Exhibit 10.1

Execution Version

 

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April 21, 2013

CECO Environmental Corp.

4625 Red Bank Road

Cincinnati, Ohio 45227

Attention:   

Phillip DeZwirek

Chairman

Commitment Letter—$125,000,000 Senior Credit Facilities

Ladies and Gentlemen:

CECO Environmental Corp., a Delaware corporation (“you” or the “Borrower”), has
advised Bank of America, N.A. (“Bank of America”) and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“MLPFS”) that you intend to acquire 100% of the
equity interests of Met-Pro Corporation, a Pennsylvania corporation (the
“Target” and such transaction, the “Acquisition”) using a combination of your
common stock and up to $110,200,000 of cash consideration. You have also advised
Bank of America and MLPFS that you intend to finance the Acquisition (including
the refinancing of material indebtedness of the Target and its subsidiaries),
the repayment in full of the material indebtedness of the Borrower and its
subsidiaries (the “Refinancing”), costs and expenses related to the Transaction
(as hereinafter defined) and the ongoing working capital and other general
corporate purposes of the Borrower and its subsidiaries after consummation of
the Acquisition from the following sources (and that no financing other than the
financing described herein will be required to finance the Acquisition and costs
and expenses related to the Transaction: (a) a $65,000,000 senior term loan
facility (the “Term Loan Facility”) and (b) a revolving credit facility of up to
$60,000,000 (the “Revolving Credit Facility” and together with the Term Loan
Facility, collectively, the “Senior Credit Facilities”). The Acquisition, the
Refinancing, the entering into and funding of the Senior Credit Facilities and
all related transactions are hereinafter collectively referred to as the
“Transaction.” The sources and uses for the financing for the Transaction are as
set forth on Schedule I hereto.

1. COMMITMENTS, ENGAGEMENT AND TITLES.

(a) Subject to the terms and conditions set forth in this letter agreement (this
“Commitment Letter”) and in the Summary of Terms and Conditions attached as
Exhibit A hereto and incorporated herein by this reference (the “Summary of
Terms”),

(i) Bank of America is pleased to advise you of its commitment to (A) provide
the full principal amount of the Senior Credit Facilities and (B) act as the
sole administrative agent for the Senior Credit Facilities, and

(ii) MLPFS is pleased to advise you of its willingness, in connection with the
foregoing commitments, to act as the sole lead arranger and sole book manager
for the Senior Credit Facilities, and, in such capacity, to form a syndicate of
financial institutions (collectively, the “Lenders”) in consultation with you
for the Senior Credit Facilities.

(b) No additional agents, co-agents or arrangers will be appointed and no other
titles will be awarded without our prior written approval.

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2. CONDITIONS. The commitment of Bank of America hereunder and the undertaking
of MLPFS to provide the services described herein are subject to the
satisfaction of each (and only each) of the following conditions precedent in a
manner acceptable to Bank of America and MLPFS: (i) the accuracy and
completeness of all representations that you and your affiliates make to Bank of
America and MLPFS and your compliance with the terms of this Commitment Letter
(including the Summary of Terms) and the Fee Letter (as hereinafter defined);
(ii) prior to and during the syndication of the Senior Credit Facilities, there
shall be no competing offering, placement or arrangement of any debt securities
or bank financing by or on behalf of the Borrower or any of its subsidiaries;
and (iii) the satisfaction of the conditions precedent set forth in Schedule I
to the Summary of Terms.

3. SYNDICATION.

(a) MLPFS shall commence syndication of the Senior Credit Facilities promptly
upon your acceptance of this Commitment Letter and the Fee Letter. You agree,
until the Syndication Assistance Termination Date (as hereinafter defined), to
actively assist MLPFS in achieving a Successful Syndication (as defined in the
Fee Letter). Such assistance shall include (i) your providing and causing your
advisors to provide Bank of America and MLPFS and the other Lenders upon request
with all information reasonably deemed necessary by Bank of America and MLPFS to
complete syndication, including, but not limited to, information and evaluations
prepared by you and your advisors, or on your behalf, relating to the
Transaction (including the Projections (as hereinafter defined), the
“Information”), (ii) your assistance in the preparation of an Information
Memorandum to be used in connection with the syndication of the Senior Credit
Facilities (collectively with the Summary of Terms, the “Information
Materials”), (iii) using your best efforts to ensure that the syndication
efforts of Bank of America and MLPFS benefit materially from your existing
banking relationships, and (iv) otherwise assisting Bank of America and MLPFS in
their syndication efforts, including by making your officers and advisors
available from time to time to attend and make presentations regarding the
business and prospects of the Borrower and its subsidiaries and the Target and
its subsidiaries, as appropriate, at one or more meetings of prospective
Lenders.

(b) It is understood and agreed that MLPFS will manage and control all aspects
of the syndication in consultation with you, including decisions as to the
selection of prospective Lenders and any titles offered to proposed Lenders,
when commitments will be accepted and the final allocations of the commitments
among the Lenders. It is understood that no Lender participating in the Senior
Credit Facilities will receive compensation from you in order to obtain its
commitment, except on the terms contained in the Fee Letter and in the Summary
of Terms (it being understood and agreed that such fees are in lieu of and not
in addition to the fees described in the letter agreement dated as of March 8,
2013, between you and MLPFS (the “Engagement Letter”)). It is also understood
and agreed that the amount and distribution of the fees among the Lenders will
be at the sole and absolute discretion of Bank of America and MLPFS.

(c) Notwithstanding the right of MLPFS to syndicate the Senior Credit Facilities
and receive commitments with respect thereto, (i) Bank of America shall not be
relieved, released or novated from its obligations hereunder, including its
obligation to fund its commitment to the Senior Credit Facilities on the date of
consummation of the Transaction (the date of such consummation and funding being
referred to as the “Closing Date”), in connection with any syndication,
assignment or participation of the Senior Credit Facilities, including its
commitment in respect thereof, until funding of the Senior Credit Facilities on
the Closing Date and (ii) Bank of America shall retain exclusive control over
all rights and obligations with respect to its commitment in respect of the
Senior Credit Facilities, including all rights with respect to consents,
modifications, supplements, waivers and amendments, until the Closing Date has
occurred, in each case unless you otherwise agree in writing (including, without
limitation, pursuant to any revised version of this Commitment Letter or an
amendment or joinder hereto).

 

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(d) The provisions of this Section 3 shall remain in full force and effect until
the earliest of (i) ninety (90) days following the Closing Date, (ii) the
completion of a Successful Syndication, or (iii) the termination of this
Commitment Letter pursuant to the last paragraph hereof other than as a result
of the occurrence of the Closing Date (the “Syndication Assistance Termination
Date”).

