Exhibit 10.1

 

 

 

 

AMENDED AND RESTATED REVOLVING CREDIT, Term Loan

AND

SECURITY AGREEMENT

 

 

 

PNC BANK, NATIONAL ASSOCIATION

(AS A REVOLVING LENDER AND AS AGENT)

 

STEEL CITY CAPITAL FUNDING,
A DIVISION OF PNC BANK, NATIONAL ASSOCIATION
(AS A TERM LOAN LENDER)

 

 

 

WITH

 

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC., UNIVERSAL TRUCKLOAD, INC., UNIVERSAL
DEDICATED, INC.
Mason Dixon Intermodal, Inc., LOGISTICS INSIGHT CORP.,
UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.,
UNIVERSAL SPECIALIZED, INC., CAVALRY LOGISTICS, LLC,
UNIVERSAL MANAGEMENT SERVICES, INC., fore transportation inc., fore transport,
inc., 4 cargo llc, Southern Counties Express, Inc., AND AQUARIUS FINANCIAL, INC.

(BORROWERS)

 

 

 

AND

 

THE GUARANTORS PARTY HERETO

 

 

 

August 10, 2018

 

 

 

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

 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

I. DEFINITIONS

2

 

 

 

 

 

1.1

Accounting Terms

2

 

1.2

General Terms

2

 

1.3

Uniform Commercial Code Terms

42

 

1.4

Certain Matters of Construction

42

 

 

 

 

II. ADVANCES, PAYMENTS

43

 

 

 

 

 

2.1

Revolving Advances

43

 

2.2

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

45

 

2.3

Term Loans

47

 

2.4

Swing Loans

49

 

2.5

Disbursement of Advance Proceeds

49

 

2.6

Making and Settlement of Advances

50

 

2.7

Maximum Advances

51

 

2.8

Manner and Repayment of Advances

51

 

2.9

Repayment of Excess Advances

52

 

2.10

Statement of Account

53

 

2.11

Letters of Credit

53

 

2.12

Issuance of Letters of Credit.

54

 

2.13

Requirements For Issuance of Letters of Credit

54

 

2.14

Disbursements, Reimbursement

55

 

2.15

Repayment of Participation Advances

56

 

2.16

Documentation

56

 

2.17

Determination to Honor Drawing Request

57

 

2.18

Nature of Participation and Reimbursement Obligations

57

 

2.19

Liability for Acts and Omissions

59

 

2.20

Mandatory Payments

60

 

2.21

Use of Proceeds

61

 

2.22

Defaulting Lender

61

 

2.23

Payment of Obligations

64

 

2.24

Increase in Maximum Revolving Advance Amount

64

 

 

 

 

III. INTEREST AND FEES

67

 

 

 

 

 

3.1

Interest

67

 

3.2

Letter of Credit Fees

67

 

3.3

Unused Line Fee

69

 

3.4

Collateral Monitoring Fee; Collateral Evaluation Fee; PIK Interest and Fee
Letter

69

i

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

 

 

 

 

Page

 

 

 

 

 

3.5

Computation of Interest and Fees

70

 

3.6

Maximum Charges

70

 

3.7

Increased Costs

70

 

3.8

Alternate Rate of Interest

71

 

3.9

Capital Adequacy

73

 

3.10

Taxes

74

 

3.11

Replacement of Lenders

76

 

 

 

 

IV. COLLATERAL:  GENERAL TERMS

77

 

 

 

 

 

4.1

Security Interest in the Collateral

77

 

4.2

Perfection of Security Interest

77

 

4.3

Preservation of Collateral

78

 

4.4

Ownership and Location of Collateral

78

 

4.5

Defense of Agent’s and Lenders’ Interests

79

 

4.6

Inspection of Premises

79

 

4.7

Reserved

80

 

4.8

Receivables; Deposit Accounts and Securities Accounts

80

 

4.9

Inventory

82

 

4.10

Maintenance of Equipment

83

 

4.11

Exculpation of Liability

83

 

4.12

Financing Statements

83

 

 

 

 

V. REPRESENTATIONS AND WARRANTIES

83

 

 

 

 

 

5.1

Authority

83

 

5.2

Formation and Qualification

84

 

5.3

Survival of Representations and Warranties

84

 

5.4

Tax Returns

84

 

5.5

Financial Statements

84

 

5.6

Entity Names

85

 

5.7

O.S.H.A. Environmental Compliance

85

 

5.8

Solvency; No Litigation, Violation, Indebtedness or Default; ERISA
Compliance

86

 

5.9

Patents, Trademarks, Copyrights and Licenses

88

 

5.10

Licenses and Permits

88

 

5.11

Default of Indebtedness

88

 

5.12

No Default

88

 

5.13

No Burdensome Restrictions

88

 

5.14

No Labor Disputes

88

 

5.15

Margin Regulations

88

 

5.16

Investment Company Act

89

 

5.17

Disclosure

89

 

5.18

Delivery of Acquisition Agreement

89

ii

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

 

 

 

 

Page

 

 

 

 

 

5.19

Swaps

89

 

5.20

Business and Property of Borrowers

89

 

5.21

Ineligible Securities

89

 

5.22

Reserved

89

 

5.23

Equity Interests

89

 

5.24

Commercial Tort Claims

90

 

5.25

Letter of Credit Rights

90

 

5.26

Material Contracts

90

 

5.27

No Cross-Default

90

 

5.28

Certificate of Beneficial Ownership

90

 

 

 

 

VI. AFFIRMATIVE COVENANTS

90

 

 

 

 

 

6.1

Compliance with Laws

90

 

6.2

Conduct of Business and Maintenance of Existence and Assets

91

 

6.3

Books and Records

91

 

6.4

Payment of Taxes

91

 

6.5

Financial Covenants

92

 

6.6

Insurance

92

 

6.7

Payment of Indebtedness and Leasehold Obligations

93

 

6.8

Environmental Matters

93

 

6.9

Standards of Financial Statements

94

 

6.10

Certificate of Beneficial Ownership and Other Additional Information

94

 

6.11

Execution of Supplemental Instruments

94

 

6.12

Exercise of Rights

94

 

6.13

Government Receivables

94

 

6.14

Deposit Accounts

95

 

6.15

Keepwell

95

 

6.16

Notice of Cross-Default Provision

95

 

6.17

Certain Material Contracts

95

 

6.18

Post-Closing Deliverables

95

 

 

 

 

VII. NEGATIVE COVENANTS

96

 

 

 

 

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets

96

 

7.2

Creation of Liens

96

 

7.3

Guarantees

96

 

7.4

Investments

97

 

7.5

Loans

97

 

7.6

Capital Expenditures

97

 

7.7

Dividends

97

 

7.8

Indebtedness

97

 

7.9

Nature of Business

98

 

7.10

Transactions with Affiliates

98

iii

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

 

 

 

 

Page

 

 

 

 

 

7.11

Reserved.

98

 

7.12

Subsidiaries

98

 

7.13

Fiscal Year and Accounting Changes

98

 

7.14

Pledge of Credit

98

 

7.15

Amendment of Organizational Documents

99

 

7.16

Compliance with ERISA

99

 

7.17

Prepayment of Indebtedness

99

 

7.18

Amendment to Fore Acquisition Documents

100

 

7.19

Creation of Liens; Negative Pledge Acquisition Documents

 

 

 

 

 

VIII. CONDITIONS PRECEDENT

100

 

 

 

 

 

8.1

Conditions to Initial Advances

100

 

8.2

Conditions to Each Advance

104

 

 

 

 

IX. INFORMATION AS TO BORROWERS

105

 

 

 

 

 

9.1

Disclosure of Material Matters

105

 

9.2

Schedules Borrowing Base Certificate

105

 

9.3

Environmental Reports

105

 

9.4

Litigation

106

 

9.5

Material Occurrences

106

 

9.6

Government Receivables

107

 

9.7

Annual Financial Statements

107

 

9.8

Quarterly Financial Statements

107

 

9.9

Monthly Financial Statements

107

 

9.10

Other Reports

108

 

9.11

Additional Information

108

 

9.12

Projected Operating Budget

108

 

9.13

Variances From Operating Budget

108

 

9.14

Notice of Suits, Adverse Events

108

 

9.15

ERISA Notices and Requests

109

 

9.16

Additional Documents

109

 

9.17

Updates to Certain Schedules

109

 

9.18

Financial Disclosure

110

 

 

 

 

X. EVENTS OF DEFAULT.

110

 

 

 

 

 

10.1

Nonpayment

110

 

10.2

Breach of Representation;

110

 

10.3

Financial Information

110

 

10.4

Judicial Actions

110

 

10.5

Noncompliance

110

 

10.6

Judgments

111

iv

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

 

 

 

 

Page

 

 

 

 

 

10.7

Bankruptcy

111

 

10.8

Material Adverse Effect

111

 

10.9

Lien Priority

111

 

10.10

Cross Default

111

 

10.11

Breach of Guaranty or Pledge Agreement

112

 

10.12

Change of Control

112

 

10.13

Invalidity

112

 

10.14

Seizures

112

 

10.15

Reserved

112

 

10.16

Pension Plans

112

 

10.17

Anti-Money Laundering/International Trade Law Compliance

112

 

 

 

 

XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT

113

 

 

 

 

 

11.1

Rights and Remedies

113

 

11.2

Agent’s Discretion

114

 

11.3

Setoff

114

 

11.4

Rights and Remedies not Exclusive

114

 

11.5

Allocation of Payments After Event of Default

115

 

 

 

 

XII. WAIVERS AND JUDICIAL PROCEEDINGS

116

 

 

 

 

 

12.1

Waiver of Notice

116

 

12.2

Delay

116

 

12.3

Jury Waiver

116

 

 

 

 

XIII. EFFECTIVE DATE AND TERMINATION

117

 

 

 

 

 

13.1

Term

117

 

13.2

Termination

117

 

 

 

 

XIV. REGARDING AGENT

117

 

 

 

 

 

14.1

Appointment

117

 

14.2

Nature of Duties

118

 

14.3

Lack of Reliance on Agent

118

 

14.4

Resignation of Agent; Successor Agent

119

 

14.5

Certain Rights of Agent

119

 

14.6

Reliance

119

 

14.7

Notice of Default

120

 

14.8

Indemnification

120

 

14.9

Agent in its Individual Capacity

120

 

14.10

Delivery of Documents

120

 

14.11

Borrowers’ Undertaking to Agent

120

v

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

 

 

 

 

Page

 

 

 

 

 

14.12

No Reliance on Agent’s Customer Identification Program

121

 

14.13

Other Agreements

121

 

 

 

 

XV. BORROWING AGENCY

121

 

 

 

 

 

15.1

Borrowing Agency Provisions

121

 

15.2

Waiver of Subrogation

122

 

 

 

 

XVI. MISCELLANEOUS

122

 

 

 

 

 

16.1

Governing Law

122

 

16.2

Entire Understanding

123

 

16.3

Successors and Assigns; Participations; New Lenders

126

 

16.4

Application of Payments

128

 

16.5

Indemnity

128

 

16.6

Notice

130

 

16.7

Survival.

132

 

16.8

Severability

132

 

16.9

Expenses

132

 

16.10

Injunctive Relief

132

 

16.11

Consequential Damages

133

 

16.12

Captions

133

 

16.13

Counterparts; Facsimile Signatures

133

 

16.14

Construction

133

 

16.15

Confidentiality; Sharing Information

133

 

16.16

Publicity

134

 

16.17

Certifications From Banks and Participants; USA PATRIOT Act

134

 

16.18

Anti-Terrorism Laws

134

 

16.18

Amended and Restated; No Novation

135

 

 

 

 

XVII. GUARANTY PROVISIONS

135

 

 

 

 

 

17.1.

Guaranty of Obligations

135

 

17.2.

Nature of Guaranty; Waivers

135

 

17.3.

Repayments or Recovery

137

 

17.4.

Enforceability of Obligations

137

 

17.5.

Postponement of Subrogation

137

 

17.6.

Limitation on Contingent Liability of UTSI Finance, Inc.

138

 

 

 

vi

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

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

 

 

Exhibit 1.2

Borrowing Base Certificate

Exhibit 1.2(a)

Compliance Certificate

Exhibit 1.3

Form of Pledge Agreement

Exhibit 2.1(a)

Revolving Credit Note

Exhibit 2.3

Term Note

Exhibit 2.4(a)

Swing Loan Note

Exhibit 2.24

Lender Joinder Agreement

Exhibit 5.5(b)

Financial Projections

Exhibit 8.1(d)

Financial Condition Certificate

Exhibit 16.3

Commitment Transfer Supplement

Exhibit 16.4

Form of Dover Agreement

 

 

Schedules

 

 

 

Schedule 1.1

Disclosed Action

Schedule 1.2

Permitted Disclosed Accounts

Schedule 1.3

Permitted Encumbrances

Schedule 1.4

Specified Indebtedness

Schedule 4.4

Equipment and Inventory Locations; Place of Business, Chief Executive Office,
Real Property

Schedule 4.8(j)

Deposit and Investment Accounts

Schedule 5.1

Consents

Schedule 5.2(a)

States of Qualification and Good Standing

Schedule 5.2(b)

Subsidiaries

Schedule 5.4

Federal Tax Identification Number

Schedule 5.6

Prior Names

Schedule 5.7

Environmental

Schedule 5.8(b)(i)

Litigation

Schedule 5.8(b)(ii)

Indebtedness

Schedule 5.8(d)

Plans

Schedule 5.9

Intellectual Property

Schedule 5.10

Licenses and Permits

Schedule 5.14

Labor Disputes

Schedule 5.23

Equity Interests

Schedule 5.24

Commercial Tort Claims

Schedule 5.25

Letter of Credit Rights

Schedule 5.26

Material Contracts

Schedule 7.3

Guarantees

Schedule 8.1(l)

Lien Waiver Agreements

 

 

vii

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

 

AMENDED AND RESTATED REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

Amended and Restated Revolving Credit, Term Loan and Security Agreement dated as
of August 10, 2018 among Universal Logistics Holdings, Inc., a corporation
organized under the laws of the State of Michigan (“Holdings”), Universal
Truckload, Inc., a corporation organized under the laws of the State of Delaware
(“UTI”), Universal Dedicated, Inc., a corporation organized under the laws of
the State of Michigan (“UDI”), Mason Dixon Intermodal, Inc. (dba Universal
Intermodal Services, Inc.), a corporation organized under the laws of the State
of Michigan (“Mason Dixon”), Logistics Insight Corp., a corporation organized
under the laws of the State of Michigan (“Logistics”), Universal Logistics
Solutions International, Inc., a corporation organized under the laws of the
State of Illinois (“Solutions”), Universal Specialized, Inc., a corporation
organized under the laws of the State of Michigan (“Specialized”), Cavalry
Logistics, LLC, a limited liability company organized under the laws of the
State of Tennessee (“Cavalry”), Universal Management Services, Inc., a
corporation organized under the laws of the State of Michigan (“Management
Services”), Fore Transportation Inc., a corporation organized under the laws of
the State of Illinois (“Fore Transportation”), Fore Transport, Inc., a
corporation organized under the laws of the State of Illinois (“Fore
Transport”), 4 Cargo LLC, a limited liability company organized under the laws
of the State of Illinois (“4 Cargo”), Southern Counties Express, Inc., a
corporation organized under the laws of the State of California (“Southern
Counties Inc.”), Aquarius Financial, Inc., a limited liability company organized
under the laws of the State of California (“Aquarius” and, together with
Holdings, UTI, UDI, Mason Dixon, Logistics, Solutions, Specialized, Calvary,
Management Services, Fore Transportation, Fore Transport, 4 Cargo, Southern
Counties Inc., and each Person joined hereto as a borrower from time to time,
collectively, the “Borrowers”, and each a “Borrower”), each Person party hereto
as a guarantor from time to time (collectively, the “Guarantors”, and each a
“Guarantor”), PNC BANK, NATIONAL ASSOCIATION (“PNC”) as a Revolving Lender (as
hereinafter defined), STEEL CITY CAPITAL FUNDING, A DIVISION OF PNC BANK,
NATIONAL ASSOCIATION (“SCCF”), as a Term Loan Lender (as hereinafter defined),
the other financial institutions which are now or which hereafter become a party
hereto as Revolving Lenders or Term Loan Lenders (collectively with all
Revolving Lenders and Term Loan Lenders party hereto as of the date hereof, the
“Lenders” and each, individually, a “Lender”) and PNC, as agent for the Lenders
(PNC, in such capacity, the “Agent”).

WHEREAS, certain Borrowers, the Agent and the Lenders party there to are parties
to that certain Revolving Credit and Security Agreement dated as of December 23,
2015 (as amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Original Credit Agreement”).  This Agreement amends and restates
the Original Credit Agreement but does not extinguish the obligations evidenced
thereby or constitute a novation of or affect the status of any Liens granted by
Borrowers to Agent and Lenders under the Original Credit Agreement or any other
documents, instruments or agreements executed in connection therewith.  

NOW THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, Borrowers, Guarantors, Lenders and Agent hereby agree as follows:

1

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

 

I.   DEFINITIONS.

1.1   Accounting Terms.  As used in this Agreement, the Other Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined shall have the respective meanings given to them under GAAP; provided,
however that, whenever such accounting terms are used for the purposes of
determining compliance with financial covenants in this Agreement, such
accounting terms shall be defined in accordance with GAAP as applied in
preparation of the audited financial statements of Borrowers for the fiscal year
ended December 31, 2017.  If there occurs after the Closing Date any change in
GAAP that affects in any respect the calculation of any covenant contained in
this Agreement or the definition of any term defined under GAAP used in such
calculations, Agent, Lenders and Borrowers shall negotiate in good faith to
amend the provisions of this Agreement that relate to the calculation of such
covenants with the intent of having the respective positions of Agent, Lenders
and Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the Closing Date, provided, that, until any such
amendments have been agreed upon, the covenants in this Agreement shall be
calculated as if no such change in GAAP had occurred and Borrowers shall provide
additional financial statements or supplements thereto, attachments to
Compliance Certificates and/or calculations regarding financial covenants as
Agent may reasonably require in order to provide the appropriate financial
information required hereunder with respect to Borrowers both reflecting any
applicable changes in GAAP and as necessary to demonstrate compliance with the
financial covenants before giving effect to the applicable changes in GAAP.

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

“4 Cargo” shall have the meaning set forth in the preamble to this Agreement.

“Accountants” shall have the meaning set forth in Section 9.7 hereof.

“Acquisition Agreement” shall mean the Stock Purchase Agreement including all
exhibits and schedules thereto dated on or about August 10, 2018 between Sellers
and Mason Dixon, as buyer.

“Advance Rates” shall mean the percentages set forth in Section 2.1(a)(i)-(iii)
hereof and the Pledged Securities Advance Rate.

“Advances” shall mean and include the Revolving Advances, Letters of Credit, the
Swing Loans and the Term Loan.

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

“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, manager, member, managing
member, general partner or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above.  For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to

2

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

 

vote 5% or more of the Equity Interests having ordinary voting power for the
election of directors of such Person or other Persons performing similar
functions for any such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by ownership of Equity Interests,
contract or otherwise.

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

“Agreement” shall mean this Amended and Restated Revolving Credit, Term Loan and
Security Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (a) the Base Rate in effect on such day, (b) the sum of the Overnight
Bank Funding Rate in effect on such day plus one half of one percent (0.5%), and
(c) the sum of the Daily LIBOR Rate in effect on such day plus one percent
(1.0%), so long as a Daily LIBOR Rate is offered, ascertainable and not
unlawful.  Any change in the Alternate Base Rate (or any component thereof)
shall take effect at the opening of business on the day such change occurs.

“Alternate Source” shall have the meaning set forth in the definition of
Overnight Bank Funding Rate.

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering or bribery,
and any regulation, order, or directive promulgated, issued or enforced pursuant
to such Laws, all as amended, supplemented or replaced from time to time.

“Applicable Accounts Advance Percentage” shall mean the applicable percentage
set forth in the table below for the periods specified therein:

Applicable Time Period

Applicable Accounts Advance Percentage

Closing Date through and including September 30, 2018

September 30, 2018

89%

October 1, 2018 through and including

December 31, 2018

88%

January 1, 2019 through and including

March 31, 2019

87%

April 1, 2019 through and including June 30, 2019

86%

July 1, 2019 and thereafter

85%

 

The Borrowers may elect to have the Applicable Accounts Advance Percentage
permanently reduced to eighty five percent (85%) at any time by providing
written notice of such election to the Agent, which election shall be effective
on the first day of the following month and once made, shall be irrevocable.

3

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

 

“Applicable Law” shall mean all Laws applicable to the Person, conduct,
transaction, covenant, Other Document or contract in question, all provisions of
all applicable state, federal and foreign constitutions, statutes, rules,
regulations, treaties, directives and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.

“Applicable Margin” shall mean (a) an amount equal to four and one half of one
percent (4.5%) for Advances under the Term Loan consisting of Domestic Rate
Loans, (b) an amount equal to five and one half of one percent (5.5%) for
Advances under the Term Loan consisting of LIBOR Rate Loans, and (c) for each of
the Revolving Advances and the Swing Loans, the applicable percent per annum set
forth in the pricing table below corresponding to the Average Excess
Availability for the fiscal quarter then ended, as adjusted on a quarterly basis
effective on the date of the receipt by the Agent of the quarterly financial
statements of Holdings and its Subsidiaries and related Compliance Certificate
for such fiscal quarter required under Section 9.8 to be delivered (each such
day on which delivery of such financial statements shall have been received by
the Agent, an “Adjustment Date”).

Level

Quarterly Average Excess Availability

Applicable Margin for LIBOR Rate Loans

Applicable Margin for Domestic Rate Loans

I

≥ 50% of the Maximum Revolving Advance Amount

During the Increased Availability Period:

1.50%

 

At all other times:

1.25%

During the Increased Availability Period:

.50%

 

At all other times:

.25%

II

<50% and ≥ 25.0% of the Maximum Revolving Advance Amount

During the Increased Availability Period:

1.75%

 

At all other times:

1.50%

During the Increased

Availability Period:

.75%

 

At all other times:

.50%

III

< 25.0% of the Maximum Revolving Advance Amount

During the Increased Availability Period:

2.00%

 

At all other times:

1.75%

During the Increased Availability Period:

1.00%

 

At all other times:

.75%

 

If Borrowers shall fail to deliver the financial statements, certificates and/or
other information required under Section 9.8 by the dates required pursuant to
such sections, each Applicable Margin set forth in the above pricing table shall
be conclusively presumed to equal the highest Applicable Margin specified in the
pricing table set forth above until the date of delivery of such financial
statements, certificates and/or other information, at which time the rate will
be adjusted based upon Average Excess Availability reflected in such
statements.  Notwithstanding anything to the contrary contained herein, no
downward adjustment in any Applicable Margin shall be made on any Adjustment
Date on which any Event of Default shall have occurred and be
continuing.  Notwithstanding anything to the contrary contained herein,
immediately and automatically upon the occurrence of any Event of Default, each
Applicable Margin set forth in the above pricing table shall increase to and
equal the highest Applicable Margin specified in the pricing table set forth
above and shall continue at such highest

4

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

 

Applicable Margin until the date (if any) on which such Event of Default shall
be waived or cured in accordance with the provisions of this Agreement, at which
time the rate will be adjusted based upon the Average Excess Availability
reflected on the most recently delivered Compliance Certificate delivered by
Borrowers to Agent pursuant to Section 9.8.  Any increase in interest rates
and/or other fees payable by Borrowers under this Agreement and the Other
Documents pursuant to the provisions of the foregoing sentence shall be in
addition to and independent of any increase in such interest rates and/or other
fees resulting from the occurrence of any Event of Default (including, if
applicable, any Event of Default arising from a breach of Sections 9.8 hereof)
and/or the effectiveness of the Default Rate provisions of Section 3.1 hereof or
the default fee rate provisions of Section 3.2 hereof.

If Agent determines in good faith that (a) the Average Excess Availability as
previously calculated as of any applicable date for any applicable period was
inaccurate, and (b) a proper calculation of the Average Excess Availability for
any such period would have resulted in different pricing for such period, then
(i) if the proper calculation of the Average Excess Availability would have
resulted in a higher interest rate and/or fees (as applicable) for such period,
automatically and immediately without the necessity of any demand or notice by
Agent or any other affirmative act of any party, the interest accrued on the
applicable outstanding Advances and/or the amount of the fees accruing for such
period under the provisions of this Agreement and the Other Documents shall be
deemed to be retroactively increased by, and after notice by Agent, Borrowers
shall be obligated to promptly pay to Agent for the ratable benefit of the
Revolving Lenders an amount equal to the excess of the amount of interest and
fees that should have been paid for such period over the amount of interest and
fees actually paid for such period; and (ii) if the proper calculation of the
Average Excess Availability would have resulted in a lower interest rate and/or
fees (as applicable) for such period, then the interest accrued on the
applicable outstanding Advances and the amount of the fees accruing for such
period under the provisions of this Agreement and the Other Documents shall be
deemed to remain unchanged, and Agent and the Revolving Lenders shall have no
obligation to repay interest or fees to the Borrowers; provided, that, if as a
result of any restatement or other event or other determination by Agent in good
faith a proper calculation of the Average Excess Availability would have
resulted in a higher interest rate and/or fees (as applicable) for one or more
periods and a lower interest rate and/or fees (as applicable) for one or more
other periods, then the amount payable by Borrowers pursuant to clause (i) above
shall be based upon the excess, if any, of the amount of interest and fees that
should have been paid for all applicable periods over the amounts of interest
and fees actually paid for such periods.

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

“Approvals” shall have the meaning set forth in Section 5.7(b) hereof.

“Approved Electronic Communication” shall mean each notice, demand,
communication, information, document and other material transmitted, posted or
otherwise made or communicated by e-mail, E-Fax, the Credit Management Module of
PNC’s PINACLE® System, or any other equivalent electronic service agreed to by
Agent, whether owned, operated or hosted by Agent, any Lender, any of their
Affiliates or any other Person, that any party is obligated to, or otherwise
chooses to, provide to Agent pursuant to this Agreement or any Other Document,
including any financial statement, financial and other report, notice, request,
certificate and other information material; provided that Approved Electronic
Communications shall not include any notice, demand, communication, information,
document or other material that Agent specifically instructs a Person to deliver
in physical form.

5

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

 

“Aquarius” shall have the meaning set forth in the preamble to this Agreement.

“Average Excess Availability” shall mean as of any date of determination, an
amount equal to the average Excess Availability of Borrowers for the most
recently ended applicable fiscal period at such time; calculated by dividing the
sum of Excess Availability for each of the days in such period by the number of
days in such period.

“Base Rate” shall mean the base commercial lending rate of PNC as publicly
announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such
rate.  This rate of interest is determined from time to time by PNC as a means
of pricing some loans to its customers and is neither tied to any external rate
of interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.

“Beneficial Owner” shall mean, for each Loan Party, each of the following:  (a)
each individual, if any, who, directly or indirectly, owns 25% or more of such
Loan Party’s Equity Interests; and (b) a single individual with significant
responsibility to control, manage, or direct such Loan Party.

“Benefited Lender” shall have the meaning set forth in Section 2.6(e) hereof.

“BLT” Brenda Lewo Transportation & Logistics, LLC.

“Blocked Account Bank” shall have the meaning set forth in Section 4.8(h)
hereof.

“Blocked Accounts” shall have the meaning set forth in Section 4.8(h) hereof.

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

“Borrowers on a Consolidated Basis” shall mean the consolidation in accordance
with GAAP of the accounts or other items of Borrowers and their respective
Subsidiaries.

“Borrowers’ Account” shall have the meaning set forth in Section 2.10 hereof.

“Borrowing Agent” shall mean Universal Management Services, Inc.

“Borrowing Base Certificate” shall mean a certificate in substantially the form
of Exhibit 1.2 hereto duly executed by the President, Chief Financial Officer or
Controller of the Borrowing Agent and delivered to the Agent, appropriately
completed, by which such officer shall certify to Agent the Formula Amount and
calculation thereof as of the date of such certificate.

“Brokered Receivables” shall mean Receivables in which any or all of the
services Borrowers, or any of them, are to perform or have performed have been
contracted by one or more of the Borrowers (including by lease agreement) with a
third party to perform.  Such third parties, may include, but are not limited
to, motor carriers, independent contractor carriers, owner-operators, and
private carriers (as defined in 49 C.F.R.§ 376.2), whether or not such parties
are determined to be employees under 49 C.F.R. § 390.5 and whether or not such
parties use their own or one or more of the Borrowers’ United States Department
of Transportation numbers to perform such services for Borrowers, or any of
them.

6

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

 

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

“Calvary” shall have the meaning set forth in the preamble to this Agreement.  

“Capital Expenditures” shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements (or of any replacements or
substitutions thereof or additions thereto) which have a useful life of more
than one year and which, in accordance with GAAP, would be classified as capital
expenditures.  Capital Expenditures shall include the total principal portion of
Capitalized Lease Obligations.

“Capitalized Lease Obligation” shall mean any Indebtedness of any Loan Party
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.

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

“Cash Management Products and Services” shall mean agreements or other
arrangements under which Agent or any Lender or any Affiliate of Agent or a
Lender provides any of the following products or services to any Loan
Party:  (a) credit cards; (b) credit card processing services; (c) debit cards
and stored value cards; (d) commercial cards; (e) ACH transactions; and (f) cash
management and treasury management services and products, including without
limitation controlled disbursement accounts or services, lockboxes, automated
clearinghouse transactions, overdrafts, interstate depository network
services.  The indebtedness, obligations and liabilities of any Loan Party to
the provider of any Cash Management Products and Services (including all
obligations and liabilities owing to such provider in respect of any returned
items deposited with such provider) (the “Cash Management Liabilities”) shall be
“Obligations” hereunder, guaranteed obligations under any Guaranty and secured
obligations under any Guarantor Security Agreement, as applicable, and otherwise
treated as Obligations for purposes of each of the Other Documents.  The Liens
securing the Cash Management Products and Services shall be pari passu with the
Liens securing all other Obligations under this Agreement and the Other
Documents, subject to the express provisions of Section 11.5.

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

“CFTC” shall mean the Commodity Futures Trading Commission.

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

“Certificate of Beneficial Ownership” shall mean, for each Loan Party, a
certificate in form and substance acceptable to Agent (as amended or modified by
Agent from time to time in its sole discretion), certifying, among other things,
the Beneficial Owner of such Loan Party.

7

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

 

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

“Change of Control” shall mean: (a) the occurrence of any event (whether in one
or more transactions) which results in a transfer of control of Holdings or any
other Loan Party to a Person other than the Moroun Family Shareholders or MSF
Entities, or (b) the occurrence of any event (whether in one or more
transactions) which results in Moroun Family Shareholders or the MFS Entities
failing to own more than fifty one percent (51%) of the Equity Interests (on a
fully diluted basis) of Holdings, (c) other than as permitted by Section 7.1,
the occurrence of any event (whether in one or more transactions) which results
in Holdings failing to own, directly or indirectly, one hundred (100%) percent
of the Equity Interests (on a fully diluted basis) of any Loan Party.  

“Charges” shall mean all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross income, gross receipts, sales, use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon the
Collateral, any Loan Party or any of its Affiliates.

“Cherokee” shall mean Cherokee Insurance Company, a Michigan insurance company,
and its successors and assigns.

“Cherokee Holdings Subordination Agreement” shall mean that certain
subordination agreement, dated as of the Closing Date, among Cherokee, Holdings
and the Agent, as amended, modified, supplemented or restated from time to time.

“Cherokee Indemnity Agreement” shall mean that certain General Indemnity
Agreement, dated on or about August 10, 2018, between Cherokee as Indemnitee and
UTI as Indemnitor, as amended, supplemented or restated from time to time.

“Cherokee Surety Bond” shall mean that certain surety bond issued by Cherokee in
connection with the stay of enforcement of the judgment rendered in respect of
the Disclosed Action, as such surety bond may be supplemented, increased,
revised, replaced, renewed, modified or amended.

8

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

 

“CIP Regulations” shall have the meaning set forth in Section 14.12 hereof.

“Closing Date” shall mean August 10, 2018 or such other date as may be agreed to
in writing by the parties hereto.

“Closing Date Excess Availability” shall mean an amount equal to (a) the lesser
of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount minus the
Maximum Undrawn Amount of all outstanding Letters of Credit, minus (b) the sum
of (i) the outstanding amount of Advances on the Closing Date (after payment of
all fees and expenses) plus (ii) all amounts due and owing to any Borrower’s
trade creditors which are outstanding sixty (60) days or more past their due
date.

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended
or supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

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

(a)   all Receivables and all supporting obligations relating thereto;

(b)   all equipment and fixtures;

(c)   all general intangibles (including all payment intangibles and all
software) and all supporting obligations related thereto;

(d)   all Inventory;

(e)   all Subsidiary Stock, financial assets and investment property, including
all Pledged Securities;

(f)   all Real Property;

(g)   all Leasehold Interests;

(h)   all contract rights, rights of payment which have been earned under a
contract rights, chattel paper (including electronic chattel paper and tangible
chattel paper), commercial tort claims (whether now existing or hereafter
arising); documents (including all warehouse receipts and bills of lading),
deposit accounts, instruments (including promissory notes), letters of credit
(whether or not the respective letter of credit is evidenced by a writing) and
letter-of-credit rights, cash, certificates of deposit, insurance proceeds, tort
claim proceeds and all supporting obligations;

(i)   all ledger sheets, ledger cards, files, correspondence, records, books of
account, business papers, computers, computer software (owned by any Loan Party
or in which it has an interest), computer programs, tapes, disks and documents,
including all of such property relating to the property described in clauses (a)
through (h) of this definition; and

9

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

 

(j)   all proceeds and products of the property described in clauses (a) through
(i) of this definition, in whatever form.  It is the intention of the parties
that if Agent shall fail to have a perfected Lien in any particular property or
assets of any Loan Party for any reason whatsoever, but the provisions of this
Agreement and/or of the Other Documents, together with all financing statements
and other public filings relating to Liens filed or recorded by Agent against
Loan Parties, would be sufficient to create a perfected Lien in any property or
assets that such Loan Party may receive upon the sale, lease, license, exchange,
transfer or disposition of such particular property or assets, then all such
“proceeds” of such particular property or assets shall be included in the
Collateral as original collateral that is the subject of a direct and original
grant of a security interest as provided for herein and in the Other Documents
(and not merely as proceeds (as defined in Article 9 of the Uniform Commercial
Code) in which a security interest is created or arises solely pursuant to
Section 9-315 of the Uniform Commercial Code).

Notwithstanding the forgoing, Collateral shall not include any Excluded
Property.

“Com Data” shall mean ComData, Inc. or an alternate payment processing vendor
offering comparable services.

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

“Compliance Certificate” shall mean a compliance certificate substantially in
the form of Exhibit 1.2(a) hereto to be signed by the Chief Financial Officer or
Controller of Borrowing Agent.

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

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

“Controlled Group” shall mean, at any time, each Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Borrower, are treated as a single employer under Section 414 of the Code.

“Covered Entity” shall mean (a) each Loan Party, each Loan Party’s Subsidiaries,
all Guarantors and all pledgors of Collateral and (b) each Person that, directly
or indirectly, is in control of a Person described in clause (a) above.  For
purposes of this definition, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 25% or more of the issued and
outstanding equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

10

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

 

“Credit Party Agent Investments” shall mean loans, advances and other
investments by a Borrower in or to a Credit Party Agent.

“Credit Party Agents” shall mean commissioned agents or agencies and business
entities formed by commissioned agents or agencies which provide goods or
services to a Borrower in connection with the transportation of goods.

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

“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by the
Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the
Reserve Percentage.

“Debt Payments” shall mean for any period (without duplication): (a) scheduled
interest payments on any Advances hereunder, plus (b) all scheduled principal
payments and all mandatory prepayments, to the extent funded with the proceeds
of Funded Debt, in each case on any Indebtedness (including the Term Loan and,
to the extent accompanied by a permanent reduction to the Maximum Revolving
Advance Amount, Revolving Advances) during such period, plus (c) payments for
all fees, commissions and charges set forth herein or in the Fee Letter during
such period (other than any one-time fees paid or payable on the Closing Date),
plus (d) scheduled payments on Capitalized Lease Obligations during such period,
plus (e) payments made during such period, to the extent not made in the
Ordinary Course of Business, to Affiliates that are not Loan Parties, to the
extent such payments are not expensed and deducted in the calculation of net
income of Borrowers on a Consolidated Basis.

