Execution Version

     

Exhibit 10.1 

 

 [ex10-1img001.gif]

 

 

October 14, 2016

 

NV5 Global, Inc.

200 South Park Road, Suite 350

Hollywood, Florida 33021

Attention: Michael P. Rama, Vice President and Chief Financial Officer

 

 

 

$80,000,000 Senior Secured Revolving Credit Facility

 

Ladies and Gentlemen:

 

Bank of America, N.A. (“Bank of America”) is pleased to offer to be the sole
administrative agent (in such capacity, the “Administrative Agent”) for a
$80,000,000 Senior Secured Revolving Credit Facility (the “Senior Credit
Facility”) to NV5 Global, Inc. (“you” or the “Borrower”), and Bank of America is
pleased to offer its commitment to lend all of the Senior Credit Facility (the
“Commitment”), upon and subject to the terms and conditions set forth in this
letter (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”). Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any
of its designated affiliates, “MLPFS”) is pleased to advise you of its
willingness in connection with the foregoing commitment, as sole lead arranger
and sole bookrunner (in such capacities, the “Lead Arranger”) for the Senior
Credit Facility, to use commercially reasonable efforts to form, through
assignments by Bank of America under the Senior Credit Facility, a syndicate of
commercial banking institutions (including Bank of America) (collectively, the
“Lenders”) for the Senior Credit Facility.

 

Bank of America will act as sole Administrative Agent for the Senior Credit
Facility and MLPFS will act as sole Lead Arranger for the Senior Credit
Facility. No additional agents, co-agents or arrangers will be appointed and no
other titles will be awarded without our prior written approval. You hereby
agree that, effective upon your acceptance of this Commitment Letter and
continuing through the earlier of 120 days after the closing of the Senior
Credit Facility and completion of the syndication process by Bank of America
achieving its desired hold level of $40,000,000 (such period, the “Syndication
Period”), you shall not solicit any other bank, investment bank, financial
institution, person or entity to provide, structure, arrange or syndicate any
component of the Senior Credit Facility or any other senior financing similar to
or as a replacement of any component of the Senior Credit Facility.

 

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 of
the following conditions precedent in a manner acceptable to Bank of America and
MLPFS: (a) the completion of a due diligence review of the assets, liabilities
(including contingent liabilities) and business of the Borrower and its
subsidiaries in scope and with results satisfactory to us in our sole and
absolute discretion; (b) 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); (c) prior to and during the
syndication of the Senior Credit Facility 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; (d) the negotiation,
execution and delivery of definitive documentation for the Senior Credit
Facility consistent with the Summary of Terms and otherwise satisfactory to Bank
of America and MLPFS; (e) no material adverse change in or material disruption
of conditions in the market for syndicated bank credit facilities or the
financial, banking or capital markets generally shall have occurred that, in the
judgment of Bank of America and MLPFS, would impair the syndication of the
Senior Credit Facility; and (f) no change, occurrence or development shall have
occurred or become known to Bank of America or MLPFS since December 31, 2015
that has had or could reasonably be expected to have a Material Adverse Effect
(as defined in the Summary of Terms); provided that, solely for the purposes of
the commitment of Bank of America hereunder and the undertaking of MLPFS to
provide the services described herein, nothing disclosed in the financial
statements filed with the periodic reports filed by the Borrower with the
Securities and Exchange Commission will be treated as having, or reasonably
being expected to have, a Material Adverse Effect.

 

 
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MLPFS intends to commence syndication of the Senior Credit Facility promptly
after the Closing Date, as defined in the Summary of Terms, and the commitment
of Bank of America hereunder shall be reduced, through assignments under the
Senior Credit Facility after closing, dollar-for-dollar as and when
corresponding commitments are received from the Lenders until Bank of America
reaches its desired hold level of $40,000,000. You agree to actively assist
MLPFS in achieving a syndication of the Senior Credit Facility that is
satisfactory to MLPFS and you. Such assistance shall include your (a) 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 transactions contemplated hereby (including the
Projections (as hereinafter defined), the “Information”), (b) if requested by
the Lead Arranger, assisting in the preparation of an Information Memorandum and
other materials to be used in connection with the syndication of the Senior
Credit Facility (collectively with the Summary of Terms, the “Information
Materials”), (c) using your commercially reasonable efforts to ensure that the
syndication efforts of MLPFS benefit materially from your existing banking
relationships, and (d) otherwise assisting Bank of America and MLPFS in their
syndication efforts, including by making your officers and advisors, upon
reasonable prior notice and during normal business hours, available from time to
time to attend and make presentations regarding the business and prospects of
the Borrower and its subsidiaries, as appropriate, at one or more meetings of
prospective Lenders.

 

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 (each of which shall be a commercial banking
institution reasonably acceptable to you) 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 Facility will receive compensation from you in order to obtain
its commitment, except on the terms contained herein, in the Summary of Terms
and in the Fee Letter.