4. INFORMATION.

(a) You hereby represent, warrant and covenant that (i) all Information, other
than Projections and information of a general economic or general industry
nature, which has been or is hereafter made available to Bank of America, MLPFS
or the Lenders by you or any of your representatives (or on your or their
behalf) in connection with any aspect of the Transaction, as and when furnished,
is and will be complete and correct in all material respects, when taken as a
whole with other Information furnished with respect to such aspect of the
Transaction, and does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and (ii) all financial projections concerning the Borrower and its subsidiaries
or the Target and its subsidiaries that have been or are hereafter made
available to Bank of America, MLPFS or the Lenders by you or any of your
representatives (or on your or their behalf) (the “Projections”) have been or
will be prepared in good faith based upon assumptions believed by you to be
reasonable at the time made and at the time the related Projections are made
available to Bank of America, MLPFS or the Lenders (it being understood that any
such Projections are subject to uncertainties and contingencies, some of which
are beyond your control, that no assurance can be given that any particular
Projections will be realized, that actual results may differ and that such
differences may be material). You agree to furnish us with further and
supplemental information from time to time until the Closing Date and, if
requested by us, from time to time thereafter until the Syndication Assistance
Termination Date so that the representation, warranty and covenant in the
preceding sentence is correct on the Closing Date and, if requested by us, until
the Syndication Assistance Termination Date so that the representations,
warranties and covenants in the immediately preceding sentence are correct on
the Closing Date and, if further and supplemental information is requested
pursuant to this sentence, on such later date prior to the Syndication
Assistance Termination Date on which the Successful Syndication is completed as
if the Information were being furnished, and such representation, warranty and
covenant were being made, on such date. In issuing this commitment and in
arranging and syndicating the Senior Credit Facilities, Bank of America and
MLPFS are and will be using and relying on the Information without independent
verification thereof.

(b) You acknowledge that MLPFS and/or Bank of America on your behalf will make
available Information Materials to the proposed syndicate of Lenders by posting
the Information Materials on IntraLinks, SyndTrak or another similar electronic
system. In connection with the syndication of the Senior Credit Facilities,
unless the parties hereto otherwise agree in writing, you shall be under no
obligation to provide Information Materials suitable for distribution to any
prospective Lender (each, a “Public Lender”) that has personnel who do not wish
to receive material non-public information (within the meaning of the United
States federal securities laws, “MNPI”) with respect to the Borrower, the
Target, your or their respective affiliates or any other entity, or the
respective securities of any of the foregoing. You agree, however, that the
Facilities Documentation (as defined in the Summary of Terms) will contain
provisions concerning Information Materials to be provided to Public Lenders and
the absence of MNPI therefrom. Prior to distribution of Information Materials to
prospective Lenders, you shall provide us with a customary letter authorizing
the dissemination thereof.

 

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5. EXPENSES. By executing this Commitment Letter, you agree to reimburse Bank of
America and MLPFS from time to time on demand for all reasonable out-of-pocket
fees and expenses (including, but not limited to, (a) the reasonable fees,
disbursements and other charges of McGuireWoods LLP, as counsel to Bank of
America and MLPFS, and, if reasonably necessary, of one local counsel and one
applicable regulatory counsel in each relevant jurisdiction and (b) due
diligence expenses) incurred in connection with the Senior Credit Facilities,
the syndication thereof, the preparation of the Facilities Documentation and any
other aspect of the Transaction. You acknowledge that we may receive a benefit,
including without limitation, a discount, credit or other accommodation, from
counsel based on the fees such counsel may receive on account of its
relationship with us, including, without limitation, fees paid pursuant hereto.

6. INDEMNIFICATION. You agree to indemnify and hold harmless Bank of America,
MLPFS, each Lender and each of their affiliates and their respective partners,
officers, directors, employees, agents, trustees, administrators, managers,
advisors and representatives (each, an “Indemnified Party”) from and against
(and will reimburse each Indemnified Party as the same are incurred for) any and
all claims, damages, losses, liabilities and expenses (including, without
limitation, the reasonable and documented fees, disbursements and other charges
of one counsel to the Indemnified Parties, taken as a whole, and, if reasonably
necessary, of one local counsel and one applicable regulatory counsel in each
relevant jurisdiction to all such Indemnified Parties, taken as a whole, and,
solely in the case of a conflict of interest, one additional counsel to all
affected Indemnified Parties similarly situated, taken as a whole) that may be
incurred by or asserted or awarded against any Indemnified Party (collectively,
“Losses”), in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (a) any
matters contemplated by this Commitment Letter, the Transaction or any related
transaction or (b) the Senior Credit Facilities and any other concurrent or
subsequent financings or any use made or proposed to be made with the proceeds
thereof, except to the extent such Loss is found in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or willful misconduct. In the case of an
investigation, litigation or proceeding to which the indemnity in this paragraph
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by you, your equity holders or creditors or
an Indemnified Party, whether or not an Indemnified Party is otherwise a party
thereto and whether or not any aspect of the Transaction is consummated. You
also agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to you or your subsidiaries or
affiliates or to your or their respective equity holders or creditors arising
out of, related to or in connection with any aspect of the Transaction, except
to the extent of direct, as opposed to special, indirect, consequential or
punitive, damages determined in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. Notwithstanding any other provision of this
Commitment Letter, no Indemnified Party shall be liable for any damages arising
from the use by others of information or other materials obtained through
electronic telecommunications or other information transmission systems.

7. CONFIDENTIALITY. This Commitment Letter and the fee letter among you, Bank of
America and MLPFS of even date herewith (the “Fee Letter”) and the contents
hereof and thereof are confidential and, except for disclosure hereof or thereof
on a confidential basis to your accountants, attorneys and other professional
advisors retained by you in connection with the Transaction or as otherwise
required by law, may not be disclosed in whole or in part to any person or
entity without our prior written consent; provided, however, it is understood
and agreed that you may disclose this Commitment Letter (including the Summary
of Terms) but not the Fee Letter (a) on a confidential basis to the board of
directors, officers, attorneys and advisors of the Target in connection with
their consideration of the Transaction and (b) after your acceptance of this
Commitment Letter and the Fee

 

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Letter, in filings with the Securities and Exchange Commission and other
applicable regulatory authorities and stock exchanges. Bank of America and MLPFS
hereby notify you that pursuant to the requirements of the USA PATRIOT Act,
Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), each
of them is required to obtain, verify and record information that identifies
you, which information includes your name and address and other information that
will allow Bank of America or MLPFS, as applicable, to identify you in
accordance with the Act.

