Exhibit 10.1

 

CUSIP NUMBER: 50048RAA7

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

November 7, 2014

 

among

 

KONA GRILL, INC.,

as Borrower,

 

THE LENDING INSTITUTIONS NAMED HEREIN,

as Lenders,

 

and

 

keybank national association,

as an LC Issuer, Swing Line Lender, as the Administrative Agent,

as the Sole Lead Arranger and the Sole Bookrunner

 

 

 

$35,000,000 Senior Secured Revolving Credit Facility

 

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ARTICLE I.

DEFINITIONS AND TERMS

1

     

Section 1.01

Certain Defined Terms

1

Section 1.02

Computation of Time Periods

33

Section 1.03

Accounting Terms

33

Section 1.04

Terms Generally

33

     

ARTICLE II.

THE TERMS OF THE CREDIT FACILITY

34

     

Section 2.01

Establishment of the Credit Facility

34

Section 2.02

Revolving Facility

34

Section 2.03

Swing Line Facility

35

Section 2.04

Letters of Credit

36

Section 2.05

Notice of Borrowing

41

Section 2.06

Funding Obligations; Disbursement of Funds

41

Section 2.07

Evidence of Obligations

42

Section 2.08

Interest; Default Rate

43

Section 2.09

Conversion and Continuation of Loans

44

Section 2.10

Fees

45

Section 2.11

Termination and Reduction of Revolving Commitments

46

Section 2.12

Voluntary and Mandatory Prepayments of Loans

46

Section 2.13

Method and Place of Payment

47

Section 2.14

Defaulting Lenders

48

Section 2.15

Cash Collateral

50

Section 2.16

Increase in Credit Facility

51

Section 2.17

Maturity Extension

53

     

ARTICLE III.

INCREASED COSTS, ILLEGALITY AND TAXES

55

     

Section 3.01

Increased Costs, Illegality, etc

55

Section 3.02

Breakage Compensation

56

Section 3.03

Net Payments

57

Section 3.04

Increased Costs to LC Issuers

60

Section 3.05

Change of Lending Office; Replacement of Lenders

61

     

ARTICLE IV.

CONDITIONS PRECEDENT

62

     

Section 4.01

Conditions Precedent at Closing Date

62

Section 4.02

Conditions Precedent to All Credit Events

65

     

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

65

     

Section 5.01

Corporate Status

65

Section 5.02

Corporate Power and Authority

65

Section 5.03

No Violation

66

Section 5.04

Governmental Approvals

66

Section 5.05

Litigation

66

Section 5.06

Use of Proceeds; Margin Regulations

66

Section 5.07

Financial Statements

67

Section 5.08

Solvency

67

Section 5.09

No Material Adverse Change

68

Section 5.10

Tax Returns and Payments

68

Section 5.11

Title to Properties, etc

68

Section 5.12

Lawful Operations, etc

68

Section 5.13

Environmental Matters

68

 

 
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Section 5.14

Compliance with ERISA

69

Section 5.15

Intellectual Property, etc

69

Section 5.16

Investment Company Act, etc

69

Section 5.17

Insurance

70

Section 5.18

Labor Relations

70

Section 5.19

Security Interests

70

Section 5.20

True and Complete Disclosure

70

Section 5.21

Defaults

70

Section 5.22

Capitalization

71

Section 5.23

[Reserved.]

71

Section 5.24

Anti-Terrorism and Anti-Money Laundering Law Compliance

71

Section 5.25

Location of Bank Accounts

71

Section 5.26

Material Contracts

71

Section 5.27

Affiliate Transactions

72

Section 5.28

Common Enterprise

72

     

ARTICLE VI.

AFFIRMATIVE COVENANTS

72

     

Section 6.01

Reporting Requirements

72

Section 6.02

Books, Records and Inspections

76

Section 6.03

Insurance

76

Section 6.04

Payment of Taxes and Claims

77

Section 6.05

Corporate Franchises

77

Section 6.06

Good Repair

77

Section 6.07

Compliance with Statutes, etc

77

Section 6.08

Compliance with Environmental Laws

77

Section 6.09

Certain Subsidiaries to Join in Guaranty

78

Section 6.10

Additional Security; Real Property Matters; Further Assurances

78

Section 6.11

Most Favored Covenant Status

79

Section 6.12

Control Agreements

80

Section 6.13

[Reserved]

80

Section 6.14

Senior Debt

80

Section 6.15

Subordination

80

Section 6.16

Lender Meetings

80

Section 6.17

Post Closing Obligations

80

     

ARTICLE VII.

NEGATIVE COVENANTS

81

     

Section 7.01

Changes in Business

81

Section 7.02

Consolidation, Merger, Acquisitions, Asset Sales, etc

81

Section 7.03

Liens

82

Section 7.04

Indebtedness

82

Section 7.05

Investments and Guaranty Obligations

83

Section 7.06

Restricted Payments

84

Section 7.07

Financial Covenants

84

Section 7.08

Limitation on Certain Restrictive Agreements

85

Section 7.09

Transactions with Affiliates

85

Section 7.10

Plan Terminations, Minimum Funding, etc

86

Section 7.11

Modification of Certain Agreements

86

Section 7.12

Bank Accounts

86

Section 7.13

Anti-Terrorism Laws

86

Section 7.14

Fiscal Year

86

Section 7.15

Lease Incurrence Test

86

 

 
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ARTICLE VIII.

EVENTS OF DEFAULT

87

     

Section 8.01

Events of Default

87

Section 8.02

Remedies

89

Section 8.03

Application of Certain Payments and Proceeds

89

     

ARTICLE IX.

THE ADMINISTRATIVE AGENT

90

     

Section 9.01

Appointment

90

Section 9.02

Delegation of Duties

91

Section 9.03

Exculpatory Provisions

92

Section 9.04

Reliance by Administrative Agent

92

Section 9.05

Notice of Default

92

Section 9.06

Non-Reliance

93

Section 9.07

No Reliance on Administrative Agent’s Customer Identification Program

93

Section 9.08

USA Patriot Act

93

Section 9.09

Indemnification

93

Section 9.10

The Administrative Agent in Individual Capacity

94

Section 9.11

Successor Administrative Agent

94

Section 9.12

Other Agents

95

Section 9.13

Collateral Matters

95

Section 9.14

Agency for Perfection

95

Section 9.15

Proof of Claim

95

Section 9.16

Posting of Approved Electronic Communications

96

Section 9.17

Credit Bidding

97

     

ARTICLE X.

GUARANTY

97

     

Section 10.01

Guaranty by the Borrower

97

Section 10.02

Additional Undertaking

98

Section 10.03

Guaranty Unconditional

98

Section 10.04

Borrower Obligations to Remain in Effect; Restoration

99

Section 10.05

Waiver of Acceptance, etc

99

Section 10.06

Subrogation

99

Section 10.07

Effect of Stay

99

Section 10.08

Keepwell

99

     

ARTICLE XI.

MISCELLANEOUS

100

     

Section 11.01

Payment of Expenses etc

100

Section 11.02

Indemnification

100

Section 11.03

Right of Setoff

101

Section 11.04

Equalization

101

Section 11.05

Notices

102

Section 11.06

Successors and Assigns

103

Section 11.07

No Waiver; Remedies Cumulative

107

Section 11.08

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial

107

Section 11.09

Counterparts

108

Section 11.10

Integration

109

Section 11.11

Headings Descriptive

109

Section 11.12

Amendment or Waiver; Acceleration by Required Lenders

109

Section 11.13

Survival of Indemnities

112

Section 11.14

Domicile of Loans

112

Section 11.15

Confidentiality

112

 

 
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Section 11.16

Limitations on Liability of the LC Issuers

113

Section 11.17

General Limitation of Liability

113

Section 11.18

No Duty

113

Section 11.19

Lenders and Agent Not Fiduciary to Borrower, etc

113

Section 11.20

Survival of Representations and Warranties

114

Section 11.21

Severability

114

Section 11.22

Independence of Covenants

114

Section 11.23

Interest Rate Limitation

114

Section 11.24

USA Patriot Act

114

Section 11.25

Advertising and Publicity

114

Section 11.26

Release of Guarantees and Liens

115

Section 11.27

Payments Set Aside

115

     

EXHIBITS

     

Exhibit A-1

Form of Revolving Facility Note

 

Exhibit A-2

Form of Swing Line Note

 

Exhibit B-1

Form of Notice of Borrowing

 

Exhibit B-2

Form of Notice of Continuation or Conversion

 

Exhibit B-3

Form of LC Request

 

Exhibit C

[Reserved]

 

Exhibit D

Form of Solvency Certificate

 

Exhibit E

Form of Compliance Certificate

 

Exhibit F

Form of Closing Certificate

 

Exhibit G

Form of Assignment Agreement

 

Exhibit H-1

Form of U.S. Tax Compliance Certificate

 

Exhibit H-2

Form of U.S. Tax Compliance Certificate

 

Exhibit H-3

Form of U.S. Tax Compliance Certificate

 

Exhibit H-4

Form of U.S. Tax Compliance Certificate

 

 

 
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AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of November 7,
2014 among the following: (i) Kona Grill, Inc., a Delaware corporation (the
“Borrower”); (ii) the lenders from time to time party hereto (each a “Lender”
and collectively, the “Lenders”); and (iii) KeyBank National Association, as the
administrative agent (the “Administrative Agent”), as the Swing Line Lender (as
hereinafter defined), an LC Issuer (as hereinafter defined), and as the sole
lead arranger and sole bookrunner (in such capacity, the “Arranger”).

 

PRELIMINARY STATEMENTS:

 

(1)     The Borrower, certain Lenders and the Administrative Agent are party to
that certain Credit Agreement, dated as of April 19, 2013 (as amended, restated,
supplemented or otherwise modified prior to the date hereof, the “Existing
Credit Agreement”). The Borrower has requested that the Lenders, the Swing Line
Lender and each LC Issuer agree to certain amendments to the Existing Credit
Agreement in order to (a) provide funds for working capital needs and for other
general corporate purposes of the Borrower and (b) pay certain fees and expenses
incurred in connection with the negotiation and documentation of this Agreement
and the other Loan Documents. Accordingly, upon satisfaction of the conditions
set forth herein, the Existing Credit Agreement (including all exhibits and
schedules thereto) shall be amended and restated in its entirety and replaced by
this Agreement.     

 

(2)     Subject to and upon the terms and conditions set forth herein, the
Lenders, the Swing Line Lender and each LC Issuer are willing to extend credit
and make available to the Borrower the credit facilities provided for herein for
the foregoing purposes.

 

AGREEMENT:

 

In consideration of the premises and the mutual covenants contained herein, the
parties hereto agree as follows:

 

ARTICLE I.

DEFINITIONS AND TERMS

 

Section 1.01     Certain Defined Terms. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires:

 

“1934 Act” means the Securities Exchange Act of 1934, as amended.

 

“2014 Equity Offering” means the Borrower’s public offering of 2,645,000 shares
of common stock completed on June 25, 2014.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (i) the acquisition of all
or substantially all of the assets of any Person, or any business or division of
any Person, (ii) the acquisition or ownership of in excess of 50% of the Equity
Interests of any Person, or (iii) the acquisition of another Person by a merger,
consolidation, amalgamation or any other combination with such Person.

 

“Additional Equity Offering” means the issuance by the Borrower of its Equity
Interests in (a) a private placement of Equity Interests or (b) an underwitten
public offering pursuant to an effective registration statement filed by the
Borrower with the Securities and Exchange Commission in accordance with the
Securities Act of 1933, as amended, after the Closing Date, but excluding any
public offering pursuant to a registration statement on Form S-8.

 

 

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“Additional Security Documents” has the meaning provided in Section 6.10(a).

 

“Adjusted LIBOR Rate” means with respect to each Interest Period for a LIBOR
Rate Loan, (i) the rate per annum equal to the offered rate appearing on Reuters
Screen LIBOR01 Page (or on the appropriate page of any successor to or
substitute for such service, or, if such rate is not available, on the
appropriate page of any generally recognized financial information service, as
selected by the Administrative Agent from time to time) that displays an average
ICE Benchmark Administration (or any successor thereto) Interest LIBOR Rate at
approximately 11:00 A.M. (London time) two Business Days prior to the
commencement of such Interest Period, for deposits in Dollars with a maturity
comparable to such Interest Period, divided (and rounded to the nearest 1/100th
of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves and without benefit of
credits for proration, exceptions or offsets that may be available from time to
time) applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D); provided, however, that if the rate referred
to in clause (i) above is not available at any such time for any reason, then
the rate referred to in clause (i) shall instead be the interest rate per annum,
as determined by the Administrative Agent, to be the average (rounded to the
nearest 1/100th of 1%) of the rates per annum at which deposits in Dollars in an
amount equal to the amount of such LIBOR Rate Loan are offered to major banks in
the London interbank market at approximately 11:00 A.M. (London time), two
Business Days prior to the commencement of such Interest Period, for contracts
that would be entered into at the commencement of such Interest Period for the
same duration as such Interest Period.

 

“Administrative Agent” has the meaning provided in the first paragraph of this
Agreement and includes any successor to the Administrative Agent appointed
pursuant to Section 9.11.

 

“Administrative Agent Fee Letters” means, collectively, (i) the Fee Letter dated
as of March 20, 2013 between the Borrower and the Administrative Agent and (ii)
the Fee Letter dated as of October 27, 2014 between the Borrower and the
Administrative Agent.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person, or, in the case of any Lender that is an investment
fund, the investment advisor thereof and any investment fund having the same
investment advisor. A Person shall be deemed to control a second Person if such
first Person possesses, directly or indirectly, the power (i) to vote 10% or
more of the securities having ordinary voting power for the election of
directors or managers of such second Person or (ii) to direct or cause the
direction of the management and policies of such second Person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, none of the Administrative Agent nor any Lender shall in any
event be considered an Affiliate of the Borrower or any of its Subsidiaries.

 

“Agent Advances” has the meaning provided in Section 9.13.

 

“Aggregate Credit Facility Exposure” means, at any time, the sum of (i) the
Aggregate Revolving Facility Exposure at such time and (ii) the principal amount
of Swing Loans outstanding at such time.

 

 
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“Aggregate Revolving Facility Exposure” means, at any time, the sum of (i) the
aggregate principal amount of all Revolving Loans made by all Lenders and
outstanding at such time and (ii) the aggregate amount of the LC Outstandings at
such time.

 

“Agreement” means this Amended and Restated Credit Agreement, including any
exhibits or schedules, as the same may from time to time be amended, restated,
amended and restated, supplemented or otherwise modified.

 

“Anti-Terrorism Law” means the USA Patriot Act or any other law pertaining to
the prevention of future acts of terrorism, in each case as such law may be
amended from time to time.

 

“Applicable Lending Office” means, with respect to each Lender, the office
designated by such Lender to the Administrative Agent as such Lender’s lending
office for all purposes of this Agreement. A Lender may have a different
Applicable Lending Office for Base Rate Loans and LIBOR Rate Loans.

 

“Applicable Period” has the meaning provided to such term in subpart (iv) of the
definition of “Applicable Commitment Fee Rate.”

 

“Applicable Commitment Fee Rate” means:

 

(i)     On the Closing Date and thereafter until changed in accordance with the
provisions set forth in this definition, the Applicable Commitment Fee Rate
shall be 25.0 basis points;

 

(ii)     Upon receipt by the Administrative Agent of the Compliance Certificate
in accordance with Section 6.01(c) for the fiscal quarter ended on December 31,
2014, and continuing with each fiscal quarter thereafter, the Administrative
Agent shall determine the Applicable Commitment Fee Rate in accordance with the
following matrix, based on the Leverage Ratio:

 

Leverage Ratio

Applicable Commitment Fee Rate

Greater than or equal to 4.00 to 1.00

35.0 bps

Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00

30.0 bps

Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00

25.0 bps

Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00

20.0 bps

Less than 2.50 to 1.00

17.5 bps

 

(iii)     Changes in the Applicable Commitment Fee Rate based upon changes in
the Leverage Ratio shall become effective on the third Business Day following
the receipt by the Administrative Agent pursuant to Section 6.01(a) or Section
6.01(b), as the case may be, of the financial statements of the Borrower for the
Testing Period most recently ended, accompanied by a Compliance Certificate in
accordance with Section 6.01(c), demonstrating the computation of the Leverage
Ratio. Notwithstanding the foregoing provisions, if at any time (A) the Borrower
has failed to timely deliver its consolidated financial statements referred to
in Section 6.01(a) or Section 6.01(b), accompanied by a Compliance Certificate
in accordance with Section 6.01(c), or (B) an Event of Default has occurred and
is continuing, for the period from the time of such failure until the
appropriate financial statements or compliance certificate is delivered, or
during the continuation of such Event of Default, as the case may be, the
Applicable Commitment Fee Rate shall be the highest rate (in basis points)
indicated in the above matrix, regardless of the Leverage Ratio at such time.
The above matrix does not modify or waive, in any respect, the rights of the
Administrative Agent and the Lenders to charge any default rate of interest or
any of the other rights and remedies of the Administrative Agent and the Lenders
hereunder.

 

 
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(iv)     In the event that any financial statement or certificate, as
applicable, delivered pursuant to Section 6.01(a), (b) or (c) is shown to be
inaccurate (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of (A) a higher Applicable Commitment Fee Rate
for any Applicable Period than the Applicable Commitment Fee Rate actually
applied for such Applicable Period, then (i) the Borrower shall immediately
deliver to the Administrative Agent a corrected certificate for such Applicable
Period, (ii) the Applicable Commitment Fee Rate shall be determined as if such
corrected, higher Applicable Commitment Fee Rate were applicable for such
period, and (iii) the Borrower shall immediately pay to the Administrative Agent
the accrued additional Commitment Fees owing as a result of such higher
Applicable Commitment Fee Rate for such Applicable Period or (B) a lower
Applicable Commitment Fee Rate for an Applicable Period than the Applicable
Commitment Fee Rate actually applied for such Applicable Period, then (i) the
Borrower shall immediately deliver to the Administrative Agent a corrected
certificate for such Applicable Period and (ii) the Applicable Commitment Fee
Rate shall be determined as if such corrected, lower Applicable Commitment Fee
Rate were applicable from the date of delivery of such corrected certificate.

 

“Applicable Revolving Loan Margin” means:

 

(i)     On the Closing Date and thereafter, until changed in accordance with the
following provisions, the Applicable Revolving Loan Margin shall be (A) 100.0
basis points for Revolving Loans that are Base Rate Loans, and (B) 200.0 basis
points for Revolving Loans that are LIBOR Rate Loans;

 

(ii)     Upon receipt by the Administrative Agent of the Compliance Certificate
in accordance with Section 6.01(c) for the fiscal quarter ended on December 31,
2014, and continuing with each fiscal quarter thereafter, the Administrative
Agent shall determine the Applicable Revolving Loan Margin in accordance with
the following matrix, based on the Leverage Ratio:

 

Leverage Ratio

Applicable Revolving Loan Margin for Base Rate Loans

Applicable Revolving Loan Margin for LIBOR Rate Loans

Greater than or equal to 4.00 to 1.00

150.0 bps

250.0 bps

Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00

125.0 bps

225.0 bps

Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00

100.0 bps

200.0 bps

Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00

75.0 bps

175.0 bps

Less than 2.50 to 1.00

50.0 bps

150.0 bps

 

(iii)     Changes in the Applicable Revolving Loan Margin based upon changes in
the Leverage Ratio shall become effective on the third Business Day following
the receipt by the Administrative Agent pursuant to Section 6.01(a) or Section
6.01(b), as the case may be, of the financial statements of the Borrower for the
Testing Period most recently ended, accompanied by a Compliance Certificate in
accordance with Section 6.01(c), demonstrating the computation of the Leverage
Ratio. Notwithstanding the foregoing provisions, if at any time (A) the Borrower
has failed to timely deliver its consolidated financial statements referred to
in Section 6.01(a) or Section 6.01(b), accompanied by a Compliance Certificate
in accordance with Section 6.01(c), or (B) an Event of Default has occurred and
is continuing, for the period from the time of such failure until the
appropriate financial statements or compliance certificate is delivered, or
during the continuation of such Event of Default, as the case may be, the
Applicable Revolving Loan Margin shall be the highest rate (in basis points)
indicated in the above matrix, regardless of the Leverage Ratio at such time.
The above matrix does not modify or waive, in any respect, the rights of the
Administrative Agent and the Lenders to charge any default rate of interest or
any of the other rights and remedies of the Administrative Agent and the Lenders
hereunder.

 

 
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(iv)     In the event that any financial statement or certificate, as
applicable, delivered pursuant to Section 6.01(a), (b) or (c) is shown to be
inaccurate (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of (A) a higher Applicable Revolving Loan
Margin for any Applicable Period than the Applicable Revolving Loan Margin
actually applied for such Applicable Period, then (i) the Borrower shall
immediately deliver to the Administrative Agent a corrected certificate for such
Applicable Period, (ii) the Applicable Revolving Loan Margin shall be determined
as if such corrected, higher Applicable Revolving Loan Margin were applicable
for such period, and (iii) the Borrower shall immediately pay to the
Administrative Agent the accrued additional interest owing as a result of such
higher Applicable Revolving Loan Margin for such Applicable Period or (B) a
lower Applicable Revolving Loan Margin for an Applicable Period than the
Applicable Revolving Loan Margin actually applied for such Applicable Period,
then (i) the Borrower shall immediately deliver to the Administrative Agent a
corrected certificate for such Applicable Period and (ii) the Applicable
Revolving Loan Margin shall be determined as if such corrected, lower Applicable
Revolving Loan Margin were applicable from the date of delivery of such
corrected certificate.

 

“Approved Bank” has the meaning provided in subpart (ii) of the definition of
“Cash Equivalents.”

 

“Approved Fund” means a fund that is engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit and
that is administered or managed by a Lender or an Affiliate of a Lender. With
respect to any Lender, an Approved Fund shall also include any swap, special
purpose vehicle purchasing or acquiring security interests in collateralized
loan obligations or any other vehicle through which such Lender may leverage its
investments from time to time.

 

“Arranger” has the meaning provided in the first paragraph of this Agreement.

 

“Asset Sale” means, with respect to any Person, the sale, lease, transfer or
other disposition (including by means of Sale and Lease-Back Transactions, and
by means of mergers, consolidations, amalgamations and liquidations of a
corporation, partnership or limited liability company of the interests therein
of such Person) by such Person to any other Person of any of such Person’s
assets, provided that the term Asset Sale specifically excludes (i) any sales,
transfers or other dispositions of inventory, or obsolete, worn-out or excess
furniture, fixtures, equipment or other property, real or personal, tangible or
intangible, in each case in the ordinary course of business, and (ii) the actual
or constructive total loss of any property or the use thereof resulting from any
Event of Loss.

 

“Assignment Agreement” means an Assignment Agreement substantially in the form
of Exhibit G hereto.

 

 
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“Augmenting Lender” has the meaning provided in Section 2.16(a).

 

“Authorized Officer” means, with respect to any Person, any of the following
officers: the President, the Chief Executive Officer, the Chief Financial
Officer, the Treasurer, the Assistant Treasurer or the Controller, or such other
Person as is authorized in writing to act on behalf of such Person and is
acceptable to the Administrative Agent. Unless otherwise qualified, all
references herein to an Authorized Officer shall refer to an Authorized Officer
of the Borrower.

 

“Banking Services Obligations” means all obligations of the Credit Parties,
whether absolute or contingent, and howsoever and whensoever created, arising,
evidenced or acquired in connection with the provision of commercial credit
cards, stored value cards, or treasury management services (including controlled
disbursement automated clearinghouse transactions, return items, overdrafts,
netting and interstate depository network services) by any Lender to any Credit
Party.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now or hereafter in effect, or any successor thereto, as
hereafter amended.

 

“Base Rate” means, for any day, a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall at all times be equal
to the greatest of: (i) the rate of interest established by KeyBank National
Association, from time to time, as its “prime rate,” whether or not publicly
announced, which interest rate may or may not be the lowest rate charged by it
for commercial loans or other extensions of credit; (ii) the Federal Funds
Effective Rate in effect from time to time, determined one Business Day in
arrears, plus 1/2 of 1% per annum; and (iii) the Adjusted LIBOR Rate for a
one-month Interest Period on such day plus 1.00%. The “prime rate” is a rate set
by KeyBank based upon various factors including KeyBank’s costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by KeyBank shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base
Rate in effect from time to time.

 

“Benefited Creditors” means, with respect to the Borrower Guaranteed Obligations
pursuant to Article X, each of the Administrative Agent, the Lenders, each LC
Issuer and the Swing Line Lender and each Designated Hedge Creditor, and the
respective successors and assigns of each of the foregoing.

 

“Borrower” has the meaning provided in the first paragraph of this Agreement.

 

“Borrower Guaranteed Obligations” has the meaning provided in Section 10.01.

 

“Borrowing” means a Revolving Borrowing or the incurrence of a Swing Loan.

 

“Business Day” means (i) any day other than Saturday, Sunday or any other day on
which commercial banks in Cleveland, Ohio or New York, New York are authorized
or required by law to close and (ii) with respect to any matters relating to
LIBOR Rate Loans, any day on which dealings in U.S. Dollars are carried on in
the London interbank market.

 

“Capital Distribution” means, with respect to any Person, a payment made,
liability incurred or other consideration given for the purchase, acquisition,
repurchase, redemption or retirement of any Equity Interest of such Person or as
a dividend, return of capital or other distribution in respect of any of such
Person’s Equity Interests.

 

 
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“Capital Expenditures” means, without duplication, (a) any expenditure or
commitment to expend money for any purchase or other acquisition of any asset
including capitalized leasehold improvements, which would be classified as a
fixed or capital asset on a consolidated balance sheet of Borrower and its
Subsidiaries prepared in accordance with GAAP, and (b) Capitalized Lease
Obligations and Synthetic Lease Obligations, but excluding (i) the purchase
price of equipment that is purchased substantially contemporaneously with the
trade-in of existing equipment to the extent that the gross amount of such
purchase price is reduced by the credit granted by the seller of such equipment
for the equipment being traded in at such time and (ii) Permitted Acquisitions.

 

“Capital Lease” as applied to any Person means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, should be accounted for as a capital lease on the balance sheet of
that Person.

 

“Capitalized Lease Obligations” means, with respect to any Person, all
obligations under Capital Leases of such Person, without duplication, in each
case taken at the amount thereof accounted for as liabilities identified as
“capital lease obligations” (or any similar words) on a consolidated balance
sheet of such Person prepared in accordance with GAAP.

 

“Cash Collateralize” means, (i) to deposit into a cash collateral account
maintained with (or on behalf of) the Administrative Agent, and under the sole
dominion and control of the Administrative Agent, or (ii) to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of one or more of
the LC Issuers or Lenders, as collateral for LC Outstandings or obligations of
Lenders to fund participations in respect of LC Outstandings, cash or deposit
account balances or, if the Administrative Agent and each applicable LC Issuer
shall agree in their sole discretion, other credit support; in each case
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and each applicable LC Issuer. “Cash Collateral” shall have
a meaning correlative to the foregoing and shall include the proceeds of such
cash collateral and other credit support.

 

“Cash Dividend” means a Capital Distribution by a Person payable in cash to the
holders of Equity Interests of such Person with respect to any class or series
of Equity Interest of such Person.

 

“Cash Equivalents” means any of the following:

 

(i)     securities issued or directly and fully guaranteed or insured by the
United States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than two years from the date of acquisition;

 

(ii)     U.S. dollar denominated time deposits, certificates of deposit and
bankers’ acceptances of (x) any Lender, (y) any commercial bank of recognized
standing organized under the laws of the United States (or any state thereof or
the District of Columbia) and having capital and surplus in excess of
$500,000,000 or (z) any commercial bank (or the parent company of such bank) of
recognized standing organized under the laws of the United States (or any state
thereof or the District of Columbia) and whose short-term commercial paper
rating from S&P is at least A-1, A-2 or the equivalent thereof or from Moody’s
is at least P-1, P-2 or the equivalent thereof (any such bank, an “Approved
Bank”), in each case with maturities of not more than 180 days from the date of
acquisition;

 

 
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(iii)     commercial paper issued by any Lender or Approved Bank or by the
parent company of any Lender or Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody’s, or guaranteed by any industrial company with
a long-term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody’s, as the case may be, and in each case maturing
within 180 days after the date of acquisition;

 

(iv)     fully collateralized repurchase agreements entered into with any Lender
or Approved Bank having a term of not more than 30 days and covering securities
described in clause (i) above;

 

(v)     investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (i) through (iv)
above;

 

(vi)     investments in money market funds access to which is provided as part
of “sweep” accounts maintained with a Lender or an Approved Bank;

 

(vii)     investments in industrial development revenue bonds that (A) “re-set”
interest rates not less frequently than quarterly, (B) are entitled to the
benefit of a remarketing arrangement with an established broker dealer, and (C)
are supported by a direct pay letter of credit covering principal and accrued
interest that is issued by an Approved Bank; and

 

(viii)     investments in pooled funds or investment accounts consisting of
investments of the nature described in the foregoing clause (vii).

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. §
9601 et seq.

 

“Change of Control” means:

 

(i)     the acquisition of, or, if earlier, the shareholder or director approval
of the acquisition of, ownership or voting control, directly or indirectly,
beneficially or of record, on or after the Closing Date, by any Person or group
(within the meaning of Rule 13d-3 of the SEC under the 1934 Act, as then in
effect), of more than 25% of the Equity Interests of the Borrower;

 

(ii)     the Borrower shall fail to own and control, directly or indirectly,
100% of the Equity Interests of each Subsidiary (or, in the case of any
Subsidiary that is a non-wholly owned Subsidiary as of the Closing Date, not
less than the percentage of the Equity Interests of such Subsidiary owned and
controlled, directly or indirectly, by the Borrower as of the Closing Date),
except pursuant to a transaction not otherwise prohibited by this Agreement;

 

(iii)     the occupation of a majority of the seats (other than vacant seats) on
the board of directors (or similar governing body) of the Borrower by Persons
who were neither (A) nominated by the Board of Directors of the Borrower, as
applicable, nor (B) appointed by directors so nominated; or

 

(iv)     the occurrence of a change of control, or other similar provision,
under or with respect to any Material Indebtedness Agreement or Equity Interests
of the Borrower or any of its Subsidiaries.

 

 
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“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Charges” has the meaning provided in Section 11.23.

 

“CIP Regulations” has the meaning provided in Section 9.07.

 

“Claims” has the meaning set forth in the definition of “Environmental Claims.”

 

“Closing Certificate” means a certificate substantially in the form of Exhibit F
attached hereto.

 

“Closing Date” means November 7, 2014.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.
Section references to the Code are to the Code as in effect at the Closing Date
and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.

 

“Collateral” means the “Collateral” as defined in the Security Agreement,
together with any other collateral covered by any Security Document.

 

“Collateral Assignment Agreement” has the meaning specified in the Security
Agreement.

 

“Commercial Letter of Credit” means any letter of credit or similar instrument
issued for the purpose of providing the primary payment mechanism in connection
with the purchase of materials, goods or services in the ordinary course of
business.

 

“Commitment” means, with respect to each Lender, its Revolving Commitment.

 

“Commitment Fees” has the meaning provided in Section 2.10(a).

 

“Commodities Hedge Agreement” means a commodities contract purchased by the
Borrower or any of its Subsidiaries in the ordinary course of business, and not
for speculative purposes, with respect to raw materials necessary to the
manufacturing or production of goods in connection with the business of the
Borrower and its Subsidiaries.

 

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

 

“Communications” has the meaning provided in Section 9.16(a).

 

“Compliance Certificate” has the meaning provided in Section 6.01(c).

 

 
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“Confidential Information” has the meaning provided in Section 11.15(b).

 

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

 

“Consideration” means, in connection with an Acquisition, the aggregate
consideration paid, including borrowed funds, cash, the issuance of securities
or notes, the assumption or incurring of liabilities (direct or contingent), the
payment of consulting fees (excluding any fees payable to any investment banker
in connection with such Acquisition) or fees for a covenant not to compete and
any other consideration paid.

 

“Consolidated Depreciation and Amortization Expense” means, for any period, all
depreciation and amortization expenses of the Borrower and its Subsidiaries, all
as determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.

 

“Consolidated EBITDAR” means, for any period, Consolidated Net Income for such
period, plus, without duplication, in each case only to the extent deducted in
determining such Consolidated Net Income, (A) (i) Consolidated Interest Expense
for such period, (ii) Consolidated Depreciation and Amortization Expense for
such period, (iii) Consolidated Tax Expense for such period, (iv) Consolidated
Rental Expense for such period, (v) the aggregate amount of non-cash expenses
relating to stock-based compensation reducing Consolidated Net Income, (vi)
pre-opening store expenses in an aggregate amount not to exceed $550,000 per
leased location for such period and (vii) losses on sales of assets and losses
that are properly classified under GAAP as extraordinary and other non-recurring
non-cash losses less (B) gains on sales of assets and gains that are properly
classified under GAAP as extraordinary and other non-recurring non-cash gains,
all as determined for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP; provided, however, that Consolidated EBITDAR for any
Testing Period shall (y) include the Consolidated EBITDAR for any Person or
business unit that has been acquired by the Borrower or any of its Subsidiaries
for any portion of such Testing Period prior to the date of acquisition, so long
as such Consolidated EBITDAR has been verified by appropriate audited financial
statements or other financial statements reasonably acceptable to the
Administrative Agent and (z) exclude the Consolidated EBITDAR for any Person or
business unit that has been disposed of by the Borrower or any of its
Subsidiaries, for the portion of such Testing Period prior to the date of
disposition in any twelve-month period.

 

“Consolidated Fixed Charges” means, for any period, as determined on a
consolidated basis and in accordance with GAAP, the sum, without duplication, of
(i) Consolidated Interest Expense paid in cash for such period (net of the
consolidated interest income of the Borrower and its Subsidiaries for such
period), (ii) the principal amount of all scheduled amortization payments on all
Indebtedness (including the principal component of all Capitalized Lease
Obligations of the Borrower and its Subsidiaries for such period), (iii) Capital
Distributions made by the Borrower in respect of its common stock and (iv)
Consolidated Rental Expense for such period.

 

“Consolidated Interest Expense” means, for any period, total interest expense
(including, without limitation, that which is capitalized and that which is
attributable to Capital Leases or Synthetic Leases) of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries.

 

“Consolidated Maintenance Capital Expenditures” means, for any period, Capital
Expenditures of the Borrower and its Subsidiaries made in connection with the
replacement, maintenance, substitution or restoration of assets (other than
Capital Expenditures made in connection with the expansion of seating or
customer capacity or remodeling of any existing unit or restaurant location) for
such period, as determined on a consolidated basis.

 

 
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“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded from such net income (to the extent
otherwise included therein), without duplication: (a) the net income (or loss)
of any person (other than a Subsidiary of the Borrower) in which any person
other than the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that cash in an amount equal to any such income has
actually been received by the Borrower or any of its wholly-owned Subsidiaries
from such person during such period; (b) the net income of any Subsidiary of the
Borrower during such period to the extent that the declaration and/or payment of
dividends or similar distributions by such Subsidiary of that income is not
permitted by operation of the terms of its organizational documents or any
agreement, instrument, or other legal requirement applicable to that Subsidiary
or its equityholders during such period, except that the Borrower’s equity in
net loss of any such Subsidiary for such period shall be included in determining
Consolidated Net Income.

 

“Consolidated Net Worth” means at any time, all amounts that, in conformity with
GAAP, would be included under the caption “total stockholders’ equity” (or any
like caption) on a consolidated balance sheet of the Borrower at such time.

 

“Consolidated Rental Expense” means, for any period, the aggregate amount of all
fixed payments paid in cash that the Borrower and its Subsidiaries are required
to make as lessee under, or by the terms of, any lease of real property during
such period.

 

“Consolidated Tax Expense” shall mean, for any period, the tax expense
(including federal, state, local and foreign income taxes) of the Borrower and
its Subsidiaries, for such period, determined on a consolidated basis in
accordance with GAAP.

 

“Consolidated Total Debt” means the sum (without duplication), as at any date of
determination, of all Indebtedness and all LC Outstandings of the Borrower and
of its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 

“Continue,” “Continuation” and “Continued” each refers to a continuation of a
LIBOR Rate Loan for an additional Interest Period as provided in Section 2.09.

 

“Control Agreements” has the meaning set forth in the Security Agreement.

 

“Convert,” “Conversion” and “Converted” each refers to a conversion of Loans of
one Type into Loans of another Type.

 

“Credit Event” means the making of any Borrowing, any Conversion or Continuation
or any LC Issuance.

 

“Credit Facility” means the credit facility established under this Agreement
pursuant to which (i) the Lenders shall make Revolving Loans to the Borrower,
and shall participate in LC Issuances, under the Revolving Facility pursuant to
the Revolving Commitment of each such Lender, (ii) the Swing Line Lender shall
make Swing Loans to the Borrower under the Swing Line Facility pursuant to the
Swing Line Commitment, and (iii) each LC Issuer shall issue Letters of Credit
for the account of the LC Obligors in accordance with the terms of this
Agreement.

 

 
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“Credit Facility Exposure” means, for any Lender at any time, the sum of (i)
such Lender’s Revolving Facility Exposure at such time and (ii) in the case of
the Swing Line Lender, the principal amount of Swing Loans outstanding at such
time.

 

“Credit Party” means the Borrower or any Subsidiary Guarantor.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

 

“Default” means any event, act or condition that with notice or lapse of time,
or both, would constitute an Event of Default.

 

“Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, any LC Issuer, any
Swing Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Loans) within two Business Days of the date when due, (b) has notified the
Borrower, the Administrative Agent or any LC Issuer or Swing Line Lender in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund a Loan hereunder
and states that such position is based on such Lender’s determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by the Administrative Agent or the Borrower, to confirm in
writing to the Administrative Agent and the Borrower that it will comply with
its prospective funding obligations hereunder (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), or (d) has,
or has a direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the ownership
or acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender (subject to Section
2.14(b)) upon delivery of written notice of such determination to the Borrower,
each LC Issuer, each Swing Line Lender and each Lender.