 

You represent, warrant and covenant that (a) all financial projections
concerning the Borrower 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 reasonable assumptions (it being
recognized that such Projections are not to be viewed as facts and that actual
results during the period or periods covered by any Projections may differ from
the projected results contained therein, which differences may be material) and
(b) all Information, other than Projections, 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 transactions contemplated hereby, as and when furnished, is and will be
complete and correct in all material respects 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. You agree to
furnish us with further and supplemental information from time to time until the
date of the effectiveness of the Senior Credit Facility (the “Closing Date”) and
for such period thereafter as is necessary to complete the syndication of the
Senior Credit Facility so that the representation, warranty and covenant in the
immediately preceding sentence are correct on the Closing Date and on such later
date on which the syndication of the Senior Credit Facility 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 Facility, Bank of America and MLPFS
are and will be using and relying on the Information without independent
verification thereof.

 

 
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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 Facility, 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 or its affiliates, or the
respective securities of any of the foregoing. You agree, however, that the
definitive credit documentation 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.

 

By executing this Commitment Letter, you agree to reimburse Bank of America and
MLPFS from time to time on written demand accompanied by reasonable supporting
detail 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 the Lead Arranger and the Administrative Agent,
and (b) due diligence expenses) incurred in connection with the Senior Credit
Facility, the syndication thereof, the preparation of the definitive
documentation therefor and the other transactions contemplated hereby. You
acknowledge that we may receive a benefit, including without limitation, a
discount, credit or other accommodation, from any of such counsel based on the
fees such counsel may receive on account of their relationship with us
including, without limitation, fees paid pursuant hereto.

 

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 fees, disbursements and other charges of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party, 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 or any related transaction or (b) the
Senior Credit Facility and any other similar or replacement financings in which
Bank of America or any of its affiliates is involved, or any use made or
proposed to be made with the proceeds thereof, except to the extent such claim,
damage, loss, liability or expense (i) is found in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence, willful misconduct or breach in bad faith
of its obligations hereunder. 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 the transactions contemplated hereby are 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 transactions contemplated hereby, 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, willful misconduct or breach in bad faith of its obligations
hereunder. 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 other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnified Party as determined by a final nonappealable judgment of a court of
competent jurisdiction. Notwithstanding the foregoing, each Indemnified Party
shall be obligated to refund and return any and all amounts paid by you under
this paragraph to such Indemnified Party for any such losses, claims, damages,
liabilities and expenses to the extent it has been determined by a final,
nonappealable judgment by a court of competent jurisdiction that such
Indemnified Person is not entitled to payment of such amounts in accordance with
the terms hereof.

 

 
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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 Senior Credit Facility or as otherwise required by
law, may not be disclosed by you 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 (other than the existence thereof and the contents
thereof as part of projections, pro forma information and a generic disclosure
of aggregate sources and uses to the extent customary in marketing materials and
other required filings) after your acceptance of this Commitment Letter and the
Fee 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.

 

Each of Bank of America and MLPFS shall use all confidential information
provided to it or its affiliates by or on behalf of you hereunder solely for the
purpose of providing the services which are the subject of this letter agreement
and shall treat confidentially all such information; provided, however, that
nothing herein shall prevent the either Bank of America or MLPFS from disclosing
any such information (i) pursuant to the order of any court or administrative
agency or in any pending legal or administrative proceeding, or otherwise as
required by applicable law or compulsory legal process (in which case Bank of
America and MLPFS agree to inform you promptly thereof prior to such disclosure
to the extent not prohibited by law, rule or regulation and shall comply with
any applicable protective order (or equivalent) obtained by you or on your
behalf and, in the event no such order (or equivalent) is obtained, shall
disclose only such of the confidential information as they are advised by
counsel is necessary to comply with applicable law, regulation, or court or
administrative agency order)), (ii) upon the request or demand of any regulatory
authority having jurisdiction over Bank of America, MLPFS or any of their
respective affiliates, (iii) to the extent that such information becomes
publicly available other than by reason of disclosure in violation of this
agreement by Bank of America or MLPFS or any of its affiliates or
Representatives (as defined below), (iv) to Bank of America’s and MLPFS’
respective affiliates, and their and such affiliates’ respective employees,
legal counsel, independent auditors and other experts or agents who need to know
such information in connection with the transactions contemplated hereby
(collectively, the “Representatives”) and are informed of the confidential
nature of such information and instructed to keep such information confidential,
(v) for purposes of establishing a “due diligence” defense, (vi) to the extent
that such information is or was received by the Bank of America or MLPFS from a
third party that is not to the Bank of America’s or MLPFS’ knowledge subject to
confidentiality obligations to you, (vii) to the extent that such information is
independently developed by Bank of America or MLPFS or (viii) to potential
Lenders, participants, assignees or potential counterparties to any swap or
derivative transaction relating to the Borrower or any of its subsidiaries or
any of their respective obligations, in each case, who agree to be bound by the
terms of this paragraph (or language substantially similar to this paragraph or
as otherwise reasonably acceptable to you and Bank of America and MLPFS,
including as may be agreed in any confidential information memorandum or other
marketing material). This paragraph shall terminate on the first anniversary of
the date hereof; provided, however, that nothing in this paragraph (including
the first clause of this sentience) shall limit temporally or in scope or ambit
the confidentially obligation imposed on Bank of America and MLPFS by applicable
law or regulation.