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

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

“Defaulting Lender” shall mean any Lender that: (a) has failed, within two (2)
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Revolving Commitment Percentage or Term Loan Commitment Percentage, as
applicable, of Advances, (ii) if applicable, fund any portion of its
Participation Commitment in Letters of Credit or Swing Loans or (iii) pay over
to Agent, Issuer, Swing Loan Lender or any Lender any other amount required to
be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies Agent in writing that such failure is the result of such Lender’s good
faith determination that a condition precedent to funding (specifically
identified and including a particular Default or Event of Default, if any) has
not been satisfied; (b) has notified Borrowers or Agent in writing, or has made
a public statement to the effect, that it does not intend or expect to comply
with any of its funding obligations under this Agreement (unless such writing or
public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including a particular Default or Event of Default, if any) to funding a loan
under this Agreement cannot be satisfied) or generally under other agreements in
which it commits to extend credit; (c) has failed, within two (2) Business Days
after request by Agent or Borrowing Agent, acting in good faith, to provide a
certification in writing from an authorized

11

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

 

officer of such Lender that it will comply with its obligations (and is
financially able to meet such obligations) to fund prospective Advances and, if
applicable, participations in then outstanding Letters of Credit and Swing Loans
under this Agreement, provided that such Lender shall cease to be a Defaulting
Lender pursuant to this clause (c) upon Agent’s receipt of such certification in
form and substance reasonably satisfactory to the Agent; (d) has become the
subject of an Insolvency Event; or (e) has failed at any time to comply with the
provisions of Section 2.6(e) with respect to purchasing participations from the
other Lenders, whereby such Lender’s share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Lenders.

“Depository Accounts” shall have the meaning set forth in Section 4.8(h) hereof.

“Designated Lender” shall have the meaning set forth in Section 16.2(d) hereof.

“Disclosed Action” shall mean that certain litigation described on Schedule 1.1.

“Disqualified Equity Interests” means any Equity Interest which, by its terms
(or by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
Equity Interests which are not Disqualified Equity Interests), pursuant to a
sinking fund obligation or otherwise (except as a result of a change of control
or asset sale so long as any rights of the holders thereof upon the occurrence
of a change of control or asset sale event shall be subject to the prior
repayment in full of all Obligations that are accrued and payable and the
termination of the Commitments and all outstanding Letters of Credit), (b) is
redeemable at the option of the holder thereof (other than solely for Equity
Interests which are not Disqualified Equity Interests), in whole or in part, (c)
provides for the scheduled payments of dividends in cash (other than, in the
case of limited liability companies, limited partnerships and other entities
that are pass-through entities for tax purposes, for taxes attributable to the
operations of the business) prior to the time that the Obligations are paid in
full in cash (other than (i) contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted and (ii) Letters of Credit
so long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to this Agreement), or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Equity Interests
that would constitute Disqualified Equity Interests.

“Document” shall have the meaning given to the term “document” in the Uniform
Commercial Code.

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

“Domestic Borrower” shall mean a Borrower incorporated or organized under the
laws of the United States of America, or any state or other political
subdivision thereof or which is considered to be a “disregarded entity” for
United States federal income tax purposes and which is not a “controlled foreign
corporation” as defined under Section 957 of the Internal Revenue Code, in each
case provided such Borrower is owned by Holdings or a Domestic Subsidiary of
Holdings, and “Domestic Borrower” shall mean any or all of them.

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

12

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

 

“Doubtful Accounts Adjustment” shall mean an amount equal to the provision for
doubtful accounts for such period less the sum of write-downs for bad debts for
such period.  For example, if the provision for doubtful accounts for such
period is $3,000,000 and the sum of write-downs for bad debt for such period is
$2,000,000, then the Doubtful Accounts Adjustment is $1,000,000.  The Doubtful
Accounts Adjustment shall be consistently applied and approved by the Agent in
its reasonable discretion.

“Dover Agreement” shall mean that certain Receivables Purchase Agreement dated
as of April 12, 2018 by and between Cavalry Logistics, LLC (in its capacity as
creditor), the Investor (as defined therein) and JPMorgan Chase Bank, N.A. in
its capacity as Investor Agent with respect to certain receivables of Dover
Corporation Inc. and/or its subsidiaries and affiliates (in their respective
capacity as account debtor) substantially in the form attached hereto as Exhibit
16.4.

“Dover Entity” shall mean Dover Corporation, Inc. and each of its Subsidiaries
and Affiliates, including without limitation, Norris Rods Inc., UPCO, Inc.,
Vehicle Service Group, LLC, Hill PHOENIX, Inc. and PDQ Manufacturing, Inc.

“Drawing Date” shall have the meaning set forth in Section 2.14(b) hereof.

“EBITDA” shall mean for any period with respect to any Person, the sum of (a)
net income (or loss) for such period (excluding extraordinary gains and losses),
plus (b) all interest expense for such period, plus (c) all charges against
income for such period for federal, state and local taxes, plus (d) depreciation
expenses for such period, plus (e) amortization expenses for such period, plus
(f) non-cash charges for such period (minus the sum of cash payments made during
such period with respect to non-cash charges which have previously been added
back in the calculations of EBITDA, and, to the extent included in
the  calculation of net income, non-cash gains during such period ), plus (g)
non cash losses on sales of assets in an amount not to exceed $500,000 in any
twelve month period, minus (h) non cash gains on sales of assets, plus (i) in
the case of the Borrowers, if so elected by them, by notification to the Agent
in the Compliance Certificate for such period, the Doubtful Accounts Adjustment,
plus (j) stock based compensation, plus (k) fees, expenses and costs (including
fees of advisors, legal counsels, agents and representatives) incurred in
connection with the closing and consummation of this Agreement and the
Acquisition Agreement, plus (l) fees, expenses and costs (including fees of
advisors, legal counsels, agents and representatives) incurred in connection
with any amendment to, or consent or waiver under, the Loan Documents (whether
or not consummated), plus (m) all fees, costs and expenses (including fees of
advisors, legal counsels, agents and representatives) related to the Disclosed
Action, in each case to the extent accrued and not paid in cash plus (n)  fees,
expenses and costs (including fees of advisors, legal counsels, agents and
representatives) incurred in connection with any (i) failed acquisition (to the
extent not duplicative of amounts added back in prior periods) and (ii)
Permitted Acquisition (to the extent not duplicative of amounts added back in
prior periods), not to exceed in any fiscal year, with respect to all such fees,
expenses, and costs described in this clause (n), the aggregate sum of $750,000,
plus (o) insurance premiums paid in cash during such period.

“Effective Date” means the date indicated in a document or agreement to be the
date on which such document or agreement becomes effective, or, if there is no
such indication, the date of execution of such document or agreement.

13

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

 

“Eligible Affiliate Receivables” shall mean Receivables which satisfy the
definition of Eligible Receivables, except for clause (a) thereof provided such
Receivables arise from the rendition of services to P.A.M. Transportation, Inc.
and its Subsidiaries or an MFS Entity.

“Eligible BLT Receivables” shall mean Eligible Receivables owing from BLT under
the terms of that certain Services Agreement dated as of September 12, 2016 by
and between BLT and Logistics Insight Corp. arising from the rendition of
services to General Motors Company, or such other customer of BLT as Agent may
approve in writing.

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

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

“Eligible Domestic Billed Receivables” shall mean Eligible Receivables which are
owned and billed and collected by a Domestic Borrower.

“Eligible Foreign Receivables” shall mean each Receivable which satisfies the
definition of Eligible Receivables, except for clause (f) thereof provided such
Receivable arises from a sale or provision of services to a Customer which is
located in Canada or Mexico provided that no Receivable arising from a sale to a
Customer located in Canada who remits payment to an account maintained in Canada
shall be deemed an Eligible Foreign Receivable until such time as the applicable
Borrowers have either delivered a deposit account control agreement in form and
substance satisfactory to Agent with respect to each of such Borrower’s deposit
accounts maintained in Canada, or caused such accounts to be maintained with the
Agent in Canada.

“Eligible Pledged Securities” shall mean Pledged Securities constituting cash
and certificates of deposit, bonds with a rating by S&P of BBB- or better or by
Moody’s of Baa3 or better, mutual funds, and equity securities.

“Eligible Receivables” shall mean and include, each Receivable of a Borrower
arising in the Ordinary Course of Business and which Agent, in its sole credit
judgment, shall deem to be an Eligible Receivable, based on such considerations
as Agent may from time to time deem appropriate.  A Receivable shall not be
deemed eligible unless such Receivable is subject to Agent’s first priority
perfected security interest and no other Lien (other than Permitted
Encumbrances), and is evidenced by an invoice or other documentary evidence
satisfactory to Agent.  In addition, no Receivable shall be an Eligible
Receivable if:

(a)   it arises out of a sale made by any Borrower to an Affiliate of any
Borrower or to a Person controlled by an Affiliate of any Borrower;

(b)   it is due or unpaid more than ninety (90) days after the original invoice
date (or, in the case of a Receivable for which payments are on greater than net
thirty (30) day terms,

14

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

 

more than one hundred twenty (120) days after the original invoice date) or
sixty (60) days after the original due date;

(c)   fifty percent (50%) or more of the Receivables from such Customer are not
deemed Eligible Receivables hereunder.  Such percentage may be increased or
decreased from time to time by Agent by exercise of its Permitted Discretion;

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

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

(f)   the sale is to a Customer outside the continental United States of America
unless the sale is on letter of credit, guaranty or acceptance terms, in each
case acceptable to Agent as determined by exercise of its Permitted Discretion;

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

(h)   Agent determines, by exercise of its Permitted Discretion, that collection
of such Receivable is insecure or that such Receivable may not be paid by reason
of the Customer’s financial inability to pay;

(i)   the Customer is the United States of America, any state or any department,
agency or instrumentality of any of them, unless the applicable Borrower assigns
its right to payment of such Receivable to Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes
or ordinances;

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

(k)   the Receivables of the Customer exceed a credit limit determined by Agent,
by exercise of its Permitted Discretion, to the extent such Receivable exceeds
such limit;

(l)   the Receivable is subject to any offset, deduction, defense, dispute,
credits or counterclaim (but such Receivable shall only be ineligible to the
extent of such offset, deduction, defense or counterclaim) the Customer is also
a creditor or supplier of a Borrower or the Receivable is contingent in any
respect or for any reason;

(m)   the applicable Borrower has made any agreement with any Customer for any
deduction therefrom, except for discounts or allowances made in the Ordinary
Course of Business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;

15

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

 

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

(o)   such Receivable is not payable to a Borrower;

(p)   such Receivable is not otherwise satisfactory to Agent as determined in
good faith by Agent in the exercise of its discretion in a reasonable manner; or

(q)   at any time after a Borrower has entered into the Dover Agreement, such
Receivable is owing from a Dover Entity.

“Eligible Unbilled Receivables” shall mean a Receivable which satisfies the
definition of Eligible Receivables, except for clause (b) thereof because it is
unbilled provided no more than 30 days have elapsed since the service date.

“Environmental Complaint” shall have the meaning set forth in Section 9.3(b)
hereof.

“Environmental Laws” shall mean all federal, state and local environmental, land
use, zoning, health, chemical use, safety and sanitation Laws, relating to the
protection of the environment, human health and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Materials and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of federal, state,
international and local governmental agencies and authorities with respect
thereto.

“Equity Interests” shall mean, with respect to any Person, any and all shares,
rights to purchase, options, warrants, general, limited or limited liability
partnership interests, member interests, participation or other equivalents of
or interest in (regardless of how designated) equity of such Person, whether
voting or nonvoting, including common stock, preferred stock, convertible
securities or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Exchange Act), including in each case all of the following rights relating to
such Equity Interests, whether arising under the Organizational Documents of the
Person issuing such Equity Interests (the “issuer”) or under the Applicable Laws
of such issuer’s jurisdiction of organization relating to the formation,
existence and governance of corporations, limited liability companies or
partnerships or business trusts or other legal entities, as the case may be: (i)
all economic rights (including all rights to receive dividends and
distributions) relating to such Equity Interests; (ii) all voting rights and
rights to consent to any particular action(s) by the applicable issuer; (iii)
all management rights with respect to such issuer; (iv) in the case of any
Equity Interests consisting of a general partner interest in a partnership, all
powers and rights as a general partner with respect to the management,
operations and control of the business and affairs of the applicable issuer; (v)
in the case of any Equity Interests consisting of the membership/limited
liability company interests of a managing member in a limited liability company,
all powers and rights as a managing member with respect to the management,
operations and control of the business and affairs of the applicable issuer;
(vi) all rights to designate or appoint or vote for or remove any officers,
directors, manager(s), general partner(s) or managing member(s) of such issuer
and/or any members of any board of members/managers/partners/directors that may
at any time have any rights to manage and direct the business and affairs of the
applicable issuer under its

16

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

 

Organizational Documents as in effect from time to time or under Applicable Law;
(vii) all rights to amend the Organizational Documents of such issuer, (viii) in
the case of any Equity Interests in a partnership or limited liability company,
the status of the holder of such Equity Interests as a “partner”, general or
limited, or “member” (as applicable) under the applicable Organizational
Documents and/or Applicable Law; and (ix) all certificates evidencing such
Equity Interests.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time and the rules and
regulations promulgated thereunder.

“Event of Default” shall have the meaning set forth in Article X hereof.

“Excess Availability” shall mean at any time of determination, (a) the lesser of
(i) the Maximum Revolving Advance Amount minus the Maximum Undrawn amount of all
outstanding Letters of Credit, or (ii) the Formula Amount, minus (b) the sum of
(i) outstanding Revolving Advances, plus (ii) unpaid fees and
expenses  outstanding hereunder.

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

“Excluded Accounts” shall mean (i) payroll accounts, employee benefit accounts,
trust accounts, escrow accounts, and other similar types of fiduciary accounts
and (ii) accounts with respect to which the aggregate amount on deposit,
collectively for all such accounts described in this clause (ii), does not
exceed $50,000 at any time.

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

17

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

 

“Excluded Property” shall mean (a) any non-material lease, license, contract or
agreement to which any Loan Party is a party, including, without limitation, but
irrespective of materiality, (i) any equipment financing or leasing agreement to
which LGSI Equipment of Indiana, LLC, an Indiana limited liability company, is a
party and (ii) any mortgage financing or loan agreement to which UTSI Finance,
Inc. a Michigan corporation, or APA Holdings, LLC, an Illinois limited liability
company, is a party, and any of such Loan Party’s rights or interests in
property that constitutes collateral thereunder, if and to the extent that a
security interest in such property is prohibited by or in violation of (x) any
Applicable Law, or (y) a term, provision or condition of any such lease,
license, contract or agreement (unless in each case, such Applicable Law, term,
provision or condition would be rendered ineffective with respect to the
creation of such security interest pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the Uniform Commercial Code (or any successor provision or provisions)
of any relevant jurisdiction or any other Applicable Law or principles of
equity), provided, however, that the foregoing shall cease to be treated as
“Excluded Property” (and shall constitute Collateral) immediately at such time
as the contractual or legal prohibition shall no longer be applicable and to the
extent severable, such security interest shall attach immediately to any portion
of such lease, license, contract or agreement, and such property, not subject to
the prohibitions specified in (x) or (y) above, provided, further that Excluded
Property shall not include any proceeds of any such lease, license, contract or
agreement or any goodwill of Loan Parties’ business associated therewith or
attributable thereto, (b) the Loan Parties’ rights as lessee under equipment
leases, (c) Excluded Accounts, (d) Equity Interests of Subsidiaries of a Loan
Party (including, for the avoidance of doubt, each of the Westport Companies) to
the extent such Subsidiary is subject to an agreement restricting the pledge of
the Equity Interests issued by such Subsidiary, as reasonably determined by the
Agent based on its prior review of any such Agreement, and (e) securities
consisting of shares of Holdings’ treasury stock.

“Excluded Taxes” shall mean, with respect to Agent, any Lender, Participant,
Swing Loan Lender, Issuer or any other recipient of any payment to be made by or
on account of any Obligations, (a) taxes imposed on or measured by its overall
net income (however denominated), and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof)
under the Laws of which such recipient is organized or in which its principal
office or applicable lending office is located or, in the case of any Lender,
Participant, Swing Loan Lender or Issuer, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which any Borrower is
located, (c) in the case of a Foreign Lender, any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.10(e), except to the extent
that such Foreign Lender or Participant (or its assignor or seller of a
participation, if any) was entitled, at the time of designation of a new lending
office (or assignment or sale of a participation), to receive additional amounts
from Borrowers with respect to such withholding tax pursuant to Section 3.10(a),
or (d) any Taxes imposed on any “withholding payment” payable to such recipient
as a result of the failure of such recipient to satisfy the requirements set
forth in the FATCA after December 31, 2012.

“FATCA” shall mean 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) and any current or
future regulations thereunder or official interpretations thereof.

18

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

 

“Federal Funds Effective Rate” shall mean, for any day, the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) calculated by the Federal Reserve Bank of New York (or any
successor), based on such day’s federal funds transactions by depositary
institutions, as determined in such matter as such Federal Reserve Bank (or any
successor) shall set forth on its public website from time to time, and as
published on the next succeeding Business Day by such Federal Reserve Bank as
the “Federal Funds Effective Rate”; provided, if such Federal Reserve Bank (or
its successor) does not publish such rate on any day, the “Federal Funds
Effective Rate” for such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced.

“Federal Funds Open Rate” shall mean for any day the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by PNC (an “Alternate Source”) (or if such rate for such day
does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on
any Alternate Source, or if there shall at any time, for any reason, no longer
exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
Source, a comparable replacement rate determined by PNC at such time (which
determination shall be conclusively presumed correct absent demonstrable error);
provided however, that if such day is not a Business Day, the Federal Funds Open
Rate for such day shall be the “open” rate on the immediately preceding Business
Day.  If and when the Federal Funds Open Rate changes, the rate of interest with
respect to any advance to which the Federal Funds Open Rate applies will change
automatically without notice to Borrowers, effective on the date of any such
change.

“Fee Letter” shall mean the fee letter dated as of August 10, 2018 among
Borrowers and PNC.

“Fixed Charge Coverage Ratio” shall mean, with respect to any fiscal period, the
ratio of (a) Global EBITDA, minus Unfunded Capital Expenditures made during such
period, minus distributions (including tax distributions) and dividends made
during such period, minus cash taxes paid during such period, to (b) all Debt
Payments made by Holdings and its Subsidiaries during such period (including,
for the avoidance of doubt, all Debt Payments made by Westport USA Holdings, LLC
and its direct and indirect Subsidiaries).

“Fore Acquisition Documents” shall mean the Fore Purchase Agreement and any
other related documents or agreements arising from or entered into pursuant to
the terms of such Fore Purchase Agreement, in each case as amended as permitted
hereunder from time to time.

“Fore Purchase Agreement” shall mean that certain Equity Purchase Agreement
(including all schedules, exhibits and attachments to same) by and among UIS,
UTSI Finance, Inc. and the Fore Sellers dated as of February 1, 2018, as
amended, restated or otherwise modified from time to time to the extent
permitted hereunder.

“Fore Sellers” shall mean Michael R Apa, Sr. Irrevocable Business Trust dated
June 30, 2016, Michael R. Apa, Sr. Irrevocable Real Estate Trust dated June 30,
2016 and James A. Apa.

19

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

 

“Fore Transport” shall have the meaning set forth in the preamble to this
Agreement.

“Fore Transportation” shall have the meaning set forth in the preamble to this
Agreement.  

“Foreign Currency Hedge” shall mean any foreign exchange transaction, including
spot and forward foreign currency purchases and sales, listed or
over-the-counter options on foreign currencies, non-deliverable forwards and
options, foreign currency swap agreements, currency exchange rate price hedging
arrangements, and any other similar transaction providing for the purchase of
one currency in exchange for the sale of another currency entered into by any
Borrower, Guarantor and/or any of their respective Subsidiaries.

“Foreign Currency Hedge Liabilities” shall have the meaning assigned in the
definition of Lender-Provided Foreign Currency Hedge.

“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which Borrowers are resident for tax
purposes.  For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

“Foreign Subsidiary” shall mean any Subsidiary of any Person that is not
organized or incorporated in the United States, any State or territory thereof
or the District of Columbia.

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

“Funded Debt” shall mean, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness, and specifically including Capitalized Lease
Obligations, current maturities of long-term debt, revolving credit, short term
debt, and also including, in the case of the Loan Parties, the Obligations and,
without duplication, Indebtedness consisting of guaranties of Funded Debt of
other Persons provided, however, that in the case of the Loan Parties, Funded
Debt shall not include any contingent liability of such Loan Party arising from
an indemnification or reimbursement obligation of such Loan Party related to (x)
the Disclosed Action or (y) any bond or other security granted in connection
therewith, so long as the right to receive payment from such Loan Party in
respect of such obligation is subordinated to the prior payment in full of all
Obligations, pursuant to a duly executed Subordination Agreement.

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

“GFI” shall mean Green Fleet, Inc., a corporation organized under the laws of
the State of California.

“GFL” shall mean Green Fleet, LLC, a limited liability company organized under
the laws of the State of California.

“Global EBITDA” shall mean the EBITDA of Holdings and its Subsidiaries, on a
consolidated basis.

“Governmental Acts” shall mean any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental Body.

20

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

 

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

“Group EBITDA” shall mean EBITDA of the Loan Parties, on a consolidated basis.

“Guarantor” shall mean any Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations and “Guarantors” means
collectively all such Persons.

“Guarantor Security Agreement” shall mean any security agreement executed by any
Guarantor in favor of Agent securing the Obligations or the Guaranty of such
Guarantor, in form and substance satisfactory to Agent.

“Guaranty” shall mean any guaranty of the Obligations executed by a Guarantor in
favor of Agent for its benefit and for the ratable benefit of Lenders, in form
and substance satisfactory to Agent.

“Hazardous Discharge” shall have the meaning set forth in Section 9.3(b) hereof.

“Hazardous Materials” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
as defined in or subject to regulation under Environmental Laws.

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

“Hedge Liabilities” shall mean collectively, the Foreign Currency Hedge
Liabilities and the Interest Rate Hedge Liabilities.

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

“Holdings – UTI Intercompany Loan” shall mean that certain intercompany loan in
the original principal amount of $7,000,000 made on or about the Closing Date by
Holdings to UTI.

“Increased Availability Period” shall mean the period of time from the Closing
Date until the date that the Applicable Accounts Advance Percentage is equal to
or less than 85%.

21

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

 

“Increased Tax Burden” shall mean the additional federal, state or local taxes
assumed to be payable by a shareholder or member of any Borrower as a result of
such Borrower’s status as a member of a group filing tax returns on a combined
or consolidated basis (“Tax Group”) or as a limited liability company,
subchapter S corporation or any other entity that is disregarded for federal and
state income, franchise, gross receipts, sales or other tax purposes (as
applicable) but only so long as such Borrower remains a member of such a Tax
Group or has elected to be treated as a pass though entity for such tax purposes
and such election has not been rescinded or withdrawn, as evidenced and
substantiated by the tax returns filed by such Borrower (as applicable), with
such taxes being calculated for all members or shareholders, as applicable, at
the highest marginal rate applicable to any member or shareholder, as
applicable.

“Increasing Lender” shall have the meaning set forth in Section 2.24(a) hereof.

“Indebtedness” shall mean, as to any Person at any time (but without
duplication), any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, or joint or several) of such Person for or in respect
of:  (a) borrowed money; (b) amounts received under or liabilities in respect of
any note purchase or acceptance credit facility, and all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments; (c)
all Capitalized Lease Obligations; (d) reimbursement obligations (contingent or
otherwise) under any letter of credit agreement, banker’s acceptance agreement
or similar arrangement; (e) obligations under any Interest Rate Hedge, Foreign
Currency Hedge, or other interest rate management device, foreign currency
exchange agreement, currency swap agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement; (f) any other advances of credit made to or on behalf of such
Person or other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements including to finance the purchase price of
property or services and all obligations of such Person to pay the deferred
purchase price of property or services (but not including trade payables and
accrued expenses incurred in the Ordinary Course of Business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than thirty (30) days past due); (g) all Equity Interests of such
Person subject to repurchase or redemption rights or obligations (excluding
repurchases or redemptions at the sole option of such Person); (h) all
indebtedness, obligations or liabilities secured by a Lien on any asset of such
Person, whether or not such indebtedness, obligations or liabilities are
otherwise an obligation of such Person; (i) all obligations of such Person for
“earnouts”, purchase price adjustments, profit sharing arrangements, deferred
purchase money amounts and similar payment obligations or continuing obligations
of any nature of such Person arising out of purchase and sale contracts; (j)
off-balance sheet liabilities and/or pension plan liabilities of such Person;
(k) obligations arising under bonus, deferred compensation, incentive
compensation or similar arrangements, other than those arising in the Ordinary
Course of Business; and (l) any guaranty of any indebtedness, obligations or
liabilities of a type described in the foregoing clauses (a) through (k).

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

22

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

 

“Ineligible Security” shall mean any security which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

“Insolvency Event” shall mean, with respect to any Person, including without
limitation any Lender, such Person or such Person’s direct or indirect parent
company (a) becomes the subject of a bankruptcy or insolvency proceeding
(including any proceeding under Title 11 of the United States Code), or
regulatory restrictions, (b) has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it or has called a meeting of its creditors, (c) admits in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business except as permitted under Section 7.1(a)
hereof, (d) with respect to a Lender, such Lender is unable to perform hereunder
due to the application of Applicable Law, or (e) in the good faith determination
of Agent, has taken any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any such proceeding or appointment of a type
described in clauses (a) or (b), provided that an Insolvency Event shall not
result solely by virtue of any ownership interest, or the acquisition of any
ownership interest, in such Person or such Person’s direct or indirect parent
company by a Governmental Body or instrumentality thereof if, and only if, such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Body or instrumentality) to reject, repudiate, disavow or disaffirm
any contracts or agreements made by such Person.

“Intellectual Property” shall mean property constituting a patent, copyright,
trademark (or any application in respect of the foregoing), service mark,
copyright, copyright application, trade name, mask work, trade secrets, design
right, assumed name or license or other right to use any of the foregoing under
Applicable Law.

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

“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
floor, adjustable strike cap, adjustable strike corridor, cross-currency swap or
similar agreements entered into by any Borrower, Guarantor and/or their
respective Subsidiaries in order to provide protection to, or minimize the
impact upon, such Borrower, any Guarantor and/or their respective Subsidiaries
of increasing floating rates of interest applicable to Indebtedness.

“Interest Rate Hedge Liabilities” shall have the meaning assigned in the
definition of Lender-Provided Interest Rate Hedge.

“Inventory” shall mean and include as to each Loan Party all of such Loan
Party’s inventory (as defined in Article 9 of the Uniform Commercial Code) and
all of such Loan Party’s goods, merchandise and other personal property,
wherever located, to be furnished under any consignment arrangement, contract of
service or held for sale or lease, all raw materials, work in process, finished
goods and materials and supplies of any kind, nature or description which are or
might be used or consumed in such Loan Party’s business or used in selling or
furnishing such goods, merchandise and other personal property, and all
Documents.

23

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

 

“Issuer” shall mean (i) Agent in its capacity as the issuer of Letters of Credit
under this Agreement and (ii) any other Lender which Agent in its discretion
shall designate as the issuer of and cause to issue any particular Letter of
Credit under this Agreement in place of Agent as issuer.

“Judgment Reserve” shall mean a cumulative reserve established under Section
2.1(a)(y)(xi) hereof, not to exceed $11,200,000 in the aggregate, imposed
automatically on the first day of each successive calendar quarter, commencing
with the calendar quarter ending on December 31, 2018, in the amount of
$2,000,000 per calendar quarter, which Judgment Reserve may be eliminated in
accordance with the terms of Section 2.1(c) hereof.

“Law(s)” shall mean any law(s) (including common law and equitable principles),
constitution, statute, treaty, regulation, rule, ordinance, opinion, issued
guidance, code, release, ruling, order, executive order, injunction, writ,
decree, bond, judgment, authorization or approval, lien or award of or any
settlement arrangement, by agreement, consent or otherwise, with any
Governmental Body, foreign or domestic.

“Leasehold Interests” shall mean all of each Loan Party’s right, title and
interest in and to, and as lessee of, the premises identified as leased Real
Property on Schedule 4.4 hereto.

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

“Lender-Provided Foreign Currency Hedge” shall mean a Foreign Currency Hedge
which is provided by any Lender and for which such Lender confirms to Agent in
writing prior to the execution thereof that it: (a) is documented in a standard
International Swap Dealers Association, Inc. Master Agreement or another
reasonable and customary manner; (b) provides for the method of calculating the
reimbursable amount of the provider’s credit exposure in a reasonable and
customary manner; and (c) is entered into for hedging (rather than speculative)
purposes.  The liabilities owing to the provider of any Lender-Provided Foreign
Currency Hedge (the “Foreign Currency Hedge Liabilities”) by any Borrower,
Guarantor, or any of their respective Subsidiaries that is party to such
Lender-Provided Foreign Currency Hedge shall, for purposes of this Agreement and
all Other Documents be “Obligations” of such Person and of each other Borrower
and Guarantor, be guaranteed obligations under any Guaranty and secured
obligations under any Guarantor Security Agreement, as applicable, and otherwise
treated as Obligations for purposes of the Other Documents, except to the extent
constituting Excluded Hedge Liabilities of such Person.  The Liens securing the
Foreign Currency Hedge Liabilities shall be pari passu with the Liens
securing all other Obligations under this Agreement and the Other Documents,
subject to the express provisions of Section 11.5 hereof.

24

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

 

“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which such Lender confirms to Agent
in writing prior to the execution thereof that it: (a) is documented in a
standard International Swap Dealers Association, Inc. Master Agreement or
another reasonable and customary manner; (b) provides for the method of
calculating the reimbursable amount of the provider’s credit exposure in a
reasonable and customary manner; and (c) is entered into for hedging (rather
than speculative) purposes.  The liabilities owing to the provider of any
Lender-Provided Interest Rate Hedge (the “Interest Rate Hedge Liabilities”) by
any Borrower, Guarantor, or any of their respective Subsidiaries that is party
to such Lender-Provided Interest Rate Hedge shall, for purposes of this
Agreement and all Other Documents be “Obligations” of such Person and of each
other Borrower and Guarantor, be guaranteed obligations under any Guaranty and
secured obligations under any Guarantor Security Agreement, as applicable, and
otherwise treated as Obligations for purposes of the Other Documents, except to
the extent constituting Excluded Hedge Liabilities of such Person.  The Liens
securing the Hedge Liabilities shall be pari passu with the Liens securing all
other Obligations under this Agreement and the Other Documents, subject to the
express provisions of Section 11.5 hereof.

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

“Letter of Credit Borrowing” shall have the meaning set forth in Section 2.14(d)
hereof.

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

“Letter of Credit Sublimit” shall mean $3,000,000.

“Letters of Credit” shall have the meaning set forth in Section 2.11 hereof.

“LIBOR Alternate Source” shall have the meaning set forth in the definition of
LIBOR Rate.

“LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest
Period relating thereto, the interest rate per annum determined by Agent by
dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (a) the rate which appears on the Bloomberg Page BBAM1
(or on such other substitute Bloomberg page that displays rates at which U.S.
dollar deposits are offered by leading banks in the London interbank deposit
market), or the rate which is quoted by another source selected by Agent as an
authorized information vendor for the purpose of displaying rates at which U.S.
dollar deposits are offered by leading banks in the London interbank deposit
market (a “LIBOR Alternate Source”), at approximately 11:00 a.m., London time,
two (2) Business Days prior to the commencement of such Interest Period as the
London interbank offered rate for U.S. Dollars for an amount comparable to such
LIBOR Rate Loan and having a borrowing date and a maturity comparable to such
Interest Period (or (x) if there shall at any time, for any reason, no longer
exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate
Source, a comparable replacement rate determined by Agent at such time (which
determination shall be conclusive absent demonstrable error), (y) if the LIBOR
Rate is unascertainable as set forth in Section 3.8.2(i), a comparable
replacement rate determined in accordance with Section 3.8.2), by (b) a number
equal to 1.00 minus the Reserve Percentage; provided, however, that if the LIBOR
Rate determined as provided above would be less than zero, such Rate shall be
deemed to be zero for purposes of this Agreement.

25

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

 

The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of
such effective date.  Agent shall give reasonably prompt notice to the Borrowing
Agent of the LIBOR Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent demonstrable error.

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

“LIBOR Termination Date” shall have the meaning set forth in Section 3.8.2(a)
hereof.

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

“Lien Waiver Agreement” shall mean an agreement which is executed in favor of
Agent by a Person who is the owner of (x) the chief executive office of a Loan
Party or (y) a location at which books and records relating to Collateral, or
Collateral consisting of tangible personal property with a fair market value, as
of any date of determination, in excess of [$1,000,000] in the aggregate, may be
located from time to time, in form and substance reasonably satisfactory to
Agent.

“Loan Parties” shall mean, collectively, the Borrowers and the Guarantors.

“Logistics” shall have the meaning set forth in the preamble to this Agreement.

“Management Services” shall have the meaning set forth in the preamble to this
Agreement.

“Mason Dixon” shall have the meaning set forth in the preamble to this
Agreement.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
condition (financial or otherwise), results of operations, assets, business,
properties or prospects of Borrowers (taken as a whole), (b) the ability of the
Borrowers (taken as a whole) to duly and punctually pay or perform the
Obligations in accordance with the terms thereof, (c) the value of the
Collateral, or Agent’s Liens on the Collateral or the priority of any such Lien
or (d) the practical realization of the benefits of Agent’s and each Lender’s
rights and remedies under this Agreement and the Other Documents.

“Material Contract” shall mean any contract, agreement, instrument, permit,
lease or license of any Borrower which is material to the business of the
Borrowers (taken as a whole) or which the failure to comply with could
reasonably be expected to result in a Material Adverse Effect.

26

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

 

“Maximum Swing Loan Advance Amount” shall mean $15,000,000; provided that, upon
the effective date of each increase in the Maximum Revolving Advance Amount in
accordance with Section 2.24, the Maximum Swing Loan Advance Amount shall
increase by an amount equal to ten percent (10%) of the amount of such increase
in the Maximum Revolving Advance Amount.

“Maximum Revolving Advance Amount” shall mean $150,000,000 plus any increases in
accordance with Section 2.24.

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

“MFS Entities” shall mean CenTra, Inc., its Subsidiaries and any other business
entity which has at least a majority of its voting Equity Interests owned,
directly or indirectly, through one or more intermediaries, by the Moroun Family
Shareholders.

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

“Moody’s” shall mean Moody’s Investor Services, Inc. and its successors or any
other nationally recognized statistical rating organization which is acceptable
to the Agent.

“Moroun Family Shareholders” shall mean M.J. Moroun, M.T. Moroun, their
respective estates and trusts for their respective benefit or for the benefit of
their respective spouses and/or lineal descendants.

“Mortgage” shall mean any mortgage or deed of trust on any of the Real Property,
as collateral security for the Obligations.

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

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

“Net Cash Proceeds” means (i) with respect to any sale or other disposition by
any Person, the amount of cash received (directly or indirectly) from time to
time (whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person, in connection therewith
after deducting therefrom only (A) the amount of any Indebtedness secured by any
Lien permitted by Section 7.2 on any asset (other than Indebtedness assumed by
the purchaser of such asset) which is required to be, and is, repaid in
connection with such sale or other disposition (other than Indebtedness under
this Agreement), (B) reasonable fees and expenses related thereto incurred by
such Person in connection therewith, including without limitation, all legal,
investment banking, underwriting, brokerage and accounting and

27

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

 

other professional fees, sales commissions and disbursements, (C) transfer taxes
paid to any taxing authorities by such Person in connection therewith, (D) net
income taxes to be paid in connection with such sale or other disposition (after
taking into account any tax credits or deductions and any tax sharing
arrangements), and (E) any reserve established in accordance with GAAP against
(x) any liabilities under any indemnification obligations, earnout obligations
or purchase price adjustments associated with such sale or other disposition or
(y) any other liabilities retained or payable by such Person associated with
such sale or other disposition, (ii) with respect to the issuance or incurrence
of any Indebtedness by any Person, the aggregate amount of cash received from
time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person in
connection therewith, after deducting therefrom only (A) reasonable fees and
expenses related thereto incurred by such Person in connection therewith
including without limitation, all customary underwriting commissions and legal,
investment banking, underwriting, brokerage and accounting and other
professional fees, sales commissions and disbursements incurred in connection
with such incurrence or issuance and (B) transfer taxes paid by such Person in
connection therewith; and (iii) with respect to any proceeds for casualty
insurance or condemnation awards received by any Person, the amount of any
insurance proceeds or condemnation awards received in connection with such
event  after deducting therefrom only (A) reasonable fees and expenses and
expenses thereof (including, without limitation, any legal or other professional
fees)), (B) any proceeds or awards required to be paid to a creditor (other than
the Lenders) which holds a first priority Lien permitted by Section 7.2 on the
property which is the subject of such event or to other parties having superior
rights to such proceeds, awards or payments and, without duplication of any
amount reinvested pursuant to Section 2.20(c) any money actually applied to
repair or reconstruct the damaged property or property affected by the
condemnation or taking, and (C) any taxes payable by such Person on account of
such insurance proceeds or condemnation award, actually paid, assessed or
estimated by such Person (in good faith) to be payable within the next 12 months
in cash in connection with such event.

“New Lender” shall have the meaning set forth in Section 2.24(a) hereof.