8. OTHER SERVICES.

(a) You acknowledge that Bank of America and MLPFS or their affiliates may be
providing financing or other services to parties whose interests may conflict
with yours. Bank of America and MLPFS agree that they will not furnish
confidential information obtained from you to any of their other customers and
that they will treat confidential information relating to you, the Target and
your and their respective affiliates with the same degree of care as they treat
their own confidential information. Bank of America and MLPFS further advise you
that they will not make available to you confidential information that they have
obtained or may obtain from any other customer. In connection with the services
and transactions contemplated hereby, you agree that Bank of America and MLPFS
are permitted to access, use and share with any of their bank or non-bank
affiliates, agents, advisors (legal or otherwise) or representatives any
information concerning you, the Target or any of your or its respective
affiliates that is or may come into the possession of Bank of America, MLPFS or
any of such affiliates.

(b) In connection with all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (i) the arranging and other services described herein
regarding the Senior Credit Facilities are arm’s-length commercial transactions
between you and your affiliates, on the one hand, and Bank of America and MLPFS,
on the other hand, (ii) you have consulted your own legal, accounting,
regulatory and tax advisors to the extent you have deemed appropriate, and
(iii) you are capable of evaluating, and understand and accept, the terms, risks
and conditions of the transactions contemplated hereby; (b) (i) each of Bank of
America and MLPFS has been, is, and will be acting solely as a principal and,
except as otherwise expressly agreed in writing by the relevant parties, neither
Bank of America nor MLPFS has been, is, or will be acting as an advisor, agent
or fiduciary for you, any of your affiliates or any other person or entity and
(ii) Bank of America and MLPFS have no obligation to you or your affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein; and (c) Bank of America, MLPFS and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from yours and those of your affiliates, and Bank of
America and MLPFS have no obligation to disclose any of such interests to you or
your affiliates. To the fullest extent permitted by law, you hereby waive and
release any claims that you may have against Bank of America and MLPFS with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated by this Commitment
Letter.

9. SURVIVAL.

(a) The provisions of Sections 5, 6, 7, 8, 9 and 10 of this Commitment Letter
shall remain in full force and effect regardless of whether any of the
Facilities Documentation shall be executed and delivered, and notwithstanding
the termination of this Commitment Letter or any commitment or undertaking
hereunder.

(b) In the event the Closing Date occurs prior to the occurrence of the
Syndication Assistance Termination Date, your obligations to assist in the
syndication of the Senior Credit Facilities set forth in Section 3 and the
representations, covenants and other provisions of Section 4 with respect to the
syndication of the Senior Credit Facilities shall remain in full force and
effect until the Syndication Assistance Termination Date.

 

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10. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL; ETC. This Commitment
Letter (including the Summary of Terms) and the Fee Letter shall be governed by,
and construed in accordance with, the laws of the State of New York. The
Borrower irrevocably and unconditionally agrees that it will not commence any
action, litigation or proceeding of any kind or description, whether in law or
equity, whether in contract or in tort or otherwise, against Bank of America,
MLPFS, any Lender or any Indemnified Party in any way relating to this
Commitment Letter (including the Summary of Terms), the Fee Letter, the
transactions contemplated hereby or thereby or the actions of Bank of America or
MLPFS in the negotiation, performance or enforcement hereof or thereof, in any
forum other than the courts of the State of New York sitting in New York County,
and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, and each of the parties hereto
irrevocably and unconditionally submits to the jurisdiction of such courts and
agrees that all claims in respect of any such action, litigation or proceeding
may be heard and determined in such New York State court or, to the fullest
extent permitted by applicable law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action, litigation or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Commitment
Letter (including the Summary of Terms) shall affect any right that MLPFS or any
Lender may otherwise have to bring any action or proceeding relating to this
Commitment Letter (including the Summary of Terms) against the Borrower or its
properties in the courts of any jurisdiction. Each of you, Bank of America and
MLPFS hereby irrevocably waives any and all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Commitment Letter (including,
without limitation, the Summary of Terms), the Fee Letter, the transactions
contemplated hereby and thereby or the actions of Bank of America and MLPFS in
the negotiation, performance or enforcement hereof or thereof.

11. MISCELLANEOUS.

(a) This Commitment Letter and the Fee Letter may be executed in counterparts
which, taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by facsimile or other
electronic imaging means (including .pdf) shall be effective as delivery of a
manually executed counterpart thereof.

(b) This Commitment Letter (including the Summary of Terms) and the Fee Letter,
embodies the entire agreement and understanding among Bank of America, MLPFS,
you and your affiliates with respect to the Senior Credit Facilities and
supersedes all prior agreements and understandings relating to the specific
matters hereof. However, please note that the terms and conditions of the
commitment of Bank of America and the undertaking of MLPFS hereunder are not
limited to those set forth herein or in the Summary of Terms. Those matters that
are not covered or made clear herein or in the Summary of Terms or the Fee
Letter are subject to mutual agreement of the parties. No party has been
authorized by Bank of America or MLPFS to make any oral or written statements
that are inconsistent with this Commitment Letter. This Commitment Letter is not
assignable by the Borrower without our prior written consent and is intended to
be solely for the benefit of the parties hereto and the Indemnified Parties.

12. ACCEPTANCE/EXPIRATION OF COMMITMENTS. This Commitment Letter and all
commitments and undertakings of Bank of America and MLPFS hereunder will expire
at 5:00 p.m. (New York time) on April 30, 2013 unless you execute this
Commitment Letter and the Fee Letter and return them to us prior to that time
(which may be by facsimile transmission), whereupon this Commitment Letter and
the Fee Letter (each of which may be signed in one or more counterparts) shall
become binding

 

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agreements. Thereafter, all commitments and undertakings of Bank of America and
MLPFS hereunder will expire on the earliest of (a) September 30, 2013 (or, if
the Drop Dead Date (as defined in the Purchase Agreement) is automatically
extended pursuant to Section 9.2(a) of the Purchase Agreement, October 31,
2013), unless the Closing Date occurs on or prior thereto, (b) the closing of
the Acquisition without the use of the Senior Credit Facilities, (c) the
acceptance by the Target or any of its affiliates of an offer for all or any
material part of the capital stock or property and assets of the Target and its
subsidiaries other than as part of the Transaction and (d) the date you
announce, or inform in writing Bank of America or MLPFS, that the Acquisition is
not proceeding. In consideration of the time and resources that MLPFS and Bank
of America will devote to the Senior Credit Facilities, you agree that, until
such expiration, you will not solicit, initiate, entertain or permit, or enter
into any discussions in respect of, any offering, placement or arrangement of
any competing debt securities or bank financing for the Borrower or any of its
subsidiaries with respect to the matters addressed in this Commitment Letter.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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If this letter agreement reflects our agreement, please indicate your acceptance
by signing in the space below.

 

Very truly yours, BANK OF AMERICA, N.A. By:  

/s/ Matthew S. Buzzelli

  Name: Matthew S. Buzzelli   Title: Senior Vice President MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED By:  

/s/ D. Clay Hall

  Name: D. Clay Hall   Title: Director

 

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE WRITTEN:

CECO ENVIRONMENTAL CORP. By:  

/s/ Phillip DeZwirek

  Name: Phillip DeZwirek   Title: Chairman

COMMITMENT LETTER

Signature Page

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Execution Version

EXHIBIT A

SUMMARY OF TERMS AND CONDITIONS

CECO ENVIRONMENTAL CORP.