 

“Default Rate” means, for any day, (i) with respect to any Loan, a rate per
annum equal to 2% per annum above the interest rate that is or would be
applicable from time to time to such Loan pursuant to Section 2.08(a) and (ii)
with respect to any other amount, a rate per annum equal to 2% per annum above
the rate that would be applicable to Revolving Loans that are Base Rate Loans
pursuant to Section 2.08(a).

 

 
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“Deposit Account” has the meaning set forth in the Security Agreement.

 

“Designated Hedge Agreement” means any Hedge Agreement (other than a Commodities
Hedge Agreement) to which the Borrower or any of its Subsidiaries is a party and
as to which a Lender or any of its Affiliates is a counterparty that, pursuant
to a written instrument signed by the Administrative Agent, has been designated
as a Designated Hedge Agreement so that the Borrower’s or such Subsidiary’s
counterparty’s credit exposure thereunder will be entitled to share in the
benefits of the Guaranty and the Security Documents to the extent the Guaranty
and such Security Documents provide guarantees or security for creditors of the
Borrower or any Subsidiary under Designated Hedge Agreements.

 

“Designated Hedge Creditor” means each Lender or Affiliate of a Lender that
participates as a counterparty to any Credit Party pursuant to any Designated
Hedge Agreement with such Lender or Affiliate of such Lender.

 

“Disqualified Equity Interests” means any Equity Interest that (a) by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Revolving Facility Termination Date, (b)
is convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or other Indebtedness or (ii) any Equity
Interest referred to in clause (a) above, in each case at any time on or prior
to the first anniversary of the Revolving Facility Termination Date, (c)
contains any repurchase obligation that may come into effect prior to payment in
full of all Obligations, (d) requires cash dividend payments prior to one year
after the Revolving Facility Termination Date, (e) does not provide that any
claims of any holder of such Equity Interest may have against the Borrower or
any other Credit Party (including any claims as judgment creditor or other
creditor in respect of claims for the breach of any covenant contained therein)
shall be fully subordinated (including a full remedy bar) to the Obligations in
a manner reasonably satisfactory to the Administrative Agent, (f) provides the
holders of such Equity Interests with any rights to receive any cash upon the
occurrence of a change of control prior to the first anniversary date on which
the Obligations have been irrevocably paid in full, unless the rights to receive
such cash are contingent upon the Obligations being irrevocably paid in full, or
(g) is otherwise prohibited by the terms of this Agreement. The parties hereto
hereby agree that, for the avoidance of doubt, the common stock of the Borrower
shall not constitute Disqualified Equity Interests.

 

“Dollars,” “U.S. Dollars” and the sign “$” each means lawful money of the United
States.

 

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States, any State thereof, or the District of Columbia.

 

“EBITDA” means, with respect to any Person for any period, the net income for
such Person for such period plus the sum of the amounts for such period included
in determining such net income in respect of (i) interest expense, (ii) income
tax expense, and (iii) depreciation and amortization expense, in each case as
determined in accordance with GAAP.

 

 
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“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund, and (iv) any other Person (other than a natural Person) approved
by (A) the Administrative Agent, (B) each LC Issuer, (C) each Swing Line Lender
and (D) unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed (and the Borrower
shall be deemed to have consented thereto if it fails to object to any
assignment within five Business Days after it received written notice thereof));
provided, however, that notwithstanding the foregoing, “Eligible Assignee” shall
not include (x) the Borrower or any of the Borrower’s Affiliates or
Subsidiaries, (y) any holder of any Subordinated Indebtedness or any of such
holder’s Affiliates or (z) any Defaulting Lender or any of its Subsidiaries, or
any Person who, upon becoming a Lender hereunder, would constitute any of the
foregoing Persons described in this clause (z).

 

“Eligible Participant” means (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund, (iv) any commercial bank (or the parent company of such
bank), insurance company or any company engaged in the business of making
commercial loans and (v) any other Person (other than a natural Person) approved
by (A) the Administrative Agent, (B) each LC Issuer, (C) each Swing Line Lender
and (D) unless a Default or Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed (and the
Borrower shall be deemed to have consented thereto if it fails to object to any
participation within five Business Days after it received written notice
thereof)); provided, however, that notwithstanding the foregoing, “Eligible
Participant” shall not include (x) the Borrower or any of the Borrower’s
Affiliates or Subsidiaries, (y) any holder of any Subordinated Indebtedness or
any of such holder’s Affiliates or (z) any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (z).

 

“Environmental Claims” means any and all global, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of non-compliance or
violation, investigations or proceedings relating in any way to any
Environmental Law or any permit issued under any such law (hereafter “Claims”),
including, without limitation, (i) any and all Claims by any Governmental
Authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any applicable Environmental Law, and (ii) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the storage,
treatment or Release (as defined in CERCLA) of any Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.

 

“Environmental Law” means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any binding and enforceable
judicial or global interpretation thereof, including any judicial or global
order, consent, decree or judgment issued to or rendered against the Borrower or
any of its Subsidiaries relating to the environment, employee health and safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq., the
Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any state and local
or foreign counterparts or equivalents, in each case as amended from time to
time.

 

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any Environmental Claim which relate to any
environmental condition or a release, use, handling, storage or treatment of
Hazardous Materials by any Credit Party or a predecessor in interest from or on
to (i) any property presently or formerly owned by any Credit Party or (ii) any
facility which received Hazardous Materials generated by any Credit Party.

 

 
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“Equity Interest” means with respect to any Person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or non-voting) of equity of such Person,
including, if such Person is a partnership, partnership interests (whether
general or limited) or any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership, but in no event will Equity
Interest include any debt securities convertible or exchangeable into equity
unless and until actually converted or exchanged.

 

“Equity Offering” means, collectively, the 2014 Equity Offering and any
Additional Equity Offering.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Closing Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means each Person (as defined in Section 3(9) of ERISA), which
together with the Borrower or a Subsidiary of the Borrower, would be deemed to
be a “single employer” (i) within the meaning of Section 414(b), (c), (m) or (o)
of the Code or Section 4001(a)(14) or 4001(b)(i) of ERISA or (ii) as a result of
the Borrower or a Subsidiary of the Borrower being or having been a general
partner of such Person.

 

“ERISA Event” means: (i) that a Reportable Event has occurred with respect to
any Plan; (ii) the institution of any steps by the Borrower or any Subsidiary,
any ERISA Affiliate, the PBGC or any other Person to terminate any Plan or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan; (iii) the institution of any steps by the Borrower or any
Subsidiary or any ERISA Affiliate to withdraw from any Multi-Employer Plan or
Multiple Employer Plan, if such withdrawal could result in withdrawal liability
(as described in Part 1 of Subtitle E of Title IV of ERISA or in Section 4063 of
ERISA) in excess of $100,000; (iv) a non-exempt “prohibited transaction” within
the meaning of Section 406 of ERISA in connection with any Plan; (v) that a Plan
has Unfunded Benefit Liabilities exceeding $100,000; (vi) the cessation of
operations at a facility of the Borrower or any Subsidiary or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (vii) the
conditions for imposition of a Lien under Section 303(a) of ERISA shall have
been met with respect to a Plan; (viii) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 206(g) of
ERISA; (ix) the insolvency of or commencement of reorganization proceedings with
respect to a Multi-Employer Plan; (x) any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to any post-retirement
welfare liability; or (xi) the taking of any action by, or the threatening of
the taking of any action by, the IRS, the Department of Labor or the PBGC with
respect to any of the foregoing.

 

“Event of Default” has the meaning provided in Section 8.01.

 

“Event of Loss” means, with respect to any property, (i) the actual or
constructive total loss of such property or the use thereof resulting from
destruction, damage beyond repair, or the rendition of such property permanently
unfit for normal use from any casualty or similar occurrence whatsoever, (ii)
the destruction or damage of a portion of such property from any casualty or
similar occurrence whatsoever, (iii) the condemnation, confiscation or seizure
of, or requisition of title to or use of, any property, or (iv) in the case of
any property located upon a leasehold, the termination or expiration of such
leasehold.

 

 
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“Excluded Deposit Account” means all Deposit Accounts other than any Deposit
Account that contains proceeds of any Equity Offering.

 

“Excluded Swap Obligations” means with respect to any Credit Party, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty
Obligations of such Person of, or the grant by such Person of a security
interest to secure, such Swap Obligation (or any Guaranty Obligation thereof) is
or becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof). If a Swap Obligation arises under a
master agreement governing more than one swap, such exclusion shall apply only
to the portion of such Swap Obligation that is attributable to swaps for which
such Guaranty Obligation or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its Applicable Lending Office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 3.05) or (ii) such Lender changes its Applicable Lending
Office, except in each case to the extent that, pursuant to Section 3.03,
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Applicable Lending Office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 3.03(g) and (d)
any U.S. federal withholding Taxes imposed under FATCA.

 

“Existing Closing Date” means April 19, 2013, the date the Existing Credit
Agreement became effective.

 

“Existing Credit Agreement” has the meaning assigned to such term in the
preliminary statements hereto.

 

“Existing Obligations” means the “Obligations” as defined in the Existing Credit
Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Effective Rate” means, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.

 

 
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“Fees” means all amounts payable pursuant to, or referred to in, Section 2.10.

 

“Financial Officer” means the chief executive officer, the president or the
chief financial officer of the Borrower.

 

“Financial Projections” has the meaning provided in Section 5.07(b).

 

“Fixed Charge Coverage Ratio” means, for any Testing Period, the ratio of (i)
Consolidated EBITDAR minus all cash payments in respect of Taxes (including
federal, state, local and foreign income taxes) made during such period (net of
any cash refund in respect of income taxes actually received by the Borrower and
its Subsidiaries during such period) minus Consolidated Maintenance Capital
Expenditures, to the extent paid in cash, to (ii) Consolidated Fixed Charges.

 

“Foreign Lender” means a Lender that is not a U.S. Person.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to any LC Issuer, such Defaulting Lender’s Revolving Facility Percentage
of LC Outstandings with respect to Letters of Credit issued by such LC Issuer
other than LC Outstandings as to which such Defaulting Lender’s participation
obligation has been reallocated to other Lenders or Cash Collateralized in
accordance with the terms hereof, and (b) with respect to any Swing Line Lender,
such Defaulting Lender’s Revolving Facility Percentage of outstanding Swing
Loans made by such Swing Line Lender other than Swing Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders.

 

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

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

 

“Granting Lender” has the meaning provided in Section 11.06(f).

 

“Guarantors” shall mean, collectively, the Subsidiary Guarantors.

 

“Guaranty” means the Subsidiary Guaranty, dated as of April 19, 2013, by the
Subsidiary Guarantors in favor of the Administrative Agent.

 

 
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“Guaranty Obligations” means as to any Person (without duplication) any
obligation of such Person guaranteeing any Indebtedness (“primary Indebtedness”)
of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent: (i) to purchase any such primary Indebtedness or any
property constituting direct or indirect security therefore; (ii) to advance or
supply funds for the purchase or payment of any such primary Indebtedness or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary Indebtedness of the ability of the primary obligor to make
payment of such primary Indebtedness; or (iv) otherwise to assure or hold
harmless the owner of such primary Indebtedness against loss in respect thereof,
provided, however, that the definition of Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary Indebtedness in
respect of which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder).

 

“Hazardous Materials” means (i) any petrochemical or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (ii) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“restricted hazardous materials,” “extremely hazardous wastes,” “restrictive
hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants” or
“pollutants,” or words of similar meaning and regulatory effect, under any
applicable Environmental Law.

 

“Hedge Agreement” means (i) any interest rate swap agreement, any interest rate
cap agreement, any interest rate collar agreement or other similar interest rate
management agreement or arrangement, (ii) any currency swap or option agreement,
foreign exchange contract, forward currency purchase agreement or similar
currency management agreement or arrangement or (iii) any Commodities Hedge
Agreement.

 

“Hedging Obligations” means all obligations of any Credit Party under and in
respect of (i) any Hedge Agreements entered into with any Secured Hedge Provider
or (ii) any Designated Hedge Agreement.

 

“Increasing Lender” has the meaning provided in Section 2.16(a).

 

“Incremental Facility Amount” means $25,000,000.

 

“Indebtedness” of any Person means without duplication:

 

(i)     all indebtedness of such Person for borrowed money;

 

(ii)     all bonds, notes, debentures and similar debt securities of such
Person;

 

(iii)     the deferred purchase price of capital assets or services that in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person;

 

(iv)     the face amount of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder;

 

(v)     all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances;

 

 
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(vi)     all indebtedness of a second Person secured by any Lien on any property
owned by such first Person, whether or not such indebtedness has been assumed;

 

(vii)     all Capitalized Lease Obligations of such Person;

 

(viii)     the present value, determined on the basis of the implicit interest
rate, of all basic rental obligations under all Synthetic Leases of such Person;

 

(ix)     all obligations of such Person with respect to asset securitization
financing;

 

(x)     all obligations of such Person to pay a specified purchase price for
goods or services whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, in each case that in accordance with GAAP would be shown on
the liability side of the balance sheet of such Person;

 

(xi)     all net obligations of such Person under Hedge Agreements;

 

(xii)     all Disqualified Equity Interests of such Person;

 

(xiii)     the full outstanding balance of trade receivables, notes or other
instruments sold with full recourse (and the portion thereof subject to
potential recourse, if sold with limited recourse), other than in any such case
any thereof sold solely for purposes of collection of delinquent accounts; and

 

(xiv)     all Guaranty Obligations of such Person;

 

provided, however, that (y) neither trade payables (other than trade payables
outstanding for more than 90 days after the date such trade payables were
created), deferred revenue, taxes nor other similar accrued expenses, in each
case arising in the ordinary course of business, shall constitute Indebtedness;
and (z) the Indebtedness of any Person shall in any event include (without
duplication) the Indebtedness of any other entity (including any general
partnership in which such Person is a general partner) to the extent such Person
is liable thereon as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide expressly that such Person is not liable thereon.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any
Credit Party under any Loan Document and (b) to the extent not otherwise
described in (a), Other Taxes.

 

“Indemnitees” has the meaning provided in Section 11.02.

 

“Insolvency Event” means, with respect to any Person:

 

(i)     the commencement of a voluntary case by such Person under the Bankruptcy
Code or the seeking of relief by such Person under any bankruptcy or insolvency
or analogous law in any jurisdiction outside of the United States;

 

(ii)     the commencement of an involuntary case against such Person under the
Bankruptcy Code or any bankruptcy or insolvency or analogous law in any
jurisdiction outside of the United States and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case;

 

 
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(iii)     a custodian (as defined in the Bankruptcy Code)is appointed for, or
takes charge of, all or substantially all of the property of such Person;

 

(iv)     such Person commences (including by way of applying for or consenting
to the appointment of, or the taking of possession by, a rehabilitator,
receiver, custodian, trustee, conservator or liquidator (collectively, a
“conservator”) of such Person or all or any substantial portion of its
property)any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency, liquidation,
rehabilitation, conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Person;

 

(v)     any such proceeding of the type set forth in clause (iv)above is
commenced against such Person to the extent such proceeding is consented to by
such Person or remains undismissed for a period of 60 days;

 

(vi)     such Person is adjudicated insolvent or bankrupt;

 

(vii)     any order of relief or other order approving any such case or
proceeding is entered;

 

(viii)     such Person suffers any appointment of any conservator or the like
for it or any substantial part of its property that continues undischarged or
unstayed for a period of 60 days;

 

(ix)     such Person makes a general assignment for the benefit of creditors or
generally does not pay its debts as such debts become due; or

 

(x)     any corporate (or similar organizational) action is taken by such Person
for the purpose of effecting any of the foregoing.

 

“Intellectual Property” has the meaning provided in the Security Agreement.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period of one,
two, three or six months as selected by the Borrower; provided, however, that
(i) the initial Interest Period for any Borrowing of such LIBOR Rate Loan shall
commence on the date of such Borrowing (the date of a Borrowing resulting from a
Conversion or Continuation shall be the date of such Conversion or Continuation)
and each Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires; (ii) if
any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar month; (iii)
if any Interest Period would otherwise expire on a day that is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day;
provided, however, that if any Interest Period would otherwise expire on a day
that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day; (iv) no Interest Period for any LIBOR Rate Loan may be
selected that would end after the Revolving Facility Termination Date; and (v)
if, upon the expiration of any Interest Period, the Borrower has failed to (or
may not) elect a new Interest Period to be applicable to the respective
Borrowing of LIBOR Rate Loans as provided above, the Borrower shall be deemed to
have elected to Convert such Borrowing to Base Rate Loans effective as of the
expiration date of such current Interest Period.

 

 
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“Investment” means: (i) any direct or indirect purchase or other acquisition by
a Person of any Equity Interest of any other Person; (ii) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand), capital contribution or extension of credit to, guarantee or assumption
of debt or purchase or other acquisition of any other Indebtedness of, any
Person by any other Person; or (iii) the purchase, acquisition or investment of
or in any stocks, bonds, mutual funds, notes, debentures or other securities, or
any deposit account, certificate of deposit or other investment of any kind.

 

“IRS” means the United States Internal Revenue Service.

 

“Landlord’s Agreement” means a landlord’s waiver, mortgagee’s waiver or bailee’s
waiver, each in form and substance reasonably satisfactory to the Administrative
Agent, and providing, among other things, for waiver of Lien, certain notices
and opportunity to cure and access to Collateral, delivered by a Credit Party in
connection with this Agreement, as the same may from time to time be amended,
restated or otherwise modified.

 

“LC Commitment Amount” means $10,000,000.

 

“LC Documents” means, with respect to any Letter of Credit, any documents
executed in connection with such Letter of Credit, including the Letter of
Credit itself.

 

“LC Fee” means any of the fees payable pursuant to Section 2.10(b) or Section
2.10(c) in respect of Letters of Credit.

 

“LC Issuance” means the issuance of any Letter of Credit by any LC Issuer for
the account of an LC Obligor in accordance with the terms of this Agreement, and
shall include any amendment thereto that increases the Stated Amount thereof or
extends the expiry date of such Letter of Credit.

 

“LC Issuer” means KeyBank National Association or any of its Affiliates, or such
other Lender that is requested by the Borrower and agrees to be an LC Issuer
hereunder and is approved by the Administrative Agent.

 

“LC Obligor” means, with respect to each LC Issuance, the Borrower or the
Subsidiary Guarantor for whose account such Letter of Credit is issued.

 

“LC Outstandings” means, at any time, the sum, without duplication, of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings with respect to Letters of Credit.

 

“LC Participant” has the meaning provided in Section 2.04(g).

 

“LC Participation” has the meaning provided in Section 2.04(g).

 

“LC Request” has the meaning provided in Section 2.04(b).

 

“Leaseholds” of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

 

 
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“Lender” and “Lenders” have the meaning provided in the first paragraph of this
Agreement and includes any other Person that becomes a party hereto pursuant to
an Assignment Agreement, other than any such Person that ceases to be a party
hereto pursuant to an Assignment Agreement. Unless the context otherwise
requires, the term “Lenders” includes the Swing Line Lender. In addition to the
foregoing, solely for the purpose of identifying the Persons entitled to share
in payments and collections from the Collateral and the benefit of any
guarantees of the Obligations, as more fully set forth in this Agreement and the
other Loan Documents, the term “Lender” shall include Secured Hedge Providers.
For the avoidance of doubt, any Secured Hedge Provider to whom any Hedging
Obligations are owed and that does not hold any Loans or commitments hereunder
shall not be entitled to any other rights as a “Lender” under this Agreement or
the other Loan Documents.

 

“Lender Register” has the meaning provided in Section 2.07(b).

 

“Letter of Credit” means any Standby Letter of Credit or Commercial Letter of
Credit, in each case issued by any LC Issuer under this Agreement pursuant to
Section 2.04 for the account of any LC Obligor.

 

“Leverage Ratio” means, for any Testing Period, the ratio of (i) Consolidated
Total Debt on the last day of such Testing Period plus an amount equal to
Consolidated Rental Expense multiplied by eight to (ii) Consolidated EBITDAR.

 

“LIBOR Rate Loan” means each Loan bearing interest at a rate based upon the
Adjusted LIBOR Rate.

 

“Lien” means any mortgage, pledge, security interest, hypothecation,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).

 

“Loan” means any Revolving Loan or Swing Loan.

 

“Loan Documents” means this Agreement, the Notes, the Guaranty, the Security
Documents, each Administrative Agent Fee Letter and each Letter of Credit and
each other LC Document and any amendments, supplements, reaffirmations or other
modifications of the foregoing and all other agreements, documents and
instruments executed in connection with the foregoing.

 

“Margin Stock” has the meaning provided in Regulation U.

 

“Material Adverse Effect” means any or all of the following: (i) any material
adverse effect on the business, operations, property, assets, liabilities,
financial or other condition or prospects of the Borrower or the Borrower and
its Subsidiaries, taken as a whole; (ii) any material adverse effect on the
ability of the Borrower or any other Credit Party to perform its obligations
under any of the Loan Documents to which it is a party, or any material adverse
effect on the ability of the Borrower and the other Credit Parties, taken as a
whole, to perform their obligations under any of the Loan Documents to which
they are party; (iii) any material adverse effect on the validity, effectiveness
or enforceability, as against any Credit Party, of any of the Loan Documents to
which it is a party; (iv) any material adverse effect on the rights and remedies
of the Administrative Agent or any Lender under any Loan Document; or (v) any
material adverse effect on the validity, perfection or priority of any Lien in
favor of the Administrative Agent on any of the Collateral.

 

“Material Contract” means each contract or agreement to which the Borrower or
any of its Subsidiaries is a party involving aggregate consideration payable to
or by the Borrower or such Subsidiary of $500,000 or more per annum (other than
purchase orders in the ordinary course of business of the Borrower or such
Subsidiary and other than contracts that by their terms may be terminated by the
Borrower or such Subsidiary in the ordinary course of its business upon less
than 60 days’ notice without penalty or premium).

 

 
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“Material Indebtedness” means, as to the Borrower or any of its Subsidiaries,
any particular Indebtedness of the Borrower or such Subsidiary (including any
Guaranty Obligations) in excess of the aggregate principal amount of $1,000,000.

 

“Material Indebtedness Agreement” means any agreement governing or evidencing
any Material Indebtedness.

 

“Maximum Rate” has the meaning provided in Section 11.23.

 

“Minimum Borrowing Amount” means (i) with respect to any Base Rate Loan,
$250,000, with minimum increments thereafter of $100,000, (ii) with respect to
any LIBOR Rate Loan, $500,000, with minimum increments thereafter of $250,000,
and (iii) with respect to Swing Loans, $250,000, with minimum increments
thereafter of $100,000.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
105% of the Fronting Exposure of all LC Issuers with respect to Letters of
Credit issued and outstanding at such time and (ii) otherwise, an amount
determined by the Administrative Agent and the LC Issuers in their sole
discretion.

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Multi-Employer Plan” means a multi-employer plan, as defined in Section
4001(a)(3) of ERISA to which the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate is making or accruing an obligation to make contributions or
has within any of the preceding five plan years made or accrued an obligation to
make contributions.

 

“Multiple Employer Plan” means an employee benefit plan, other than a
Multi-Employer Plan, to which the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate, and one or more employers other than the Borrower or a
Subsidiary of the Borrower or an ERISA Affiliate, is making or accruing an
obligation to make contributions or, in the event that any such plan has been
terminated, to which the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate made or accrued an obligation to make contributions during any of the
five plan years preceding the date of termination of such plan.

 

“Non-Consenting Lender” has the meaning provided in Section 11.12(g).

 

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

 

“Non-Extending Lender” means, with respect to any extension of the Revolving
Facility Termination Date pursuant to Section 2.17, any Lender that has not
consented to or has been deemed not to have consented to such extension pursuant
to Section 2.17.

 

“Non-Increasing Lender” has the meaning provided in Section 2.16(a).

 

“Note” means a Revolving Facility Note or a Swing Line Note, as applicable.

 

 
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“Notice of Borrowing” has the meaning provided in Section 2.05(b).

 

“Notice of Continuation or Conversion” has the meaning provided in Section
2.09(b).

 

“Notice of Swing Loan Refunding” has the meaning provided in Section 2.03(b).

 

“Notice Office” means the office of the Administrative Agent at 4900 Tiedeman
Road, 1st Floor SE, OH-01-49-0114, Brooklyn, Ohio 44144, Attention: KNB Agency
Services (facsimile: 216-370-5999), or such other office as the Administrative
Agent may designate in writing to the Borrower from time to time, with a copy to
KeyBank National Association, 127 Public Square, Cleveland, Ohio 44114,
Attention: Leverage Finance Manager (facsimile: 216-689-4814).

 

“Obligations” means all amounts, indemnities and reimbursement obligations,
direct or indirect, contingent or absolute, of every type or description, and at
any time existing, owing by the Borrower or any other Credit Party to the
Administrative Agent, any Lender, any Affiliate of any Lender, the Swing Line
Lender, any Secured Hedge Provider or any LC Issuer pursuant to the terms of
this Agreement, any other Loan Document or any Designated Hedge Agreement
(including, but not limited to, interest and fees that accrue after the
commencement by or against any Credit Party of any insolvency proceeding,
regardless of whether allowed or allowable in such proceeding or subject to an
automatic stay under Section 362(a) of the Bankruptcy Code; provided, however,
that the Obligations shall not include any Excluded Swap Obligations). Without
limiting the generality of the foregoing description of Obligations, the
Obligations include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, reasonable attorneys’ fees and
disbursements, indemnities and other amounts payable by the Credit Parties under
any Loan Document, (b) Banking Services Obligations, (c) Hedging Obligations and
(d) the obligation to reimburse any amount in respect of any of the foregoing
that the Administrative Agent, any Lender or any Affiliate or any Secured Hedge
Provider of any of them, in connection with the terms of any Loan Document, may
elect to pay or advance on behalf of the Credit Parties.

 

“Operating Lease” as applied to any Person means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is not accounted for as a Capital Lease on the balance sheet of that
Person.

 

“Organizational Documents” means, with respect to any Person (other than an
individual), such Person’s Articles (Certificate) of Incorporation, or
equivalent formation documents, and Regulations (Bylaws), or equivalent
governing documents, and, in the case of any partnership, includes any
partnership agreement and any amendments to any of the foregoing.

 

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

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.05).

 

 
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“Participant Register” has the meaning provided in Section 11.06(b).

 

“Payment Office” means the office of the Administrative Agent at 4900 Tiedeman
Road, 1st Floor SE, OH-01-49-0114, Brooklyn, Ohio 44144, Attention: KNB Agency
Services (facsimile: 216-370-5999), or such other office as the Administrative
Agent may designate in writing to the Borrower from time to time.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

 

“Perfection Certificate” has the meaning provided in the Security Agreement.

 

“Permitted Acquisition” means any Acquisition as to which all of the following
conditions are satisfied:

 

(i)     such Acquisition involves a line or lines of business that is or are
similar to or related to the lines of business in which the Borrower and its
Subsidiaries, considered as an entirety, are engaged on the Closing Date;

 

(ii)     the Borrower shall have furnished to the Administrative Agent at least
10 Business Days prior to the consummation of such Acquisition (or such shorter
period of time as the Administrative Agent agrees) (A) an executed term sheet
and/or commitment letter (setting forth in reasonable detail the terms and
conditions of such Acquisition) and, at the reasonable request of the
Administrative Agent, such other information and documents that the
Administrative Agent may request, including, without limitation, executed
counterparts of the respective agreements, instruments or other documents
pursuant to which such Acquisition is to be consummated (including, without
limitation, any related management, non-compete, employment, option or other
material agreements and any environmental reports), any schedules to such
agreements, instruments or other documents and all other material ancillary
agreements, instruments or other documents to be executed or delivered in
connection therewith to the extent that the Consideration for such Acquisition
exceeds $500,000, (B) pro forma financial statements of the Borrower and its
Subsidiaries giving effect to the consummation of such Acquisition to the extent
that the Consideration for such Acquisition exceeds $7,500,000, and (C) copies
of such other agreements, instruments or other documents (other than the Loan
Documents required by Section 6.10) as the Administrative Agent shall reasonably
request;

 

(iii)     the agreements, instruments and other documents referred to in
paragraph (ii) above shall provide that (A) neither the Credit Parties nor any
of their Subsidiaries shall, in connection with such Acquisition, assume or
remain liable in respect of any Indebtedness of the seller or sellers, except
for Indebtedness permitted hereunder, and (B) all property to be so acquired in
connection with such Acquisition shall be free and clear of any and all Liens,
except for Permitted Liens (and if any such property is subject to any Lien not
permitted by this clause (B), then concurrently with such Acquisition such Lien
shall be released);

 

(iv)     such Acquisition shall be effected in such a manner so that the
acquired Equity Interests or assets are owned either by a Credit Party or a
Person that will become a Credit Party in accordance with Section 6.09 and, if
effected by merger or consolidation involving a Credit Party, such Credit Party
shall be the continuing or surviving Person or the continuing or surviving
Person shall become a Credit Party upon the effectiveness of such merger or
consolidation;

 

 
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(v)     the aggregate Consideration (excluding Equity Interests in the Borrower)
for all such Acquisitions made in any fiscal year shall not exceed $15,000,000
and, when added together with the aggregate Consideration (excluding Equity
Interests in the Borrower) for all other Permitted Acquisitions made since the
Closing Date, shall not exceed $20,000,000; provided, however, that the
requirements of this clause (v) shall not be applicable to any Acquisition made
while the Leverage Ratio (which shall be calculated on a pro forma basis as if
(A) such Acquisition had been completed at the beginning of the most recent
Testing Period for which financial information for the Borrower and the business
or Person to be acquired, is available, and (B) any such Indebtedness, or other
Indebtedness incurred to finance such Acquisition, had been outstanding for such
entire Testing Period) is (x) at least 0.25x less than the ratio required by
Section 7.07(a) for such Testing Period and (y) less than 4.50 to 1.00;

 

(vi)     no Default or Event of Default shall exist prior to or immediately
after giving effect to such Acquisition;

 

(vii)     the Borrower would, after giving effect to such Acquisition, on a pro
forma basis (as determined in accordance with subpart (viii) below whether or
not a certificate is required pursuant to such subpart (viii)), be in compliance
with the financial covenants contained in Section 7.07;

 

(viii)     at least five Business Days prior to the consummation of any such
Acquisition in which the Consideration exceeds $7,500,000, the Borrower shall
have delivered to the Administrative Agent and the Lenders (A) a certificate of
an Authorized Officer demonstrating, in reasonable detail, the computation of
the financial covenants referred to in Section 7.07 on a pro forma basis, such
pro forma ratios being determined as if (y) such Acquisition had been completed
at the beginning of the most recent Testing Period for which financial
information for the Borrower and the business or Person to be acquired, is
available, and (z) any such Indebtedness, or other Indebtedness incurred to
finance such Acquisition, had been outstanding for such entire Testing Period,
and (B) historical financial statements relating to the business or Person to be
acquired evidencing positive EBITDA on a pro forma basis (with such adjustments
as the Administrative Agent reasonably agrees to) for the four fiscal quarter
period most recently ended prior to the date of the Acquisition and such other
information as the Administrative Agent may reasonably request;

 

(ix)     all transactions in connection with such Acquisition shall be
consummated, in all material respects, in accordance with all applicable laws;

 

(x)     if proceeds of the Loans are used to pay all or a portion of the
Consideration for such Acquisition, the Acquisition shall have been approved by
the board of directors or other governing body or controlling Person of the
Person from whom such Equity Interests or assets are proposed to be acquired;

 

(xi)     as of the date of the Acquisition, a Financial Officer shall provide a
certificate to the Administrative Agent and the Lenders certifying as to the
matters set forth in the foregoing clauses and further certifying that the
Acquisition could not reasonably be expected to have a Material Adverse Effect;

 

(xii)     immediately after giving effect to such Acquisition, any acquired or
newly formed Subsidiary shall be a wholly owned Subsidiary and shall take all
actions required to be taken pursuant to Section 6.09 and Section 6.10; and

 

 
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(xiii)     immediately after giving effect to the Acquisition, the Credit
Parties’ unrestricted cash, together with Revolving Availability, shall be no
less than $5,000,000.

 

“Permitted Acquisition Agreement” means each stock purchase agreement, asset
purchase agreement or other agreement entered into by the Borrower or any of its
Subsidiaries in connection with any Permitted Acquisition, in each case as
amended, supplemented or otherwise modified from time to time.

 

“Permitted Acquisition Documentation” means, collectively, each Permitted
Acquisition Agreement and all schedules, exhibits and annexes thereto and all
side letters and agreements (including without limitation all non-competition
agreements) affecting the terms thereof or entered into in connection therewith,
in each case as amended, supplemented or otherwise modified from time to time.

 

“Permitted Creditor Investment” means any securities (whether debt or equity)
received by the Borrower or any of its Subsidiaries in connection with the
bankruptcy or reorganization of any customer or supplier of the Borrower or any
such Subsidiary and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business.

 

“Permitted Lien” means any Lien permitted by Section 7.03.

 

“Person” means any individual, partnership, joint venture, firm, corporation,
limited liability company, association, central bank, trust or other enterprise
or any governmental or political subdivision or any agency, department or
instrumentality thereof.

 

“Plan” means any Multi-Employer Plan, Multiple Employer Plan or Single-Employer
Plan.

 

“Platform” has the meaning provided in Section 9.16(b).

 

“primary Indebtedness” has the meaning provided in the definition of “Guaranty
Obligations.”

 

“primary obligor” has the meaning provided in the definition of “Guaranty
Obligations.”

 

“Prohibited Transaction” means a transaction with respect to a Plan that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.

 

“Purchase Date” has the meaning provided in Section 2.03(c).

 

“Qualified ECP Guarantor” means, in respect of any Obligations with respect to a
Designated Hedge Agreement, each Credit Party that has total assets exceeding
$10,000,000 at the time the relevant guarantee or grant of the relevant security
interest becomes effective with respect to such Obligations or such other person
as constitutes an “eligible contract participant” under the Commodity Exchange
Act or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.

 

“Real Property” of any Person shall mean all of the right, title and interest of
such Person in and to land, improvements and fixtures, including Leaseholds.

 

 
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“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any LC
Issuer, as applicable.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing margin requirements.

 

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

 

“Remedial Action” means all actions any Environmental Law requires any Credit
Party to: (i) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate or in any other way address Hazardous Materials in the environment;
(ii) prevent or minimize a release or threatened release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or
(iv) perform any other actions authorized by 42 U.S.C. § 9601.

 

“Reportable Event” means an event described in Section 4043 of ERISA or the
regulations thereunder with respect to a Plan, other than those events as to
which the notice requirement is waived under subsection .22, .23, .25, .27, .28,
.29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC Regulation
Section 4043.

 

“Required Lenders” means Lenders whose Credit Facility Exposure and Unused
Revolving Commitments constitute more than 51% of the sum of the Aggregate
Credit Facility Exposure and the Unused Total Revolving Commitment; provided
that the Required Lenders shall consist of no fewer than two Lenders at any
time; provided further that if there is only one Lender or there is only one
Lender that is not a Defaulting Lender, the Required Lenders shall be such one
Lender. The Credit Facility Exposure and Unused Revolving Commitments of any
Defaulting Lender shall be disregarded in determining Required Lenders at any
time.

 

“Restricted Participant” means (i) any Person who has a Standard Industrial
Classification of 5812 and listed on the attachment to the most recently
delivered Compliance Certificate, which list may be updated more frequently by
the Borrower in a writing to the Administrative Agent and the Lenders from time
to time or (ii) any Person that owns more than 5% of the outstanding common
stock of the Borrower and has been specified in a written notice to the
Administrative Agent and the Lenders by the Borrower from time to time.

 

“Restricted Payment” means (i) any Capital Distribution or (ii) any amount paid
by the Borrower or any of its Subsidiaries in repayment, redemption, retirement,
repurchase, direct or indirect, of any Subordinated Indebtedness.

 

“Revolving Availability” means, at the time of determination, (a) the sum of all
Revolving Commitments at such time less (b) the sum of (i) the principal amount
of Revolving Loans and Swing Loans made and outstanding at such time and (ii)
the LC Outstandings at such time.

 

“Revolving Borrowing” means the incurrence of Revolving Loans consisting of one
Type of Revolving Loan by the Borrower from all of the Lenders having Revolving
Commitments in respect thereof on a pro rata basis on a given date (or resulting
from Conversions or Continuations on a given date) in the same currency, having
in the case of any LIBOR Rate Loans, the same Interest Period.

 

 
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“Revolving Commitment” means, with respect to each Lender, the amount set forth
opposite such Lender’s name in Schedule 1 hereto as its “Revolving Commitment”
or in the case of any Lender that becomes a party hereto pursuant to an
Assignment Agreement, the amount set forth in such Assignment Agreement, as such
commitment may be reduced from time to time pursuant to Section 2.11, increased
from time to time pursuant to Section 2.16, or adjusted from time to time as a
result of assignments to or from such Lender pursuant to Section 11.06.

 

“Revolving Facility” means the credit facility established under Section 2.02
pursuant to the Revolving Commitment of each Lender.

 

“Revolving Facility Availability Period” means the period from the Closing Date
until the Revolving Facility Termination Date.

 

“Revolving Facility Exposure” means, for any Lender at any time, the sum of (i)
the principal amount of Revolving Loans made by such Lender and outstanding at
such time, and (ii) such Lender’s share of the LC Outstandings at such time.

 

“Revolving Facility Note” means a promissory note substantially in the form of
Exhibit A-1 hereto.