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

“Non-Qualifying Party” shall mean any Borrower or any Guarantor that on the
Eligibility Date fails for any reason to qualify as an Eligible Contract
Participant.

“Note” shall mean, collectively, the Term Note, the Revolving Credit Note and
the Swing Loan Note.

“Obligations” shall mean and include any and all loans (including without
limitation, all Advances and Swing Loans), advances, debts, liabilities,
obligations (including without limitation all reimbursement obligations and cash
collateralization obligations with respect to Letters of Credit issued
hereunder), covenants and duties owing by any Borrower or Guarantor or any
Subsidiary of any Borrower or any Guarantor under this Agreement or any Other
Document (and any amendments, extensions, renewals or increases thereto), to
Issuer, Swing Loan Lender, Lenders or Agent (or to any other direct or indirect
subsidiary or affiliate of Issuer, Swing Loan Lender, any Lender or Agent) of
any kind or nature, present or future (including any

28

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

 

interest or other amounts accruing thereon, any fees accruing under or in
connection therewith, any costs and expenses of any Person payable by any Loan
Party and any indemnification obligations payable by any Loan Party arising or
payable after maturity, or after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding relating
to any Loan Party, whether or not a claim for post-filing or post-petition
interest, fees or other amounts is allowable or allowed in such proceeding),
whether direct or indirect (including those acquired by assignment or
participation), absolute or contingent, joint or several, due or to become due,
now existing or hereafter arising, contractual or tortious, liquidated or
unliquidated, regardless of how such indebtedness or liabilities arise including
all costs and expenses of Agent, Issuer, Swing Loan Lender and any Lender
incurred in the documentation, negotiation, modification, enforcement,
collection or otherwise in connection with any of the foregoing, including but
not limited to reasonable attorneys’ fees and expenses and all obligations of
any Loan Party to Agent, Issuer, Swing Loan Lender or Lenders to perform acts or
refrain from taking any action, (ii) all Hedge Liabilities and (iii) all Cash
Management Liabilities.  Notwithstanding anything to the contrary contained in
the foregoing, the Obligations shall not include any Excluded Hedge Liabilities.

“Ordinary Course of Business” shall mean, with respect to any Loan Party, the
ordinary course of such Loan Party’s respective types of businesses as of the
Closing Date.

“Organizational Documents” shall mean, with respect to any Person, any charter,
articles or certificate of incorporation, certificate of organization,
registration or formation, certificate of partnership or limited partnership,
bylaws, operating agreement, limited liability company agreement, or partnership
agreement of such Person and any and all other applicable documents relating to
such Person’s formation, organization or entity governance matters (including
any shareholders’ or equity holders’ agreement or voting trust agreement) and
specifically includes, without limitation, any certificates of designation for
preferred stock or other forms of preferred equity.

“Original Credit Agreement” shall have the meaning set forth in the recitals
hereto.

“Other Documents” shall mean the Note, the Perfection Certificates, the Fee
Letter, any Guaranty, any Guarantor Security Agreement, any Pledge Agreement,
any Mortgages, any Lender-Provided Interest Rate Hedge any Lender-Provided
Foreign Currency Hedge, any Cash Management Products and Services, and any and
all other agreements, instruments and documents, including intercreditor
agreements, guaranties, pledges, powers of attorney, consents, interest or
currency swap agreements or other similar agreements and all other writings
heretofore, now or hereafter executed by any Borrower or any Guarantor and/or
delivered to Agent or any Lender in respect of the transactions contemplated by
this Agreement, in each case together with all extensions, renewals, amendments,
supplements, modifications, substitutions and replacements thereto and thereof.

“Other Taxes” shall mean all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any Other Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
Other Document.

29

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

 

“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(e)
hereof.

“Overnight Bank Funding Rate” shall mean, for any, day the rate per annum (based
on a year of 360 days and actual days elapsed) comprised of both overnight
federal funds and overnight Eurocurrency borrowings by  U.S.-managed banking
offices of depository institutions, as such composite rate shall be determined
by the Federal Reserve Bank of New York, as set forth on its public website from
time to time,  and as published on the next succeeding Business Day as the
overnight bank funding rate by such Federal Reserve Bank  (or by such other
recognized electronic source (such as Bloomberg) selected by the Agent for the
purpose of displaying such rate) (an “Alternate Source”); provided, that if such
day is not a Business Day, the Overnight Bank Funding Rate for such day shall be
such rate on the immediately preceding Business Day; provided, further,  that if
such rate shall at any time, for any reason, no longer exist, a comparable
replacement rate determined by the Agent at such time (which determination shall
be conclusively presumed correct absent demonstrable error).  If the Overnight
Bank Funding Rate determined as above would be less than zero, then such rate
shall be deemed to be zero.  The rate of interest charged shall be adjusted as
of each Business Day based on changes in the Overnight Bank Funding Rate without
notice to the Borrower.

“Parent” of any Person shall mean a corporation or other entity owning, directly
or indirectly, 50% or more of the Equity Interests issued by such Person having
ordinary voting power to elect a majority of the directors of such Person, or
other Persons performing similar functions for any such Person.

“Participant” shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.

“Participation Advance” shall have the meaning set forth in Section 2.14(d)
hereof.

“Participation Commitment” shall mean the obligation hereunder of each Revolving
Lender to buy a participation equal to its Revolving Commitment Percentage
(subject to any reallocation pursuant to Section 2.22(b)(iii) hereof) in the
Swing Loans made by Swing Loan Lender hereunder as provided for in Section
2.4(c) hereof and in the Letters of Credit issued hereunder as provided for in
Section 2.14(a) hereof.

“Payment Conditions” shall mean with respect to any transaction contemplated in
Section 7.1, 7.4, 7.5, 7.10 and 7.17 and the definitions of Permitted
Acquisition and Permitted Dividends hereunder, satisfaction of the conditions
set forth in either (a) or (b) below:

(a)   (i) No Default or Event of Default shall have occurred or be continuing or
would occur as a result thereof and (ii) Borrowers demonstrate in form and
substance reasonably acceptable to the Agent pro-forma Excess Availability of at
least twenty-five percent (25%) of the Maximum Revolving Advance Amount
immediately prior and upon giving effect to any such action; or

(b)   (i) No Default or Event of Default shall have occurred or be continuing or
would occur as a result thereof and (ii) Borrowers demonstrate in form and
substance reasonably acceptable to the Agent pro-forma Excess Availability, as
measured both (A) as an average for

30

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

 

the prior thirty (30) consecutive days and (B) at the time of payment after
giving effect to any such action, of at least ten percent (10%) of the Maximum
Revolving Advance Amount immediately prior and upon giving effect to any such
action, and (iii) Borrowers demonstrate, in form and substance reasonably
acceptable to Agent, pro-forma Fixed Charge Coverage Ratio of at least 1.15 to
1.00 upon giving effect to such transaction.

“Payment Office” shall mean initially Two Tower Center Boulevard, East
Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.

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

“Pension Benefit Plan” shall mean at any time any “employee pension benefit
plan” as defined in Section 3(2) of ERISA (including a Multiple Employer Plan,
but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Sections 412, 430 or 436 of the
Code and either (i) is maintained or to which contributions are required by Loan
Party or any member of the Controlled Group or (ii) has at any time within the
preceding five years been maintained or to which contributions have been
required by a Loan Party or any entity which was at such time a member of the
Controlled Group.

“Perfection Certificates” shall mean, collectively, the information
questionnaires and the responses thereto provided by each Loan Party and
delivered to Agent.

“Permitted Acquisitions” shall mean acquisitions of the assets or Equity
Interests of another Person (the “target”), other than the acquisition of the
assets of, or the Equity Interests issued by, the Target pursuant to the
Acquisition Agreement, so long as: (a) such acquisition is (x) made only upon
satisfaction of the Payment Conditions or (y) funded solely with the cash
proceeds received by a Loan Party from the issuance of Equity Interests (other
than Disqualified Equity Interests) issued on terms acceptable to Agent (or
contributed as paid in capital with respect to existing Equity Interests) or by
subordinated debt from Holdings on terms and subject to a subordination
agreement acceptable to Agent in its sole discretion; (b) the total costs and
liabilities (including without limitation, all assumed liabilities, all earn-out
payments, deferred payments and the value of any other stock or assets
transferred, assigned or encumbered with respect to such acquisitions) of any
individual acquisition does not exceed $10,000,000 and of all such acquisitions
do not exceed $20,000,000 in the aggregate throughout the Term, unless the costs
and liabilities are funded solely with the cash proceeds received by a Loan
Party from the issuance of Equity Interests (other than Disqualified Equity
Interests) issued on terms acceptable to Agent (or contributed as paid in
capital with respect to existing Equity Interests) or by subordinated debt from
Holdings on terms and subject to a subordination agreement acceptable to Agent
in its sole discretion, in which case such limitations shall not apply; (c) with
respect to the acquisition of Equity Interests, such target shall (i) have a
positive EBITDA and Tangible Net Worth, calculated in accordance with GAAP
immediately prior to such acquisition, (ii) be added as a Loan Party to this
Agreement and be jointly and severally liable for all Obligations, and (iii)
grant to Agent a first priority lien in all assets of such target of the type
described in the definition of Collateral; (d) the target or property is used or
useful in the Loan Parties’ Ordinary Course of Business; (e) Agent shall have
received a first-priority security interest in all acquired

31

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

 

assets or Equity Interests, subject to documentation satisfactory to Agent; (f)
the board of directors (or other comparable governing body) of the target shall
have duly approved the transaction; (g) Borrowers shall have delivered to Agent
(i) a pro forma balance sheet and pro forma financial statements and a
Compliance Certificate demonstrating that, upon giving effect to such
acquisition on a pro forma basis, Borrowers would be in compliance with the
financial covenants set forth in Section 6.5 as of the most recent fiscal
quarter end and (ii) financial statements of the acquired entity for the two
most recent fiscal years then ended, in form and substance reasonably acceptable
to Agent; (h) if such acquisition includes general partnership interests or any
other Equity Interest that does not have a corporate (or similar) limitation on
liability of the owners thereof, then such acquisition shall be effected by
having such Equity Interests acquired by a corporate holding company directly or
indirectly wholly-owned by a Borrower and newly formed for the sole purpose of
effecting such acquisition; (i) no assets acquired in any such transaction(s)
shall be included in the Formula Amount until Agent has received a field
examination and/or appraisal of such assets, in form and substance acceptable to
Agent; and (j) no Default or Event of Default shall have occurred or will occur
after giving pro forma effect to such acquisition.  For the purposes of
calculating Excess Availability in determining satisfaction of the Payment
Conditions for purposes of this definition, any assets being acquired in the
proposed acquisition shall be included in the Formula Amount on the date of
closing so long as Agent has received an audit or appraisal of such assets as
set forth in clause (i) above and so long as such assets satisfy the applicable
eligibility criteria.

“Permitted Assignees” shall mean: (a) Agent, any Lender or any of their direct
or indirect Affiliates; (b) a federal or state chartered bank, a United States
branch of a foreign bank, an insurance company, or any finance company generally
engaged in the business of making commercial loans; (c) any fund that is
administered or managed by Agent or any Lender, an Affiliate of Agent or any
Lender or a related entity; and (d) any Person to whom Agent or any Lender
assigns its rights and obligations under this Agreement as part of an assignment
and transfer of such Agent’s or Lender’s rights in and to a material portion of
such Agent’s or Lender’s portfolio of asset-based credit facilities.

“Permitted Disclosed Accounts” shall mean those accounts listed on Schedule 1.2
hereto.

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

“Permitted Dividends” shall mean (a) dividends made by any Loan Party (other
than Holdings) so long as the Payment Conditions shall have been satisfied, (b)
dividends made by Holdings (i) pursuant to its quarterly dividends policy, in an
aggregate amount not to exceed, with respect to any fiscal quarter, $3,000,000,
so long as the Payment Conditions contained in clause (b) of the definition
thereof shall have been satisfied, and (ii) annually, after the end of each
fiscal year, in an aggregate amount not to exceed (I) forty percent (40%) of the
net income of Holdings and its Subsidiaries for such fiscal year, calculated on
a consolidated basis in accordance with GAAP, consistently applied, minus (II)
the aggregate amount of quarterly dividends paid by Holdings during such fiscal
year pursuant to the preceding clause (i), so long

32

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

 

as the Payment Conditions contained in clause (b) of the definition thereof
shall have been satisfied, and (c) so long as: (x) a notice of termination with
regard to this Agreement shall not be outstanding; (y) no Event of Default or
Default shall have occurred or would occur after giving pro forma effect to such
distribution, any Borrower shall be permitted to make distributions to its
members or shareholders in an aggregate amount equal to the Increased Tax Burden
of its members or shareholders.  Payments to members or shareholders shall be
made so as to be available when the tax is due, including in respect of
estimated tax payments.

“Permitted Encumbrances” shall mean: (a) Liens in favor of Agent for the benefit
of Agent and Lenders, including without limitation, Liens securing Hedge
Liabilities and Cash Management Products and Services; (b) Liens for taxes,
assessments or other governmental charges not delinquent or being Properly
Contested; (c) deposits or pledges to secure obligations under worker’s
compensation, social security or similar Laws, or under unemployment insurance;
(d) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the Ordinary Course of
Business; (e) Liens arising by virtue of the rendition, entry or issuance
against any Loan Party or any Subsidiary, or any property of any Loan Party or
any Subsidiary, of any judgment, writ, order, or decree to the extent the
rendition, entry, issuance or continued existence of such judgment, writ, order
or decree (or any event or circumstance relating thereto) has not resulted in
the occurrence of an Event of Default under Section 10.6 hereof; (f) carriers’,
repairmens’, mechanics’, workers’, materialmen’s or other like Liens arising in
the Ordinary Course of Business with respect to obligations which are not due or
which are being Properly Contested; (g) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided that (I)
any such lien shall not encumber any other property of any Loan Party and (II)
the aggregate amount of Indebtedness secured by such Liens incurred as a result
of such purchases during any fiscal year shall not exceed the amount permitted
in Section 7.6 hereof; (h) other Liens incidental to the conduct of any Loan
Party’s business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit and do not encumber the Collateral and which do not in the aggregate
materially detract from the value of any Loan Party’s property or assets or
which do not materially impair the use thereof in the operation of any Loan
Party’s business; (h) easements, rights-of-way, zoning restrictions, minor
defects or irregularities in title and other charges or encumbrances, in each
case, which do not interfere in any material respect with the Ordinary Course of
Business of Loan Parties and their Subsidiaries; (i) subordination agreements
with respect to and assignments of the Borrower’s interest as lessee in leases;
(j) Liens granted to secure the contingent obligations of UTI arising under any
reimbursement agreement between UTI and Cherokee relating to the Disclosed
Action, to the extent the priority of such Liens is subordinated pursuant to the
agreement described in clause (i) of the defined term Subordination Agreement,
and (k) Liens disclosed on Schedule 1.3; provided that such Liens shall secure
only those obligations which they secure on the Closing Date (and extensions,
renewals and refinancing of such obligations permitted by Section 7.8 hereof)
and shall not subsequently apply to any other property or assets of any Loan
Party other than the property and assets to which they apply as of the Closing
Date.

33

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

 

“Permitted Indebtedness” shall mean: (a) the Obligations; (b) Indebtedness
incurred for Capital Expenditures permitted in Section 7.6 hereof; (c) any
guarantees of Indebtedness permitted under Section 7.3 hereof; (d) any
Indebtedness listed on Schedule 5.8(b)(ii) hereof; (e) Indebtedness incurred in
connection with Permitted Acquisitions to the extent it is subordinated to the
Obligations on terms and conditions satisfactory to Agent in its sole
discretion; (f) Indebtedness assumed under the Acquisition Agreement, (g)
Indebtedness consisting of Permitted Loans made by one or more Borrowers to any
other Borrowers; (h) Interest Rate Hedges and Foreign Currency Hedges that are
entered into by Loan Parties to hedge their risks with respect to outstanding
Indebtedness of Borrowers and not for speculative or investment purposes; (i)
Indebtedness consisting of the contingent obligations described in clause (j) of
the defined term Permitted Encumbrances, to the extent such Indebtedness is
subordinated in right of payment pursuant to the agreement described in clause
(i) of the defined term Subordination Agreement, and (j) intercompany
Indebtedness owing from one or more Borrower to any other one or more Borrowers
in accordance with clause (c) of the definition of Permitted Loans.

“Permitted Investments” shall mean investments in: (a) obligations issued or
guaranteed by the United States of America or any agency thereof; (b) commercial
paper with maturities of not more than 180 days and a published rating of not
less than A-1 or P-1 (or the equivalent rating); (c) certificates of time
deposit and bankers’ acceptances having maturities of not more than 180 days and
repurchase agreements backed by United States government securities of a
commercial bank if (i) such bank has a combined capital and surplus of at least
$500,000,000, or (ii) its debt obligations, or those of a holding company of
which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency; (d) U.S. money market funds
that invest solely in obligations issued or guaranteed by the United States of
America or an agency thereof; (e) Permitted Loans; (f) bonds with a rating by
S&P of BBB- or better or by Moody’s of Baa3 or better, (g) mutual funds, but
only to the extent constituting Pledged Securities, and (h) equity securities,
but only to the extent constituting Pledged Securities.

“Permitted KeyBank Account” shall mean an account maintained with KeyBank which
may be one of the accounts set forth on Schedule 4.8(j) or, subject to
compliance with the requirements under Section 4.8(j) to deliver notice of such
new account to Agent and a control agreement in favor of Agent, a new account,
which account is funded solely with deposits made by a Borrower to such account
from time to time and not by receipt of payments made to such account from any
Customer.

“Permitted Loans” shall mean: (a) the extension of trade credit by a Loan Party
to its Customer(s), in the Ordinary Course of Business in connection with a sale
of inventory or rendition of services, in each case on open account terms; (b)
loans to employees in the Ordinary Course of Business not to exceed as to all
such loans the aggregate amount of $250,000 at any time outstanding; and (c)
intercompany loans between and among Loan Parties, including the Holdings – UTI
Intercompany Loan, so long as, at the request of Agent, each such intercompany
loan is evidenced by a promissory note (including, if applicable, any master
intercompany note executed by Loan Parties) on terms and conditions (including
terms subordinating payment of the indebtedness evidenced by such note to the
prior payment in full of all Obligations (other than (i) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (ii) Letters of Credit so long as Agent has received the cash
collateral with respect to the Letters of Credit to the extent required pursuant
to this Agreement)) acceptable to Agent in its sole discretion that has been
delivered to Agent either endorsed in blank or together with an undated
instrument of transfer executed in blank by the applicable Borrower(s) that are
the payee(s) on such note.

34

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

 

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

“PIK Interest” shall have the meaning set forth in 3.4(c) hereof.

“Plan” shall mean any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Benefit Plan and a Multiemployer Plan, as defined
herein) maintained by any Loan Party or any member of the Controlled Group or to
which any Loan Party or any member of the Controlled Group is required to
contribute.

“Pledge Agreement” shall mean a pledge agreement executed by the relevant Loan
Party in favor of Agent to secure the Obligations, substantially in the form
attached hereto as Exhibit 1.3.

“Pledged Securities” shall mean cash, certificates of deposit, bonds, mutual
funds and equity securities of a Borrower which are subject to a first priority
perfected lien in favor of the Agent as security for the Obligations under a
Pledge Agreement and which are maintained in an account at PNC or an Affiliate
of PNC.

“Pledged Securities Advance Rate” shall mean (a) 100% with respect to cash and
certificates of deposit, (b) 80% with respect to bonds with a rating by S&P of
BBB- or better or by Moody’s of Baa3 or better; (c) 80% with respect to mutual
funds, and (d) 75% with respect to equity securities.

“PNC” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.

“Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a)
hereof.

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

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

“Properly Contested” shall mean, in the case of any Indebtedness, Lien or Taxes,
as applicable, of any Person that are not paid as and when due or payable by
reason of such Person’s bona fide dispute concerning its liability to pay the
same or concerning the amount thereof: (a) such Indebtedness, Lien or Taxes, as
applicable, are being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (b) such Person has
established appropriate reserves as shall be required in conformity with GAAP;
(c) the non-payment of such Indebtedness or Taxes will not have a Material
Adverse Effect or will not result in the forfeiture of any assets of such
Person; (d) no Lien is imposed upon any of such Person’s assets with respect to
such Indebtedness or taxes unless such Lien (x) does not attach to any
Receivables or Inventory, (y) is at all times junior and subordinate in priority
to the Liens in favor of the Agent (except only with respect to property Taxes
that have priority as a matter of

35

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

 

applicable state Law) and, (z) enforcement of such Lien is stayed during the
period prior to the final resolution or disposition of such dispute; and (e) if
such Indebtedness or Lien, as applicable, results from, or is determined by the
entry, rendition or issuance against a Person or any of its assets of a
judgment, writ, order or decree, enforcement of such judgment, writ, order or
decree is stayed pending a timely appeal or other judicial review.

“Protective Advances” shall have the meaning set forth in Section 16.2(f)
hereof.

“Published Rate” shall mean the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the LIBOR
Rate for a one month period as published in another publication selected by the
Agent).

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

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

“Qualified ECP Loan Party” shall mean each Borrower or Guarantor that on the
Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a “commodity pool” as defined in
Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets
exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause
another person to qualify as an Eligible Contract Participant on the Eligibility
Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise
providing a “letter of credit or keepwell, support, or other agreement” for
purposes of Section 1a(18)(A)(v)(II) of the CEA.

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

“Real Property” shall mean all of the owned and leased premises identified on
Schedule 4.4 hereto or in and to any other premises or real property that are
hereafter owned or leased by any Loan Party.

“Receivables” shall mean and include, as to each Borrower, all of such
Borrower’s accounts (as defined in Article 9 of the Uniform Commercial Code) and
all of such Borrower’s contract rights, instruments (including those evidencing
indebtedness owed to such Borrower by its Affiliates), documents, chattel paper
(including electronic chattel paper), general intangibles relating to accounts,
contract rights, instruments, documents and chattel paper, and drafts and
acceptances, credit card receivables and all other forms of obligations owing to
such Borrower arising out of or in connection with the rendition of services,
all supporting obligations, guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and whether or not
specifically sold or assigned to Agent hereunder.

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

“Reimbursement Obligation” shall have the meaning set forth in Section 2.14(b)
hereof.

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

36

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

 

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

“Reportable ERISA Event” shall mean a reportable event described in Section
4043(c) of ERISA or the regulations promulgated thereunder.

“Required Lenders” shall mean Lenders (not including Swing Loan Lender (in its
capacity as such Swing Loan Lender) or any Defaulting Lender) holding at least
fifty-one percent (51%) of either (a) the aggregate of the (x) Revolving
Commitment Amounts of all Lenders (excluding any Defaulting Lender) and (y)
outstanding principal amount of the Term Loan, or (b) after the termination of
all commitments of Lenders hereunder, the sum of (x) the outstanding Revolving
Advances, Swing Loans and Term Loans plus the Maximum Undrawn Amount of all
outstanding Letters of Credit; provided, however, if there are fewer than three
(3) Lenders, Required Lenders shall mean all Lenders (excluding any Defaulting
Lender).

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

“Revolving Advances” shall mean Advances other than Letters of Credit, the Term
Loan and the Swing Loans.

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

“Revolving Commitment Amount” shall mean, (i) as to any Lender other than a New
Lender, the Revolving Commitment amount (if any) set forth below such Lender’s
name on the signature page hereto (or, in the case of any Lender that became
party to this Agreement after the Closing Date pursuant to Section 16.3(c) or
(d) hereof, the Revolving Commitment amount (if any) of such Lender as set forth
in the applicable Commitment Transfer Supplement), and (ii) as to any Lender
that is a New Lender, the Revolving Commitment amount provided for in the
joinder signed by such New Lender under Section 2.24(a)(x), in each case as the
same may be adjusted upon any increase by such Lender pursuant to Section 2.24
hereof, or any assignment by or to such Lender pursuant to Section 16.3(c) or
(d) hereof.

“Revolving Commitment Percentage” shall mean, (i) as to any Revolving Lender
other than a New Lender, the Revolving Commitment Percentage (if any) set forth
below such Revolving Lender’s name on the signature page hereof (or, in the case
of any Revolving Lender that became party to this Agreement after the Closing
Date pursuant to Section 16.3(c) or (d) hereof, the Revolving Commitment
Percentage (if any) of such Revolving Lender as set forth in the applicable
Commitment Transfer Supplement), and (ii) as to any Revolving Lender that is a

37

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

 

New Lender, the Revolving Commitment Percentage provided for in the joinder
signed by such New Lender under Section 2.24(a)(ix), in each case as the same
may be adjusted upon any increase in the Maximum Revolving Advance Amount
pursuant to Section 2.24 hereof, or any assignment by or to such Lender pursuant
to Section 16.3(c) or (d) hereof.

“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof.

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

“Revolving Lender” shall mean each Lender that holds a Revolving Commitment
Percentage and/or any interest in any Revolving Advances.

“S&P” shall mean Standard and Poor’s Rating Services, its successor and any
other nationally recognized statistical rating organization which is acceptable
to the Agent.

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

“Sanctioned Person” shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.

“SCCF” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.

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

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

“Subordination Agreement” shall mean (i) that certain Subordination Agreement,
dated on or about the Closing Date, between the Agent and [Cherokee] and (ii)
any other subordination agreement executed between the Agent and another
Person  with respect to debt priorities, lien priorities or both, in each case
with regard to clauses (i) and (ii) hereof, as amended, modified, supplemented
or restated from time to time.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Sellers” shall mean The Brian and Rocio Griley Family Trust u/t/d March 18,
2008 and Donald Griley Irrevocable Trust u/t/d March 1, 2008.

“Settlement” shall have the meaning set forth in Section 2.6(d) hereof.

38

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

 

“Settlement Date” shall have the meaning set forth in Section 2.6(d) hereof.

“Specialized” shall have the meaning set forth in the preamble to this
Agreement.

“Specified Indebtedness” shall mean the Indebtedness disclosed on Schedule 1.4.

“Solutions” shall have the meaning set forth in the preamble to this Agreement.

“Southern Counties Inc.” shall have the meaning set forth in the preamble to
this Agreement.

“Southern Counties LLC” shall mean Southern Counties Express, LLC, a limited
liability company organized under the laws of the State of California.

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

“Subsidiary Stock” shall mean (a) with respect to the Equity Interests issued to
a Loan Party by any Subsidiary (other than a Foreign Subsidiary), 100% of such
issued and outstanding Equity Interests, and (b) with respect to any Equity
Interests issued to a Loan Party by any Foreign Subsidiary (i) 100% of such
issued and outstanding Equity Interests not entitled to vote (within the meaning
of Treas. Reg. Section 1.956(c)(2)) and (ii) 66% (or such greater percentage
that, due to a change in an Applicable Law after the date hereof, (x) could not
reasonably be expected to cause the undistributed earnings of such  Foreign
Subsidiary as determined for United States federal income tax purposes to be
treated as a deemed dividend to such Loan Party and (y) could not reasonably be
expected to cause any material adverse tax consequences) of such issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956‑2(c)(2)).

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

“Swap Obligation” means any obligation to pay or perform under any agreement,
contract or transaction that constitutes a Swap which is also a Lender-Provided
Interest Rate Hedge, or a Lender-Provided Foreign Currency Hedge.

“Swing Loan Lender” shall mean PNC, in its capacity as lender of the Swing
Loans.

“Swing Loan Note” shall mean the promissory note described in Section 2.4(a)
hereof.

“Swing Loans” shall mean the Advances made pursuant to Section 2.4 hereof.

39

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

 

“Target” shall mean, collectively, Southern Counties Inc., Southern Counties
LLC, Greet Fleet, LLC and Green Fleet, Inc.

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

“Term” shall have the meaning set forth in Section 13.1 hereof.

“Term Loan” shall have the meaning set forth in Section 2.3 hereof.

“Term Loan Commitment” shall mean, as to any Lender, the obligation of such
Lender (if applicable), to fund a portion of the Term Loan in an aggregate
principal amount equal to the Term Loan Commitment Amount (if any) of such
Lender.

“Term Loan Commitment Percentage” shall mean, as to any Lender, the Term Loan
Commitment Percentage (if any) set forth below such Lender’s name on the
signature page hereof (or, in the case of any Lender that becomes a party to
this Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof,
the Term Loan Commitment Percentage (if any) of such Lender as set forth in the
applicable Commitment Transfer Supplement), as the same may be adjusted upon any
assignment by or to such Lender pursuant to Section 16.3(c) or (d) hereof.

“Term Loan Commitment Amount” shall mean, as to any Lender, the term loan
commitment amount (if any) set forth below such Lender’s name on the signature
page hereof (or, in the case of any Lender that becomes a party to this
Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the
term loan commitment amount (if any) of such Lender as set forth in the
applicable Commitment Transfer Supplement), as the same may be adjusted upon any
assignment by or to such Lender pursuant to Section 16.3(c) or (d) hereof.

“Term Loan Lender” shall mean (i) prior to the funding of the Term Loan on the
Closing Date, each Lender that holds a commitment to advance all or any
percentage of the Term Loan as indicated on the signature pages hereto and (ii)
at any time after the funding of the Term Loan on the Closing Date, each Lender
that holds an interest in all or any portion of the Term Loan at such time.

“Term Loan Maturity Date” shall mean August 10, 2019.

“Term Loan Rate” shall mean (a) with respect to Term Loans that are Domestic
Rate Loans, an interest rate per annum equal to the sum of the Applicable Margin
plus the Alternate Base Rate and (b) with respect to Term Loans that are LIBOR
Rate Loans, the sum of the Applicable Margin plus the greater of (i) the LIBOR
Rate and (ii) one and one half of one percent (1.5%).

“Term Loan Refinancing Event” shall means any prepayment or repayment in full of
the Term Loan with proceeds of, or any conversion of the Term Loan into, any new
or replacement indebtedness (such replacement indebtedness being referred to
herein as the “Term Loan Replacement Facility”).

40

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

 

“Term Loan Replacement Facility” shall have the meaning set forth in the
definition of “Term Loan Refinancing Event”.

“Term Note” shall mean the promissory note described in Section 2.3 hereof.

“Termination Event” shall mean: (a) a Reportable ERISA Event with respect to any
Plan; (b) the withdrawal of any Borrower or any member of the Controlled Group
from a Plan during a plan year in which such entity was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) the providing
of notice of intent to terminate a Plan in a distress termination described in
Section 4041(c) of ERISA; (d) the commencement of proceedings by the PBGC to
terminate a Plan; (e) any event or condition (a) which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; (f) the partial or
complete withdrawal within the meaning of Section 4203 or 4205 of ERISA, of any
Borrower or any member of the Controlled Group from a Multiemployer Plan; (g)
notice that a Multiemployer Plan is subject to Section 4245 of ERISA; or (h) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not diligent, upon any Borrower or any member of the Controlled
Group.

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

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

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

“Trigger Event” shall (a) occur upon any of (i) the occurrence of a Default or
Event of Default or (ii) any day on which Excess Availability measured as of the
close of business on such day shall be less than 10% of the Maximum Revolving
Advance Amount, and (b) terminate when both (i) Excess Availability shall have
been 10% or greater of the Maximum Revolving Advance Amount for forty-five (45)
consecutive days and (ii) no Default or Event of Default is continuing
(including as a result of the wavier or cure thereof); provided however, that
the Borrower shall be permitted to cure a Trigger Event which arises under
clause (a)(ii) hereof if, the Borrowers shall upon becoming aware of the
shortfall in Excess Availability give the Agent immediate notice thereof and
within three (3) days of the occurrence of such shortfall contribute Eligible
Pledged Securities in an amount sufficient to cause Excess Availability to be
10% or greater of the Maximum Revolving Advance Amount.

“UBS Securities Account” shall mean that certain business services account
maintained by Holdings with UBS Financial Services, Inc. or an affiliate
thereof.

“UDI” shall have the meaning set forth in the preamble to this Agreement.

41

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

 

“Unfunded Capital Expenditures” shall mean, as to any Loan Party, without
duplication, a Capital Expenditure funded (a) from such Loan Party’s internally
generated cash flow or (b) with the proceeds of a Revolving Advance or Swing
Loan.

“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof.

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

“UTI” shall have the meaning set forth in the preamble to this Agreement.

“Voidable Transfer” shall have the meaning set forth in Section 17.3 hereof.

“Westport Companies” shall mean Westport USA Holdings, LLC, a limited liability
company organized under the laws of Delaware, and each of its directly or
indirectly owned Subsidiaries.

“Westport Indebtedness” shall mean that certain Credit Agreement dated as of
December 23, 2015 by and among the lenders party thereto, Comerica Bank, as
administrative agent for the lenders and Westport Axle Corp., as amended,
restated or otherwise modified from time to time.

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

1.4   Certain Matters of Construction.  The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  All references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any
pronoun used shall be deemed to cover all genders.  Wherever appropriate in the
context, terms used herein in the singular also include the plural and vice
versa.  All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations.  Unless otherwise
provided, all references to any instruments or agreements to which Agent is a
party, including references to any of the Other Documents, shall include any and
all modifications, supplements or amendments thereto, any and all restatements
or replacements thereof and any and all extensions or renewals thereof.  Except
as otherwise expressly provided for herein, all references herein to the time of
day shall mean the

42

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

 

time in New York, New York.  Whenever the words “including” or “include” shall
be used, such words shall be understood to mean “including, without limitation”
or “include, without limitation”.  A Default or an Event of Default shall be
deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing pursuant to this Agreement or, in the case of a
Default, is cured within any period of cure expressly provided for in this
Agreement; and an Event of Default shall “continue” or be “continuing” until
such Event of Default has been waived in writing by Required Lenders.  Any Lien
referred to in this Agreement or any of the Other Documents as having been
created in favor of Agent, any agreement entered into by Agent pursuant to this
Agreement or any of the Other Documents, any payment made by or to or funds
received by Agent pursuant to or as contemplated by this Agreement or any of the
Other Documents, or any act taken or omitted to be taken by Agent, shall, unless
otherwise expressly provided, be created, entered into, made or received, or
taken or omitted, for the benefit or account of Agent and Lenders.  Wherever the
phrase “to the best of Loan Parties’ knowledge” or words of similar import
relating to the knowledge or the awareness of any Loan Party are used in this
Agreement or Other Documents, such phrase shall mean and refer to (i) the actual
knowledge of a senior officer of any Loan Party or (ii) the knowledge that a
senior officer would have obtained if he/she had engaged in a good faith and
diligent performance of his/her duties, including the making of such reasonably
specific inquiries as may be necessary of the employees or agents of such Loan
Party and a good faith attempt to ascertain the existence or accuracy of the
matter to which such phrase relates.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise within the limitations of, another covenant shall not avoid the
occurrence of a default if such action is taken or condition exists.  In
addition, all representations and warranties hereunder shall be given
independent effect so that if a particular representation or warranty proves to
be incorrect or is breached, the fact that another representation or warranty
concerning the same or similar subject matter is correct or is not breached will
not affect the incorrectness of a breach of a representation or warranty
hereunder.

II.   ADVANCES, PAYMENTS.

2.1   Revolving Advances.

(a)   Amount of Revolving Advances.  Subject to the terms and conditions set
forth in this Agreement specifically including Section 2.1(b) each Revolving
Lender, severally and not jointly, will make Revolving Advances to Borrowers in
aggregate amounts outstanding at any time equal to such Revolving Lender’s
Revolving Commitment Percentage of the lesser of (x) the Maximum Revolving
Advance Amount, less the outstanding amount of Swing Loans, less the aggregate
Maximum Undrawn Amount of all outstanding Letters of Credit, or (y) an amount
equal to the sum of:

(i)   Up to the Applicable Accounts Advance Percentage of Eligible Domestic
Billed Receivables, plus

(ii)   Up to the lesser of (a) the Applicable Accounts Advance Percentage of
Eligible Foreign Receivables, and (b) $1,000,000 plus

43

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

 

(iii)   Up to the lesser of (a) the Applicable Accounts Advance Percentage of
Eligible Unbilled Receivables, and (b) $25,000,000, plus

(iv)   Up to the lesser of (a) the Applicable Accounts Advance Percentage of
Eligible Affiliate Receivables, and (b) $1,000,000, plus

(v)   Up to the Applicable Accounts Advance Percentage of the Eligible BLT
Receivables; plus

(vi)   Up to the Pledged Securities Advance Rate of Eligible Pledged Securities,
minus

(vii)   the aggregate Maximum Undrawn Amount of all outstanding Letters of
Credit; minus

(viii)   the aggregate amount of all discretionary maintenance and contractually
determined accounts maintained by the Borrowers with respect to owner operators;
minus

(ix)   the aggregate amount of payables owing by the Borrowers with respect to
Brokered Receivables whether or not paid to the extent exceeding $15,000,000;
minus

(x)   the aggregate amount of accounts payable owing by the Borrowers to Com
Data with respect to the amounts earned by and owed to owner operators; minus

(xi)   the Judgment Reserve, and such other reserves as Agent may reasonably
deem proper and necessary from time to time in its Permitted Discretion.