$125,000,000 SENIOR CREDIT FACILITIES

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the commitment letter (the “Commitment Letter”) to
which

this Summary of Terms and Conditions is attached.

 

BORROWER:

   CECO Environmental Corp., a Delaware corporation (the “Borrower”).

GUARANTORS:

   The obligations of the Borrower and its subsidiaries under the Senior Credit
Facilities (as defined below) and under any treasury management, interest
protection or other hedging arrangements entered into with a Lender (or any
affiliate thereof) will be guaranteed by each existing and future direct and
indirect domestic and, to the extent no adverse tax consequences would result,
material foreign subsidiary of the Borrower (collectively, the “Guarantors”);
provided that, in any event, none of CECO Environmental Netherlands B.V.,
Aarding Thermal Acoustics B.V., ATA Beheer B.V. or Atradius Credit Insurances
N.V. shall be required to become a Guarantor. All guarantees will be guarantees
of payment and not of collection.

ADMINISTRATIVE AND

COLLATERAL AGENT:

   Bank of America, N.A. (“Bank of America”) will act as sole administrative and
collateral agent (in such capacity, the “Administrative Agent”).

SOLE LEAD ARRANGER  AND

SOLE BOOK MANAGER:

   Merrill Lynch, Pierce, Fenner & Smith Incorporated will act as sole lead
arranger and sole book manager (in such capacity, the “Lead Arranger”).

LENDERS:

   A syndicate of banks and financial institutions (including Bank of America)
acceptable to the Lead Arranger and the Administrative Agent selected in
consultation with the Borrower (collectively, the “Lenders”).

SENIOR CREDIT FACILITIES:

   An aggregate principal amount of up to $125,000,000 will be available through
the following facilities (each, a “Facility” and, collectively, the “Senior
Credit Facilities”):    Term Loan Facility: A term loan facility in an aggregate
principal amount of up to $65,000,000 (the “Term Loan Facility”), all of which
will be drawn on the Closing Date (as defined below).    Revolving Credit
Facility: A $60,000,000 revolving credit facility, available from time to time
until the fifth anniversary of the Closing

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   Date, which will include a sublimit to be determined for the issuance of
standby letters of credit (each a “Letter of Credit”) and a sublimit to be
determined for swingline loans (each a “Swingline Loan”). Letters of Credit will
be issued by Bank of America (in such capacity, the “Fronting Bank”) and
Swingline Loans will be made available by Bank of America, and each of the
Lenders under the Revolving Credit Facility will purchase an irrevocable and
unconditional participation in each Letter of Credit and each Swingline Loan.

SWINGLINE OPTION:

   Swingline Loans will be made available on a same day basis in an aggregate
amount not exceeding a sublimit to be determined and in minimum amounts of
$100,000. The Borrower must repay each Swingline Loan in full no later than ten
(10) business days after such loan is made.

INCREASE OPTION:

   The Borrower may from time to time after the Closing Date request the
addition of a new tranche of term loans (an “Incremental Term Facility”), an
increase in the commitments to the Revolving Credit Facility (an “Incremental
Revolving Commitment”) or a combination thereof without any further consent of
the Lenders; provided that (i) at the time of any such request and upon the
effectiveness of the Incremental Facility Amendment (as defined below), no
default or event of default shall exist (including a projection by the Borrower
of pro forma financial covenant compliance reasonably acceptable to the
Administrative Agent), (ii) no existing Lender shall be required to (but may)
provide any portion of any Incremental Term Facility or Incremental Revolving
Commitment, (iii) each Incremental Term Facility or Incremental Revolving
Commitment shall be in a minimum amount of $10,000,000 and (iv) the aggregate
amount of all such Incremental Term Facilities and Incremental Revolving
Commitments shall not exceed $30,000,000.    Each Incremental Term Facility
shall (a) rank pari passu in right of payment and of security with the Senior
Credit Facilities, (b) not mature earlier than the maturity date of the Term
Loan Facility, (c) have a weighted average life at least equal to the remaining
weighted average life of the Term Loan Facility and contain terms as to
prepayments and amortization no more favorable than the Term Loan Facility and
(d) not contain additional or different covenants or financial covenants which
are more restrictive in any material respect than the covenants applicable to
the Senior Credit Facilities unless either such covenants benefit all of the
Lenders or are otherwise consented to by the Administrative Agent.    The
Borrower may arrange for one or more new banks or other financial institutions,
each of which shall be reasonably satisfactory to the Administrative Agent and,
with respect to any Incremental Revolving Commitments, the Fronting Bank and the
Swingline Lender (any such bank or financial institution, an “Additional
Lender”), to provide all or any portion of any Incremental Term Facility or
Incremental Revolving Commitment.

 

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   Each Incremental Term Facility or Incremental Revolving Commitment shall be
evidenced by an amendment (an “Incremental Facility Amendment”) to the credit
agreement executed by the Borrower, each existing Lender agreeing to provide any
portion of such Incremental Term Facility or Incremental Revolving Commitment,
each Additional Lender, if any, and the Administrative Agent. An Incremental
Facility Amendment may, without the consent of any other Lenders, effect such
amendments to the Loan Documents as are determined by the Administrative Agent
to be reasonably necessary to effect the provisions of this Section.    No
Incremental Revolving Commitment shall increase the sublimit for Letters of
Credit or Swingline Loans without the consent of the Fronting Bank and the
Swingline Lender. PURPOSE:    The proceeds of the Senior Credit Facilities shall
be used to (i) finance in part the Acquisition; (ii) refinance certain existing
indebtedness of the Borrower and its subsidiaries; (iii) pay fees and expenses
incurred in connection with the Transaction; and (iv) provide ongoing working
capital and for other general corporate purposes of the Borrower and its
subsidiaries. CLOSING DATE:    The execution of the definitive documentation for
the Senior Credit Facilities (such documentation, the “Facilities
Documentation”), to occur on or before September 30, 2013 (or, if the Drop Dead
Date (as defined in the Purchase Agreement) is automatically extended pursuant
to Section 9.2(a) of the Purchase Agreement, October 31, 2013) (the “Closing
Date”). INTEREST RATES:    As set forth in Addendum I. MATURITY:    The Senior
Credit Facilities shall terminate and all amounts outstanding thereunder shall
be due and payable in full five years from the Closing Date. SCHEDULED
AMORTIZATION/ AVAILABILITY:    Term Loan Facility: The Term Loan Facility will
be subject to quarterly amortization of principal, based upon the annual
percentages of the original stated amount of the Term Loan Facility set forth
below, with the final payment of all amounts outstanding, plus accrued interest,
being due at maturity:

 

3

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Loan Year

   % of Stated Principal Amount  

Loan year 1

     7.5 % 

Loan year 2

     7.5 % 

Loan year 3

     7.5 % 

Loan year 4

     10.0 % 

Loan year 5

     12.5 % 

 

   Revolving Credit Facility: Loans under the Revolving Credit Facility may be
made on a revolving basis up to the full amount of the Revolving Credit
Facility, Letters of Credit may be issued up to the sublimit for Letters of
Credit and Swingline Loans may be issued up to the sublimit for Swingline Loans.
MANDATORY PREPAYMENTS:    The Term Loan Facility will be subject to mandatory
prepayment provisions that are usual and customary for transactions of this
type; provided that such prepayment provisions shall (a) not include any excess
cash flow recapture requirements and (b) include a carveout in an amount to be
determined for amounts received in connection with dispositions of certain real
property acquired in the Acquisition. Each such prepayment of the Term Loan
Facility shall be applied to the principal installments thereof on a pro rata
basis. OPTIONAL PREPAYMENTS AND COMMITMENT    REDUCTIONS:    The Senior Credit
Facilities may be prepaid in whole or in part at any time without premium or
penalty, subject to reimbursement of the Lenders’ breakage and redeployment
costs in the case of prepayment of LIBOR borrowings. Each such prepayment of the
Term Loan Facility shall be applied to the principal installments thereof on a
pro rata basis. The unutilized portion of the commitments under the Revolving
Credit Facility may be irrevocably reduced or terminated by the Borrower at any
time without penalty. SECURITY:    The Borrower and each of the Guarantors shall
grant the Administrative Agent and the Lenders valid and perfected first
priority (subject to certain exceptions to be set forth in the Facilities
Documentation) liens and security interests in all of the following:   

(a)      All present and future shares of capital stock of (or other ownership
or profit interests in) each of its present and future subsidiaries (limited, in
the case of each entity that is a “controlled foreign corporation” under Section
957 of the Internal Revenue Code, to a pledge of 65% of the capital stock of
each such first-tier foreign subsidiary to the extent the pledge of any greater
percentage would result in adverse tax consequences to the Borrower).

 

4

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(b)      All present and future intercompany debt of the Borrower and each
Guarantor.

  

(c)      All of the present and future property and assets, real and personal,
of the Borrower and each Guarantor, including, but not limited to, machinery and
equipment, inventory and other goods, accounts receivable, owned real estate,
material leaseholds, fixtures, bank accounts, general intangibles, financial
assets, investment property, license rights, patents, trademarks, tradenames,
copyrights, chattel paper, insurance proceeds, contract rights, hedge
agreements, documents, instruments, indemnification rights, tax refunds and
cash.

  

(d)      All proceeds and products of the property and assets described in
clauses (a), (b) and (c) above.

   The Security shall ratably secure the relevant party’s obligations in respect
of the Senior Credit Facilities and any treasury management, interest protection
or other hedging arrangements entered into with a Lender (or an affiliate
thereof). CONDITIONS PRECEDENT    TO CLOSING AND INITIAL    FUNDING:    The
closing and the initial funding of the Senior Credit Facilities will be subject
to satisfaction of the conditions precedent set forth in the Commitment Letter
and in the attached Schedule I.

CONDITIONS PRECEDENT TO

ALL EXTENSIONS

   OF CREDIT:    Each extension of credit under the Senior Credit Facilities
will be subject to satisfaction of the following conditions precedent: (a) all
of the representations and warranties in the Facilities Documentation shall be
true and correct as of the date of such extension of credit; and (b) no event of
default under the Senior Credit Facilities or incipient default shall have
occurred and be continuing or would result from such extension of credit.
REPRESENTATIONS AND    WARRANTIES:    Usual and customary for transactions of
this type, including, without limitation, the following: (i) legal existence,
qualification and power; (ii) due authorization and no contravention of law,
contracts or organizational documents; (iii) governmental and third party
approvals and consents; (iv) enforceability; (v) accuracy and completeness of
specified financial statements and other information and no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect (as hereinafter
defined); (vi) no material litigation (which as a closing condition shall be
limited as set forth on Schedule I); (vii) no default;

 

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   (viii) ownership of property; (ix) insurance matters; (x) environmental
matters; (xi) tax matters; (xii) ERISA compliance; (xiii) identification of
subsidiaries, equity interests and loan parties; (xiv) use of proceeds and not
engaging in business of purchasing/carrying margin stock; (xv) status under
Investment Company Act; (xvi) accuracy of disclosure; (xvii) compliance with
laws; (xviii) intellectual property; (xix) OFAC compliance; (xx) solvency; (xxi)
no casualty; (xxii) labor matters; and (xxiii) collateral documents.    As used
in this Summary of Terms and Conditions (other than Schedule I attached hereto),
“Material Adverse Effect” means (i) a material adverse change in, or a material
adverse effect on, the operations, business, assets, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower and
its subsidiaries, taken as a whole; (ii) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Facilities
Documentation, or of the ability of either the Borrower or the Borrower and the
Guarantors, taken as a whole, to perform their respective obligations under any
Facilities Documentation; or (iii) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower or any Guarantor
of any Facilities Documentation to which it is a party. As used in Schedule I
attached hereto, “Material Adverse Effect” has the meaning set forth in the
Purchase Agreement. COVENANTS:    Usual and customary for transactions of this
type, including, without limitation, the following:   

(a)      Affirmative Covenants - (i) delivery of financial statements, budgets
and forecasts; (ii) delivery of certificates and other information; (iii)
delivery of notices (of any default, material adverse condition, ERISA event,
material change in accounting or financial reporting practices, disposition of
property, sale of equity, incurrence of debt); (iv) payment of obligations; (v)
preservation of existence; (vi) maintenance of properties; (vii) maintenance of
insurance; (viii) compliance with laws; (ix) maintenance of books and records;
(x) inspection rights; (xi) use of proceeds; (xii) covenant to guarantee
obligations, give security; (xiii) compliance with environmental laws; (xiv)
further assurances; and (xv) compliance with material contracts; in each case
with such customary exceptions as may be agreed upon in the Facilities
Documentation.

  

(b)      Negative Covenants - Restrictions on (i) liens; (ii) indebtedness,
(including guarantees and other contingent obligations); (iii) investments
(including loans and advances); (iv) mergers and other fundamental changes; (v)
sales and other dispositions of property or assets; (vi) payments of dividends
and other distributions; (vii) changes in the nature of business; (viii)
transactions with affiliates; (ix) burdensome agreements; (x) use of proceeds
(including with respect to margin stock and OFAC sanctions); (xi) amendments of
organizational documents; (xii) changes in accounting policies or reporting
practices; and (xiii) material adverse modification or

 

6

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   termination of documents related to the Acquisition; in each case with such
customary exceptions as may be agreed upon in the Facilities Documentation.   

