material provision of this Agreement or any
Other Document shall, for any reason, cease to be valid and binding on any
Credit Party or any Credit Party shall so claim in writing to Agent or any
Lender;

 

10.15.              Licenses.  Any Governmental Body shall revoke, terminate,
suspend or adversely modify any material license, permit, patent, trademark or
tradename of any Credit Party or Restricted Subsidiary that is material to a
Borrower’s business and such revocation, termination, suspension or modification
would reasonably be expected to have a Material Adverse Effect or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted;

 

10.16.              Pension Plans.  An event or condition specified in
Section 7.13 or Section 9.13 hereof shall occur or exist with respect to any
Plan and, as a result of such event or condition, together with all other such
events or conditions, any Borrower or any member of the Controlled Group shall
incur liability (including liability of any Borrower in its capacity as a member
of a Controlled Group) to a Plan or the PBGC (or both) which, in the reasonable
judgment of Agent, would have a Material Adverse Effect or result in material
liability to any Credit Party;

 

10.17.              Reportable Compliance Event.  The occurrence of any
Reportable Compliance Event, or any Credit Party’s failure to immediately report
a Reportable Compliance Event in accordance with Section 16.18 hereof; or

 

10.18.              SEC.  The failure of the Parent Guarantor to maintain its
current registration and reporting status with the Securities and Exchange
Commission, including formal enforcement action by the Securities

 

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and Exchange Commission against the Parent Guarantor or any of its subsidiaries
which would materially impact the Parent Guarantors’ ability to maintain its
current registration and reporting status.

 

XI.                               LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

 

11.1.                     Rights and Remedies.

 

(a)                                 Upon the occurrence of:  (i) an Event of
Default pursuant to Section 10.7 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated, and all principal of and any accrued interest in respect
of all Advances and all other Obligations (including, without limitation, any
Prepayment Premium applicable in accordance with Section 2.15) owing hereunder
and thereunder shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrowers; and, (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured), at the option of
Required Lenders all Obligations shall be immediately due and payable and
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances, and all principal of and any accrued
interest in respect of all Advances and all other Obligations (including,
without limitation, any Prepayment Premium applicable in accordance with
Section 2.15) owing hereunder and thereunder shall be immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers; and (iii) a filing of a petition
against any Borrower in any involuntary case under any state or federal
bankruptcy laws, all Obligations shall be immediately due and payable and the
obligation of Lenders to make Advances hereunder shall be terminated other than
as may be required by an appropriate order of the bankruptcy court having
jurisdiction over such Borrower.  Upon the occurrence and during the
continuation of any Event of Default, subject to Applicable Law, Agent shall
have the right to exercise any and all rights and remedies provided for herein,
under the Other Documents, under the Uniform Commercial Code, the PPSA and other
Applicable Law and at law or equity generally, including the right to foreclose
the security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of
the Collateral with or without judicial process. Upon the occurrence and during
the continuation of any Event of Default, subject to Applicable Law, and upon
the written request of the Agent, each Credit Party will use its commercially
reasonable efforts to obtain all consents and approvals necessary or appropriate
for the assignment to or for the benefit of the Agent of any license
constituting Collateral that is held by such Credit Party to enable the Agent to
enforce the security interests granted hereunder.  To the extent required
pursuant to any license constituting Collateral pursuant to which a Credit Party
is the licensee, each Credit Party party to such license shall deliver to the
licensor thereunder any notice of the grant of security interest hereunder or
such other notices required to be delivered thereunder in order to permit the
security interest created or permitted to be created hereunder pursuant to the
terms of such license. For the purpose of enabling the Agent to exercise the
rights and remedies under this Section upon the occurrence and during the
continuance of an Event of Default and at such time as the Agent shall be
lawfully entitled to exercise such rights and remedies, each Credit Party hereby
grants to the Agent a power of attorney to sign any document which may be
required by the United States Patent and Trademark Office, the United States
Copyright Office or any relevant registrar in any applicable foreign
jurisdiction in order to effect an absolute assignment of all right, title and
interest in each item of Intellectual Property and each application for such
registration, in each case, constituting Collateral, and record the same.  If an
Event of Default shall occur and be continuing, the Agent may (i) declare the
entire right, title and interest of such Credit Party in and to each item of
Intellectual Property constituting Collateral vested in the Agent for the
benefit of the Secured Parties, in which event such rights, title and interest
shall immediately vest, in the Agent for the benefit of the Secured Parties, and
the

 

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Agent shall be entitled to exercise the power of attorney referred to in this
Section to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency or registrar; (ii) sell any
Credit Party’s Inventory constituting Collateral directly to any Person,
including without limitation Persons who have previously purchased any Credit
Party’s Inventory from such Credit Party and in connection with any such sale or
other enforcement of the Agent’s rights under this Agreement, may (subject to
any restrictions contained in applicable third party licenses entered into by a
Credit Party) sell Inventory constituting Collateral which bears any trademark
owned by or licensed to any Credit Party and the Agent may finish any work in
process and affix any relevant trademark owned by or licensed to any Credit
Party and constituting Collateral and sell such Inventory as provided herein;
(iii) direct such Credit Party to refrain, in which event such Credit Party
shall refrain, from using any item of Intellectual Property constituting
Collateral in any manner whatsoever, directly or indirectly; and (iv) assign or
sell each item of Intellectual Property constituting Collateral, as well as the
goodwill of such Borrower’s business symbolized by the trademarks and the right
to carry on the business and use the assets of such Credit Party in connection
with which the trademarks or domain names have been used, in each case, to the
extent such trademarks, domain names and other assets constitute Collateral.
Agent may enter any of any Credit Party’s premises or other premises without
legal process and without incurring liability to any Credit Party therefor, and
Agent may thereupon, or at any time thereafter, in its discretion without notice
or demand, take the Collateral and remove the same to such place as Agent may
deem advisable and Agent may require Credit Parties to make the Collateral
available to Agent at a convenient place.  With or without having the Collateral
at the time or place of sale, Agent may sell the Collateral, or any part
thereof, at public or private sale, at any time or place, in one or more sales,
at such price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect.  Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Agent shall give Credit Parties reasonable
notification of such sale or sales, it being agreed that in all events written
notice mailed to Borrowing Agent at least ten (10) days prior to such sale or
sales is reasonable notification.  At any public sale Agent or any Lender may
bid for and become the purchaser, and Agent, any Lender or any other purchaser
at any such sale thereafter shall hold the Collateral sold absolutely free from
any claim or right of whatsoever kind, including any equity of redemption and
all such claims, rights and equities are hereby expressly waived and released by
each Credit Party.  In connection with the exercise of the foregoing remedies,
including the sale of Inventory, Agent is granted a nonrevocable, royalty free,
nonexclusive license and Agent is granted permission to use all of each Credit
Party’s Equipment for the purpose of completing the manufacture of unfinished
goods and, in each case, the Credit Parties shall assist Agent in obtaining
access and the rights to use, at no cost or expense to Agent, such Equipment. 
The cash proceeds realized from the sale of any Collateral shall be applied to
the Obligations in the order set forth in Section 11.5 hereof unless required
otherwise by Applicable Law.  Noncash proceeds will only be applied to the
Obligations as they are converted into cash.  If any deficiency shall arise,
Credit Parties shall remain liable to Agent and Lenders therefor.

 

(b)                                 To the extent that Applicable Law imposes
duties on Agent to exercise remedies in a commercially reasonable manner, each
Credit Party acknowledges and agrees that it is not commercially unreasonable
for Agent:  (i) to fail to incur expenses reasonably deemed significant by Agent
to prepare Collateral for disposition or otherwise to complete raw material or
work in process into finished goods or other finished products for disposition;
(ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of; (iii) to fail to exercise collection
remedies against Customers or other Persons obligated on Collateral or to remove
Liens on or any adverse claims against Collateral; (iv) to exercise collection
remedies against Customers and other Persons

 

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obligated on Collateral directly or through the use of collection agencies and
other collection specialists; (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature; (vi) to contact other Persons, whether or
not in the same business as any Credit Party, for expressions of interest in
acquiring all or any portion of such Collateral; (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature; (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets; (ix) to dispose of assets in wholesale
rather than retail markets; (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment; (xi) to purchase insurance or credit
enhancements to insure Agent against risks of loss, collection or disposition of
Collateral or to provide to Agent a guaranteed return from the collection or
disposition of Collateral; or (xii) to the extent deemed appropriate by Agent,
to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist Agent in the collection or disposition of any of
the Collateral.  Each Credit Party acknowledges that the purpose of this
Section 11.1(b) is to provide non-exhaustive indications of what actions or
omissions by Agent would not be commercially unreasonable in Agent’s exercise of
remedies against the Collateral and that other actions or omissions by Agent
shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 11.1(b).  Without limitation upon the foregoing,
nothing contained in this Section 11.1(b) shall be construed to grant any rights
to any Credit Party or to impose any duties on Agent that would not have been
granted or imposed by this Agreement or by Applicable Law in the absence of this
Section 11.1(b).