The amount derived from the sum of (x) Sections 2.1(a)(y)(i)-(vi) minus (y)
Sections 2.1 (a)(y)(vii)-(xi) at any time and from time to time shall be
referred to as the “Formula Amount”.  The Revolving Advances shall be evidenced
by one or more secured promissory notes (collectively, the “Revolving Credit
Note”) substantially in the form attached hereto as Exhibit
2.1(a).  Notwithstanding anything to the contrary contained in the foregoing or
otherwise in this Agreement, the outstanding aggregate principal amount of Swing
Loans and the Revolving Advances at any one time outstanding shall not exceed an
amount equal to the lesser of (i) the Maximum Revolving Advance Amount less the
Maximum Undrawn Amount of all outstanding Letters of Credit or (ii) the Formula
Amount.

(b)   Discretionary Rights.  The Advance Rates may be increased or decreased by
Agent at any time and from time to time in the exercise of its Permitted
Discretion.  Each Borrower consents to any such increases or decreases and
acknowledges that decreasing the Advance Rates or increasing or imposing
reserves may limit or restrict Advances requested by Borrowing Agent.  Agent
shall use reasonable effects to provide Borrowing Agent five (5) days prior
written notice of its intention to decrease the Advance Rates.  The rights of
Agent under this subsection are subject to the provisions of Section 16.2(b).

44

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

 

(c)   Judgment Reserve.  In the event of any settlement of the Disclosed Action,
or should a court having competent jurisdiction over the Disclosed Action issue
a final non-appealable decision regarding the initial judgment rendered in favor
of the judgment creditors in respect of the Disclosed Action, then, in any such
event, following the full and final payment by the applicable judgment debtor of
all amounts then due in respect of such judgment, or, if such court shall have
reversed such initial judgment in full, promptly following the delivery to the
Agent of evidence thereof reasonably satisfactory to it, the Judgment Reserve
shall be eliminated in full.

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

(a)   Borrowing Agent on behalf of any Borrower may notify Agent prior to 3:00
p.m. on a Business Day of a Borrower’s request to incur, on that day, a
Revolving Advance hereunder.  Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other Obligation under
this Agreement, become due, the same shall be deemed a request for a Revolving
Advance maintained as a Domestic Rate Loan as of the date such payment is due,
in the amount required to pay in full such interest, fee, charge or Obligation,
and such request shall be irrevocable.  If the Borrowers enter into a separate
written agreement with Agent regarding Agent’s auto-advance service, then each
Advance made pursuant to such service (including Advances made for the payment
of interest, fees, charges or Obligations) shall be deemed an irrevocable
request for a Revolving Advance maintained as a Domestic Rate Loan as of the
date such auto-advance is made.

(b)   Notwithstanding the provisions of subsection (a) above, in the event any
Borrower desires to obtain a LIBOR Rate Loan for any Advance (other than a Swing
Loan), Borrowing Agent shall give Agent written notice by no later than 1:00
p.m. on the day which is three (3) Business Days prior to the date such LIBOR
Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing
(which shall be a Business Day), (ii) the type of borrowing and the amount of
such Advance to be borrowed, which amount shall be in a minimum amount of
$1,000,000 and in integral multiples of $100,000 thereafter, and (iii) the
duration of the first Interest Period therefor.  Interest Periods for LIBOR Rate
Loans shall be for one, two or three months; provided that, if an Interest
Period would end on a day that is not a Business Day, it shall end on the next
succeeding Business Day unless such day falls in the next succeeding calendar
month in which case the Interest Period shall end on the next preceding Business
Day.  Any Interest Period that begins on the last Business Day of a calendar
month (or a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  During the continuation of an
Event of Default, at the option of Agent or at the direction of Required
Lenders, no LIBOR Rate Loan shall be made available to any Borrower.  After
giving effect to each requested LIBOR Rate Loan, including those which are
converted from a Domestic Rate Loan under Section 2.2(e), there shall not be
outstanding more than five (5) LIBOR Rate Loans, in the aggregate.

45

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

 

(c)   Each Interest Period of a LIBOR Rate Loan shall commence on the date such
LIBOR Rate Loan is made and shall end on such date as Borrowing Agent may elect
as set forth in subsection (b)(iii) above, provided that the exact length of
each Interest Period shall be determined in accordance with the practice of the
interbank market for offshore Dollar deposits and (i) with respect to the Term
Loan, no Interest Period shall end after the last day of the Term Loan Maturity
Date and (ii) with respect to the Revolving Advances and the Swing Loans, no
Interest Period shall end after the last day of the Term.

(d)   Borrowing Agent shall elect the initial Interest Period applicable to a
LIBOR Rate Loan by its notice of borrowing given to Agent pursuant to Section
2.2(b) or by its notice of conversion given to Agent pursuant to Section 2.2(e),
as the case may be.  Borrowing Agent shall elect the duration of each succeeding
Interest Period by giving irrevocable written notice to Agent of such duration
not later than 1:00 p.m. on the day which is three (3) Business Days prior to
the last day of the then current Interest Period applicable to such LIBOR Rate
Loan.  If Agent does not receive timely notice of the Interest Period elected by
Borrowing Agent, Borrowing Agent shall be deemed to have elected to convert such
LIBOR Rate Loan to a Domestic Rate Loan subject to Section 2.2(e) below.

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

(f)   At its option and upon written notice given prior to 1:00 p.m. at least
three (3) Business Days prior to the date of such prepayment, any Borrower may,
subject to Section 2.2(g) hereof, prepay the LIBOR Rate Loans in whole at any
time or in part from time to time with accrued interest on the principal being
prepaid to the date of such repayment.  Such Borrower shall specify the date of
prepayment of Advances which are LIBOR Rate Loans and the amount of such
prepayment.  In the event that any prepayment of a LIBOR Rate Loan is required
or permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, such Borrower shall indemnify Agent and
Lenders therefor in accordance with Section 2.2(g) hereof.

46

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

 

(g)   Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders
harmless from and against any and all losses or expenses that Agent and Lenders
may sustain or incur as a consequence of any prepayment, conversion of or any
default by any Borrower in the payment of the principal of or interest on any
LIBOR Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a LIBOR Rate Loan after notice thereof has
been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
LIBOR Rate Loans hereunder.  A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing
Agent shall be conclusively presumed correct absent demonstrable error.

(h)   Notwithstanding any other provision hereof, if any Applicable Law, treaty,
regulation or directive, or any change therein or in the interpretation or
application thereof, including without limitation any Change in Law, shall make
it unlawful for Lenders or any Lender (for purposes of this subsection (h), the
term “Lender” shall include any Lender and the office or branch where any Lender
or any Person controlling such Lender makes or maintains any LIBOR Rate Loans)
to make or maintain its LIBOR Rate Loans, the obligation of Lenders (or such
affected Lender) to make LIBOR Rate Loans hereunder shall forthwith be cancelled
and Borrowers shall, if any affected LIBOR Rate Loans are then outstanding,
promptly upon request from Agent, either pay all such affected LIBOR Rate Loans
or convert such affected LIBOR Rate Loans into loans of another type.  If any
such payment or conversion of any LIBOR Rate Loan is made on a day that is not
the last day of the Interest Period applicable to such LIBOR Rate Loan,
Borrowers shall pay Agent, upon Agent’s request, such amount or amounts set
forth in clause (g) above.  A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall
be conclusively presumed correct absent demonstrable error.

(i)   Anything to the contrary contained herein notwithstanding, neither any
Agent nor any Lender, nor any of their participants, is required actually to
acquire LIBOR deposits to fund or otherwise match fund any Obligation as to
which interest accrues based on the LIBOR Rate.  The provisions set forth herein
shall apply as if each Lender or its participants had match funded any
Obligation as to which interest is accruing based on the LIBOR Rate by acquiring
LIBOR deposits for each Interest Period in the amount of the LIBOR Rate Loans.

2.3   Term Loans.  Subject to the terms and conditions of this Agreement, each
Term Loan Lender, severally and not jointly, will make a term loan to Borrowers
in the amount equal to such Term Loan Lender’s Term Loan Commitment Percentage
of $30,000,000 (the “Term Loan”).  The Term Loan shall be advanced on the
Closing Date and shall be, with respect to principal, payable as follows,
subject to acceleration upon the occurrence of an Event of Default under this
Agreement or termination of this Agreement: equal and consecutive monthly
installments each in the amount of three hundred and fifty seven thousand, one
hundred and forty two dollars and eighty six cents ($357,142.86) commencing
October 1, 2018 and continuing on the first day of each month thereafter
followed by a final payment of all unpaid principal, accrued and unpaid interest
and all unpaid fees and expenses on the Term Loan Maturity Date.  The Term Loan
shall be evidenced by one or more secured promissory notes (collectively, the
“Term Note”) in substantially the form attached hereto as Exhibit 2.3.  The Term
Loan may consist of Domestic Rate Loans or LIBOR Rate Loans, or a combination
thereof, as Borrowing

47

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

 

Agent may request; and in the event that Borrowers desire to obtain or extend
any portion of the Term Loan as a LIBOR Rate Loan or to convert any portion of
the Term Loan from a Domestic Rate Loan to a LIBOR Rate Loan, Borrowing Agent
shall comply with the notification requirements set forth in Sections 2.2(b)
and/or (e) and the provisions of Sections 2.2(b) through (i) shall apply.

2.4   Swing Loans.

(a)   Subject to the terms and conditions set forth in this Agreement, and in
order to minimize the transfer of funds between Lenders and Agent for
administrative convenience, Agent, Lenders holding Revolving Commitments and
Swing Loan Lender agree that in order to facilitate the administration of this
Agreement, Swing Loan Lender may, at its election and option made in its sole
discretion cancelable at any time for any reason whatsoever, make swing loan
advances (“Swing Loans”) available to Borrowers as provided for in this Section
2.4 at any time or from time to time after the date hereof to, but not
including, the expiration of the Term, in an aggregate principal amount up to
but not in excess of the Maximum Swing Loan Advance Amount, provided that the
outstanding aggregate principal amount of Swing Loans and the Revolving Advances
at any one time outstanding shall not exceed an amount equal to the lesser of
(i) the Maximum Revolving Advance Amount less the Maximum Undrawn Amount of all
outstanding Letters of Credit or (ii) the Formula Amount.  All Swing Loans shall
be Domestic Rate Loans only.  Borrowers may borrow (at the option and election
of Swing Loan Lender), repay and reborrow (at the option and election of Swing
Loan Lender) Swing Loans and Swing Loan Lender may make Swing Loans as provided
in this Section 2.4 during the period between Settlement Dates.  All Swing Loans
shall be evidenced by a secured promissory note (the “Swing Loan Note”)
substantially in the form attached hereto as Exhibit 2.4(a).  Swing Loan
Lender’s agreement to make Swing Loans under this Agreement is cancelable at any
time for any reason whatsoever and the making of Swing Loans by Swing Loan
Lender from time to time shall not create any duty or obligation, or establish
any course of conduct, pursuant to which Swing Loan Lender shall thereafter be
obligated to make Swing Loans in the future

(b)   Upon either (i) any request by Borrowing Agent for a Revolving Advance
made pursuant to Section 2.2(a) hereof or (ii) the occurrence of any deemed
request by Borrowers for a Revolving Advance pursuant to the provisions of the
last sentence of Section 2.2(a) hereof, Swing Loan Lender may elect, in its sole
discretion, to have such request or deemed request treated as a request for a
Swing Loan, and may advance same day funds to Borrowers as a Swing Loan;
provided that notwithstanding anything to the contrary provided for herein,
Swing Loan Lender may not make Swing Loan Advances if Swing Loan Lender has been
notified by Agent or by Required Lenders that one or more of the applicable
conditions set forth in Section 8.2 of this Agreement have not been satisfied or
the Revolving Commitments have been terminated for any reason.

(c)   Upon the making of a Swing Loan (whether before or after the occurrence of
a Default or an Event of Default and regardless of whether a Settlement has been
requested with respect to such Swing Loan), each Revolving Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from Swing Loan Lender, without recourse or warranty, an
undivided interest and participation in

48

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

 

such Swing Loan in proportion to its Revolving Commitment Percentage.  Swing
Loan Lender or Agent may, at any time, require the Lenders holding Revolving
Commitments to fund such participations by means of a Settlement as provided for
in Section 2.6(d) below.  From and after the date, if any, on which any
Revolving Lender is required to fund, and funds, its participation in any Swing
Loans purchased hereunder, Agent shall promptly distribute to such Lender its
Revolving Commitment Percentage of all payments of principal and interest and
all proceeds of Collateral received by Agent in respect of such Swing Loan;
provided that no Revolving Lender shall be obligated in any event to make
Revolving Advances in an amount in excess of its Revolving Commitment Amount
minus its Participation Commitment (taking into account any reallocations under
Section 2.22) of the Maximum Undrawn Amount of all outstanding Letters of
Credit.

2.5   Disbursement of Advance Proceeds.  All Advances shall be disbursed from
whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers’ Account on Agent’s books.  The proceeds of each
Revolving Advance or Swing Loan requested by Borrowing Agent on behalf of any
Borrower or deemed to have been requested by any Borrower under Sections 2.2(a),
2.6(b) or 2.14 hereof shall, (i) with respect to requested Revolving Advances,
to the extent Lenders make such Revolving Advances in accordance with Section
2.2(a), 2.6(b) or 2.14 hereof, and with respect to Swing Loans made upon any
request or deemed request by Borrowing Agent for a Revolving Advance to the
extent Swing Loan Lender makes such Swing Loan in accordance with Section 2.4(b)
hereof, be made available to the applicable Borrower on the day so requested by
way of credit to the Borrowing Agent’s operating account at PNC, or such other
bank as Borrowing Agent may designate following notification to Agent, in
immediately available federal funds or other immediately available funds or,
(ii) with respect to Revolving Advances deemed to have been requested by any
Borrower or Swing Loans made upon any deemed request for a Revolving Advance by
any Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.  During the Term, Borrowers may use the
Revolving Advances and Swing Loans by borrowing, prepaying and reborrowing, all
in accordance with the terms and conditions hereof.

2.6   Making and Settlement of Advances.

(a)   Each borrowing of Revolving Advances shall be advanced according to the
applicable Revolving Commitment Percentages of Lenders holding the Revolving
Commitments (subject to any contrary terms of Section 2.22).  The Term Loan
shall be advanced according to the applicable Term Loan Commitment Percentages
of Lenders holding the Term Loan Commitments.  Each borrowing of Swing Loans
shall be advanced by Swing Loan Lender alone.

(b)   Promptly after receipt by Agent of a request or a deemed request for a
Revolving Advance pursuant to Section 2.2(a) and, with respect to Revolving
Advances, to the extent Agent elects not to provide a Swing Loan or the making
of a Swing Loan would result in the aggregate amount of all outstanding Swing
Loans exceeding the maximum amount permitted in Section 2.4(a), Agent shall
notify Lenders holding the Revolving Commitments of its receipt of such request
specifying the information provided by Borrowing Agent and the apportionment

49

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

 

among Lenders of the requested Revolving Advance as determined by Agent in
accordance with the terms hereof.  Each Lender shall remit the principal amount
of each Revolving Advance to Agent such that Agent is able to, and Agent shall,
to the extent the applicable Lenders have made funds available to it for such
purpose and subject to Section 8.2, fund such Revolving Advance to Borrowers in
U.S. Dollars and immediately available funds at the Payment Office prior to the
close of business, on the applicable borrowing date; provided that if any
applicable Lender fails to remit such funds to Agent in a timely manner, Agent
may elect in its sole discretion to fund with its own funds the Revolving
Advance of such Lender on such borrowing date, and such Lender shall be subject
to the repayment obligation in Section 2.6(c) hereof.

(c)   Unless Agent shall have been notified by telephone, confirmed in writing,
by any Revolving Lender that such Revolving Lender will not make the amount
which would constitute its applicable Revolving Commitment Percentage of the
requested Revolving Advance available to Agent, Agent may (but shall not be
obligated to) assume that such Revolving Lender has made such amount available
to Agent on such date in accordance with Section 2.6(b) and may, in reliance
upon such assumption, make available to Borrowers a corresponding amount.  In
such event, if a Revolving Lender has not in fact made its applicable Revolving
Commitment Percentage of the requested Revolving Advance available to Agent,
then the applicable Revolving Lender and Borrowers severally agree to pay to
Agent on demand such corresponding amount with interest thereon, for each day
from and including the date such amount is made available to Borrowers through
but excluding the date of payment to Agent, at (i) in the case of a payment to
be made by such Revolving Lender, the greater of (A) (x) the daily average
Federal Funds Effective Rate (computed on the basis of a year of 360 days)
during such period as quoted by Agent, times (y) such amount or (B) a rate
determined by Agent in accordance with banking industry rules on interbank
compensation, and (ii) in the case of a payment to be made by Borrower, the
Revolving Interest Rate for Revolving Advances that are Domestic Rate Loans.  If
such Revolving Lender pays its share of the applicable Revolving Advance to
Agent, then the amount so paid shall constitute such Revolving Lender’s
Revolving Advance.  Any payment by Borrowers shall be without prejudice to any
claim Borrowers may have against a Revolving Lender holding a Revolving
Commitment that shall have failed to make such payment to Agent.  A certificate
of Agent submitted to any Revolving Lender or Borrower with respect to any
amounts owing under this paragraph (c) shall be conclusively presumed to be
correct in the absence of demonstrable error.

(d)   Agent, on behalf of Swing Loan Lender, shall demand settlement (a
“Settlement”) of all or any Swing Loans with Lenders holding the Revolving
Commitments on at least a weekly basis, or on any more frequent date that Agent
elects or that Swing Loan Lender at its option exercisable for any reason
whatsoever may request, by notifying Lenders holding the Revolving Commitments
of such requested Settlement by facsimile, telephonic or electronic transmission
no later than 3:00 p.m. on the date of such requested Settlement (the
“Settlement Date”).  Subject to any contrary provisions of Section 2.22, each
Revolving Lender Commitment shall transfer the amount of such Revolving Lender’s
Revolving Commitment Percentage of the outstanding principal amount (plus
interest accrued thereon to the extent requested by Agent) of the applicable
Swing Loan with respect to which Settlement is requested by Agent, to such
account of Agent as Agent may designate not later than 5:00 p.m. on such
Settlement Date if requested by Agent by 3:00 p.m., otherwise not later than
5:00 p.m. on the next Business Day.  Settlements may occur at any time
notwithstanding that the conditions precedent to making

50

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

 

Revolving Advances set forth in Section 8.2 have not been satisfied or the
Revolving Commitments shall have otherwise been terminated at such time.  All
amounts so transferred to Agent shall be applied against the amount of
outstanding Swing Loans and, when so applied shall constitute Revolving Advances
of such Lenders accruing interest as Domestic Rate Loans.  If any such amount is
not transferred to Agent by any Revolving Lender on such Settlement Date, Agent
shall be entitled to recover such amount on demand from such Revolving Lender
together with interest thereon as specified in Section 2.6(c).

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

2.7   Maximum Advances.  The aggregate balance of Revolving Advances plus Swing
Loans outstanding at any time shall not exceed the lesser of (a) the Maximum
Revolving Advance Amount less the aggregate Maximum Undrawn Amount of all issued
and outstanding Letters of Credit or (b) the Formula Amount.

2.8   Manner and Repayment of Advances.

(a)   The Revolving Advances and Swing Loans shall be due and payable in full on
the last day of the Term subject to earlier prepayment as herein provided.  The
Term Loan (including all accrued PIK Interest) shall be due and payable as
provided in Section 2.3 hereof and shall be due and payable in full on the Term
Loan Maturity Date, subject to mandatory prepayments as herein provided and
Section 3.4(c).  Notwithstanding the foregoing, all Advances shall be subject to
earlier repayment upon (x) acceleration upon the occurrence of an Event of
Default under this Agreement or (y) termination of this Agreement.  Each payment
(including each prepayment) by any Borrower on account of the principal of and
interest on the Advances (other than the Term Loan) shall be applied, first to
the outstanding Swing Loans and next, pro rata according to the applicable
Revolving Commitment Percentages of Lenders, to the

51

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

 

outstanding Revolving Advances (subject to any contrary provisions of Section
2.22).  Each payment (including each prepayment) by any Borrower on account of
the principal of and interest on the Term Loan shall be applied to the Term Loan
pro rata according to the Term Loan Commitment Percentages of Lenders, provided
that each prepayment shall be applied to the Term Loan in the inverse order of
maturities thereof.    

(b)   Each Borrower recognizes that the amounts evidenced by checks, notes,
drafts or any other items of payment relating to and/or proceeds of Collateral
may not be collectible by Agent on the date received by Agent.  Agent shall
conditionally credit Borrowers’ Account for each item of payment on the next
Business Day after the Business Day on which such item of payment is received by
Agent (and the Business Day on which each such item of payment is so credited
shall be referred to, with respect to such item, as the “Application
Date”).  Agent is not, however, required to credit Borrowers’ Account for the
amount of any item of payment which is unsatisfactory to Agent and Agent may
charge Borrowers’ Account for the amount of any item of payment which is
returned, for any reason whatsoever, to Agent unpaid.  Subject to the foregoing,
Borrowers agree that for purposes of computing the interest charges under this
Agreement, each item of payment received by Agent shall be deemed applied by
Agent on account of the Obligations on its respective Application
Date.  Borrowers further agree that there is a monthly float charge payable to
Agent for Agent’s sole benefit, in an amount equal to (y) the face amount of all
items of payment received during the prior month (including items of payment
received by Agent as a wire transfer or electronic depository check) multiplied
by (z) the Revolving Interest Rate with respect to Domestic Rate Loans for one
(1) Business Day.  All proceeds received by Agent shall be applied to the
Obligations in accordance with Section 4.8(h).

(c)   All payments of principal, interest and other amounts payable hereunder,
or under any of the Other Documents shall be made to Agent at the Payment Office
not later than 1:00 p.m. on the due date therefor in Dollars in federal funds or
other funds immediately available to Agent.  Agent shall have the right to
effectuate payment of any and all Obligations due and owing hereunder by
charging Borrowers’ Account or by making Advances as provided in Section 2.2
hereof.

(d)   Except as expressly provided herein, all payments (including prepayments)
to be made by any Borrower on account of principal, interest, fees and other
amounts payable hereunder shall be made without deduction, setoff or
counterclaim and shall be made to Agent on behalf of Lenders to the Payment
Office, in each case on or prior to 1:00 p.m., in Dollars and in immediately
available funds.

2.9   Repayment of Excess Advances.  If at any time the aggregate balance of
outstanding Revolving Advances, Swing Loans, Term Loan and/or Advances taken as
a whole exceeds the maximum amount of such type of Advances and/or Advances
taken as a whole (as applicable) permitted hereunder, Borrowing Agent shall give
Agent immediate notice of such excess and such excess Advances shall be repaid
by the Borrowers within Two (2) Business Days from the date such excess occurs,
without the necessity of any demand, at the Payment Office, whether or not a
Default or an Event of Default has occurred.  To the extent that on the date any
mandatory repayment of such excess Advances is due under this Section 2.9 and
such Advances to be repaid consist of LIBOR Rate Loans and no Default or Event
of Default has occurred and is continuing,

52

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

 

Borrowers may deposit the amount of such mandatory prepayment in a cash
collateral account to be held by the Agent for and on behalf of the Lenders, on
such terms and conditions as are reasonably acceptable to Agent and upon such
deposit the obligation of the Borrowers to make such repayment shall be deemed
satisfied.  Subject to the terms and conditions of said cash collateral account,
sums on deposit in said cash collateral account shall be applied (until
exhausted) to reduce the principal balance of the outstanding Revolving Advances
which are LIBOR Rate Loans on the last day of each Interest Period attributable
to such LIBOR Rate Loans, thereby avoiding indemnification obligations under
Section 2.2(g) hereof with respect to such LIBOR Rate Loans; provided, however,
that if a Default or Event of Default shall have occurred at any time while sums
are on deposit in the cash collateral account, Agent may, in its sole
discretion, elect to apply such sums to reduce the principal balance of such
LIBOR Rate Loans prior to the last day of the applicable Interest Period, and
the Borrowers will be obligated to pay any resulting indemnification under
Section 2.2(g).

2.10   Statement of Account.  Agent shall maintain, in accordance with its
customary procedures, a loan account (“Borrowers’ Account”) in the name of
Borrowers in which shall be recorded the date and amount of each Advance made by
Agent or Lenders and the date and amount of each payment in respect thereof;
provided, however, the failure by Agent to record the date and amount of any
Advance shall not adversely affect Agent or any Lender.  Each month, Agent shall
send to Borrowing Agent a statement showing the accounting for the Advances
made, payments made or credited in respect thereof, and other transactions
between Agent, Lenders and Borrowers during such month.  The monthly statements
shall be conclusively presumed to be correct and binding upon Borrowers in the
absence of demonstrable error and shall constitute an account stated between
Lenders and Borrowers unless Agent receives a written statement of Borrowers’
specific exceptions thereto within thirty (30) days after such statement is
received by Borrowing Agent.  The records of Agent with respect to Borrowers’
Account shall be conclusively presumed correct absent demonstrable error of the
amounts of Advances and other charges thereto and of payments applicable
thereto.

2.11   Letters of Credit.

(a)   Subject to the terms and conditions hereof, Issuer shall issue or cause
the issuance of standby letters of credit denominated in Dollars (“Letters of
Credit”) for the account of any Borrower except to the extent that the issuance
thereof would then cause the sum of (i) the outstanding Revolving Advances plus
(ii) the outstanding Swing Loans, plus (iii) the Maximum Undrawn Amount of all
outstanding Letters of Credit, plus (iv) the Maximum Undrawn Amount of the
Letter of Credit to be issued to exceed the lesser of (x) the Maximum Revolving
Advance Amount or (y) the Formula Amount (calculated without giving effect to
the deductions provided for in Section 2.1(a)(y)(v)); The Maximum Undrawn Amount
of all outstanding Letters of Credit shall not exceed in the aggregate at any
time the Letter of Credit Sublimit.  All disbursements or payments related to
Letters of Credit shall be deemed to be Domestic Rate Loans consisting of
Revolving Advances and shall bear interest at the Revolving Interest Rate for
Domestic Rate Loans.  Letters of Credit that have not been drawn upon shall not
bear interest (but fees shall accrue in respect of outstanding Letters of Credit
as provided in Section 3.2 hereof).

53

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

 

(b)   Notwithstanding any provision of this Agreement, Issuer shall not be under
any obligation to issue any Letter of Credit if (i) any order, judgment or
decree of any Governmental Body or arbitrator shall by its terms purport to
enjoin or restrain  Issuer from issuing any Letter of Credit, or any Law
applicable to Issuer or any request or directive (whether or not having the
force of law) from any Governmental Body with jurisdiction over Issuer shall
prohibit, or request that Issuer refrain from, the issuance of letters of credit
generally or the Letter of Credit in particular or shall impose upon Issuer with
respect to the Letter of Credit any restriction, reserve or capital requirement
(for which Issuer is not otherwise compensated hereunder) not in effect on the
date of this Agreement, or shall impose upon Issuer any unreimbursed loss, cost
or expense which was not applicable on the date of this Agreement, and which
Issuer in good faith deems material to it, or (ii) the issuance of the Letter of
Credit would violate one or more policies of Issuer applicable to letters of
credit generally.

2.12   Issuance of Letters of Credit.

(a)   Borrowing Agent, on behalf of any Borrower, may request Issuer to issue or
cause the issuance of a Letter of Credit by delivering to Issuer, with a copy to
Agent at the Payment Office, prior to 1:00 p.m., at least five (5) Business Days
prior to the proposed date of issuance, such Issuer’s form of Letter of Credit
Application (the “Letter of Credit Application”) completed to the satisfaction
of Agent and Issuer; and, such other certificates, documents and other papers
and information as Agent or Issuer may reasonably request.  Issuer shall not
issue any requested Letter of Credit if such Issuer has received notice from
Agent or any Lender that one or more of the applicable conditions set forth in
Section 8.2 of this Agreement have not been satisfied or the commitments of
Lenders to make Revolving Advances hereunder have been terminated for any
reason.

(b)   Each Letter of Credit shall, among other things, (i) provide for the
payment of sight drafts, or other written demands for payment, and (ii) have an
expiry date not later than twelve (12) months after such Letter of Credit’s date
of issuance and in no event later than the last day of the Term.  Each standby
Letter of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits as most recently published by the International Chamber of
Commerce at the time a Letter of Credit is issued (the “UCP”) or the
International Standby Practices (International Chamber of Commerce Publication
Number 590) (the “ISP98 Rules”), or any subsequent revision thereof at the time
a standby Letter of Credit is issued, as determined by Issuer.

(c)   Agent shall use its reasonable efforts to notify Lenders of the request by
Borrowing Agent for a Letter of Credit hereunder.

2.13   Requirements For Issuance of Letters of Credit.  Borrowing Agent shall
authorize and direct any Issuer to name the applicable Borrower as the
“Applicant” or “Account Party” of each Letter of Credit.  If Agent is not the
Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct
Issuer to deliver to Agent all instruments, documents, and other writings and
property received by Issuer pursuant to the Letter of Credit and to accept and
rely upon Agent’s instructions and agreements with respect to all matters
arising in connection with the Letter of Credit, and the application therefor.

54

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

 

2.14   Disbursements, Reimbursement.

(a)   Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from Issuer a participation in each Letter of Credit and each drawing
thereunder in an amount equal to such Revolving Lender’s Revolving Commitment
Percentage of the Maximum Undrawn Amount of such Letter of Credit (as in effect
from time to time) and the amount of such drawing, respectively.

(b)   In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, Issuer will promptly notify Agent and
Borrowing Agent.  Regardless of whether Borrowing Agent shall have received such
notice, Borrowers shall reimburse (such obligation to reimburse Issuer shall
sometimes be referred to as a “Reimbursement Obligation”) Issuer prior to 12:00
Noon, on each date that an amount is paid by Issuer under any Letter of Credit
(each such date, a “Drawing Date”) in an amount equal to the amount so paid by
Issuer.  In the event Borrowers fail to reimburse Issuer for the full amount of
any drawing under any Letter of Credit by 12:00 Noon, on the Drawing Date,
Issuer will promptly notify Agent and each Revolving Lender thereof, and
Borrowers shall be automatically deemed to have requested that a Revolving
Advance maintained as a Domestic Rate Loan be made by Revolving Lender to be
disbursed on the Drawing Date under such Letter of Credit, and Revolving Lender
shall be unconditionally obligated to fund such Revolving Advance (all whether
or not the conditions specified in Section 8.2 are then satisfied or the
commitments of Revolving Lender to make Revolving Advances hereunder have been
terminated for any reason) as provided for in Section 2.14(c) immediately
below.  Any notice given by Issuer pursuant to this Section 2.14(b) may be oral
if promptly confirmed in writing; provided that the lack of such a confirmation
shall not affect the conclusiveness or binding effect of such notice.

(c)   Each Revolving Lender shall upon any notice pursuant to Section 2.14(b)
make available to Issuer through Agent at the Payment Office an amount in
immediately available funds equal to its Revolving Commitment Percentage
(subject to any contrary provisions of Section 2.22) of the amount of the
drawing, whereupon the participating Revolving Lenders shall (subject to Section
2.14(d)) each be deemed to have made a Revolving Advance maintained as a
Domestic Rate Loan to Borrowers in that amount.  If any Revolving Lender so
notified fails to make available to Agent, for the benefit of Issuer, the amount
of such Revolving Lender’s Revolving Commitment Percentage of such amount by
2:00 p.m. on the Drawing Date, then interest shall accrue on such Revolving
Lender’s obligation to make such payment, from the Drawing Date to the date on
which such Revolving Lender makes such payment (i) at a rate per annum equal to
the Federal Funds Effective Rate during the first three (3) days following the
Drawing Date and (ii) at a rate per annum equal to the rate applicable to
Revolving Advances maintained as a Domestic Rate Loan on and after the fourth
day following the Drawing Date.  Agent and Issuer will promptly give notice of
the occurrence of the Drawing Date, but failure of Agent or Issuer to give any
such notice on the Drawing Date or in sufficient time to enable any Revolving
Lender to effect such payment on such date shall not relieve such Revolving
Lender from its obligations under this Section 2.14(c), provided that such
Revolving Lender shall not be obligated to pay interest as provided in Section
2.14(c)(i) and (ii) until and commencing from the date of receipt of notice from
Agent or Issuer of a drawing.

55

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

 

(d)   With respect to any unreimbursed drawing that is not converted into a
Revolving Advance maintained as a Domestic Rate Loan to Borrowers in whole or in
part as contemplated by Section 2.14(b), because of Borrowers’ failure to
satisfy the conditions set forth in Section 8.2 hereof (other than any notice
requirements) or for any other reason, Borrowers shall be deemed to have
incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in the
amount of such drawing.  Such Letter of Credit Borrowing shall be due and
payable on demand (together with interest) and shall bear interest at the rate
per annum applicable to a Revolving Advance maintained as a Domestic Rate
Loan.  Each applicable Lender’s payment to Agent pursuant to Section 2.14(c)
shall be deemed to be a payment in respect of its participation in such Letter
of Credit Borrowing and shall constitute a “Participation Advance” from such
Lender in satisfaction of its Participation Commitment in respect of the
applicable Letter of Credit under this Section 2.14.

(e)   Each applicable Lender’s Participation Commitment in respect of the
Letters of Credit shall continue until the last to occur of any of the following
events: (x) Issuer ceases to be obligated to issue or cause to be issued Letters
of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains
outstanding and uncancelled; and (z) all Persons (other than Borrowers) have
been fully reimbursed for all payments made under or relating to Letters of
Credit.

2.15   Repayment of Participation Advances.

(a)   Upon (and only upon) receipt by Agent for the account of Issuer of
immediately available funds from Borrowers (i) in reimbursement of any payment
made by Issuer or Agent under the Letter of Credit with respect to which any
Lender has made a Participation Advance to Agent, or (ii) in payment of interest
on such a payment made by Issuer or Agent under such a Letter of Credit, Agent
will pay to each Revolving Lender, in the same funds as those received by Agent,
the amount of such Revolving Lender’s Revolving Commitment Percentage of such
funds, except Agent shall retain the amount of the Revolving Commitment
Percentage of such funds of any Revolving Lender that did not make a
Participation Advance in respect of such payment by Agent (and, to the extent
that any of the other Revolving Lender(s) have funded any portion such
Defaulting Lender’s Participation Advance in accordance with the provisions of
Section 2.22, Agent will pay over to such Non-Defaulting Lenders a pro rata
portion of the funds so withheld from such Defaulting Lender).

(b)   If Issuer or Agent is required at any time to return to any Borrower, or
to a trustee, receiver, liquidator, custodian, or any official in any insolvency
proceeding, any portion of the payments made by Borrowers to Issuer or Agent
pursuant to Section 2.15(a) in reimbursement of a payment made under the Letter
of Credit or interest or fee thereon, each applicable Lender shall, on demand of
Agent, forthwith return to Issuer or Agent the amount of its Revolving
Commitment Percentage of any amounts so returned by Issuer or Agent plus
interest at the Federal Funds Effective Rate.

2.16   Documentation.  Each Borrower agrees to be bound by the terms of the
Letter of Credit Application and by Issuer’s interpretations of any Letter of
Credit issued on behalf of such Borrower and by Issuer’s written regulations and
customary practices relating to letters of credit, though Issuer’s
interpretations may be different from such Borrower’s own.  In the event of a

56

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

 

conflict between the Letter of Credit Application and this Agreement, this
Agreement shall govern.  It is understood and agreed that, except in the case of
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), Issuer shall not be liable for
any error, negligence and/or mistakes, whether of omission or commission, in
following Borrowing Agent’s or any Borrower’s instructions or those contained in
the Letters of Credit or any modifications, amendments or supplements thereto.

2.17   Determination to Honor Drawing Request.  In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
Issuer shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit and that any other drawing condition appearing on the face of
such Letter of Credit has been satisfied in the manner so set forth.