(c)      Financial Covenants—To include (but not be limited to) the following:

  

•      Maximum Total Leverage Ratio of not greater than (a) at any time prior to
March 30, 2015, 2.75 to 1.00 and (b) at any time thereafter, 2.50 to 1.00 (with
financial definitions to be agreed upon).

  

•      Minimum Fixed Charge Coverage Ratio of not less than 1.25 to 1.00 as of
the end of any fiscal quarter (with financial definitions to be agreed upon).

   Each of the ratios referred to above will be calculated on a consolidated
basis for each consecutive four fiscal quarter period, except that during the
first year following the Closing Date such calculations shall be made on a
historical pro forma basis specified in the Facilities Documentation. EVENTS OF
DEFAULT:    Usual and customary in transactions of this type, including, without
limitation, the following: (i) nonpayment of principal, interest, fees or other
amounts (with customary grace periods for nonpayment of interest, fees and other
amounts); (ii) failure to perform or observe covenants set forth in the
Facilities Documentation within a specified period of time, where customary and
appropriate, after such failure; (iii) any representation or warranty proving to
have been incorrect when made or confirmed; (iv) cross-default to other
indebtedness in an amount to be agreed; (v) bankruptcy and insolvency defaults
(with grace period for involuntary proceedings); (vi) inability to pay debts;
(vii) monetary judgment defaults in an amount to be agreed and material
nonmonetary judgment defaults; (viii) customary ERISA defaults; (ix) actual or
asserted invalidity or impairment of any Facilities Documentation; (x) change of
control; (xi) change in management; and (xii) occurrence of any event or
circumstance that, either individually or in the aggregate when taken together
with other events or circumstances, has had or could reasonably be expected to
have a Material Adverse Effect. ASSIGNMENTS AND    PARTICIPATIONS:    Revolving
Credit Facility Assignments: Subject to the consents described below (which
consents will not be unreasonably withheld or delayed), each Lender will be
permitted to make assignments to other financial institutions in respect of the
Revolving Credit Facility in a minimum amount equal to $5,000,000.    Term Loan
Facility Assignments: Subject to the consents described below (which consents
will not be unreasonably withheld or delayed), each Lender will be permitted to
make assignments to other financial institutions in respect of the Term Loan
Facility in a minimum amount equal to $1,000,000.

 

7

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   Consents: The consent of the Borrower will be required unless (i) an Event of
Default has occurred and is continuing or (ii) the assignment is to a Lender, an
affiliate of a Lender or an Approved Fund (as such term shall be defined in the
Facilities Documentation). The consent of the Administrative Agent will be
required for any assignment (i) in respect of the Revolving Credit Facility or
an unfunded commitment under the Term Loan Facility to an entity that is not a
Lender with a commitment in respect of the applicable Facility, an affiliate of
such a Lender or an Approved Fund in respect of such a Lender or (ii) of any
outstanding term loan to an entity that is not a Lender, an affiliate of a
Lender or an Approved Fund. The consent of the Fronting Bank and the lender of
any Swingline Loan will be required for any assignment under the Revolving
Credit Facility.    Assignments Generally: An assignment fee in the amount of
$3,500 will be charged with respect to each assignment unless waived by the
Administrative Agent in its sole discretion. Each Lender will also have the
right, without consent of the Borrower or the Administrative Agent, to assign as
security all or part of its rights under the Facilities Documentation to any
Federal Reserve Bank.    Participations: Lenders will be permitted to sell
participations with voting rights limited to significant matters such as changes
in amount, rate, maturity date and releases of all or substantially all of the
collateral securing the Senior Credit Facilities or all or substantially all of
the value of the guaranty of the Borrower’s obligations made by the Guarantors.
WAIVERS AND    AMENDMENTS:                                 Amendments and
waivers of the provisions of the Facilities Documentation will require the
approval of Lenders holding loans and commitments representing more than 50% of
the aggregate amount of the loans and commitments under the Senior Credit
Facilities (the “Required Lenders”), except that (a) the consent of each Lender
shall be required with respect to (i) the waiver of certain conditions precedent
to the initial credit extension under the Senior Credit Facilities, (ii) the
amendment of certain of the pro rata sharing provisions, (iii) the amendment of
the voting percentages of the Lenders, (iv) the release of all or substantially
all of the collateral securing the Senior Credit Facilities, and (v) the release
of all or substantially all of the value of the guaranty of the Borrower’s
obligations made by the Guarantors; (b) the consent of each Lender affected
thereby shall be required with respect to (i) increases or extensions in the
commitment of such Lender, (ii) reductions of principal, interest or fees, and
(iii) extensions of scheduled maturities or times for payment; and (c) the
consent of the Lenders holding more than 50% of the loans and commitments under
the applicable Facility shall be required with respect to certain other matters.
INDEMNIFICATION:                                 The Borrower will indemnify and
hold harmless the Administrative Agent, the Lead Arranger, each Lender and their
respective affiliates and their partners, directors, officers, employees,
agents, trustees,

 

8

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   administrators, managers, advisors and representatives (each such person
being called an “Indemnitee”) from and against all losses, claims, damages,
liabilities and expenses arising out of or relating to the Senior Credit
Facilities, the Transaction, the Borrower’s use of loan proceeds or the
commitments, including, but not limited to, the reasonable and documented fees,
disbursements and other charges of one counsel to the Indemnitees, taken as a
whole, and, if reasonably necessary, of one local counsel and one applicable
regulatory counsel in each relevant jurisdiction to all such Indemnitees, taken
as a whole, and solely in the case of a conflict of interest, one additional
counsel to all affected Indemnitees similarly situated, taken as a whole, and
settlement costs; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence, willful
misconduct or breach in bad faith of such Indemnitee. This indemnification shall
survive and continue for the benefit of all such persons or entities. GOVERNING
LAW:    State of New York. PRICING/FEES/    EXPENSES:    As set forth in
Addendum I. OTHER:       Each of the parties shall (i) waive its right to a
trial by jury and (ii) submit to New York jurisdiction. The Facilities
Documentation will contain customary increased cost, withholding tax, capital
adequacy, liquidity and yield protection provisions, as well as provisions
reflecting the Administrative Agent’s policy concerning market standards,
including but not limited to, provisions regarding defaulting lenders.