 

“Revolving Facility Percentage” means, at any time for any Lender, the
percentage obtained by dividing such Lender’s Revolving Commitment by the Total
Revolving Commitment, provided, however, that if the Total Revolving Commitment
has been terminated, the Revolving Facility Percentage for each Lender shall be
determined by dividing such Lender’s Revolving Commitment immediately prior to
such termination by the Total Revolving Commitment immediately prior to such
termination. The Revolving Facility Percentage of each Lender as of the Closing
Date is set forth on Schedule 1 hereto.

 

“Revolving Facility Termination Date” means the earlier of (i) November 7, 2019,
subject to the extension thereof with respect to all or part of the Commitments
pursuant to Section 2.17, or (ii) the date that the Commitments have been
terminated pursuant to Section 8.02.

 

“Revolving Loan” means, with respect to each Lender, any loan made by such
Lender pursuant to Section 2.02.

 

“Sale and Lease-Back Transaction” means any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of the Borrower of
any property (except for temporary leases for a term, including any renewal
thereof, of not more than one year and except for leases between the Borrower
and a Subsidiary or between Subsidiaries), which property has been or is to be
sold or transferred by the Borrower or such Subsidiary to such Person.

 

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc.,
and its successors.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Regulation D” means Regulation D as promulgated under the Securities Act of
1933, as amended, as the same may be in effect from time to time.

 

 
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“Secured Creditors” has the meaning provided in the Security Agreement.

 

“Secured Hedge Provider” means a Lender or an Affiliate of a Lender (or a Person
who was a Lender or an Affiliate of a Lender at the time of execution and
delivery of a Designated Hedge Agreement) who has entered into a Designated
Hedge Agreement with the Borrower or any of its Subsidiaries.

 

“Security Agreement” means the Pledge and Security Agreement, dated as of April
19, 2013, by and among the Borrower, the Subsidiary Guarantors, the other
grantors named therein and the Administrative Agent.

 

“Security Documents” means the Security Agreement, each Landlord’s Agreement,
each Additional Security Document, any UCC financing statement, any Control
Agreement, any Collateral Assignment Agreement, any Perfection Certificate, any
reaffirmation of any of them and any document pursuant to which any Lien is
granted or perfected by any Credit Party to the Administrative Agent as security
for any of the Obligations.

 

“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, to which the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate is making or accruing an obligation to make contributions
or, in the event that any such plan has been terminated, to which the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate made or accrued an
obligation to make contributions during any of the five plan years preceding the
date of termination of such plan.

 

“SPC” has the meaning provided in Section 11.06(f).

 

“Standard Permitted Lien” means any of the following:

 

(i)     Liens for taxes not yet delinquent or Liens for taxes, assessments or
governmental charges being contested in good faith and by appropriate
proceedings for which adequate reserves in accordance with GAAP have been
established;

 

(ii)     Liens in respect of property or assets imposed by law that were
incurred in the ordinary course of business, such as carriers’, suppliers’,
warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business, that do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries and do not secure any Indebtedness;

 

(iii)     Liens created by the Existing Credit Agreement, this Agreement or the
other Loan Documents;

 

(iv)     Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 8.01(h);

 

(v)     Liens (other than any Lien imposed by ERISA)incurred or deposits made in
the ordinary course of business in connection with workers compensation,
unemployment insurance and other types of social security, and mechanic’s Liens,
carrier’s Liens, and other Liens to secure the performance of tenders, statutory
obligations, contract bids, government contracts, surety, appeal, customs,
performance and return-of-money bonds and other similar obligations, incurred in
the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money), whether pursuant to statutory requirements, common
law or consensual arrangements;

 

 
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(vi)     leases or subleases granted in the ordinary course of business to
others not interfering in any material respect with the business of the Borrower
or any of its Subsidiaries and any interest or title of a lessor under any lease
not in violation of this Agreement;

 

(vii)     easements, rights-of-way, zoning or other restrictions, charges,
encumbrances, defects in title, prior rights of other persons, and obligations
contained in similar instruments, in each case that do not secure Indebtedness
and do not involve, and are not likely to involve at any future time, either
individually or in the aggregate, (A) a substantial and prolonged interruption
or disruption of the business activities of the Borrower and its Subsidiaries
considered as an entirety, or (B) a Material Adverse Effect;

 

(viii)     Liens arising from the rights of lessors under leases (including
financing statements regarding property subject to lease) not in violation of
the requirements of this Agreement, provided that such Liens are only in respect
of the property subject to, and secure only, the respective lease (and any other
lease with the same or an affiliated lessor); and

 

(ix)     rights of consignors of goods, whether or not perfected by the filing
of a financing statement under the UCC.

 

“Standby Letter of Credit” means any standby letter of credit issued for the
purpose of supporting workers compensation, liability insurance, releases of
contract retention obligations, contract performance guarantee requirements and
other bonding obligations or for other lawful purposes.

 

“Stated Amount” of each Letter of Credit shall mean the maximum amount available
to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).

 

“Subordinated Debt Documents” means, collectively, any loan agreements,
indentures, note purchase agreements, promissory notes, guarantees and other
instruments and agreements evidencing the terms of any Subordinated
Indebtedness.

 

“Subordinated Indebtedness” means any Indebtedness that has been subordinated to
the prior payment in full of all of the Obligations pursuant to a written
agreement or written terms acceptable to the Administrative Agent.

 

“Subsidiary” of any Person means (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary Voting Power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have Voting Power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries, and (ii) any partnership, limited liability company, association,
joint venture or other entity in which such Person directly or indirectly
through Subsidiaries, owns more than 50% of the Equity Interests of such Person
at the time or in which such Person, one or more other Subsidiaries of such
Person or such Person and one or more Subsidiaries of such Person, directly or
indirectly, has the power to direct the policies, management and affairs
thereof. Unless otherwise expressly provided, all references herein to
“Subsidiary” shall mean a Subsidiary of the Borrower.

 

 
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“Subsidiary Guarantor” means any Subsidiary that is or hereafter becomes a party
to the Guaranty. Schedule 2 hereto lists each Subsidiary Guarantor as of the
Closing Date.

 

“Swap Obligation” means, with respect to the Borrower or any Guarantor, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of Section 1a(47) of the Commodity
Exchange Act.

 

“Swing Line Commitment” means $2,500,000.

 

“Swing Line Facility” means the credit facility established under Section 2.03
pursuant to the Swing Line Commitment of the Swing Line Lender.

 

“Swing Line Lender” means KeyBank National Association.

 

“Swing Line Note” means a promissory note substantially in the form of Exhibit
A-2 hereto.

 

“Swing Line Participation Amount” has the meaning provided in Section 2.03(c).

 

“Swing Loan” means any loan made by the Swing Line Lender under the Swing Line
Facility pursuant to Section 2.03.

 

“Swing Loan Maturity Date” means, with respect to any Swing Loan, the earlier of
(i) the last day of the period for such Swing Loan as established by the Swing
Line Lender and agreed to by the Borrower, which shall be 7 days or less, and
(ii) the Revolving Facility Termination Date.

 

“Swing Loan Participation” has the meaning provided in Section 2.03(c).

 

“Synthetic Lease” means any lease (i) that is accounted for by the lessee as an
Operating Lease, and (ii) under which the lessee is intended to be the “owner”
of the leased property for federal income tax purposes.

 

“Synthetic Lease Obligations” means, as to any person, an amount equal to the
capitalized amount of the remaining lease payments under any Synthetic Lease
that would appear on a balance sheet of such person in accordance with GAAP if
such obligations were accounted for as Capitalized Lease Obligations.

 

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

 

“Testing Period” means a single period consisting of the four consecutive fiscal
quarters of the Borrower then last ended (whether or not such quarters are all
within the same fiscal year), except that if a particular provision of this
Agreement indicates that a Testing Period shall be of a different specified
duration, such Testing Period shall consist of the particular fiscal quarter or
quarters then last ended that are so indicated in such provision.

 

“Total Credit Facility Amount” means the Total Revolving Commitment, subject to
adjustment as provided herein. As of the Closing Date, the Total Credit Facility
Amount is $35,000,000.

 

 
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“Total Revolving Commitment” means the sum of the Revolving Commitments of the
Lenders as the same may be decreased pursuant to Section 2.11(b) or increased
pursuant to Section 2.16. As of the Closing Date, the amount of the Total
Revolving Commitment is $35,000,000.

 

“Type” means any type of Loan determined with respect to the interest option and
currency denomination applicable thereto, which in each case shall be a Base
Rate Loan or a LIBOR Rate Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time. Unless
otherwise specified, the UCC shall refer to the UCC as in effect in the State of
New York.

 

“Unfunded Benefit Liabilities” of any Plan means the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“United States” and “U.S.” each means United States of America.

 

“Unpaid Drawing” means, with respect to any Letter of Credit, the aggregate
Dollar amount of the draws made on such Letter of Credit that have not been
reimbursed by the Borrower or the applicable LC Obligor or converted to a
Revolving Loan pursuant to Section 2.04(f)(i), and, in each case, all interest
that accrues thereon pursuant to this Agreement.

 

“Unused Revolving Commitment” means, for any Lender at any time, the excess of
(i) such Lender’s Revolving Commitment at such time over (ii) such Lender’s
Revolving Facility Exposure at such time.

 

“Unused Total Revolving Commitment” means, at any time, the excess of (i) the
Total Revolving Commitment at such time over (ii) the Aggregate Revolving
Facility Exposure at such time.

 

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 3.03(g)(ii)(B)(iii).

 

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act)
Act of 2001.

 

“Voting Power” means, with respect to any Person, the exclusive ability to
control, through the ownership of shares of capital stock, partnership
interests, membership interests or otherwise, the election of members of the
board of directors or other similar governing body of such Person, and the
holding of a designated percentage of Voting Power of a Person means the
ownership of shares of capital stock, partnership interests, membership
interests or other interests of such Person sufficient to control exclusively
the election of that percentage of the members of the board of directors or
other similar governing body of such Person.

 

“Withholding Agent” means any Credit Party and the Administrative Agent.

 

Section 1.02     Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including,” the words “to” and “until” each
means “to but excluding” and the word “through” means “through and including.”

 

 
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Section 1.03     Accounting Terms. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time, provided that if the
Borrower notifies the Administrative Agent and the Lenders that the Borrower
wishes to amend any covenant in Article VII to eliminate the effect of any
change in GAAP that occurs after the Closing Date on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Lenders wish to amend Article VII for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower, the Administrative Agent and the Required Lenders, with the
Borrower, the Administrative Agent and the Lenders agreeing to enter into
negotiations to amend any such covenant immediately upon receipt from any party
entitled to send such notice. Notwithstanding the foregoing, all financial
statements delivered hereunder shall be prepared, and all financial covenants
contained herein shall be calculated, without giving effect to any election
under Statement of Financial Accounting Standards 159 (or any similar accounting
principle) permitting a Person to value its financial liabilities at the fair
value thereof. For the avoidance of doubt, references to “during the term of
this Agreement” or “over the life of this Agreement” or words of like import
shall mean the period of time commencing with the Closing Date.

 

Section 1.04     Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein or in any other
Loan Document), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein,” “hereof”
and “hereunder,” and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Sections, Schedules and Exhibits shall be construed to
refer to Sections of, and Schedules and Exhibits to, this Agreement, (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all Real Property, tangible and intangible assets
and properties, including cash, securities, accounts and contract rights, and
interests in any of the foregoing, and (f) any reference to a statute, rule or
regulation is to that statute, rule or regulation as now enacted or as the same
may from time to time be amended, re-enacted or expressly replaced.

 

Section 1.05          Effect of Amendment and Restatement; No Novation. Upon the
effectiveness of this Agreement, the Existing Credit Agreement shall be amended
and restated in its entirety by this Agreement. The Existing Obligations shall
continue in full force and effect, and the effectiveness of this Agreement shall
not constitute a novation or repayment of the Existing Obligations. Such
Existing Obligations, together with any and all additional Obligations incurred
by the Borrower under this Agreement or under any of the other Loan Documents,
shall continue to be secured by, among other things, the applicable portions of
the Collateral, whether now existing or hereafter acquired and wheresoever
located, all as more specifically set forth in the Loan Documents. The Borrower
hereby reaffirms its obligations, liabilities, grants of security interests,
pledges and the validity of all covenants by it contained in any and all Loan
Documents, as amended, supplemented or otherwise modified by this Agreement and
by the other Loan Documents delivered prior to the Closing Date. Any and all
references in any Loan Documents to the Existing Credit Agreement shall be
deemed to be amended to refer to this Agreement. Without limiting the foregoing,
upon the effectiveness hereof: the Administrative Agent shall make such
reallocations, sales, assignments or other relevant actions in respect of each
Lender’s credit and loan exposure under the Existing Credit Agreement as are
necessary so that the Obligations in respect of Loans, Letters of Credit,
interest and fees due and payable to a Lender hereunder reflect such Lender’s
ratable share of the aggregate of all such Obligations on the Closing Date, and
the Borrower hereby agrees to compensate each Lender for any reasonable losses
and expenses incurred by such Lender as a result of the sale and assignment of
any LIBOR Rate Loans on the terms and in the manner set forth in Section 2.12(d)
hereof.

 

 
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ARTICLE II.

THE TERMS OF THE CREDIT FACILITY

 

Section 2.01     Establishment of the Credit Facility. On the Closing Date, and
subject to and upon the terms and conditions set forth in this Agreement and the
other Loan Documents, the Administrative Agent, the Lenders, the Swing Line
Lender and each LC Issuer agree to establish the Credit Facility for the benefit
of the Borrower; provided, however, that at no time will (i) the Aggregate
Credit Facility Exposure exceed the Total Credit Facility Amount, or (ii) the
Credit Facility Exposure of any Lender exceed the aggregate amount of such
Lender’s Commitment.

 

Section 2.02     Revolving Facility. Immediately prior to the effectiveness of
this Agreement, “Revolving Loans” were outstanding under the Existing Credit
Agreement. The outstanding principal balance of the “Total Revolving Commitment”
under the Existing Credit Agreement, if any, shall be deemed to be, and hereby
constitutes, on the Closing Date, a portion of the Total Revolving Commitment
hereunder, and the outstanding “Revolving Loans” advanced by the Existing
Lenders under the Existing Credit Agreement shall be deemed to be, and hereby
constitute, on the Closing Date, a portion of the Revolving Loans hereunder.
During the Revolving Facility Availability Period, each Lender severally, and
not jointly, agrees, on the terms and conditions set forth in this Agreement, to
make a Revolving Loan or Revolving Loans to the Borrower from time to time
pursuant to such Lender’s Revolving Commitment, which Revolving Loans: (i) may,
except as set forth herein, at the option of the Borrower, be incurred and
maintained as, or Converted into, Revolving Loans that are Base Rate Loans or
LIBOR Rate Loans, in each case denominated in Dollars, provided that all
Revolving Loans made as part of the same Revolving Borrowing shall consist of
Revolving Loans of the same Type; (ii) may be repaid or prepaid and reborrowed
in accordance with the provisions hereof; and (iii) shall not be made if, after
giving effect to any such Revolving Loan, (A) the Revolving Facility Exposure of
any Lender would exceed such Lender’s Revolving Commitment, (B) the Aggregate
Revolving Facility Exposure plus the principal amount of Swing Loans would
exceed the Total Revolving Commitment, or (C) the Borrower would be required to
prepay Loans or Cash Collateralize Letters of Credit pursuant to Section
2.12(b). The Revolving Loans to be made by each Lender will be made by such
Lender on a pro rata basis based upon such Lender’s Revolving Facility
Percentage of each Revolving Borrowing, in each case in accordance with Section
2.06 hereof.

 

Section 2.03     Swing Line Facility.

 

(a)     Swing Loans. During the Revolving Facility Availability Period, the
Swing Line Lender agrees, on the terms and conditions set forth in this
Agreement, to make a Swing Loan or Swing Loans to the Borrower from time to
time, which Swing Loans: (i) shall be payable on the Swing Loan Maturity Date
applicable to each such Swing Loan; (ii) shall be made only in U.S. Dollars;
(iii) may be repaid or prepaid and reborrowed in accordance with the provisions
hereof; (iv) may only be made if after giving effect thereto (A) the aggregate
principal amount of Swing Loans outstanding does not exceed the Swing Line
Commitment, and (B) the Aggregate Revolving Facility Exposure plus the principal
amount of Swing Loans would not exceed the Total Revolving Commitment; (v) shall
not be made if, after giving effect thereto, the Borrower would be required to
prepay Loans or Cash Collateralize Letters of Credit pursuant to Section 2.12(b)
hereof; (vi) shall not be made if the proceeds thereof would be used to repay,
in whole or in part, any outstanding Swing Loan and (vii) at no time shall there
be more than three (3) Borrowings of Swing Loans outstanding hereunder.

 

 
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(b)     Swing Loan Refunding. The Swing Line Lender may at any time, in its sole
and absolute discretion, direct that the Swing Loans owing to it be refunded by
delivering a notice to such effect to the Administrative Agent, specifying the
aggregate principal amount thereof (a “Notice of Swing Loan Refunding”).
Promptly upon receipt of a Notice of Swing Loan Refunding, the Administrative
Agent shall give notice of the contents thereof to the Lenders with Revolving
Commitments and, unless an Event of Default specified in Section 8.01(i) in
respect of the Borrower has occurred, the Borrower. Each such Notice of Swing
Loan Refunding shall be deemed to constitute delivery by the Borrower of a
Notice of Borrowing requesting Revolving Loans consisting of Base Rate Loans in
the amount of the Swing Loans to which it relates. Each Lender with a Revolving
Commitment (including the Swing Line Lender) hereby unconditionally agrees
(notwithstanding that any of the conditions specified in Section 4.02 or
elsewhere in this Agreement shall not have been satisfied, but subject to the
provisions of paragraph (d) below) to make a Revolving Loan to the Borrower in
the amount of such Lender’s Revolving Facility Percentage of the aggregate
amount of the Swing Loans to which such Notice of Swing Loan Refunding relates.
Each such Lender shall make the amount of such Revolving Loan available to the
Administrative Agent in immediately available funds at the Payment Office not
later than 2:00 P.M. (local time at the Payment Office), if such notice is
received by such Lender prior to 11:00 A.M. (local time at its Payment Office),
or not later than 2:00 P.M. (local time at the Payment Office) on the next
Business Day, if such notice is received by such Lender after such time. The
proceeds of such Revolving Loans shall be made immediately available to the
Swing Line Lender and applied by it to repay the principal amount of the Swing
Loans to which such Notice of Swing Loan Refunding relates.

 

(c)     Swing Loan Participation. If prior to the time a Revolving Loan would
otherwise have been made as provided above as a consequence of a Notice of Swing
Loan Refunding, any of the events specified in Section 8.01(i) shall have
occurred in respect of the Borrower or one or more of the Lenders with Revolving
Commitments shall determine that it is legally prohibited from making a
Revolving Loan under such circumstances, each Lender (other than the Swing Line
Lender), or each Lender (other than such Swing Line Lender) so prohibited, as
the case may be, shall, on the date such Revolving Loan would have been made by
it (the “Purchase Date”), purchase an undivided participating interest (a “Swing
Loan Participation”) in the outstanding Swing Loans to which such Notice of
Swing Loan Refunding relates, in an amount (the “Swing Loan Participation
Amount”) equal to such Lender’s Revolving Facility Percentage of such
outstanding Swing Loans. On the Purchase Date, each such Lender or each such
Lender so prohibited, as the case may be, shall pay to the Swing Line Lender, in
immediately available funds, such Lender’s Swing Loan Participation Amount, and
promptly upon receipt thereof the Swing Line Lender shall, if requested by such
other Lender, deliver to such Lender a participation certificate, dated the date
of the Swing Line Lender’s receipt of the funds from, and evidencing such
Lender’s Swing Loan Participation in, such Swing Loans and its Swing Loan
Participation Amount in respect thereof. If any amount required to be paid by a
Lender to the Swing Line Lender pursuant to the above provisions in respect of
any Swing Loan Participation is not paid on the date such payment is due, such
Lender shall pay to the Swing Line Lender on demand interest on the amount not
so paid at the overnight Federal Funds Effective Rate from the due date until
such amount is paid in full. Whenever, at any time after the Swing Line Lender
has received from any other Lender such Lender’s Swing Loan Participation
Amount, the Swing Line Lender receives any payment from or on behalf of the
Borrower on account of the related Swing Loans, the Swing Line Lender will
promptly distribute to such Lender its ratable share of such amount based on its
Revolving Facility Percentage of such amount on such date on account of its
Swing Loan Participation (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s participating
interest was outstanding and funded); provided, however, that if such payment
received by the Swing Line Lender is required to be returned, such Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.

 

 
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(d)     Obligations Unconditional. Each Lender’s obligation to make Revolving
Loans pursuant to Section 2.03(b) and/or to purchase Swing Loan Participations
in connection with a Notice of Swing Loan Refunding shall be subject to the
conditions that (i) such Lender shall have received a Notice of Swing Loan
Refunding complying with the provisions hereof and (ii) at the time the Swing
Loans that are the subject of such Notice of Swing Loan Refunding were made, the
Swing Line Lender making the same had no actual written notice from the Borrower
or another Lender that an Event of Default had occurred and was continuing, but
otherwise shall be absolute and unconditional, shall be solely for the benefit
of the Swing Line Lender that gives such Notice of Swing Loan Refunding, and
shall not be affected by any circumstance, including, without limitation,
(A) any set-off, counterclaim, recoupment, defense or other right that such
Lender may have against any other Lender, any Credit Party, or any other Person,
or any Credit Party may have against any Lender or other Person, as the case may
be, for any reason whatsoever; (B) the occurrence or continuance of a Default or
Event of Default; (C) any event or circumstance involving a Material Adverse
Effect; (D) any breach of any Loan Document by any party thereto; or (E) any
other circumstance, happening or event, whether or not similar to any of the
foregoing.

 

Section 2.04     Letters of Credit.

 

(a)     LC Issuances. During the Revolving Facility Availability Period, the
Borrower may request an LC Issuer at any time and from time to time to issue,
for the account of the Borrower or any Subsidiary Guarantor, and subject to and
upon the terms and conditions herein set forth, each LC Issuer agrees to issue
from time to time Letters of Credit denominated and payable in Dollars and in
each case in such form as may be approved by such LC Issuer and the
Administrative Agent; provided, however, that notwithstanding the foregoing, no
LC Issuance shall be made if, after giving effect thereto, (i) the LC
Outstandings would exceed the LC Commitment Amount, (ii) the Revolving Facility
Exposure of any Lender would exceed such Lender’s Revolving Commitment, (iii)
the Aggregate Revolving Facility Exposure plus the principal amount of Swing
Loans outstanding would exceed the Total Revolving Commitment, or (iv) the
Borrower would be required to prepay Loans or Cash Collateralize Letters of
Credit pursuant to Section 2.12(b) hereof. Subject to Section 2.04(c) below,
each Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (y) one year from the date of issuance
thereof, or (z) 30 Business Days prior to the Revolving Facility Termination
Date.

 

(b)     LC Requests. Whenever the Borrower desires that a Letter of Credit be
issued for its account or the account of any eligible LC Obligor, the Borrower
shall give the Administrative Agent and the applicable LC Issuer written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent) which, if in the form of
written notice, shall be substantially in the form of Exhibit B-3 (each such
request, an “LC Request”), or transmit by electronic communication (if
arrangements for doing so have been approved by the applicable LC Issuer), prior
to 11:00 A.M. (local time at the Notice Office) at least three Business Days (or
such shorter period as may be acceptable to the relevant LC Issuer) prior to the
proposed date of issuance (which shall be a Business Day), which LC Request
shall include such supporting documents that such LC Issuer customarily requires
in connection therewith (including, in the case of a Letter of Credit for an
account party other than the Borrower, an application for, and if applicable a
reimbursement agreement with respect to, such Letter of Credit). In the event of
any inconsistency between any of the terms or provisions of any LC Document and
the terms and provisions of this Agreement respecting Letters of Credit, the
terms and provisions of this Agreement shall control.

 

 
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(c)     Auto-Renewal Letters of Credit. If an LC Obligor so requests in any
applicable LC Request, each LC Issuer shall agree to issue a Letter of Credit
that has automatic renewal provisions; provided, however, that any Letter of
Credit that has automatic renewal provisions must permit such LC Issuer to
prevent any such renewal at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued. Once any such Letter
of Credit that has automatic renewal provisions has been issued, the Lenders
shall be deemed to have authorized (but may not require) such LC Issuer to
permit the renewal of such Letter of Credit at any time to an expiry date not
later than 30 Business Days prior to the Revolving Facility Termination Date;
provided, however, that such LC Issuer shall not permit any such renewal if (i)
such LC Issuer has determined that it would have no obligation at such time to
issue such Letter of Credit in its renewed form under the terms hereof, or (ii)
it has received notice (which may be by telephone or in writing) on or before
the day that is two Business Days before the date that such LC Issuer is
permitted to send a notice of non-renewal from the Administrative Agent, any
Lender or the Borrower that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied.

 

(d)     Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the
applicable LC Issuer and the applicable LC Obligor, when a Letter of Credit is
issued, (i) the rules of the “International Standby Practices 1998” published by
the Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) shall apply to each Standby
Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance (including the International Chamber of
Commerce’s decision published by the Commission on Banking Technique and
Practice on April 6, 1998 regarding the European single currency (euro)) shall
apply to each Commercial Letter of Credit.

 

(e)     Notice of LC Issuance. Each LC Issuer shall, on the date of each LC
Issuance by it, give the Administrative Agent, each applicable Lender and the
Borrower written notice of such LC Issuance, accompanied by a copy to the
Administrative Agent of the Letter of Credit or Letters of Credit issued by it.
Each LC Issuer shall provide to the Administrative Agent a quarterly (or monthly
if requested by any applicable Lender) summary describing each Letter of Credit
issued by such LC Issuer and then outstanding and an identification for the
relevant period of the daily aggregate LC Outstandings represented by Letters of
Credit issued by such LC Issuer.

 

(f)     Reimbursement Obligations.

 

(i)     The Borrower hereby agrees to reimburse (or cause any LC Obligor for
whose account a Letter of Credit was issued to reimburse) each LC Issuer, by
making payment directly to such LC Issuer in immediately available funds at the
payment office of such LC Issuer, for any Unpaid Drawing with respect to any
Letter of Credit immediately after, and in any event on the date on which, such
LC Issuer notifies the Borrower (or any such other LC Obligor for whose account
such Letter of Credit was issued) of such payment or disbursement (which notice
to the Borrower (or such other LC Obligor) shall be delivered reasonably
promptly after any such payment or disbursement), such payment to be made in
Dollars in which such Letter of Credit is denominated, with interest on the
amount so paid or disbursed by such LC Issuer, to the extent not reimbursed
prior to 1:00 P.M. (local time at the payment office of the applicable LC
Issuer) on the date of such payment or disbursement, from and including the date
paid or disbursed to but not including the date such LC Issuer is reimbursed
therefor at a rate per annum that shall be the rate then applicable to Revolving
Loans pursuant to Section 2.08(a) that are Base Rate Loans or, if not reimbursed
on the date of such payment or disbursement, at the Default Rate, any such
interest also to be payable on demand. If by 11:00 A.M. on the Business Day
immediately following notice to it of its obligation to make reimbursement in
respect of an Unpaid Drawing, the Borrower or the relevant LC Obligor has not
made such reimbursement out of its available cash on hand or, in the case of the
Borrower, a contemporaneous Borrowing hereunder (if such Borrowing is otherwise
available to the Borrower), (x) the Borrower will in each case be deemed to have
given a Notice of Borrowing for Revolving Loans that are Base Rate Loans in an
aggregate principal amount sufficient to reimburse such Unpaid Drawing (and the
Administrative Agent shall promptly give notice to the Lenders of such deemed
Notice of Borrowing), (y) the Lenders shall, unless they are legally prohibited
from doing so, make the Revolving Loans contemplated by such deemed Notice of
Borrowing (which Revolving Loans shall be considered made under Section 2.02),
and (z) the proceeds of such Revolving Loans shall be disbursed directly to the
applicable LC Issuer to the extent necessary to effect such reimbursement and
repayment of the Unpaid Drawing, with any excess proceeds to be made available
to the Borrower in accordance with the applicable provisions of this Agreement.

 

 
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(ii)     Obligations Absolute. Each LC Obligor’s obligation under this Section
to reimburse each LC Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that such LC Obligor may have or have had against such LC Issuer, the
Administrative Agent or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform to the
terms of the Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that no LC
Obligor shall be obligated to reimburse an LC Issuer for any wrongful payment
made by such LC Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such LC
Issuer.

 

(g)     LC Participations.

 

(i)     Immediately upon each LC Issuance, the LC Issuer of such Letter of
Credit shall be deemed to have sold and transferred to each Lender with a
Revolving Commitment, and each such Lender (each an “LC Participant”) shall be
deemed irrevocably and unconditionally to have purchased and received from such
LC Issuer, without recourse or warranty, an undivided interest and participation
(an “LC Participation”), to the extent of such Lender’s Revolving Facility
Percentage of the Stated Amount of such Letter of Credit in effect at such time
of issuance, in such Letter of Credit, each substitute Letter of Credit, each
drawing made thereunder, the obligations of any LC Obligor under this Agreement
with respect thereto (although LC Fees relating thereto shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in Section 2.10 and the LC Participants shall have no right to receive any
portion of any fees of the nature contemplated by Section 2.10(c) or Section
2.10(d)), the obligations of any LC Obligor under any LC Documents pertaining
thereto, and any security for, or guaranty pertaining to, any of the foregoing.

 

(ii)     In determining whether to pay under any Letter of Credit, an LC Issuer
shall not have any obligation relative to the LC Participants other than to
determine that any documents required to be delivered under such Letter of
Credit have been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be taken
by an LC Issuer under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for such LC Issuer any resulting liability.

 

 
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(iii)     If an LC Issuer makes any payment under any Letter of Credit and the
applicable LC Obligor shall not have reimbursed such amount in full to such LC
Issuer pursuant to Section 2.04(f), such LC Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each LC
Participant of such failure, and each LC Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such LC
Issuer, the amount of such LC Participant’s Revolving Facility Percentage of
such payment in Dollars and in same-day funds; provided, however, that no LC
Participant shall be obligated to pay to the Administrative Agent its Revolving
Facility Percentage of such unreimbursed amount for any wrongful payment made by
such LC Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such LC
Issuer. If the Administrative Agent so notifies any LC Participant required to
fund a payment under a Letter of Credit prior to 11:00 A.M. (local time at its
Notice Office) on any Business Day, such LC Participant shall make available to
the Administrative Agent for the account of the relevant LC Issuer such LC
Participant’s Revolving Facility Percentage of the amount of such payment on
such Business Day in same-day funds. If and to the extent such LC Participant
shall not have so made its Revolving Facility Percentage of the amount of such
payment available to the Administrative Agent for the account of the relevant LC
Issuer, such LC Participant agrees to pay to the Administrative Agent for the
account of such LC Issuer, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such LC Issuer at the Federal
Funds Effective Rate. The failure of any LC Participant to make available to the
Administrative Agent for the account of the relevant LC Issuer its Revolving
Facility Percentage of any payment under any Letter of Credit shall not relieve
any other LC Participant of its obligation hereunder to make available to the
Administrative Agent for the account of such LC Issuer its Revolving Facility
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no LC Participant shall be responsible for the failure of
any other LC Participant to make available to the Administrative Agent for the
account of such LC Issuer such other LC Participant’s Revolving Facility
Percentage of any such payment.

 

(iv)     Whenever an LC Issuer receives a payment of a reimbursement obligation
as to which the Administrative Agent has received for the account of such LC
Issuer any payments from the LC Participants pursuant to subpart (iii) above,
such LC Issuer shall pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each LC Participant that has paid its Revolving
Facility Percentage thereof, in same-day funds, an amount equal to such LC
Participant’s Revolving Facility Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective LC
Participations, as and to the extent so received.

 

(v)     The obligations of the LC Participants to make payments to the
Administrative Agent for the account of each LC Issuer with respect to Letters
of Credit shall be irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:

 

 
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(A)     any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;

 

(B)     the existence of any claim, set-off defense or other right that any LC
Obligor may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any LC Issuer, any Lender,
or other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the applicable LC Obligor and the
beneficiary named in any such Letter of Credit), other than any claim that the
applicable LC Obligor may have against any applicable LC Issuer for gross
negligence or willful misconduct of such LC Issuer in making payment under any
applicable Letter of Credit;

 

(C)     any draft, certificate or other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

 

(D)     the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or

 

(E)     the occurrence of any Default or Event of Default.

 

(vi)     To the extent any LC Issuer is not indemnified by the Borrower or any
LC Obligor, the LC Participants will reimburse and indemnify such LC Issuer, in
proportion to their respective Revolving Facility Percentages, for and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or
nature that may be imposed on, asserted against or incurred by such LC Issuer in
performing its respective duties in any way related to or arising out of LC
Issuances by it; provided, however, that no LC Participants shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements resulting from such
LC Issuer’s gross negligence or willful misconduct.

 

Section 2.05     Notice of Borrowing.

 

(a)     Time of Notice. Each Borrowing of a Loan (other than a Continuation or
Conversion) shall be made upon notice in the form provided for below which shall
be provided by the Borrower to the Administrative Agent at its Notice Office not
later than (i) in the case of each Borrowing of a LIBOR Rate Loan, 11:00 A.M.
(local time at its Notice Office) at least three Business Days’ prior to the
date of such Borrowing, (ii) in the case of each Borrowing of a Base Rate Loan,
prior to 11:00 A.M. (local time at its Notice Office) on the proposed date of
such Borrowing, and (iii) in the case of any Borrowing under the Swing Line
Facility, prior to 1:00 P.M. (local time at its Notice Office) on the proposed
date of such Borrowing.

 

 
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(b)     Notice of Borrowing. Each request for a Borrowing (other than a
Continuation or Conversion) shall be made by an Authorized Officer of the
Borrower by delivering written notice of such request substantially in the form
of Exhibit B-1 hereto (each such notice, a “Notice of Borrowing”) or by
telephone (to be confirmed immediately in writing by delivery by an Authorized
Officer of the Borrower of a Notice of Borrowing), and in any event each such
request shall be irrevocable and shall specify (i) the aggregate principal
amount of the Loans to be made pursuant to such Borrowing, (ii) the date of the
Borrowing (which shall be a Business Day), (iii) the Type of Loans such
Borrowing will consist of, and (iv) if applicable, the initial Interest Period
or the Swing Loan Maturity Date. Without in any way limiting the obligation of
the Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice believed
by the Administrative Agent in good faith to be from an Authorized Officer of
the Borrower entitled to give telephonic notices under this Agreement on behalf
of the Borrower. In each such case, the Administrative Agent’s record of the
terms of such telephonic notice shall be conclusive absent manifest error.

 

(c)     Minimum Borrowing Amount. The aggregate principal amount of each
Borrowing by the Borrower shall not be less than the Minimum Borrowing Amount.

 

(d)     Maximum Borrowings. More than one Borrowing may be incurred by the
Borrower on any day; provided, however, that (i) if there are two or more
Borrowings on a single day by the Borrower that consist of LIBOR Rate Loans,
each such Borrowing shall have a different initial Interest Period, and (ii) at
no time shall there be more than five (5) Borrowings of LIBOR Rate Loans
outstanding hereunder.

 

Section 2.06     Funding Obligations; Disbursement of Funds.

 

(a)     Several Nature of Funding Obligations. The Commitments of each Lender
hereunder and the obligation of each Lender to make Loans, acquire and fund
Swing Loan Participations, and LC Participations, as the case may be, are
several and not joint obligations. No Lender shall be responsible for any
default by any other Lender in its obligation to make Loans or fund any
participation hereunder and each Lender shall be obligated to make the Loans
provided to be made by it and fund its participations required to be funded by
it hereunder, regardless of the failure of any other Lender to fulfill any of
its Commitments hereunder. Nothing herein and no subsequent termination of the
Commitments pursuant to Section 2.11 shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder and in existence from time
to time or to prejudice any rights that the Borrower may have against any Lender
as a result of any default by such Lender hereunder.

 

(b)     Borrowings Pro Rata. Except with respect to the making of Swing Loans by
the Swing Line Lender, all Loans hereunder shall be made as follows: all
Revolving Loans made, and LC Participations acquired by each Lender, shall be
made or acquired, as the case may be, on a pro rata basis based upon each
Lender’s Revolving Facility Percentage of the amount of such Revolving Borrowing
or Letter of Credit in effect on the date the applicable Revolving Borrowing is
to be made or the Letter of Credit is to be issued.

 

(c)     Notice to Lenders. The Administrative Agent shall promptly give each
Lender, as applicable, written notice (or telephonic notice promptly confirmed
in writing) of each proposed Borrowing, or Conversion or Continuation thereof,
and LC Issuance, and of such Lender’s proportionate share thereof or
participation therein and of the other matters covered by the Notice of
Borrowing, Notice of Continuation or Conversion, or LC Request, as the case may
be, relating thereto.

 

(d)     Funding of Loans.

 

(i)     Loans Generally. No later than 2:00 P.M. (local time at the Payment
Office) on the date specified in each Notice of Borrowing, each Lender will make
available its amount, if any, of each Borrowing requested to be made on such
date to the Administrative Agent at the Payment Office in Dollars and in
immediately available funds and the Administrative Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office (or
such other account as the Borrower shall specify) the aggregate of the amounts
so made available in the type of funds received.

 

 
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(ii)     Swing Loans. No later than 2:00 P.M. (local time at the Payment Office)
on the date specified in each Notice of Borrowing, the Swing Line Lender will
make available to the Borrower by depositing to its account at the Payment
Office (or such other account as the Borrower shall specify) the aggregate of
Swing Loans requested in such Notice of Borrowing.