2.18   Nature of Participation and Reimbursement Obligations.  The obligation of
each Revolving Lender in accordance with this Agreement to make the Revolving
Advances or Participation Advances as a result of a drawing under a Letter of
Credit, and the obligations of Borrowers to reimburse Issuer upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.18 under all
circumstances, including the following circumstances:

(a)   any set-off, counterclaim, recoupment, defense or other right which such
Lender or any Borrower, as the case may be, may have against Issuer, Agent, any
Borrower or Lender, as the case may be, or any other Person for any reason
whatsoever;

(b)   the failure of any Borrower or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in this
Agreement for the making of a Revolving Advance, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of Lenders to make Participation Advances under Section 2.14;

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

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

57

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

 

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

(f)   payment by Issuer under any Letter of Credit against presentation of a
demand, draft or certificate or other document which is forged or does not fully
comply with the terms of such Letter of Credit (provided that the foregoing
shall not excuse Issuer from any obligation under the terms of any applicable
Letter of Credit to require the presentation of documents that on their face
appear to satisfy any applicable requirements for drawing under such Letter of
Credit prior to honoring or paying any such draw);

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

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

(i)   the occurrence of any Material Adverse Effect;

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

(k)   the occurrence or continuance of an insolvency proceeding with respect to
any Borrower or any Guarantor;

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

(m)   the fact that the Term Loan Maturity Date shall have occurred, the Term
shall have expired or this Agreement or the obligations of Lenders to make
Advances have been terminated; and

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

58

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

 

2.19   Liability for Acts and Omissions.

(a)   As between Borrowers and Issuer, Swing Loan Lender, Agent and Lenders,
each Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of
Credit.  In furtherance and not in limitation of the foregoing, Issuer shall not
be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if Issuer or any of its Affiliates shall have been
notified thereof); (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) the
failure of the beneficiary of any such Letter of Credit, or any other party to
which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other
claim of any Borrower against any beneficiary of such Letter of Credit, or any
such transferee, or any dispute between or among any Borrower and any
beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, facsimile, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Issuer, including any Governmental Acts, and
none of the above shall affect or impair, or prevent the vesting of, any of
Issuer’s rights or powers hereunder.  Nothing in the preceding sentence shall
relieve Issuer from liability for Issuer’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment) in connection with actions or omissions described in
such clauses (i) through (viii) of such sentence.  In no event shall Issuer or
Issuer’s Affiliates be liable to any Borrower for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.

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

59

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

 

letter of guarantee or of indemnity issued to a steamship agent or carrier or
any document or instrument of like import (each an “Order”) and honor any
drawing in connection with any Letter of Credit that is the subject of such
Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.  Nothing in the preceding sentence shall relieve Issuer from
liability for Issuer’s gross negligence or willful misconduct (as determined by
a court of competent jurisdiction in a final non-appealable judgment) in
connection with actions or omissions described in such clauses (i) through (vi)
of such sentence.  

(c)   In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Issuer under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment), shall not put Issuer under any resulting liability to
any Borrower, Agent or any Lender.

2.20   Mandatory Payments.

(a)   Subject to Section 7.1 hereof, when any Loan Party sells or otherwise
disposes of any Collateral other than Inventory in the Ordinary Course of
Business, Borrowers shall repay the Advances in an amount equal to the Net Cash
Proceeds received by such Loan Party in connection with such sale or disposition
to the extent that the amount of Net Cash Proceeds received such by Loan Party
exceeds (I) $250,000 for any such single sale or disposition or (II) $1,000,000
with respect to all such sales or dispositions occurring in any fiscal year,
such repayments to be made promptly but in no event more than three (3) Business
Days following receipt of such Net Cash Proceeds, and until the date of payment,
such proceeds shall be held in trust for Agent.  The foregoing shall not be
deemed to be implied consent to any such sale otherwise prohibited by the terms
and conditions hereof.   Notwithstanding the foregoing and provided no Event of
Default has occurred and is continuing, such Net Cash Proceeds shall not be
required to be so applied to the extent (A) the Borrowing Agent delivers to the
Agent concurrently with the consummation of such sale or other disposition, a
certificate stating that Borrowers intend to use such Net Cash Proceeds to
acquire fixed, capital or replacement assets used or useful in the Loan Parties'
business within one hundred eighty (180) days of the receipt of such Net Cash
Proceeds and (B) Borrowers in fact either (x) reinvest such Net Cash Proceeds
within such one hundred eighty (180) day period or (y) enter into a binding
commitment to reinvestment such Net Cash Proceeds within such one hundred eighty
(180) day period and if so committed, make such reinvestment within ninety (90)
days after such initial one hundred eighty (180) day period.  Any Net Cash
Proceeds not so reinvested shall be applied to prepay the Advances.  Such
repayments shall be applied (x) first, to the outstanding principal installments
of the Term Loan in the inverse order of the maturities thereof and (y) second,
to the remaining Advances (including cash collateralization of all Obligations
relating to any outstanding Letters of Credit in accordance with the provisions
of Section 3.2(b); provided however that if no Default or Event of Default has
occurred and is continuing, such repayments shall be applied to cash
collateralize any Obligations related to outstanding Letters of Credit last) in
such order as Agent may determine, subject to Borrowers’ ability to reborrow
Revolving Advances in accordance with the terms hereof .

60

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

 

(b)   In the event of any issuance or other incurrence of Indebtedness (other
than Permitted Indebtedness) by Borrowers, Borrowers shall, no later than three
(3) Business Days after the receipt by Borrowers of the Net Cash Proceeds from
any such issuance or incurrence of Indebtedness repay the Advances in an amount
equal to such Net Cash Proceeds. Such repayments will be applied in the same
manner as set forth in Section 2.20(a) hereof.

(c)   All Net Cash Proceeds received by Borrowers (i) under any insurance policy
on account of damage or destruction of any assets or property of any Borrowers,
or (ii) as a result of any taking or condemnation of any assets or property in
excess of (I) $250,000 with respect to any single loss, taking or condemnation
by Borrowers or (II) $1,000,000 with respect to all such losses, takings or
condemnations received by Borrowers in any fiscal year shall be applied in
accordance with Section 2.20(a).  Notwithstanding the foregoing and provided no
Event of Default has occurred and is continuing, Net Cash Proceeds of casualty
insurance and/or condemnation awards shall not be required to be so applied to
the extent (A) the Borrowing Agent delivers to the Agent promptly following the
casualty or condemnation stating that it intends to use such proceeds to repair
or replace the assets so destroyed or condemned or acquire fixed or capital
assets used or useful in the Loan Parties' business within one hundred eighty
(180) days of the receipt of such Net Cash Proceeds and (B) Borrowers in fact
either (x) so use such proceeds within such within such one hundred eighty (180)
day period or (y) enter into a binding commitment use such proceeds within such
one hundred eighty (180) day period and if so committed, use such proceeds
within sixty (60) days after such initial one hundred eighty (180) day
period.  Any Net Cash Proceeds not so reinvested shall be applied to prepay the
Advances in the same manner as set forth in Section 2.20(a) hereof.

2.21   Use of Proceeds.

(a)   Borrowers shall apply the proceeds of Advances to (i) finance the
acquisition by Mason Dixon of the Target, (ii) pay fees and expenses relating to
this transaction, and (iii) provide for its general corporate needs, including
working capital needs and Capital Expenditures and to reimburse drawings under
Letters of Credit.  Borrowers shall not use the proceeds of any Revolving
Advance to prepay the Term Loan.

(b)   Without limiting the generality of Section 2.21(a) above, neither the
Borrowers, the Guarantors nor any other Person which may in the future become
party to this Agreement or the Other Documents as a Borrower or Guarantor,
intends to use nor shall they use any portion of the proceeds of the Advances,
directly or indirectly, for any purpose in violation of Applicable Law.

2.22   Defaulting Lender.

(a)   Notwithstanding anything to the contrary contained herein, in the event
any Lender is a Defaulting Lender, all rights and obligations hereunder of such
Defaulting Lender and of the other parties hereto shall be modified to the
extent of the express provisions of this Section 2.22 so long as such Lender is
a Defaulting Lender.

61

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

 

(b)   (i) except as otherwise expressly provided for in this Section 2.22,
Revolving Advances shall be made pro rata from Lenders holding Revolving
Commitments which are not Defaulting Lenders based on their respective Revolving
Commitment Percentages, and no Revolving Commitment Percentage of any Lender or
any pro rata share of any Revolving Advances required to be advanced by any
Lender shall be increased as a result of any Lender being a Defaulting
Lender.  Amounts received in respect of principal of any type of Revolving
Advances shall be applied to reduce such type of Revolving Advances of each
Revolving Lender (other than any Defaulting Lender) Revolving Lender in
accordance with its Revolving Commitment Percentage; provided, that, Agent shall
not be obligated to transfer to a Defaulting Lender any payments received by
Agent for Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled
to the sharing of any payments hereunder (including any principal, interest or
fees).  Amounts payable to a Defaulting Lender shall instead be paid to or
retained by Agent.  Agent may hold and, in its discretion, re-lend to a Borrower
the amount of such payments received or retained by it for the account of such
Defaulting Lender.

(ii)   fees pursuant to Section 3.3 hereof shall cease to accrue in favor of
such Defaulting Lender.

(iii)   if any Swing Loans are outstanding or any Letters of Credit (or drawings
under any Letter of Credit for which Issuer has not been reimbursed) are
outstanding or exist at the time any such Revolving Lender becomes a Defaulting
Lender, then:

(A)   Defaulting Lender’s Participation Commitment in the outstanding Swing
Loans and of the Maximum Undrawn Amount of all outstanding Letters of Credit
shall be reallocated among Non-Defaulting Lenders holding Revolving Commitments
in proportion to the respective Revolving Commitment Percentages of such
Non-Defaulting Lenders to the extent (but only to the extent) that (x) such
reallocation does not cause the aggregate sum of outstanding Revolving Advances
made by any such Non-Defaulting Lender holding a Revolving Commitment plus such
Revolving Lender’s reallocated Participation Commitment in the outstanding Swing
Loans plus such Lender’s reallocated Participation Commitment in the aggregate
Maximum Undrawn Amount of all outstanding Letters of Credit to exceed the
Revolving Commitment Amount of any such Non-Defaulting Lender, and (y) no
Default or Event of Default has occurred and is continuing at such time;

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

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

62

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

 

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

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

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

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

(d)   Other than as expressly set forth in this Section 2.22, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify Agent)
and the other parties hereto shall remain unchanged.  Nothing in this Section
2.22 shall be deemed to release any Defaulting Lender from its obligations under
this Agreement and the Other Documents, shall alter such obligations, shall
operate as a waiver of any default by such Defaulting Lender hereunder, or shall
prejudice any rights which any Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.

63

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

 

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

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

2.23   Payment of Obligations.  Agent may charge to Borrowers’ Account as a
Revolving Advance or, at the discretion of Swing Loan Lender, as a Swing Loan
(i) all payments with respect to any of the Obligations required hereunder
(including without limitation principal payments, payments of interest, payments
of Letter of Credit Fees and all other fees provided for hereunder and payments
under Sections 16.5 and 16.9) as and when each such payment shall become due and
payable (whether as regularly scheduled, upon or after acceleration, upon
maturity or otherwise), (ii) without limiting the generality of the foregoing
clause (i), (a) all amounts expended by Agent or any Lender pursuant to Sections
4.2 or 4.3 hereof and (b) all expenses which Agent incurs in connection with the
forwarding of Advance proceeds and the establishment and maintenance of any
Blocked Accounts or Depository Accounts as provided for in Section 4.8(h), and
(iii) any sums expended by Agent or any Lender due to any Borrower’s failure to
perform or comply with its obligations under this Agreement or any Other
Document including any Borrower’s obligations under Sections 3.3, 3.4, 4.4, 6.4,
6.6, 6.7 and 6.8 hereof, and all amounts so charged shall be added to the
Obligations and shall be secured by the Collateral.  To the extent Revolving
Advances are not actually funded by the other Lenders in respect of any such
amounts so charged, all such amounts so charged shall be deemed to be Revolving
Advances / Swing Loans made by and owing to Agent and Agent shall be entitled to
all rights (including accrual of interest) and remedies of a Lender under this
Agreement and the Other Documents with respect to such Revolving Advances.

2.24   Increase in Maximum Revolving Advance Amount.

(a)   Borrowers may, at any time prior to the date that is one year prior to the
expiration of the Term, request that the Maximum Revolving Advance Amount be
increased by (1) one or more of the current Lenders increasing their Revolving
Commitment Amount (any current Lender which elects to increase its Revolving
Commitment Amount shall be referred to as an “Increasing Lender”) or (2) one or
more new lenders (each a “New Lender”) joining this Agreement and providing a
Revolving Commitment Amount hereunder , subject to the following terms and
conditions:

64

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

 

(i)   No current Lender shall be obligated to increase its Revolving Commitment
Amount and any increase in the Revolving Commitment Amount by any current Lender
shall be in the sole discretion of such current Lender;

(ii)   Borrowers may not request the addition of a New Lender unless (and then
only to the extent that) there is insufficient participation on behalf of the
existing Lenders in the increased Revolving Commitments being requested by
Borrowers;

(iii)   There shall exist no Event of Default or Default on the effective date
of such increase after giving effect to such increase;

(iv)   After giving effect to such increase, the Maximum Revolving Advance
Amount shall not exceed $175,000,000;

(v)   Borrowers may not request an increase in the Maximum Revolving Advance
Amount under this Section 2.24 more than three (3) times during the Term, and no
single such increase in the Maximum Revolving Advance Amount shall be for an
amount less than $10,000,000 (or such lesser amount if it is the entire
remaining permitted increase under clause (iv));

(vi)   Borrowers shall deliver to Agent on or before the effective date of such
increase the following documents in form and substance satisfactory to Agent:
(1) certifications of their corporate secretaries with attached resolutions
certifying that the increase in the Revolving Commitment Amounts has been
approved by such Borrowers, (2) certificate dated as of the effective date of
such increase certifying that no Default or Event of Default shall have occurred
and be continuing and certifying that the representations and warranties made by
each Borrower herein and in the Other Documents are true and complete in all
respects with the same force and effect as if made on and as of such date
(except to the extent any such representation or warranty expressly relates only
to any earlier and/or specified date), (3) such other agreements, instruments
and information (including supplements or modifications to this Agreement and/or
the Other Documents executed by Borrowers as Agent reasonably deems necessary in
order to document the increase to the Maximum Revolving Advance Amount and to
protect, preserve and continue the perfection and priority of the liens,
security interests, rights and remedies of Agent and Lenders hereunder and under
the Other Documents in light of such increase, and (4) an opinion of counsel in
form and substance satisfactory to Agent which shall cover such matters related
to such increase as Agent may reasonably require and each Borrower hereby
authorizes and directs such counsel to deliver such opinions to Agent and
Lenders;

(vii)   Borrowers shall execute and deliver (1) to each Increasing Lender a
replacement Note reflecting the new amount of such Increasing Lender’s Revolving
Commitment Amount after giving effect to the increase (and the prior Note issued
to such Increasing Lender shall be deemed to be cancelled) and (2) to each New
Lender a Note reflecting the amount of such New Lender’s Revolving Commitment
Amount;

(viii)   Any New Lender shall be subject to the approval of Agent and Issuer in
their good faith business judgment;

65

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

 

(ix)   Each Increasing Lender shall confirm its agreement to increase its
Revolving Commitment Amount pursuant to an acknowledgement in a form acceptable
to Agent, signed by it and each Borrower and delivered to Agent at least five
(5) days before the effective date of such increase; and

(x)   Each New Lender shall execute a lender joinder in substantially the form
of Exhibit 2.24 pursuant to which such New Lender shall join and become a party
to this Agreement and the Other Documents with a Revolving Commitment Amount as
set forth in such lender joinder.

(b)   On the effective date of such increase, (i) Borrowers shall repay all
Revolving Advances then outstanding, subject to Borrowers’ obligations under
Sections 3.7, 3.9, or 3.10; provided that subject to the other conditions of
this Agreement, the Borrowing Agent may simultaneously request new Revolving
Advances on such date and (ii) the Revolving Commitment Percentages of Revolving
Lenders (including each Increasing Lender and/or New Lender) shall be
recalculated such that each such Revolving Lender’s Revolving Commitment
Percentage is equal to (x) the Revolving Commitment Amount of such Revolving
Lender divided by (y) the aggregate of the Revolving Commitment Amounts of all
Lenders.  Each Revolving Lender shall participate in any new Revolving Advances
made on or after such date in accordance with its Revolving Commitment
Percentage after giving effect to the increase in the Maximum Revolving Advance
Amount and recalculation of the Revolving Commitment Percentages contemplated by
this Section 2.24.

(c)   On the effective date of such increase, each Increasing Lender shall be
deemed to have purchased an additional/increased participation in, and each New
Lender will be deemed to have purchased a new participation in, each then
outstanding Letter of Credit and each drawing thereunder and each then
outstanding Swing Loan in an amount equal to such Lender’s Revolving Commitment
Percentage (as calculated pursuant to Section 2.24(b) above) of the Maximum
Undrawn Amount of each such Letter of Credit (as in effect from time to time)
and the amount of each drawing and of each such Swing Loan, respectively.  As
necessary to effectuate the foregoing, each existing Revolving Lender that is
not an Increasing Lender shall be deemed to have sold to each applicable
Increasing Lender and/or New Lender, as necessary, a portion of such existing
Revolving Lender’s participations in such outstanding Letters of Credit and
drawings and such outstanding Swing Loans such that, after giving effect to all
such purchases and sales, each Revolving Lender (including each Increasing
Lender and/or New Lender) shall hold a participation in all Letters of Credit
(and drawings thereunder) and all Swing Loans in accordance with their
respective Revolving Commitment Percentages (as calculated pursuant to Section
2.24(b) above).

(d)   On the effective date of such increase, Borrowers shall pay all costs and
expenses (including reasonable fees and disbursements of counsel) incurred by
Agent and by each Increasing Lender and New Lender in connection with the
negotiations regarding, and the preparation, negotiation, execution and delivery
of all agreements and instruments executed and delivered by any of Agent,
Borrowers and/or Increasing Lenders and New Lenders in connection with, such
increase (including all fees for any supplemental or additional public filings
of any Other Documents necessary to protect, preserve and continue the
perfection and priority of the liens, security interests, rights and remedies of
Agent and Lenders hereunder and under the Other Documents in light of such
increase).

66

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

 

III.   INTEREST AND FEES.

3.1   Interest.  Interest on Advances shall (x) be payable in cash in arrears on
the first day of each calendar quarter with respect to Domestic Rate Loans and,
with respect to LIBOR Rate Loans, at the end of each Interest Period, and (y)
shall also be payable, in the case of the Term Loan, in kind, as more
particularly set forth in Section 3.4(c) hereof; provided further that (i) all
accrued and unpaid interest on the Term Loan shall be due and payable on the
Term Loan Maturity Date and (ii) all accrued and unpaid interest on the
Revolving Advances and the Swing Loans shall be due and payable at the end of
the Term.  Interest charges shall be computed on the actual principal amount of
Advances outstanding during the calendar quarter at a rate per annum equal to
(i) with respect to Revolving Advances, the applicable Revolving Interest Rate,
(ii) with respect to Swing Loans, the Revolving Interest Rate for Domestic Rate
Loans and (iii) with respect to the Term Loan, the Term Loan Rate (as
applicable, the “Contract Rate”).  Except as expressly provided otherwise in
this Agreement, any Obligations other than the Advances that are not paid when
due shall accrue interest at the Revolving Interest Rate for Domestic Rate
Loans, subject to the provision of the final sentence of this Section 3.1
regarding the Default Rate.  Whenever, subsequent to the date of this Agreement,
the Alternate Base Rate is increased or decreased, the applicable Contract Rate
shall be similarly changed without notice or demand of any kind by an amount
equal to the amount of such change in the Alternate Base Rate during the time
such change or changes remain in effect.  The LIBOR Rate shall be adjusted with
respect to LIBOR Rate Loans without notice or demand of any kind on the
effective date of any change in the Reserve Percentage as of such effective
date.  Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent or at the direction of Required
Lenders (or, in the case of any Event of Default under Section 10.7, immediately
and automatically upon the occurrence of any such Event of Default without the
requirement of any affirmative action by any party), (i) the Obligations other
than LIBOR Rate Loans shall bear interest at the applicable Contract Rate for
Domestic Rate Loans plus two percent (2%) per annum and (ii) LIBOR Rate Loans
shall bear interest at the Revolving Interest Rate for LIBOR Rate Loans plus two
percent (2%) per annum (as applicable, the “Default Rate”).

3.2   Letter of Credit Fees.

(a)   Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders
holding Revolving Commitments, fees for each Letter of Credit for the period
from and excluding the date of issuance of same to and including the date of
expiration or termination, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by the Applicable Margin for Revolving
Advances consisting of LIBOR Rate Loans, such fees to be calculated on the basis
of a 360-day year for the actual number of days elapsed and to be payable
quarterly in arrears on the first day of each calendar quarter and on the last
day of the Term, and (y) to Issuer, a fronting fee of one quarter of one percent
(0.25%) per annum times the average daily face amount of each outstanding Letter
of Credit for the period from and excluding the date of issuance of same to and
including the date of expiration or termination, to be payable quarterly in
arrears on the first day of each calendar quarter and on the last day of the
Term (all of the foregoing fees, the “Letter of Credit Fees”).  In addition,
Borrowers shall pay to Agent, for the benefit of Issuer, any and all
administrative, issuance, amendment, payment and negotiation charges with
respect to Letters of Credit and all fees and expenses as agreed upon by Issuer
and the Borrowing Agent in connection with any Letter of Credit, including in
connection with the

67

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

 

opening, amendment or renewal of any such Letter of Credit and any acceptances
created thereunder, all such charges, fees and expenses, if any, to be payable
on demand.  All such charges shall be deemed earned in full on the date when the
same are due and payable hereunder and shall not be subject to rebate or
pro-ration upon the termination of this Agreement for any reason.  Any such
charge in effect at the time of a particular transaction shall be the charge for
that transaction, notwithstanding any subsequent change in Issuer’s prevailing
charges for that type of transaction.  Upon and after the occurrence of an Event
of Default, and during the continuation thereof, at the option of Agent or at
the direction of Required Lenders (or, in the case of any Event of Default under
Section 10.7, immediately and automatically upon the occurrence of any such
Event of Default without the requirement of any affirmative action by any
party), the Letter of Credit Fees described in clause (x) of this Section 3.2(a)
shall be increased by an additional two percent (2.0%) per annum.

(b)   At any time following the occurrence of an Event of Default, at the option
of Agent or at the direction of Required Lenders (or, in the case of any Event
of Default under Section 10.7, immediately and automatically upon the occurrence
of such Event of Default, without the requirement of any affirmative action by
any party), or upon the expiration of the Term or any other termination of this
Agreement (and also, if applicable, in connection with any mandatory prepayment
under Section 2.20),  Borrowers will cause cash to be deposited and maintained
in an account with Agent, as cash collateral, in an amount equal to one hundred
and five percent (105%) of the Maximum Undrawn Amount of all outstanding Letters
of Credit, and each Borrower hereby irrevocably authorizes Agent, in its
discretion, on such Borrower’s behalf and in such Borrower’s name, to open such
an account and to make and maintain deposits therein, or in an account opened by
such Borrower, in the amounts required to be made by such Borrower, out of the
proceeds of Receivables or other Collateral or out of any other funds of such
Borrower coming into any Lender’s possession at any time.  Agent may, in its
discretion, invest such cash collateral (less applicable reserves) in such
short-term money-market items as to which Agent and such Borrower mutually agree
(or, in the absence of such agreement, as Agent may reasonably select) and the
net return on such investments shall be credited to such account and constitute
additional cash collateral, or Agent may (notwithstanding the foregoing)
establish the account provided for under this Section 3.2(b) as a non-interest
bearing account and in such case Agent shall have no obligation (and Borrowers
hereby waive any claim) under Article 9 of the Uniform Commercial Code or under
any other Applicable Law to pay interest on such cash collateral being held by
Agent.  No Borrower may withdraw amounts credited to any such account except
upon the occurrence of all of the following: (x) payment and performance in full
of all Obligations; (y) expiration of all Letters of Credit; and (z) termination
of this Agreement.  Borrowers hereby assign, pledge and grant to Agent, for its
benefit and the ratable benefit of Issuer, Lenders and each other Secured Party,
a continuing security interest in and to and Lien on any such cash collateral
and any right, title and interest of Borrowers in any deposit account,
securities account or investment account into which such cash collateral may be
deposited from time to time to secure the Obligations, specifically including
all Obligations with respect to any Letters of Credit.  Borrowers agree that
upon the coming due of any Reimbursement Obligations (or any other Obligations,
including Obligations for Letter of Credit Fees) with respect to the Letters of
Credit, Agent may use such cash collateral to pay and satisfy such Obligations.

68

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

 

3.3   Unused Line Fee.  Borrowers shall pay to the Agent, for the ratable
benefit of the Lenders holding the Revolving Commitments based on their
Revolving Commitment Percentages, a fee (the “Unused Line Fee”) at a rate equal
to one quarter of one percent (.25%) per annum multiplied by the difference
between the Maximum Revolving Advance Amount and the average outstanding
Revolving Advances and the Maximum Outstanding Amount of Letters of Credit
during the immediately preceding calendar quarter.  Such Unused Line Fee shall
be payable to the Agent in arrears on the first day of each calendar quarter
with respect to the previous calendar quarter.

3.4   Collateral Monitoring Fee; Collateral Evaluation Fee; PIK Interest and Fee
Letter.

(a)   Borrowers shall pay Agent a collateral monitoring fee equal to $1,500 per
month commencing on the first day of the month following the Closing Date and on
the first day of each month thereafter during the Term.  The collateral
monitoring fee shall be deemed earned in full on the date when same is due and
payable hereunder and shall not be subject to rebate or proration upon
termination of this Agreement for any reason.

(b)   Borrowers shall pay to Agent promptly at the conclusion of any collateral
evaluation performed by or for the benefit of Agent - namely any field
examination, collateral analysis or other business analysis, the need for which
is to be determined by Agent and which evaluation is undertaken by Agent or for
Agent’s benefit - a collateral evaluation fee in an amount equal to $1,000 (or
such other amount customarily charged by Agent to its customers per day for each
person employed to perform such evaluation (based on an eight (8) hour day, and
subject to adjustment if additional hours are worked), plus a per examination
manager review fee (whether such examination is performed by Agent’s employees
or by a third party retained by agent) in the amount of $1,300 (or such other
amount customarily charged by Agent to its customers, plus all costs and
disbursements incurred by Agent in the performance of such examination or
analysis, and further provided that if third parties are retained to perform
such collateral evaluations, either at the request of another Lender or for
extenuating reasons determined by Agent in its sole discretion, then such fees
charged by such third parties plus all costs and disbursements incurred by such
third party, shall be the responsibility of Borrower and shall not be subject to
the foregoing limits, and provided further that the Borrower shall only be
required to pay for one field examination per calendar year and absent the
existence of a Trigger Event, the cost of field examinations will be limited to
$75,000 per annum.  Any field examination initiated by the Agent during the 60
day period following (i) the date of any Default or Event of Default or (ii) a
Trigger Event, shall not count against the limitation on Borrower-reimbursed
field exams.

(c)   In addition to the interest on the unpaid principal balance of the Term
Loan payable in cash under Section 3.1, from and after the Closing Date, an
additional amount of interest shall be payable in kind on the last day of each
month, which shall accrue daily at a rate equal to two and one-half percent
(2.5%) per annum and shall be compounded monthly (“PIK Interest”) on an amount
equal to the sum of (i) the aggregate principal amount of the Term Loan as of
the last day of the preceding month and (ii) the aggregate sum of all PIK
Interest accrued from the Closing Date through and including the last day of
such month.  On the earlier to occur of a Term Loan Refinancing Event or the
Term Loan Maturity Date, all then accrued PIK Interest shall be capitalized and
added to the principal outstanding under the Term Loan and

69

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

 

shall be due and payable in full; provided that, in the event that prepayment of
the Term Loan in full occurs prior to the Term Loan Maturity Date in connection
with a Term Loan Refinancing Event, then if PNC or any of its Affiliates
provides the Term Loan Replacement Facility, either by itself or pursuant to a
syndicate of lenders for which PNC or such Affiliate acts as agent, then payment
of all accrued PIK Interest shall be waived, and Borrowers shall have no
obligation with respect to the payment thereof.  

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

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

3.6   Maximum Charges.  In no event whatsoever shall interest and other charges
charged hereunder exceed the highest rate permissible under Applicable Law.  In
the event interest and other charges as computed hereunder would otherwise
exceed the highest rate permitted under Applicable Law: (i) the interest rates
hereunder will be reduced to the maximum rate permitted under Applicable Law;
(ii) such excess amount shall be first applied to any unpaid principal balance
owed by Borrowers; and (iii) if the then remaining excess amount is greater than
the previously unpaid principal balance, Lenders shall promptly refund such
excess amount to Borrowers and the provisions hereof shall be deemed amended to
provide for such permissible rate.

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

(a)   subject Agent, Swing Loan Lender, any Lender or Issuer to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Rate Loan, or change the basis
of taxation of payments to Agent, Swing Loan Lender, such Lender or Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section
3.10 and the imposition of, or any change in the rate of, any Excluded Tax
payable by Agent, Swing Loan Lender, such Lender or the Issuer);

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

70

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

 

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

and the result of any of the foregoing is to increase the cost to Agent, Swing
Loan Lender, any Lender or Issuer of making, converting to, continuing, renewing
or maintaining its Advances hereunder by an amount that Agent, Swing Loan
Lender, such Lender or Issuer deems to be material or to reduce the amount of
any payment (whether of principal, interest or otherwise) in respect of any of
the Advances by an amount that Agent, Swing Loan Lender or such Lender or Issuer
deems to be material, then, in any case Borrowers shall promptly pay Agent,
Swing Loan Lender, such Lender or Issuer, upon its demand, such additional
amount as will compensate Agent, Swing Loan Lender or such Lender or Issuer for
such additional cost or such reduction, as the case may be, so long as Agent,
Swing Loan Lender or such Lender first received knowledge that such amounts have
accrued on or after the day that is 270 days prior to the date on which Agent,
Swing Loan Lender or such Lender first made demand therefor; provided, that if
the event giving rise to such costs or reductions has retroactive effect, such
270-day period shall be extended to include the period of retroactive effect,
provided further that the foregoing shall not apply to increased costs which are
reflected in the LIBOR Rate, as the case may be..  Agent, Swing Loan Lender,
such Lender or Issuer shall certify the amount of such additional cost or
reduced amount to Borrowing Agent, and such certification shall be conclusively
presumed to be correct absent demonstrable error.

3.8   Alternate Rate of Interest.

3.8.1   Interest Rate Inadequate or Unfair.  In the event that Agent or any
Lender shall have determined that:

(a)   reasonable means do not exist for ascertaining the LIBOR Rate applicable
pursuant to Section 2.2 hereof for any Interest Period; or

(b)   Dollar deposits in the relevant amount and for the relevant maturity are
not available in the London interbank LIBOR market, with respect to an
outstanding LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a LIBOR Rate Loan; or

(c)   the making, maintenance or funding of any LIBOR Rate Loan has been made
impracticable or unlawful by compliance by Agent or such Lender in good faith
with any Applicable Law or any interpretation or application thereof by any
Governmental Body or with any request or directive of any such Governmental Body
(whether or not having the force of law), or

(d)   the LIBOR Rate will not adequately and fairly reflect the cost to such
Lender of the establishment or maintenance of any LIBOR Rate Loan, then Agent
shall give Borrowing Agent prompt written or telephonic notice of such
determination.  If such notice is given prior to a LIBOR Termination Date (as
defined below) or prior to the date on which Section 3.8.2(a)(ii) applies, (i)
any such requested LIBOR Rate Loan shall be made as a

71

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

 

Domestic Rate Loan, unless Borrowing Agent shall notify Agent no later than 1:00
p.m. two (2) Business Days prior to the date of such proposed borrowing, that
its request for such borrowing shall be cancelled or made as an unaffected type
of LIBOR Rate Loan, (ii) any Domestic Rate Loan or LIBOR Rate Loan which was to
have been converted to an affected type of LIBOR Rate Loan shall be continued as
or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 1:00 p.m. two (2) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of LIBOR Rate Loan, and
(iii) any outstanding affected LIBOR Rate Loans shall be converted into a
Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than
1:00 p.m. two (2) Business Days prior to the last Business Day of the then
current Interest Period applicable to such affected LIBOR Rate Loan, shall be
converted into an unaffected type of LIBOR Rate Loan, on the last Business Day
of the then current Interest Period for such affected LIBOR Rate Loans (or
sooner, if any Lender cannot continue to lawfully maintain such affected LIBOR
Rate Loan).  Until such notice has been withdrawn, Lenders shall have no
obligation to make an affected type of LIBOR Rate Loan or maintain outstanding
affected LIBOR Rate Loans and no Borrower shall have the right to convert a
Domestic Rate Loan or an unaffected type of LIBOR Rate Loan into an affected
type of LIBOR Rate Loan.

3.8.2   Successor LIBOR Rate Index.

(a)   If the Agent determines in good faith (which determination shall be final
and conclusive, absent manifest error) that either (i) (A) the circumstances set
forth in Section 3.8.1(a) have arisen and are unlikely to be temporary, or (B)
the circumstances set forth in Section 3.8.1(a) have not arisen but the
applicable supervisor or administrator (if any) of the LIBOR Rate or a
Governmental Body having jurisdiction over the Agent has made a public statement
identifying the specific date after which the LIBOR Rate shall no longer be used
for determining interest rates for loans (either such date, a “LIBOR Termination
Date”), or (ii)  a rate other than the LIBOR Rate has become a widely recognized
benchmark rate for newly originated loans in Dollars in the U.S. market, then
the Agent may (in consultation with the Borrowing Agent) choose a replacement
index for the LIBOR Rate and make adjustments to applicable margins and related
amendments to this Agreement as referred to below such that, to the extent
practicable, the all-in interest rate based on the replacement index will be
substantially equivalent to the all-in LIBOR Rate-based interest rate in effect
prior to its replacement.  

(b)   The Agent and the Borrowers shall enter into an amendment to this
Agreement to reflect the replacement index, the adjusted margins and such other
related amendments as may be appropriate, in the discretion of the Agent, for
the implementation and administration of the replacement index-based
rate.  Notwithstanding anything to the contrary in this Agreement or the Other
Documents (including, without limitation, Section 16.2), such amendment shall
become effective without any further action or consent of any other party to
this Agreement at 5:00 p.m. on the tenth (10th) Business Day after the date a
draft of the amendment is provided to the Lenders, unless the Agent receives, on
or before such tenth (10th) Business Day, a written notice from the Required
Lenders stating that such Lenders object to such amendment.  

72

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

 

(c)   Selection of the replacement index, adjustments to the applicable margins,
and amendments to this Agreement (i) will be determined with due consideration
to the then-current market practices for determining and implementing a rate of
interest for newly originated loans in the United States and loans converted
from a LIBOR Rate-based rate to a replacement index-based rate, and (ii) may
also reflect adjustments to account for (x) the effects of the transition from
the LIBOR Rate to the replacement index and (y) yield- or risk-based differences
between the LIBOR Rate and the replacement index.

(d)   Until an amendment reflecting a new replacement index in accordance with
this Section 3.8.2 is effective, each advance, conversion and renewal of a LIBOR
Rate Loan will continue to bear interest with reference to the LIBOR Rate;
provided however, that if the Agent determines in good faith (which
determination shall be final and conclusive, absent manifest error) that a LIBOR
Termination Date has occurred, then following the LIBOR Termination Date, all
LIBOR Rate Loans shall automatically be converted to Domestic Rate Loans until
such time as an amendment reflecting a replacement index and related matters as
described above is implemented.  

(e)   Notwithstanding anything to the contrary contained herein, if at any time
the replacement index is less than zero, at such times, such index shall be
deemed to be zero for purposes of this Agreement.

3.9   Capital Adequacy.

(a)   In the event that Agent, Swing Loan Lender or any Lender shall have
determined that any Applicable Law or guideline regarding capital adequacy, or
any Change in Law or any change in the interpretation or administration thereof
by any Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent, Swing Loan
Lender, Issuer or any Lender (for purposes of this Section 3.9, the term
“Lender” shall include Agent, Swing Loan Lender, Issuer or any Lender and any
corporation or bank controlling Agent , Swing Loan Lender or any Lender and the
office or branch where Agent , Swing Loan Lender or any Lender (as so defined)
makes or maintains any LIBOR Rate Loans) 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, has or would have the effect of reducing the
rate of return on Agent, Swing Loan Lender or any Lender’s capital as a
consequence of its obligations hereunder (including the making of any Swing
Loans) to a level below that which Agent , Swing Loan Lender or such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration Agent’s, Swing Loan Lender’s and each Lender’s policies with
respect to capital adequacy) by an amount deemed by Agent, Swing Loan Lender or
any Lender to be material, then, from time to time, Borrowers shall pay upon
demand to Agent, Swing Loan Lender or such Lender such additional amount or
amounts as will compensate Agent, Swing Loan Lender or such Lender for such
reduction, so long as Agent, Swing Loan Lender or such Lender first received
knowledge that such amounts have accrued on or after the day that is 270 days
prior to the date on which Agent, Swing Loan Lender or such Lender first made
demand therefor; provided, that if the Change in Law giving rise to such costs
or reductions has retroactive effect, such 270-day period shall be extended to
include the period of retroactive effect.  In determining such amount or
amounts, Agent, Swing Loan Lender or such Lender may use any reasonable
averaging or attribution methods.  The protection of this Section 3.9 shall be
available to Agent, Swing Loan Lender and each Lender regardless of any possible
contention of invalidity or inapplicability with respect to the Applicable Law,
rule, regulation, guideline or condition.