 

9

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ADDENDUM I

PRICING, FEES AND EXPENSES

 

INTEREST RATES:    At the Borrower’s option any loan under the Senior Credit
Facilities (other than Swingline Loans) that is made to it will bear interest at
a rate equal to the Applicable Margin (as defined below) plus one of the
following indexes: (a) LIBOR or (b) the Base Rate (to be defined as the highest
of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus 0.50%
and (iii) the one month LIBOR plus 1.00%). Each Swingline Loan shall bear
interest at the Base Rate plus the Applicable Margin for Base Rate loans.
“Applicable Margin” means a percentage per annum to be determined in accordance
with the Pricing Grid set forth below; provided, however, that until delivery of
the compliance certificate for the first full fiscal quarter ending after the
Closing Date, the Applicable Margin shall be determined based on Pricing Level
III.    The Borrower may select interest periods of one, two, three or six
months for LIBOR loans, subject to availability. Interest shall be payable at
the end of the selected interest period, but no less frequently than quarterly.
   During the continuance of any default (beyond any applicable grace period)
under the Facilities Documentation, the Applicable Margin on obligations owing
under the Facilities Documentation shall increase by 2% per annum (subject, in
all cases other than a default in the payment of principal when due or
insolvency events, to the request of the Required Lenders). COMMITMENT FEE:   
The Borrower will pay a fee (the “Commitment Fee”), of a percentage per annum to
be determined in accordance with the Pricing Grid set forth below, on the unused
portion of each Lender’s commitments under the Revolving Credit Facility;
provided, however, that until delivery of the compliance certificate for the
first full fiscal quarter ending after the Closing Date, the Commitment Fee
shall be determined based on Pricing Level III. The Commitment Fee is payable
quarterly in arrears commencing upon the Closing Date. Swingline Loans will not
be deemed to be utilization for purposes of calculating the Commitment Fee
LETTER OF CREDIT FEES:    The Borrower will pay a fee (the “Letter of Credit
Fee”), of a percentage per annum to be determined in accordance with the Pricing
Grid set forth below, on the maximum amount available to be drawn under each
Letter of Credit that is issued and outstanding; provided, however, that until
delivery of the compliance certificate for the first full fiscal quarter ending
after the Closing Date, the Letter of Credit Fee shall be determined based on
Pricing Level III. The Letter of Credit Fee is payable quarterly in arrears,
commencing on the Closing Date, and will be shared proportionately by the
Lenders under the Revolving Credit Facility. In addition, a fronting fee shall
be payable to the Fronting Bank for its own account, in an amount to be mutually
agreed.

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PRICING GRID

 

Pricing

Level

  

Total Leverage Ratio

 

Applicable Margin

for LIBOR Loans /

Letter of Credit Fee

   

Applicable Margin for

Base Rate Loans

   

Commitment

Fee

 

I

   < 0.75 to 1.00     1.500 %      0.500 %      0.250 % 

II

   < 1.50 to 1.00 but ³ 0.75 to 1.00     1.750 %      0.750 %      0.300 % 

III

   < 2.00 to 1.00 but ³ 1.50 to 1.00     2.000 %      1.000 %      0.350 % 

IV

   < 2.50 to 1.00 but ³ 2.00 to 1.00     2.250 %      1.250 %      0.425 % 

V

   ³ 2.50 to 1.00     2.500 %      1.500 %      0.500 % 

 

CALCULATION OF    INTEREST AND FEES:    Other than calculations in respect of
interest for Base Rate Loans (which shall be made on the basis of actual number
of days elapsed in a 365/366 day year), all calculations of interest and fees
shall be made on the basis of actual number of days elapsed in a 360 day year.
COST AND YIELD    PROTECTION:    Customary for transactions and facilities of
this type, including, without limitation, in respect of breakage or redeployment
costs incurred in connection with prepayments, changes in capital adequacy and
capital or liquidity requirements or their interpretation (including
implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act
and Basel III), illegality, unavailability, reserves without proration or offset
and payments free and clear of withholding or other taxes. EXPENSES:    The
Borrower will pay all reasonable costs and expenses associated with the
preparation, due diligence, administration, syndication and closing of all
Facilities Documentation, including, without limitation, the reasonable and
documented fees, disbursements and other charges of one counsel to the
Administrative Agent and the Lead Arranger, taken as a whole, and, if reasonably
necessary, of one local counsel and one regulatory counsel in any relevant
jurisdiction to the Administrative Agent and the Lead Arranger, taken as a
whole, regardless of whether or not the Senior Credit Facilities are closed. The
Borrower will also pay the expenses of the Administrative Agent and each Lender
in connection with the enforcement of any of the Facilities Documentation,
including, but not limited to, the documented fees, disbursements and other
charges of one counsel to the Administrative Agent and the Lenders, taken as a
whole, and, if reasonably necessary, of one local counsel and one applicable
regulatory counsel in each relevant jurisdiction to the Administrative Agent and
the Lenders, taken as a whole, and, solely in the case of a conflict of
interest, one additional counsel to all such affected persons similarly
situated, taken as a whole.

 

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Schedule I

CONDITIONS PRECEDENT TO CLOSING AND INITIAL FUNDING

The closing and extension of credit under the Senior Credit Facilities, in
addition to the conditions precedent set forth in the Commitment Letter, will be
subject to satisfaction of the conditions precedent:

 

(i) Satisfactory Documentation. The negotiation, execution and delivery of
Facilities Documentation with respect to the Senior Credit Facilities consistent
with the Summary of Terms and reasonably satisfactory to the Borrower, the Lead
Arranger, the Administrative Agent and the Lenders. Without limitation of the
foregoing, the Administrative Agent shall receive (A) reasonably satisfactory
opinions of counsel to the Borrower and the Guarantors (which shall cover, among
other things, authority, legality, validity, binding effect and enforceability
of the documents for the Senior Credit Facilities,) and of appropriate local
counsel and such corporate resolutions, certificates and other documents as the
Administrative Agent may reasonably require, (B) customary officers’
certificates, good standing certificates and other customary closing documents
(including, without limitation, certificates of insurance (along with related
endorsements), lien searches, resolutions and organizational documents), (C) a
reasonably satisfactory certificate of the chief financial officer (or
equivalent officer) of the Borrower certifying that the Borrower and the
Borrower and its subsidiaries, taken as a whole, will be solvent after giving
effect to the Transaction and the incurrence of indebtedness related thereto and
(D) all documentation and other information required by regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation the PATRIOT Act.

 

(ii) Security. All filings, recordations and searches necessary in connection
with the liens and security interests set forth in Exhibit A under the section
entitled “Security” shall have been duly made; all filing and recording fees and
taxes shall have been duly paid and the Lead Arranger shall have received
(x) evidence of the insurance maintained by the Borrower and its subsidiaries,
and the Administrative Agent shall have received certificates naming the
Administrative Agent and the Lenders as an additional insured, in the case of
liability insurance, and the Administrative Agent, on behalf of the Lenders, as
lenders’ loss payee, in the case of property insurance and (y) reasonably
satisfactory evidence that the Administrative Agent (on behalf of the Lenders)
shall have a valid and perfected first priority (subject to certain exceptions
to be set forth in the loan documentation) lien and security interest in such
capital stock and in the other collateral referred to under the section entitled
“Security” set forth in Exhibit A.