 

(e)     Advance Funding. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of Borrowing that such Lender does not
intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made the same available to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent’s demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a rate per annum equal to (i) if paid by such Lender,
the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section 2.08,
for the respective Loans (but without any requirement to pay any amounts in
respect thereof pursuant to Section 3.02).

 

Section 2.07     Evidence of Obligations.

 

(a)     Loan Accounts of Lenders. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the Obligations of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

 

(b)     Loan Accounts of Administrative Agent; Lender Register. The
Administrative Agent shall maintain accounts in which it shall record: (i) the
amount of each Loan and Borrowing made hereunder, the Type thereof, the currency
in which such Loan is denominated, the Interest Period and applicable interest
rate and, in the case of a Swing Loan, the Swing Loan Maturity Date applicable
thereto; (ii) the amount and other details with respect to each Letter of Credit
issued hereunder; (iii) the amount of any principal due and payable or to become
due and payable from the Borrower to each Lender hereunder; (iv) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender’s share thereof; and (v) the other details relating to
the Loans, Letters of Credit and other Obligations. In addition, the
Administrative Agent shall maintain a register (the “Lender Register”) on or in
which it will record the names and addresses of the Lenders, and the Commitments
from time to time of each of the Lenders. The Administrative Agent will make the
Lender Register available to any Lender or the Borrower upon its request.

 

 
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(c)     Effect of Loan Accounts, etc. The entries made in the accounts
maintained pursuant to Section 2.07(b) shall be prima facie evidence of the
existence and amounts of the Obligations recorded therein; provided, that the
failure of the Administrative Agent to maintain such accounts or any error
(other than manifest error) therein shall not in any manner affect the
obligation of any Credit Party to repay or prepay the Loans or the other
Obligations in accordance with the terms of this Agreement.

 

(d)     Notes. Upon request of any Lender or the Swing Line Lender, the Borrower
will execute and deliver to such Lender or the Swing Line Lender, as the case
may be, (i) a Revolving Facility Note with blanks appropriately completed in
conformity herewith to evidence the Borrower’s obligation to pay the principal
of, and interest on, the Revolving Loans made to it by such Lender and (ii) a
Swing Line Note with blanks appropriately completed in conformity herewith to
evidence the Borrower’s obligation to pay the principal of, and interest on, the
Swing Loans made to it by the Swing Line Lender; provided, however, that the
decision of any Lender or the Swing Line Lender to not request a Note shall in
no way detract from the Borrower’s obligation to repay the Loans and other
amounts owing by the Borrower to such Lender or the Swing Line Lender.

 

Section 2.08     Interest; Default Rate.

 

(a)     Interest on Revolving Loans. The outstanding principal amount of each
Revolving Loan made by each Lender shall bear interest at a fluctuating rate per
annum that shall at all times be equal to (i) during such periods as such
Revolving Loan is a Base Rate Loan, the Base Rate plus the Applicable Revolving
Loan Margin in effect from time to time and (ii) during such periods as such
Revolving Loan is a LIBOR Rate Loan, the relevant Adjusted LIBOR Rate for such
LIBOR Rate Loan for the applicable Interest Period plus the Applicable Revolving
Loan Margin in effect from time to time.

 

(b)     Interest on Swing Loans. The outstanding principal amount of each Swing
Loan shall bear interest from the date of the Borrowing at a rate per annum that
shall be equal to the Base Rate in effect from time to time plus the Applicable
Revolving Loan Margin.

 

(c)     Default Interest. Notwithstanding the above provisions, if an Event of
Default has occurred and is continuing, (i) automatically upon an Event of
Default under Section 8.01(a)(i) or Section 8.01(h) hereof, and (ii) upon
written notice by the Administrative Agent (which notice the Administrative
Agent may give in its discretion and shall give at the direction of the Required
Lenders) upon any Event of Default not described in clause (i) of this Section
2.08(c): (A) the principal amount of all Loans outstanding and, to the extent
permitted by applicable law, all overdue interest in respect of each Loan and
all fees or other amounts owed hereunder, shall thereafter bear interest
(including post petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable on demand, at a rate per annum equal
to the Default Rate, and (B) the LC Fees shall be increased by an additional 2%
per annum in excess of the LC Fees otherwise applicable thereto. In addition, if
any amount (other than amounts as to which the foregoing subparts (A) and (B)
are applicable) payable by the Borrower under the Loan Documents is not paid
when due, upon written notice by the Administrative Agent (which notice the
Administrative Agent may give in its discretion and shall give at the direction
of the Required Lenders), such amount shall bear interest, payable on demand, at
a rate per annum equal to the Default Rate.

 

(d)     Accrual and Payment of Interest. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable by the Borrower: (i) in respect of
each Base Rate Loan, quarterly in arrears on the last Business Day of each
March, June, September and December: (ii) in respect of each LIBOR Rate Loan, on
the last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on the dates that are successively
three months after the commencement of such Interest Period; (iii) in respect of
any Swing Loan, on the Swing Loan Maturity Date applicable thereto; and (iv) in
respect of all Loans, other than Revolving Loans accruing interest at the Base
Rate, on any repayment, prepayment or Conversion (on the amount repaid, prepaid
or Converted), at maturity (whether by acceleration or otherwise), and, after
such maturity or, in the case of any interest payable pursuant to Section
2.08(b), on demand.

 

 
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(e)     Computations of Interest. All computations of interest on LIBOR Rate
Loans and Swing Loans hereunder shall be made on the actual number of days
elapsed over a year of 360 days. All computations of interest on Base Rate Loans
and Unpaid Drawings hereunder shall be made on the actual number of days elapsed
over a year of 365 or 366 days, as applicable.   

 

(f)     Information as to Interest Rates. The Administrative Agent, upon
determining the interest rate for any Borrowing, shall promptly notify the
Borrower and the Lenders thereof. Any changes in the Applicable Revolving Loan
Margin, shall be determined by the Administrative Agent in accordance with the
provisions set forth in the definition of “Applicable Revolving Loan Margin” and
the Administrative Agent will promptly provide notice of such determinations to
the Borrower and the Lenders. Any such determination by the Administrative Agent
shall be conclusive and binding absent manifest error.

 

Section 2.09     Conversion and Continuation of Loans.

 

(a)     Conversion and Continuation of Revolving Loans. The Borrower shall have
the right, subject to the terms and conditions of this Agreement, to (i) Convert
all or a portion of the outstanding principal amount of Loans of one Type made
to it into a Borrowing or Borrowings of another Type of Loans that can be made
to it pursuant to this Agreement and (ii) Continue a Borrowing of LIBOR Rate
Loans at the end of the applicable Interest Period as a new Borrowing of LIBOR
Rate Loans with a new Interest Period; provided, however, that any Conversion of
LIBOR Rate Loans into Base Rate Loans shall be made on, and only on, the last
day of an Interest Period for such LIBOR Rate Loans.

 

(b)     Notice of Continuation and Conversion. Each Continuation or Conversion
of a Loan shall be made upon notice in the form provided for below provided by
the Borrower to the Administrative Agent at its Notice Office not later than (i)
in the case of each Continuation of or Conversion into a LIBOR Rate Loan, prior
to 11:00 A.M. (local time at its Notice Office) at least three Business Days’
prior to the date of such Continuation or Conversion, and (ii) in the case of
each Conversion to a Base Rate Loan, prior to 11:00 A.M. (local time at its
Notice Office) on the proposed date of such Conversion. Each such request shall
be made by an Authorized Officer of the Borrower delivering written notice of
such request substantially in the form of Exhibit B-2 hereto (each such notice,
a “Notice of Continuation or Conversion”) or by telephone (to be confirmed
immediately in writing by delivery by an Authorized Officer of the Borrower of a
Notice of Continuation or Conversion), and in any event each such request shall
be irrevocable and shall specify (A) the Borrowings to be Continued or
Converted, (B) the date of the Continuation or Conversion (which shall be a
Business Day), and (C) the Interest Period or, in the case of a Continuation,
the new Interest Period. Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice believed
by the Administrative Agent in good faith to be from an Authorized Officer of
the Borrower entitled to give telephonic notices under this Agreement on behalf
of the Borrower. In each such case, the Administrative Agent’s record of the
terms of such telephonic notice shall be conclusive absent manifest error.

 

 
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Section 2.10     Fees.

 

(a)     Commitment Fees. The Borrower agrees to pay to the Administrative Agent,
for the ratable benefit of each Lender based upon each such Lender’s Revolving
Facility Percentage, as consideration for the Revolving Commitments of the
Lenders, commitment fees (the “Commitment Fees”) for the period from the Closing
Date to, but not including, the Revolving Facility Termination Date, computed
for each day at a rate per annum equal to (i) the Applicable Commitment Fee Rate
times (ii) the Unused Total Revolving Commitment in effect on such day. Accrued
Commitment Fees shall be due and payable in arrears on the last Business Day of
each March, June, September and December and on the Revolving Facility
Termination Date.

 

(b)     LC Fees. (i) Standby Letters of Credit. The Borrower agrees to pay to
the Administrative Agent, for the ratable benefit of each Lender with a
Revolving Commitment based upon each such Lender’s Revolving Facility
Percentage, a fee in respect of each Letter of Credit issued hereunder that is a
Standby Letter of Credit for the period from the date of issuance of such Letter
of Credit until the expiration date thereof (including any extensions of such
expiration date that may be made at the election of the account party or the
beneficiary), computed for each day at a rate per annum equal to (A) the
Applicable Revolving Loan Margin for Revolving Loans that are LIBOR Rate Loans
in effect on such day times (B) the Stated Amount of such Letter of Credit on
such day. The foregoing fees shall be payable quarterly in arrears on the last
Business Day of each March, June, September and December and on the Revolving
Facility Termination Date.

 

(i)     Commercial Letters of Credit. The Borrower agrees to pay to the
Administrative Agent for the ratable benefit of each Lender based upon each such
Lender’s Revolving Facility Percentage, a fee in respect of each Letter of
Credit issued hereunder that is a Commercial Letter of Credit in an amount equal
to (A) the Applicable Revolving Loan Margin for Revolving Loans that are LIBOR
Rate Loans in effect on the date of issuance times (B) the Stated Amount of such
Letter of Credit. The foregoing fees shall be payable on the date of issuance of
such Letter of Credit.

 

(c)     Fronting Fees. The Borrower agrees to pay directly to each LC Issuer,
for its own account, a fee in respect of each Letter of Credit issued by it,
payable on the date of issuance (or any increase in the amount, or renewal or
extension) thereof, computed at the rate of 1/4th of 1% per annum on the Stated
Amount thereof for the period from the date of issuance (or increase, renewal or
extension) to the expiration date thereof (including any extensions of such
expiration date which may be made at the election of the beneficiary thereof).

 

(d)     Additional Charges of LC Issuer. The Borrower agrees to pay directly to
each LC Issuer upon each LC Issuance, drawing under, or amendment, extension,
renewal or transfer of, a Letter of Credit issued by it such amount as shall at
the time of such LC Issuance, drawing under, amendment, extension, renewal or
transfer be the processing charge that such LC Issuer is customarily charging
for issuances of, drawings under or amendments, extensions, renewals or
transfers of, letters of credit issued by it.

 

(e)     Administrative Agent Fees. The Borrower shall pay to the Administrative
Agent, on the Closing Date and thereafter, for its own account, the fees set
forth in the Administrative Agent Fee Letters.

 

(f)     Computations and Determination of Fees. Any changes in the Applicable
Commitment Fee Rate shall be determined by the Administrative Agent in
accordance with the provisions set forth in the definition of “Applicable
Commitment Fee Rate” and the Administrative Agent will promptly provide notice
of such determination to the Borrower and the Lenders. Any such determination by
the Administrative Agent shall be conclusive and binding absent manifest error.
All computations of Commitment Fees, LC Fees and other Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.

 

 
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Section 2.11     Termination and Reduction of Revolving Commitments.

 

(a)     Mandatory Termination of Revolving Commitments. All of the Revolving
Commitments shall terminate on the Revolving Facility Termination Date (as it
may be extended with respect to some or all of the Commitments pursuant to
Section 2.17).

 

(b)     Voluntary Termination of the Total Revolving Commitment. Upon at least
three Business Days’ prior irrevocable written notice (or telephonic notice
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders),
the Borrower shall have the right to terminate in whole the Total Revolving
Commitment, provided that (i) all outstanding Revolving Loans and Unpaid
Drawings are contemporaneously prepaid in accordance with Section 2.12 and (ii)
either there are no outstanding Letters of Credit or the Borrower shall
contemporaneously cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters of credit
issued by other financial institutions acceptable to each LC Issuer and the
Revolving Lenders) or shall Cash Collateralize all LC Outstandings.

 

(c)     Partial Reduction of Total Revolving Commitment. Upon at least three
Business Days’ prior irrevocable written notice (or telephonic notice confirmed
in writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right to partially and permanently reduce the Unused
Total Revolving Commitment; provided, however, that (i) any such reduction shall
apply to proportionately (based on each Lender’s Revolving Facility Percentage)
and permanently reduce the Revolving Commitment of each Lender, (ii) such
reduction shall apply to proportionately and permanently reduce the LC
Commitment Amount, but only to the extent that the Unused Total Revolving
Commitment would be reduced below any such limits, (iii) no such reduction shall
be permitted if the Borrower would be required to make a mandatory prepayment of
Loans pursuant to Section 2.12(b)(ii) or (iii), and (iv) any partial reduction
shall be in the amount of at least $1,000,000 (or, if greater, in integral
multiples of $1,000,000). If the Total Revolving Commitment is reduced to any
amount that is less than the LC Outstandings, the Borrower shall immediately
Cash Collateralize the LC Outstandings to the extent of such excess.

 

Section 2.12     Voluntary and Mandatory Prepayments of Loans.

 

(a)     Voluntary Prepayments. The Borrower shall have the right to prepay any
of the Loans owing by it, in whole or in part, without premium or penalty,
except as specified in subpart (c) below, from time to time. The Borrower shall
give the Administrative Agent at the Notice Office written or telephonic notice
(in the case of telephonic notice, promptly confirmed in writing if so requested
by the Administrative Agent) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of LIBOR Rate Loans) the specific Borrowing(s)
pursuant to which the prepayment is to be made, which notice shall be received
by the Administrative Agent by (y) 11:00 A.M. (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in the case of any
prepayment of LIBOR Rate Loans, or (z) 11:00 A.M. (local time at the Notice
Office) on the date of such prepayment, in the case of any prepayment of Base
Rate Loans, and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders.

 

 
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(b)     Mandatory Payments. The Loans shall be subject to mandatory repayment or
prepayment (in the case of any partial prepayment conforming to the requirements
as to the amounts of partial prepayments set forth in Section 2.12(a) above),
and the LC Outstandings shall be subject to cash collateralization requirements,
in accordance with the following provisions:

 

(i)     Revolving Facility Termination Date. The entire principal amount of all
outstanding Revolving Loans shall be repaid in full on the Revolving Facility
Termination Date.

 

(ii)     Loans Exceed the Commitments. If on any date (after giving effect to
any other payments on such date) (A) the Aggregate Credit Facility Exposure
exceeds the Total Credit Facility Amount, (B) the Revolving Facility Exposure of
any Lender exceeds such Lender’s Revolving Commitment, (C) the Aggregate
Revolving Facility Exposure plus the principal amount of Swing Loans exceeds the
Total Revolving Commitment, or (D) the aggregate principal amount of Swing Loans
outstanding exceeds the Swing Line Commitment, then, in the case of each of the
foregoing, the Borrower shall, on such day, prepay on such date the principal
amount of Loans and, after Loans have been paid in full, Unpaid Drawings, in an
aggregate amount at least equal to such excess.

 

(iii)     LC Outstandings Exceed LC Commitment. If on any date the LC
Outstandings exceed the LC Commitment Amount, then the applicable LC Obligor or
the Borrower shall, on such day, Cash Collateralize the LC Outstandings to the
extent of such excess.

 

(c)     Particular Loans to be Prepaid. With respect to each repayment or
prepayment of Loans made or required by this Section, the Borrower shall
designate the Types of Loans that are to be repaid or prepaid and the specific
Borrowing(s) pursuant to which such repayment or prepayment is to be made;
provided, however, that (i) the Borrower shall first so designate all Loans that
are Base Rate Loans and LIBOR Rate Loans with Interest Periods ending on the
date of repayment or prepayment prior to designating any other LIBOR Rate Loans
for repayment or prepayment, and (ii) if the outstanding principal amount of
LIBOR Rate Loans made pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such repayment or prepayment, then
all the Loans outstanding pursuant to such Borrowing shall, in the case of LIBOR
Rate Loans, be Converted into Base Rate Loans. In the absence of a designation
by the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Article III.

 

(d)     Breakage and Other Compensation. Any prepayment made pursuant to this
Section 2.12 shall be accompanied by any amounts payable in respect thereof
under Article III hereof.

 

Section 2.13     Method and Place of Payment.

 

(a)     Generally. All payments made by the Borrower hereunder (including any
payments made with respect to the Borrower Guaranteed Obligations under
Article X) under any Note or any other Loan Document shall be made without
setoff, counterclaim or other defense.

 

(b)     Application of Payments. Except as specifically set forth elsewhere in
this Agreement and subject to Section 8.03, (i) all payments and prepayments of
Revolving Loans and Unpaid Drawings with respect to Letters of Credit shall be
applied by the Administrative Agent on a pro rata basis based upon each Lender’s
Revolving Facility Percentage of the amount of such prepayment and (ii) all
payments or prepayments of Swing Loans shall be applied by the Administrative
Agent to pay or prepay such Swing Loans.

 

 
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(c)     Payment of Obligations. Except as specifically set forth elsewhere in
this Agreement, all payments under this Agreement with respect to any of the
Obligations shall be made to the Administrative Agent on the date when due,
shall be made at the Payment Office in immediately available funds and shall be
made in Dollars.

 

(d)     Timing of Payments. Any payments under this Agreement that are made
later than 11:00 A.M. (local time at the Payment Office) shall be deemed to have
been made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.

 

(e)     Distribution to Lenders. Upon the Administrative Agent’s receipt of
payments hereunder, the Administrative Agent shall immediately distribute to
each Lender or the applicable LC Issuer, as the case may be, its ratable share,
if any, of the amount of principal, interest, and Fees received by it for the
account of such Lender. Payments received by the Administrative Agent in Dollars
shall be delivered to the Lenders or the applicable LC Issuer, as the case may
be, in Dollars in immediately available funds; provided, however, that if at any
time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, Unpaid Drawings, interest and Fees
then due hereunder then, except as specifically set forth elsewhere in this
Agreement and subject to Section 8.03, such funds shall be applied, first,
towards payment of interest and Fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and Fees
then due to such parties, and second, towards payment of principal and Unpaid
Drawings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and Unpaid Drawings then due to such
parties.

 

Section 2.14     Defaulting Lenders.

 

(a)     Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

 

(i)     Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

 

(ii)     Defaulting Lender Waterfall. Any payment of principal, interest, fees
or other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 11.03 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to any LC Issuer or Swing Line Lender hereunder;
third, to Cash Collateralize the LC Issuers’ Fronting Exposure with respect to
such Defaulting Lender in accordance with Section 2.15; fourth, as the Borrower
may request (so long as no Default or Event of Default exists), to the funding
of any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the LC Issuers’
future Fronting Exposure with respect to such Defaulting Lender with respect to
future Letters of Credit issued under this Agreement, in accordance with Section
2.15; sixth, to the payment of any amounts owing to the Lenders, the LC Issuers
or Swing Line Lenders as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, the LC Issuers or Swing Line Lenders
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if (x)
such payment is a payment of the principal amount of any Loans or reimbursement
of any payment on any Letter of Credit in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans or
reimbursement of any payment on any Letter of Credit were made or the related
Letters of Credit were issued at a time when the conditions set forth in Section
4.02 were satisfied or waived, such payment shall be applied solely to pay the
Loans of, and LC Outstandings owed to, all Non-Defaulting Lenders on a pro rata
basis prior to being applied to the payment of any Loans of, or LC Outstandings
owed to, such Defaulting Lender until such time as all Loans and funded and
unfunded participations in LC Outstandings and Swing Loans are held by the
Lenders pro rata in accordance with the Commitments under the Credit Facility
without giving effect to Section 2.14(a)(iv). Any payments, prepayments or other
amounts paid or payable to a Defaulting Lender that are applied (or held) to pay
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.14(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

 
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(iii)     Certain Fees. (A) No Defaulting Lender shall be entitled to receive
any Commitment Fee for any period during which that Lender is a Defaulting
Lender (and the Borrower shall not be required to pay any such fee that
otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)     Each Defaulting Lender shall be entitled to receive LC Fees for any
period during which that Lender is a Defaulting Lender only to the extent
allocable to its Revolving Facility Percentage of the stated amount of Letters
of Credit for which it has provided Cash Collateral pursuant to Section 2.15.

 

(C)     With respect to any LC Fee not required to be paid to any Defaulting
Lender pursuant to clause (B) above, the Borrower shall (x) pay to the
Administrative Agent for the ratable benefit of each Non-Defaulting Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect
to such Defaulting Lender’s participation in LC Outstandings or Swing Loans that
has been reallocated to such Non-Defaulting Lender pursuant to clause (iv)
below, (y) pay to each LC Issuer and Swing Line Lender, as applicable, the
amount of any such fee otherwise payable to such Defaulting Lender to the extent
allocable to such LC Issuer’s or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee.

 

(iv)     Reallocation of Participations to Reduce Fronting Exposure. All or any
part of such Defaulting Lender’s participation in LC Outstandings and Swing
Loans shall be reallocated among the Non-Defaulting Lenders in accordance with
their respective Revolving Facility Percentages (calculated without regard to
such Defaulting Lender’s Commitment) but only to the extent that (x) the
conditions set forth in Section 4.02 are satisfied at the time of such
reallocation (and, unless the Borrower shall have otherwise notified the
Administrative Agent at such time, the Borrower shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause the aggregate Revolving Facility Exposure
of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving
Commitment. No reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

 

 
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(v)     Cash Collateral, Repayment of Swing Loans. If the reallocation described
in clause (iv) above cannot, or can only partially, be effected, the Borrower
shall, without prejudice to any right or remedy available to it hereunder or
under law, (x) first, prepay Swing Loans in an amount equal to the Swing Line
Lenders’ Fronting Exposure and (y) second, Cash Collateralize the LC Issuers’
Fronting Exposure in accordance with the procedures set forth in Section 2.15.

 

(b)     Defaulting Lender Cure. If the Borrower, the Administrative Agent and
each Swing Line Lender and LC Issuer agree in writing that a Lender is no longer
a Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase at par
that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Loans and funded and unfunded participations in Letters of Credit and Swing
Loans to be held pro rata by the Lenders in accordance with the Commitments
under the Credit Facility (without giving effect to Section 2.14(a)(iv),
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrower while that Lender was a Defaulting Lender;
and provided, further, that except to the extent otherwise expressly agreed by
the affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

 

(c)     New Swing Loans/Letters of Credit. So long as any Lender is a Defaulting
Lender, (i) the Swing Line Lender shall not be required to fund any Swing Loans
unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swing Loan and (ii) no LC Issuer shall be required to issue,
extend, renew or increase any Letter of Credit unless it is satisfied that it
will have no Fronting Exposure after giving effect thereto.

 

Section 2.15     Cash Collateral.

 

(a)     Fronting Exposure. At any time that there shall exist a Defaulting
Lender, within one Business Day following the written request of the
Administrative Agent or any LC Issuer (with a copy to the Administrative Agent)
the Borrower shall Cash Collateralize the LC Issuers’ Fronting Exposure with
respect to such Defaulting Lender (determined after giving effect to Section
2.14(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an
amount not less than the Minimum Collateral Amount.

 

(b)     Grant of Security Interest. The Borrower, and to the extent provided by
any Defaulting Lender, such Defaulting Lender, hereby grants to the
Administrative Agent, for the benefit of the LC Issuers, and agrees to maintain,
a first priority security interest in all such Cash Collateral as security for
the Defaulting Lenders’ obligation to fund participations in respect of LC
Outstandings, to be applied pursuant to clause (c) below. If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent and the LC Issuers as
herein provided, or that the total amount of such Cash Collateral is less than
the Minimum Collateral Amount, the Borrower will, promptly upon demand by the
Administrative Agent, pay or provide to the Administrative Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency (after giving
effect to any Cash Collateral provided by the Defaulting Lender).

 

 
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(c)     Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.15 or Section 2.14 in
respect of Letters of Credit shall be applied to the satisfaction of the
Defaulting Lender’s obligation to fund participations in respect of LC
Outstandings (including, as to Cash Collateral provided by a Defaulting Lender,
any interest accrued on such obligation) for which the Cash Collateral was so
provided, prior to any other application of such property as may otherwise be
provided for herein.

 

(d)     Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce any LC Issuer’s Fronting Exposure shall no longer be
required to be held as Cash Collateral pursuant to this Section 2.15 following
(i) the elimination of the applicable Fronting Exposure (including by the
termination of Defaulting Lender status of the applicable Lender), or (ii) the
determination by the Administrative Agent and each LC Issuer that there exists
excess Cash Collateral; provided that, subject to Section 2.14, the Person
providing Cash Collateral and each LC Issuer may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other
obligations and provided, further that to the extent that such Cash Collateral
was provided by the Borrower, such Cash Collateral shall remain subject to the
security interest granted pursuant to the Loan Documents.

 

Section 2.16     Increase in Credit Facility.

 

(a)     The Borrower may, by written notice to the Administrative Agent from
time to time, request that the Total Revolving Commitment be increased by an
aggregate amount not to exceed the Incremental Facility Amount. The
Administrative Agent shall deliver a copy thereof to each Lender. Such notice
shall set forth the amount of the requested increase in the Total Revolving
Commitment (which shall be in minimum increments of $1,000,000, and a minimum
amount of $5,000,000 or equal to the remaining Incremental Facility Amount) and
the date on which such increase is requested to become effective (which shall be
not less than 10 Business Days nor more than 60 days after the date of such
notice and which, in any event, must be on or prior to the termination of the
Revolving Facility Availability Period), and shall offer each such Lender the
opportunity, as applicable, to increase its Commitment by its Revolving Facility
Percentage of the proposed increased amount. Each such Lender shall, by notice
to the Borrower and the Administrative Agent given not more than 10 days after
the date of the Administrative Agent’s notice, agree to increase its Commitment
by all or a portion of the offered amount (each such Lender so agreeing being an
“Increasing Lender”) or decline to increase its Commitment (and any such Lender
that does not deliver such a notice within such period of 10 days shall be
deemed to have declined to increase its Commitment and each Lender so declining
or being deemed to have declined being a “Non-Increasing Lender”). In the event
that, on the 10th day after the Administrative Agent shall have delivered a
notice pursuant to the second sentence of this paragraph, the Increasing Lenders
shall have agreed pursuant to the preceding sentence to increase their
Commitments by an aggregate amount less than the increase in the Total Revolving
Commitment requested by the Borrower, the Borrower may arrange for one or more
banks or other entities (any such bank or other entity referred to in this
clause being an “Augmenting Lender”), which may include any Lender, to extend
Commitments or increase their existing Commitments in an aggregate amount equal
to the unsubscribed amount; provided that (i) each Augmenting Lender, if not
already a Lender with a Commitment hereunder, shall be subject to the approval
of the Administrative Agent (which approval shall not be unreasonably withheld
or delayed); (ii) the Borrower and each Augmenting Lender shall execute all such
documentation as the Administrative Agent shall reasonably specify to evidence
its Commitment and/or its status as a Lender with a Commitment; and (iii) the
minimum commitment of such Augmenting Lender equals or exceeds $5,000,000 or, if
less, the unsubscribed amount of the requested increase in the Total Revolving
Commitment. Any increase in the Total Revolving Commitment may be made in an
amount that is less than the increase requested by the Borrower if the Borrower
is unable to arrange for, or chooses not to arrange for, Augmenting Lenders. No
consent of any Lender (other than the Lenders participating in the increase of
their respective Revolving Commitments) shall be required for any increase in
Total Revolving Commitment pursuant to this Section 2.16.

 

 
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(b)     Each of the parties hereto agrees that the Administrative Agent may take
any and all actions as may be reasonably necessary to ensure that, after giving
effect to any increase in the Total Revolving Commitment pursuant to this
Section 2.16(b), the outstanding Revolving Loans (if any) are held by the
Lenders with Commitments in accordance with their new Revolving Facility
Percentages. This may be accomplished at the discretion of the Administrative
Agent (w) by requiring the outstanding Revolving Loans to be prepaid with the
proceeds of new Revolving Loans, (x) by causing Non-Increasing Lenders to assign
portions of their outstanding Revolving Loans to Increasing Lenders and
Augmenting Lenders, (y) by permitting the Revolving Loans outstanding at the
time of any increase in the Total Revolving Commitment pursuant to this Section
2.16(b) to remain outstanding until the last days of the respective Interest
Periods therefor, even though the Lenders would hold such Revolving Loans other
than in accordance with their new Revolving Facility Percentages, or (z) by any
combination of the foregoing. Notwithstanding the foregoing, in order to
eliminate any break funding liability to the Borrower, if, upon the date of any
increase in the Total Revolving Commitment pursuant to this Section 2.16(b),
there is an unpaid principal amount of Revolving Loans outstanding to the
Borrower, the principal outstanding amount of all such Revolving Loans shall (A)
in the case of such Revolving Loans which are Base Rate Loans, be immediately
prepaid by the Borrower (but all such Revolving Loans may, on the terms and
conditions, be reborrowed on such date on a pro rata basis, based on the revised
Commitments as then in effect) and (B) in the case of such Revolving Loans which
are LIBOR Rate Loans, continue to remain outstanding (notwithstanding any other
requirement in this Agreement that such Revolving Loans be held on a pro rata
basis based on the revised Commitments as then in effect) until the end of the
then current Interest Period therefore, at which time such LIBOR Rate Loans
shall be paid by the Borrower (but all such Revolving Loans may, on the terms
and conditions hereof, be reborrowed on such date on a pro rata basis, based on
the Commitments as then in effect). Any prepayment or assignment described in
this paragraph (b) shall be without premium or penalty.

 

Notwithstanding the foregoing, no increase in the Total Revolving Commitment (or
in the Commitment of any Lender) or addition of a new Lender shall become
effective under this Section 2.16 unless, (x) on the date of such increase, no
Default or Event of Default has occurred and is continuing and the other
conditions set forth in Section 4.02 hereof have been satisfied, and (y) the
Administrative Agent shall have received (with sufficient copies for each of the
Lenders) legal opinions, board resolutions and an officer’s certificate
consistent with those delivered on the Closing Date under Article IV in each
case to the extent reasonably requested by the Administrative Agent.

 

Section 2.17     Maturity Extension.

 

(a)     At least 30 days prior to, but not more than 90 days prior to, any
anniversary of the Closing Date, the Borrower, by written notice to the
Administrative Agent, may request an extension of the Revolving Facility
Termination Date to the date that is one year after the then existing Revolving
Facility Termination Date (such existing Revolving Facility Termination Date,
the “Existing Revolving Facility Termination Date”). The Administrative Agent
shall promptly notify each Lender of such request, and each Lender shall, in
turn, in its sole discretion, not later than 10 days after delivery of such
notice by the Administrative Agent to the Lenders, notify the Administrative
Agent in writing as to whether such Lender consents to such extension. If any
Lender shall fail to notify the Administrative Agent in writing of its consent
to any such request for extension of the Revolving Facility Termination Date not
later than 10 days after the delivery of such notice by the Administrative Agent
to the Lenders, such Lender shall be deemed to have not consented to such
extension. The Administrative Agent shall promptly notify the Borrower of the
consents received with respect to the Borrower’s request for an extension of the
Revolving Facility Termination Date. The Revolving Facility Termination Date may
be extended pursuant to this Section 2.17 on not more than one occasion during
the term of this Agreement.

 

 
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(b)     If Lenders constituting the Required Lenders consent in writing to any
such request in accordance with Section 2.17(a), the Revolving Facility
Termination Date shall be extended to the date which is one year after the
Existing Revolving Facility Termination Date as to those Lenders that so
consented (each, an “Extending Lender”) but shall not be extended as to any
Non-Extending Lender; provided that no extension of the Revolving Facility
Termination Date pursuant to this Section shall become effective unless the
Administrative Agent shall have received a certificate signed by the chief
financial officer of the Borrower, dated as of the effective date of such
extension, certifying that (i) as of and on such date, no Default or Event of
Default has occurred and is continuing and (ii) the representations and
warranties of each Credit Party set forth in this Agreement and the other Loan
Documents are true and correct in all material respects (or in the case of any
representation and warranty that is already subject to a materiality qualifier,
true and correct) on and as of such date, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case such representations and warranties continue to be true and correct
in all material respects (or in the case of any representation and warranty that
is already subject to a materiality qualifier, true and correct) as of such
specified earlier date. To the extent that the Revolving Facility Termination
Date is not extended as to any Non-Extending Lender pursuant to this Section
2.17 and the Commitment of such Non-Extending Lender is not assigned in
accordance with Section 2.17(c) on or prior to the applicable Existing Revolving
Facility Termination Date, (A) the Commitment of such Non-Extending Lender shall
automatically terminate in whole on such Existing Revolving Facility Termination
Date without any further notice or other action by the Borrower, such Lender or
any other Person and (B) the principal amount of any outstanding Loans made by
Non-Extending Lenders, together with any accrued interest thereon and any
accrued fees and other amounts payable to or for the account of such
Non-Extending Lenders hereunder, shall be due and payable on such Existing
Revolving Facility Termination Date, and on such Existing Revolving Facility
Termination Date the Borrower shall also make such other prepayments of the
Loans pursuant to Section 2.12 as shall be required in order that, after giving
effect to the termination of the Commitments of, and all payments to,
Non-Extending Lenders pursuant to this sentence, the Aggregate Credit Facility
Exposure would not exceed the Total Revolving Commitment; provided that such
Non-Extending Lender’s rights under Sections 3.01, 3.02, 3.03, 11.01 and 11.02,
shall survive such Existing Revolving Facility Termination Date for such Lender
as to matters occurring prior to such date. It is understood and agreed that no
Lender shall have any obligation whatsoever to agree to any request made by the
Borrower for any requested extension of the Revolving Facility Termination Date.

 

(c)     If, pursuant to Section 2.17(a), the Borrower requests an extension of
the Revolving Facility Termination Date and Lenders constituting the Required
Lenders consent to such request, then the Borrower may, at any time after the
day that is 27 months prior to the Revolving Facility Termination Date in effect
at such time, at its sole expense and effort (including payment of any
applicable processing and recordation fees), require any Non-Extending Lender,
promptly following notice to such Non-Extending Lender and the Administrative
Agent, to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 11.06), all its interests, rights and
obligations under this Agreement to a willing assignee that shall assume such
obligations (which assignee must be an Eligible Assignee and may be another
Lender, if a Lender accepts such assignment) and will agree to the applicable
request for extension; provided that (i) unless the assignee is already a
Lender, the Borrower shall have received the prior written consent of the
Administrative Agent and the LC Issuers and, so long as no Event of Default has
occurred and is continuing, shall have provided its consent to such assignment,
in each case, which consent shall not unreasonably be withheld, conditioned or
delayed, (ii) such Non-Extending Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in LC
Outstandings and Swing Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) such assignment does not conflict with
applicable law.

 

 
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(d)     If Lenders constituting the Required Lenders consent in writing to a
requested extension of the Revolving Facility Termination Date, not later than
15 days following the Borrower’s delivery of written notice pursuant to Section
2.17(a), the Administrative Agent shall so notify the Borrower, and the Existing
Revolving Facility Termination Date then in effect shall, subject to the
satisfaction of the conditions set forth in the proviso in the first sentence of
Section 2.17(b), be extended for the additional one-year period as described in
Section 2.17(b), and all references in the Loan Documents to the “Revolving
Facility Termination Date” shall, solely with respect to the Commitments and
Credit Facility Exposure of each Extending Lender and each assignee pursuant to
Section 2.17(c) for such extension, refer to the Revolving Facility Termination
Date as so extended. Promptly following the applicable Existing Revolving
Facility Termination Date, the Administrative Agent shall notify the Lenders
(including each assignee pursuant to Section 2.17(c)) of such extension of the
applicable Existing Revolving Facility Termination Date and shall thereupon
record in the Register the relevant information with respect to each such
Extending Lender and each such assignee.

 

Notwithstanding the foregoing, the Revolving Facility Availability Period and
the Revolving Facility Termination Date (without taking into consideration any
extension pursuant to this Section), as such terms are used in reference to any
LC Issuer or any Letters of Credit issued by such LC Issuers or the Swing Line
Lender or any Swing Loans made by the Swing Line Lender, may not be extended
without the prior written consent of such LC Issuer or the Swing Line Lender, as
applicable (it being understood and agreed that, in the event any LC Issuer or
the Swing Line Lender shall not have consented to any such extension, (i) such
LC Issuer or the Swing Line Lender, as applicable, shall continue to have all
the rights and obligations of an LC Issuer or the Swing Line Lender, as
applicable, hereunder through the applicable Existing Revolving Facility
Termination Date (or the Revolving Facility Availability Period determined on
the basis thereof, as applicable), and thereafter shall have no obligation to
issue, amend, extend or renew any Letter of Credit or to make any Swing Loan, as
applicable (but shall, in each case, continue to be entitled to the benefits of
Sections 2.03, 2.04, 3.01, 11.01 and 11.02, as applicable, as to Letters of
Credit or Swing Loans issued or made prior to such time, as applicable), and
(ii) the Borrower shall cause the LC Outstandings attributable to Letters of
Credit issued by such LC Issuer and the credit exposure under the Swing Line
Facility, as applicable, to be zero (or, in the case of LC Outstandings, Cash
Collateralized or subject to a back-to-back letter of credit in form and
substance reasonably satisfactory to the applicable LC Issuer) no later than the
day on which such LC Outstandings or credit exposure under the Swing Line
Facility, as applicable, would have been required to have been reduced to zero
in accordance with the terms hereof without giving effect to any effectiveness
of the extension of the applicable Existing Revolving Facility Termination Date
pursuant to this Section (and, in any event, no later than the applicable
Existing Revolving Facility Termination Date)).