 

 
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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 and your
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
or any of your affiliates that is or may come into the possession of Bank of
America, MLPFS or any of such affiliates.

 

In connection with all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (a) (i) the arranging and other services described herein
regarding the Senior Credit Facility 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) Bank of America and
MLPFS each has been, is, and will be acting solely as a principal and, except as
otherwise expressly agreed in writing by the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary for you, any of
your affiliates or any other person or entity and (ii) neither Bank of America
nor MLPFS nor any other Lead Arranger has any 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 and 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, 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.

 

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. 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 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. Each of Bank of
America, MLPFS and you hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in the Borough of Manhattan in New York City in
respect of any suit, action or proceeding arising out of or relating to the
provisions of this Commitment Letter (including the Summary of Terms), the Fee
Letter and the transactions contemplated hereby and thereby and irrevocably
agrees that all claims in respect of any such suit, action or proceeding may be
heard and determined in any such court. Nothing in this Commitment Letter, the
Summary of Terms or the Fee Letter shall affect any right that Bank of America,
MLPFS or any affiliate thereof may otherwise have to bring any claim, action or
proceeding relating to this Commitment Letter (including the Summary of Terms),
the Fee Letter and/or the transactions contemplated hereby and thereby in any
court of competent jurisdiction to the extent necessary or required as a matter
of law to assert such claim, action or proceeding against any assets of the
Borrower or any of its subsidiaries or enforce any judgment arising out of any
such claim, action or proceeding. Each of Bank of America, MLPFS and you agree
that service of any process, summons, notice or document by registered mail
addressed to you shall be effective service of process against you for any suit,
action or proceeding relating to any such dispute. Each of Bank of America,
MLPFS and you waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceedings brought in any such court, and any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. A final judgment in any such suit, action or
proceeding brought in any such court may be enforced in any other courts to
whose jurisdiction you are or may be subject by suit upon judgment. The
commitments and undertakings of Bank of America and MLPFS may be terminated by
us if you fail to perform your obligations under this Commitment Letter or the
Fee Letter on a timely basis.

 

 
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The provisions of the immediately preceding seven paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Senior Credit Facility shall be executed and delivered, and notwithstanding the
termination of this Commitment Letter or any commitment or undertaking of Bank
of America or MLPFS hereunder.

 

You hereby agree that MLPFS may, without notice to you, assign its rights and
obligations under this Commitment Letter to any other registered broker-dealer
wholly-owned by Bank of America Corporation to which all or substantially all of
Bank of America Corporation’s or any of its subsidiaries’ investment banking,
commercial lending services or related businesses may be transferred following
the date of this Commitment Letter.

 

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 telecopier or
facsimile shall be effective as delivery of a manually executed counterpart
thereof.

 

This Commitment Letter (including the Summary of Terms) and the Fee Letter
embody the entire agreement and understanding among Bank of America, MLPFS, you
and your affiliates with respect to the Senior Credit Facility 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.

 

 
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This Commitment Letter and all commitments and undertakings of Bank of America
and MLPFS hereunder will expire at 5:00 p.m. (Eastern time) on October 17, 2016
unless you execute this Commitment Letter and the Fee Letter and return them to
us prior to that time (which may be by fax transmission or other electronic mail
transmission), whereupon this Commitment Letter (including the Summary of Terms)
and the Fee Letter (each of which may be signed in one or more counterparts)
shall become binding agreements. Thereafter, the commitment of Bank of America
hereunder will expire on November 30, 2016 unless definitive documentation for
the Senior Credit Facility is executed and delivered prior to such date.

 

 

 

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We are pleased to have the opportunity to work with you in connection with this
important financing.

 

 

Very truly yours,

 

        BANK OF AMERICA, N.A.  

 

 

 

 

 

By:

   /s/ Tony Keranov

 

 

Name: 

   Tony Keranov

 

 

Title:

   Senior Vice President

 

                          MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED    
      By:    /s/ Lorraine M. Kieffer     Name:     Lorraine M. Kieffer    
Title:    Senior Vice President  

 

 

Accepted and agreed to

as of the date first above written:

 

NV5 GLOBAL, INC.