 

(c)                                  If, following or upon an Event of Default,
the Obligations are accelerated for any reason, the Prepayment Premium will also
be due and payable as though said Obligations were voluntarily prepaid and shall
constitute part of the Obligations, in view of the impracticability and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of each Lender’s lost profits as a result
thereof.  The Prepayment Premium payable hereunder shall be presumed to be the
liquidated damages sustained by each Lender as the result of the early
termination and the Borrowers agree that such Prepayment Premium is reasonable
under the circumstances currently existing.  The Prepayment Premium shall also
be payable in the event the Obligations are satisfied or released by foreclosure
(whether by power of judicial proceeding), deed in lieu of foreclosure or by any
other means.

 

11.2.                     Agent’s Discretion.  Agent shall have the right in its
sole discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of Agent’s or Lenders’ rights hereunder.

 

11.3.                     Setoff.  Subject to Section 14.12, in addition to any
other rights which Agent or any Lender may have under Applicable Law, upon the
occurrence of an Event of Default hereunder, Agent and such Lender shall have a
right, immediately and without notice of any kind, to apply any Credit Party’s
property held by Agent and such Lender to reduce the Obligations.

 

11.4.                     Rights and Remedies not Exclusive.  The enumeration of
the foregoing rights and remedies is not intended to be exhaustive and the
exercise of any rights or remedy shall not preclude the exercise of any other
right or remedies provided for herein or otherwise provided by law, all of which
shall be cumulative and not alternative.

 

11.5.                     Allocation of Payments After Event of Default. 
Notwithstanding any other provisions of this Agreement to the contrary, upon the
occurrence and during the continuance of an Event of Default, all

 

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amounts collected or received by Agent on account of the Obligations or any
other amounts outstanding under any of the Other Documents or in respect of the
Collateral shall be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Agent in connection with enforcing
its rights and the rights of the Lenders under this Agreement and the Other
Documents, under or pursuant to the terms of this Agreement;

 

SECOND, to payment of any fees owed to Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each of the Lenders to the extent
owing to such Lender pursuant to the terms of this Agreement;

 

FOURTH, to the payment of all Obligations arising under this Agreement and the
Other Documents consisting of accrued fees and interest with respect to Advances
and Commitment Percentages (including any Prepayment Premium applicable in
accordance with Section 2.15);

 

FIFTH, to the payment of Revolving Advances, and to the payment of Hedge
Liabilities and Cash Management Liabilities (in each case, only to the extent of
reserves established for Hedge Liabilities or Cash Management Liabilities
against the Formula Amount), and payment or Cash Collateralization of any
outstanding Letters of Credit in accordance with Section 3.2(b) or
2.8(j) hereof, and not repaid pursuant to clauses “FIRST” through “FOURTH”
above;

 

SIXTH, to payment or Cash Collateralization of Cash Management Liabilities and
Hedge Liabilities, to the extent not provided for above;

 

SEVENTH, to all other Obligations which shall have become due and payable and
not repaid pursuant to clauses “FIRST” through “SIXTH”; and

 

EIGHTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its Pro Rata Share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses “THIRD”, “FOURTH”, “FIFTH”, “SIXTH” and “SEVENTH”; and (iii) to the
extent that any amounts available for distribution pursuant to clause “FIFTH”
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Agent as Cash Collateral for the
Letters of Credit pursuant to Sections 3.2(b) and 2.8(j) hereof and applied
(A) first, to reimburse the Issuer from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clause “FIFTH” above
in the manner provided in this Section 11.5.  Monies and proceeds obtained from
a Credit Party shall not be applied to its Excluded Hedge Liabilities, but
appropriate adjustments shall be made with respect to amounts obtained from
other Credit Parties to preserve the allocations specified above.

 

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XII.                          WAIVERS AND JUDICIAL PROCEEDINGS.

 

12.1.                     Waiver of Notice.  To the fullest extent permitted by
Applicable Law, each Borrower hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any
and all instruments, notice of acceptance hereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.

 

12.2.                     Delay.  No delay or omission on Agent’s or any
Lender’s part in exercising any right, remedy or option shall operate as a
waiver of such or any other right, remedy or option or of any Default or Event
of Default.

 

12.3.                     Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND
EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

XIII.                     EFFECTIVE DATE AND TERMINATION.

 

13.1.                     Term.  This Agreement, which shall inure to the
benefit of and shall be binding upon the respective successors and permitted
assigns of each Credit Party signatory hereto, Agent and each Lender, shall
become effective on the Closing Date and shall continue in full force and effect
until the Maturity Date unless sooner terminated as herein provided.  Borrowers
may terminate this Agreement at any time upon five (5) days’ prior written
notice upon payment in full of the Obligations (other than contingent indemnity
claims not yet asserted or threatened) and termination of the Commitments.  Each
notice delivered by the Borrowers under this Section 13.1 may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrowers (by notice to the Agent
on or prior to the specified effective date) if such condition is not satisfied.

 

13.2.                     Termination.  The termination of the Agreement shall
not affect any Credit Party’s, Agent’s or any Lender’s rights, or any of the
Obligations having their inception prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
(other than contingent indemnity claims not yet asserted or threatened) have
been fully and indefeasibly paid, disposed of, concluded or liquidated and all
Commitments have been terminated.  The security interests, Liens and rights
granted to Agent for the benefit of the Secured Parties hereunder and the
financing statements filed in connection therewith shall continue in full force
and effect, notwithstanding the termination of this Agreement or the fact that
Borrowers’ Account may from time to time be temporarily in a zero or credit
position, until the Termination Date.  Upon the occurrence of the Termination
Date or any release of Collateral or any part thereof in accordance with the
provisions of this Agreement, then the Collateral (or such part of the
Collateral) shall

 

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be released from the security interests created by this Agreement and Agent
shall, upon the request and at the sole cost and expense of the Borrowers and
receipt by Agent of a certificate from an Authorized Officer of the Borrowing
Agent confirming that such release (other than in connection with the occurrence
of the Termination Date) is permitted under this Agreement and each Other
Document, assign, transfer and deliver to Credit Parties, without recourse to or
warranty by Agent, such of the Collateral or any part thereof as may be in
possession of and as shall not have been sold or otherwise applied pursuant to
the terms hereof, and, with respect to any other Collateral, proper documents
and instruments (including UCC-3 termination financing statements or releases)
acknowledging the termination of the Liens granted pursuant to this Agreement. 
All representations, warranties, covenants, waivers and agreements contained
herein shall survive termination hereof until all Obligations (other than
contingent indemnity claims not yet asserted or threatened) are indefeasibly
paid and performed in full and all Commitments have been terminated.

 

XIV.                      REGARDING AGENT.

 

14.1.                     Appointment.  Each Lender hereby designates HPS to act
as Agent for such Lender under this Agreement and the Other Documents.  Each
Lender hereby irrevocably authorizes Agent to enter into the Other Documents and
to take such action on its behalf under the provisions of this Agreement and the
Other Documents and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto and Agent shall hold all Collateral, payments of principal and interest,
fees, charges and collections (without giving effect to any collection days)
received pursuant to this Agreement, for the benefit of Lenders entitled
thereto.  Agent may perform any of its duties hereunder by or through its agents
or employees.  As to any matters not expressly provided for by this Agreement
(including collection of the Note) Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding; provided, however, that Agent shall not be required to take any action
which exposes Agent to liability or which is contrary to this Agreement or the
Other Documents or Applicable Law unless Agent is furnished with an
indemnification reasonably satisfactory to Agent with respect thereto.

 

14.2.                     Nature of Duties.  Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents.  Neither Agent nor any of its officers, directors, employees or
agents shall be (i) liable for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
due execution, enforceability or sufficiency of this Agreement, or any of the
Other Documents or for any failure of any Borrower to perform its obligations
hereunder or for the existence, priority or perfection of the Liens and security
interests granted hereunder or under any Other Documents or in the value of any
of the Collateral.  Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any of the Other
Documents, or to inspect the properties, books or records of any Borrower.  The
duties of Agent as respects the Advances to Borrowers shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligations in respect of this Agreement except as expressly set forth
herein.  Anything herein to the contrary notwithstanding, none of the Lenders
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any Other Document, except in its
capacity, as applicable, as

 

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Agent, Collateral Agent, Administrative Agent, a Lender or the Issuer hereunder
or thereunder.  No Secured Party has any fiduciary relationship with or duty to
any Credit Party arising out of or in connection with this Agreement or any
Other Document, and the relationship between the Credit Parties, on the one
hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor.  No joint venture is created
hereby or by any Other Document or otherwise exists by virtue of the
transactions contemplated hereby among the Secured Parties or among the Credit
Parties and the Secured Parties.