 

 
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ARTICLE III.

INCREASED COSTS, ILLEGALITY AND TAXES

 

Section 3.01     Increased Costs, Illegality, etc.

 

(a)     In the event that (y) in the case of clause (i) below, the
Administrative Agent or (z) in the case of clauses (ii) and (iii) below, any
Lender or other Recipient, shall have determined on a reasonable basis (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):

 

(i)     on any date for determining the interest rate applicable to any LIBOR
Rate Loan for any Interest Period that, by reason of any changes arising after
the Closing Date, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in this Agreement for such
LIBOR Rate Loan; or

 

(ii)     at any time, that such Lender or other Recipient shall incur increased
costs or reductions in the amounts received or receivable by it hereunder in an
amount that such Lender deems material with respect to any LIBOR Rate Loans
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of any Connection
Income Taxes) because of (x) any Change in Law since the Closing Date (such as,
for example, but not limited to, a change in official reserve requirements, but,
in all events, excluding reserves already includable in the interest rate
applicable to such LIBOR Rate Loan pursuant to this Agreement) or (y) other
circumstances adversely affecting the London interbank market or the position of
such Lender or other Recipient in any such market; or

 

(iii)     at any time, that the making or continuance of any LIBOR Rate Loan has
become unlawful by compliance by such Lender in good faith with any Change in
Law since the Closing Date, or would conflict with any thereof not having the
force of law but with which such Lender customarily complies, or has become
impracticable as a result of a contingency occurring after the Closing Date that
materially adversely affects the London interbank market;

 

then, and in each such event, such Lender or other Recipient (or the
Administrative Agent in the case of clause (i) above) shall (1) on or promptly
following such date or time and (2) within 10 Business Days of the date on which
such event no longer exists give notice (by telephone confirmed in writing) to
the Borrower and to the Administrative Agent of such determination (which notice
the Administrative Agent shall promptly transmit to each of the other Lenders or
other Recipients). Thereafter (x) in the case of clause (i) above, the affected
Type of LIBOR Rate Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders or other Recipients
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Continuation or
Conversion given by the Borrower with respect to such Type of LIBOR Rate Loans
that have not yet been incurred, Converted or Continued shall be deemed
rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at
the option of the Borrower, be deemed converted into a Notice of Borrowing for
Base Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender or other Recipient, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender or other Recipient shall determine) as
shall be required to compensate such Lender or other Recipient for such
increased costs or reductions in amounts receivable hereunder (a written notice
as to the additional amounts owed to such Lender or other Recipient, showing the
basis for the calculation thereof, which basis must be reasonable, submitted to
the Borrower by such Lender or other Recipient shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 3.01(b) as promptly as possible and, in any event, within the time
period required by law.

 

 
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(b)     At any time that any LIBOR Rate Loan is affected by the circumstances
described in Section 3.01(a)(ii) or (iii), the Borrower may (and in the case of
a LIBOR Rate Loan affected pursuant to Section 3.01(a)(iii) the Borrower shall)
either (i) if the affected LIBOR Rate Loan is then being made pursuant to a
Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender or other Recipient pursuant to Section 3.01(a)(ii) or (iii), cancel
said Borrowing, or, in the case of any Borrowing, convert the related Notice of
Borrowing into one requesting a Borrowing of Base Rate Loans or require the
affected Lender or other Recipient to make its requested Loan as a Base Rate
Loan, or (ii) if the affected LIBOR Rate Loan is then outstanding, upon at least
one Business Day’s notice to the Administrative Agent, require the affected
Lender or other Recipient to Convert each such LIBOR Rate Loan into a Base Rate
Loan; provided, however, that if more than one Lender or other Recipient is
affected at any time, then all affected Lenders or other Recipients must be
treated the same pursuant to this Section 3.01(b).

 

(c)     If any Lender shall have determined that after the Closing Date, any
Change in Law regarding capital adequacy by any Governmental Authority, central
bank or comparable agency charged by law with the interpretation or
administration thereof, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank, or comparable agency, in
each case made subsequent to the Closing Date, has or would have the effect of
reducing by an amount reasonably deemed by such Lender to be material to the
rate of return on such Lender’s or its parent corporation’s capital or assets as
a consequence of such Lender’s commitments or obligations hereunder to a level
below that which such Lender or its parent corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender’s or its parent corporation’s policies with respect to
capital adequacy), then from time to time, within 15 days after demand by such
Lender (with a copy to the Administrative Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or its
parent corporation for such reduction. Each Lender, upon determining in good
faith that any additional amounts will be payable pursuant to this Section
3.01(c), will give prompt written notice thereof to the Borrower, which notice
shall set forth, in reasonable detail, the basis of the calculation of such
additional amounts, which basis must be reasonable, although the failure to give
any such notice shall not release or diminish any of the Borrower’s obligations
to pay additional amounts pursuant to this Section 3.01(c) upon the subsequent
receipt of such notice.

 

Section 3.02     Breakage Compensation. The Borrower shall compensate each
Lender (including the Swing Line Lender), upon its written request (which
request shall set forth the detailed basis for requesting and the method of
calculating such compensation), for all reasonable losses, costs, expenses and
liabilities (including, without limitation, any loss, cost, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its LIBOR Rate Loans or Swing Loans) which such
Lender may sustain in connection with any of the following: (i) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of LIBOR Rate Loans or Swing Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Continuation or Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 3.01(a)); (ii) if any repayment, prepayment, Conversion or Continuation
of any LIBOR Rate Loan occurs on a date that is not the last day of an Interest
Period applicable thereto or any Swing Loan is paid prior to the Swing Loan
Maturity Date applicable thereto; (iii) if any prepayment of any of its LIBOR
Rate Loans is not made on any date specified in a notice of prepayment given by
the Borrower; (iv) as a result of an assignment by a Lender of any LIBOR Rate
Loan other than on the last day of the Interest Period applicable thereto
pursuant to a request by the Borrower pursuant to Section 3.05(b); or (v) as a
consequence of (y) any other default by the Borrower to repay or prepay any
LIBOR Rate Loans when required by the terms of this Agreement or (z) an election
made pursuant to Section 3.05(b). The written request of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such request within 10 days after receipt thereof.

 

 
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Section 3.03     Net Payments.

 

(a)     Defined Terms. For purposes of this Section 3.03, the term “Lender”
includes any LC Issuer and the term “applicable law” includes FATCA.

 

(b)     Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Credit Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Credit Party shall be increased as necessary so that after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

(c)     Payment of Other Taxes by the Borrower. The Credit Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

 

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

 

(e)     Indemnification by the Lenders. Each Lender shall severally indemnify
the Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Credit Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Credit Parties to
do so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 11.06(b) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

 
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(f)     Evidence of Payments. As soon as practicable after any payment of Taxes
by any Credit Party to a Governmental Authority pursuant to this Section 3.03,
such Credit Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

(g)     Status of Lenders. (i) Any Lender that is entitled to an exemption from
or reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower and the Administrative Agent, at the time
or times reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 3.03(g)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

 

(ii)     Without limiting the generality of the foregoing:

 

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

 

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

 

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

 

 
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ii)     executed originals of IRS Form W-8ECI;

 

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

 

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

 

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

 

(D)     if a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement. For purposes of determining withholding Taxes imposed under
FATCA, from and after the date of this Agreement, the Borrower and the
Administrative Agent shall treat (and the Lenders hereby authorize the
Administrative Agent to treat) this Agreement as not qualifying as a
“grandfathered obligation” within the meaning of Treasury Regulation Section
1.1471-2(b)(2)(i).

 

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

 

(h)     Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.03 (including by
the payment of additional amounts pursuant to this Section 3.03), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

(i)     Survival. Each party’s obligations under this Section 3.03 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

 

Section 3.04     Increased Costs to LC Issuers. If after the Closing Date, there
is a Change in Law by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any LC Issuer or any Lender with any request or directive (whether or not
having the force of law) by any such authority, central bank or comparable
agency (in each case made subsequent to the Closing Date) shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such LC Issuer or such
Lender’s participation therein, or (ii) impose on such LC Issuer or any Lender
any other conditions affecting this Agreement, any Letter of Credit or such
Lender’s participation therein; and the result of any of the foregoing is to
increase the cost to such LC Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such LC Issuer or such Lender hereunder (other than
any increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar charges),
then, upon demand to the Borrower by such LC Issuer or such Lender (a copy of
which notice shall be sent by such LC Issuer or such Lender to the
Administrative Agent), the Borrower shall pay to such LC Issuer or such Lender
such additional amount or amounts as will compensate any such LC Issuer or such
Lender for such increased cost or reduction. A certificate submitted to the
Borrower by any LC Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such LC Issuer or such Lender to the Administrative
Agent), setting forth, in reasonable detail, the basis for the determination of
such additional amount or amounts necessary to compensate any LC Issuer or such
Lender as aforesaid shall be conclusive and binding on the Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish the Borrower’s obligations to pay additional amounts
pursuant to this Section 3.04.

 

 
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Section 3.05     Change of Lending Office; Replacement of Lenders.

 

(a)     Each Lender agrees that, upon the occurrence of any event giving rise to
the operation of Section 3.01(a)(ii) or (iii), 3.01(c), 3.03 or 3.04 requiring
the payment of additional amounts to the Lender, such Lender will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Applicable Lending Office
for any Loans or Commitments affected by such event; provided, however, that
such designation is made on such terms that such Lender and its Applicable
Lending Office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such Section. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

 

(b)     If (i) any Lender requests any compensation, reimbursement or other
payment under Section 3.01(a)(ii) or (iii), 3.01(c) or 3.04 with respect to such
Lender, (ii) the Borrower is, or because of a matter in existence as of the date
that the Borrower is seeking to exercise its rights under this Section will be,
required to pay any additional amount to any Lender or Governmental Authority
pursuant to Section 3.03, or (iii) any Lender is a Defaulting Lender or a
Non-Consenting Lender, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with the restrictions
contained in Section 11.06(c)), all its interests, rights and obligations under
this Agreement to an Eligible Assignee that shall assume such obligations;
provided, however, that (1) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld or delayed, (2) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts, including any breakage
compensation under Section 3.02 hereof), (3) in the case of any such assignment
resulting from a claim for compensation, reimbursement or other payments
required to be made under Section 3.01(a)(ii) or (iii), Section 3.01(c) or
Section 3.04 with respect to such Lender, or resulting from any required
payments to any Lender or Governmental Authority pursuant to Section 3.03, such
assignment will result in a reduction in such compensation, reimbursement or
payments and (4) in the case of any assignment from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

 

(c)     Nothing in this Section 3.05 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Sections
3.01, 3.03 or 3.04.

 

 
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ARTICLE IV.

CONDITIONS PRECEDENT

 

Section 4.01     Conditions Precedent at Closing Date. The obligation of the
Lenders to make Loans, and of any LC Issuer to issue Letters of Credit, is
subject to the satisfaction of each of the following conditions on or prior to
the Closing Date:

 

(i)     Credit Agreement. This Agreement shall have been executed by the
Borrower, the Administrative Agent, each LC Issuer and each of the Lenders.

 

(ii)     Notes. The Borrower shall have executed and delivered to the
Administrative Agent the appropriate Note or Notes for the account of each
Lender that has requested the same.

 

(iii)     [Reserved]

 

(iv)     [Reserved]

 

(v)     Fees and Administrative Agent Fee Letters. The Borrower shall have (A)
paid to the Administrative Agent, for its own account, the fees required to be
paid by it on the Closing Date, including those fees set forth in the
Administrative Agent Fee Letters, and (B) paid or caused to be paid all
reasonable fees and expenses of the Administrative Agent and of special counsel
to the Administrative Agent that have been invoiced on or prior to the Closing
Date in connection with the preparation, execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby.

 

(vi)     Corporate Resolutions and Approvals. The Administrative Agent shall
have received certified copies of the resolutions of the Board of Directors (or
similar governing body) of each Credit Party approving the Loan Documents to
which such Credit Party is or may become a party, and of all documents
evidencing other necessary corporate or other organizational action, as the case
may be, and governmental approvals, if any, with respect to the execution,
delivery and performance by such Credit Party of the Loan Documents to which it
is or may become a party and the expiration of all applicable waiting periods,
all of which documents to be in form and substance satisfactory to the
Administrative Agent.

 

(vii)     Incumbency Certificates. The Administrative Agent shall have received
a certificate of the Secretary or an Assistant Secretary of each Credit Party
certifying the names and true signatures of the officers of such Credit Party
authorized to sign the Loan Documents to which such Credit Party is a party and
any other documents to which such Credit Party is a party that may be executed
and delivered in connection herewith.

 

(viii)     Opinions of Counsel. The Administrative Agent shall have received
such opinions of counsel from counsel to the Credit Parties, including opinions
of local counsel for the Credit Parties in each jurisdiction in which any Credit
Party is registered under the UCC, which opinions shall be addressed to the
Administrative Agent and the Lenders and dated the Closing Date and in form and
substance satisfactory to the Administrative Agent.

 

(ix)     Recordation of Security Documents, Delivery of Collateral, Taxes, etc.
The Security Documents (or proper notices or UCC financing statements in respect
thereof) shall have been duly recorded, published and filed in such manner and
in such places as is required by law to establish, perfect, preserve and protect
the rights, Liens and security interests of the parties thereto and their
respective successors and assigns, all Collateral items required to be
physically delivered to the Administrative Agent thereunder shall have been so
delivered, accompanied by any appropriate instruments of transfer, and all
taxes, fees and other charges then due and payable in connection with the
execution, delivery, recording, publishing and filing of such instruments and
the issuance of the Obligations and the delivery of the Notes shall have been
paid in full.

 

 
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(x)     Evidence of Insurance. The Administrative Agent shall have (A) received
certificates of insurance and other evidence satisfactory to it of compliance
with the insurance requirements of this Agreement and the Security Documents and
(B) received endorsements naming the Administrative Agent, for the benefit of
the Lenders, as an additional insured on the liability insurance policies of the
Credit Parties and as a loss payee on the property insurance policies of the
Credit Parties.

 

(xi)     Search Reports. The Administrative Agent shall have received the
results of UCC and other search reports from one or more commercial search firms
acceptable to the Administrative Agent, listing all of the effective financing
statements filed against any Credit Party, together with copies of such
financing statements.

 

(xii)     Corporate Charter and Good Standing Certificates. The Administrative
Agent shall have received: (A) an original certified copy of the Certificate or
Articles of Incorporation or equivalent formation document of each Credit Party
and any and all amendments and restatements thereof, certified as of a recent
date by the relevant Secretary of State (or, alternatively, a certified copy of
the Certificate or Articles of Incorporation or equivalent formation document of
any Credit Party delivered in connection with the Existing Credit Agreement,
provided that the Secretary or an Assistant Secretary of such Credit Party has
certified that there have been no amendments, restatements or modifications to
such formation document as of the Closing Date); (B) an original “long-form”
good standing certificate or certificate of existence from the Secretary of
State of the state of incorporation, dated as of a recent date, listing all
charter documents affecting such Credit Party and certifying as to the good
standing of such Credit Party; and (C) original certificates of good standing or
foreign qualification from each other jurisdiction in which each Credit Party is
authorized or qualified to do business.

 

(xiii)     Closing Certificate. The Administrative Agent shall have received a
Closing Certificate, dated the Closing Date, of an Authorized Officer, to the
effect that, at and as of the Closing Date, both before and after giving effect
to the initial Borrowings hereunder and the application of the proceeds thereof:
(i) no Default or Event of Default has occurred and is continuing; and (ii) all
representations and warranties of each Credit Party set forth in each Loan
Document to which any Credit Party is a party are true and correct. All
documents attached to the Closing Certificate shall be in form and substance
satisfactory to the Administrative Agent.

 

(xiv)     Financial Statements. The Administrative Agent shall have received (i)
audited consolidated financial statements of the Borrower and its Subsidiaries
for the fiscal years ending December 31, 2011, December 31, 2012 and December
31, 2013; (ii) unaudited consolidated financial statements of the Borrower and
its Subsidiaries for the fiscal quarter ending September 30, 2014; and (iii) the
Financial Projections.

 

 
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(xv)     Solvency Certificate. The Administrative Agent shall have received a
solvency certificate in the form attached hereto as Exhibit D, dated as of the
Closing Date, and executed by the Chief Financial Officer of the Borrower.

 

(xvi)     Proceedings and Documents. All corporate and other proceedings and all
documents incidental to the transactions contemplated hereby shall be
satisfactory in substance and form to the Administrative Agent and the
Administrative Agent and its special counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Administrative Agent or its special counsel may reasonably request.

 

(xvii)     Payment of Outstanding Indebtedness, etc. The Administrative Agent
shall have received evidence that immediately after the making of the Loans on
the Closing Date, all Indebtedness not permitted by Section 7.04, together with
all interest, all payment premiums and all other amounts due and payable with
respect thereto, shall be paid in full from the proceeds of the initial Credit
Event, and the commitments in respect of such Indebtedness shall be permanently
terminated, and all Liens securing payment of any such Indebtedness shall be
released and the Administrative Agent shall have received all payoff and release
letters, Uniform Commercial Code Form UCC-3 termination statements or other
instruments or agreements as may be suitable or appropriate in connection with
the release of any such Liens.

 

(xviii)     Litigation. There shall not exist any litigation that could
reasonably be expected to cause a material adverse change, in the reasonable
judgment of the Administrative Agent, in or affecting the business, operations,
property or condition (financial or otherwise) of the Credit Parties taken as a
whole.

 

(xix)     No Material Adverse Change. As of the Closing Date, no condition or
event shall have occurred since December 31, 2013 that has resulted in, or could
reasonably be expected to result in, a material adverse change, in the
reasonable judgment of the Administrative Agent, in or affecting the business,
operations, property or condition (financial or otherwise) of the Borrower or of
the Borrower and the other Credit Parties taken as a whole.

 

(xx)     Leverage Ratio. The Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that the pro forma Leverage Ratio as of
the Closing Date is not greater than 5.00 to 1.00.

 

(xxi)     Patriot Act. The Administrative Agent shall have received, at least
five Business Days prior to the Closing Date, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
Patriot Act.

 

(xxii)     Ownership; Intercompany Debt. The Administrative Agent, in its sole
discretion, shall be reasonably satisfied with (i) the pro forma capital and
ownership structure and the equity holder arrangements of the Credit Parties,
and (ii) the amount, terms, conditions and holders of all intercompany
indebtedness of the Borrower and its Affiliates.

 

(xxiii)     Reaffirmation Agreement. The Credit Parties shall have duly executed
and delivered a Reaffirmation Agreement in form and substance satisfactory to
the Administrative Agent.

 

 
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(xxiv)     Miscellaneous. The Credit Parties shall have provided to the
Administrative Agent and the Lenders such other items and shall have satisfied
such other conditions as may be reasonably required by the Administrative Agent
or the Lenders.

 

Section 4.02     Conditions Precedent to All Credit Events. The obligations of
the Lenders, the Swing Line Lender and each LC Issuer to make or participate in
each Credit Event is subject, at the time thereof, to the satisfaction of the
following conditions:

 

(a)     Notice. The Administrative Agent (and in the case of subpart (iii)
below, the applicable LC Issuer) shall have received, as applicable, (i) a
Notice of Borrowing meeting the requirements of Section 2.05(b) with respect to
any Borrowing (other than a Continuation or Conversion), (ii) a Notice of
Continuation or Conversion meeting the requirements of Section 2.09(b) with
respect to a Continuation or Conversion, or (iii) an LC Request meeting the
requirements of Section 2.04(b) with respect to each LC Issuance.

 

(b)     No Default; Representations and Warranties. At the time of each Credit
Event and also after giving effect thereto, (i) there shall exist no Default or
Event of Default and (ii) all representations and warranties of the Credit
Parties contained herein or in the other Loan Documents shall be true and
correct in all material respects (or, in the case of any representation and
warranty already subject to a materiality qualifier, true and correct) with the
same effect as though such representations and warranties had been made on and
as of the date of such Credit Event, except to the extent that such
representations and warranties expressly relate to an earlier specified date, in
which case such representations and warranties shall have been true and correct
in all material respects as of the date when made.

 

The acceptance of the benefits of (i) the Credit Events on the Closing Date
shall constitute a representation and warranty by the Borrower to the
Administrative Agent, the Swing Line Lender, each LC Issuer and each of the
Lenders that all of the applicable conditions specified in Section 4.01 have
been satisfied as of the times referred to in such Section and (ii) each Credit
Event thereafter shall constitute a representation and warranty by the Borrower
to the Administrative Agent, the Swing Line Lender, each LC Issuer and each of
the Lenders that all of the applicable conditions specified in this Section 4.02
have been satisfied as of the times referred to in such Section.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Administrative Agent, the Lenders and each LC Issuer to
enter into this Agreement and to make the Loans and to issue and to participate
in the Letters of Credit provided for herein, the Borrower makes the following
representations and warranties to, and agreements with, the Administrative
Agent, the Lenders and each LC Issuer, all of which shall survive the execution
and delivery of this Agreement and each Credit Event:

 

Section 5.01     Corporate Status. Each Credit Party (i) is a duly organized or
formed and validly existing corporation, partnership or limited liability
company, as the case may be, in good standing or in full force and effect under
the laws of the jurisdiction of its formation and has the corporate, partnership
or limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified or
authorized except where the failure to be so qualified would not have a Material
Adverse Effect.

 

 
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Section 5.02     Corporate Power and Authority. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Loan Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Loan Documents to which
it is party. Each Credit Party has duly executed and delivered each Loan
Document to which it is party and each Loan Document to which it is party
constitutes the legal, valid and binding agreement and obligation of such Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).

 

Section 5.03     No Violation. Neither the execution, delivery and performance
by any Credit Party of the Loan Documents to which it is party nor compliance
with the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any
Governmental Authority applicable to such Credit Party or its properties and
assets, (ii) will conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (other than the Liens created pursuant to the Security Documents) upon any
of the property or assets of such Credit Party pursuant to the terms of (A) any
Material Contract, or (B) any other promissory note, bond, debenture, indenture,
mortgage, deed of trust, credit or loan agreement, or any other agreement or
other instrument, to which such Credit Party is a party or by which it or any of
its property or assets are bound or to which it may be subject, or (iii) will
violate any provision of the Organizational Documents of such Credit Party.

 

Section 5.04     Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize or is required
as a condition to (i) the execution, delivery and performance by any Credit
Party of any Loan Document to which it is a party or any of its obligations
thereunder, or (ii) the legality, validity, binding effect or enforceability of
any Loan Document to which any Credit Party is a party, except the filing and
recording of financing statements and other documents necessary in order to
perfect the Liens created by the Security Documents.

 

Section 5.05     Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened with respect to any Credit
Party or any of their respective Subsidiaries or against any of their respective
properties (i) that have had, or could reasonably be expected to have, a
Material Adverse Effect, or (ii) that question the validity or enforceability of
any of the Loan Documents, or of any action to be taken by any Credit Party
pursuant to any of the Loan Documents.

 

Section 5.06     Use of Proceeds; Margin Regulations.

 

(a)     The proceeds of all Loans and LC Issuances shall be utilized to (a)
provide funds for working capital and for other general corporate purposes of
the Credit Parties and (b) pay certain fees and expenses incurred in connection
with the negotiation and documentation of this Agreement and the other Loan
Documents, in each case, not inconsistent with the terms of this Agreement.

 

(b)     No part of the proceeds of any Credit Event will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of
the provisions of Regulations T, U or X of the Board of Governors of the Federal
Reserve System. No Credit Party is engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or of the Borrower and
its consolidated Subsidiaries that are subject to any “arrangement” (as such
term is used in Section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.

 

 
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Section 5.07     Financial Statements.

 

(a)     The Borrower has furnished to the Administrative Agent and the Lenders
complete and correct copies of the audited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries for the fiscal year ended December
31, 2013 and the related audited consolidated statements of income,
shareholders’ equity, and cash flows of the Borrower and its consolidated
Subsidiaries for the fiscal year of the Borrower then ended, accompanied by the
report thereon of Ernst & Young LLP. All such financial statements have been
prepared in accordance with GAAP, consistently applied (except as stated
therein), and fairly present the financial position of the Borrower and its
Subsidiaries as of the respective dates indicated and the consolidated results
of their operations and cash flows for the respective periods indicated, subject
in the case of any such financial statements that are unaudited, to normal audit
adjustments, none of which shall be material. The Borrower and its Subsidiaries
did not have, as of the date of the latest financial statements referred to
above, and will not have as of the Closing Date after giving effect to the
incurrence of Loans or LC Issuances hereunder, any material or significant
contingent liability or liability for taxes (excluding liabilities for taxes
incurred in the ordinary course of business and consistent with past practice),
long-term lease or unusual forward or long-term commitment that is not reflected
in the foregoing financial statements or the notes thereto in accordance with
GAAP and that in any such case is material in relation to the business,
operations, properties, assets, financial or other condition or prospects of the
Borrower and its Subsidiaries.

 

(b)     The financial projections of the Borrower and its Subsidiaries for the
fiscal years 2014 through 2017 prepared by the Borrower and delivered to the
Administrative Agent and the Lenders (the “Financial Projections”) were prepared
on behalf of the Borrower in good faith after taking into account historical
levels of business activity of the Borrower and its Subsidiaries, known trends,
including general economic trends, and all other information, assumptions and
estimates considered by management of the Borrower and its Subsidiaries to be
pertinent thereto; provided, however, that no representation or warranty is made
as to the impact of future general economic conditions or as to whether the
Borrower’s projected consolidated results as set forth in the Financial
Projections will actually be realized, it being recognized by the Lenders that
such projections as to future events are not to be viewed as facts and that
actual results for the periods covered by the Financial Projections may differ
materially from the Financial Projections. No facts are known to the Borrower as
of the Closing Date which, if reflected in the Financial Projections, would
result in a material adverse change in the assets, liabilities, results of
operations or cash flows reflected therein.

 

Section 5.08     Solvency. The Borrower has received consideration that is the
reasonable equivalent value of the obligations and liabilities that the Borrower
has incurred to the Administrative Agent, each LC Issuer and the Lenders under
the Loan Documents. The Borrower now has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is now solvent and able to pay its debts as they mature, and the
Borrower owns property having a value, both at fair valuation and at present
fair salable value, greater than the amount required to pay the Borrower’s
debts; and the Borrower is not entering into the Loan Documents with the intent
to hinder, delay or defraud its creditors. The Credit Parties, taken as a whole,
now have capital sufficient to carry on their business and transactions and all
business and transactions in which they are about to engage and are now solvent
and able to pay their debts as they mature, and the Credit Parties, taken as a
whole, own property having a value, both at fair valuation and at present fair
salable value, greater than the amount required to pay the Credit Parties’
debts; and the Credit Parties are not entering into the Loan Documents with the
intent to hinder, delay or defraud their creditors. For purposes of this Section
5.08, “debt” means any liability on a claim, and “claim” means (y) right to
payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (z) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.

 

 
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Section 5.09     No Material Adverse Change. Since December 31, 2013, there has
been no change in the condition, business, affairs or prospects of the Borrower
and its Subsidiaries taken as a whole, or their properties and assets considered
as an entirety, except for changes none of which, individually or in the
aggregate, has had or could reasonably be expected to have, a Material Adverse
Effect.

 

Section 5.10     Tax Returns and Payments. Each Credit Party has filed all
federal income tax returns and all other material tax returns, domestic and
foreign, required to be filed by it and has paid all taxes and assessments, fees
and other governmental charges payable by it that have become due, other than
those not yet delinquent and except for those contested in good faith. Each
Credit Party has established on its books such charges, accruals and reserves in
respect of taxes, assessments, fees and other governmental charges for all
fiscal periods as are required by GAAP. No Credit Party knows of any proposed
assessment for additional federal, foreign or state taxes for any period, or of
any basis therefor, which, individually or in the aggregate, taking into account
such charges, accruals and reserves in respect thereof as the Borrower and its
Subsidiaries have made, could reasonably be expected to have a Material Adverse
Effect.

 

Section 5.11     Title to Properties, etc. Each Credit Party has good and
marketable title, in the case of Real Property, and good title (or valid
Leaseholds, in the case of any leased property), in the case of all other
property, to all of its properties and assets free and clear of Liens other than
Permitted Liens. The interests of the Credit Parties and their Subsidiaries in
the properties reflected in the most recent balance sheet referred to in Section
5.07(a), taken as a whole, were sufficient, in the judgment of the Credit
Parties, as of the date of such balance sheet for purposes of the ownership and
operation of the businesses conducted by the Credit Parties and their
Subsidiaries. Schedule 5.11 sets forth a complete list of Real Property owned
and/or leased or subleased (as lessor or sublessor, lessee or sublessee) by the
Credit Parties on the Closing Date.

 

Section 5.12     Lawful Operations, etc. Each Credit Party and each of its
Subsidiaries: (i) holds all necessary foreign, federal, state, local and other
governmental licenses, registrations, certifications, permits and authorizations
necessary to conduct its business and own its properties; and (ii) is in full
compliance with all requirements imposed by law, regulation or rule, whether
foreign, federal, state or local, that are applicable to it, its operations, or
its properties and assets, including, without limitation, applicable
requirements of Environmental Laws, except for any failure to obtain and
maintain in effect, or noncompliance that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

Section 5.13     Environmental Matters.

 

(a)     Each Credit Party and each of their Subsidiaries is in material
compliance with all applicable Environmental Laws. All material licenses,
permits, registrations or approvals required for the conduct of the business of
each Credit Party and each of their Subsidiaries under any Environmental Law
have been secured and each Credit Party and each of their Subsidiaries is in
substantial compliance therewith. No Credit Party nor any of their Subsidiaries
has received written notice, or otherwise knows, that it is in any respect in
material noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which such Credit Party or such
Subsidiary is a party or that would affect the ability of such Credit Party or
such Subsidiary to operate any Real Property and no event has occurred and is
continuing that, with the passage of time or the giving of notice or both, would
constitute noncompliance, breach of or default thereunder. There are no material
Environmental Claims pending or, to the best knowledge of any Credit Party,
threatened. There are no facts, circumstances, conditions or occurrences on any
Real Property now or at any time owned, leased or operated by the Credit Parties
or their Subsidiaries or on any property adjacent to any such Real Property,
that are known by the Credit Parties or as to which any Credit Party or any such
Subsidiary has received written notice, that could reasonably be expected: (i)
to form the basis of a material Environmental Claim against any Credit Party or
any of their Subsidiaries or any Real Property of a Credit Party or any of their
Subsidiaries; or (ii) to cause such Real Property to be subject to any material
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law.

 

 
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(b)     Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the Credit
Parties or any of their Subsidiaries or (ii) released on or about any such Real
Property, in each case where such occurrence or event is not in compliance with
or could give rise to liability under Environmental Laws and is reasonably
likely to have a Material Adverse Effect.

 

Section 5.14     Compliance with ERISA. Compliance by the Credit Parties with
the provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the Code.
The Credit Parties, their Subsidiaries and each ERISA Affiliate (i) has
fulfilled all obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan that is not a Multi-Employer Plan or a Multiple
Employer Plan, (ii) has satisfied all contribution obligations in respect of
each Multi-Employer Plan and each Multiple Employer Plan, (iii) is in compliance
in all material respects with all other applicable provisions of ERISA and the
Code with respect to each Plan, each Multi-Employer Plan and each Multiple
Employer Plan, and (iv) has not incurred any liability under Title IV of ERISA
to the PBGC with respect to any Plan, any Multi-Employer Plan, any Multiple
Employer Plan, or any trust established thereunder. No Plan or trust created
thereunder has been terminated, and there have been no Reportable Events, with
respect to any Plan or trust created thereunder or with respect to any
Multi-Employer Plan or Multiple Employer Plan, which termination or Reportable
Event will or could give rise to a material liability of the Credit Parties or
any ERISA Affiliate in respect thereof. No Credit Party nor any Subsidiary of a
Credit Party nor any ERISA Affiliate is at the date hereof, or has been at any
time within the five years preceding the date hereof, an employer required to
contribute to any Multi-Employer Plan or Multiple Employer Plan, or a
“contributing sponsor” (as such term is defined in Section 4001 of ERISA) in any
Multi-Employer Plan or Multiple Employer Plan. No Credit Party nor any
Subsidiary of a Credit Party nor any ERISA Affiliate has any contingent
liability with respect to any post-retirement “welfare benefit plan” (as such
term is defined in ERISA) except as has been disclosed to the Administrative
Agent and the Lenders in writing.

 

Section 5.15     Intellectual Property, etc. Each Credit Party and each of its
Subsidiaries has obtained or has the right to use all patents, trademarks,
service marks, trade names, copyrights, licenses and other rights with respect
to the foregoing necessary for the present and planned future conduct of its
business, without any known conflict with the rights of others, except for such
patents, trademarks, service marks, trade names, copyrights, licenses and
rights, the loss of which, and such conflicts that, in any such case
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, Schedule 5.15 sets forth a
complete list of all material licenses, trade names and service marks and all
registered patents, trademarks and copyrights, in each case with respect to
Intellectual Property.

 

 
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Section 5.16     Investment Company Act, etc. No Credit Party nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Federal Power Act, as amended or any applicable Federal or state public utility
law.

 

Section 5.17     Insurance. The Credit Parties and their Subsidiaries maintain
insurance coverage by such insurers and in such forms and amounts and against
such risks as are generally consistent with industry standards and in each case
in compliance with the terms of Section 6.03. Schedule 5.17 sets forth a
complete list of all insurance maintained by the Credit Parties on the Closing
Date.

 

Section 5.18     Labor Relations. No Credit Party nor any of its Subsidiaries
(a) is a party to any labor dispute affecting any bargaining unit or other group
of employees generally, (b) is subject to any strike, slowdown, workout or other
concerted interruptions of operations by employees of a Credit Party or any
Subsidiary, whether or not relating to any labor contracts, (c) is subject to
any pending or, to the knowledge of any Credit Party, threatened, unfair labor
practice complaint, before the National Labor Relations Board, (d) is subject to
any pending or, to the knowledge of any Credit Party, threatened grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, (e) is subject to any pending or, to the knowledge of any Credit
Party, threatened significant strike, labor dispute, slowdown or stoppage, or
(f) is, to the knowledge of the Credit Parties, involved or subject to any union
representation organizing or certification matter with respect to the employees
of the Credit Parties or any of their Subsidiaries, except (with respect to any
matter specified in any of the above clauses) for such matters as, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries has suffered any
strikes, walkouts or work stoppages in the five years preceding the Closing
Date.

 

Section 5.19     Security Interests. Once executed and delivered, each of the
Security Documents creates, as security for the Secured Obligations (as defined
in the Security Agreement), a valid and enforceable, and upon making the filings
and recordings referenced in the next sentence, perfected security interest in
and Lien on all of the Collateral subject thereto from time to time, in favor of
the Administrative Agent for the benefit of the Secured Creditors, superior to
and prior to the rights of all third persons and subject to no other Liens,
except that the Collateral under the Security Documents may be subject to
Permitted Liens. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document that shall
have been made, or for which satisfactory arrangements have been made, upon or
prior to the execution and delivery thereof. All recording, stamp, intangible or
other similar taxes required to be paid by any Person under applicable legal
requirements or other laws applicable to the property encumbered by the Security
Documents in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement thereof have been paid.

 

Section 5.20     True and Complete Disclosure. The factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of any Credit
Party to the Administrative Agent or any Lender for purposes of or in connection
with this Agreement or any transaction contemplated herein, other than the
Financial Projections (as to which representations are made only as provided in
Section 5.07(b)), is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of such Person in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that all
information consisting of financial projections prepared by any Credit Party or
any Subsidiary is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made.

 

 
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Section 5.21     Defaults. No Default or Event of Default exists as of the
Closing Date hereunder, nor will any Default or Event of Default begin to exist
immediately after the execution and delivery hereof.

 

Section 5.22     Capitalization. As of the Closing Date, Schedule 5.22 sets
forth a true, complete and accurate description of the equity capital structure
of each Subsidiary of the Borrower showing, for each such Person, accurate
ownership percentages of the equityholders of record and accompanied by a
statement of authorized and issued Equity Interests for each such Person. As of
the Closing Date (a) there are no preemptive rights, outstanding subscriptions,
warrants or options to purchase any Equity Interests of any Credit Party, (b)
there are no obligations of any Credit Party to redeem or repurchase any of its
Equity Interests and (c) there is no agreement, arrangement or plan to which any
Credit Party is a party or of which any Credit Party has knowledge that could
directly or indirectly affect the capital structure of any Credit Party. The
Equity Interests of each Credit Party described on Schedule 5.22 (i) are validly
issued and fully paid and non-assessable (to the extent such concepts are
applicable to the respective Equity Interests) and (ii) are owned of record and
beneficially as set forth on Schedule 5.22, free and clear of all Liens (other
than Liens created under the Security Documents).

 

Section 5.23     [Reserved.]