73

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

 

(b)   A certificate of Agent, Swing Loan Lender or such Lender setting forth
such amount or amounts as shall be necessary to compensate Agent, Swing Loan
Lender or such Lender with respect to Section 3.9(a) hereof when delivered to
Borrowing Agent shall be conclusively presumed correct absent demonstrable
error.

3.10   Taxes.

(a)   Any and all payments by or on account of any Obligations hereunder or
under any Other Document shall be made free and clear of and without reduction
or withholding for any Indemnified Taxes or Other Taxes; provided that if
Borrowers shall be required by Applicable Law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
Agent, Swing Loan Lender, any Lender, Issuer or Participant, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrowers shall make such deductions and
(iii) Borrowers shall timely pay the full amount deducted to the relevant
Governmental Body in accordance with Applicable Law.  Notwithstanding the
foregoing, if any Indemnified Taxes are directly asserted against Agent, Swing
Loan Lender, Lender, Issuer or Participant, as the case may be, with respect to
any payment received by such Person hereunder, such Person may pay such
Indemnified Taxes and the Loan Parties will promptly pay such additional amounts
(including any penalty, interest or expense) as is necessary in order that the
net amount received by such Person after the payment of such Indemnified Taxes
(including any Indemnified Taxes on such additional amount) shall equal the
amount such Person would have received had such Indemnified Taxes not been
asserted, so long as Agent, Swing Loan Lender, Lender, Issuer or Participant
first received knowledge that such amounts have accrued on or after the day that
is 270 days prior to the date on which Agent, Swing Loan Lender, Lender, Issuer
or Participant first made demand therefor; provided, that if the event giving
rise to such costs or reductions has retroactive effect, such 270-day period
shall be extended to include the period of retroactive effect.

(b)   Without limiting the provisions of Section 3.10(a) above, Borrowers shall
timely pay any Other Taxes to the relevant Governmental Body in accordance with
Applicable Law.

(c)   Each Borrower shall indemnify Agent, Swing Loan Lender, each Lender,
Issuer and any Participant, within ten (10) days after demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by Agent, Swing Loan Lender, such Lender, Issuer, or such
Participant, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Body.  A certificate as to the amount of such
payment or liability delivered to Borrowers by any Lender, Swing Loan Lender,
Participant, or Issuer (with a copy to Agent), or by Agent on its own behalf or
on behalf of Swing Loan Lender, a Lender or Issuer, shall be conclusively
presumed to be correct absent demonstrable error.

74

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

 

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

(e)   Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the Law of the jurisdiction in which any Borrower is
resident for tax purposes, or under any treaty to which such jurisdiction is a
party, with respect to payments hereunder or under any Other Document shall
deliver to Borrowers (with a copy to Agent), at the time or times prescribed by
Applicable Law or reasonably requested by Borrowers or Agent, such properly
completed and executed documentation prescribed by Applicable Law as will permit
such payments to be made without withholding or at a reduced rate of
withholding.  Notwithstanding the submission of such documentation claiming a
reduced rate of or exemption from U.S. withholding tax, Agent shall be entitled
to withhold United States federal income taxes at the full 30% withholding rate
if in its reasonable judgment it is required to do so under the due diligence
requirements imposed upon a withholding agent under § 1.1441-7(b) of the United
States Income Tax Regulations or other Applicable Law.  Further, Agent is
indemnified under § 1.1461-1(e) of the United States Income Tax Regulations
against any claims and demands of any Lender, Issuer or assignee or participant
of a Lender or Issuer for the amount of any tax it deducts and withholds in
accordance with regulations under § 1441 of the Code.  In addition, any Lender,
if requested by Borrowers or Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrowers or Agent
as will enable Borrowers or Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.  Without
limiting the generality of the foregoing, in the event that any Borrower is
resident for tax purposes in the United States of America, any Foreign Lender
(or other Lender) shall deliver to Borrowers and Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender (or other Lender) becomes a Lender under this Agreement (and from
time to time thereafter upon the request of Borrowers or Agent, but only if such
Foreign Lender (or other Lender) is legally entitled to do so), whichever of the
following is applicable: two (2) duly completed valid originals of IRS Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which the
United States of America is a party,

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

(ii)   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 to
the effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Borrowers
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) two
duly completed valid originals of IRS Form W-8BEN,

(iii)   any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrowers to determine the withholding or deduction
required to be made, or

75

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

 

(iv)   To the extent that any Lender is not a Foreign Lender, such Lender shall
submit to Agent two (2) originals of an IRS Form W-9 or any other form
prescribed by Applicable Law demonstrating that such Lender is not a Foreign
Lender.

(f)   If a payment made to a Lender, Swing Loan Lender, Participant, Issuer, or
Agent under this Agreement or any Other Document would be subject to U.S.
Federal withholding Tax imposed by FATCA if such Person fails 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, Swing Loan Lender,
Participant, Issuer, or Agent shall deliver to the Agent (in the case of Swing
Loan Lender, a Lender, Participant or Issuer) and Borrowers (A) a certification
signed by the chief financial officer, principal accounting officer, treasurer
or controller of such Person, and (B) other documentation reasonably requested
by Agent or any Borrower sufficient for Agent and Borrowers to comply with their
obligations under FATCA and to determine that Swing Loan Lender, such Lender,
Participant, Issuer, or Agent has complied with such applicable reporting
requirements.

(g)   If Agent, Swing Loan Lender, a Lender, a Participant or Issuer determines,
in its sole discretion, that it has received a refund of any Indemnified Taxes
or Other Taxes as to which it has been indemnified by Borrowers or with respect
to which Borrowers have paid additional amounts pursuant to this Section, it
shall pay to Borrowers an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by Borrowers under this
Section with respect to the Indemnified Taxes or Other Taxes giving rise to such
refund); net of all out-of-pocket expenses of the Agent, Swing Loan Lender, such
Lender, Participant, or the Issuer, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Body with respect to
such refund), provided that Borrowers, upon the request of Agent, Swing Loan
Lender, such Lender, Participant, or Issuer, agrees to repay the amount paid
over to Borrowers (plus any penalties, interest or other charges imposed by the
relevant Governmental Body) to Agent, Swing Loan Lender, such Lender,
Participant or the Issuer in the event Agent, Swing Loan Lender, such Lender,
Participant or the Issuer is required to repay such refund to such Governmental
Body.  This Section shall not be construed to require Agent, Swing Loan Lender,
any Lender, Participant, or Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to Borrowers
or any other Person.

3.11   Replacement of Lenders.  If any Lender (an “Affected Lender”) (a) makes
demand upon Borrowers for (or if Borrowers are otherwise required to pay)
amounts pursuant to Section 3.7 or 3.9 hereof, (b) is unable to make or maintain
LIBOR Rate Loans as a result of a condition described in Section 2.2(h) hereof,
(c) is a Defaulting Lender, or (d) denies any consent requested by the Agent
pursuant to Section 16.2(b) hereof, Borrowers may, within ninety (90) days of
receipt of such demand, notice (or the occurrence of such other event causing
Borrowers to be required to pay such compensation or causing Section 2.2(h)
hereof to be applicable), or such Lender becoming a Defaulting Lender or denial
of a request by Agent pursuant to Section 16.2(b) hereof, as the case may be, by
notice in writing to the Agent and such Affected Lender (i) request the Affected
Lender to cooperate with Borrowers in obtaining a replacement Lender
satisfactory to Agent and Borrowers (the “Replacement Lender”); (ii) request the
non-Affected Lenders to acquire and assume all of the Affected Lender’s Advances
and its Revolving Commitment Percentage and/or Term Loan Commitment Percentages,
as applicable, as provided

76

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

 

herein, but none of such Lenders shall be under any obligation to do so; or
(iii) propose a Replacement Lender subject to approval by Agent in its good
faith business judgment.  If any satisfactory Replacement Lender shall be
obtained, and/or if any one or more of the non-Affected Lenders shall agree to
acquire and assume all of the Affected Lender’s Advances and its Revolving
Commitment Percentage and/or Term Loan Commitment Percentages, as applicable,
then such Affected Lender shall assign, in accordance with Section 16.3 hereof,
all of its Advances and its Revolving Commitment Percentage and/or Term Loan
Commitment Percentages, and other rights and obligations under this Loan
Agreement and the Other Documents to such Replacement Lender or non-Affected
Lenders, as the case may be, in exchange for payment of the principal amount so
assigned and all interest and fees accrued on the amount so assigned, plus all
other Obligations then due and payable to the Affected Lender.

IV.   COLLATERAL:  GENERAL TERMS

4.1   Security Interest in the Collateral.  To secure the prompt payment and
performance to Agent, Issuer and each Lender (and each other holder of any
Obligations) of the Obligations, each Loan Party hereby collaterally assigns,
and pledges and grants, to Agent for its benefit and for the ratable benefit of
each Lender, Issuer and each other Secured Party, a continuing security interest
in and to and Lien on all of its Collateral, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located.  Each Loan Party
shall mark its books and records as may be necessary or appropriate to evidence,
protect and perfect Agent’s security interest and shall cause its financial
statements to reflect such security interest.  Each Loan Party shall provide
Agent with written notice of all commercial tort claims in excess of $250,000
promptly upon the occurrence of any events giving rise to any such claim(s)
(regardless of whether legal proceedings have yet been commenced), such notice
to contain a brief description of the claim(s), the events out of which such
claim(s) arose and the parties against which such claims may be asserted and, if
applicable in any case where legal proceedings regarding such claim(s) have been
commenced, the case title together with the applicable court and docket
number.  Upon delivery of each such notice, such Loan Party shall be deemed to
thereby grant to Agent a security interest and lien in and to such commercial
tort claims described therein and all proceeds thereof.  Each Loan Party shall
provide Agent with written notice promptly upon becoming the beneficiary under
any letter of credit or otherwise obtaining any right, title or interest in any
letter of credit rights in excess of $250,000, and at Agent’s request shall take
such actions as Agent may reasonably request for the perfection of Agent’s
security interest therein.

4.2   Perfection of Security Interest.  Each Loan Party shall take all action
that may be necessary, or that Agent may reasonably request, so as at all times
to maintain the validity, perfection, enforceability and priority of Agent’s
security interest in and Lien on the Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to, (i) immediately discharging all Liens other than Permitted
Encumbrances, (ii) using commercially reasonable efforts to obtain Lien Waiver
Agreements, (iii) if an Event of Default exists delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may specify, and stamping
or marking, in such manner as Agent may specify, any and all chattel paper,
instruments, letters of credits and advices thereof and documents evidencing or
forming a part of the Collateral, (iv) if an Event of Default or Trigger Event
exists entering into lockbox and other custodial arrangements satisfactory to
Agent, and (v) executing and delivering financing statements, control
agreements, instruments of

77

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

 

pledge, mortgages, notices and assignments, in each case in form and substance
satisfactory to Agent, relating to the creation, validity, perfection,
maintenance or continuation of Agent’s security interest and Lien under the
Uniform Commercial Code or other Applicable Law.  By its signature hereto, each
Loan Party hereby authorizes Agent to file against such Loan Party, one or more
financing, continuation or amendment statements pursuant to the Uniform
Commercial Code in form and substance satisfactory to Agent (which statements
may have a description of collateral which is broader than that set forth
herein, including without limitation a description of Collateral as “all assets”
and/or “all personal property” of any Loan Party).  All charges, expenses and
fees Agent may incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrowers’ Account as a Revolving Advance of a
Domestic Rate Loan and added to the Obligations, or, at Agent’s option, shall be
paid by Borrowers to Agent for its benefit and for the ratable benefit of
Lenders immediately upon demand.  Notwithstanding anything to the contrary
contained herein, unless the Agent, in the exercise of its commercially
reasonable judgement, shall have requested a Loan Party to do so, no such Loan
Party shall be required to take any actions in a foreign jurisdiction to perfect
the pledge of any Subsidiary Stock issued to such Loan Party.

4.3   Preservation of Collateral.  If an Event of Default has occurred and is
continuing, in addition to the rights and remedies set forth in Section 11.1
hereof, Agent: (a) may at any time take such steps as Agent deems necessary to
protect Agent’s interest in and to preserve the Collateral, including the hiring
of security guards or the placing of other security protection measures as Agent
may deem appropriate in good faith; (b) may employ and maintain at any of any
Loan Party’s premises a custodian who shall have full authority to do all acts
necessary to protect Agent’s interests in the Collateral; and (c) may lease
warehouse facilities to which Agent may move all or part of the Collateral; (d)
may use any Loan Party’s owned or leased lifts, hoists, trucks and other
facilities or equipment for handling or removing the Collateral; and (e) shall
have, and is hereby granted, a right of ingress and egress to the places where
the Collateral is located, and may proceed over and through any Loan Party’s
owned or leased property where the Collateral is located.  Each Loan Party shall
cooperate fully with all of Agent’s efforts to preserve the Collateral and will
take such actions to preserve the Collateral as Agent may direct.  All of
Agent’s expenses of preserving the Collateral, including any expenses relating
to the bonding of a custodian, shall be charged to Borrowers’ Account as a
Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations.

4.4   Ownership and Location of Collateral.

(a)   With respect to the Collateral, at the time the Collateral becomes subject
to Agent’s security interest:  (i) each Loan Party shall be the sole owner of
and fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of its respective Collateral
to Agent; and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens whatsoever; (ii) each document and agreement executed by
each Loan Party or delivered to Agent or any Lender in connection with this
Agreement shall be true and correct in all respects; and (iii) all signatures
and endorsements of each Loan Party that appear on such documents and agreements
shall be genuine and each Loan Party shall have full capacity to execute same
and (iv) each Loan Party’s equipment and Inventory shall be located as set forth
on Schedule 4.4 and shall not be removed from such location(s) without the prior
written consent of Agent except with respect to the sale of Inventory in the
Ordinary Course of Business and to the extent permitted in Section 7.1(b).

78

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

 

(b)   (i) There is no location at which any Loan Party has any Inventory (except
for Inventory in transit) or other Collateral other than those locations listed
on Schedule 4.4(b)(i); (ii) Schedule 4.4(b)(ii) hereto contains a correct and
complete list, as of the Closing Date, of the legal names and addresses of each
warehouse at which Inventory of any Loan Party is stored; (iii) Schedule
4.4(b)(iii) hereto sets forth a correct and complete list as of the Closing Date
of (A) each place of business of each Loan Party, (B) the chief executive office
of each Loan Party, (C) each place where Collateral or books and records related
thereto is located, and (D) a correct and complete list as of the Closing Date
of the location, by state and street address, of all Real Property owned or
leased by each Loan Party, identifying which properties are owned and which are
leased, together with the names and addresses of any landlords.

4.5   Defense of Agent’s and Lenders’ Interests.  Until (a) payment and
performance in full of all of the Obligations (other than (i) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (ii) Letters of Credit so long as Agent has received the cash
collateral with respect to the Letters of Credit to the extent required pursuant
to this Agreement) and (b) termination of this Agreement, Agent’s interests in
the Collateral shall continue in full force and effect.  During such period no
Loan Party shall, without Agent’s prior written consent, pledge, sell (except
for sales or other dispositions otherwise permitted in Section 7.1(b) hereof),
assign, transfer, create or suffer to exist a Lien upon or encumber or allow or
suffer to be encumbered in any way except for Permitted Encumbrances, any part
of the Collateral.  Each Loan Party shall defend Agent’s interests in the
Collateral against any and all Persons whatsoever.  At any time following, the
occurrence and during the continuance of an Event of Default or Trigger Event,
Agent shall have the right to take possession of the indicia of the Collateral
and the Collateral in whatever physical form contained, including:  labels,
stationery, documents, instruments and advertising materials.  If Agent
exercises this right to take possession of the Collateral, Loan Parties shall,
upon demand, assemble it in the best manner possible and make it available to
Agent at a place reasonably convenient to Agent.  In addition, with respect to
all Collateral, Agent and Lenders shall be entitled to all of the rights and
remedies set forth herein and further provided by the Uniform Commercial Code or
other Applicable Law.  Each Loan Party shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehousers or others receiving or
holding cash, checks, Inventory, documents or instruments in which Agent holds a
security interest to deliver same to Agent and/or subject to Agent’s order and
if they shall come into any Loan Party’s possession, they, and each of them,
shall be held by such Loan Party in trust as Agent’s trustee, and such Loan
Party will promptly deliver them to Agent in their original form together with
any necessary endorsement.

4.6   Inspection of Premises.  At all reasonable times and from time to time as
often as Agent shall elect in its sole discretion, upon prior notice to Loan
Parties, except during the continuance of an Event of Default when no prior
notice shall be required, Agent and each Lender shall have full access to and
the right to audit, check, inspect and make abstracts and copies from each Loan
Party’s books, records, audits, correspondence and all other papers relating to
the Collateral and the operation of each Loan Party’s business.  Agent, any
Lender and their agents may enter upon any premises of any Loan Party at any
time during business hours and at any other reasonable time, and from time to
time as often as Agent shall elect in its sole discretion, upon prior notice to
Loan Parties, except during the continuance of an Event of Default when no prior
notice shall be required, for the purpose of inspecting the Collateral and any
and all records pertaining thereto and the operation of such Loan Party’s
business.

79

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

 

4.7   Reserved.

4.8   Receivables; Deposit Accounts and Securities Accounts.

(a)   Each of the Receivables shall be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to be a breach
hereof) with respect to an absolute sale or lease and delivery of goods upon
stated terms of a Loan Party, or work, labor or services theretofore rendered by
a Loan Party as of the date each Receivable is created.  Same shall be due and
owing in accordance with the applicable Loan Party’s standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Loan Parties to Agent.

(b)   Each Customer, to the best of each Loan Party’s knowledge, as of the date
each Receivable which is included as an Eligible Receivable in a Borrowing Base
Certificate, is created, is and will be solvent and able to pay all Receivables
on which the Customer is obligated in full when due.  With respect to such
Customers of any Loan Party who are not solvent, such Loan Party has set up on
its books and in its financial records bad debt reserves adequate to cover such
Receivables.

(c)   Each Loan Party’s chief executive office is located as set forth on
Schedule 4.4(b)(iii).  Until written notice is given to Agent by Borrowing Agent
of any other office at which any Loan Party keeps its records pertaining to
Receivables, all such records shall be kept at such executive office.

(d)   After the occurrence and during the continuance of a Trigger Event, Loan
Parties shall instruct their Customers to deliver all remittances upon
Receivables (whether paid by check or by wire transfer of funds) to such Blocked
Account(s) and/or Depository Accounts (and any associated lockboxes) as Agent
shall designate from time to time as contemplated by Section 4.8(h) or as
otherwise agreed to from time to time by Agent.  Notwithstanding the foregoing,
to the extent any Loan Party directly receives any remittances upon Receivables,
such Loan Party shall, at such Loan Party’s sole cost and expense, but on
Agent’s behalf and for Agent’s account, collect as Agent’s property and in trust
for Agent all amounts received on Receivables, and shall not commingle such
collections with any Loan Party’s funds or use the same except to pay
Obligations, and shall as soon as possible and in any event no later than one
(1) Business Day after the receipt thereof (i) in the case of remittances paid
by check, deposit all such remittances in their original form (after supplying
any necessary endorsements) and (ii) in the case of remittances paid by wire
transfer of funds, transfer all such remittances, in each case, into such
Blocked Accounts(s) and/or Depository Account(s).  After the occurrence of a
Trigger Event and during the continuance thereof, each Loan Party shall deposit
in the Blocked Account and/or Depository Account or, upon request by Agent,
deliver to Agent, in original form and on the date of receipt thereof, all
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.

80

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

 

(e)   At any time following the occurrence of a Trigger Event and during the
continuance thereof Agent shall have the right to send notice of the assignment
of, and Agent’s security interest in and Lien on, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral.  Thereafter, Agent shall have the sole right to collect the
Receivables, take possession of the Collateral, or both.  Agent’s actual
collection expenses, including, but not limited to, stationery and postage,
telephone, facsimile, telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrowers’ Account and added to the Obligations.

(f)   At any time following the occurrence of a Trigger Event and during the
continuance thereof Agent shall have the right to receive, endorse, assign
and/or deliver in the name of Agent or any Loan Party any and all checks, drafts
and other instruments for the payment of money relating to the Receivables, and
each Loan Party hereby waives notice of presentment, protest and non-payment of
any instrument so endorsed.  Each Loan Party hereby constitutes Agent or Agent’s
designee as such Loan Party’s attorney with power (i) at any time after the
occurrence of a Trigger Event and during the continuance thereof: (A) to endorse
such Loan Party’s name upon any notes, acceptances, checks, drafts, money orders
or other evidences of payment or Collateral; (B) to sign such Loan Party’s name
on any invoice or bill of lading relating to any of the Receivables, drafts
against Customers, assignments and verifications of Receivables; (C) to send
verifications of Receivables to any Customer; (D) to sign such Loan Party’s name
on all financing statements or any other documents or instruments deemed
necessary or appropriate by Agent to preserve, protect, or perfect Agent’s
interest in the Collateral and to file same; and (E) to receive, open and
dispose of all mail addressed to any Loan Party at any post office box/lockbox
maintained by Agent for Loan Parties or at any other business premises of Agent;
and (ii) at any time following the occurrence and during the continuance of an
Event of Default: (A) to demand payment of the Receivables; (B) to enforce
payment of the Receivables by legal proceedings or otherwise; (C) to exercise
all of such Loan Party’s rights and remedies with respect to the collection of
the Receivables and any other Collateral; (D) to sue upon or otherwise collect,
extend the time of payment of, settle, adjust, compromise, extend or renew the
Receivables; (E) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (F) to prepare, file and sign such Loan Party’s name on
a proof of claim in bankruptcy or similar document against any Customer; (G) to
prepare, file and sign such Loan Party’s name on any notice of Lien, assignment
or satisfaction of Lien or similar document in connection with the Receivables;
(H) to accept the return of goods represented by any of the Receivables; (I) to
change the address for delivery of mail addressed to any Loan Party to such
address as Agent may designate; and (J) to do all other acts and things
necessary to carry out this Agreement.  All acts of said attorney or designee
are hereby ratified and approved, and said attorney or designee shall not be
liable for any acts of omission or commission nor for any error of judgment or
mistake of fact or of law, unless done maliciously or with gross (not mere)
negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment); this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid.

(g)   Neither Agent nor any Lender shall, under any circumstances or in any
event whatsoever, absent gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final non-appealable judgment) have
any liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof, or for any damage resulting therefrom.

81

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

 

(h)   At any time following the occurrence of a Trigger Event and during the
continuance thereof all proceeds of Collateral shall be deposited by Loan
Parties into either (i) a lockbox account, dominion account or such other
“blocked account” (“Blocked Accounts”) established at a bank or banks (each such
bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked
Account Bank as may be acceptable to Agent or (ii) depository accounts
(“Depository Accounts”) established at Agent for the deposit of such
proceeds.  Each applicable Loan Party, Agent and each Blocked Account Bank shall
enter into a deposit account control agreement in form and substance
satisfactory to Agent that is sufficient to give Agent “control” (for purposes
of Articles 8 and 9 of the Uniform Commercial Code) over such account and which
directs such Blocked Account Bank to transfer such funds so deposited on a daily
basis or at other times acceptable to Agent to Agent, either to any account
maintained by Agent at said Blocked Account Bank or by wire transfer to
appropriate account(s) at Agent.  All funds deposited in such Blocked Accounts
or Depository Accounts shall immediately become subject to the security interest
of Agent for its own benefit and the ratable benefit of Issuer, Lenders and all
other holders of the Obligations, and Borrowing Agent shall obtain the agreement
by such Blocked Account Bank to waive any offset rights against the funds so
deposited.  Neither Agent nor any Lender assumes any responsibility for such
blocked account arrangement, including any claim of accord and satisfaction or
release with respect to deposits accepted by any Blocked Account Bank
thereunder.  Agent shall apply all funds received by it from the Blocked
Accounts and/or Depository Accounts to the satisfaction of the Obligations
(including the cash collateralization of the Letters of Credit) in such order as
Agent shall determine in its sole discretion, provided that, in the absence of
any Event of Default, Agent shall apply all such funds representing collection
of Receivables first to the prepayment of the principal amount of the Swing
Loans, if any, and then to the Revolving Advances.

(i)   No Loan Party will, without Agent’s consent, compromise or adjust any
Receivables (or extend the time for payment thereof) or accept any returns of
merchandise or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts, credits and
allowances as have been heretofore customary in the Ordinary Course of Business
of such Loan Party.

(j)   All deposit accounts (including all Blocked Accounts and Depository
Accounts), securities accounts and investment accounts of each Loan Party and
its Subsidiaries as of the Closing Date are set forth on Schedule 4.8(j).  No
Loan Party shall open any new deposit account, securities account or investment
account unless (i) Loan Parties shall have given at least thirty (30) days prior
written notice to Agent, unless such account is an Excluded Account, in which
case Loan Party shall give Agent prompt notice of the opening of such account,
and (ii) if such account is to be maintained with a bank, depository institution
or securities intermediary that is not the Agent, such bank, depository
institution or securities intermediary, each applicable Loan Party and Agent
shall, unless such account is an Excluded Account, first have entered into an
account control agreement in form and substance satisfactory to Agent sufficient
to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform
Commercial Code) over such account.

4.9   Inventory.  To the extent Inventory held for sale or lease has been
produced by any Loan Party, it has been and will be produced by such Loan Party
in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.

82

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

 

4.10.   Maintenance of Equipment.  The equipment shall be maintained in good
operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the equipment shall be maintained and preserved.  No
Loan Party shall use or operate the equipment in violation of any law, statute,
ordinance, code, rule or regulation except where such violation would not be
reasonably likely to have a Material Adverse Effect.

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

4.12.   Financing Statements.  Except as respects the financing statements filed
by Agent, financing statements described on Schedule 1.2, and financing
statements filed in connection with Permitted Encumbrances, no financing
statement covering any of the Collateral or any proceeds thereof is or will be
on file in any public office.

V.   REPRESENTATIONS AND WARRANTIES.

Each Loan Party represents and warrants as follows:

5.1   Authority.  Each Loan Party has full power, authority and legal right to
enter into this Agreement and the Other Documents to which it is a party and to
perform all its respective Obligations hereunder and thereunder.  This Agreement
and the Other Documents to which it is a party have been duly executed and
delivered by each Loan Party, and this Agreement and the Other Documents to
which it is a party constitute the legal, valid and binding obligation of such
Loan Party enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar Laws affecting creditors’ rights generally.  The
execution, delivery and performance of this Agreement and of the Other Documents
to which it is a party (a) are within such Loan Party’s corporate or company
powers, as applicable, have been duly authorized by all necessary corporate or
company action, as applicable, are not in contravention of Law or the terms of
such Loan Party’s Organizational Documents or to the conduct of such Loan
Party’s business or of any Material Contract or undertaking to which such Loan
Party is a party or by which such Loan Party is bound, including the Acquisition
Agreement, (b) will not conflict with or violate any Law or regulation, or any
judgment, order or decree of any Governmental Body, (c) will not require the
Consent of any Governmental Body or any other Person, except those Consents set
forth on Schedule 5.1 hereto, all of which will have been duly obtained, made or
compiled prior to the Closing Date and which are in full force and effect and
(d) will not conflict with, nor result in any breach in any of the provisions of
or constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of such Loan Party under the provisions of

83

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

 

any agreement, instrument, or other document to which such Loan Party is a party
or by which it or its property is a party or by which it may be bound, including
the Acquisition Agreement, in each case, other than where such conflict,
violation, failure to obtain Consent or breach would not be reasonably likely to
have a Material Adverse Effect.

5.2   Formation and Qualification.

(a)   Each Loan Party is duly incorporated or formed, as applicable, and in good
standing under the laws of the state listed on Schedule 5.2(a) and is qualified
to do business and is in good standing in the states listed on Schedule 5.2(a)
which constitute all states in which qualification and good standing are
necessary for such Loan Party to conduct its business and own its property and
where the failure to so qualify could reasonably be expected to have a Material
Adverse Effect on such Loan Party.  Each Loan Party has delivered to Agent true
and complete copies of its Organizational Documents and will promptly notify
Agent of any amendment or changes thereto.

(b)   The only Subsidiaries of each Loan Party are listed on Schedule 5.2(b).

5.3   Survival of Representations and Warranties.  Subject to any applicable
materiality qualifier, all representations and warranties of such Loan Party
contained in this Agreement and the Other Documents to which it is a party shall
be true at the time of such Loan Party’s execution of this Agreement and the
Other Documents to which it is a party, and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.

5.4   Tax Returns.  Each Loan Party’s federal tax identification number is set
forth on Schedule 5.4.  Each Loan Party has filed all federal, state and local
tax returns and other reports each is required by Law to file and has paid all
taxes, assessments, fees and other governmental charges that are due and payable
except those being Properly Contested.  The provision for taxes on the books of
each Loan Party is adequate for all years not closed by applicable statutes, and
for its current fiscal year, and no Loan Party has any knowledge of any
deficiency or additional assessment in connection therewith not provided for on
its books.

5.5   Financial Statements.

(a)   The pro forma balance sheet of Holdings and its Subsidiaries on a
consolidating and consolidated basis and of the Borrowers on a consolidating and
consolidated basis (collectively, the “Pro Forma Balance Sheet”) furnished to
Agent on the Closing Date reflects the consummation of the transactions
contemplated by the Acquisition Agreement and under this Agreement
(collectively, the “Transactions”) and is accurate, complete and correct in all
material respects and fairly reflects in all material respects the financial
condition of Holdings and its Subsidiaries on a consolidating and consolidated
basis and of the Borrowers on a consolidating and consolidated basis as of the
Closing Date after giving effect to the Transactions, and has been prepared in
accordance with GAAP, consistently applied.  The Pro Forma Balance Sheet has
been certified as accurate, complete and correct in all material respects by the
President and Chief Financial Officer of Holdings.  All financial statements
referred to in this subsection 5.5(a), including the related schedules and notes
thereto, have been prepared in accordance with GAAP, except as may be disclosed
in such financial statements.

84

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

 

(b)   The 2018 income statement, cash flow and balance sheet projections of
Holdings and its Subsidiaries on a consolidating and consolidated basis and of
the Borrowers on a consolidating and consolidated, copies of which are annexed
hereto as Exhibit 5.5(b) (the “Projections”) were prepared by the Chief
Financial Officer of Holdings, are based on underlying assumptions which provide
a reasonable basis for the projections contained therein and reflect Borrowers’
judgment based on present circumstances of the most likely set of conditions and
course of action for the projected period  (it being acknowledged by Agent and
Lenders that projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by such projections may
differ from the projected results).  The cash flow Projections together with the
Pro Forma Balance Sheet are referred to as the “Pro Forma Financial Statements”.

(c)   The consolidated balance sheets of Borrowers, and such other Persons
described therein, as of December 31, 2017, and the related statements of
income, for the period ended on such date, all accompanied by reports thereon
containing opinions without qualification by independent certified public
accountants, copies of which have been delivered to Agent, have been prepared in
accordance with GAAP, consistently applied (except for changes in application to
which such accountants concur and present fairly the financial position of
Borrowers at such date and the results of their operations for such
period).  Since December 31, 2017 there has been no change in the condition,
financial or otherwise, of Borrowers as shown on the consolidated balance sheet
as of such date and no change in the aggregate value of machinery, equipment and
real property owned by Borrowers, except changes in the Ordinary Course of
Business, none of which individually or in the aggregate has been materially
adverse.

5.6   Entity Names.  No Loan Party has been known by any other company or
corporate name, as applicable, in the past five (5) years except as set forth on
Schedule 5.6, nor has any Loan Party been the surviving corporation or company,
as applicable, of a merger or consolidation or acquired all or substantially all
of the assets of any Person during the preceding five (5) years except as set
forth on Schedule 5.6.

5.7   O.S.H.A. Environmental Compliance; Flood Insurance.

(a)   Except as set forth on Schedule 5.7 hereto, each Loan Party is in
compliance in all material respects with, and its facilities, business, assets,
property, leaseholds, Real Property and equipment are in compliance with the
Federal Occupational Safety and Health Act, and Environmental Laws and there are
no outstanding citations, notices or orders of non-compliance issued to any Loan
Party or relating to its business, assets, property, leaseholds or equipment
under any such Laws, rules or regulations.

(b)   Except as set forth on Schedule 5.7 hereto, each Loan Party has been
issued all required federal, state and local licenses, certificates or permits
(collectively, “Approvals”) relating to all applicable Environmental Laws and
all such Approvals are current and in full force and effect.

85

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

 

(c)   Except as set forth on Schedule 5.7: (i) there have been no releases,
spills, discharges, leaks or disposal (collectively referred to as “Releases”)
of Hazardous Materials at, upon, under or migrating from or onto any real
property owned, leased or occupied by any Loan Party, except for those Releases
which are in full compliance with Environmental Laws; (ii) there are no
underground storage tanks or polychlorinated biphenyls on any real property
owned, leased or occupied by any Loan Party, except for such underground storage
tanks or polychlorinated biphenyls that are present in compliance with
Environmental Laws; (iii) the real property including any premises owned, leased
or occupied by any Loan Party has never been used by any Loan Party to dispose
of Hazardous Materials, except as authorized by Environmental Laws; and (iv) no
Hazardous Materials are managed by any Loan Party on any real property including
any premises owned, leased or occupied by any Loan Party, excepting such
quantities as are managed in accordance with all applicable manufacturer’s
instructions and compliance with Environmental Laws and as are necessary for the
operation of the commercial business of any Loan Party or of its tenants.

(d)   All Real Property owned by the Loan Parties is insured pursuant to
policies and other bonds which are valid and in full force and effect and which
provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each such Loan Party in
accordance with prudent business practice in the industry of such Loan
Party.  Each Loan Party has taken all actions required under the Flood Laws
and/or requested by Agent to assist in ensuring that each Lender is in
compliance with the Flood Laws applicable to the Collateral, including, but not
limited to, providing Agent with the address and/or GPS coordinates of each
structure located upon any Real Property that will be subject to a Mortgage in
favor of Agent, for the benefit of Lenders, and, to the extent required,
obtaining flood insurance for such property, structures and contents prior to
such property, structures and contents becoming Collateral.

5.8   Solvency; No Litigation, Violation, Indebtedness or Default; ERISA
Compliance.

(a)   (i) After giving effect to the Transactions, the Loan Parties (taken as a
whole) will be solvent, able to pay their debts as they mature, will have
capital sufficient to carry on their businesses and all businesses in which they
are about to engage, (ii) as of the Closing Date, the fair present saleable
value of the Loan Parties’ assets (taken as a whole), calculated on a going
concern basis, is in excess of the amount of their liabilities (taken as a
whole), and (iii) subsequent to the Closing Date, the fair saleable value of the
Loan Parties’ assets (taken as a whole) (calculated on a going concern basis)
will be in excess of the amount of their liabilities (taken as a whole).

(b)   Except as disclosed in Schedule 5.8(b)(i), no Loan Party has any pending
or, to its knowledge, threatened litigation, arbitration, actions or proceedings
(each a “Proceeding”)where the amount in controversy exceeds $1,000,000 with
respect to any single Proceeding then pending or so threatened, or $3,000,000 in
the aggregate with respect to all such Proceedings then pending or so
threatened, or which could reasonably be expected to have a Material Adverse
Effect.  No Loan Party has any outstanding Indebtedness other than the
Obligations, except for (i) Indebtedness disclosed in Schedule 5.8(b)(ii) and
(ii) Indebtedness otherwise permitted under Section 7.8 hereof.

86

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

 

(c)   No Loan Party is in violation of any applicable statute, Law, rule,
regulation or ordinance in any respect which could reasonably be expected to
have a Material Adverse Effect, nor is any Loan Party in violation of any order
of any court, Governmental Body or arbitration board or tribunal.  Each Plan is
in compliance in all material respects with the applicable provisions of ERISA,
the Code and other federal or state Laws.

(d)   No Loan Party or any member of the Controlled Group maintains or is
required to contribute to any Plan other than those listed on Schedule 5.8(d)
hereto.  (i) Each Loan Party and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA and Section
412 of the Code in respect of each Plan, and each Plan is in compliance with
Sections 412, 430 and 436 of the Code and Sections 206(g), 302 and 303 of ERISA,
without regard to waivers and variances; (ii) each Plan which is intended to be
a qualified plan under Section 401(a) of the Code as currently in effect has
been determined by the Internal Revenue Service to be qualified under Section
401(a) of the Code and the trust related thereto is exempt from federal income
tax under Section 501(a) of the Code or an application for such a determination
is currently being processed by the Internal Revenue Code; (iii) neither any
Loan Party nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid; (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan; (v) the current value of the assets of each Plan
exceeds the present value of the accrued benefits and other liabilities of such
Plan and neither any Loan Party nor any member of the Controlled Group knows of
any facts or circumstances which would materially change the value of such
assets and accrued benefits and other liabilities; (vi) neither any Loan Party
nor any member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan; (vii)
neither any Loan Party nor any member of a Controlled Group has incurred any
liability for any excise tax arising under Section 4971, 4972 or 4980B of the
Code, and no fact exists which could give rise to any such liability; (viii)
neither any Loan Party nor any member of the Controlled Group nor any fiduciary
of, nor any trustee to, any Plan, has engaged in a “prohibited transaction”
described in Section 406 of the ERISA or Section 4975 of the Code nor taken any
action which would constitute or result in a Termination Event with respect to
any such Plan which is subject to ERISA; (ix) no Termination Event has occurred
or is reasonably expected to occur; (x) there exists no event described in
Section 4043 of ERISA, for which the thirty (30) day notice period has not been
waived; (xi) neither any Loan Party nor any member of the Controlled Group has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA; (xii) neither any Loan Party nor any member of the Controlled Group
maintains or is required to contribute to any Plan which provides health,
accident or life insurance benefits to former employees, their spouses or
dependents, other than in accordance with Section 4980B of the Code; (xiii)
neither any Loan Party nor any member of the Controlled Group has withdrawn,
completely or partially, within the meaning of Section 4203 or 4205 of ERISA,
from any Multiemployer Plan so as to incur liability under the Multiemployer
Pension Plan Amendments Act of 1980 and there exists no fact which would
reasonably be expected to result in any such liability; and (xiv) no Plan
fiduciary (as defined in Section 3(21) of ERISA) has any liability for breach of
fiduciary duty or for any failure in connection with the administration or
investment of the assets of a Plan.