 

Without limiting the foregoing, the Agent shall not be required to act hereunder
or to advance its own funds or otherwise incur any financial liability in the
performance of its duties or the exercise of its rights hereunder and under any
Other Document, and shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall receive further assurances to its satisfaction
from the Lenders of their indemnification obligations under and in accordance
with the provisions of Section 14.7 against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take or
refraining from taking any such action.  The Agent shall be fully justified in
requesting direction from the Required Lenders in the event this Agreement or
any Other Document is silent or vague with respect to Agent’s duties, rights or
obligations.  The Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders or (ii) in the
absence of its own gross negligence or willful misconduct, as determined by a
court of competent jurisdiction in a final and non-appealable decision.  In no
instance shall the Agent have any liability for special, consequential or
indirect damages or penalties (including lost profits) even if it has been
advised of the likelihood of the same.  Without prejudice to the generality of
the foregoing, the Agent shall not be liable for any damage or loss resulting
from or caused by events or circumstances beyond the Agent’s reasonable control,
including nationalization, expropriation, currency restrictions, the
interruption, disruption or suspension of the normal procedures and practices of
any securities market, power, mechanical, communications or other technological
failures or interruptions, computer viruses or the like, acts of war or
terrorism, riots, revolution, acts of God, work stoppages, strikes, national
disasters of any kind, or other similar events or acts.

 

14.3.                     Lack of Reliance on Agent and Resignation. 
Independently and without reliance upon Agent or any other Lender, each Lender
has made and shall continue to make (i) its own independent investigation of the
financial condition and affairs of each Credit Party in connection with the
making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of each Credit Party.  Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before making of the Advances or at any time or times thereafter
except as shall be provided by any Credit Party pursuant to the terms hereof. 
Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectability,
sufficiency or value of this Agreement or any Other Document or any other
instrument or document furnished pursuant hereto or thereto, or of the financial
condition of any Credit Party, or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement, the Note, the Other Documents or the financial
condition of any Borrower, or the existence of any Event of Default or any
Default.

 

Agent may resign on sixty (60) days’ written notice to each of Lenders and
Borrowing Agent and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowing Agent.  If a
successor Agent shall not have been so appointed within said sixty (60) Business
Day period, the retiring Agent may appoint a successor Agent reasonably
satisfactory to Borrower who shall serve as an Agent until such time, if any, as
the Required Lenders appoint a successor Agent as provided above.

 

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Any such successor Agent shall succeed to the rights, powers and duties of
Agent, and the term “Agent” shall mean such successor agent effective upon its
appointment, and the former Agent’s rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent.  After any Agent’s resignation as Agent, the provisions of this
Article XIV 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 the Person serving as Agent is a Defaulting Lender pursuant to clause (d) of
the definition thereof, the Required Lenders may, to the extent permitted by
Applicable Law, by notice in writing to the Borrowing Agent and such Person
remove such Person as Agent and, in consultation with the Borrowing Agent,
appoint a successor.  If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days (or
such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date.

 

14.4.                     Certain Rights of Agent.  The Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of this Agreement or of any of the Other Documents the Agent
is permitted or required to take or to grant.  If Agent shall request any such
instructions, Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining.  Without limiting the foregoing, Lenders shall not have any right of
action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.

 

14.5.                     Reliance.  Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing (including any electronic
message), resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, order or other document or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and the Other Documents and its duties hereunder,
upon advice of counsel selected by it.  Agent may employ agents and
attorneys-in-fact and shall not be liable for the acts, omissions, negligence or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.  In determining compliance with any condition hereunder, the
Agent shall be entitled to receive, and shall not incur any liability for
relying upon, a certificate of an Authorized Officer or an opinion of counsel or
both certifying as to compliance with such condition.  The Agent may consult
with legal counsel (who may be counsel for the Credit Parties or any Lender),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

14.6.                     Notice of Default.  Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or under the Other Documents, unless Agent has received written notice
from a Lender or Borrowing Agent referring to this Agreement or the Other
Documents, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the event that Agent receives such a
notice, Agent shall give notice thereof to Lenders and Borrowers.  Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that, unless and until
Agent shall have received such directions, Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
Lenders.

 

14.7.                     Indemnification.  To the extent Agent is not
reimbursed and indemnified by Borrowers, each Lender will reimburse and
indemnify Agent in proportion to its respective portion of the Advances (or, if
no Advances are outstanding, according to its Commitment Percentage), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or

 

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disbursements of any kind or nature, including, without limitation, the fees and
expenses of its agents and attorneys, whatsoever which may be imposed on,
incurred by or asserted against Agent in performing its duties hereunder, or in
any way relating to or arising out of this Agreement or any Other Document;
provided that, Lenders shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment).

 

14.8.                     Agent in its Individual Capacity.  With respect to the
obligation of Agent to lend under this Agreement, the Advances made by it shall
have the same rights and powers hereunder as any other Lender and as if it were
not performing the duties as Agent specified herein; and the term “Lender” or
any similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender.  Agent may engage in business with
any Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.

 

14.9.                     Delivery of Documents.  To the extent Agent receives
financial statements required under Sections 9.3, 9.7, 9.8, 9.10 and 9.11 or
Borrowing Base Certificates from Borrowers pursuant to the terms of this
Agreement which any Borrower is not obligated to deliver to each Lender, Agent
will promptly furnish such documents and information to Lenders.

 

14.10.              Borrowers’ Undertaking to Agent.  Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid.  Any payment made pursuant to any such demand shall pro tanto
satisfy the relevant Borrower’s obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.

 

14.11.              No Reliance on Agent’s Customer Identification Program. 
Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on Agent to carry out such
Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any Borrower, its Affiliates
or its agents, this Agreement, the Other Documents or the transactions hereunder
or contemplated hereby:  (1) any identity verification procedures, (2) any
record-keeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other Laws.

 

14.12.              Other Documents.  Each of the Lenders agrees that it shall
not, without the express consent of Agent, and that it shall, to the extent it
is lawfully entitled to do so, upon the request of Agent, set off against the
Obligations, any amounts owing by such Lender to any Borrower or any deposit
accounts of any Borrower now or hereafter maintained with such Lender.  Anything
in this Agreement to the contrary notwithstanding, each of the Lenders further
agrees that it shall not, unless specifically requested to do so by Agent, take
any action to protect or enforce its rights arising out of this Agreement or the
Other Documents, it being the intent of Lenders that any such action to protect
or enforce rights under this Agreement and the Other Documents shall be taken in
concert and at the direction or with the consent of Agent or Required Lenders.

 

14.13.              Withholding Tax.  To the extent required by any Applicable
Law, Agent may deduct or withhold from any payment to any Lender an amount
equivalent to any applicable withholding Tax.  If the

 

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IRS or any other Governmental Body asserts a claim that Agent did not properly
withhold Tax from amounts paid to or for the account of any Lender for any
reason (including because the appropriate form was not delivered or was not
properly executed or because such Lender failed to notify Agent of a change in
circumstance that rendered the exemption from, or reduction of, withholding Tax
ineffective), such Lender shall indemnify and hold harmless Agent fully for all
amounts paid, directly or indirectly, by Agent as Tax or otherwise, including
any penalties, additions to Tax or interest and together with all expenses
(including legal expenses, allocated internal costs and out-of-pocket expenses)
incurred (to the extent invoiced), whether or not such Tax was correctly or
legally imposed or asserted by the relevant Governmental Body.  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
this Agreement or any Other Document against any amount due Agent under this
Section 14.13.  The agreements in this Section 14.13 shall survive the
resignation and/or replacement of Agent, any assignment of rights by, or the
replacement of, a Lender, the termination of this Agreement and the repayment,
satisfaction or discharge of all other obligations.  For purposes of this
Section 14.13, the term “Lender” shall include any Issuer.

 

14.14.              Collateral and Guaranty Matters.  Each of the Lenders
(including in their capacity as counterparties to any Hedge Liabilities or Cash
Management Liabilities) irrevocably authorize the Agent, at its option and in
its discretion, (a) to release any Lien on any property granted to or held by
the Agent under this Agreement and/or any applicable Other Document (i) upon the
occurrence of the Termination Date, (ii) that is sold or to be sold as part of
or in connection with any sale permitted under this Agreement to a Person that
is not a Credit Party, (iii) that constitutes Excluded Collateral, or (iv) if
approved, authorized or ratified in writing in accordance with Section 16.2 and
(b) to release any Guarantor from its obligations under this Agreement and the
Other Documents if such Person ceases to be a Restricted Subsidiary as a result
of a transaction permitted under this Agreement.  Upon request by the Agent at
any time, the Required Lenders will confirm in writing the Agent’s authority to
release its interest in particular types or items of property, or to release any
Guarantor from its obligations under this Agreement and the Other Documents
pursuant to this Section 14.14.

 

XV.                           BORROWING AGENCY.

 

15.1.                     Borrowing Agency Provisions.

 

(a)                                 Each Borrower hereby irrevocably designates
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf
of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit
all loan proceeds hereunder in accordance with the request of Borrowing Agent.

 

(b)                                 The handling of this credit facility as a
co-borrowing facility with a borrowing agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request. 
Neither Agent nor any Lender shall incur liability to Borrowers as a result
thereof.