 

Section 5.24     Anti-Terrorism and Anti-Money Laundering Law Compliance. Each
Credit Party and each Subsidiary of each Credit Party is and will remain in
compliance in all material respects with all U.S. economic sanctions laws,
Executive Orders and implementing regulations as promulgated by the U.S.
Treasury Department’s Office of Foreign Assets Control, and all applicable
anti-money laundering and counter-terrorism financing provisions of the Bank
Secrecy Act and all regulations issued pursuant to it. No Credit Party and no
Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S.
government on the list of the Specially Designated Nationals and Blocked Persons
(the “SDN List”) with which a U.S. Person cannot deal with or otherwise engage
in business transactions, (ii) is a Person who is otherwise the target of U.S.
economic sanctions laws such that a U.S. Person cannot deal or otherwise engage
in business transactions with such Person or (iii) is controlled by (including
without limitation by virtue of such person being a director or owning voting
shares or interests), or acts, directly or indirectly, for or on behalf of, any
person or entity on the SDN List or a foreign government that is the target of
U.S. economic sanctions prohibitions such that the entry into, or performance
under, this Agreement or any other Loan Document would be prohibited under U.S.
law. The Credit Parties, each of their Subsidiaries and each of their Affiliates
are in compliance with (a) the Trading with the Enemy Act, and each of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, (b) the Patriot Act and (c) other federal or
state laws relating to “know your customer” and anti-money laundering rules and
regulations. No part of the proceeds of any Loan will be used directly or
indirectly for any payments to any government official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977.

 

 
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Section 5.25     Location of Bank Accounts. Schedule 5.25 sets forth a complete
and accurate list as of the Closing Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Credit Party, together with a
description thereof (i.e., the bank or broker dealer at which such deposit or
other account is maintained and the account number and the purpose thereof).

 

Section 5.26     Material Contracts. Schedule 5.26 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date. As of
the Closing Date, all such Material Contracts are in full force and effect and
no material defaults by a Credit Party currently exist thereunder (other than as
described in Schedule 5.26).

 

Section 5.27     Affiliate Transactions. Except as set forth on Schedule 5.27,
as of the date of this Agreement, there are no existing or proposed agreements,
arrangements or transactions between any Credit Party and any of the officers,
members, managers, directors, stockholders, parents, other interest holders,
employees, or Affiliates (other than by and among Credit Parties) of any Credit
Party or any members of their respective immediate families, and none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any
Credit Party or any Person with which any Credit Party has a business
relationship or which competes with any Credit Party.

 

Section 5.28     Common Enterprise. The successful operation and condition of
each of the Credit Parties is dependent on the continued successful performance
of the functions of the Credit Parties as a whole and the successful operation
of each of the Credit Parties is dependent on the successful performance and
operation of each other Credit Party. Each Credit Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) the successful operations of each of the other Credit Parties and (ii) the
credit extended by the Lenders to the Borrower hereunder, both in their separate
capacities and as members of the group of companies. Each Credit Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Credit Party is within its purpose,
will be of direct and indirect benefit to such Credit Party, and is in its best
interest.

  

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

The Borrower hereby covenants and agrees that on the Closing Date and thereafter
so long as this Agreement is in effect and until such time as the Commitments
have been terminated, no Notes remain outstanding and the Loans, together with
interest, Fees and all other Obligations incurred hereunder and under the other
Loan Documents, have been paid in full, as follows:

 

Section 6.01     Reporting Requirements. The Borrower will furnish to the
Administrative Agent and each Lender:

 

(a)     Annual Financial Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Borrower, the audited
consolidated balance sheets of the Borrower and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of
income, of stockholders’ equity and of cash flows for such fiscal year, in each
case setting forth comparative figures for the preceding fiscal year, all in
reasonable detail and accompanied by the opinion with respect to such
consolidated financial statements of independent public accountants of
recognized national standing selected by the Borrower and reasonably acceptable
to the Administrative Agent (it being agreed that Ernst & Young LLP is
reasonably acceptable to the Administrative Agent), which opinion shall be
unqualified and shall (i) state that such accountants audited such consolidated
financial statements in accordance with generally accepted auditing standards,
that such accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial statements
present fairly, in all material respects, the consolidated financial position of
the Borrower and its consolidated Subsidiaries as at the end of such fiscal year
and the consolidated results of their operations and cash flows for such fiscal
year in conformity with generally accepted accounting principles, or (ii)
contain such statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and requirements
of the American Institute of Certified Public Accountants (or any successor
organization), together with all management letters of such accountants
addressed to the Borrower or any other Credit Party. Any financial statements
required to be delivered pursuant to this Section 6.01(a) shall be deemed to
have been furnished to the Administrative Agent on the date that such financial
statement is posted on the Securities and Exchange Commission’s website at
www.sec.gov or the website for the Company.

 

 
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(b)     Quarterly Financial Statements. As soon as available and in any event
within 45 days after the close of each of the quarterly accounting periods in
each fiscal year of the Borrower, the unaudited consolidated and consolidating
balance sheets of the Borrower and its consolidated Subsidiaries as at the end
of such quarterly period and the related unaudited consolidated and
consolidating statements of income and of cash flows for such quarterly period
and/or for the fiscal year to date, and setting forth, in the case of such
unaudited consolidated and consolidating statements of income and of cash flows,
comparative figures for the related periods in the prior fiscal year, and which
shall be certified on behalf of the Borrower by the Chief Financial Officer of
the Borrower, subject to changes resulting from normal year-end audit
adjustments. Any financial statements required to be delivered pursuant to this
Section 6.01(b) shall be deemed to have been furnished to the Administrative
Agent on the date that such financial statement is posted on the Securities and
Exchange Commission’s website at www.sec.gov or the website for the Company.

 

(c)     Officer’s Compliance Certificates. At the time of the delivery of the
financial statements provided for in subparts (a) and (b) above, (i) a
certificate (a “Compliance Certificate”), substantially in the form of Exhibit
E, signed by the Chief Financial Officer of the Borrower to the effect that
(A) no Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof and the actions the Credit
Parties have taken or proposes to take with respect thereto, and (B) the
representations and warranties of the Credit Parties are true and correct in all
material respects (or in the case of any representation or warranty subject to a
materiality qualifier, true and correct), except to the extent that any relate
to an earlier specified date, in which case, such representations shall be true
and correct in all material respects as of the date made, which certificate
shall set forth the calculations required to establish compliance with the
provisions of Section 7.07, and (ii) if, as a result of any change in accounting
principles and policies (or the application thereof) from those used in the
preparation of the historical financial statements of the Borrower, the
consolidated financial statements of the Credit Parties delivered pursuant to
Sections 6.01(a) and (b) will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for all such prior
financial statements in form and substance reasonably satisfactory to the
Administrative Agent.

 

(d)     Budgets and Forecasts. Not later than 30 days after the end of each
fiscal year of the Borrower and its Subsidiaries, commencing with the fiscal
year ending December 31, 2014, a consolidated budget in reasonable detail for
each of the four fiscal quarters of such fiscal year, and (if and to the extent
prepared by management of the Borrower or any other Credit Party) for any
subsequent fiscal years, as customarily prepared by management for its internal
use, setting forth, with appropriate discussion, the forecasted balance sheet,
income statement, operating cash flows and capital expenditures of the Borrower
and its Subsidiaries for the period covered thereby, and the principal
assumptions upon which such forecasts and budget are based.

 

 
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(e)     Notices. Promptly, and in any event within three Business Days, after
any Credit Party or any Subsidiary obtains knowledge thereof, notice of:

 

(i)     the occurrence of any event that constitutes a Default or Event of
Default, which notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower or other applicable Credit Party proposes
to take with respect thereto;

 

(ii)     the commencement of, or any other material development concerning, any
litigation or governmental or regulatory proceeding pending against any Credit
Party or any Subsidiary or the occurrence of any other event, if the same could
be reasonably likely to have a Material Adverse Effect;

 

(iii)     any significant adverse change in the Borrower’s or any Subsidiary’s
relationship with, or any significant event or circumstance that is in the
Borrower’s reasonable judgment likely to adversely affect the Borrower’s or any
Subsidiary’s relationship with, (A) any customer (or related group of customers)
representing more than 10% of the Borrower’s consolidated revenues during its
most recent fiscal year, or (B) any supplier that is material to the operations
of the Borrower and its Subsidiaries considered as an entirety;

 

(iv)     any amendment or waiver of the terms of, or notice of default under,
any Subordinated Debt Documents; or

 

(v)     any event that could reasonably be expected to have a Material Adverse
Effect

 

(f)     ERISA. Promptly, and in any event within 10 days after any Credit Party
or any Subsidiary of a Credit Party or any ERISA Affiliate knows of the
occurrence of any ERISA Event, the Borrower will deliver to the Administrative
Agent and each of the Lenders a certificate of an Authorized Officer of the
Borrower setting forth the full details as to such occurrence and the action, if
any, that such Credit Party or such Subsidiary of such Credit Party or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given by such Credit Party or such Subsidiary of such
Credit Party or the ERISA Affiliate to or filed with the PBGC, a Plan
participant or the Plan administrator with respect thereto.

 

(g)     Environmental Matters. Promptly upon, and in any event within 10
Business Days after, an officer of a Credit Party or any Subsidiary of a Credit
Party obtaining knowledge thereof, notice of one or more of the following
environmental matters: (i) any pending or threatened material Environmental
Claim against such Credit Party or any of its Subsidiaries or any Real Property
owned or operated by such Credit Party or any of its Subsidiaries; (ii) any
condition or occurrence on or arising from any Real Property owned or operated
by such Credit Party or any of its Subsidiaries that (A) results in material
noncompliance by such Credit Party or any of its Subsidiaries with any
applicable Environmental Law or (B) would reasonably be expected to form the
basis of a material Environmental Claim against such Credit Party or any of its
Subsidiaries or any such Real Property; (iii) any condition or occurrence on any
Real Property owned, leased or operated by such Credit Party or any of its
Subsidiaries that could reasonably be expected to cause such Real Property to be
subject to any material restrictions on the ownership, occupancy, use or
transferability by such Credit Party or any of its Subsidiaries of such Real
Property under any Environmental Law; and (iv) the taking of any removal or
remedial action in response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by such Credit Party or
any of its Subsidiaries as required by any Environmental Law or any governmental
or other Global agency. All such notices shall describe in reasonable detail the
nature of the Environmental Claim, the Credit Party’s or such Subsidiary’s
response thereto and the potential exposure in Dollars of the Credit Parties and
their Subsidiaries with respect thereto.

 

 
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(h)     SEC Reports and Registration Statements. Promptly after transmission
thereof or other filing with the SEC, copies of all registration statements
(other than the exhibits thereto and any registration statement on Form S-8 or
its equivalent) and all annual, quarterly or current reports that any Credit
Party or any Subsidiary files with the SEC on Form 10-K, 10-Q or 8-K (or any
successor forms). Any such documents that are filed pursuant to and are
accessible through the SEC’s EDGAR system will be deemed to have been provided
in accordance with this clause (h).

 

(i)     Management Reports.

 

(i)     Together with the delivery of the financial statements pursuant to
subparts (a) and (b) above, a management report describing the operations and
financial conditions of the Credit Parties and their Subsidiaries for the period
then ended and the portion of the current fiscal year then elapsed (or for the
fiscal year then ended in the case of year-end financials). Any reports required
to be delivered pursuant to this Section 6.01(i)(i) shall be deemed to have been
furnished to the Administrative Agent on the date that such report is posted on
the Securities and Exchange Commission’s website at www.sec.gov or the website
for the Company.

 

(ii)     Upon the reasonable request of the Administrative Agent, together with
the delivery of the financial statements pursuant to subparts (a) and (b) above,
a management report discussing the reasons for any significant variations from
the budgets and forecasts delivered pursuant to subpart (d). The management
report shall be presented in reasonable detail.

 

(j)     Annual, Quarterly and Other Reports. Promptly after transmission thereof
to its stockholders, copies of all annual, quarterly and other reports and all
proxy statements that the Borrower furnishes to its stockholders generally. Any
statements or reports required to be delivered pursuant to this Section 6.01(j)
shall be deemed to have been furnished to the Administrative Agent on the date
that such financial statement or report (as applicable) is posted on the
Securities and Exchange Commission’s website at www.sec.gov or the website for
the Company.

 

(k)     Auditors’ Internal Control Comment Letters, etc. Promptly upon receipt
thereof, a copy of each letter or memorandum commenting on internal accounting
controls and/or accounting or financial reporting policies followed by the
Credit Parties and/or any of their Subsidiaries that is submitted to such Credit
Party or Subsidiary, as applicable, by its independent accountants in connection
with any annual or interim audit made by them of the books of the Borrower or
any of its Subsidiaries.

 

(l)     Press Releases. Promptly after the release thereof to any news
organization or news distribution organization, copies of any press releases and
other similar statements intended to be made available generally by any Credit
Party or any Subsidiary to the public concerning material developments relating
to such Credit Party or its Subsidiaries. Any press release required to be
delivered pursuant to this Section 6.01(l) shall be deemed to have been
furnished to the Administrative Agent on the date that such press release is
posted on the Securities and Exchange Commission’s website at www.sec.gov or the
website for the Company.

 

 
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 (m)     Other Notices. Promptly after the transmission or receipt thereof, as
applicable, copies of all non-routine notices received or sent by any Credit
Party to or from the holders of any Material Indebtedness or any trustee with
respect thereto.

 

(n)     Proposed Amendments, etc. to Certain Agreements. No later than five (5)
Business Days prior to the effectiveness thereof, copies of substantially final
drafts of any proposed amendment, supplement, waiver or other modification with
respect to any Subordinated Debt Document, any Material Indebtedness Agreement
or any other agreement or instrument subject to the restrictions contained in
Section 7.11.

 

(o)     Notice Regarding New Leases. Promptly, and in any event within ten (10)
Business Days (i) after any Real Property Lease of any Credit Party is
terminated or amended in a manner that could reasonably be expected to have a
Material Adverse Effect, or (ii) any new Real Property lease is entered into,
written notice of the same.

 

(p)     Violation of Anti-Terrorism Laws. Promptly (i) if any Credit Party
obtains knowledge that any Credit Party or any Affiliate of any Credit Party, or
any other holder at any time of any direct or indirect equitable, legal or
beneficial interest therein is the subject of any of the Anti-Terrorism Laws,
such Credit Party will notify the Administrative Agent and (ii) upon the request
of the Administrative Agent or any Lender (through the Administrative Agent),
such Credit Party will provide any information the Administrative Agent or such
Lender believes is reasonably necessary to be delivered to comply with the USA
Patriot Act.

 

(q)     Other Information. Promptly upon the reasonable request therefor (and in
any events within 10 days of such request), such other information or documents
(financial or otherwise) relating to any Credit Party or any Subsidiary as the
Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request from time to time.

 

Section 6.02     Books, Records and Inspections. Each Credit Party will, and
will cause each of its Subsidiaries to, (i) keep proper books of record and
account, in which full and correct entries shall be made of all financial
transactions and the assets and business of such Credit Party or such
Subsidiary, as the case may be, in accordance with GAAP; and (ii) permit
officers and designated representatives of the Administrative Agent or any of
the Lenders to visit and inspect any of the properties or assets of such Credit
Party and/or its Subsidiaries in whomsoever’s possession (but only to the extent
such Credit Party or such Subsidiary, as applicable, has the right to do so to
the extent in the possession of another Person), to examine the books of account
of such Credit Party or such Subsidiary, as applicable, and make copies thereof
and take extracts therefrom, and to discuss the affairs, finances and accounts
of such Credit Party and/or such Subsidiary, as applicable, with, and be advised
as to the same by, its and their officers and independent accountants and
independent actuaries, if any, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any of the Lenders
(through the Administrative Agent) may request.

 

Section 6.03     Insurance.

 

(a)     Each Credit Party will, and will cause each of its Subsidiaries to, (i)
maintain insurance coverage by such insurers and in such forms and amounts and
against such risks as are generally consistent with the insurance coverage
maintained by the Credit Parties and their Subsidiaries as of the Closing Date,
and (ii) forthwith upon the Administrative Agent’s or any Lender’s written
request, furnish to the Administrative Agent or such Lender such information
about such insurance as the Administrative Agent or such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to the Administrative Agent or such Lender and certified by an
Authorized Officer of the Borrower.

 

 
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(b)     Each Credit Party will at all times keep its respective property that is
subject to the Lien of any Security Document insured in favor of the
Administrative Agent, for the benefit of the Secured Creditors and all policies
or certificates (or certified copies thereof) with respect to such insurance
(and any other insurance maintained by the Credit Parties) (i) shall be endorsed
to the Administrative Agent’s satisfaction for the benefit of the Administrative
Agent (including, without limitation, by naming the Administrative Agent as loss
payee (with respect to Collateral) or, to the extent permitted by applicable
law, as an additional insured), (ii) shall state that such insurance policies
shall not be canceled without 30 days’ prior written notice thereof (or 10 days’
prior written notice in the case of cancellation for the non-payment of
premiums) by the respective insurer to the Administrative Agent, (iii) shall
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Administrative Agent and the Lenders, and (iv)
shall in the case of any such certificates or endorsements in favor of the
Administrative Agent, be delivered to or deposited with the Administrative
Agent.

 

(c)     If any Credit Party shall fail to maintain any insurance in accordance
with this Section 6.03, or if any Credit Party shall fail to so endorse and
deliver or deposit all endorsements or certificates with respect thereto, the
Administrative Agent shall have the right (but shall be under no obligation) to
procure such insurance and the Borrower agrees to reimburse the Administrative
Agent on demand for all costs and expenses of procuring such insurance.

 

Section 6.04     Payment of Taxes and Claims. Each Credit Party will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all lawful claims that, if unpaid, might
become a Lien or charge upon any properties of any Credit Party or any of their
respective Subsidiaries; provided, however, that no Credit Party nor any of
their respective Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings if (i) it has maintained adequate reserves with respect thereto in
accordance with GAAP and (ii) in the case of a tax or claim that has or may
become a Lien against any of the Collateral, such proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such tax or
claim. Without limiting the generality of the foregoing, each Credit Party will,
and will cause each of its Subsidiaries to, pay in full all of its wage
obligations in accordance with the Fair Labor Standards Act (29 U.S.C. Sections
206-207), with respect to its employees subject thereto, and any comparable
provisions of applicable law.

 

Section 6.05     Corporate Franchises. Each Credit Party will do, and will cause
each of its Subsidiaries to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
authority, qualification, franchises, licenses and permits; provided, however,
that nothing in this Section 6.05 shall be deemed to prohibit any transaction
permitted by Section 7.02.

 

Section 6.06     Good Repair. Each Credit Party will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever’s possession they may be, are kept in
reasonably good repair, working order and condition, normal wear and tear
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, in each case, to the extent and
in the manner customary for companies in similar businesses.

 

 
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Section 6.07     Compliance with Statutes, etc. Each Credit Party will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities in respect of the conduct of its business and the
ownership of its property, other than those the noncompliance with which would
not individually or in the aggregate be reasonably expected to have a Material
Adverse Effect.

 

Section 6.08     Compliance with Environmental Laws. Without limitation of the
covenants contained in Section 6.07:

 

(a)     Each Credit Party will comply, and will cause each of its Subsidiaries
to comply, with all Environmental Laws applicable to the ownership, lease or use
of all Real Property now or hereafter owned, leased or operated by such Credit
Party or any of its Subsidiaries, and will promptly pay or cause to be paid all
costs and expenses incurred in connection with such compliance, except to the
extent that such compliance with Environmental Laws is being contested in good
faith and by appropriate proceedings and for which adequate reserves have been
established to the extent required by GAAP, and the reasonably likely outcome in
such proceedings could not reasonably be expected to have a Material Adverse
Effect.

 

(b)     Each Credit Party will keep or cause to be kept, and will cause each of
its Subsidiaries to keep or cause to be kept, all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws other than
Permitted Liens.

 

(c)     No Credit Party nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit any of their Affiliates to generate,
use, treat, store, release or dispose of, Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by the Credit Parties or any
of their Subsidiaries or transport or permit the transportation of Hazardous
Materials to or from any such Real Property other than in compliance with
applicable Environmental Laws and in the ordinary course of business, except to
the extent that any noncompliance with Environmental Laws is being contested in
good faith and by appropriate proceedings and for which adequate reserves have
been established to the extent required by GAAP, and the reasonably likely
outcome in such proceedings could not reasonably be expected to have a Material
Adverse Effect.

 

(d)     If required to do so under any applicable order of any Governmental
Authority, each Credit Party will undertake, and cause each of its Subsidiaries
to undertake any clean up, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by the Credit Parties or any of its Subsidiaries in accordance with, in
all material respects, the requirements of all applicable Environmental Laws and
in accordance with, in all material respects, such orders of all Governmental
Authorities, except to the extent that such Credit Party or such Subsidiary
contesting such order in good faith and by appropriate proceedings and for which
adequate reserves have been established to the extent required by GAAP, and the
reasonably likely outcome in such proceedings could not reasonably be expected
to have a Material Adverse Effect.

 

Section 6.09     Certain Subsidiaries to Join in Guaranty. In the event that at
any time after the Closing Date, any Credit Party acquires, creates or has any
Domestic Subsidiary that is not already a party to the Guaranty, such Credit
Party will promptly, but in any event within 10 Business Days, cause such
Subsidiary to deliver to the Administrative Agent, in sufficient quantities for
the Lenders, (a) a Guaranty Supplement (as defined in the Guaranty), duly
executed by such Subsidiary, pursuant to which such Subsidiary joins in the
Guaranty as a guarantor thereunder, (b) resolutions of the Board of Directors or
equivalent governing body of such Subsidiary, certified by the Secretary or an
Assistant Secretary of such Subsidiary, as duly adopted and in full force and
effect, authorizing the execution and delivery of such joinder supplement and
the other Loan Documents to which such Subsidiary is or will be a party,
together with such other corporate documentation and an opinion of counsel as
the Administrative Agent shall reasonably request, in each case, in form and
substance satisfactory to the Administrative Agent and (c) all such documents,
instruments, agreements, and certificates as are similar to those described in
Section 6.10. In the event that any Person becomes a Foreign Subsidiary of the
Borrower, and the ownership interests of such Foreign Subsidiary are owned by
the Borrower or by any Domestic Subsidiary thereof, the Borrower shall, or shall
cause such Domestic Subsidiary to, deliver, all such documents, instruments,
agreements, and certificates as are similar to those described in Section 6.10,
and the Borrower shall take, or shall cause such Domestic Subsidiary to take,
all of the actions referred to in Section 6.10.

 

 
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Section 6.10     Additional Security; Real Property Matters; Further Assurances.

 

(a)     Additional Security. Subject to subpart (b) below, if any Credit Party
acquires, owns or holds an interest in any personal property that is not at the
time included in the Collateral, the Borrower will promptly notify the
Administrative Agent in writing of such event, identifying the property or
interests in question and referring specifically to the rights of the
Administrative Agent and the Lenders under this Section, and the Credit Party
will, or will cause such Subsidiary to, within 10 Business Days following
request by the Administrative Agent, grant to the Administrative Agent for the
benefit of the Secured Creditors a Lien on such personal property pursuant to
the terms of such security agreements, assignments or other documents as the
Administrative Agent deems appropriate (collectively, the “Additional Security
Documents”) or a joinder in any existing Security Document. Furthermore, the
Borrower or such other Credit Party shall cause to be delivered to the
Administrative Agent such opinions of local counsel, corporate resolutions, a
Perfection Certificate, consents of landlords, Landlord’s Agreements and other
related documents as may be reasonably requested by the Administrative Agent in
connection with the execution, delivery and recording of any such Additional
Security Document or joinder, all of which documents shall be in form and
substance satisfactory to the Administrative Agent.

 

(b)     Foreign Subsidiaries. Notwithstanding anything in subpart (a) above or
elsewhere in this Agreement to the contrary, no Credit Party shall be required
to (i) pledge (or cause to be pledged) more than 65% of the Equity Interests
designated as voting and 100% of the Equity Interests designated as non-voting
in any first tier Foreign Subsidiary that is treated as a “controlled foreign
corporation” within the meaning of Section 957 of the Code, (ii) pledge (or
cause to be pledged) any Equity Interests in any Foreign Subsidiary that is a
direct or indirect Subsidiary of a Foreign Subsidiary that is treated as a
“controlled foreign corporation” within the meaning of Section 957 of the Code,
or (iii) cause a Foreign Subsidiary that is treated as a “controlled foreign
corporation” within the meaning of Section 957 of the Code to join in the
Guaranty or to become a party to the Security Agreement or any other Security
Document, if to do so would subject the Borrower or any of its Subsidiaries to
liability for additional United States income taxes by virtue of Section 956 of
the Code in an amount the Borrower considers material.

 

(c)     Landlord/Mortgagee/Bailee Waivers. The Credit Parties will promptly upon
request of the Administrative Agent use commercially reasonable efforts to
obtain, and will use commercially reasonable efforts to maintain in effect,
Landlord’s Agreements on any Real Property (i) on which any items of Collateral
are located, (ii) that functions as the chief executive office for any Credit
Party or (iii) at which books and records of any Credit Party are located, in
each case in form and substance reasonably acceptable to the Administrative
Agent.

 

(d)     Further Assurances. The Credit Parties will, and will cause each of
their respective Subsidiaries to, at the expense of the Borrower, make, execute,
endorse, acknowledge, file and/or deliver to the Administrative Agent from time
to time such conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Administrative Agent may reasonably require, including any
documents, instruments and filings required by the Assignment of Claims Act of
1940. If at any time the Administrative Agent determines, based on applicable
law, that all applicable taxes (including, without limitation, mortgage
recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall promptly pay
the same upon demand.

 

 
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Section 6.11     Most Favored Covenant Status. If any Credit Party at any time
after the Closing Date enters into or modifies any Material Indebtedness
Agreement such that such Material Indebtedness Agreement includes affirmative or
negative covenants (or any events of default or other type of restriction that
would have the practical effect of any affirmative or negative business or
financial covenant, including, without limitation, any “put” or mandatory
prepayment of such Indebtedness upon the occurrence of a “change of control”)
that are applicable to any Credit Party and are more restrictive than the
covenants set forth herein or in any of the other Loan Documents, the Borrower
shall promptly so notify the Administrative Agent and the Lenders and, if the
Administrative Agent shall so request by written notice to the Borrower (after a
good faith determination has been made by the Required Lenders that such
Material Indebtedness Agreement contains any such provisions that either
individually or in the aggregate are more favorable to the holders of such
Indebtedness than any of the provisions set forth herein), the Borrower, the
Administrative Agent and the Lenders shall promptly amend this Agreement to
incorporate some or all of such provisions, in the discretion of the
Administrative Agent and the Required Lenders, into this Agreement and, to the
extent necessary and reasonably desirable to the Administrative Agent and the
Required Lenders, into any of the other Loan Documents, all at the election of
the Administrative Agent and the Required Lenders.

 

Section 6.12     Control Agreements. Subject to Section 6.17, the Credit Parties
will enter into, and will maintain in effect, Control Agreements with respect to
each Deposit Account (excluding any Excluded Deposit Account) and lock-box
account maintained by the Credit Parties after the Closing Date. Each such
Control Agreement shall be in form and substance reasonably satisfactory to the
Administrative Agent.

 

Section 6.13     [Reserved]

 

Section 6.14     Senior Debt. The Obligations shall, and the Credit Parties
shall take all necessary action to ensure that the Obligations shall, at all
times rank prior in right of payment, to the extent set forth in the applicable
subordination agreement, to the Subordinated Indebtedness.

 

Section 6.15     Subordination. Each Credit Party shall cause all Indebtedness
and other obligations now or hereafter owed by it to any of its Affiliates
(other than, in the case of management of the Credit Parties, (x) payroll
obligations and (y) other obligations incurred in the ordinary course of
business) to be subordinated in right of payment and security to the
Indebtedness and other Obligations owing to the Administrative Agent and the
Lenders in accordance with a subordination agreement in form and substance
reasonably satisfactory to the Administrative Agent.

 

Section 6.16     Lender Meetings. The Credit Parties will, upon the request of
the Administrative Agent or the Required Lenders, participate in a meeting of
the Administrative Agent and the Lenders once during each fiscal year to be held
at the Borrower’s corporate offices (or at such other location as may be agreed
to by the Borrower and Administrative Agent) at such time as may be agreed to by
the Borrower and the Administrative Agent.

 

 
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Section 6.17     Post Closing Obligations. The Borrower shall, and shall cause
its Subsidiaries to:

 

(a)     deliver to the Administrative Agent, a fully executed control agreement
in form and substance reasonably satisfactory to the Administrative Agent with
respect to the account no. 8193-7932 of the Borrower maintained at Wells Fargo
Advisors within thirty (30) days after the Closing Date (or such later date as
may be agreed by the Administrative Agent);

 

(b)     deliver to the Administrative Agent evidence reasonably satisfactory to
the Administrative Agent that the tax lien filed against Kona Sushi Inc. in the
amount of $10,470.55 by the State of Arizona – Department of Revenue with an ID
number of 9982417 has been released and discharged within sixty (60) days after
the Closing Date (or such later date as may be agreed by the Administrative
Agent);

 

(c)     deliver to the Administrative Agent evidence reasonably satisfactory to
the Administrative Agent that the tax lien filed against Kona Sushi Inc. in the
amount of $4,265.21 by the Comptroller of Public Accounts of the State of Texas
with an ID number of 2014006830 has been released and discharged within sixty
(60) days after the Closing Date (or such later date as may be agreed by the
Administrative Agent); and

 

(d)     deliver to the Administrative Agent file stamped copies of the
Certificate of Incorporation of Kona Grill International, Inc. and Kona Grill
Puerto Rico, Inc. each certified by the Secretary of State of the State of
Arizona in substantially the form of the Certificate of Incorporations delivered
to the Administrative Agent on the Closing Date within ten (10) Business Days
after the Closing Date (or such later date as may be agreed by the
Administrative Agent).

 

ARTICLE VII.

NEGATIVE COVENANTS

 

The Borrower hereby covenants and agrees that on the Closing Date and thereafter
for so long as this Agreement is in effect and until such time as the
Commitments have been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Loan Documents, have been paid in full as follows:

 

Section 7.01     Changes in Business. No Credit Party nor any of its
Subsidiaries will engage in any business other than the businesses engaged in by
the Credit Parties and its Subsidiaries on the Closing Date and any other
business reasonably related thereto.

 

Section 7.02     Consolidation, Merger, Acquisitions, Asset Sales, etc. No
Credit Party will, nor will any Credit Party permit any of its Subsidiaries to,
(i) wind up, liquidate or dissolve its affairs, (ii) enter into any transaction
of merger or consolidation, (iii) make or otherwise effect any Acquisition, (iv)
sell or otherwise dispose of any of its property or assets outside the ordinary
course of business, or otherwise make or otherwise effect any Asset Sale, or (v)
agree to do any of the foregoing at any future time, except that, if no Default
or Event of Default shall have occurred and be continuing or would result
therefrom, each of the following shall be permitted:

 

(a)     the merger, consolidation or amalgamation of (i) any Subsidiary of the
Borrower with or into the Borrower, provided the Borrower is the surviving or
continuing or resulting corporation; (ii) any Subsidiary of the Borrower with or
into any Subsidiary Guarantor, provided that the surviving or continuing or
resulting corporation is a Subsidiary Guarantor; or (iii) any Foreign Subsidiary
of the Borrower with or into any other Foreign Subsidiary of the Borrower;

 

 
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(b)     any Asset Sale by (i) the Borrower to any other Credit Party, (ii) any
Subsidiary of the Borrower to any Credit Party; or (iii) any Foreign Subsidiary
of the Borrower to any other Foreign Subsidiary of the Borrower;

 

(c)     any transaction permitted pursuant to Section 7.05;

 

(d)     in addition to any Asset Sale permitted above, the Borrower or any of
its Subsidiaries may consummate any Asset Sale, provided that (i) the
consideration for each such Asset Sale represents fair value and at least 50% of
such consideration consists of cash; (ii) in the case of any Asset Sale
involving consideration in excess of $250,000, at least five Business Days prior
to the date of completion of such Asset Sale, the Borrower shall have delivered
to the Administrative Agent an officer’s certificate executed by an Authorized
Officer, which certificate shall contain (A) a description of the proposed
transaction, the date such transaction is scheduled to be consummated, the
estimated sale price or other consideration for such transaction, and (B) a
certification that no Default or Event of Default has occurred and is
continuing, or would result from consummation of such transaction; and (iii) the
aggregate amount of all such Asset Sales made pursuant to this subpart during
any fiscal year of the Borrower shall not exceed $1,000,000 in any fiscal year
and $3,000,000 in the aggregate for all such Asset Sales over the life of this
Agreement; and

 

(e)     the Borrower or any Subsidiary may make any Acquisition that is a
Permitted Acquisition, provided that all of the conditions contained in the
definition of the term Permitted Acquisition are satisfied.

 

Section 7.03     Liens. No Credit Party will, nor will any Credit Party permit
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind of such Credit Party or such
Subsidiary whether now owned or hereafter acquired, except that the foregoing
shall not apply to:

 

(a)     any Standard Permitted Lien;

 

(b)     Liens in existence on the Closing Date that are listed in Schedule 7.03
hereto;

 

(c)     Liens (i) that are placed upon fixed or capital assets acquired,
constructed or improved by the Credit Parties or any of their respective
Subsidiaries, provided that (A) such Liens only secure Indebtedness permitted by
Section 7.04(c), (B) such Liens and the Indebtedness secured thereby are
incurred prior to or within 120 days after such acquisition or the completion of
such construction or improvement, (C) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or
capital assets; and (D) such Liens shall not apply to any other property or
assets of the Credit Parties or any of their respective Subsidiaries; or (ii)
arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any such Liens, provided that the principal amount of
such Indebtedness is not increased and such Indebtedness is not secured by any
additional assets; or

 

(d)     any Lien granted to the Administrative Agent securing any of the
Obligations or any other Indebtedness of the Credit Parties under the Loan
Documents or any Indebtedness under any Designated Hedge Agreement.

 

 
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Section 7.04     Indebtedness. No Credit Party will, nor will any Credit Party
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness of the Credit Parties or any of their respective
Subsidiaries, except:

 

(a)     Indebtedness incurred under this Agreement and the other Loan Documents;

 

(b)     the Indebtedness set forth on Schedule 7.04 hereto, and any refinancing,
extension, renewal or refunding of any such Indebtedness not involving an
increase in the principal amount thereof;

 

(c)     (i) Indebtedness consisting of Capitalized Lease Obligations of the
Credit Parties and their Subsidiaries, (ii) Indebtedness secured by a Lien
referred to in Section 7.03(c), and (iii) any refinancing, extension, renewal or
refunding of any such Indebtedness not involving an increase in the principal
amount thereof, provided the aggregate outstanding principal amount (using
Capitalized Lease Obligations in lieu of principal amount, in the case of any
Capital Lease) of Indebtedness permitted by this subpart (c) shall not exceed
$1,500,000 at any time;

 

(d)     any intercompany loans (i) made by the Borrower or any Subsidiary of the
Borrower to any Credit Party; or (ii) made by any Foreign Subsidiary of the
Borrower to any other Foreign Subsidiary of the Borrower, provided that such
intercompany loans shall constitute Subordinated Indebtedness;

 

(e)     Indebtedness of the Borrower and its Subsidiaries under Hedge
Agreements, provided such Hedge Agreements have been entered into in the
ordinary course of business and not for speculative purposes;

 

(f)     Indebtedness constituting Guaranty Obligations permitted by Section
7.05; and

 

(g)     additional unsecured Indebtedness of the Borrower or any of its
Subsidiaries to the extent not permitted by any of the foregoing clauses,
provided that the aggregate outstanding principal amount of all such
Indebtedness does not exceed $1,500,000 at any time.

 

Section 7.05     Investments and Guaranty Obligations. No Credit Party will, nor
will any Credit Party permit any of its Subsidiaries to, directly or indirectly,
(i) make or commit to make any Investment or (ii) be or become obligated under
any Guaranty Obligations, except:

 

(a)     Investments by the Borrower or any of its Subsidiaries in cash and Cash
Equivalents;

 

(b)     any endorsement of a check or other medium of payment for deposit or
collection, or any similar transaction in the normal course of business;

 

(c)     the Borrower and its Subsidiaries may acquire and hold receivables and
similar items owing to them in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;

 

(d)     any Permitted Creditor Investment;

 

(e)     loans and advances to employees for business-related travel expenses,
moving expenses, costs of replacement homes, business machines or supplies,
automobiles and other similar expenses, in each case incurred in the ordinary
course of business, provided the aggregate outstanding amount of all such loans
and advances shall not exceed $100,000 at any time;

 

 
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(f)     Investments existing as of the Closing Date and described on Schedule
7.05 hereto;

 

(g)     any Guaranty Obligations of the Credit Parties or any of their
respective Subsidiaries in favor of the Administrative Agent, each LC Issuer and
the Lenders and any other benefited creditors under any Designated Hedge
Agreements pursuant to the Loan Documents;

 

(h)     Investments of the Borrower and its Subsidiaries in Hedge Agreements
permitted to be entered into pursuant to this Agreement;

 

(i)     Investments (i) of the Borrower or any of its Subsidiaries in any
Subsidiary existing as of the Closing Date, (ii) of the Borrower in any Credit
Party made after the Closing Date or (iii) of any Credit Party in any other
Credit Party made after the Closing Date;

 

(j)     Investments of any Foreign Subsidiary in any other Subsidiary of the
Borrower;

 

(k)     intercompany loans and advances permitted by Section 7.04(d);

 

(l)     the Acquisitions permitted by Section 7.02(e);

 

(m)     any Guaranty Obligation incurred by any Credit Party with respect to
Indebtedness of another Credit Party that is permitted by Section 7.04;

 

(n)     Investments using the proceeds of any Equity Offering so long as (i)
prior to the receipt of any proceeds of any Additional Equity Offering, the
aggregate amount of Investments made pursuant to this clause (n) and the
aggregate amount of Restricted Payments made pursuant to Section 7.06(c) shall
not exceed $40,900,000, (ii) at least three Business Days prior to any
Investment made pursuant to this clause (n), the Borrower shall have delivered
to the Administrative Agent a certificate of an Authorized Officer
demonstrating, in reasonable detail, compliance with the financial covenants
referred to in Section 7.07 on a pro forma basis and (iii) immediately after
giving effect to such Investments, the Credit Parties’ shall (x) be in pro forma
covenant compliance with the financial covenants set forth in Section 7.07 and
(y) have unrestricted cash, together with Revolving Availability, of no less
than $5,000,000; and

 

(o)     other Investments by the Borrower or any Subsidiary of the Borrower in
any other Person made after the Closing Date and not permitted pursuant to the
foregoing subparts, provided that (i) at the time of making any such Investment
no Default or Event of Default shall have occurred and be continuing, or would
result therefrom, and (ii) the maximum cumulative amount of all such Investments
that are so made pursuant to this subpart and outstanding at any time shall not
exceed an aggregate of $500,000, taking into account the repayment of any loans
or advances comprising such Investments.