 

By:          /s/ Dickerson Wright                                   
               

Name:     Dickerson Wright                                                     
   

Title:       Chairman/CEO                                                 
            

 

 
 

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SUMMARY OF INDICATIVE TERMS AND CONDITIONS

NV5 GLOBAL, INC.

$80,000,000 SENIOR SECURED REVOLVING CREDIT FACILITY

 

 

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:

NV5 Global, Inc., a Delaware corporation (the “Borrower”).

   

GUARANTORS:

The Senior Credit Facility and any treasury or cash management services,
interest rate, currency, foreign exchange or commodity swap or hedging
arrangements entered into with a Lender (or any affiliate thereof) (“Additional
Secured Obligations”) will be guaranteed by each existing and future direct and
indirect domestic and, to the extent no material adverse tax or regulatory
consequences would result and no material impediment (including but not limited
to repatriation limitations) exists under the law of the applicable foreign
jurisdictions, , foreign subsidiary of the Borrower (collectively, the
“Guarantors”; and together with the Borrower, the “Loan Parties”). In addition,
the Borrower will guaranty any Additional Secured Obligations entered into by
any Loan Party with a Lender (or any affiliate thereof). Notwithstanding
anything contained herein to the contrary, any Additional Secured Obligations of
a Loan Party shall exclude certain swap obligations if, and to the extent that
such swap obligation is or becomes illegal under the Commodity Exchange Act
(determined after giving effect to any keepwell or other support for the benefit
of such Loan Party).

    ADMINISTRATIVE  

AGENT:

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

    SOLE LEAD ARRANGER AND  

SOLE BOOKRUNNER

Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its affiliates)
will act as sole lead arranger and sole bookrunner (the “Lead Arranger”).

   

LENDERS:

A syndicate of commercial banking institutions (including Bank of America)
arranged by the Lead Arranger, which institutions shall be acceptable to the
Administrative Agent (collectively, the “Lenders”).

    SENIOR CREDIT  

FACILITY:

$80,000,000 million revolving facility (the “Revolving Facility” or “Senior
Credit Facility”), which will include a $5,000,000 million sublimit for the
issuance of standby letters of credit (each a “Letter of Credit”) and a
$15,000,000 million sublimit for swingline loans (each a “Swingline Loan”).
Letters of Credit will be issued by Bank of America (in such capacity, the “L/C
Issuer”) and Swingline Loans may be made available by Bank of America (in such
capacity, the “Swingline Lender”), and each of the Lenders under the Revolving
Facility will purchase an irrevocable and unconditional participation in each
Letter of Credit and each Swingline Loan.

  

 
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PURPOSE:

The proceeds of the Senior Credit Facility shall be used to finance permitted
acquisitions, for capital expenditures, and for general corporate purposes not
in contravention of any law or of any Loan Document (as hereinafter defined).

   

CLOSING DATE:

The execution of definitive Loan Documents, anticipated to occur on or before
November 30, 2016 (the “Closing Date”).

    INTEREST RATES:  As set forth in Addendum I.    

MATURITY:

The Senior Credit Facility shall terminate and all amounts outstanding
thereunder shall be due and payable in full five (5) years after the Closing
Date.

   

INCREASE OPTION:

The Senior Credit Facility will include an accordion feature permitting the
Borrower to request an increase in the revolving commitments by an additional
amount of up to $60,000,000; provided that any such request shall be in a
minimum amount of $20,000,000 and in increments of $5,000,000 in excess thereof.
Such increases may be effected from time to time after the Closing Date subject
to customary terms and conditions and provided that (a) no default or event of
default exists at the time of any such increase and (b) the Borrower may make a
maximum of two (2) such requests. The Borrower may offer the increase to (i) its
existing Lenders, and each existing Lender will have the right, but not the
obligation, to commit to all or a portion of the proposed increase, and (ii) if
necessary to obtain the requested additional commitments, third party commercial
banking institutions reasonably acceptable to the Administrative Agent, the
Swingline Lender, the L/C Issuer and the Borrower.

   

AVAILABILITY:

Extensions of credit under the Senior Credit Facility may be made on a revolving
basis up to the full amount of the Senior Credit Facility and Letters of Credit
may be issued up to the sublimit for Letters of Credit. Swingline Loans may be
issued up to the sublimit for Swingline Loans.

   

OPTIONAL

PREPAYMENTS

AND COMMITMENT

 

REDUCTIONS:

The Borrower may prepay the Senior Credit Facility 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
(but excluding any loss of anticipated profits). The unutilized portion of the
commitments under the Senior Credit Facility may be irrevocably reduced or
terminated by the Borrower at any time without penalty.

  

 
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SECURITY: The Borrower and each of the Guarantors shall grant the Administrative
Agent (for the benefit of the Lenders and the other secured parties,
collectively, the “Secured Parties”)) valid and perfected first priority
(subject to certain exceptions to be set forth in the Loan Documents) liens and
security interests in all of the following:

           

 

(a)

Equity Interests. 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.