 

(c)                                  Each of the Borrowers shall be jointly and
severally liable with respect to their Obligations under the Agreement and the
Other Documents to which it is party (including the Obligations to repay the
Advances and interest and fees thereon, together with each other payment,
reimbursement, indemnification and contribution Obligation under this Agreement
and any Other Document).  Such joint and several liability of each Borrower
shall not be impaired or released by, and each Borrower irrevocably waives any
defense it might have by virtue of:  (i) the failure of any Lender or the Agent
or any successor or assign thereof to assert any claim or demand or to exercise
or enforce any right, power or remedy against any Borrower, any other Person,
any collateral under

 

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this Agreement or otherwise, (ii) any extension or renewal for any period
(whether or not longer than the original period) or exchange of any of the
obligations under this Agreement or any Other Document or the release or
compromise of any obligation of any nature of any Person with respect thereto,
(iii) the surrender, release or exchange of all or any part of any property
(including any collateral under this Agreement or otherwise) securing payment,
performance and/or observance of any of the obligations under this Agreement or
the Other Documents or the compromise or extension or renewal for any period
(whether or not longer than the original period) of any obligations of any
nature of any Person with respect to any such property, (iv) any action or
inaction on the part of any Lender, the Agent or any other Person, or any other
event or condition with respect to any other Borrower, including any such action
or inaction or other event or condition, which might otherwise constitute a
defense available to, or a discharge of, such other Borrower, or a guarantor or
surety of or for any or all of the Obligations under this Agreement or the Other
Documents, (v) any disability, incapacity or lack of powers, authority or legal
personality of or dissolution or change in the members or status of any Borrower
or any other person, (vi) any unenforceability, illegality or invalidity of any
obligation of any other Person under this Agreement or any Other Document or any
other document, guaranty or security, (vii) any avoidance, postponement,
discharge, reduction, non-provability or other similar circumstance affecting
any obligation of any Credit Party under this Agreement or an Other Document
resulting from any bankruptcy, insolvency, receivership, liquidation or
dissolution proceedings or from any law, regulation or order so that each such
obligation shall for the purposes of such other Borrower’s obligations hereunder
be construed as if there were no such circumstances, (viii) the release or
substitution of any other Borrower in respect of the Obligations, or (ix) any
other act, matter or thing which would or might, in the absence of this
provision, operate to release, discharge or otherwise prejudicially affect the
joint and several nature of the obligations of such or any other Borrower.  It
is understood and agreed that the Lenders and the Agent shall be entitled to
payment from any one or more Borrowers, as determined by the Lenders and the
Agent in their discretion, of any amount due in accordance with this Agreement
and the Other Documents, and no Lender nor the Agent shall be required to seek
prior or simultaneous payment from any other Borrower.  Until the indefeasible
payment in full in cash of all Obligations and the expiration or termination of
the Commitments under this Agreement, each Borrower hereby agrees that it shall
not exercise any right or remedy arising by reason of any performance by such
Borrower of its obligations hereunder, whether by subrogation, reimbursement,
contribution, indemnification or otherwise, against any other Borrower or any
other Person or any Collateral for any of the Obligations.

 

(d)                                 Notwithstanding anything to the contrary in
Section 15.1(c), the obligations of each Borrower under Section 15.1(c) with
respect to advances made by a Secured Party to one or more other Borrowers shall
be limited to a maximum aggregate amount equal to the largest amount that would
not render such Borrower’s undertakings hereunder subject to avoidance as a
fraudulent transfer or fraudulent conveyance under Section 548 of Title 11 of
the United States Bankruptcy Code or any applicable provisions of comparable
state law (collectively, the “Fraudulent Transfer Laws”), in each case taking
into account the provisions of Section 15.1(e), and after giving effect to all
other liabilities of such Borrower, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such Borrower pursuant to applicable law or any agreement
providing for an equitable allocation among such Borrower and the other
Borrowers and Affiliates of the Borrowers of obligations arising under
co-borrowings or guarantees by such parties.

 

(e)                                  The Borrowers hereby agree, as between
themselves, that if any Borrower shall become an Excess Funding Borrower (as
defined below) by reason of the payment by such

 

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Borrower of any of the Obligations, each other Borrower shall, on written demand
of such Excess Funding Borrower (but subject to the immediately following
sentence), pay to such Excess Funding Borrower an amount equal to such
Borrower’s Pro Rata Borrower Share (as defined below and determined, for this
purpose, without reference to the properties, debts and liabilities of such
Excess Funding Borrower) of the Excess Borrower Payment (as defined below) in
respect of such Obligations.  The payment obligation of a Borrower to any Excess
Funding Borrower under this clause (e) shall be subordinated and subject in
right of payment to the prior payment in full of the Obligations and such Excess
Funding Borrower shall not exercise any right or remedy with respect to such
excess until payment in full of all of the Obligations.  For purposes of this
Section 15.1(e), (i) “Excess Funding Borrower” means a Borrower that has paid an
amount in excess of its Pro Rata Borrower Share of the Obligations, (ii) “Excess
Borrower Payment” means the amount paid by an Excess Funding Borrower in excess
of its Pro Rata Borrower Share of the Obligations and (iii) “Pro Rata Borrower
Share” means, for any Borrower, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate fair saleable value of all properties of such
Borrower (excluding any shares of stock of any other Borrower) exceeds the
amount of all the debts and liabilities of such Borrower (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Borrower hereunder and any obligations of any other Borrower
that have been guaranteed by such Borrower) to (y) the amount by which the
aggregate fair saleable value of all properties of all of the Borrowers exceeds
the amount of all the debts and liabilities of all of the Borrowers (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrowers under this Agreement and the Other Documents),
determined (A) with respect to any Borrower that is a party hereto on the date
hereof, as of the date hereof, and (B) with respect to any other Borrower, as of
the date such Borrower becomes a Borrower hereunder.

 

15.2.                     Waiver of Subrogation.  Each Borrower expressly waives
any and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution of any other claim which such Borrower may now or hereafter have
against the other Borrowers or other Person directly or contingently liable for
the Obligations hereunder, or against or with respect to the other Borrowers’
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until the Termination Date.

 

XVI.                      MISCELLANEOUS.

 

16.1.                     Governing Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York.  Any judicial
proceeding brought by or against any Credit Party with respect to any of the
Obligations, this Agreement, the Other Documents or any related agreement may be
brought in any court of competent jurisdiction in the State of New York, United
States of America, and, by execution and delivery of this Agreement, each Credit
Party accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement.  Each Credit Party hereby waives personal service of any
and all process upon it and consents that all such service of process may be
made by registered mail (return receipt requested) directed to Borrowing Agent
at its address set forth in Section 16.6 and service so made shall be deemed
completed five (5) days after the same shall have been so deposited in the mails
of the United States of America, or, at Agent’s option, by service upon
Borrowing Agent which each Credit Party irrevocably appoints as such Credit
Party’s Agent for the purpose of accepting service within the State of New
York.  Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Agent or any Lender to bring
proceedings against any Credit Party in the courts of any other jurisdiction. 
Each Credit Party waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of

 

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jurisdiction or venue or based upon forum non conveniens with respect to any
action brought in the aforesaid courts.  The provisions of Sections 3.6, 16.20
and 16.21 are included solely out of an abundance of caution and shall not be
construed to mean that any provisions of Texas law are in any way applicable to
this Agreement, the Other Documents or any of the Obligations.

 

16.2.                     Entire Understanding; Amendments; No Waiver by Course
of Conduct.

 

(a)                                 This Agreement and the documents executed
concurrently herewith contain the entire understanding among each Credit Party,
Agent and each Lender and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof.  Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no
force and effect unless in writing, signed by each Credit Party’s, Agent’s and
each Lender’s respective officers.  Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged (with a copy of each amendment provided to the Agent).  Each Credit
Party acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.

 

(b)                                 The Required Lenders, Agent with the consent
in writing of the Required Lenders, and the applicable Credit Parties may,
subject to the provisions of this Section 16.2(b), from time to time enter into
written supplemental agreements to this Agreement or the Other Documents (other
than with respect to Cash Management Products and Services and Lender-Provided
Hedges, other similar agreements or the Fee Letter, which shall require only the
consent of the parties thereto) executed by the applicable Credit Parties, for
the purpose of adding or deleting any provisions or otherwise changing, varying
or waiving in any manner the rights of Lenders, Agent or Credit Parties
thereunder or the conditions, provisions or terms thereof or waiving any Event
of Default thereunder, but only to the extent specified in such written
agreements; provided, however, that no such supplemental agreement shall:

 

(i)                                     increase the Commitment Percentage, or
the maximum dollar amount of the Commitment Amount of any Lender without the
consent of such Lender directly affected thereby;

 

(ii)                                  whether or not any Advances are
outstanding, extend the Maturity Date or the time for payment of principal or
interest of any Advance (excluding the due date of any mandatory prepayment of
an Advance), or any fee payable to any Lender, or reduce the principal amount of
or the rate of interest borne by any Advances or reduce any fee payable to any
Lender, without the consent of each Lender directly affected thereby (except
that Required Lenders may elect to waive or rescind any imposition of the
Default Rate under Section 3.1 or of default rates of Letter of Credit fees
under Section 3.2 (unless imposed by Agent));

 

(iii)                               except in connection with any increase
pursuant to Section 2.15 hereof, increase the Maximum Revolving Advance Amount
(other than as contemplated in the definition thereof) without the consent of
all Lenders;

 

(iv)                              alter the definition of the term Required
Lenders or alter, amend or modify this Section 16.2(b) without the consent of
all Lenders;

 