87

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

 

5.9   Patents, Trademarks, Copyrights and Licenses.  All Intellectual Property
owned or utilized by any Loan Party: (i) is set forth on Schedule 5.9; (ii) is
valid, and (iii) constitutes all of the intellectual property rights which are
necessary for the operation of its business.  There is no objection to, pending
challenge to the validity of, or proceeding by any Governmental Body to suspend,
revoke, terminate or adversely modify, any such Intellectual Property and no
Loan Party is aware of any grounds for any challenge or proceedings, except as
set forth in Schedule 5.9 hereto.  All Intellectual Property owned or held by
any Loan Party consists of original material or property developed by such Loan
Party or was lawfully acquired by such Loan Party from the proper and lawful
owner thereof.  Each of such items has been maintained so as to preserve the
value thereof from the date of creation or acquisition thereof.

5.10   Licenses and Permits.  Except as set forth in Schedule 5.10, each Loan
Party (a) is in compliance with and (b) has procured and is now in possession
of, all material licenses or permits required by any applicable federal, state,
provincial or local Law, rule or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits could reasonably be
expected to have a Material Adverse Effect.

5.11   Default of Indebtedness.  No Loan Party is in default in the payment of
the principal of or interest on any Indebtedness (other than, for the avoidance
of doubt, any Specified Indebtedness or the Westport Indebtedness to the extent
either are Indebtedness of a Loan Party) or under any instrument or agreement
under or subject to which any Indebtedness (other than, for the avoidance of
doubt, any Specified Indebtedness or the Westport Indebtedness to the extent
either are Indebtedness of a Loan Party) has been issued and no event has
occurred under the provisions of any such instrument or agreement which with or
without the lapse of time or the giving of notice, or both, constitutes or would
constitute an event of default thereunder.

5.12   No Default.  No Default or Event of Default has occurred and is
continuing.

5.13   No Burdensome Restrictions.  No Loan Party is party to any contract or
agreement the performance of which could reasonably be expected to have a
Material Adverse Effect. No Loan Party has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a Lien
which is not a Permitted Encumbrance.

5.14   No Labor Disputes.  No Loan Party is involved in any labor dispute; there
are no strikes or walkouts or union organization of any Loan Party’s employees
threatened, to its knowledge, or in existence and no labor contract is scheduled
to expire during the Term other than as set forth on Schedule 5.14 hereto.

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

88

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

 

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

5.17   Disclosure.  No representation or warranty made by any Loan Party in this
Agreement or in the Acquisition Agreement or in any financial statement, report,
certificate or any other document furnished in connection herewith or therewith
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading.  There
is no fact known to any Loan Party or which reasonably should be known to such
Loan Party which such Loan Party has not disclosed to Agent in writing with
respect to the transactions contemplated by the Acquisition Agreement or this
Agreement which could reasonably be expected to have a Material Adverse Effect.

5.18   Delivery of Acquisition Agreement.  Agent has received complete copies of
the Acquisition Agreement and related documents (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and other
side letters or agreements affecting the terms thereof.  None of such documents
and agreements has been amended or supplemented, nor have any of the provisions
thereof been waived, except pursuant to a written agreement or instrument which
has heretofore been delivered to Agent.  Each of the representations made by
each Person party thereto is true and correct in all respects.

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

5.20   Business and Property of Loan Parties.  Upon and after the Closing Date,
Loan Parties do not propose to engage in any business other than transportation
and logistics services and activities necessary to conduct the foregoing.  On
the Closing Date, each Loan Party will own all the property and possess all of
the rights and Consents necessary for the conduct of the business of such Loan
Party.

5.21   Ineligible Securities.  Loan Parties do not intend to use and shall not
use any portion of the proceeds of the Advances, directly or indirectly, to
purchase during the underwriting period, or for 30 days thereafter, Ineligible
Securities being underwritten by a securities Affiliate of Agent or any Lender.

5.22   Reserved.

5.23   Equity Interests.  The authorized and outstanding Equity Interests of
each Loan Party, and each legal and beneficial holder thereof as of the Closing
Date, are as set forth on Schedule 5.23 hereto.  All of the Equity Interests of
each Loan Party have been duly and validly authorized and issued and are fully
paid and non-assessable and have been sold and delivered to the holders hereof
in compliance with, or under valid exemption from, all federal and state Laws
and the rules and regulations of each Governmental Body governing the sale and
delivery of securities.  Except for the rights and obligations set forth on
Schedule 5.23(b), there are no

89

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

 

subscriptions, warrants, options, calls, commitments, rights or agreement by
which any Loan Party or any of the shareholders of any Loan Party is bound
relating to the issuance, transfer, voting or redemption of shares of its Equity
Interests or any pre-emptive rights held by any Person with respect to the
Equity Interests of Loan Parties.  Except as set forth on Schedule 5.23(c), Loan
Parties have not issued any securities convertible into or exchangeable for
shares of its Equity Interests or any options, warrants or other rights to
acquire such shares or securities convertible into or exchangeable for such
shares.

5.24   Commercial Tort Claims.  Except as set forth on Schedule 5.24 hereto or
for those which a Loan Party has previously delivered notice to Agent pursuant
to Section 4.1, no Loan Party has any commercial tort claims.

5.25   Letter of Credit Rights.  As of the Closing Date, no Loan Party has any
letter of credit rights except as set forth on Schedule 5.25 hereto.

5.26   Material Contacts.  As of the Closing Date, no material default exists
under any Material Contract.

5.27   No Cross-Default.  None of the documents evidencing any of the Specified
Indebtedness includes as an event of default thereunder the occurrence of an
Event of Default under this Agreement.

5.28   Certificate of Beneficial Ownership.  Any Certificate of Beneficial
Ownership executed and delivered to Agent and Lenders for the Loan Parties as
required pursuant to Section 6.10 hereof, as updated from time to time in
accordance with this Agreement, is accurate, complete and correct as of the date
so delivered on and as of the date any such update is so delivered, as
applicable.  The Loan Parties acknowledge and agree that any such Certificate of
Beneficial Ownership is one of the Other Documents.

VI.   AFFIRMATIVE COVENANTS.

Each Loan Party shall, until payment in full of the Obligations (other than (i)
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted and (ii) Letters of Credit so long as Agent has
received the cash collateral with respect to the Letters of Credit to the extent
required pursuant to this Agreement) and termination of this Agreement:

6.1   Compliance with Laws.  Comply with all Applicable Laws with respect to the
Collateral or any part thereof or to the operation of such Loan Party’s business
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect (except to the extent any separate provision of this Agreement
shall expressly require compliance with any particular Applicable Law(s)
pursuant to another standard).  Each Loan Party may, however, contest or dispute
any Applicable Laws in any reasonable manner, provided that any related Lien is
inchoate or stayed and sufficient reserves are established to the reasonable
satisfaction of Agent to protect Agent’s Lien on or security interest in the
Collateral.

90

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

 

6.2   Conduct of Business and Maintenance of Existence and Assets.  (a) Except
(i) for the orderly wind down (and any dissolution or liquidation conducted in
connection therewith) of GFI, GFL and Southern Counties LLC, and (ii) as
permitted under Section 7.1(a), conduct continuously and operate actively its
business according to good business practices and maintain all of its properties
useful or necessary in its business in good working order and condition
(reasonable wear and tear excepted and except as may be disposed of in
accordance with the terms of this Agreement), including all Intellectual
Property and take all actions necessary to enforce and protect the validity of
any intellectual property right or other right included in the Collateral; (b)
keep in full force and effect its existence and comply in all material respects
with the Laws and regulations governing the conduct of its business where the
failure to do so could reasonably be expected to have a Material Adverse Effect;
and (c) make all such reports and pay all such franchise and other taxes and
license fees and do all such other acts and things as may be lawfully required
to maintain its rights, licenses, leases, powers and franchises under the Laws
of the United States or any political subdivision thereof where the failure to
do so could reasonably be expected to have a Material Adverse Effect.  

6.3   Books and Records.  Keep proper books of record and account in which full,
true and correct in all material respects entries will be made of all dealings
or transactions of or in relation to its business and affairs (including without
limitation accruals for taxes, assessments, Charges, levies and claims,
allowances against doubtful Receivables and accruals for depreciation,
obsolescence or amortization of assets), all in accordance with, or as required
by, GAAP consistently applied in the opinion of such independent public
accountant as shall then be regularly engaged by the Loan Parties.

6.4   Payment of Taxes.  Pay, prior to delinquency, all taxes, assessments and
other Charges lawfully levied or assessed upon such Loan Party or any of the
Collateral, including real and personal property taxes, assessments and charges
and all franchise, income, employment, social security benefits, withholding,
and sales taxes except where such amounts are being Properly Contested.  If any
tax by any Governmental Body is or may be imposed on or as a result of any
transaction between any Loan Party and Agent or any Lender which Agent or any
Lender may be required to withhold or pay or if any taxes, assessments, or other
Charges remain unpaid after the date fixed for their payment, or if any claim
shall be made which, in Agent’s or any Lender’s opinion, may possibly create a
valid Lien on the Collateral and which are not being reasonably and diligently
contested by the Loan Parties, Agent may upon notice to Loan Parties pay the
taxes, assessments or other Charges, and each Loan Party hereby indemnifies and
holds Agent and each Lender harmless in respect thereof.  The amount of any
payment by Agent under this Section 6.4 shall be charged to Borrowers’ Account
as a Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations and, until Loan Parties shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Borrowers’ credit and Agent shall retain its security
interest in and Lien on any and all Collateral held by Agent.

91

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

 

6.5   Financial Covenants.

(a)   Fixed Charge Coverage Ratio.  At all times cause to be maintained as of
the end of each fiscal month, a Fixed Charge Coverage Ratio of not less than 1.0
to 1.0, measured for the trailing twelve month period ending on the last day of
such month.

(b)   Leverage Ratio.  Maintain as of the end of each fiscal month set forth
below a ratio of (i) Funded Debt of the Loan Parties to (ii) Group EBITDA of not
greater than the ratio set forth below opposite such fiscal month, measured for
the trailing twelve month period ending on the last day of such month.

 

Trailing Twelve Month Period Ending on the Last Day of

Maximum Leverage Ratio

September, October and November 2018

3.75 to 1.00

December 2018 and January and February 2019

3.50 to 1.00

March 2019 and each fiscal month thereafter

3.25 to 1.00

 

6.6   Insurance.

(a)   (i) Keep all its insurable properties and properties in which such Loan
Party has an interest insured against the hazards of fire, flood, sprinkler
leakage, those hazards covered by extended coverage insurance and such other
hazards, and for such amounts, as is customary in the case of companies engaged
in businesses similar to such Loan Party’s; (ii) maintain director’s and
officer’s insurance; (iii) maintain a bond in such amounts as is customary in
the case of companies engaged in businesses similar to such Borrower insuring
against larceny, embezzlement or other criminal misappropriation of insured’s
officers and employees who may either singly or jointly with others at any time
have access to the assets or funds of such Borrower either directly or through
authority to draw upon such funds or to direct generally the disposition of such
assets; (iv) maintain public liability insurance against claims for personal
injury, death or property damage suffered by others; (v) maintain all such
worker’s compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which such Borrower is engaged in business; (vi)
maintain worker’s compensation or similar insurance as required under the Laws
of any state or jurisdiction in which such Loan Party is engaged in business and
(vii) furnish Agent with (A) copies of all policies and evidence of the
maintenance of such policies by the renewal thereof at least fifteen (15) days
before any expiration date, and promptly upon Agent’s request deliver copies of
all such policies and (B) appropriate loss payable endorsements in form and
substance satisfactory to Agent, naming Agent as an additional insured and
mortgagee and/or lender loss payee (as applicable) as its interests may appear
with respect to all insurance coverage referred to in clauses (i) and (iv)
above, and providing (I) no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such policy, and
(II) that such policy and loss payable clauses may not be cancelled, amended or
terminated unless at least thirty (30) days prior written notice is given to
Agent (or in the case of non-payment, at least ten (10) days prior written
notice). If any insurance losses are paid by check, draft or other instrument
payable to any Borrower and Agent jointly, if an Event of Default has occurred
and is continuing, Agent may endorse such Borrower’s name thereon and do such
things as Agent may deem advisable to reduce the same to cash.

92

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

 

(b)   Each Loan Party shall take all actions required under the Flood Laws
and/or requested by Agent to assist in ensuring that each Lender is in
compliance with the Flood Laws applicable to the Collateral, including, but not
limited to, providing Agent with the address and/or GPS coordinates of each
structure on any real property that will be subject to a mortgage in favor of
Agent, for the benefit of Lenders, and, to the extent required, obtaining flood
insurance for such property, structures and contents prior to such property,
structures and contents becoming Collateral, and thereafter maintaining such
flood insurance in full force and effect for so long as required by the Flood
Laws.

6.7   Payment of Indebtedness and Leasehold Obligations.  Pay, discharge or
otherwise satisfy (i) at or before maturity (subject, where applicable, to
specified grace periods) all its Indebtedness, except when the failure to do so
could not reasonably be expected to have a Material Adverse Effect or when the
amount or validity thereof is currently being Properly Contested, subject at all
times to any applicable subordination arrangement in favor of Lenders and (ii)
when due its rental obligations under all leases under which it is a tenant, and
shall otherwise comply, in all material respects, with all other terms of such
leases and keep them in full force and effect.  Pay in full, in cash, all
amounts when due and payable under the Stay of Enforcement Agreement.

6.8   Environmental Matters.

(a)   Ensure that the real property and all operations and businesses conducted
thereon are in compliance and remain in compliance with all Environmental Laws
and it shall manage any and all Hazardous Materials on any real property in
compliance with Environmental Laws.

(b)   Establish and maintain an environmental management and compliance system
to assure and monitor continued compliance with all applicable Environmental
Laws.

(c)   Respond promptly to any Hazardous Discharge or Environmental Complaint and
take all necessary action in order to safeguard the health of any Person and to
avoid subjecting the Collateral or real property to any Lien.  If any Loan Party
shall fail to respond promptly to any Hazardous Discharge or Environmental
Complaint or any Loan Party shall fail to comply with any of the requirements of
any Environmental Laws, Agent on behalf of Lenders may, but without the
obligation to do so, for the sole purpose of protecting Agent’s interest in the
Collateral:  (i) give such notices or (ii) enter onto the Real Property (or
authorize third parties to enter onto the Real Property) and take such actions
as Agent (or such third parties as directed by Agent) deem reasonably necessary
or advisable, to remediate, remove, mitigate or otherwise manage with any such
Hazardous Discharge or Environmental Complaint.  All reasonable costs and
expenses incurred by Agent and Lenders (or such third parties) in the exercise
of any such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for Domestic Rate
Loans constituting Revolving Advances shall be paid upon demand by Loan Parties,
and until paid shall be added to and become a part of the Obligations secured by
the Liens created by the terms of this Agreement or any other agreement between
Agent, any Lender and any Loan Party.

93

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

 

(d)   Promptly upon the written request of Agent from time to time, the Loan
Parties shall provide Agent, at Borrowers’ expense, such information and
certifications which Agent or any Lender may reasonably request from time to
time to demonstrate compliance with this Section 6.8, including without
limitation, any environmental site assessments or environmental compliance audit
reports prepared by an environmental engineering firm acceptable in the
reasonable opinion of Agent, to assess with a reasonable degree of certainty the
existence of a Hazardous Discharge and the potential costs in connection with
abatement, remediation and removal of any Hazardous Materials found on, under,
at or within the Real Property.  Any report or investigation of such Hazardous
Discharge proposed and acceptable to the responsible Governmental Body shall be
acceptable to Agent.  If such estimates, individually or in the aggregate,
exceed $100,000, Agent shall have the right to require the Loan Parties to post
a bond, letter of credit or other security reasonably satisfactory to Agent to
secure payment of these costs and expenses.

6.9   Standards of Financial Statements.  Cause all financial statements
referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, and 9.13 as to which
GAAP is applicable to be complete and correct in all material respects (subject,
in the case of interim financial statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
disclosed therein and agreed to by such reporting accountants or officer, as
applicable).

6.10   Certificate of Beneficial Ownership and Other Additional
Information.  Provide to Agent and the Lenders: (i) confirmation of the accuracy
of the information set forth in the most recent Certificate of Beneficial
Ownership provided to the Agent and Lenders; (ii) a new Certificate of
Beneficial Ownership, in form and substance acceptable to Agent and each
Lenders, when the individual(s) to be identified as a Beneficial Owner have
changed; and (iii) such other information and documentation as may reasonably be
requested by Agent or any Lender from time to time for purposes of compliance by
Agent or such Lender with applicable laws (including without limitation the USA
Patriot Act and other “know your customer” and anti-money laundering rules and
regulations), and any policy or procedure implemented by Agent or such Lender to
comply therewith.

  

6.11   Execution of Supplemental Instruments.  Execute and deliver to Agent from
time to time, upon demand, such supplemental agreements, statements, assignments
and transfers, or instructions or documents relating to the Collateral, and such
other instruments as Agent may reasonably request, in order that the full intent
of this Agreement may be carried into effect.

6.12   Exercise of Rights.  Enforce all of its rights under the Acquisition
Agreement including, but not limited to, all indemnification rights and pursue
all remedies available to it with diligence and in good faith in connection with
the enforcement of any such rights.

6.13   Government Receivables.  Upon Agent’s request, take all steps necessary
to protect Agent’s interest in the Collateral under the Federal Assignment of
Claims Act, the Uniform Commercial Code and all other applicable state or local
statutes or ordinances and, upon Agent’s request, deliver to Agent appropriately
endorsed, any instrument or chattel paper connected with any Receivable arising
out of any contract between any Loan Party and the United States, any state or
any department, agency or instrumentality of any of them.

94

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

 

6.14   Deposit Accounts.  (i) Except as provided in clause (ii) hereof, cause
all of the Loan Parties’ deposit accounts, other than the Excluded Accounts, the
Permitted KeyBank Account, the Permitted Disclosed Accounts and the accounts
maintained in Canada as of the Closing Date, to be maintained with the Agent and
(ii) on or before the date that is one hundred twenty (120) days from the
Closing Date, or such later date as Agent may agree in writing, cause all of the
deposit accounts of Southern Counties Inc., Southern Counties LLC, GFI and GFL,
other than the Excluded Accounts, to be maintained with the Agent.

6.15   Keepwell.  If it is a Qualified ECP Loan Party, then jointly and
severally, together with each other Qualified ECP Loan Party, hereby absolutely
unconditionally and irrevocably (a) guarantees the prompt payment and
performance of all Swap Obligations owing by each Non-Qualifying Party (it being
understood and agreed that this guarantee is a guaranty of payment and not of
collection), and (b) undertakes to provide such funds or other support as may be
needed from time to time by any Non-Qualifying Party to honor all of such
Non‑Qualifying Party’s obligations under this Agreement or any Other Document in
respect of Swap Obligations (provided, however, that each Qualified ECP Loan
Party shall only be liable under this Section 6.15 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 6.15, or otherwise under this Agreement or any Other
Document, voidable under Applicable Law, including Applicable Law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater
amount).  The obligations of each Qualified ECP Loan Party under this Section
6.15 shall remain in full force and effect until payment in full of the
Obligations (other than (i) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (ii) Letters of Credit so
long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to this Agreement) and termination of
this Agreement and the Other Documents.  Each Qualified ECP Loan Party intends
that this Section 6.15 constitute, and this Section 6.15 shall be deemed to
constitute, a guarantee of the obligations of, and a “keepwell, support, or
other agreement” for the benefit of each other Loan Party and Guarantor for all
purposes of Section 1a(18(A)(v)(II) of the CEA.

6.16   Notice of Cross-Default Provision.  Notify Agent if the documents
evidencing any of the Specified Indebtedness shall ever include or be amended to
include, as an event of default thereunder, the occurrence of an Event of
Default under this Agreement and concurrently with the entry into any such
document or amendment, enter into an Amendment to this Agreement to provide that
any event of default under such Specified Indebtedness shall give rise to an
Event of Default hereunder.

6.17   Certain Material Contracts.  Deliver to the Agent as soon as practicable
after the Closing Date, and in any event no later than 90 days after the Closing
Date (or such later date as the Agent may agree in its reasonable discretion), a
listing of the Material Contracts to which a Borrower is a party (to include the
name of the contract, date of execution and the parties thereto) entered into
after the date of execution of the Original Credit Agreement and in effect on
the Closing Date.

6.18   Post-Closing Deliverables.  Deliver to the Agent as soon as practicable
after the Closing Date, and in any event no later than the number of days
specified on Schedule 6.18, the items set forth on Schedule 6.18.

95

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

 

VII.   NEGATIVE COVENANTS.

No Loan Party shall, until satisfaction in full of the Obligations (other than
(i) contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted and (ii) Letters of Credit so long as Agent has
received the cash collateral with respect to the Letters of Credit to the extent
required pursuant to this Agreement) and termination of this Agreement:

7.1   Merger, Consolidation, Acquisition and Sale of Assets.

(a)   Enter into any merger, consolidation or other reorganization with or into
any other Person or acquire all or a substantial portion of the assets or Equity
Interests of any Person or permit any other Person to consolidate with or merge
with it, except (i) any Borrower may merge, consolidate or reorganize with
another Borrower or acquire the assets or Equity Interest of another Borrower so
long as such Borrower provides Agent with ten (10) days prior written notice of
such merger, consolidation or reorganization and delivers all of the relevant
documents evidencing such merger, consolidation or reorganization, (ii) any Loan
Party (other than a Borrower) may merge, consolidate or reorganize with another
Loan Party (other than a Borrower) or acquire the assets or Equity Interest of
another Loan Party (other than a Borrower) so long as such Loan Party provides
Agent with ten (10) days prior written notice of such merger, consolidation or
reorganization and delivers all of the relevant documents evidencing such
merger, consolidation or reorganization, and (iii) Permitted Acquisitions.

(b)   Sell, lease, transfer or otherwise dispose of any of its properties or
assets, except (i) (a) the sale of obsolete assets or assets that such Loan
Party no longer deems useful in its business, (b) so long as no Event of Default
has occurred and is continuing, the disposition or transfer of property or
assets (other than Receivables), for fair market value, payable in cash, in an
aggregate amount (with respect to the fair market value thereof) not to exceed
$25,000,000 in any fiscal year,(c) the sale of Inventory in the Ordinary Course
of Business, (d) the sale of Excluded Property, (e) the sale of securities in
the UBS Securities Account, and (f) leases, subleases, licenses or sublicenses
of property in the Ordinary Course of Business, (ii) sales by Cavalry Logistics,
LLC of Receivables owing from a Dover Entity pursuant to the terms of the Dover
Agreement; provided that the proceeds of any such sales shall be deposited
directly to an account of a Loan Party maintained with Agent, (iii) any other
sales or dispositions expressly permitted by this Agreement, and (iv) any sale,
transfer or other disposition of the assets or properties of GFI, GFL or and
Southern Counties LLC, to the extent conducted in connection with an orderly
wind down or liquidation of such Person, provided that the Net Cash Proceeds of
each such sale, transfer or other disposition permitted under this Section
7.1(b) are paid to the Agent for the benefit of the Lenders if and when required
pursuant to the terms of Section 2.20(a).

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

7.3   Guarantees.  Become liable upon the obligations or liabilities of any
Person by assumption, endorsement or guaranty thereof or otherwise (other than
to Lenders) except (a) as disclosed on Schedule 7.3, (b) guarantees made in the
Ordinary Course of Business up to an

96

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

 

aggregate amount of $5,000,000, (c) guarantees by one or more Loan Party(ies) of
the Indebtedness or obligations of any other Loan Party(ies) to the extent such
Indebtedness or obligations are permitted to be incurred and/or outstanding
pursuant to the provisions of this Agreement and (d) the endorsement of checks
in the Ordinary Course of Business.

7.4   Investments.  Purchase or acquire obligations or Equity Interests of, or
any other interest in, any Person, other than (a) Permitted Investments,
provided that in with respect to any investment, brokerage or other similar
account in which Permitted Investments are maintained which any Loan Party
intends to establish after the Closing Date, Borrowing Agent shall give not less
than ten (10) days written notice thereof to the Agent before such account shall
have been established, (b) investments made upon satisfaction of the Payment
Conditions, (c) investments which are funded solely with the cash proceeds
received by a Loan Party from the issuance of Equity Interests (other than
Disqualified Equity Interests) issued on terms acceptable to Agent (or
contributed as paid in capital with respect to existing Equity Interests) or by
subordinated debt from Holdings on terms and subject to a subordination
agreement acceptable to Agent in its sole discretion, and (d) Credit Party Agent
Investments, which when taken together with loans or extensions of credit under
Section 7.5(c) do not exceed $10,000,000 at any one time outstanding.

7.5   Loans.  Make advances, loans or extensions of credit to any Person,
including any Parent, Subsidiary or Affiliate other than (a) Permitted Loans and
advances, loans or extensions of credit made upon satisfaction of the Payment
Conditions, (b) advances, loans or extensions of credit which are made solely
with the cash proceeds received by a Loan Party from the issuance of  Equity
Interests (other than Disqualified Equity Interests) issued on terms acceptable
to Agent (or contributed as paid in capital with respect to existing Equity
Interests) or by subordinated debt from Holdings on terms and subject to a
subordination agreement acceptable to Agent in its sole discretion, and (c)
Credit Party Agent Investments, which when taken together with investments under
Section 7.4(d)], do not exceed $10,000,000 at any one time outstanding.

7.6   Capital Expenditures.  Contract for, purchase or make any expenditure or
commitments for Capital Expenditures in any fiscal year in an aggregate amount
for all Loan Parties in excess of $75,000,000, unless such purchase or
expenditure is funded or to be funded solely with the cash proceeds received by
a Loan Party from the issuance of Equity Interests (other than Disqualified
Equity Interests) issued on terms acceptable to Agent (or contributed as paid in
capital with respect to existing Equity Interests) or by subordinated debt from
Holdings on terms and subject to a subordination agreement acceptable to Agent
in its sole discretion.

7.7   Dividends.  Declare, pay or make any dividend or distribution on any
Equity Interests of any Loan Party (other than dividends or distributions
payable in its stock, or split-ups or reclassifications of its stock) or apply
any of its funds, property or assets to the purchase, redemption or other
retirement of any Equity Interest, or of any options to purchase or acquire any
Equity Interest of any Loan Party other than (i) dividends paid on or about
August 16, 2018 by Holdings to its shareholders in the aggregate amount of
$2,981,464 and (ii) Permitted Dividends.  

7.8   Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness
other than Permitted Indebtedness.

97

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

 

7.9   Nature of Business.  Substantially change the nature of the businesses in
which it was engaged in immediately prior to the Closing Date, nor except as
specifically permitted hereby purchase or invest, directly or indirectly, in any
assets or property other than in the Ordinary Course of Business for assets or
property which are useful in, necessary for and are to be used in its business
as conducted immediately prior to the Closing Date.

7.10   Transactions with Affiliates.  Directly or indirectly, purchase, acquire
or lease any property from, or sell, transfer or lease any property to, or
otherwise enter into any transaction or deal with, any Affiliate, except for (i)
transactions among Loan Parties which are not expressly prohibited by the terms
of this Agreement and which are in the Ordinary Course of Business, (ii) payment
by Loan Parties of dividends and distributions permitted under Section 7.7
hereof, (iii) transactions disclosed to Agent in writing which are in the
Ordinary Course of Business, on an arm’s-length basis on terms and conditions no
less favorable than terms and conditions which would have been obtainable from a
Person other than an Affiliate, (iv) transactions with P.A.M. Transportation,
Inc. and the MFS Entities which are in the Ordinary Course of Business, on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate, (v) transactions with BLT which are in the Ordinary Course of
Business, on an arm’s-length basis on terms and conditions no less favorable
than terms and conditions which would have been obtainable from a Person other
than an Affiliate, and (vi) payment of annual management fees in an amount not
to exceed 3% of gross revenue per year made upon satisfaction of the Payment
Conditions.

7.11   Reserved.

7.12   Subsidiaries.

(a)   Form any Subsidiary unless such Subsidiary (i) is not a Foreign
Subsidiary, (ii) at Agent’s discretion, (x) expressly joins in this Agreement as
a borrower and becomes jointly and severally liable for the obligations of
Borrowers hereunder, under the Notes, and under any other agreement between any
Borrower and Lenders, or (y) becomes a Guarantor with respect to the Obligations
and executes a Guarantor Security Agreement in favor of Agent, and (iii) Agent
shall have received all documents, including without limitation, legal opinions
and appraisals it may reasonably require to establish compliance with each of
the foregoing conditions in connection therewith.

(b)   Enter into any partnership, joint venture or similar arrangement.

7.13   Fiscal Year and Accounting Changes.  Change its fiscal year from December
31 or make any significant change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as permitted by Law.

7.14   Pledge of Credit.  Now or hereafter pledge Agent’s or any Lender’s credit
on any purchases, commitments or contracts or for any purpose whatsoever or use
any portion of any Advance in or for any business other than such Loan Party’s
business operations as conducted on the Closing Date.

98

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

 

7.15   Amendment of Organizational Documents.  (i) Change its legal name, (ii)
change its form of legal entity (e.g., converting from a corporation to a
limited liability company or vice versa), (iii) change its jurisdiction of
organization or become (or attempt or purport to become) organized in more than
one jurisdiction, or (iv) otherwise amend, modify or waive any term or material
provision of its Organizational Documents unless required by Law, in any such
case without (x) giving at least fifteen (15) days prior written notice of such
intended change to Agent (or such lesser time as Agent may agree in its
reasonable discretion), (y) having received from Agent confirmation that Agent
has taken all steps necessary for Agent to continue the perfection of and
protect the enforceability and priority of its Liens in the Collateral belonging
to such Loan Party and that such amendment or modification does not violate the
terms and conditions of this Agreement or any of the other Loan Documents.

7.16   Compliance with ERISA.  (i) (x) Maintain, or permit any member of the
Controlled Group to maintain, or (y) become obligated to contribute, or permit
any member of the Controlled Group to become obligated to contribute, to any
Plan, other than those Plans disclosed on Schedule 5.8(d), (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
“prohibited transaction”, as that term is defined in Section 406 of ERISA or
Section 4975 of the Code, (iii) terminate, or permit any member of the
Controlled Group to terminate, any Plan where such event could result in any
liability of any Loan Party or any member of the Controlled Group or the
imposition of a lien on the property of any Loan Party or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (iv) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (v) fail promptly to notify Agent of the occurrence of any
Termination Event, (vi) fail to comply, or permit a member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
Applicable Laws in respect of any Plan, (vii) fail to meet, permit any member of
the Controlled Group to fail to meet, or permit any Plan to fail to meet all
minimum funding requirements under ERISA and the Code, without regard to any
waivers or variances, or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan, or
(viii) cause, or permit any member of the Controlled Group to cause, a
representation or warranty in Section 5.8(d) to cease to be true and correct.

7.17   Prepayment of Indebtedness; Payment of Holdings – UTI Intercompany Loan;
Payments Under Cherokee Indemnity Agreement.  Except upon satisfaction of the
Payment Conditions at any time, directly or indirectly, prepay any Indebtedness
(other than to Lenders), or repurchase, redeem, retire or otherwise acquire any
Indebtedness of any Loan Party.  No payment of any kind may be made (i) under or
in connection with the Cherokee Indemnity Agreement or (ii) with respect to the
Indebtedness arising from the Holdings – UTI Intercompany Loan until all
Obligations (other than (x) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (y) Letters of Credit so long
as Agent has received the cash collateral with respect to the Letters of Credit
to the extent required pursuant to this Agreement) have been paid in full.

99

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

 

7.18   Amendment to Fore Acquisition Documents.  Make, permit or consent to  any
amendment to or other modification of the Fore Acquisition Documents without the
prior written consent of the Agent, except to the extent that any such amendment
or modification (i) does not violate the terms and conditions of this Agreement
or any of the Other Documents, (ii) does not adversely affect the interest of
the Lenders as creditors and/or as secured parties under any Other Document and
(iii) could not reasonably be expected to have a Material Adverse Effect.

VIII.   CONDITIONS PRECEDENT.

8.1   Conditions to Initial Advances.  The agreement of Lenders to make the
initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or waiver by Agent immediately prior to or concurrently with the
making of such Advances, of the following conditions precedent:

(a)   Note.  Agent shall have received the Notes duly executed and delivered by
an authorized officer of each Borrower;

(b)   Other Documents.  Agent shall have received each of the executed Other
Documents, as applicable;

(c)   Certificate of Beneficial Ownership; USA Patriot Act Diligence.  Agent and
each Lender shall have received, in form and substance acceptable to Agent and
each Lender an executed Certificate of Beneficial Ownership and such other
documentation and other information requested in connection with applicable
“know your customer” and anti-money laundering rules and regulations, including
the USA Patriot Act.

(d)   Financial Condition Certificates.  Agent shall have received an executed
Financial Condition Certificate in the form of Exhibit 8.1(d).

(e)   Closing Certificate.  Agent shall have received a closing certificate
signed by the Chief Financial Officer or the President of each Borrower dated as
of the date hereof, stating that (i) all representations and warranties set
forth in this Agreement and the Other Documents are true and correct on and as
of such date, and (ii) on such date no Default or Event of Default has occurred
or is continuing;

(f)   Borrowing Base.  Agent shall have received evidence from Borrowers that
the aggregate amount of Eligible Domestic Billed Receivables, Eligible Foreign
Receivables, Eligible Unbilled Receivables, Eligible Affiliate Receivables,
Eligible BLT Receivables and Eligible Pledged Securities, is sufficient in value
and amount to support Advances in the amount requested by Borrowers on the
Closing Date;

(g)   Closing Date Excess Availability.  After giving effect to the initial
Advances hereunder, Borrowers shall have Closing Date Excess Availability of at
least $15,000,000;

(h)   Blocked Accounts; other Accounts.  Other than as permitted by Section
6.14, the Loan Parties shall have opened the Depository Accounts with Agent or
Agent shall have received duly executed agreements establishing the Blocked
Accounts with financial

100

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

 

institutions acceptable to Agent for the collection or servicing of the
Receivables and proceeds of the Collateral and Agent shall have entered into
control agreements with the applicable financial institutions in form and
substance satisfactory to Agent with respect to such Blocked Account; Borrowing
Agent shall have opened a deposit account with Agent and all other deposit
accounts of the Loan Parties other than the Excluded Accounts and the Loan
Parties’ deposit accounts maintained in Canada shall either be with the Agent or
subject to control agreements with the applicable financial institutions in form
and substance satisfactory to Agent;

(i)   Acquisition Agreement.  Agent shall have received final executed copies of
the Acquisition Agreement, and all related agreements, documents and instruments
as in effect on the Closing Date all of which shall be satisfactory in form and
substance to Agent and the transactions contemplated by such documentation shall
be consummated prior to or simultaneously with the making of the initial Advance
including;

(j)   Other Debt Documents; Fund Flow.  Agent shall have received the final
funds flow memorandum evidencing the use of proceeds with respect to the
financing transactions of the Borrower, Holdings and their subsidiaries to be
consummated prior to or simultaneously with the making of the initial Advance
hereunder on the Closing Date together with a summary of terms of such financing
transactions all of which shall be satisfactory in form and substance to Agent.