       

(b)

Personal Property. All of its present and future personal property and assets,
including, but not limited to, machinery and equipment, inventory and other
goods, accounts receivable, bank accounts, general intangibles, financial
assets, investment property, letter of credit rights, license rights, patents,
trademarks, tradenames, copyrights, chattel paper, insurance proceeds, contract
rights, hedge agreements, documents, instruments, indemnification rights, tax
refunds and cash.

       

(c)

Proceeds, Products, Etc. All proceeds and products of the property and assets
described in clauses (a) and (b) above.

 

  The Security shall ratably secure the relevant party’s obligations in respect
of the Senior Credit Facility and the Additional Secured Obligations.    
CONDITIONS PRECEDENT  

TO CLOSING:

The closing and the initial extension of credit under the Senior Credit Facility
will be subject to satisfaction of the conditions precedent deemed appropriate
by the Administrative Agent and Bank of America including, but not limited to,
the following, in each case, in form and substance reasonably satisfactory to
the Administrative Agent and Bank of America:

 

 

(a)

Loan Documentation. The negotiation, execution and delivery of definitive
documentation with respect to the Senior Credit Facility satisfactory to the
Lead Arranger, the Administrative Agent and Bank of America (collectively, the
“Loan Documents”).

       

(b)

Organizational Documents; Certificates of Good Standing. Bank of America shall
have received organizational documents of each Loan Party certified by a
responsible officer and certificates of good standing for each Loan Party.

       

(c)

Legal Opinions. Bank of America shall have received satisfactory opinions of
counsel to the Loan Parties (which shall cover, among other things, authority,
legality, validity, binding effect and enforceability of the documents for the
Senior Credit Facility) and of appropriate local counsel.

   

 
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(d)

Financial Statements. Bank of America shall have received copies of interim
financial statements of the Borrower and its subsidiaries dated the end of the
most recent fiscal quarter for which financial statements are available and
projections for the Borrower and its subsidiaries for the first year following
the Closing Date.

       

(e)

Collateral Documentation. All filings, recordations and searches necessary or
desirable in connection with the liens and security interests referred to above
under Security shall have been duly made. All deliverables related to the
collateral shall have been delivered to the Administrative Agent, including,
without limitation, stock certificates and stock powers, instruments, documents
and chattel paper (together with allonges or assignments), landlord lien waivers
and access agreements with respect to the Borrower’s headquarters location, and,
if reasonably required by the Administrative Agent upon further diligence,
executed assignment of claims forms. All filing and recording fees and taxes
shall have been duly paid. Bank of America shall have received satisfactory
evidence that the Administrative Agent (on behalf of the Secured Parties) shall
have a valid and perfected first priority (subject to certain exceptions to be
set forth in the Loan Documents) lien and security interest in the collateral.

       

(f)

Insurance. Bank of America shall be satisfied with the amount, types and terms
and conditions of all insurance maintained by the Loan Parties and their
subsidiaries. The Administrative Agent shall have received copies of insurance
policies, declaration pages, certificates and endorsements of insurance or
insurance binders evidencing liability, casualty, property, terrorism and
business interruption insurance meeting the requirements set forth in the Loan
Documents.

       

(g)

Solvency Certificate. Bank of America shall have received a solvency certificate
signed by a responsible officer of the Borrower as to the financial condition,
solvency and related matters of the Loan Parties and their subsidiaries.

       

(h)

Perfection Certificate. Bank of America shall have received a customary
perfection certificate signed by a responsible officer of the Borrower.

       

(i)

Material Adverse Effect. There shall not have occurred since December 31, 2015
any event or condition that has had or could be reasonably expected, either
individually or in the aggregate, to have a Material Adverse Effect. “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), condition (financial or otherwise) or prospects of the Loan Parties
and their respective subsidiaries, taken as a whole; (ii) a material impairment
of the rights and remedies of the Administrative Agent or any Lender under any
Loan Documents, or of the ability of any Loan Party to perform its obligations
under any Loan Documents to which it is a party; or (iii) a material adverse
effect upon the legality, validity, binding effect or enforceability against any
Loan Party of any Loan Documents to which it is a party.

   

 
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(j)

No Litigation. The absence of any action, suit, investigation or proceeding
pending or, to the knowledge of the Loan Parties, threatened in any court or
before any arbitrator or governmental authority that could reasonably be
expected to have a Material Adverse Effect.

       

(k)

Existing Indebtedness. All existing indebtedness for borrowed money of the Loan
Parties and their subsidiaries (other than indebtedness permitted by the Loan
Documents, including, but not limited to, the existing seller notes on which the
Borrower is obligated (the “Seller Notes”)) shall be repaid in full and all
security interests related thereto shall be terminated.

       

(l)

Consents. Bank of America shall have received evidence that all boards of
directors, governmental, shareholder and material third party consents and
approvals necessary in connection with the Loan Documents have been obtained.