 

Section 7.06     Restricted Payments. No Credit Party will, nor will any Credit
Party permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except:

 

(a)     the Borrower or any of its Subsidiaries may declare and pay or make
Capital Distributions that are payable solely in additional shares of its common
stock (or warrants, options or other rights to acquire additional shares of its
common stock);

 

(b)     (i) any Subsidiary of the Borrower may declare and pay or make Capital
Distributions to the Borrower or any Subsidiary Guarantor, and (ii) any Foreign
Subsidiary of the Borrower may declare and pay or make Capital Distributions to
any other Foreign Subsidiary, the Borrower or any Subsidiary Guarantor;

 

 
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(c)     the Borrower may declare and pay or make Restricted Payments using the
proceeds of any Equity Offering so long as (i) prior to the receipt of any
proceeds of any Additional Equity Offering, the aggregate amount of Restricted
Payments made pursuant to this clause (c) and the aggregate amount of
Investments made pursuant to Section 7.05(n) shall not exceed $40,900,000, (ii)
at least three Business Days prior to any Restricted Payment made pursuant to
this clause (c), the Borrower shall have delivered to the Administrative Agent a
certificate of an Authorized Officer demonstrating, in reasonable detail,
compliance with the financial covenants referred to in Section 7.07 on a pro
forma basis and (iii) immediately after giving effect to such Restricted
Payment, the Credit Parties’ shall (x) be in pro forma covenant compliance with
the financial covenants set forth in Section 7.07 and (y) have unrestricted
cash, together with Revolving Availability, of no less than $5,000,000; and

 

(d)     the Borrower may declare and pay or make any other Restricted Payments,
provided that (i) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (ii) the Administrative Agent has received
evidence that the Borrower will be in compliance with the financial covenants
set forth in Section 7.07 after giving pro forma effect to each such Restricted
Payment, (iii) immediately after giving effect to such Restricted Payment, the
Credit Parties’ unrestricted cash subject to a Control Agreement, together with
Revolving Availability, shall be greater than $5,000,000, (iv) the Leverage
Ratio after giving pro forma effect to such Restricted Payment shall not exceed
3.50x and (v) the aggregate amount of all Restricted Payments made by the
Borrower during any fiscal year shall not exceed an amount equal to (x)
$5,000,000 plus (y) 50% of Consolidated Net Income of the Borrower and its
Subsidiaries on a consolidated basis after giving effect to any tax
distribution.

 

Section 7.07     Financial Covenants.

 

(a)     Leverage Ratio. The Credit Parties will not permit at any time the
Leverage Ratio of the Credit Parties and their Subsidiaries to be greater than
the maximum ratio specified below during the period opposite such minimum
amount:

 

Period

Maximum Ratio

Closing Date through March 31, 2016

5.00 to 1.00

April 1, 2016 through the Revolving Facility Termination Date

4.75 to 1.00

 

 

(b)     Fixed Charge Coverage Ratio. The Credit Parties will not permit at any
time the Fixed Charge Coverage Ratio of the Credit Parties and their
Subsidiaries to be less than 1.50 to 1.00.

 

Section 7.08     Limitation on Certain Restrictive Agreements. No Credit Party
will, nor will any Credit Party permit any of its Subsidiaries to, directly or
indirectly, enter into, incur or permit to exist or become effective, any
“negative pledge” covenant or other agreement, restriction or arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of any Credit
Party or any of their respective Subsidiaries to create, incur or suffer to
exist any Lien upon any of its property or assets as security for Indebtedness,
or (b) the ability of any such Credit Party or any such Subsidiary to make
Capital Distributions or any other interest or participation in its profits
owned by any Credit Party or any Subsidiary, or pay any Indebtedness owed to any
Credit Party or any Subsidiary, or to make loans or advances to any Credit Party
or any Subsidiary, or transfer any of its property or assets to any Credit Party
or any Subsidiary, except for such restrictions existing under or by reason of
(i) applicable law, (ii) this Agreement and the other Loan Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest, (iv) customary provisions restricting assignment of any
licensing agreement entered into in the ordinary course of business, (v)
customary provisions restricting the transfer or further encumbering of assets
subject to Liens permitted under Section 7.03(c), (vi) customary restrictions
affecting only a Subsidiary of the Borrower under any agreement or instrument
governing any of the Indebtedness of a Credit Party permitted pursuant to
Section 7.04, (vii) restrictions affecting any Foreign Subsidiary of the
Borrower under any agreement or instrument governing any Indebtedness of such
Foreign Subsidiary permitted pursuant to Section 7.04, and customary
restrictions contained in “comfort” letters and guarantees of any such
Indebtedness, (viii) any document relating to Indebtedness secured by a Lien
permitted by Section 7.03, insofar as the provisions thereof limit grants of
junior liens on the assets securing such Indebtedness, and (ix) any Operating
Lease or Capital Lease, insofar as the provisions thereof limit grants of a
security interest in, or other assignments of, the related leasehold interest to
any other Person.

 

 
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Section 7.09     Transactions with Affiliates. No Credit Party will, nor will
any Credit Party permit any of its Subsidiaries to, enter into any transaction
or series of transactions with any Affiliate (other than, in the case of the
Borrower, any Subsidiary, and in the case of a Subsidiary, the Borrower or
another Subsidiary) other than in the ordinary course of business of and
pursuant to the reasonable requirements of such Credit Party’s or such
Subsidiary’s business and upon fair and reasonable terms no less favorable to
such Credit Party or such Subsidiary than would be obtained in a comparable
arm’s-length transaction with a Person other than an Affiliate, except (i) sales
of goods to an Affiliate for use or distribution outside the United States that
in the good faith judgment of the Credit Parties comply with any applicable
legal requirements of the Code, or (ii) agreements and transactions with and
payments to officers, directors and shareholders that are either (A) entered
into in the ordinary course of business and not prohibited by any of the other
provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the other provisions of this Agreement or in violation of
any law, rule or regulation.

 

Section 7.10     Plan Terminations, Minimum Funding, etc. No Credit Party will,
nor will any Credit Party permit any of its Subsidiaries to, and will not permit
any ERISA Affiliate to, (i) terminate any Plan or Plans so as to result in
liability of the Credit Parties, their Subsidiaries or any ERISA Affiliate to
the PBGC in excess of, in the aggregate, the amount that is equal to 5% of the
Borrower’s Consolidated Net Worth as of the date of the then most recent
financial statements furnished to the Lenders pursuant to the provisions of this
Agreement, (ii) permit to exist one or more events or conditions that present a
material risk of the termination by the PBGC of any Plan or Plans with respect
to which the Credit Parties, their Subsidiaries or ERISA Affiliate would, in the
event of such termination, incur liability to the PBGC in excess of such amount
in the aggregate, (iii) fail to comply with the minimum funding standards of
ERISA and the Code with respect to any Plan, or (iv) incur an obligation to
contribute to, or become a contributing sponsor (as such term is defined in
Section 4001 of ERISA) in, any Multi-Employer Plan or Multiple Employer Plan.

 

Section 7.11     Modification of Certain Agreements. Without the prior written
consent of the Required Lenders, no Credit Party will amend, modify, supplement,
waive or otherwise change, or consent or agree to any amendment, modification,
supplement, waiver or other change to, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in:

 

(a)     any Subordinated Debt Document other than as expressly permitted by the
subordination agreement applicable to such Subordinated Debt Document;

 

 
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(b)     any of the terms of any preferred Equity Interests of the Credit Parties
in a manner that is adverse, in any material respect, to the Administrative
Agent or the Lenders; or

 

(c)     any Credit Party’s Organizational Documents in a manner that is adverse,
in any material respect, to the Administrative Agent or the Lenders.

 

Section 7.12     Bank Accounts. No Credit Party shall establish any new Deposit
Accounts (excluding any Excluded Deposit Account) unless the Administrative
Agent and the depository institution at which the account is to be opened enter
into a Control Agreement pursuant to which such depository institution
acknowledges the security interest of the Administrative Agent in such Deposit
Account, agrees to comply with instructions originated by the Administrative
Agent directing disposition of the funds in the Deposit Account without further
consent from the Borrower or such Credit Party, and agrees to subordinate and
limit any security interest the bank may have in the Deposit Account and waive
all rights of set-off with respect thereto (other than for customary fees and
expenses and returned checks ) on terms reasonably satisfactory to the
Administrative Agent.

 

Section 7.13     Anti-Terrorism Laws. No Credit Party nor any of their
respective Subsidiaries shall be subject to or in violation of any law,
regulation, or list of any government agency (including, without limitation, the
U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA
Patriot Act) that prohibits or limits the conduct of business with or the
receiving of funds, goods or services to or for the benefit of certain Persons
specified therein or that prohibits or limits any Lender or LC Issuer from
making any advance or extension of credit to the Borrower or from otherwise
conducting business with the Borrower or any other Credit Party.

 

Section 7.14     Fiscal Year. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, change its Fiscal Year end from December 31.

 

Section 7.15     Lease Incurrence Test. No Credit Party will, nor will any
Credit Party permit any of its Subsidiaries to, contract, create, incur, assume
or suffer to exist any lease or similar arrangement of Real Property if at the
time thereof, after giving pro forma effect to such lease or similar
arrangement, the Leverage Ratio would exceed 0.25x less than the ratio required
by Section 7.07(a) for the current Testing Period.

 

ARTICLE VIII.

EVENTS OF DEFAULT

 

Section 8.01     Events of Default. Any of the following specified events shall
constitute an Event of Default (each an “Event of Default”):

 

(a)     Payments: the Borrower shall (i) default in the payment when due
(whether at maturity, on a date fixed for a scheduled repayment, on a date on
which a required prepayment is to be made, upon acceleration or otherwise) of
any principal of the Loans or any reimbursement obligation in respect of any
Unpaid Drawing; or (ii) default, and such default shall continue for three or
more Business Days, in the payment when due of any interest on the Loans, any
Fees or any other Obligations; or (iii) fail to Cash Collateralize any Letter of
Credit when required to do so hereunder; or

 

(b)     Representations, etc.: any representation, warranty or statement made by
the Borrower or any other Credit Party herein or in any other Loan Document or
in any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect (without
duplication as to any materiality modifiers, qualifications, or limitations
applicable thereto) on the date as of which made, deemed made, or confirmed; or

 

 
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(c)     Certain Covenants: the Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in Sections 6.01,
6.02, 6.05, 6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17 or Article VII
of this Agreement; or

 

(d)     Other Covenants: any Credit Party shall default in the due performance
or observance by it of any term, covenant or agreement contained in this
Agreement or any other Loan Document (other than those referred to in Section
8.01(a) or (b) or (c) above) and such default is not remedied within 30 days
after the earlier of (i) an Authorized Officer of any Credit Party obtaining
knowledge of such default or (ii) the Borrower receiving written notice of such
default from the Administrative Agent or the Required Lenders (any such notice
to be identified as a “notice of default” and to refer specifically to this
paragraph); or

 

(e)     Cross Default Under Other Agreements; Designated Hedge Agreements: any
Credit Party or any of its Subsidiaries shall (i) default in any payment with
respect to any Material Indebtedness (other than the Obligations), and such
default shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Material Indebtedness; or (ii)
default in the observance or performance of any agreement or condition relating
to any Material Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto (and all grace periods applicable to
such observance, performance or condition shall have expired), or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Material
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Material Indebtedness to become due prior to its stated maturity;
or any such Material Indebtedness of any Credit Party or any of its Subsidiaries
shall be declared to be due and payable, or shall be required to be prepaid
(other than by a regularly scheduled required prepayment or redemption, prior to
the stated maturity thereof); or (iii) without limitation of the foregoing
clauses, default in any payment obligation under a Designated Hedge Agreement,
and such default shall continue after the applicable grace period, if any,
specified in such Designated Hedge Agreement or any other agreement or
instrument relating thereto; or

 

(f)     Invalidity of Loan Documents: any material provision of any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or under such Loan Document or
satisfaction in full of all the Obligations, ceases to be in full force and
effect; or any Credit Party or any other Person contests in any manner the
validity or enforceability of any provision of any Loan Document; or any Credit
Party denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document or the
Administrative Agent fails to have; or

 

(g)     Invalidity of Liens: any security interest and Lien against any material
Collateral purported to be created by any Security Document shall cease to be in
full force and effect (other than in accordance with the terms hereof and
thereof), or shall cease to give the Administrative Agent, for the benefit of
the Secured Creditors, the Liens, rights, powers and privileges purported to be
created and granted under such Security Documents (including a perfected first
priority security interest in and Lien on, all of the Collateral thereunder
(except as otherwise expressly provided in such Security Document)) or shall be
asserted by any Credit Party not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement or such Security
Document) security interest in or Lien on any Collateral covered thereby;

 

 
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(h)     Judgments: (i) one or more judgments, orders or decrees (or any
settlement of any claim that, if breached, could result in a judgment order or
decree) shall be entered against any Credit Party and/or any of its Subsidiaries
involving a liability (other than a liability covered by insurance, as to which
the carrier has adequate claims paying ability and has been notified of the
potential claim and does not dispute coverage) of $1,000,000 or more in the
aggregate for all such judgments, orders, decrees and settlements for the Credit
Parties and their Subsidiaries, and any such judgments or orders or decrees or
settlements shall not have been vacated, discharged or stayed or bonded pending
appeal within 20 days (or such longer period, not in excess of 60 days, during
which enforcement thereof, and the filing of any judgment lien, is effectively
stayed or prohibited) from the entry thereof; or (ii) one or more judgments,
orders, decrees or settlements shall be entered against any Credit Party and/or
any of its Subsidiaries involving a required divestiture of any material
properties, assets or business reasonably estimated to have a fair value in
excess of $1,000,000, and any such judgments, orders or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 20 days (or
such longer period, not in excess of 60 days, during which enforcement thereof,
and the filing of any judgment lien, is effectively stayed or prohibited) from
the entry thereof; or

 

(i)     Insolvency Event: any Insolvency Event shall occur with respect to any
Credit Party or any of its Subsidiaries; or

 

(j)     ERISA: any ERISA Event shall have occurred and either (i) such event or
events could reasonably be expected to have a Material Adverse Effect or (ii)
there shall result from any such event or events the imposition of a Lien
against any material Collateral; or

 

(k)     Change of Control: if there occurs a Change of Control; or

 

(l)     [Reserved]

 

(m)     Environmental: the Borrower and its Subsidiaries shall have any
Environmental Liabilities and Costs (other than Environmental Liabilities and
Costs covered by insurance, as to which the carrier has adequate claims paying
ability and has not effectively disclaimed coverage), the payment of which is
reasonably probable and which could reasonably be expected to have a Material
Adverse Effect (after taking into consideration available claims or rights of
recovery that the Borrower and its Subsidiaries may have against any
third-party, to the extent reasonably expected to be realized); or

 

(n)     Subordinated Affiliate Obligations: any Affiliate of any Credit Party
holding obligations of any Credit Party that are subordinated to the Obligations
shall fail to perform or comply with any of the subordination provisions of any
subordination agreement or other subordination document evidencing or governing
such obligations; or

 

(o)     Subordinated Indebtedness: (i)  any of the Obligations for any reason
shall cease to be “Senior Indebtedness” or “Designated Senior Indebtedness” (or
any comparable terms) under, and as defined in, any Subordinated Debt Document,
(ii) any Indebtedness other than the Obligations shall constitute “Designated
Senior Indebtedness” (or any comparable term) under, and as defined in, any
Subordinated Debt Document, (iii) any holder of Subordinated Indebtedness that
is an Affiliate of any Credit Party shall fail to perform or comply with any of
the subordination provisions of the Subordinated Debt Document evidencing or
governing such Subordinated Indebtedness, or (iv) the subordination provisions
of the documents evidencing or governing any Subordinated Indebtedness shall, in
whole or in part, terminate, cease to be effective or cease to be legally valid,
binding and enforceable against any holder of the applicable Subordinated
Indebtedness.

 

 
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Section 8.02     Remedies. Upon the occurrence of any Event of Default, and at
any time thereafter, if any Event of Default shall then be continuing, the
Administrative Agent (i) may, in its discretion, or (ii) shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against the Borrower or
any other Credit Party in any manner permitted under applicable law:

 

(a)     declare the Commitments terminated, whereupon the Commitment of each
Lender shall forthwith terminate immediately without any other notice of any
kind;

 

(b)     declare the principal of and any accrued interest in respect of all
Loans, all Unpaid Drawings and all other Obligations (other than any Obligations
under any Designated Hedge Agreement) owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower;

 

(c)     (i) terminate any Letter of Credit that may be terminated in accordance
with its terms and/or (ii) require the Borrower to Cash Collateralize all or any
portion of the LC Outstandings; or

 

(d)     exercise any other right or remedy available under any of the Loan
Documents or applicable law;

 

provided that, if an Event of Default specified in Section 8.01(i) shall occur,
the result that would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (a), (b) and/or (c)(ii) above shall
occur automatically without the giving of any such notice. If an Event of
Default exists, then the current or past failure or refusal of any one or more
of the Lenders to provide a Loan or any LC Issuance shall not prevent the
Administrative Agent or any Lender from taking the actions provided in this
Section 8.02, including, without limitation, the exercise of any rights pursuant
to the Security Agreement.

 

Section 8.03     Application of Certain Payments and Proceeds. All payments and
other amounts received by the Administrative Agent or any Lender through the
exercise of remedies hereunder or under the other Loan Documents shall, unless
otherwise required by the terms of the other Loan Documents or by applicable
law, be applied as follows:

 

(i)     first, to the payment of that portion of the Obligations constituting
fees, indemnities and expenses and other amounts (including attorneys’ fees and
amounts due under Article III) payable to the Administrative Agent in its
capacity as such;

 

(ii)     second, to the payment of that portion of the Obligations constituting
fees, indemnities and expenses (including attorneys’ fees and amounts due under
Article III) payable to each Lender or each LC Issuer, ratably among them in
proportion to the aggregate of all such amounts;

 

(iii)     third, to the payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and Unpaid Drawings with respect to
Letters of Credit, ratably among the Lenders in proportion to the aggregate of
all such amounts;

 

(iv)     fourth, pro rata to the payment of (A) that portion of the Obligations
constituting unpaid principal of the Loans and Unpaid Drawings, ratably among
the Lenders and each LC Issuer in proportion to the aggregate of all such
amounts, and (B) the amounts due to Designated Hedge Creditors under Designated
Hedge Agreements subject to confirmation by the Administrative Agent that any
calculations of termination or other payment obligations are being made in
accordance with normal industry practice;

 

 
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(v)     fifth, to the Administrative Agent for the benefit of each LC Issuer to
Cash Collateralize the Stated Amount of outstanding Letters of Credit;

 

(vi)     sixth, to the payment of all other Obligations of the Credit Parties
owing under or in respect of the Loan Documents that are then due and payable to
the Administrative Agent, each LC Issuer, the Swing Line Lender, the Lenders and
the Designated Hedge Creditors, ratably based upon the respective aggregate
amounts of all such Obligations owing to them on such date; and

 

(vii)     finally, any remaining surplus after all of the Obligations have been
paid in full, to the Borrower or to whomsoever shall be lawfully entitled
thereto.

 

ARTICLE IX.

THE ADMINISTRATIVE AGENT

 

Section 9.01     Appointment.

 

(a)     Each Lender hereby irrevocably designates and appoints KeyBank National
Association to act as specified herein and in the other Loan Documents, and each
such Lender hereby irrevocably authorizes KeyBank National Association as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this Article. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Loan Documents, nor any fiduciary relationship with any Lender or LC Issuer, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this Article IX are solely for the
benefit of the Administrative Agent and the Lenders, and no Credit Party shall
have any rights as a third-party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Administrative
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation or relationship of agency or trust with
or for the Credit Parties or any of their respective Subsidiaries.

 

(b)     Each Lender hereby further irrevocably authorizes the Administrative
Agent on behalf of and for the benefit of the Lenders, to be the agent for and
representative of the Lenders with respect to the Guaranty, the Security
Agreement, the Collateral and any other Loan Document. Subject to Section 11.12,
without further written consent or authorization from Lenders, the
Administrative Agent may execute any documents or instruments necessary to (i)
release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted hereby or to which the Required
Lenders (or such other Lenders as may be required to give such consent under
Section 11.12) have otherwise consented, or (ii) release any Guarantor from the
Guaranty with respect to which the Required Lenders (or such other Lenders as
may be required to give such consent under Section 11.12) have otherwise
consented.

 

 
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(c)     Anything contained in any of the Loan Documents to the contrary
notwithstanding, the Borrower, the Administrative Agent and each Lender hereby
agree that (i) no Lender shall have any right individually to realize upon any
of the Collateral or to enforce the Guaranty, it being understood and agreed
that all powers, rights and remedies hereunder may be exercised solely by the
Administrative Agent, on behalf of the Lenders in accordance with the terms
hereof and all powers, rights and remedies under the Loan Documents may be
exercised solely by the Administrative Agent, and (ii) in the event of a
foreclosure by the Administrative Agent on any of the Collateral pursuant to a
public or private sale, the Administrative Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and the
Administrative Agent, as agent for and representative of the Secured Creditors
(but not any Lender or Lenders in its or their respective individual capacities
unless the Required Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any Collateral payable by the Administrative Agent at such sale.

 

Section 9.02     Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, sub-agents or attorneys-in-fact, and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents,
sub-agents or attorneys-in-fact selected by it with reasonable care except to
the extent otherwise required by Section 9.03. All of the rights, benefits and
privileges (including the exculpatory and indemnification provisions) of Section
9.03 shall apply to any such sub-agent and to the Affiliates of any such
sub-agent, and shall apply to their respective activities as sub-agent as if
such sub-agent and Affiliates were named herein. Notwithstanding anything herein
to the contrary, with respect to each sub-agent appointed by the Administrative
Agent, (i) such sub-agent shall be a third party beneficiary under this
Agreement with respect to all such rights, benefits and privileges (including
exculpatory and rights to indemnification) and shall have all of the rights,
benefits and privileges of a third party beneficiary, including an independent
right of action to enforce such rights, benefits and privileges (including
exculpatory rights and rights to indemnification) directly, without the consent
or joinder of any other Person, against any or all of the Credit Parties and the
Lenders, (ii) such rights, benefits and privileges (including exculpatory rights
and rights to indemnification) shall not be modified or amended without the
consent of such sub-agent, and (iii) such sub-agent shall only have obligations
to the Administrative Agent and not to any Credit Party, any Lender or any other
Person and no Credit Party, Lender or any other Person shall have the rights,
directly or indirectly, as a third party beneficiary or otherwise, against such
sub-agent.

 

Section 9.03     Exculpatory Provisions. Neither the Administrative Agent nor
any of its Related Parties shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except for its or such Related Parties’
own gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Credit Parties or any of their
respective Subsidiaries or any of their respective officers contained in this
Agreement, any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for any failure of any Credit Party or any of its officers to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Credit Parties or any of their respective Subsidiaries. The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Loan Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Credit Parties or any of their respective Subsidiaries to the
Administrative Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.

 

 
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Section 9.04     Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, e-mail or other electronic transmission, facsimile
transmission, telex or teletype message, statement, order or other document or
conversation believed by it, in good faith, to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders or all of the Lenders, as
applicable, as to any matter that, pursuant to Section 11.12, can only be
effectuated with the consent of all Required Lenders, or all applicable Lenders,
as the case may be), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

Section 9.05     Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” If the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

 

Section 9.06     Non-Reliance. Each Lender expressly acknowledges that neither
the Administrative Agent nor any of its Related Parties has made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including, without limitation, any review of the affairs of
the Credit Parties or their respective Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of, and investigation into, the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties and their Subsidiaries and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Credit Parties and their
Subsidiaries. The Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, assets, property, financial and other conditions,
prospects or creditworthiness of the Credit Parties and their Subsidiaries that
may come into the possession of the Administrative Agent or any of its Related
Parties.

 

 
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Section 9.07     No Reliance on Administrative Agent’s Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, participants or assignees, may rely on the Administrative
Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s
customer identification program, or other obligations required or imposed under
or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with the
Credit Parties or their respective Subsidiaries, any of their respective
Affiliates or agents, the Loan Documents or the transactions hereunder: (a) any
identity verification procedures, (b) any record keeping, (c) any comparisons
with government lists, (d) any customer notices or (e) any other procedures
required under the CIP Regulations or such other laws.

 

Section 9.08     USA Patriot Act. Each Lender or assignee or participant of a
Lender that is not organized under the laws of the United States of America or a
state thereof (and is not excepted from the certification requirement contained
in Section 313 of the USA Patriot Act and the applicable regulations because it
is both (a) an affiliate of a depository institution or foreign bank that
maintains a physical presence in the United States or foreign country, and
(b) subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to the Administrative
Agent the certification, or, if applicable, recertification, certifying that
such Lender is not a “shell” and certifying to other matters as required by
Section 313 of the USA Patriot Act and the applicable regulations: (i) within 10
days after the Closing Date, and (ii) at such other times as are required under
the USA Patriot Act.

 

Section 9.09     Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Related Parties, ratably according to their pro
rata share of the Aggregate Credit Facility Exposure (excluding Swing Loans),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent or such Related Parties
in any way relating to or arising out of this Agreement or any other Loan
Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent or such Related Parties under or in connection with any
of the foregoing, but only to the extent that any of the foregoing is not paid
by the Borrower; provided, however, that no Lender shall be liable to the
Administrative Agent or any of its Related Parties for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the Administrative Agent’s or such Related Parties’ gross negligence
or willful misconduct as determined by a final non-appealable judgment of a
court of competent jurisdiction. If any indemnity furnished to the
Administrative Agent or any such Related Parties for any purpose shall, in the
opinion of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may cease, or not commence, to do the acts indemnified
against. The agreements in this Section shall survive the payment of all
Obligations.

 

 
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Section 9.10     The Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Credit Parties, their
respective Subsidiaries and their Affiliates as though not acting as
Administrative Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, the Administrative Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.

 

Section 9.11     Successor Administrative Agent. The Administrative Agent may
resign at any time upon not less than 30 days notice to the Lenders, each LC
Issuer and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and each LC Issuer,
appoint a successor Administrative Agent; provided, however, that if the
Administrative Agent shall notify the Borrower and the Lenders that no such
successor is willing to accept such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (i) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
any LC Issuer under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (ii) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and LC Issuer directly, until such
time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this paragraph. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this paragraph). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.02 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

Section 9.12     Other Agents. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager, Lead Arranger,
Arranger or any other corresponding title, other than “Administrative Agent,”
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Loan Document except those applicable to all Lenders
as such. Each Lender acknowledges that it has not relied, and will not rely, on
any Lender so identified in deciding to enter into this Agreement or in taking
or not taking any action hereunder.

 

Section 9.13     Collateral Matters. The Administrative Agent may from time to
time make such disbursements and advances (“Agent Advances”) that the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve, protect, prepare for sale or lease or dispose of the Collateral or any
portion thereof, to enhance the likelihood or maximize the amount of repayment
by the Borrower of the Loans, Letters of Credit, and other Obligations or to pay
any other amount chargeable to the Borrower or the other Credit Parties pursuant
to the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Section 11.01. The Agent Advances shall constitute
Obligations hereunder, shall be repayable on demand, shall be secured by the
Collateral and shall bear interest at a rate per annum equal to the rate then
applicable to Revolving Loans that are Base Rate Loans. The Administrative Agent
shall notify each Lender and the Borrower in writing of each such Agent Advance,
which notice shall include a description of the purpose of such Agent Advance.
Without limitation to its obligations pursuant to Section 9.09, each Lender
agrees that it shall make available to the Administrative Agent, upon the
Administrative Agent’s demand, in Dollars in immediately available funds, the
amount equal to such Lender’s pro rata share of each such Agent Advance. If such
funds are not made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such funds on demand from such
Lender, together with interest thereon for each day from the date such payment
was due until the date such amount is paid to the Administrative Agent, at the
Federal Funds Effective Rate for three Business Days and thereafter at the Base
Rate.

 

 
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Section 9.14     Agency for Perfection. The Administrative Agent and each Lender
hereby appoints the Administrative Agent and each other Lender as agent and
bailee for the purpose of perfecting the security interests in and liens upon
the Collateral in assets that, in accordance with Article 9 of the UCC, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and the Administrative Agent and each Lender hereby
acknowledges that it holds possession of or otherwise controls any such
Collateral for the benefit of the Administrative Agent and the Lenders as
secured party. Should any Lender obtain possession or control of any such
Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly upon the Administrative Agent’s request therefor shall deliver such
Collateral to the Administrative Agent or in accordance with the Administrative
Agent’s instructions. Without limiting the generality of the foregoing, each
Lender hereby appoints the Administrative Agent for the purpose of perfecting
the Administrative Agent’s Liens on the Deposit Accounts or on any other deposit
accounts or securities accounts of any Credit Party. Each Credit Party by its
execution and delivery of this Agreement hereby consents to the foregoing.

 

Section 9.15     Proof of Claim. The Lenders and the Borrower hereby agree that
after the occurrence of an Event of Default pursuant to Section 8.01(i), in case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of the Guarantors, the Administrative
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower or
any of the Guarantors) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(a)     to file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Loans and any other Obligations that are
owing and unpaid and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
agents and counsel and all other amounts due the Lenders and the Administrative
Agent hereunder) allowed in such judicial proceeding; and

 

(b)     to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

 

 
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent and other agents hereunder. Nothing herein contained shall
be deemed to authorize the Administrative Agent to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lenders
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding. Further, nothing contained in this Section 9.15
shall affect or preclude the ability of any Lender to (i) file and prove such a
claim in the event that the Administrative Agent has not acted within ten (10)
days prior to any applicable bar date and (ii) require an amendment of the proof
of claim to accurately reflect such Lender’s outstanding Obligations.

 

Section 9.16     Posting of Approved Electronic Communications.

 

(a)     Delivery of Communications. Each Credit Party hereby agrees, unless
directed otherwise by the Administrative Agent or unless the electronic mail
address referred to below has not been provided by the Administrative Agent to
such Credit Party that it will, or will cause its Subsidiaries to, provide to
the Administrative Agent all information, documents and other materials that it
is obligated to furnish to the Administrative Agent or to the Lenders pursuant
to the Loan Documents, including all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but
excluding any such communication that (i) is or relates to a Notice of Borrowing
or a Notice of Continuation or Conversion, (ii) relates to the payment of any
principal or other amount due under this Agreement prior to the scheduled date
therefor, (iii) provides notice of any Default under this Agreement or any other
Loan Document or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any Loan or other
extension of credit hereunder (all such non-excluded communications being
referred to herein collectively as “Communications”), by transmitting the
Communications in an electronic/soft medium that is properly identified in a
format acceptable to the Administrative Agent to an electronic mail address as
directed by the Administrative Agent. In addition, each Credit Party agrees, and
agrees to cause its Subsidiaries, to continue to provide the Communications to
the Administrative Agent or the Lenders, as the case may be, in the manner
specified in the Loan Documents but only to the extent requested by the
Administrative Agent.

 

(b)     Platform. Each Credit Party further agrees that Administrative Agent may
make the Communications available to the Lenders by posting the Communications
on SyndTrak or a substantially similar electronic transmission system (the
“Platform”).

 

(c)     No Warranties as to Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.” THE INDEMNITEES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE INDEMNITEES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE INDEMNITEES HAVE ANY
LIABILITY TO ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR
NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE ADMINISTRATIVE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY
INDEMNITEES IS FOUND IN A FINAL, NON-APPEALABLE ORDER BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH INDEMNITEE’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.

 

 
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(d)     Delivery Via Platform. The Administrative Agent agrees that the receipt
of the Communications by the Administrative Agent at its electronic mail address
set forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents. Each Lender agrees that
receipt of notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of the Loan
Documents. Each Lender agrees to notify the Administrative Agent in writing
(including by electronic communication) from time to time of such Lender’s
electronic mail address to which the foregoing notice may be sent by electronic
transmission and that the foregoing notice may be sent to such electronic mail
address.

 

(e)     No Prejudice to Notice Rights. Nothing herein shall prejudice the right
of the Administrative Agent or any Lender to give any notice or other
communication pursuant to any Loan Document in any other manner specified in
such Loan Document.

 

Section 9.17     Credit Bidding. Each Lender hereby irrevocably authorizes the
Administrative Agent, based upon the instruction of the Required Lenders, to
credit bid and purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any sale thereof conducted
under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620
thereof, at any sale thereof conducted under the provisions of the Bankruptcy
Code (including Section 363 of the Bankruptcy Code) or any applicable
bankruptcy, insolvency, reorganization or other similar law (whether domestic or
foreign) now or hereafter in effect, or at any sale or foreclosure conducted by
the Administrative Agent (whether by judicial action or otherwise) in accordance
with applicable law. 

 

ARTICLE X.

GUARANTY

 

Section 10.01     Guaranty by the Borrower. The Borrower hereby irrevocably and
unconditionally guarantees, for the benefit of the Benefited Creditors, all of
the following (collectively, the “Borrower Guaranteed Obligations”): (a) all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit
issued for the benefit of any LC Obligor (other than the Borrower) under this
Agreement, and (b) all amounts, indemnities and reimbursement obligations,
direct or indirect, contingent or absolute, of every type or description, and at
any time existing owing by any Subsidiary of the Borrower under any Designated
Hedge Agreement or any other document or agreement executed and delivered in
connection therewith to any Designated Hedge Creditor, in each case, other than
any Excluded Swap Obligations, and, in all cases under subparts (a) or (b)
above, whether now existing, or hereafter incurred or arising, including any
such interest or other amounts incurred or arising during the pendency of any
bankruptcy, insolvency, reorganization, receivership or similar proceeding,
regardless of whether allowed or allowable in such proceeding or subject to an
automatic stay under Section 362(a) of the Bankruptcy Code). Such guaranty is an
absolute, unconditional, present and continuing guaranty of payment and not of
collectibility and is in no way conditioned or contingent upon any attempt to
collect from any Subsidiary or Affiliate of the Borrower, or any other action,
occurrence or circumstance whatsoever. Upon failure by any Credit Party to pay
punctually any of the Borrower Guaranteed Obligations, the Borrower shall
forthwith on demand by the Administrative Agent pay the amount not so paid at
the place and in the currency and otherwise in the manner specified in this
Agreement or any other applicable agreement or instrument.

 

 
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Section 10.02     Additional Undertaking. As a separate, additional and
continuing obligation, the Borrower unconditionally and irrevocably undertakes
and agrees, for the benefit of the Benefited Creditors that, should any Borrower
Guaranteed Obligations not be recoverable from the Borrower under Section 10.01
for any reason whatsoever (including, without limitation, by reason of any
provision of any Loan Document or any other agreement or instrument executed in
connection therewith being or becoming void, unenforceable, or otherwise invalid
under any applicable law) then, notwithstanding any notice or knowledge thereof
by any Lender, the Administrative Agent, any of their respective Affiliates, or
any other person, at any time, the Borrower as sole, original and independent
obligor, upon demand by the Administrative Agent, will make payment to the
Administrative Agent, for the account of the Benefited Creditors, of all such
obligations not so recoverable by way of full indemnity, in such currency and
otherwise in such manner as is provided in the Loan Documents or any other
applicable agreement or instrument.

 

Section 10.03     Guaranty Unconditional. The obligations of the Borrower under
this Article X shall be unconditional and absolute and, without limiting the
generality of the foregoing shall not be released, discharged or otherwise
affected by the occurrence, one or more times, of any of the following:

 

(a)     any extension, renewal, settlement, compromise, waiver or release in
respect to the Borrower Guaranteed Obligations under any agreement or
instrument, by operation of law or otherwise;

 

(b)     any modification or amendment of or supplement to this Agreement, any
Note, any other Loan Document, or any agreement or instrument evidencing or
relating to any Borrower Guaranteed Obligation;

 

(c)     any release, non-perfection or invalidity of any direct or indirect
security for the Borrower Guaranteed Obligations under any agreement or
instrument evidencing or relating to any Borrower Guaranteed Obligations;

 

(d)     any change in the corporate existence, structure or ownership of any
Credit Party or other Subsidiary or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting any Credit Party or other Subsidiary or
its assets or any resulting release or discharge of any obligation of any Credit
Party or other Subsidiary contained in any agreement or instrument evidencing or
relating to any of the Borrower Guaranteed Obligations;

 

(e)     the existence of any claim, set-off or other rights that the Borrower
may have at any time against any other Credit Party, the Administrative Agent,
any Lender, any Affiliate of any Lender or any other Person, whether in
connection herewith or any unrelated transactions;

 

(f)     any invalidity or unenforceability relating to or against any other
Credit Party for any reason of any agreement or instrument evidencing or
relating to any of the Borrower Guaranteed Obligations, or any provision of
applicable law or regulation purporting to prohibit the payment by any Credit
Party of any of the Borrower Guaranteed Obligations; or

 

(g)     any other act or omission of any kind by any other Credit Party, the
Administrative Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this Article, constitute a
legal or equitable discharge of the Borrower’s obligations under this Section
other than the irrevocable payment in full of all Borrower Guaranteed
Obligations.