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(v)                                 alter, amend or modify the provisions of
Sections 2.10(e), 2.11 (as it relates to the pro rata reduction of the Lenders’
commitments), 2.17 or 11.5, or any other provision hereof providing for the pro
rata sharing by the Lenders of payments received on the Revolving Advances or
the pro rata reduction of their commitments to make Advances without the consent
of all Lenders;

 

(vi)                              other than in accordance with the provisions
of this Agreement upon the occurrence of the Termination Date or with respect to
any disposition of Collateral permitted under this Agreement, release all or
substantially all of the Collateral without the consent of all Lenders;

 

(vii)                           change the exculpatory provisions in this
Agreement benefitting Agent without the consent of all Lenders;

 

(viii)                        permit any Revolving Advance to be made if after
giving effect thereto the total of Revolving Advances outstanding hereunder
would exceed the Line Cap for more than thirty (30) consecutive Business Days or
exceed one hundred and five percent (105%) of the Line Cap without the consent
of all Lenders directly affected thereby;

 

(ix)                              increase the Advance Rates above the Advance
Rates in effect on the Closing Date, or alter the definitions of Eligible
In-Transit Fuel Inventory, Eligible In-Transit Sand Inventory, Eligible
Inventory, Eligible Receivables in a manner that would increase the Formula
Amount without the consent of Supermajority Lenders; or

 

(x)                                 release any Guarantor or Borrower (except as
otherwise permitted under this Agreement) without the consent of all Lenders.

 

(c)                                  Any such supplemental agreement shall apply
equally to each Lender and shall be binding upon Borrowers, Lenders and Agent
and all future holders of the Obligations.  In the case of any waiver,
Borrowers, Agent and Lenders shall be restored to their former positions and
rights, and any Event of Default waived shall be deemed to be cured and not
continuing, but no waiver of a specific Event of Default shall extend to any
subsequent Event of Default (whether or not the subsequent Event of Default is
the same as the Event of Default which was waived), or impair any right
consequent thereon.

 

(d)                                 Nothing herein contained, and no act done or
omitted by the Agent pursuant to the powers and rights granted it herein, shall
be deemed to be a waiver by the Agent of its rights and remedies under this
Agreement, any Organizational Document of any Credit Party or any related
document, but this Agreement is made and accepted without prejudice to any of
the rights and remedies possessed by the Agent under the terms hereof or
thereof.  The right of the Agent to collect any amounts due to the Secured
Parties hereunder or any Other Document and to enforce its rights with respect
to Collateral may be exercised by the Agent either prior to, simultaneously with
or subsequent to any action taken by it hereunder or any Other Document.

 

16.3.                     Successors and Assigns; Participations.

 

(a)                                 This Agreement shall be binding upon and
inure to the benefit of each Credit Party, Agent, each Lender, all future
holders of the Obligations and their respective successors and permitted
assigns, except that Credit Parties may not assign or transfer any of their
rights or obligations under this Agreement without the prior written consent of
Agent and each Lender.

 

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(b)                                 Each Borrower acknowledges that in the
regular course of commercial banking business one or more Lenders may at any
time and from time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a participating
interest, a “Participant”).  Each Participant may exercise all rights of payment
(including rights of set-off to the extent permitted by Applicable Law) with
respect to the portion of such Advances held by it or other Obligations payable
hereunder as fully as if such Participant were the direct holder thereof, and
each Participant shall have the benefits of Section 3.10 hereof (subject to the
rights and limitations therein, provided that any forms required to be provided
by any Participant pursuant to Section 3.10 shall be provided to the
participating Lender) provided that Borrowers shall not be required to pay to
any Participant more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations payable
hereunder to such Participant had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder, unless the sale of
the participation is made with the Borrowers’ prior written consent (not to be
unreasonably withheld or delayed) and in no event shall Borrowers be required to
pay any such amount arising from the same circumstances and with respect to the
same Advances or other Obligations payable hereunder to both such Lender and
such Participant.  Each Participant shall have the benefits of Section 3.10
hereof.  Each Borrower hereby grants to any Participant a continuing security
interest in any deposits, moneys or other property actually or constructively
held by such Participant as security for the Participant’s interest in the
Advances.  No Lenders shall transfer, grant or sell any participation under
which the participant shall have the right to approve any amendment or waiver of
this Agreement except to the extent such amendment or waiver would require the
approval of all Lenders pursuant to Section 16.2(b).  Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Advances or other obligations under this Agreement
and the Other Documents (the “Participant Register”); provided that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any commitments, loans, letters of credit or its
other obligations under this Agreement or any Other Document) 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.

 

(c)                                  Any Lender may assign all or any part of
its rights and obligations under or relating to Revolving Advances under this
Agreement and the Other Documents to one or more additional banks or financial
institutions (each such assignee, a “Purchasing Lender”), in minimum amounts of
not less than $5,000,000, pursuant to a Commitment Transfer Supplement, executed
by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent
for recording; provided that any such assignment will require the consents of
Agent and Borrowing Agent (not to be unreasonably withheld or delayed), except
that no consent of Borrowing Agent shall be required for an assignment during an
Event of Default or to a Lender or an Affiliate of a Lender.  Upon such
execution, delivery, acceptance and recording, from and after the transfer
effective date determined pursuant to such Commitment Transfer Supplement,
(i) Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations
of a Lender thereunder with a Commitment Percentage as set forth therein, and
(ii) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Agreement, the Commitment Transfer

 

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Supplement creating a novation for that purpose.  Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents.  Each Borrower
hereby consents to the addition of such Purchasing Lender and the resulting
adjustment of the Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents.  Borrowers shall
execute and deliver such further documents and do such further acts and things
in order to effectuate the foregoing.

 

(d)                                 Any Lender, with the consent of Agent which
shall not be unreasonably withheld or delayed, may directly or indirectly sell,
assign or transfer all or any portion of its rights and obligations under or
relating to Revolving Advances under this Agreement and the Other Documents to
an entity, whether a corporation, partnership, trust, limited liability company
or other entity that (i) is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each
Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned (“Modified Commitment
Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose.  Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO.  Each Borrower hereby consents to the addition of such
Purchasing CLO.  Borrowers shall execute and deliver such further documents and
do such further acts and things in order to effectuate the foregoing.

 

(e)                                  Agent shall maintain at one of its offices
a copy of each Commitment Transfer Supplement and Modified Commitment Transfer
Supplement delivered to it and a register (the “Register”) for the recordation
of the names and addresses of each Lender and the outstanding principal, accrued
and unpaid interest and other fees due hereunder.  The entries in the Register
shall be conclusive, in the absence of manifest error, and each Borrower, Agent
and Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Advance recorded therein for the purposes of this Agreement. 
The Register shall be available for inspection by any Borrower or any Lender
(with respect to its own interests) at any reasonable time and from time to time
upon reasonable prior written notice.  Agent shall receive (i) all documentation
and other information required by required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including, without limitation, the USA PATRIOT Act and (ii) a fee in the amount
of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon
the effective date of each transfer or assignment (other than to an intermediate
purchaser) to such Purchasing Lender and/or Purchasing CLO.

 

(f)                                   Each Borrower authorizes each Lender to
disclose to any Transferee and any prospective Transferee any and all financial
information in such Lender’s possession concerning

 

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such Borrower which has been delivered to such Lender by or on behalf of such
Borrower pursuant to this Agreement or in connection with such Lender’s credit
evaluation of such Borrower; provided that the Transferee or prospective
Transferee agrees to be bound by a non-disclosure agreement approved by
Borrowers pursuant to which Borrowers are third party beneficiaries.

 

(g)                                  Notwithstanding anything to the contrary in
this Section 16.3:  (i) no sale, transfer or assignment of all or any portion of
any Lender’s rights and obligations under or relating to Loans under this
Agreement shall be made to any Credit Party or any of their respective
Affiliates.

 

(h)                                 Notwithstanding anything to the contrary
contained in this Agreement, any Lender may at any time and from time to time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

16.4.                     Application of Payments.  Subject to application of
payments and proceeds in accordance with Section 11.5, Agent shall have the
continuing and exclusive right to apply or reverse and re-apply any payment and
any and all proceeds of Collateral to any portion of the Obligations.  To the
extent that any Borrower makes a payment or Agent or any Lender receives any
payment or proceeds of the Collateral for any Borrower’s benefit, which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver, custodian
or any other party under any bankruptcy law, common law or equitable cause,
then, to such extent, the Obligations or part thereof intended to be satisfied
shall be revived and continue as if such payment or proceeds had not been
received by Agent or such Lender.