       

(m)

Fees and Expenses. Bank of America and the Lead Arranger shall have received all
fees and expenses (including the fees and expenses of counsel (including any
local counsel) for the Administrative Agent) owing pursuant to the Loan
Documents and fee letter entered into in connection with the Loan Documents.

       

(n)

Due Diligence. Bank of America shall have completed a due diligence
investigation of the Loan Parties and their respective subsidiaries in scope,
and with results, satisfactory to Bank of America, including, without
limitation, U.S. Department of Treasury Office of Foreign Assets Control,
Foreign Corrupt Practices Act (“FCPA”) and “know your customer” due diligence.
The Loan Parties shall have provided to the Administrative Agent and Bank of
America the documentation and other information requested by the Administrative
Agent and Bank of America in order to comply with applicable law, including
without limitation, the PATRIOT Act.

       

(o)

Confirmation of Subordination Terms. Bank of America shall have received copies
of and approved the subordination terms of any Seller Notes to be treated as
Subordinated Indebtedness for purposes of the calculation of the Consolidated
Senior Leverage Ratio.

    

 
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CONDITIONS PRECEDENT TO

ALL EXTENSIONS

 

OF CREDIT:

Usual and customary for transactions of this type, including, without
limitation, the following: (a) all of the representations and warranties in the
Loan Documents shall be true and correct, in each case, as of the date of such
extension of credit and (b) no default or event of default under the Senior
Credit Facility 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: (a) existence, qualification and power; (b)
authorization and no contravention; (c) receipt of governmental authorizations
and other consents; (d) binding effect; (e) accuracy of financial statements and
no material adverse effect; (f) no litigation; (g) no default; (h) ownership of
property; (i) maintenance of insurance; (j) payment of taxes; (kj) ERISA
compliance; (l) margin regulation and Investment Company Act compliance; (m)
accuracy of disclosure; (n) compliance with laws; (o) solvency; (p) no casualty;
(q) sanctions concerns and anti-corruption laws; (r) authorized officers; (s)
subsidiaries, equity interests and Loan Parties; (k) collateral representations;
and (t) intellectual property; licenses; etc.

   

COVENANTS:

Usual and customary for transactions of this type, including, without
limitation, the following:

 

 

 

Affirmative Covenants: (a) delivery of financial statements (including budgets
and forecasts); (b) delivery of certificates and other information; (c) delivery
of notices; (d) payment of obligations; (e) preservation of existence; (f)
maintenance of properties and licenses; (g) maintenance of insurance; (h)
compliance with laws; (i) books and records; (j) inspection rights; (k) use of
proceeds; (l) compliance with material contracts; (m) covenant to guarantee
obligations; (n) covenant to give security; (o) further assurances; (p) interest
rate hedging; (q) approvals and authorizations; and (r) maintenance of Bank of
America as primary depository bank (accounts to be moved to Bank of America
within 120 days of the Closing Date).

     

 

 

Negative Covenants: Restrictions (in each case, as appropriate, with exceptions
and allowances to be agreed upon) on (a) liens; (b) indebtedness (including an
allowance for subordinated seller indebtedness incurred in connection with
permitted acquisitions of $15,000,000 per fiscal year); (c) investments
(including restrictions on loans, advances and acquisitions); (d) fundamental
changes; (e) dispositions; (f) payments of dividends, share repurchases and
other distributions; (g) changes in nature of business; (h) transactions with
affiliates; (i) burdensome agreements; (j) use of proceeds; (k) capital
expenditures; (l) amendments of organizational documents and changes in fiscal
year, legal name, state of formation; form of entity and accounting changes; (m)
sale and leaseback transactions; (n) prepayment of certain indebtedness; (o)
amendment of certain indebtedness and (p) sanctions.

  

 
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The definitive loan documentation for the Senior Credit Facility will include
customary requirements for acquisitions, including but not limited to the
following:

 

 

●

Pro forma financial covenant compliance, the aggregate purchase consideration
payable in respect of all Permitted Acquisitions shall not exceed the following
without obtaining Required Lenders’ prior consent: (i) an amount greater than
$40,000,000 in any twelve calendar month period, with the first such period
commencing on the Closing Date and (ii) an amount greater than $120,000,000
(with a sublimit to be agreed upon for investments in non-wholly owned or
foreign subsidiaries) in the aggregate during the term of the Senior Credit
Facility.

       

●

Acquisition shall be approved by Target’s board.

       

●

Target’s TTM EBITDA shall not be less than $0.

       

●

At the time of such acquisition, and after giving pro forma effect to the
payment of the purchase price therefor, the Borrower shall have available
liquidity (to be defined as the sum of unrestricted cash and cash equivalents
that would be reflected on the Borrower’s consolidated balance sheet plus
availability under the Senior Credit Facility) of not less than $10,000,000.