 

 
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Section 10.04     Borrower Obligations to Remain in Effect; Restoration. The
Borrower’s obligations under this Article X shall remain in full force and
effect until the Commitments shall have terminated, and the principal of and
interest on the Notes and other Borrower Guaranteed Obligations, and all other
amounts payable by the Borrower, any other Credit Party or other Subsidiary,
under the Loan Documents or any other agreement or instrument evidencing or
relating to any of the Borrower Guaranteed Obligations, shall have been paid in
full. If at any time any payment of any of the Borrower Guaranteed Obligations
is rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of such Credit Party, the Borrower’s obligations
under this Article with respect to such payment shall be reinstated at such time
as though such payment had been due but not made at such time.

 

Section 10.05     Waiver of Acceptance, etc. The Borrower irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
person against any other Credit Party or any other Person, or against any
collateral or guaranty of any other Person.

 

Section 10.06     Subrogation. Until the indefeasible payment in full of all of
the Obligations and the termination of the Commitments hereunder, the Borrower
shall have no rights, by operation of law or otherwise, upon making any payment
under this Section 10.06 to be subrogated to the rights of the payee against any
other Credit Party with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any such Credit Party in respect thereof.

 

Section 10.07     Effect of Stay. In the event that acceleration of the time for
payment of any amount payable by any Credit Party under any of the Borrower
Guaranteed Obligations is stayed upon insolvency, bankruptcy or reorganization
of such Credit Party, all such amounts otherwise subject to acceleration under
the terms of any applicable agreement or instrument evidencing or relating to
any of the Borrower Guaranteed Obligations shall nonetheless be payable by the
Borrower under this Article forthwith on demand by the Administrative Agent.

 

Section 10.08     Keepwell. The Borrower, to the extent it is a Qualified ECP
Guarantor, hereby absolutely, unconditionally and irrevocably undertakes to
provide such funds or other support as may be needed from time to time by the
Borrower to honor all of its obligations under this Article X in respect of
Designated Hedge Agreements; provided, however, that the Borrower shall only be
liable under this Section 10.08 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this Section
10.08, or otherwise under this Article X, voidable under applicable law relating
to fraudulent conveyance or fraudulent transfer, and not for any greater amount.
The obligations of the Borrower under this Section 10.08 shall remain in full
force and effect until payment in full of all of the Obligations and the
termination of the Commitments hereunder. The Borrower intends that this Section
10.08 constitute, and this Section 10.08 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Credit
Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

 

 
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ARTICLE XI.

MISCELLANEOUS

 

Section 11.01     Payment of Expenses etc. Each Credit Party agrees to pay (or
reimburse the Administrative Agent, the Lenders or their Affiliates, as the case
may be) all of the following: (i) whether or not the transactions contemplated
hereby are consummated, for all reasonable out-of-pocket costs and expenses of
the Administrative Agent in connection with the negotiation, preparation,
syndication, administration and execution and delivery of the Loan Documents and
the documents and instruments referred to therein and the syndication of the
Commitments; (ii) all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with any amendment, waiver or consent
relating to any of the Loan Documents; (iii) all reasonable out-of-pocket costs
and expenses of the Administrative Agent, the Lenders and their Affiliates in
connection with the enforcement of any of the Loan Documents or the other
documents and instruments referred to therein, including, without limitation,
 the reasonable fees and disbursements of any individual counsel to the
Administrative Agent and any Lender (including, without limitation, allocated
costs of internal counsel); (iv) any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save the Administrative
Agent and each of the Lenders harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to any such indemnified Person) to pay such taxes; (v) all
the actual costs and expenses of creating and perfecting Liens in favor of the
Administrative Agent, for the benefit of Secured Creditors, including filing and
recording fees, expenses and amounts owed pursuant to Article III, search fees,
title insurance premiums and fees, expenses and disbursements of counsel to the
Administrative Agent and of counsel providing any opinions that the
Administrative Agent or the Required Lenders may reasonably request in respect
of the Collateral or the Liens created pursuant to the Security Documents; (vi)
all the actual costs and fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers whether internal or external; and (vii)
all the actual costs and expenses (including the fees, expenses and
disbursements of counsel and of any appraisers, consultants, advisors and agents
employed or retained by the Administrative Agent and its counsel) in connection
with the custody or preservation of any of the Collateral.

 

Section 11.02     Indemnification. Each Credit Party agrees to indemnify the
Administrative Agent, each LC Issuer, each Lender (including, for the avoidance
of doubt, any Lender that has assigned its interests hereunder), and their
respective Related Parties (collectively, the “Indemnitees”) from and hold each
of them harmless against any and all losses, liabilities, claims, damages or
expenses reasonably incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of (i) any investigation, litigation or
other proceeding (whether or not any Indemnitee is a party thereto) related to
the entering into and/or performance of any Loan Document or the use of the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated in any Loan Document, other than any such investigation, litigation
or proceeding arising out of transactions solely between any of the Lenders or
the Administrative Agent, transactions solely involving the assignment by a
Lender of all or a portion of its Loans and Commitments, or the granting of
participations therein, as provided in this Agreement, or arising solely out of
any examination of a Lender by any regulatory or other Governmental Authority
having jurisdiction over it that is not in any way related to the entering into
and/or performance of any Loan Document, or (ii) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned, leased or at any time operated
by the Credit Parties or any of their respective Subsidiaries, the release,
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location, whether or not owned or operated by the Credit Parties or any
of their respective Subsidiaries, if the Borrower or any such Subsidiary could
have or is alleged to have any responsibility in respect thereof, the
non-compliance of any such Real Property with foreign, federal, state and local
laws, regulations and ordinances (including applicable permits thereunder)
applicable thereto, or any Environmental Claim asserted against any Credit Party
or any of their respective Subsidiaries, in respect of any such Real Property,
including, in the case of each of (i) and (ii) above, without limitation, the
reasonable documented fees and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses of any Indemnitee to the
extent incurred by reason of the gross negligence or willful misconduct of such
Indemnitee, in each case, as determined by a final non-appealable judgment of a
court of competent jurisdiction). To the extent that the undertaking to
indemnify, pay or hold harmless any Person set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy, each
Credit Party shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities that is permissible under applicable law.

 

 
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Section 11.03     Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender and each LC Issuer is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Lender or such LC Issuer (including, without limitation, by branches,
agencies and Affiliates of such Lender or LC Issuer wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of any Credit Party to such Lender or LC Issuer
under this Agreement or under any of the other Loan Documents, including,
without limitation, all claims of any nature or description arising out of or
connected with this Agreement or any other Loan Document, irrespective of
whether or not such Lender or LC Issuer shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured; provided that in the event that any Defaulting Lender
shall exercise any such right of setoff, (a) all amounts so set off shall be
paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.14 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the LC Issuers, and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
Each Lender and LC Issuer agrees to promptly notify the Borrower after any such
set off and application, provided, however, that the failure to give such notice
shall not affect the validity of such set off and application.

 

Section 11.04     Equalization.

 

(a)     Equalization. If at any time any Lender receives any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents, or otherwise) that is
applicable to the payment of the principal of, or interest on, the Loans (other
than Swing Loans), LC Participations, Swing Loan Participations or Fees (other
than Fees that are intended to be paid solely to the Administrative Agent or an
LC Issuer and amounts payable to a Lender under Article III), of a sum that with
respect to the related sum or sums received by other Lenders is in a greater
proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount. The
provisions of this Section 11.04(a) shall not be construed to apply to (i) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement (including the application of funds arising from the
existence of a Defaulting Lender and any payment made by the Borrower in
connection with any increase in the Total Credit Facility Amount in accordance
with Section 2.16 or any extension of the Revolving Facility Termination Date in
accordance with Section 2.17), or (ii) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Outstandings to any assignee or participant, other
than to the Borrower or any Subsidiary thereof (as to which the provisions of
this paragraph shall apply).

 

 
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(b)     Recovery of Amounts. If any amount paid to any Lender pursuant to
subpart (a) above is recovered in whole or in part from such Lender, such
original purchase shall be rescinded, and the purchase price restored ratably to
the extent of the recovery.

 

(c)     Consent of Borrower. The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

 

Section 11.05     Notices.

 

(a)     Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subpart
(c) below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile as follows:

 

(i)     if to the Borrower or any other Credit Party, to any of them at Kona
Grill, Inc., 7150 East Camelback Road, #333, Scottsdale, Arizona 85251,
Attention: Berke Bakay (Facsimile No. (480) 991-6811);

 

(ii)     if to the Administrative Agent, to it at the Notice Office; and

 

(iii)     if to a Lender, to it at its address (or facsimile number) set forth
next to its name on the signature pages hereto or, in the case of any Lender
that becomes a party to this Agreement by way of assignment under Section 11.06
of this Agreement, to it at the address set forth in the Assignment Agreement to
which it is a party;

 

(b)     Receipt of Notices. Notices and communications sent by hand or overnight
courier service, or mailed by certified or registered mail, shall be deemed to
have been given when received; notices sent by facsimile shall be deemed to have
been given when sent and receipt has been confirmed by telephone. Notices
delivered through electronic communications to the extent provided in subpart
(c) below shall be effective as provided in said subpart (c).

 

(c)     Electronic Communications. Notices and other communications to the
Administrative Agent, an LC Issuer or any Lender hereunder and required to be
delivered pursuant to Section 6.01 may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet web sites) pursuant to
procedures approved by the Administrative Agent. The Administrative Agent and
the Borrower may, in their discretion, agree in a separate writing to accept
notices and other communications to them hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet web site shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the web site address therefor.

 

 
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(d)     Change of Address, Etc. Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to
each of the other parties hereto in accordance with Section 11.05(a).

 

Section 11.06     Successors and Assigns.

 

(a)     Successors and Assigns Generally. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns; provided, however, that the Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of all the Lenders, provided, further, that any assignment or
participation by a Lender of any of its rights and obligations hereunder shall
be effected in accordance with this Section 11.06.

 

(b)     Participations. Each Lender may at any time grant participations in any
of its rights hereunder or under any of the Notes to an Eligible Assignee, an
Eligible Participant or any other Person, provided that in the case of any such
participation,

 

(i)     the participant shall not have any rights under this Agreement or any of
the other Loan Documents, including rights of consent, approval or waiver (the
participant’s rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto),

 

(ii)     such Lender’s obligations under this Agreement (including, without
limitation, its Commitments hereunder) shall remain unchanged,

 

(iii)     such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations,

 

(iv)     such Lender shall remain the holder of the Obligations owing to it and
of any Note issued to it for all purposes of this Agreement,

 

(v)     the Borrower, the Administrative Agent, and the other Lenders shall
continue to deal solely and directly with the selling Lender in connection with
such Lender’s rights and obligations under this Agreement, and

 

(vi)     unless a Default or Event of Default has occurred and is continuing,
any assignment to a Restricted Participant shall be consented to by the Borrower
(each consent not to be unreasonably withheld, delayed or conditioned (and the
Borrower shall be deemed to have consented thereto if it fails to object to any
participation within five Business Days after it received written notice
thereof),

 

 
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and, provided, further, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent (A) such participant is an Affiliate or an Approved Fund of the
Lender granting the participations or (B) such amendment or waiver would (x)
extend the final scheduled maturity of any of the Loans in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant’s participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default shall not constitute a change
in the terms of any such Commitment), (y) release all or substantially all of
the Collateral, or release any guarantor from its guaranty of any of the
Obligations, except, in any case, in accordance with the terms of the Loan
Documents (as such agreements may be amended or modified pursuant to Section
11.12 hereof or otherwise pursuant to such agreement), or (z) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and, provided still further that each participant shall be
entitled to the benefits of Section 3.03 with respect to its participation as if
it was a Lender, except that a participant shall (i) only deliver the forms
described in Section 3.03(g) to the Lender granting it such participation and
(ii) not be entitled to receive any greater payment under Section 3.03(g) than
the applicable Lender would have been entitled to receive absent the
participation, except to the extent such entitlement to a greater payment arose
from a Change in Law occurring after the participant became a participant
hereunder. Notwithstanding the foregoing, no Lender shall knowingly grant a
participation to any Person other than an Eligible Participant or Eligible
Assignee if such grant of a participation to such Person together with the
participations previously granted to such Person and known to the Lender exceed
$3,000,000 in the aggregate. The parties hereto hereby agree that the
Administrative Agent shall not have any responsibility for ensuring that any
participant in a Loan or Commitment is not a Restricted Participant or exceeds
the threshold set forth in the foregoing sentence and the Administrative Agent
shall not be liable in the event that a participation in any Loan or Commitment
is transferred or granted to any Restricted Person or exceeds the threshold set
forth in the foregoing sentence.

 

In the event that any Lender sells participations in a Loan, such Lender shall,
acting for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name of all participants in such Loan and the
principal amount of (and stated interest on) the portion of such Loan that is
the subject of the participation (the “Participant Register”). The entries in
the Participant Register shall be conclusive absent manifest error, and each
Borrower, the Administrative Agent and each Lender shall treat each person whose
name is recorded in the Participant Register as the owner of the participation
in question for all purposes of this Agreement notwithstanding any notice to the
contrary. A Loan (and the registered note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each registered note shall expressly so provide).
Any participation of a Loan (and the registered note, if any, evidencing the
same) may be effected only by the registration of such participation on the
Participant Register. The Participant Register shall be available for inspection
by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice; provided, however, that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. For the avoidance of doubt, the Administrative Agent (in
its capacity as Administrative Agent) shall have no responsibility for
maintaining a Participant Register.

 

 
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(c)     Assignments by Lenders.

 

(i)     Any Lender may assign all, or if less than all, a fixed portion, of its
Loans, LC Participations, Swing Loan Participations and/or Commitments and its
rights and obligations hereunder to one or more Eligible Assignees, each of
which shall become a party to this Agreement as a Lender by execution of an
Assignment Agreement; provided, however, that

 

(A)     except in the case of (x) an assignment of the entire remaining amount
of the assigning Lender’s Loans and/or Commitments or (y) an assignment to
another Lender, an Affiliate of such Lender or an Approved Fund with respect to
such Lender, the aggregate amount of the Commitment so assigned (which for this
purpose includes the Loans outstanding thereunder) shall not be less than
$2,000,000;

 

(B)     in the case of any assignment to an Eligible Assignee at the time of any
such assignment the Lender Register shall be deemed modified to reflect the
Commitments of such new Lender and of the existing Lenders;

 

(C)     upon surrender of the old Notes, if any, upon request of the new Lender,
new Notes will be issued, at the Borrower’s expense, to such new Lender and to
the assigning Lender, to the extent needed to reflect the revised Commitments;
and

 

(D)     unless waived by the Administrative Agent, the Administrative Agent
shall receive at the time of each such assignment, from the assigning or
assignee Lender, the payment of a non-refundable assignment fee of $3,500.

 

(ii)     To the extent of any assignment pursuant to this subpart (c), the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments provided, that except to the extent otherwise expressly
agreed by the affected parties, no assignment by a Defaulting Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

 

(iii)     At the time of each assignment pursuant to this subpart (c), to a
Person that is not already a Lender hereunder and that is not a U.S. Person for
Federal income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the applicable Internal Revenue Service
Forms (and any necessary additional documentation) described in Section 3.03(g).

 

(iv)     With respect to any Lender, the transfer of any Commitment of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitment shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent (on
behalf of and acting solely for this purpose as a non-fiduciary agent of the
Borrower) with respect to ownership of such Commitment and Loans, including the
name and address of the Lenders and the principal amount of the Loans (and
stated interest thereon). Prior to such recordation, all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Lender Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment Agreement pursuant to this subpart
(c). The Lender Register shall be available for the inspection by the Borrower
at any reasonable time and from time to time upon reasonable prior notice.

 

 
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(v)     Nothing in this Section shall prevent or prohibit (A) any Lender that is
a bank, trust company or other financial institution from pledging its Notes or
Loans to a Federal Reserve Bank or to any Person that extends credit to such
Lender in support of borrowings made by such Lender from such Federal Reserve
Bank or such other Person, or (B) any Lender that is a trust, limited liability
company, partnership or other investment company from pledging its Notes or
Loans to a trustee or agent for the benefit of holders of certificates or debt
securities issued by it. No such pledge, or any assignment pursuant to or in
lieu of an enforcement of such a pledge, shall relieve the transferor Lender
from its obligations hereunder.

 

(vi)     In connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, each LC Issuer,
each Swing Line Lender and each other Lender hereunder (and interest accrued
thereon), and (y) acquire (and fund as appropriate) its full pro rata share of
all Loans and participations in Letters of Credit and Swing Loans in accordance
with its Revolving Facility Percentage. Notwithstanding the foregoing, in the
event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

 

Notwithstanding anything contained herein, no Lender may assign, sell, negotiate
or otherwise transfer its Loans, LC Participations, Swing Loan Participations
and/or Commitments to any Credit Party or any Affiliate of any of the foregoing.

 

(d)     No SEC Registration or Blue Sky Compliance. Notwithstanding any other
provisions of this Section, no transfer or assignment of the interests or
obligations of any Lender hereunder or any grant of participation therein shall
be permitted if such transfer, assignment or grant would require the Borrower to
file a registration statement with the SEC or to qualify the Loans under the
“Blue Sky” laws of any State.

 

(e)     Representations of Lenders. Each Lender initially party to this
Agreement hereby represents, and each Person that becomes a Lender pursuant to
an assignment permitted by this Section will, upon its becoming party to this
Agreement, represents that it is a commercial lender, other financial
institution or other “accredited” investor (as defined in SEC Regulation D) that
makes or acquires loans in the ordinary course of its business and that it will
make or acquire Loans for its own account in the ordinary course of such
business; provided, however, that subject to the preceding Section 11.06(b) and
(c), the disposition of any promissory notes or other evidences of or interests
in Indebtedness held by such Lender shall at all times be within its exclusive
control.

 

 
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(f)     Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (“Granting Lender”) may grant to a special
purpose funding vehicle (a “SPC”), identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (x) nothing herein shall constitute a commitment by any
SPC to make any Loans and (y) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Loan were made by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this clause, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower or the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
to the Granting Lender or to any financial institutions (consented to by the
Borrower and the Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This Section
may not be amended without the written consent of the SPC. The Borrower
acknowledges and agrees, subject to the next sentence, that, to the fullest
extent permitted under applicable law, each SPC, for purposes of Sections 2.09,
2.13, 3.01, 3.03, 11.01, 11.02 and 11.03, shall be considered a Lender. The
Borrower shall not be required to pay any amount under Sections 2.09, 2.13,
3.01, 3.03, 11.01, 11.02 and 11.03 that is greater than the amount that it would
have been required to pay had no grant been made by a Granting Lender to a SPC.

 

Section 11.07     No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. Without limiting the generality of the
foregoing, the making of a Loan or any LC Issuance shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the
Administrative Agent, any Lender or any LC Issuer may have had notice or
knowledge of such Default or Event of Default at the time. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies that the Administrative Agent or any Lender would otherwise
have.

 

Section 11.08     Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial.

 

(a)     THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT (OTHER THAN THE LETTERS OF
CREDIT, TO THE EXTENT SPECIFIED BELOW, AND EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN A LOAN DOCUMENT) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED
IN SUCH LETTER OF CREDIT OR, IF NO LAWS OR RULES ARE SO DESIGNATED, THE
INTERNATIONAL STANDBY PRACTICES (ISP98 — INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NUMBER 590 (THE “ISP98 RULES”)) AND, AS TO MATTERS NOT GOVERNED BY
THE ISP98 RULES, THE LAW OF THE STATE OF NEW YORK.

 

 
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(b)     EACH CREDIT PARTY HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK CITY IN ANY LITIGATION OR OTHER PROCEEDING BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT, THE LENDERS, THE LC ISSUER OR THE CREDIT PARTIES IN
CONNECTION HEREWITH OR THEREWITH; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND; PROVIDED, FURTHER, THAT NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE LC
ISSUER TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.

 

(c)     EACH CREDIT PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 11.05. EACH
CREDIT PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION THAT IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO IN
CLAUSE (b) ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY CREDIT PARTY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH
CREDIT PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS. EACH
CREDIT PARTY HEREBY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT THAT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING
REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.

 

(d)     THE ADMINISTRATIVE AGENT, EACH LENDER, THE LC ISSUER AND EACH CREDIT
PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST
EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER,
THE LC ISSUER OR SUCH CREDIT PARTY IN CONNECTION THEREWITH. EACH CREDIT PARTY
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE LC ISSUER ENTERING INTO THE LOAN
DOCUMENTS.

 

 
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Section 11.09     Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.

 

Section 11.10     Integration. This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent, for its own account and benefit and/or for the account, benefit of, and
distribution to, the Lenders, constitute the entire contract among the parties
relating to the subject matter hereof and thereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof or thereof. To the extent that there is any conflict between the
terms and provisions of this Agreement and the terms and provisions of any other
Loan Document, the terms and provisions of this Agreement will prevail.

 

Section 11.11     Headings Descriptive. The headings of the several Sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.

 

Section 11.12     Amendment or Waiver; Acceleration by Required Lenders.

 

(a)     Neither this Agreement nor any other Loan Document, nor any terms hereof
or thereof, may be amended, changed, waived or otherwise modified unless such
amendment, change, waiver or other modification is in writing and signed by the
Borrower, the Administrative Agent, and the Required Lenders or by the
Administrative Agent acting at the written direction of the Required Lenders;
provided, however, that the Borrower, the Administrative Agent and the Lenders
consenting to the Borrower’s request for any extension of the Revolving Facility
Termination Date in accordance with Section 2.17 may enter into any amendment
necessary to implement the terms thereof in accordance with the terms of this
Agreement without the consent of any other Lender, and provided, further that

 

(i)     no change, waiver or other modification shall:

 

(A)     increase the amount of any Commitment of any Lender hereunder, without
the written consent of such Lender;

 

(B)     extend or postpone the Revolving Facility Termination Date or the
maturity date provided for herein that is applicable to any Loan of any Lender,
extend or postpone the expiration date of any Letter of Credit as to which such
Lender is an LC Participant beyond the latest expiration date for a Letter of
Credit provided for herein, or extend or postpone any scheduled expiration or
termination date provided for herein that is applicable to a Commitment of any
Lender, without the written consent of such Lender;

 

(C)     reduce the principal amount of any Loan made by any Lender, or reduce
the rate or extend, defer or delay the time of payment of, or excuse the payment
of, principal or interest thereon (other than as a result of (x) waiving the
applicability of any post-default increase in interest rates or (y) any
amendment or modification of defined terms used in financial covenants), without
the written consent of such Lender;

 

 
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(D)     reduce the amount of any Unpaid Drawing as to which any Lender is an LC
Participant, or reduce the rate or extend the time of payment of, or excuse the
payment of, interest thereon (other than as a result of waiving the
applicability of any post-default increase in interest rates), without the
written consent of such Lender; or

 

(E)     reduce the rate or extend the time of payment of, or excuse the payment
of, any Fees to which any Lender is entitled hereunder, without the written
consent of such Lender; and

 

(ii)     no change, waiver or other modification or termination shall, without
the written consent of each Lender affected thereby,

 

(A)     release the Borrower from any of its obligations hereunder;

 

(B)     release the Borrower from its guaranty obligations under Article X or
release any Credit Party from the Guaranty, except, in the case of a Subsidiary
Guarantor, in accordance with a transaction permitted under this Agreement;

 

(C)     release all or any substantial portion of the Collateral, except in
connection with a transaction permitted under this Agreement;

 

(D)     amend, modify or waive any provision of this Section 11.12, Section
8.03, or any other provision of any of the Loan Documents pursuant to which the
consent or approval of all Lenders, or a number or specified percentage or other
required grouping of Lenders or Lenders having Commitments, is by the terms of
such provision explicitly required;

 

(E)     reduce the percentage specified in, or otherwise modify, the definition
of Required Lenders;

 

(F)     consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; or

 

(G)     amend, modify or waive any provision of Section 2.06(b), Section 2.13(b)
or Section 2.13(e).

 

Any waiver or consent with respect to this Agreement given or made in accordance
with this Section shall be effective only in the specific instance and for the
specific purpose for which it was given or made.

 

(b)     No provision of Section 2.04 or any other provision in this Agreement
specifically relating to Letters of Credit may be amended without the consent of
any LC Issuer adversely affected thereby.

 

 
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(c)     No provision of Article IX may be amended without the consent of the
Administrative Agent and no provision of Section 2.03 may be amended without the
consent of the Swing Line Lender.

 

(d)     To the extent the Required Lenders (or all of the Lenders, as
applicable, as shall be required by this Section) waive the provisions of
Section 7.02 with respect to the sale, transfer or other disposition of any
Collateral, or any Collateral is sold, transferred or disposed of as permitted
by Section 7.02, (i) such Collateral (but not any proceeds thereof) shall be
sold, transferred or disposed of free and clear of the Liens created by the
respective Security Documents; (ii) if such Collateral includes all of the
capital stock of a Subsidiary that is a party to the Guaranty or whose stock is
pledged pursuant to the Security Agreement, such capital stock (but not any
proceeds thereof) shall be released from the Security Agreement and such
Subsidiary shall be released from the Guaranty; and (iii) the Administrative
Agent shall be authorized to take actions deemed appropriate by it in order to
effectuate the foregoing.

 

(e)     In no event shall the Required Lenders, without the prior written
consent of each Lender, direct the Administrative Agent to accelerate and demand
payment of the Loans held by one Lender without accelerating and demanding
payment of all other Loans or to terminate the Commitments of one or more
Lenders without terminating the Commitments of all Lenders.  Each Lender agrees
that, except as otherwise provided in any of the Loan Documents and without the
prior written consent of the Required Lenders, it will not take any legal action
or institute any action or proceeding against any Credit Party with respect to
any of the Obligations or Collateral, or accelerate or otherwise enforce its
portion of the Obligations. Without limiting the generality of the foregoing,
none of Lenders may exercise any right that it might otherwise have under
applicable law to credit bid at foreclosure sales, uniform commercial code sales
or other similar sales or dispositions of any of the Collateral except as
authorized by the Required Lenders. Notwithstanding anything to the contrary set
forth in this Section 11.12(e) or elsewhere herein, each Lender shall be
authorized to take such action to preserve or enforce its rights against any
Credit Party where a deadline or limitation period is otherwise applicable and
would, absent the taking of specified action, bar the enforcement of Obligations
held by such Lender against such Credit Party, including the filing of proofs of
claim in any insolvency proceeding.

 

(f)     Notwithstanding anything to the contrary contained in this Section
11.12, (x) Security Documents (including any Additional Security Documents) and
related documents executed by Subsidiaries of the Borrower in connection with
this Agreement may be in a form reasonably determined by the Administrative
Agent and may be amended, supplemented and waived with the consent of the
Administrative Agent and the Borrower without the need to obtain the consent of
any other Person if such amendment, supplement or waiver is delivered in order
(i) to comply with local law or advice of local counsel, (ii) to cure
ambiguities, omissions, mistakes or defects or (iii) to cause such Security
Document or other document to be consistent with this Agreement and the other
Loan Documents and (y) if following the Closing Date, the Administrative Agent
and the Borrower shall have jointly identified an ambiguity, inconsistency,
obvious error or any error or omission of a technical or immaterial nature, in
each case, in any provision of the Loan Documents, then the Administrative Agent
and the Credit Parties shall be permitted to amend such provision and such
amendment shall become effective without any further action or consent of any
other party to any Loan Documents if the same is not objected to in writing by
the Required Lenders within five (5) Business Days following receipt of notice
thereof.

 

(g)     If, in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any provisions hereof as
contemplated by this Section 11.12 that requires the consent of a greater
percentage of the Lenders than the Required Lenders, the consent of the Required
Lenders shall have been obtained but the consent of a Lender whose consent is
required shall not have been obtained (each a “Non-Consenting Lender”), then the
Borrower may, at its sole expense and effort, upon notice to such Non-Consenting
Lender and the Administrative Agent, require such Non-Consenting Lender to
assign and delegate, without recourse (in accordance with the restrictions
contained in Section 11.04(c)), all its interests, rights and obligations under
this Agreement to an Eligible Assignee that shall assume such obligations;
provided that (A) the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not be unreasonably withheld or
delayed, (B) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts, including any breakage compensation under Section
3.02 and any amounts accrued and owing to such Lender under Section 3.01(a)(i),
Section 3.01(c), Section 3.03 or Section 3.04), and (C) such Eligible Assignee
shall consent at the time of such assignment to each matter in respect of which
such Non-Consenting Lender did not consent. Each Lender agrees that, if it
becomes a Non-Consenting Lender and is being replaced in accordance with this
Section 11.12(g), it shall execute and deliver to the Administrative Agent an
Assignment Agreement to evidence such assignment and shall deliver to the
Administrative Agent any Notes previously delivered to such Non-Consenting
Lender. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

 

 
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Section 11.13     Survival of Indemnities. All indemnities set forth herein
including, without limitation, in Article III, Section 9.09 or Section 11.02
shall survive the execution and delivery of this Agreement and the making and
repayment of the Obligations.

 

Section 11.14     Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender; provided, however, that the Borrower shall not be responsible for
costs arising under Section 3.01 resulting from any such transfer (other than a
transfer pursuant to Section 3.05) to the extent not otherwise applicable to
such Lender prior to such transfer.

 

Section 11.15     Confidentiality.

 

(a)     Each of the Administrative Agent, each LC Issuer and the Lenders agrees
to maintain the confidentiality of the Confidential Information, except that
Confidential Information may be disclosed (1) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the persons to whom such disclosure
is made will be informed of the confidential nature of such Confidential
Information and instructed to keep such Confidential Information confidential),
(2) to any direct or indirect contractual counterparty in any Hedge Agreement
(or to any such contractual counterparty’s professional advisor), so long as
such contractual counterparty (or such professional advisor) agrees to be bound
by the provisions of this Section, (3) to the extent requested by any regulatory
authority, (4) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (5) to any other party to this Agreement,
(6) to any other creditor of any Credit Party that is a direct or intended
beneficiary of any of the Loan Documents, (7) in connection with the exercise of
any remedies hereunder or under any of the other Loan Documents, or any suit,
action or proceeding relating to this Agreement or any of the other Loan
Documents or the enforcement of rights hereunder or thereunder, (8) subject to
an agreement containing provisions substantially the same as those of this
Section, to any assignee of or participant in any of its rights or obligations
under this Agreement, or in connection with transactions permitted pursuant to
Section 11.06(c)(v) or Section 11.06(f), (9) with the consent of the Borrower,
or (10) to the extent such Confidential Information (i) becomes publicly
available other than as a result of a breach of this Section 11.15, or
(ii) becomes available to the Administrative Agent, any LC Issuer or any Lender
on a non-confidential basis from a source other than a Credit Party and not
otherwise in violation of this Section 11.15.

 

 
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(b)     As used in this Section, “Confidential Information” shall mean all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to the Administrative Agent,
any LC Issuer or any Lender on a non-confidential basis prior to disclosure by
the Borrower; provided, however, that, in the case of information received from
the Borrower after the Closing Date, such information is clearly identified at
the time of delivery as confidential.

 

(c)     Any Person required to maintain the confidentiality of Confidential
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Confidential Information as such
Person would accord to its own confidential information. The Borrower hereby
agrees that the failure of the Administrative Agent, any LC Issuer or any Lender
to comply with the provisions of this Section shall not relieve the Borrower, or
any other Credit Party, of any of its Obligations under this Agreement or any of
the other Loan Documents.

 

Section 11.16     Limitations on Liability of the LC Issuers. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letters of Credit. Neither
any LC Issuer nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by an LC Issuer against
presentation of documents that do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the LC
Obligor shall have a claim against an LC Issuer, and an LC Issuer shall be
liable to such LC Obligor, to the extent of any direct, but not consequential,
damages suffered by such LC Obligor that such LC Obligor proves were caused by
(i) such LC Issuer’s willful misconduct or gross negligence in determining
whether documents presented under a Letter of Credit comply with the terms of
such Letter of Credit or (ii) such LC Issuer’s willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, an LC Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

 

Section 11.17     General Limitation of Liability. No claim may be made by any
Credit Party, any Lender, the Administrative Agent, any LC Issuer or any other
Person against the Administrative Agent, any LC Issuer, or any other Lender or
the Affiliates, directors, officers, employees, attorneys or agents of any of
them for any damages other than actual compensatory damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any of the other
Loan Documents, or any act, omission or event occurring in connection therewith;
and the Borrower, each Lender, the Administrative Agent and each LC Issuer
hereby, to the fullest extent permitted under applicable law, waive, release and
agree not to sue or counterclaim upon any such claim for any special,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in their favor.

 

Section 11.18     No Duty. All attorneys, accountants, appraisers, consultants
and other professional persons (including the firms or other entities on behalf
of which any such Person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Loan Documents shall
have the right to act exclusively in the interest of the Administrative Agent or
such Lender, as the case may be, and shall have no duty of disclosure, duty of
loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other Person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation. The Borrower agrees,
on behalf of itself and its Subsidiaries, not to assert any claim or
counterclaim against any such persons with regard to such matters, all such
claims and counterclaims, now existing or hereafter arising, whether known or
unknown, foreseen or unforeseeable, being hereby waived, released and forever
discharged.

 

 
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Section 11.19     Lenders and Agent Not Fiduciary to Borrower, etc. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent, each LC Issuer and the Lenders, on the other hand, is
solely that of debtor and creditor, and the Administrative Agent, each LC Issuer
and the Lenders have no fiduciary or other special relationship with the
Borrower and its Subsidiaries, and no term or provision of any Loan Document, no
course of dealing, no written or oral communication, or other action, shall be
construed so as to deem such relationship to be other than that of debtor and
creditor.

 

Section 11.20     Survival of Representations and Warranties. All
representations and warranties herein shall survive the making of Loans and all
LC Issuances hereunder, the execution and delivery of this Agreement, the Notes
and the other documents the forms of which are attached as Exhibits hereto, the
issue and delivery of the Notes, any disposition thereof by any holder thereof,
and any investigation made by the Administrative Agent or any Lender or any
other holder of any of the Notes or on its behalf. All statements contained in
any certificate or other document delivered to the Administrative Agent or any
Lender or any holder of any Notes by or on behalf of the Borrower or any of its
Subsidiaries pursuant hereto or otherwise specifically for use in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder, made as of the respective dates specified
therein or, if no date is specified, as of the respective dates furnished to the
Administrative Agent or any Lender.

 

Section 11.21     Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

Section 11.22     Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.

 

Section 11.23     Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Base Rate to the date of repayment, shall have been
received by such Lender.

 

 
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Section 11.24     USA Patriot Act. Each Lender subject to the USA Patriot Act
hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the USA Patriot Act.

 

Section 11.25     Advertising and Publicity. No Credit Party shall issue or
disseminate to the public (by advertisement, including without limitation any
“tombstone” advertisement, press release or otherwise), submit for publication
or otherwise cause or seek to publish any information describing the credit or
other financial accommodations made available by the Lenders pursuant to this
Agreement and the other Loan Documents without the prior written consent of the
Administrative Agent. Nothing in the foregoing shall be construed to prohibit
any Credit Party from making any submission or filing which it is required to
make by applicable law or pursuant to judicial process; provided, that, (i) such
filing or submission shall contain only such information as is necessary to
comply with applicable law or judicial process and (ii) unless specifically
prohibited by applicable law or court order, the Borrower shall promptly notify
the Administrative Agent of the requirement to make such submission or filing
and provide the Administrative Agent with a copy thereof.

 

Section 11.26     Release of Guarantees and Liens. Notwithstanding anything to
the contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender) to take any action requested by the Borrower
having the effect of releasing any Collateral or guarantee obligations (i) to
the extent necessary to permit consummation of any transaction permitted by any
Loan Document or that has been consented to in accordance with the terms hereof
or (ii) under the circumstances described in the next succeeding sentence. When
this Agreement has been terminated and all of the Obligations have been fully
and finally discharged (other than obligations in respect of Designated Hedge
Agreements, contingent indemnity obligations and obligations in respect of
Letters of Credit that have been Cash Collateralized) and the obligations of the
Administrative Agent and the Lenders to provide additional credit under the Loan
Documents have been terminated irrevocably, and the Credit Parties have
delivered to the Administrative Agent a written release of all claims against
the Administrative Agent and the Lenders, in form and substance reasonably
satisfactory to the Administrative Agent, the Administrative Agent will, at the
Borrower’s sole expense, execute and deliver any termination statements, lien
releases, re-assignments of intellectual property, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are necessary or advisable to release, as of record, the
Administrative Agent’s Liens and all notices of security interests and liens
previously filed by the Administrative Agent with respect to the Obligations.

 

Section 11.27     Payments Set Aside. To the extent that any Secured Creditor
receives a payment from or on behalf of the Borrower or any other Credit Party,
from the proceeds of any Collateral, from the exercise of its rights of setoff,
any enforcement action or otherwise, and such payment is subsequently, in whole
or in part, invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligations or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not occurred.

 

 
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Section 11.28          Hedging Liability. Notwithstanding any provision hereof
or in any other Loan Document to the contrary, in the event that any Credit
Party is not an “eligible contract participant” as such term is defined in
Section 1(a)(18) of the Commodity Exchange Act, as amended, at the time (i) any
transaction is entered into under any Hedging Obligation or (ii) such Person
becomes a Guarantor hereunder, and the effect of the foregoing would be to
render any Guaranty Obligations of such Person violative of the Commodity
Exchange Act, the Obligations of such Person shall not include (x) in the case
of clause (i) above, such transaction and (y) in the case of clause (ii) above,
any transactions outstanding under any Hedging Obligations as of the date such
Person becomes a Guarantor hereunder.

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

 

KONA GRILL, INC., as the Borrower

 

 

By:/s/ Berke Bakay

Name: Berke Bakay

Title:Chief Executive Officer and President

     

keybank national association, as a Lender, LC Issuer, Swing Line Lender, and as
the Administrative Agent

 

 

By:/s/ Marianne T. Meil

Name:Marianne T. Meil

Title:Senior Vice President

 

 

 

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