 

16.5.                     Indemnity.  Each Credit Party shall defend, protect,
indemnify, pay and save harmless Agent, Issuer, each Lender and each of their
respective officers, directors, Affiliates, attorneys, employees and agents
(each an “Indemnified Party”) for and from and against any and all claims,
demands, liabilities, obligations, losses, damages, penalties, fines, actions,
judgments, suits, costs, charges, expenses and disbursements of any kind or
nature whatsoever (including reasonable fees and disbursements of counsel
(including allocated costs of internal counsel)) (collectively, “Claims”) which
may be imposed on, incurred by, or asserted against any Indemnified Party in
arising out of or in any way relating to or as a consequence, direct or
indirect, of:  (a) this Agreement, the Other Documents, the Advances and other
Obligations and/or the transactions contemplated hereby including the
Transactions, (b) any action or failure to act or action taken only after delay
or the satisfaction of any conditions by any Indemnified Party in connection
with and/or relating to the negotiation, execution, delivery or administration
of the Agreement and the Other Documents, the credit facilities established
hereunder and thereunder and/or the transactions contemplated hereby including
the Transactions, (c) any Credit Party’s failure to observe, perform or
discharge any of its covenants, obligations, agreements or duties under or
breach of any of the representations or warranties made in this Agreement and
the Other Documents, (d) the enforcement of any of the rights and remedies of
Agent, Issuer or any Lender under the Agreement and the Other Documents, (e) any
threatened or actual imposition of fines or penalties, or disgorgement of
benefits, for violation of any Anti-Terrorism Law by any Credit Party, any
Affiliate or Subsidiary of any Credit Party, (f) any claim, litigation,
proceeding or investigation instituted or conducted by any Governmental Body or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not brought by any Credit Party,
any director, equity holder or creditor thereof, any Indemnified Party or any
other Person and whether or not any Indemnified Party is a party thereto and
(g) arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided in Section 15.1, reliance by Agent or any
Lender on any request or instruction from Borrowing Agent or any other action
taken by Agent or any Lender with respect to Section

 

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15.1; provided, however, notwithstanding anything in this Section 16.5, to the
contrary, no Credit Party shall be required to indemnify any Indemnified Party
for any Claim which, in each case is found in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from (x) such Indemnified
Party’s own gross negligence or willful misconduct or that of its respective
Affiliates or each of their respective officers, directors, employees, advisors
and agents, or (y) any dispute solely among Indemnified Parties and not
involving a Credit Party or any Subsidiary or Affiliate thereof and not arising
out of or in connection with, in each case is found in a final non-appealable
judgment by a court of competent jurisdiction, (i) the Agent’s or its
Affiliates’ respective capacities in connection with this Agreement or in
fulfilling their roles as Agent, arranger or bookrunner or (ii) any action or
inaction of a Credit Party, any of its Subsidiaries or Affiliates.  Without
limiting the generality of any of the foregoing (but subject to clauses (x) and
(y) above), each Credit Party shall defend, protect, indemnify, pay and save
harmless each Indemnified Party from (A) any Claims which may be imposed on,
incurred by, or asserted against any Indemnified Party arising out of or in any
way relating to or as a consequence, direct or indirect, of the issuance of any
Letter of Credit hereunder and (B) any Claims which may be imposed on, incurred
by, or asserted against any Indemnified Party under any Environmental Laws with
respect to or in connection with the Real Property, any Hazardous Discharge, the
presence of any Hazardous Substances affecting the Real Property (whether or not
the same originates or emerges from the Real Property or any contiguous or other
real estate), including any Claims consisting of or relating to the imposition
or assertion of any Lien on any of the Real Property under any Environmental
Laws and any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable to
any Hazardous Discharge resulting from actions on the part of Agent or any
Lender.  To the extent relating to Hazardous Substances at the Real Property,
the Credit Parties’ obligations under this Section 16.5 shall arise upon the
discovery of the presence of any Hazardous Substances at the Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substances, in each such case except to the extent that the presence of any
Hazardous Substances results from the actions on the part of the Indemnified
Party (as determined by a court of competent jurisdiction in a final and
non-appealable judgment).  Without limiting the generality of the foregoing (but
subject to clauses (x)-(z) above), this indemnity shall extend to any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including
reasonable fees and disbursements of counsel) asserted against or incurred by
any of the Indemnified Parties by any Person under any Environmental Laws or
similar laws by reason of any Credit Party’s or any other Person’s failure to
comply with laws applicable to solid or hazardous waste materials, including
Hazardous Substances and Hazardous Waste, or other Toxic Substances.  No
Indemnified Party shall be liable for any damage arising from the use by others
of information relating to the Credit Parties obtained through electronic,
telecommunications or other information systems, except to the extent such
damages are found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from the gross negligence or willful misconduct of such
Indemnified Party.  This Section 16.5 shall not apply to Taxes, other than any
Taxes that represent claims, demands, liabilities, obligations, losses, damages,
penalties, fines, actions, judgments, suits, costs, charges, expenses or
disbursements arising from any non-Tax claim.

 

16.6.                     Notice.  Any notice or request hereunder to any Credit
Party may be given to Borrowing Agent at its address set forth below or at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section.  Any notice or request hereunder to
Agent or any Lender at their respective addresses set forth below or at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section.  Any notice, request, demand, direction
or other communication (for purposes of this Section 16.6 only, a “Notice”) to
be given to or made upon any party hereto under any provision of this Agreement
shall be given or made by telephone or in writing (which includes by means of
electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting
forth such Notice on a site on the World Wide Web (a “Website Posting”) if
Notice of such Website Posting (including the information necessary to access
such site) has previously been delivered to

 

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the applicable parties hereto by another means set forth in this Section 16.6)
in accordance with this Section 16.6.  Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names in this Section 16.6 hereof or in accordance with any
subsequent unrevoked Notice from any such party that is given in accordance with
this Section 16.6.  Any Notice shall be effective:

 

(a)                                 In the case of hand-delivery, when
delivered;

 

(b)                                 If given by mail, four (4) days after such
Notice is deposited with the United States Postal Service, with first-class
postage prepaid, return receipt requested;

 

(c)                                  In the case of a telephonic Notice, when a
party is contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a facsimile or
electronic transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);

 

(d)                                 In the case of a facsimile transmission,
when sent to the applicable party’s facsimile machine’s telephone number, if the
party sending such Notice receives confirmation of the delivery thereof from its
own facsimile machine;

 

(e)                                  In the case of electronic transmission,
when actually received;

 

(f)                                   In the case of a Website Posting, upon
delivery of a Notice of such posting (including the information necessary to
access such site) by another means set forth in this Section 16.6; and

 

(g)                                  If given by any other means (including by
overnight courier), when actually received.

 

Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently
send a copy thereof to Agent, and Agent shall promptly notify the other Lenders
of its receipt of such Notice.

 

(A)                               If to Agent or HPS at:

 

HPS Investment Partners, LLC

40 West 57th Street, 33rd Floor

New York, New York 10019

Attention:                       Jeffrey Fitts, Brett Pertuz and Piero Russo

Telephone:                 (212) 287 4633, (212) 287 4724 and (212) 287 4271

Facsimile:                       (646) 344 4271

Email:                                          jeffrey.fitts@hpspartners.com;

brett.pertuz@hpspartners.com;

piero.russo@hpspartners.com;

deal-execution@hpspartners.com;

hpsagency@cortlandglobal.com

 

with a copy of non-routine notices only to (which shall not constitute notice):

 

Weil, Gotshal & Manges LLP
767 Fifth Avenue

 

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New York, New York 10153
Attention:                       Damian Ridealgh
Telephone:                 (212) 310 8510
Facsimile:                       (212) 310 8007

Email:                                          damian.ridealgh@weil.com

 

(B)                               If to a Lender other than Agent, to the
address for the Lender as set forth in Agent’s records.

 

(C)                               If to Borrowing Agent or any Borrower:

 

Emerge Energy Services Operating LLC

5600 Clearfork Main Street, Suite 400

Fort Worth, TX 76109

Attention: Robby Myers

Telephone: (817) 841-8087

Email: rmyers@emergelp.com

 

with a copy to (which shall not constitute notice):

 

HPS Investment Partners, LLC

40 West 57th Street, 33rd Floor

New York, New York 10019

Attention:                       Jeffrey Fitts, Brett Pertuz and Piero Russo

Telephone:                 (212) 287 4633, (212) 287 4724 and (212) 287 4271

Facsimile:                       (646) 344 4271

Email:                                          jeffrey.fitts@hpspartners.com;

brett.pertuz@hpspartners.com;

piero.russo@hpspartners.com;

deal-execution@hpspartners.com;

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas  77002
Attention:                       M. Catherine Ozdogan
Telephone:                 (713) 546-7494
Facsimile:                       (713) 546-5401

Email:                                          Catherine.Ozdogan@lw.com

 

16.7.                     Survival.  The obligations of Borrowers under Sections
2.2, 2.8(g), Article III, 4.18(d), and 16.5 and the obligations of Lenders under
Section 14.7, shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.

 

16.8.                     Severability.  If any part of this Agreement is
contrary to, prohibited by, or deemed invalid under Applicable Laws, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

 

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16.9.                     Expenses.  (a) All documented costs and expenses
including attorneys’ fees (which in the case of clauses (b) and (e) shall be
reasonable and which in each case below, includes the costs and disbursements of
one (1) lead counsel for Agent and Lenders and one (1) additional local counsel
in each applicable jurisdiction) incurred by Agent on its behalf or on behalf of
Lenders (i) in all efforts made to enforce payment of any Obligation or effect
collection of any Collateral or enforcement of this Agreement or any of the
Other Documents, (ii) in connection with the entering into, syndication,
modification, amendment and administration of this Agreement or any of the Other
Documents or any consents or waivers hereunder or thereunder and all related
agreements, documents and instruments, (iii) in instituting, maintaining,
preserving, enforcing and foreclosing on Agent’s security interest in or Lien on
any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or
any Lender’s rights hereunder or under any Other Document, whether through
judicial proceedings or otherwise, (iv) in defending or prosecuting any actions
or proceedings arising out of or relating to Agent’s or any Lender’s
transactions with any Credit Party or any other creditor of a Credit Party,
(v) in connection with any advice given to Agent or any Lender with respect to
its rights and obligations under this Agreement and the Other Documents or
(vi) without limiting the foregoing, in ensuring compliance with Article IV and
Section 6.6, and all of the foregoing may be charged to Borrowers’ Account and
shall be part of the Obligations.