       

●

Target shall be in same or related line of business as the Borrower.

       

●

Timely satisfaction of collateral and guarantee requirements, as applicable,
including, at the request of the Administrative Agent, landlord access
agreements with respect to Target headquarters and other material locations.

  

 

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

  

 

●

Maximum Consolidated Leverage Ratio, defined as the ratio of Total Indebtedness
to EBITDA, of not greater than 3.00 to 1.00.

       

●

Minimum Consolidated Fixed Charge Coverage Ratio, defined as the ratio of (a)
EBITDAR minus Maintenance Capital Expenditures minus Restricted Payments minus
Cash Taxes and (b) Interest plus Principal plus Rent Expense, of not less than
1.20 to 1.00.

          Each of the ratios referred to above will be calculated on a
consolidated basis for each consecutive four (4) fiscal quarter period, with
appropriate adjustments for material acquisitions and dispositions, as
applicable. Financial covenant term definitions to be mutually agreed upon;
calculation of EBITDA to include mutually agreed upon add-backs, including but
not limited to an add-back for non-cash stock-based compensation expense.

  

 
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EVENTS OF DEFAULT:

Usual and customary in transactions of this type, including, without limitation,
the following: (a) non-payment; (b) default of specific covenants; (c) other
defaults; (d) breach of representations and warranties; (e) cross-defaults to
other indebtedness in an amount to be agreed; (f) insolvency proceedings; (g)
inability to pay debts or attachment; (h) judgments; (i) ERISA; (j) invalidity
of Loan Documents (k) change of control; (l) uninsured loss; and (m)
subordination.

    REPORTING  

REQUIREMENTS:

The Borrower shall deliver to Administrative Agent (and if so requested by
Administrative Agent, with copies for each Lender), each of the following
financial statements, reports or other items set for below at the following
times in form satisfactory to Administrative Agent: (a) within 90 days after the
end of Borrower’s fiscal year (or, if earlier, fifteen (15) days after the date
required to be filed with the SEC (without giving effect to any extension
permitted by the SEC)), consolidated and consolidating income statement,
statement of cash flow, and statement of shareholder’s equity and a consolidated
balance sheet of Borrower and its subsidiaries for each such fiscal year,
audited by an independent certified public accountant reasonably acceptable to
Administrative Agent and certified without qualification by such accountants to
have been prepared in accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, statement of cash flow, and statement
of shareholder’s equity, and, if prepared, such accountants’ letter to
management); (b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, an unaudited consolidated and
consolidating income statement, statement of cash flow, and statement of
shareholder’s equity covering Borrower’s and its subsidiaries’ operations and a
consolidated balance sheet during such period and in each case compared to the
prior period and plan, together with a corresponding discussion and analysis of
results from management; and (c) within 120 days of after the end of Borrower’s
fiscal year, an annual budget for the Borrower and its subsidiaries.

  

 
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ASSIGNMENTS AND  

PARTICIPATIONS:

Senior Credit Facility Assignments: Subject to the consents described below,
each Lender will be permitted to make assignments to other commercial banking
institutions in respect of the Senior Credit Facility in a minimum amount equal
to $5 million.

      Consents: The consent of the Borrower (such consent not to be unreasonably
withheld or delayed) will be required unless (a) an Event of Default has
occurred and is continuing or (b) the assignment is to a Lender, an affiliate of
a Lender or an Approved Fund (as such term shall be defined in the Loan
Documents) or (c) the assignment is an assignment from Bank of America during
the period commencing on the Closing Date and ending on the date that is 120
days following the Closing Date in order to complete the syndication of the
Senior Credit Facility, consistent with Bank of America’s intended hold level of
$40,000,000, and Bank of America has consulted with the Borrower in connection
therewith; provided the Borrower shall be deemed to have consented to such
assignment unless it shall object thereto by written notice to the
Administrative Agent within fifteen (15) business days after having received
notice thereof. The consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) will be required for any assignment in respect
of the Senior Credit Facility to an entity that is not a Lender, an affiliate of
such Lender or an Approved Fund in respect of such Lender. The consent of the
L/C Issuer and the Swingline Lender will be required for any assignment under
the Senior 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 Loan Documents to any
Federal Reserve Bank.        Participations: Lenders will be permitted to sell
participations on standard terms and conditions.     WAIVERS AND  

AMENDMENTS:

Amendments and waivers of the provisions of the Loan Documents 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
Facility, provided that if there are three (3) or fewer Lenders, approval from
at least two (2) Lenders shall be required (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 Facility, (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 Facility and (v) the release of all or substantially all of the
value of the guaranties of the Borrower’s obligations made by the Guarantors,
and (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) postponing any date fixed
for payment of principal, interest, fees or other amounts due under the Loan
Documents and (c) the consent of the Lenders holding more than 50% of the loans
and commitments under the Senior Credit Facility or, if there are three (3) or
fewer Lenders, consent from at least two (2) Lenders shall be required with
respect to certain other matters.