 

(iii)

Acquisition. (A) The Acquisition shall have been consummated, or shall be
consummated substantially simultaneously with the Closing Date, in all material
respects in accordance with the terms of that certain Agreement and Plan of
Merger dated as of April 21, 2013 by and among the Borrower, the Target, Mustang
Acquisition Inc. and Mustang Acquisition II Inc. (including all schedules and
exhibits thereto, the “Purchase Agreement”), without giving effect to any
modifications, amendments, consents or waivers thereto that are material and
adverse to the interests of the Lenders, as reasonably determined by the Lead
Arranger, without the prior consent of the Lead Arranger, it being understood
that any substantive material modification, amendment, consent or waiver to
(i) the Disclosure Schedules or the definition of “Material Adverse Effect” in
the Purchase Agreement, (ii) the third party beneficiary rights in the Purchase
Agreement applicable to the Lead Arranger and/or the Lenders (including, without
limitation, any substantive modification, amendment, consent or waiver of any of
the provisions referenced in clause (c) of the first sentence of Section 10.8 of
the Purchase Agreement) or (iii) the governing law of the Purchase Agreement
shall in each case be deemed to be material and adverse to the

 

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  interests of the Lenders, and (B) all governmental, shareholder and third
party consents and approvals that are, in the opinion of the Administrative
Agent, reasonably necessary in connection with the Transaction shall have been
received, except, in the case of the Acquisition only, those which the failure
to obtain would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and all applicable waiting periods shall
have expired without any action being taken by any authority that restrains,
prevents or imposes any material adverse conditions on the Borrower and its
subsidiaries or that seeks any of the foregoing, and no law or regulation shall
be applicable which in the reasonable judgment of the Administrative Agent could
reasonably be expected to have such effect.

 

(iv) Material Adverse Effect. Except as specifically disclosed in Sections 5.8
and 4.8 of the Parent Disclosure Schedules and Company Disclosure Schedules
(each, as defined in the Purchase Agreement), since December 31, 2012 (as to the
Borrower and its subsidiaries) or since January 31, 2013 (as to the Target and
its subsidiaries), there shall not have occurred any event or condition that has
had or could be reasonably expected, either individually or in the aggregate, to
have a “Material Adverse Effect”, and there has been no adverse change in the
status of the matters described in such Sections.

 

(v) Absence of Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the actual knowledge of the Borrower after reasonable
inquiry, threatened or contemplated, at law, in equity, in arbitration or before
any governmental authority, by or against the Borrower or any of its
subsidiaries or the Target or any of its subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to the Facilities
Documentation or any of the transactions contemplated hereby, or (b) except as
specifically disclosed in Sections 5.11 and 4.11 of the Parent Disclosure
Schedules and Company Disclosure Schedules, either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect (after giving effect to the Transaction), and there has
been no adverse change in the status of the matters described in such Sections;
provided, however, that the foregoing shall not include any shareholder class
action or derivative litigation commenced against the Borrower or the Target
since the date of the Purchase Agreement and arising from allegations of breach
of fiduciary duty of the Borrower’s or the Target’s respective directors
relating to their respective approval of the Purchase Agreement or from
allegations of false or misleading public disclosure by the Borrower or the
Target with respect to the Transaction, including, without limitation, the
Purchase Agreement.

 

(vi) No Change in Information. All of the Information shall be complete and
correct in all material respects considered as a whole; and no changes or
developments shall have occurred, and no new or additional information, shall
have been received or discovered by the Administrative Agent or the Lead
Arranger regarding the Borrower or its subsidiaries, the Target or its
subsidiaries or the Transaction after the date of the Commitment Letter that
(A) either individually or in the aggregate, could reasonably be expected to
(A) have a Material Adverse Effect or (B) adversely affect the Senior Credit
Facilities or any other aspect of the Transaction, and nothing shall have come
to the attention of the Lenders to lead them to believe in good faith that
(x) the Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect or (y) the Transaction will have a Material
Adverse Effect. Without limitation of the foregoing, there shall be no adverse
change in the status of the SEC investigation initially disclosed in the
Borrower’s 10-Q for the fiscal period ending March 31, 2011 filed with the SEC
and as supplemented by filings with the SEC through the Borrower’s 10-K for the
fiscal year ending December 31, 2012 as to the Borrower or any of its officers
or directors (other than Phillip DeZwirek) from the status disclosed to the Lead
Arranger prior to the date of the Commitment Letter.

 

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(vii) Financial Information. The Lenders shall have received (a) audited
financial statements of each of the Borrower and its subsidiaries as of
December 31, 2012 and the Target and its subsidiaries as of January 31, 2013,
(b) all interim financial statements of the Borrower and its subsidiaries and
the Target and its subsidiaries from and the after the most recent fiscal year
end through the most recent quarter for which financial statements are available
which are not inconsistent in any materially adverse way with the Information
provided to the Lead Arranger prior to the date the Commitment Letter is
executed and (c) pro forma consolidated financial statements as to the Borrower
and its subsidiaries giving effect to all elements of the Transaction to be
effected on or before the Closing Date, and forecasts prepared by management of
the Borrower, each in form satisfactory to the Lenders, of balance sheets,
income statements and cash flow statements on a quarterly basis for the fiscal
year 2013 and on an annual basis for each fiscal year thereafter during the term
of the Senior Credit Facilities.

 

(viii) Maximum Total Leverage Ratio. The Lead Arranger shall be satisfied that,
on the Closing Date after giving effect to all funding under the Senior Credit
Facilities and the Transaction, the Total Leverage Ratio shall be less than 2.25
to 1.00.

 

(ix) Accuracy of Representations / No Default. All of the representations and
warranties in the Facilities Documentation shall be true and correct as of
Closing Date and no event of default under the Senior Credit Facilities or
incipient default shall have occurred and be continuing or would result from any
extension of credit made on the Closing Date.

 

(x) Minimum Marketing Period. An Information Memorandum in form satisfactory to
the Lead Arranger to be used in connection with the syndication of the Senior
Credit Facilities and approved for disclosure to the Lenders shall have been
completed at least 30 days prior to the Closing Date, and the Lead Arranger
shall have been afforded a marketing period of at least 30 days to seek to
syndicate the Senior Credit Facilities.

 

(xi) Evidence of Termination of Existing Indebtedness and Liens. Prior to or
substantially simultaneously with, the initial borrowing under the Senior Credit
Facilities, the Refinancing shall have been consummated and all commitments
thereunder shall have been terminated and cancelled and all liens in connection
therewith shall have been terminated and released.

 

(xii) Payment of Fees and Expenses. The payment of all fees and expenses to be
payable pursuant to the Commitment Letter and the Fee Letter (including the
reasonable expenses of counsel for Bank of America and the Lead Arranger).

 

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