 

(b)                                 At any time, Agent may retain a financial
advisor to Agent and the Lenders (the “Financial Advisor”) to conduct a detailed
review of the financial statements, financial projections, existing business
model, operations and long-term credit structure of the Parent Guarantor and its
Subsidiaries and such other matters relating to the Parent Guarantor and its
Subsidiaries as Agent shall determine.  The Credit Parties shall cooperate with
the Financial Advisor and provide the Financial Advisor all such information
reasonably requested by it.  Without limiting Section 16.9(a), the Credit
Parties shall be responsible for, and timely pay, all reasonable and documented
fees and reasonable out-of-pocket expenses and disbursements of the Financial
Advisor, including, if requested by the Financial Advisor and approved by Agent,
a retainer to be applied to such fees and expenses.

 

16.10.              Injunctive Relief.  Each Borrower recognizes that, in the
event any Borrower fails to perform, observe or discharge any of its obligations
or liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.

 

16.11.              Consequential Damages.  Neither Agent nor any Lender, nor
any agent or attorney for any of them, shall be liable to any Credit Party (or
any Subsidiary of any such Person) for indirect, punitive, exemplary or
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other
Document.

 

16.12.              Captions.  The captions at various places in this Agreement
are intended for convenience only and do not constitute and shall not be
interpreted as part of this Agreement.

 

16.13.              Counterparts; Facsimile Signatures.  This Agreement may be
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement.  Any
signature delivered by a party by facsimile or electronic transmission shall be
deemed to be an original signature hereto.

 

16.14.              Construction.  The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved

 

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against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.

 

16.15.              Confidentiality; Sharing Information.  Agent, each Lender
and each Transferee shall hold all non-public information of the Borrowers and
their Subsidiaries obtained by Agent, such Lender or such Transferee pursuant to
the requirements of this Agreement in accordance with Agent’s, such Lender’s and
such Transferee’s customary procedures for handling confidential information of
this nature; provided, however, Agent, each Lender and each Transferee may
disclose such confidential information (a) to its examiners, Affiliates, outside
auditors, counsel and other professional advisors, (b) to Agent, any Lender or
to any prospective Transferees (provided that any prospective Transferee has
agreed in writing to hold such information confidential), and (c) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided, further that (i) unless specifically prohibited by
Applicable Law, Agent, each Lender and each Transferee shall use its reasonable
best efforts prior to disclosure thereof, to notify the applicable Borrower of
the applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (B) pursuant to legal process and
(ii) in no event shall Agent, any Lender or any Transferee be obligated to
return any materials furnished by any Borrower other than those documents and
instruments in possession of Agent or any Lender in order to perfect its Lien on
the Collateral once the Obligations (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) have
been paid in full and this Agreement has been terminated.  Each Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to such Borrower or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by any Lender or
by one or more Subsidiaries or Affiliates of such Lender and each Borrower
hereby authorizes each Lender to share any information delivered to such Lender
by such Borrower and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement, to any
such Subsidiary or Affiliate of such Lender, it being understood that any such
Subsidiary or Affiliate of any Lender receiving such information shall be bound
by the provisions of this Section 16.15 as if it were a Lender hereunder.  Such
authorization shall survive the repayment of the other Obligations and the
termination of this Agreement.

 

16.16.              Publicity.  Each Borrower agrees that any references to
Agent, any Lender or any of their respective affiliates made in connection with
the Transactions are subject to the prior approval of Agent or such Lender, as
applicable, which approval shall not be unreasonably withheld.  Agent and
Lenders shall not be permitted to use information related to the syndication and
arrangement of the Loans in connection with marketing, press releases or other
transactional announcements or updates provided to investor or trade
publications, including, but not limited to, the placement of “tombstone”
advertisements in publications of their choice at their own expense, without the
prior written consent of Parent Guarantor (such consent not to be unreasonably
withheld or delayed); provided, that (I), notwithstanding anything to the
contrary herein, Agent and Lenders may include references to the Loans in their
marketing materials without the prior written consent of Borrowers so long as
such references shall be limited to:  (i) a description of the Transactions,
including industry type; (ii) a reproduction of any Borrower’s logo; (iii) a
description of Agent’s and/or Lenders’ roles in the Transactions (e.g.,
administrative agent, arranger); (iv) the date and amount of the Loans; and
(v) the names of the Borrowers and the other Credit Parties, and (II) upon the
consent by Parent Guarantor, Agent and Lenders may make and distribute
reproductions of such consented-to marketing, press releases or other
transactional announcements or updates.

 

16.17.              Certifications From Banks and Participants; USA PATRIOT Act.

 

(a)                                 Each Lender or assignee or participant of a
Lender that is not incorporated under the Laws of the United States of America
or a state thereof (and is not excepted from the

 

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certification requirement contained in Section 313 of the USA PATRIOT Act and
the applicable regulations because it is both (i) an affiliate of a depository
institution or foreign bank that maintains a physical presence in the United
States or foreign country, and (ii) subject to supervision by a banking
authority regulating such affiliated depository institution or foreign bank)
shall deliver to the Agent the certification, or, if applicable,
recertification, certifying that such Lender is not a “shell” and certifying to
other matters as required by Section 313 of the USA PATRIOT Act and the
applicable regulations:  (1) within 10 days after the Closing Date, and (2) as
such other times as are required under the USA PATRIOT Act.

 

(b)                                 The USA PATRIOT Act requires all financial
institutions to obtain, verify and record certain information that identifies
individuals or business entities which open an “account” with such financial
institution.  Consequently, Lenders may from time to time request, and Borrowers
shall provide to any such Lender, each Borrower’s name, address, tax
identification number and/or such other identifying information as shall be
necessary for such Lender to comply with the USA PATRIOT Act and any other
Anti-Terrorism Law.

 

16.18.              Anti-Terrorism Laws.  Each Credit Party represents and
warrants to the Agent, as of the date of this Agreement, the date of each
Advance, the date of any renewal, extension or modification of this Agreement,
and at all times until the Termination Date, that:  (i) no Covered Entity is a
Sanctioned Person and (ii) no Covered Entity, either in its own right or through
any third party, (a) has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law, (b) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law or (c) engages in any dealings or
transactions prohibited by, any Anti-Terrorism Laws.

 

16.19.              Concerning Joint and Several Liability of Borrowers.

 

(a)                                 Each of Borrowers is accepting joint and
several liability hereunder in consideration of the financial accommodations to
be provided by the Lenders under this Agreement, for the mutual benefit,
directly and indirectly, of each of Borrowers and in consideration of the
undertakings of each of Borrowers to accept joint and several liability for the
obligations of each of them.

 

(b)                                 Each of Borrowers 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, it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of Borrowers without preferences or distinction
among them.

 

(c)                                  If and to the extent that any of Borrowers
shall fail to make any payment with respect to any of the Obligations as and
when due 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.

 

(d)                                 The obligations of each Borrower under the
provisions of this Section 16.19 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.

 

(e)                                  Except as otherwise expressly provided
herein, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Advance made under this

 

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Agreement, notice of occurrence of any Event of Default, or of any demand for
any payment under this Agreement (except as otherwise provided herein), notice
of any action at any time taken or omitted by any Lender under or in respect of
any of the Obligations, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with 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 partial payment thereon, any waiver, consent or other action
or acquiescence by any Lender 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 any
Lender 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 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 Lender, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with the Applicable Laws or regulations thereunder which might, but
for the provisions of this Section 16.19, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its
obligations under this Section 16.19, it being the intention of each Borrower
that, so long as any of the Obligations remain unsatisfied, the obligations of
such Borrower under this Section 16.19 shall not be discharged except by
performance and then only to the extent of such performance.  The Obligations of
each Borrower under this Section 16.19 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any
Lender.  The joint and several liability of Borrowers hereunder shall continue
in full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution or place of
formation of any Borrower or any Lender.

 

(f)                                   The provisions of this Section 16.19 are
made for the benefit of the Lenders and their respective successors and assigns,
and may be enforced by any such Person from time to time against any of
Borrowers as often as occasion therefor may arise and without requirement on the
part of any Lender first to marshal any of its claims or to exercise any of its
rights against any of the other Borrowers or to exhaust any remedies available
to it against any of the other Borrowers or to resort to any other source or
means of obtaining payment of any of the Obligations or to elect any other
remedy.  The provisions of this Section 16.19 shall remain in effect until all
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 any
Lender upon the insolvency, bankruptcy or reorganization of any of Borrowers, or
otherwise, the provisions of this Section 16.19 will forthwith be reinstated in
effect, as though such payment had not been made.