   

 
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INDEMNIFICATION:

The Borrower will indemnify and hold harmless the Administrative Agent, the Lead
Arranger, each Lender, the L/C Issuer, the Swingline Lender and their respective
affiliates and their partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives (each such person, an
“Indemnitee”) from and against all losses, claims, damages, liabilities and
expenses arising out of or relating to the Senior Credit Facility, the Loan
Documents, the Borrower’s use of loan proceeds or the commitments, including,
but not limited to, reasonable attorneys’ fees 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 a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct 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 (a) waive its right to a trial by jury and (b) submit
to New York jurisdiction. The Loan Documents will contain customary increased
cost, withholding tax, capital adequacy and yield protection provisions and
shall reflect operational, agency, assignment and related provisions that are
customarily included in credit agreements with respect to which Bank of America
acts as administrative agent, swingline lender and/or letter of credit issuer.

  

 
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ADDENDUM I

PRICING, FEES AND EXPENSES 

 

 

INTEREST RATES:  The interest rates per annum applicable to the Senior Credit
Facility (other than in respect of and Swingline Loans) will be LIBOR (provided
that if LIBOR shall be less than zero percent, such rate shall be deemed to be
zero percent) plus the Applicable Margin (as hereinafter defined) or, at the
option of the Borrower, the Base Rate (to be defined as the highest of (a) the
Federal Funds Rate plus 0.50%, (b) the Bank of America prime rate and (c) the
one (1) month LIBOR adjusted daily plus 1.00%) plus the Applicable Margin.
“Applicable Margin” means with respect to the Senior Credit Facility, a
percentage per annum to be determined in accordance with the applicable pricing
grid set forth in Addendum II, based on the Senior Leverage Ratio. “Senior
Leverage Ratio” means the ratio of Total Indebtedness minus Subordinated Debt
(being debt subordinated on terms and conditions reasonably satisfactory to the
Administrative Agent) to EBITDA. Each Swingline Loan shall bear interest at the
Base Rate plus the Applicable Margin for Base Rate loans under the Senior Credit
Facility.       The Borrower may select interest periods of one (1), two (2),
three (3) or six (6) months for LIBOR loans, in each case subject to
availability. Interest shall be payable at the end of the selected interest
period, but no less frequently than quarterly.        Automatically upon the
occurrence and during the continuance of any payment event of default of the
Borrower or any Loan Party or, at the election of the Required Lenders upon the
occurrence of any other event of default, all outstanding principal, fees and
other obligations under the Senior Credit Facility shall bear interest at a rate
per annum of two percent (2%) in excess of the rate then applicable to such
obligation.    

COMMITMENT FEE:

Commencing on the Closing Date, a percentage per annum determined in accordance
with the applicable pricing grid set forth in Addendum II shall be payable on
the actual daily unused portions of the Senior Credit Facility. Such fee shall
be payable quarterly in arrears, commencing on the first quarterly payment date
to occur after the Closing Date. Swingline Loans will not be considered
utilization of the Senior Credit Facility for purposes of this calculation.

    LETTER OF  

CREDIT FEES:

Letter of Credit fees shall be payable on the maximum amount available to be
drawn under each Letter of Credit at a rate per annum equal to the Applicable
Margin from time to time applicable to LIBOR loans under the Senior Credit
Facility. Such fees will be (a) payable quarterly in arrears, commencing on the
first quarterly payment date to occur after the Closing Date, and (b) shared
proportionately by the Lenders under the Senior Credit Facility. In addition, a
fronting fee shall be payable to the L/C Issuer for its own account, in an
amount to be mutually agreed.

  

 
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CALCULATION OF  

INTEREST AND FEES:

Computations of interest for Base Rate Loans shall be made on the basis of a
year of 365/366 days. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed.

    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 of the Administrative
Agent and the Lead Arranger associated with the preparation, due diligence,
administration, syndication and closing of all Loan Documents, including,
without limitation, the legal fees of counsel to the Administrative Agent and
the Lead Arranger, regardless of whether or not the Senior Credit Facility is
closed. The Borrower will also pay the expenses of the Administrative Agent and
each Lender in connection with the enforcement of any of the Loan Documents.

  

 
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ADDENDUM II

PRICING GRID

 

 

 

 

Senior

Leverage Ratio

 

Applicable Margin for

LIBOR Loans/

Letter of Credit Fees

 

Commitment

Fee

 

Applicable Margin

for Base Rate Loans

> 2.50:1

2.25%

0.25%

1.25%

< 2.50:1 but > 2.00:1

2.00%

0.25%

1.00%

< 2.00:1 but > 1.50:1

1.75%

0.20%

0.75%

< 1.50:1

1.50%

0.20%

0.50%