 

(g)                                  Notwithstanding any provision to the
contrary contained herein or in any other of the Other Documents, to the extent
the joint obligations of a Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each Borrower hereunder shall be limited to the maximum
amount that is permissible under Applicable Law (whether federal or state and
including, without limitation, the federal Bankruptcy Code).

 

(h)                                 Borrowers hereby agree, as among themselves,
that if any Borrower shall become an Excess Funding Borrower (as defined below),
each other Borrower shall, on demand of such Excess Funding Borrower (but
subject to the next sentence hereof and to subsection (B) below), pay to such
Excess Funding Borrower an amount equal to such Borrower’s Pro Rata Share (as

 

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defined below and determined, for this purpose, without reference to the
properties, assets, liabilities and debts of such Excess Funding Borrower) of
such Excess Payment (as defined below).  The payment obligation of any Borrower
to any Excess Funding Borrower under this Section 16.19(h) shall be subordinate
and subject in right of payment to the prior payment in full of the Obligations
of such Borrower under the other provisions of this Agreement, and such Excess
Funding Borrower shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such Obligations.  For
purposes hereof, (i) “Excess Funding Borrower” shall mean, in respect of any
Obligations arising under the other provisions of this Agreement (hereafter, the
“Joint Obligations”), a Borrower that has paid an amount in excess of its Pro
Rata Share of the Joint Obligations; (ii) “Excess Payment” shall mean, in
respect of any Joint Obligations, the amount paid by an Excess Funding Borrower
in excess of its Pro Rata Share of such Joint Obligations; and (iii) “Pro Rata
Share,” for the purposes of this Section 16.19(h), shall mean, for any Borrower,
the ratio (expressed as a percentage) of (A) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Borrower (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Borrower hereunder) to (B) the amount by which the aggregate
present fair salable value of all assets and other properties of such Borrower
and all of the other Borrowers exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Borrower and the other
Borrowers hereunder) of such Borrower and all of the other Borrowers, all as of
the Closing Date (if any Borrower becomes a party hereto subsequent to the
Closing Date, then for the purposes of this Section 16.19(h) such subsequent
Borrower shall be deemed to have been a Borrower as of the Closing Date and the
information pertaining to, and only pertaining to, such Borrower as of the date
such Borrower became a Borrower shall be deemed true as of the Closing Date)
notwithstanding the payment obligations imposed on Borrowers in this Section,
the failure of a Borrower to make any payment to an Excess Funding Borrower as
required under this Section shall not constitute an Event of Default.

 

16.20.              Non-Applicability of Chapter 346.  The parties hereto hereby
agree that, except for the opt-out provisions of Section 346.004 thereof, the
provisions of Chapter 346 of the Texas Finance Code (regulating certain
revolving credit loans and revolving tri-party accounts) shall not apply to this
Agreement, any of the Other Documents, or the Obligations.

 

16.21.              BORROWERS’ WAIVER OF RIGHTS UNDER TEXAS DECEPTIVE TRADE
PRACTICES ACT.  EACH BORROWER HEREBY WAIVES ANY RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT, SECTION § 17.41 ET SEQ. TEXAS BUSINESS &
COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER
CONSULTATION WITH AN ATTORNEY OF THE BORROWERS’ OWN SELECTION, EACH BORROWER
VOLUNTARILY CONSENTS TO THIS WAIVER.  EACH BORROWER EXPRESSLY WARRANTS AND
REPRESENTS THAT EACH BORROWER (A) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION RELATIVE TO AGENT, AND (B) HAS BEEN REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE OTHER
DOCUMENTS.

 

16.22.              [Reserved].

 

16.23.              Acknowledgment and Consent to Bail-In of EEA Financial
Institutions.  Notwithstanding anything to the contrary in any Other Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Lender that is an EEA
Financial Institution arising under any Other Document, to the extent such
liability is unsecured, may be

 

129

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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 Lender that is an EEA Financial
Institution; and

 

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

 

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

 

(ii)                                  a conversion of all, or a portion of, such
liability into shares or other instruments of ownership in such EEA Financial
Institution, its parent 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 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.

 

[Remainder of page intentionally left blank; signature pages follow.]

 

130

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

 

 

PARENT GUARANTOR:

 

 

 

EMERGE ENERGY SERVICES LP

 

 

 

 

By: EES GP, LLC,

 

 

its general partner

 

 

 

By:

/s/ Richard Shearer

 

Name:

Richard Shearer

 

Title:

Authorized Officer

 

 

 

BORROWERS:

 

 

 

EMERGE ENERGY SERVICES OPERATING LLC

 

 

 

By:

/s/ Richard Shearer

 

Name:

Richard Shearer

 

Title:

Authorized Officer

 

 

 

SUPERIOR SILICA SANDS LLC

 

 

 

 

By: EMERGE ENERGY SERVICES OPERATING LLC, its sole member

 

 

 

By:

/s/ Richard Shearer

 

Name:

Richard Shearer

 

Title:

Authorized Officer

 

 

 

EMERGE ENERGY SERVICES FINANCE CORPORATION

 

 

 

 

By: EMERGE ENERGY SERVICES OPERATING LLC, its sole stockholder

 

 

 

By:

/s/ Richard Shearer

 

Name:

Richard Shearer

 

Title:

Chief Executive Officer

 

[Signature Page]

Revolving Credit and Security Agreement

 

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AGENT, ADMINISTRATIVE AGENT,
COLLATERAL AGENT AND LENDER:

 

 

 

HPS INVESTMENT PARTNERS, LLC

 

 

 

By:

/s/ Brett Pertuz

 

Name:

Brett Pertuz

 

Title:

Managing Director

 

[Signature Page]

Revolving Credit and Security Agreement

 

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LENDER:

 

 

 

MP III OFFSHORE MEZZANINE INVESTMENTS, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[Signature Page to Revolving Credit and Security Agreement]

 

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MEZZANINE PARTNERS III, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[Signature Page to Revolving Credit and Security Agreement]

 

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AP MEZZANINE PARTNERS III, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OHA-CDP ESCF, L.P.

 

 

 

By: OHA-CDP ESCF GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, its managing member

 

By: OHA Global PE MGP, LLC, its managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OHA BCSS SSD, L.P.

 

 

 

By: OHA BCSS SSD GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, as managing member

 

By: OHA Global PE MGP, LLC, as managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OHA MPS SSD, L.P.

 

 

 

By: OHA MPS SSD GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, as managing member

 

By: OHA Global PE MGP, LLC, as managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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THE COCA-COLA COMPANY MASTER RETIREMENT TRUST

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

By: Oak Hill Advisors GenPar, L.P., its general partner

 

 

 

By: Oak Hill Advisors MGP, Inc., its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OHA Enhanced Credit Strategies Master Fund, L.P.

 

 

 

By: OHA Enhanced Credit Strategies GenPar, LLC, its general partner

 

By: OHA Global GenPar, LLC, as managing member

 

By: OHA Global MGP, LLC, as managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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Future Fund Board of Guardians

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

By: Oak Hill Advisors GenPar, L.P., its general partner

 

 

 

By: Oak Hill Advisors MGP, Inc., its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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INDIANA PUBLIC RETIREMENT SYSTEM

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

By: Oak Hill Advisors GenPar, L.P., its general partner

 

 

 

By: Oak Hill Advisors MGP, Inc., its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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Lerner Enterprises, LLC

 

 

 

By: Oak Hill Advisors, L.P., as advisor and attorney-in-fact to Lerner
Enterprises, LLC

 

 

 

By: Oak Hill Advisors GenPar, L.P., its general partner

 

 

 

By: Oak Hill Advisors MGP, Inc., its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OCA OHA Credit Fund LLC, an individual series of OCA Investment Partners LLC

 

 

 

By: OHA Centre Street GenPar, LLC, its general partner

 

 

 

By: OHA Centre Street MGP, LLC, its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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OHA Centre Street Partnership, L.P.

 

 

 

By: OHA Centre Street GenPar, LLC, its general partner

 

By: OHA Centre Street MGP, LLC, its managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

 

Oregon Public Employees Retirement Fund

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

By: Oak Hill Advisors GenPar, L.P., its general partner

 

 

 

By: Oak Hill Advisors MGP, Inc., its managing general partner

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

OHA AD Customized Credit Fund (International), L.P.

 

 

 

By: OHA AD Customized Credit Fund GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, its managing member

 

By: OHA Global PE MGP, LLC, its managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

Master SIF SICAV-SIF

 

 

 

By: OHA (UK) LLP, as Investment Manager

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

OHA Finlandia Credit Fund, L.P.

 

 

 

By: OHA Finlandia Credit Fund GenPar, LLC, its general partner

 

By: OHA Global GenPar, LLC, its managing member

 

By: OHA Global MGP, LLC, its managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

OC II LVS III LP

 

 

 

By:

/s/ Adam L. Gubner

 

Name:

Adam L. Gubner

 

Title:

Authorized Person

 

[Signature Page to Revolving Credit and Security Agreement]

 

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