(k)   Filings, Registrations and Recordings.  Each document (including any
Uniform Commercial Code financing statement) required by this Agreement, any
related agreement or under Law or reasonably requested by Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected
security interest in or lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested, and Agent shall have received
an acknowledgment copy, or other evidence satisfactory to it, of each such
filing, registration or recordation and satisfactory evidence of the payment of
any necessary fee, tax or expense relating thereto;

(l)   Lien Waiver Agreements.  Agent shall have received a Lien Waiver Agreement
(or, in lieu thereof, in the case of any Lien Waiver Agreement in existence on
the Closing Date, a written confirmation signed by the applicable lessor of the
continuing effectiveness thereof) with respect to the locations set forth on
Schedule 8.1(l);

(m)   Secretary’s Certificates, Authorizing Resolutions and Good Standings of
Borrowers.  Agent shall have received a certificate of the Secretary or
Assistant Secretary (or other equivalent officer, partner or manager) of each
Borrower in form and substance satisfactory to Agent dated as of the Closing
Date which shall certify (i) copies of resolutions in form and substance
reasonably satisfactory to Agent, of the board of directors (or other equivalent
governing body, member or partner) of such Borrower authorizing (x) the
execution, delivery and performance of this Agreement, the Notes and each Other
Document to which such Borrower is a party (including authorization of the
incurrence of indebtedness, borrowing of Revolving Advances, Swing Loans and
Term Loan and requesting of Letters of Credit on a joint and several basis with
all Borrowers as provided for herein), and (y) the granting by such Borrower of
the security interests in and liens upon the Collateral to secure all

101

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

 

of the joint and several Obligations of Borrowers (and such certificate shall
state that such resolutions have not been amended, modified, revoked or
rescinded as of the date of such certificate), (ii) the incumbency and signature
of the officers of such Borrower authorized to execute this Agreement and the
Other Documents, (iii) copies of the Organizational Documents of such Borrower
as in effect on such date, complete with all amendments thereto, and (iv) the
good standing (or equivalent status) of such Borrower in its jurisdiction of
organization and each applicable jurisdiction where the conduct of such
Borrower’s business activities or the ownership of its properties necessitates
qualification, as evidenced by good standing certificate(s) (or the equivalent
thereof issued by any applicable jurisdiction) dated not more than 30 days prior
to the Closing Date, issued by the Secretary of State or other appropriate
official of each such jurisdiction;

(n)   Secretary’s Certificates, Authorizing Resolutions and Good Standings of
Guarantors.  Agent shall have received a certificate of the Secretary or
Assistant Secretary (or other equivalent officer, partner or manager) of each
Guarantor in form and substance satisfactory to Agent dated as of the Closing
Date which shall certify (i) copies of resolutions in form and substance
reasonably satisfactory to Agent, of the board of directors (or other equivalent
governing body, member or partner) of each Guarantor authorizing [(x)] the
execution, delivery and performance of such Guarantor’s Guaranty and each Other
Loan Document to which such Guarantor is a party [and (y) the granting by such
Guarantor of the security interests in and liens upon the Collateral to secure
its obligations under its Guaranty] (and such certificate shall state that such
resolutions have not been amended, modified, revoked or rescinded as of the date
of such certificate), (ii) the incumbency and signature of the officers of such
Guarantor authorized to execute this Agreement and the Other Documents, (iii)
copies of the Organizational Documents of such Guarantor as in effect on such
date, complete with all amendments thereto, and (iv) the good standing (or
equivalent status) of such Guarantor in its jurisdiction of organization and
each applicable jurisdiction where the conduct of such Guarantor’s business
activities or the ownership of its properties necessitates qualification, as
evidenced by good standing certificate(s) (or the equivalent thereof issued by
any applicable jurisdiction) dated not more than [___] days prior to the Closing
Date, issued by the Secretary of State or other appropriate official of each
such jurisdiction;

(o)   Legal Opinion.  Agent shall have received the executed legal opinion of
Dykema Gossett PLLC in form and substance satisfactory to Agent which shall
cover such matters incident to the transactions contemplated by this Agreement,
the Notes, the Other Documents, and related agreements as Agent may reasonably
require and each Borrower hereby authorizes and directs such counsel to deliver
such opinions to Agent and Lenders;

(p)   No Litigation.  Except as disclosed on Schedule 5.8(b)(i), no litigation,
investigation or proceeding before or by any arbitrator or Governmental Body
shall be continuing or threatened against any Loan Party or against the officers
or directors of any Loan Party (A) in connection with this Agreement, the Other
Documents, or any of the transactions contemplated thereby and which, in the
reasonable opinion of Agent, is deemed material or (B) which could, in the
reasonable opinion of Agent, have a Material Adverse Effect; and (ii) no
injunction, writ, restraining order or other order of any nature materially
adverse to any Loan Party or the conduct of its business or inconsistent with
the due consummation of the Transactions shall have been issued by any
Governmental Body;

102

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

 

(q)   Collateral Examination.  Agent shall have completed Collateral
examinations, the results of which shall be satisfactory in form and substance
to Agent, of the Receivables, and General Intangibles, of each Loan Party and
all books and records in connection therewith;

(r)   Fees.  Agent shall have received all fees payable to Agent and Lenders on
or prior to the Closing Date hereunder, including pursuant to Article III hereof
and the Fee Letter;

(s)   Pro Forma Financial Statements.  Agent shall have received a copy of the
Pro Forma Financial Statements which shall be satisfactory in all respects to
Agent;

(t)   Insurance.  Agent shall have received in form and substance satisfactory
to Agent, (i) evidence that adequate insurance, including without limitation,
casualty and liability insurance, required to be maintained under this Agreement
is in full force and effect, and (ii) insurance certificates issued by the Loan
Parties’ insurance broker containing such information regarding the Loan
Parties’ casualty and liability insurance policies as Agent shall request and
naming Agent as an additional insured as applicable.

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

(v)   Consents.  Agent shall have received any and all Consents necessary to
permit the effectuation of the transactions contemplated by this Agreement and
the Other Documents; and, Agent shall have received such Consents and waivers of
such third parties as might assert claims with respect to the Collateral, as
Agent and its counsel shall deem necessary;

(w)   No Adverse Material Change.  (i) Since December 31, 2017 there shall not
have occurred any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or
information supplied to Agent or Lenders shall have been proven to be inaccurate
or misleading in any material respect;

(x)   Matters Relating to Disclosed Action.  With regarding to the Disclosed
Action, the following shall have occurred: (i) each judgment debtor and each
judgment creditor party to the Disclosed Action shall have entered into a
written agreement (the “Stay of Enforcement Agreement”) providing for, among
other things, a stay of enforcement of the judgment rendered in respect of the
Disclosed Action, such agreement shall be in full force and effect on the
Closing Date, the Agent shall have received and reviewed such agreement to its
reasonable satisfactions and such stay shall be in effect in accordance with the
terms of such agreement; (ii) the Agent shall have received and reviewed to its
satisfaction the terms and conditions of the Cherokee Surety Bond, and the
Cherokee Surety Bond shall have been issued and filed with the applicable court;
(iii) the Agent shall have received and reviewed to its reasonable satisfaction
a copy of the executed promissory note evidencing the indebtedness owing by UTI
to Holdings under the Holdings – UTI Intercompany Loan; (iv) the Agent shall
have received and reviewed to its reasonable satisfaction the final execution
version of the Cherokee Indemnity Agreement and (v) the Agent, Cherokee and
Holdings shall have entered into the Cherokee-Holdings Subordination Agreement,
which shall be in full force and effect.

103

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

 

(y)   Compliance with Laws.  Agent shall be reasonably satisfied that each Loan
Party is in compliance with all pertinent federal, state, local or territorial
regulations, including those with respect to the Federal Occupational Safety and
Health Act, the Environmental Protection Act, ERISA and the Anti-Terrorism Laws;

(z)   Quality of Earnings.  Agent shall have received, and been satisfied with
its review of, a quality of earnings report performed by Plante Moran with
respect to Target; and

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

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

(a)   Representations and Warranties.  Each of the representations and
warranties made by any Loan Party in or pursuant to this Agreement, the Other
Documents and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement, the Other Documents or any related agreement shall be true and
correct in all material respects (unless such representation or warranty is
already qualified by materiality in any manner, in which case such
representation or warranty shall be true and correct in all respects) on and as
of such date as though made on and as of such date (except to the extent such
representation and warranty specifically relates to an earlier date, in which
case such representation and warranty shall have been true and correct in all
material respects (unless such representation or warranty is already qualified
by materiality in any manner then such representation or warrant shall be true
and correct in all respects) on and as of such earlier date).

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

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

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

104

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

 

IX.   INFORMATION AS TO LOAN PARTIES.

Each Loan Party shall, or (except with respect to Section 9.11) shall cause
Borrowing Agent on its behalf to, until satisfaction in full of the Obligations
and the termination of this Agreement:

9.1   Disclosure of Material Matters.  Immediately upon learning thereof, report
to Agent all matters materially affecting the value, enforceability or
collectability of any portion of the Collateral, including any Loan Party’s
reclamation or repossession of, or the return to any Borrower of, a material
amount of goods or any claims or disputes asserted by any Customer or other
obligor.

9.2   Schedules Borrowing Base Certificate.  Deliver to Agent (i) after the
occurrence of and during the continuance of a Trigger Event on or before Tuesday
of each week as and for the prior week and at all other times, on or before the
twentieth (20th) day of each month as and for the prior month (a) accounts
receivable ageings inclusive of reconciliations to the general ledger, (b)
accounts payable schedules inclusive of reconciliations to the general ledger,
and (c) a Borrowing Base Certificate in form and substance satisfactory to Agent
(which shall be calculated as of the last day of the prior month or week, as
applicable, and which shall not be binding upon Agent or restrictive of Agent’s
rights under this Agreement), and, whenever a weekly reporting is required under
this Section 9.2, (ii) on or before Tuesday of each week, a sales report / roll
forward for the prior week.  In addition, each Borrower will deliver to Agent at
such intervals as Agent may require: (i) confirmatory assignment schedules; (ii)
copies of Customer’s invoices; (iii) evidence of shipment or delivery; and (iv)
such further schedules, documents and/or information regarding the Collateral as
Agent may require including trial balances and test verifications.  Agent shall
have the right to confirm and verify all Receivables by any manner and through
any medium it considers advisable and do whatever it may deem reasonably
necessary to protect its interests hereunder.  The items to be provided under
this Section are to be in form satisfactory to Agent and executed by each
Borrower and delivered to Agent from time to time solely for Agent’s convenience
in maintaining records of the Collateral, and any Borrower’s failure to deliver
any of such items to Agent shall not affect, terminate, modify or otherwise
limit Agent’s Lien with respect to the Collateral.  Unless otherwise agreed to
by Agent, the items to be provided under this Section 9.2 shall be delivered to
Agent by the specific method of Approved Electronic Communication designated by
Agent.

9.3   Environmental Reports.

(a)   Furnish Agent, concurrently with the delivery of the financial statements
referred to in Sections 9.7 and 9.8, with a certificate signed by the President
of Borrowing Agent stating, to the best of his knowledge, that each Loan Party
is in compliance in all material respects with all applicable Environmental
Laws.  To the extent any Loan Party is not in compliance with the foregoing
Laws, the certificate shall set forth with specificity all areas of
non-compliance and the proposed action such Loan Party will implement in order
to achieve full compliance.

105

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

 

(b)   In the event any Loan Party obtains, gives or receives notice of any
Release or threat of Release of a reportable quantity of any Hazardous Materials
at any real property owned, leased or occupied by any Loan Party (any such event
being hereinafter referred to as a “Hazardous Discharge”) or receives any notice
of violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at any real
property owned, leased or occupied by any Loan Party, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting any real property owned,
leased or occupied by any Loan Party or any Loan Party’s interest therein or the
operations or the business (any of the foregoing is referred to herein as an
“Environmental Complaint”) from any Person, including any Governmental Body,
then Borrowing Agent shall, within five (5) Business Days, give written notice
of same to Agent detailing facts and circumstances of which any Loan Party is
aware giving rise to the Hazardous Discharge or Environmental Complaint.  Such
information is to be provided to allow Agent to protect its security interest in
and Lien on the Collateral and is not intended to create nor shall it create any
obligation upon Agent or any Lender with respect thereto.

(c)   Borrowing Agent shall promptly forward to Agent copies of any request for
information, notification of potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of
Hazardous Materials at any other site owned, operated or used by any Loan Party
to manage of Hazardous Materials and shall continue to forward copies of
correspondence between any Loan Party and the Governmental Body regarding such
claims to Agent until the claim is settled.  Borrowing Agent shall promptly
forward to Agent copies of all documents and reports concerning a Hazardous
Discharge or Environmental Complaint at any real property owned, leased or
occupied by any Loan Party, operations or business that any Loan Party is
required to file under any Environmental Laws.  Such information is to be
provided solely to allow Agent to protect Agent’s security interest in and Lien
on the Collateral.

9.4   Litigation.  Promptly notify Agent in writing of any claim, litigation,
suit or administrative proceeding affecting any Borrower, Holdings or any
Guarantor, whether or not the claim is covered by insurance, and of any
litigation, suit or administrative proceeding, which in any such case is
required to be disclosed pursuant to Item 103, Regulation S-K or which could
reasonably be expected to have a Material Adverse Effect.

9.5   Material Occurrences.  Promptly notify Agent in writing upon the
occurrence of: (a) any Event of Default or Default; (b) any event, development
or circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of any Loan
Party as of the date of such statements; (c) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two plan years and
was not corrected as provided in Section 4971 of the Code, could subject any
Loan Party to a tax imposed by Section 4971 of the Code; (d) each and every
default by any Loan Party which might result in the acceleration of the maturity
of any Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; (e) any default or event of default under any document or
instrument evidencing the Specified

106

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

 

Indebtedness; and (f) any other development in the business or affairs of any
Loan Party or any Guarantor, which could reasonably be expected to have a
Material Adverse Effect; in each case describing the nature thereof and the
action Loan Parties propose to take with respect thereto.

9.6   Government Receivables.  Notify Agent promptly if any of its Receivables
arise out of contracts between any Borrower and the United States, any state, or
any department, agency or instrumentality of any of them.

9.7   Annual Financial Statements.  Furnish Agent and Lenders within ninety five
(95) days after the end of each fiscal year of Holdings, financial statements of
(a) Holdings and its Subsidiaries on a consolidating and consolidated basis, and
(b) Borrowers on a consolidating and consolidated basis, in each case including,
but not limited to, statements of income and stockholders’ equity and cash flow
from the beginning of the current fiscal year to the end of such fiscal year and
the balance sheet as at the end of such fiscal year, all prepared in accordance
with GAAP applied on a basis consistent with prior practices, and in reasonable
detail and, in the case of the financial statements of Holdings, reported upon
without qualification by an independent certified public accounting firm
selected by Borrowers and satisfactory to Agent (the “Accountants”).

9.8   Quarterly Financial Statements.  Furnish Agent and Lenders within 50 days
after the end of each of the first three fiscal quarters and within 60 days
after the end of the fourth fiscal quarter, for (a) Holdings and its
Subsidiaries on a consolidating and consolidated basis and (b) the Borrowers on
a consolidating and consolidated basis, an unaudited balance sheet and unaudited
statements of income and stockholders’ equity and cash flow reflecting results
of operations from the beginning of the fiscal year to the end of such quarter
and for such quarter, prepared on a basis consistent with prior practices and
complete and correct in all material respects, subject to normal and recurring
year-end adjustments that individually and in the aggregate are not material to
the Loan Parties’ business operations and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year.  The reports shall be accompanied by a Compliance
Certificate.

9.9   Monthly Financial Statements.

(a)   Furnish Agent and Lenders within twenty five (25) days after the end of
each fiscal month (other than for the last month of each fiscal quarter which
shall be delivered in accordance with Sections 9.7 and 9.8 as applicable), an
unaudited balance sheet of Holdings and its Subsidiaries on a consolidating and
consolidated basis and the Borrowers on a consolidating and consolidated basis
and unaudited statements of income and stockholders’ equity and cash flow of
Holdings and its Subsidiaries on a consolidating and consolidated basis and the
Borrowers on a consolidating and consolidated basis reflecting results of
operations from the beginning of the fiscal year to the end of such fiscal month
and for such fiscal month, prepared on a basis consistent with prior practices
and complete and correct in all material respects, subject to normal and
recurring year-end adjustments that individually and in the aggregate are not
material to the Loan Parties’ business operations and setting forth in
comparative form the respective financial statements for the corresponding date
and period in the previous fiscal year.  The reports shall be accompanied by a
Compliance Certificate.

107

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

 

(b)   [Reserved.]

(c)   Within twenty five (25) days after and as of the end of each month,
including the last month of each Fiscal Year, or more frequently as requested by
the Agent or the Required Lenders the monthly summaries of accounts receivable
and accounts payable of the Borrowers (which shall include a summary of the top
ten customers of the Borrowers, a breakout of Receivables with respect to which
the Customer is CenTra, Inc. or one of its Subsidiaries, a breakout of unbilled
Receivables, a breakout of accounts payable owed to Com Data and accounts
payable owing with respect to Brokered Receivables and a breakout of the
Borrowers reserve and escrow accounts maintained with respect to owner
operators).

9.10   Other Reports.  Furnish Agent as soon as available, but in any event
within ten (10) days after the issuance thereof with copies of such financial
statements, reports and returns as each Borrower shall send to its stockholders
or members.

9.11   Additional Information.  Furnish Agent with such additional information
as Agent shall reasonably request in order to enable Agent to determine whether
the terms, covenants, provisions and conditions of this Agreement and the Notes
have been complied with by Borrowers including, without the necessity of any
request by Agent, (a) copies of all environmental audits and reviews, and (b)
promptly upon any Borrower’s learning thereof, notice of any material labor
dispute to which any Borrower may become a party, any strikes or walkouts
relating to any of its plants or other facilities, and the expiration of any
labor contract to which any Borrower is a party or by which any Borrower is
bound.

9.12   Projected Operating Budget.  Furnish Agent and Lenders, no later than
thirty (30) days after the end of Holding’s fiscal years commencing with fiscal
year 2018, a month by month projected operating budget and cash flow of Holdings
and its Subsidiaries on a consolidating and consolidated basis and the Borrowers
on a consolidating and consolidated basis for the next succeeding fiscal year
(including an income statement for each month and a balance sheet as at the end
of the last month in each fiscal quarter), such projections to be accompanied by
a certificate signed by the President or Chief Financial Officer of each
Borrower to the effect that such projections have been prepared on the basis of
sound financial planning practice consistent with past budgets and financial
statements and that such officer has no reason to question the reasonableness of
any material assumptions on which such projections were prepared.

9.13   Variances From Operating Budget.  Furnish Agent, concurrently with the
delivery of the financial statements referred to in Sections 9.7 and 9.8, a
written report summarizing all material variances from budgets submitted by
Borrowers pursuant to Section 9.12 and a discussion and analysis by management
with respect to such variances.

9.14   Notice of Suits, Adverse Events.  Furnish Agent with prompt written
notice of (i) any lapse or other termination of any Consent issued to any Loan
Party by any Governmental Body or any other Person that is material to the
operation of any Loan Party’s business, (ii) any refusal by any Governmental
Body or any other Person to renew or extend any such Consent; and (iii) copies
of any periodic or special reports filed by any Borrower or any Guarantor with
any Governmental Body or Person, if such reports indicate any material change in
the business, operations, affairs or condition of any Borrower or any Guarantor,
or if copies thereof are

108

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

 

requested by Lender, and (iv) copies of any material notices and other
communications from any Governmental Body or Person which specifically relate to
any Borrower or any Guarantor.

9.15   ERISA Notices and Requests.  Furnish Agent with prompt written notice in
the event that (i) any Loan Party or any member of the Controlled Group knows or
has reason to know that a Termination Event has occurred, together with a
written statement describing such Termination Event and the action, if any,
which such Loan Party or any member of the Controlled Group has taken, is
taking, or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, Department of Labor or PBGC
with respect thereto, (ii) any Loan Party or any member of the Controlled Group
knows or has reason to know that a prohibited transaction (as defined in
Sections 406 of ERISA and 4975 of the Code) has occurred together with a written
statement describing such transaction and the action which such Loan Party or
any member of the Controlled Group has taken, is taking or proposes to take with
respect thereto, (iii) a funding waiver request has been filed with respect to
any Plan together with all communications received by any Loan Party or any
member of the Controlled Group with respect to such request, (iv) any increase
in the benefits of any existing Plan or the establishment of any new Plan or the
commencement of contributions to any Plan to which any Loan Party or any member
of the Controlled Group was not previously contributing shall occur, (v) any
Loan Party or any member of the Controlled Group shall receive from the PBGC a
notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) any Loan Party
or any member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, together with copies
of each such letter; (vii) any Loan Party or any member of the Controlled Group
shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (viii) any Loan Party or any member of
the Controlled Group shall fail to make a required installment or any other
required payment under the Code or ERISA on or before the due date for such
installment or payment; or (ix) any Loan Party or any member of the Controlled
Group knows that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan or (d) a
Multiemployer Plan is subject to Section 432 of the Code or Section 305 of
ERISA.

9.16   Additional Documents.  Execute and deliver to Agent, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to
carry out the purposes, terms or conditions of this Agreement.

9.17   Updates to Certain Schedules.  Deliver to Agent promptly as shall be
required to maintain the related representations and warranties as true and
correct, updates to Schedule 4.4 (Equipment and Inventory Locations; Place of
Business, Chief Executive Office, Real Property); provided, that absent the
occurrence and continuance of any Event of Default, Borrower shall only be
required to provide such updates on a monthly basis in connection with delivery
of a Compliance Certificate with respect to the applicable month.  Any such
updated Schedules delivered by Borrowers to Agent in accordance with this
Section 9.17 shall automatically and immediately be deemed to amend and restate
the prior version of such Schedule previously delivered to Agent and attached to
and made part of this Agreement.

109

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

 

9.18   Financial Disclosure.  If an Event of Default exists, each Loan Party
hereby irrevocably authorizes and directs all accountants and auditors employed
by such Loan Party at any time during the Term to exhibit and deliver to Agent
and each Lender copies of any of such Loan Party’s financial statements, trial
balances or other accounting records of any sort in the accountant’s or
auditor’s possession, and to disclose to Agent and each Lender any information
such accountants may have concerning such Loan Party’s financial status and
business operations.  If an Event of Default exists, each Loan Party hereby
authorizes all Governmental Bodies to furnish to Agent and each Lender copies of
reports or examinations relating to such Loan Party, whether made by such Loan
Party or otherwise; however, Agent and each Lender will attempt to obtain such
information or materials directly from such Loan Party prior to obtaining such
information or materials from such accountants or Governmental Bodies.

X.   EVENTS OF DEFAULT.

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

10.1   Nonpayment.  Failure by any Loan Party to pay when due any principal on
the Obligations (including without limitation pursuant to Section 2.9), or any
interest on the Obligations or any other fee, charge, amount or liability
provided for herein or in any Other Document, in each case whether at maturity,
by reason of acceleration pursuant to the terms of this Agreement, by notice of
intention to prepay or by required prepayment.

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

10.3   Financial Information.  Failure by any Loan Party to (i) furnish
financial information when due or when requested, or (ii) permit the inspection
of its books or records or access to its premises for audits and appraisals in
accordance with the terms hereof;

10.4   Judicial Actions.  Issuance of a notice of Lien, levy, assessment,
injunction or attachment (a) against any Borrower’s Receivables or (b) against a
material portion of any Borrower’s other property which remains unreleased or
unstayed for a period of thirty (30) days;

10.5   Noncompliance.  Except as otherwise provided for in Sections 10.1, 10.3
and 10.5(ii), (i) failure or neglect of any Borrower, any Guarantor or any
Person to perform, keep or observe any term, provision, condition, covenant
herein contained, or contained in any Other Document or any other agreement or
arrangement, now or hereafter entered into between any Borrower, any Guarantor
or such Person, and Agent or any Lender, or (ii) failure or neglect of any Loan
Party to perform, keep or observe any term, provision, condition or covenant,
contained in Sections 4.5, 6.1, 6.3, 6.11, 6.13, 6.14, 9.4 or 9.6 hereof which
is not cured within ten (10) Business Days from the occurrence of such failure
or neglect;

110

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

 

10.6   Judgments.  Any (a) judgment or judgments, writ(s), order(s) or decree(s)
for the payment of money are rendered against any Borrower or any Guarantor, not
adequately covered by insurance, as more particularly described in the final
sentence of this Section 10.6,  for an aggregate amount in excess of $1,500,000
or against all Borrowers or Guarantors for an aggregate amount in excess of
$1,500,000 and (b) (i) action shall be legally taken by any judgment creditor to
levy upon assets or properties of any Borrower or any Guarantor to enforce any
such judgment, (ii) such judgment shall remain undischarged for a period of
thirty (30) consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, shall not be in effect, or
(iii) any Liens arising by virtue of the rendition, entry or issuance of such
judgment upon assets or properties of any Borrower or any Guarantor shall be
senior to any Liens in favor of Agent on such assets or properties. For the
avoidance of doubt, for purposes of this Section 10.6, a judgment, writ, order
or decree for the payment of money shall be deemed to be adequately covered by
insurance if and for so long as (A) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and the
insurer covering full payment thereof subject to standard and customary
deductibles and (B) such insurer has been notified, and has not disputed the
claim made for payment, of the amount of such judgment or order;

10.7   Bankruptcy.  Any Borrower, any Guarantor, any Subsidiary or Affiliate of
any Borrower shall (i) apply for, consent to or suffer the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property,
(ii) admit in writing its inability, or be generally unable, to pay its debts as
they become due or cease operations of its present business, (iii) make a
general assignment for the benefit of creditors, (iv) commence a voluntary case
under any state or federal bankruptcy or receivership Laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent (including by entry of
any order for relief in any involuntary bankruptcy or insolvency proceeding
commenced against it), (vi) file a petition seeking to take advantage of any
other Law providing for the relief of debtors, (vii) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in any
involuntary case under such bankruptcy Laws, or (viii) take any action for the
purpose of effecting any of the foregoing;

10.8   Material Adverse Effect.  The occurrence of any event or development
which could reasonably be expected to have a Material Adverse Effect, which,
solely for purposes of this Section 10.8, shall be deemed to mean and include,
in the case of clauses (a) and (b) of the defined term Material Adverse Effect,
Borrowers and the Westport Companies, taken as a whole;

10.9   Lien Priority.  Any Lien created hereunder or provided for hereby or
under any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest (subject only to Permitted
Encumbrances that have priority as a matter of Applicable Law to the extent such
Liens only attach to Collateral other than Receivables or Inventory);

10.10   Cross Default.  Either (x) any specified “event of default” shall occur
under (i) the Westport Indebtedness beyond any cure period applicable thereto or
which has not been waived within sixty (60) days after the occurrence thereof,
or (ii) any Indebtedness (other than the Obligations, or the Specified
Indebtedness) of any Loan Party (excluding for purposes of this clause (ii) only
the Westport Indebtedness by virtue of the guaranty of payment or performance

111

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

 

thereof by a Loan Party), beyond any cure period applicable thereto, with a
then-outstanding principal balance, in the case of each of clauses (i) and (ii),
(or, in the case of any Indebtedness not so denominated, with a then-outstanding
total obligation amount) of $2,500,000 or more, or any other event or
circumstance which would permit the holder of any such Indebtedness, in the case
of each of clauses (i) and (ii), to accelerate such Indebtedness (and/or the
obligations of Westport or a Loan Party thereunder, as the case may be) prior to
the scheduled maturity or termination thereof, shall occur (regardless of
whether the holder of such Indebtedness shall actually accelerate, terminate or
otherwise exercise any rights or remedies with respect to such Indebtedness) or
(y) a default of the obligations of any Loan Party under any other agreement to
which it is a party shall occur which has or is reasonably likely to have a
Material Adverse Effect;

10.11   Breach of Guaranty or Pledge Agreement.  Termination or breach of any
Guaranty, Guarantor Security Agreement, Pledge Agreement or similar agreement
executed and delivered to Agent in connection with the Obligations of any
Borrower, or if any Guarantor or pledgor attempts to terminate, challenges the
validity of, or its liability under, any such Guaranty, Guarantor Security
Agreement, Pledge Agreement or similar agreement;

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

10.13   Invalidity.  Any material provision of this Agreement or any Other
Document shall, for any reason, cease to be valid and binding on any Borrower or
any Guarantor, or any Borrower or any Guarantor shall so claim in writing to
Agent or any Lender or any Borrower challenges the validity of or its liability
under this Agreement or any Other Document;

10.14   Seizures.  Any (a) material portion of the Collateral shall be seized,
subject to garnishment or taken by a Governmental Body, or any Borrower or any
Guarantor, or (b) the title and rights of any Borrower or any Guarantor which is
the owner of any material portion of the Collateral shall have become the
subject matter of claim, litigation, suit, garnishment or other proceeding which
might, in the opinion of Agent, upon final determination, result in impairment
or loss of the security provided by this Agreement or the Other Documents;

10.15   Reserved.

10.16   Pension Plans.  An event or condition specified in Sections 7.16 or 9.15
hereof shall occur or exist with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, any Loan
Party or any member of the Controlled Group shall incur, or in the opinion of
Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Agent, would have a Material Adverse
Effect; or the occurrence of any Termination Event, or any Loan Party’s failure
to immediately report a Termination Event in accordance with Section 9.15
hereof.

10.17   Anti-Money Laundering/International Trade Law Compliance.  Any
representation or warranty contained in Section 16.18 is or becomes false or
misleading at any time.

112

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

 

XI.   LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

11.1   Rights and Remedies.

(a)   If: (i) an Event of Default pursuant to Section 10.7 (other than Section
10.7(vii)) has occurred and is continuing, all Obligations shall be immediately
due and payable and this Agreement and the obligation of Lenders to make
Advances shall be deemed terminated, (ii) any of the other Events of Default has
occurred and is continuing, at the option of Agent or at the direction of
Required Lenders all Obligations shall be immediately due and payable and Agent
or Required Lenders shall have the right to terminate this Agreement and to
terminate the obligation of Lenders to make Advances; and (iii) without limiting
Section 8.2 hereof, any Default under Sections 10.7(vii) hereof, the obligation
of Lenders to make Advances hereunder shall be suspended until such time as such
involuntary petition shall be dismissed.  If an Event of Default has occurred
and is continuing, Agent shall have the right to exercise any and all rights and
remedies provided for herein, under the Other Documents, under the Uniform
Commercial Code and at law or equity generally, including the right to foreclose
the security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of
the Collateral with or without judicial process.  Agent may enter any of any
Loan Party’s premises or other premises without legal process and without
incurring liability to any Loan Party therefor, and Agent may thereupon, or at
any time thereafter, in its discretion without notice or demand, take the
Collateral and remove the same to such place as Agent may deem advisable and
Agent may require Loan Parties to make the Collateral available to Agent at a
convenient place.  With or without having the Collateral at the time or place of
sale, Agent may sell the Collateral, or any part thereof, at public or private
sale, at any time or place, in one or more sales, at such price or prices, and
upon such terms, either for cash, credit or future delivery, as Agent may
elect.  Except as to that part of the Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Agent shall give Loan Parties reasonable notification of such
sale or sales, it being agreed that in all events written notice mailed to
Borrowing Agent at least ten (10) days prior to such sale or sales is reasonable
notification.  At any public sale Agent or any Lender may bid (including credit
bid) for and become the purchaser, and Agent, any Lender or any other purchaser
at any such sale thereafter shall hold the Collateral sold absolutely free from
any claim or right of whatsoever kind, including any equity of redemption and
all such claims, rights and equities are hereby expressly waived and released by
each Loan Party.  The cash proceeds realized from the sale of any Collateral
shall be applied to the Obligations in the order set forth in Section 11.5
hereof.  Noncash proceeds will only be applied to the Obligations as they are
converted into cash.  If any deficiency shall arise, Loan Parties shall remain
liable to Agent and Lenders therefor.

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

113

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

 

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

11.2   Agent’s Discretion.  Agent shall have the right in its sole discretion to
determine which rights, Liens, security interests or remedies Agent may at any
time pursue, relinquish, subordinate, or modify, which procedures, timing and
methodologies to employ, and what any other action to take with respect to any
or all of the Collateral and in what order, thereto and such determination will
not in any way modify or affect any of Agent’s or Lenders’ rights hereunder as
against the Loan Parties or each other.

11.3   Setoff.  Subject to Section 14.13, in addition to any other rights which
Agent or any Lender may have under Applicable Law, if an Event of Default has
occurred and is continuing, Agent and such Lender shall have a right,
immediately and without notice of any kind, to apply any Loan Party’s property
held by Agent and such Lender or any of their Affiliates to reduce the
Obligations and to exercise any and all rights of setoff which may be available
to Agent and such Lender with respect to any deposits held by Agent or such
Lender.  Agent and each Lender agrees to notify such Loan Party promptly after
any such set-off and application made by Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

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

114

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

 

11.5   Allocation of Payments After Event of Default.  Notwithstanding any other
provisions of this Agreement to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received by
Agent on account of the Obligations (including without limitation any amounts on
account of any of Cash Management Liabilities or Hedge Liabilities), or in
respect of the Collateral may, at Agent’s discretion, be paid over or delivered
as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees on an hourly rate plus expenses basis) of
Agent in connection with enforcing its rights and the rights of Lenders under
this Agreement and the Other Documents, and any Out-of-Formula Loans and
Protective Advances funded by Agent with respect to the Collateral under or
pursuant to the terms of this Agreement;

SECOND, to payment of any fees owed to Agent;

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

FOURTH, to the payment of all of the Obligations consisting of accrued interest
on account of the Swing Loans;

FIFTH, to the payment of the outstanding principal amount of the Obligations
consisting of Swing Loans;

SIXTH, to the payment of all Obligations arising under this Agreement and the
Other Documents consisting of accrued fees and interest (other than interest in
respect of Swing Loans paid pursuant to clause FOURTH above);

SEVENTH, to the payment of the outstanding principal amount of the Obligations
(other than principal in respect of Swing Loans paid pursuant to clause FIFTH
above) arising under this Agreement (including Cash Management Liabilities and
Hedge Liabilities and including the payment or cash collateralization of any
outstanding Letters of Credit in accordance with Section 3.2(b) hereof).

EIGHTH, to all other Obligations arising under this Agreement which shall have
become due and payable (hereunder, under the Other Documents or otherwise) and
not repaid pursuant to clauses “FIRST” through “SEVENTH” above;

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

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

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its pro rata

115

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

 

share (based on the proportion that the then outstanding Advances, Cash
Management Liabilities and Hedge Liabilities held by such Lender bears to the
aggregate then outstanding Advances, Cash Management Liabilities and Hedge
Liabilities) of amounts available to be applied pursuant to clauses “SIXTH”,
“SEVENTH”, “EIGHTH” and “NINTH” above; and (iii) notwithstanding anything to the
contrary in this Section 11.5, no Swap Obligations of any Non-Qualifying Party
shall be paid with amounts received from such Non-Qualifying Party under its
Guaranty (including sums received as a result of the exercise of remedies with
respect to such Guaranty) or from the proceeds of such Non-Qualifying Party’s
Collateral if such Swap Obligations would constitute Excluded Hedge Liabilities,
provided, however, that to the extent possible appropriate adjustments shall be
made with respect to payments and/or the proceeds of Collateral from other
Borrowers and/or Guarantors that are Eligible Contract Participants with respect
to such Swap Obligations to preserve the allocation to Obligations otherwise set
forth above in this Section 11.5; and (iv) to the extent that any amounts
available for distribution pursuant to clause “SEVENTH” above are attributable
to the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by Agent as cash collateral for the Letters of Credit pursuant to
Section 3.2(b) hereof and applied (A) first, to reimburse Issuer from time to
time for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses “SEVENTH,” “EIGHTH”, and “NINTH” above in the manner
provided in this Section 11.5.

XII.   WAIVERS AND JUDICIAL PROCEEDINGS.

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

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

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

116

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

 

AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

XIII.   EFFECTIVE DATE AND TERMINATION.

13.1   Term.  This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of each Loan Party,
Agent and each Lender, shall become effective on the date hereof and shall
continue in full force and effect until December 23, 2020 (the “Term”) unless
sooner terminated as herein provided.  

13.2   Termination.  The termination of the Agreement shall not affect Agent’s
or any Lender’s rights, or any of the Obligations having their inception prior
to the effective date of such termination or any Obligations which pursuant to
the terms hereof continue to accrue after such date, and the provisions hereof
shall continue to be fully operative until all transactions entered into, rights
or interests created and Obligations have been fully and indefeasibly paid,
disposed of, concluded or liquidated.  The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrowers’ Account may from time
to time be temporarily in a zero or credit position, until all of the
Obligations (other than (i) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (ii) Letters of Credit so
long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to this Agreement) of each Loan Party
have been indefeasibly paid and performed in full after the termination of this
Agreement or each Loan Party has furnished Agent and Lenders with an
indemnification satisfactory to Agent and Lenders with respect
thereto.  Accordingly, each Borrower waives any rights which it may have under
the Uniform Commercial Code to demand the filing of termination statements with
respect to the Collateral, and Agent shall not be required to send such
termination statements to each Borrower, or to file them with any filing office,
unless and until this Agreement shall have been terminated in accordance with
its terms and all Obligations (other than (i) contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted and
(ii) Letters of Credit so long as Agent has received the cash collateral with
respect to the Letters of Credit to the extent required pursuant to this
Agreement) have been indefeasibly paid in full in immediately available
funds.  All representations, warranties, covenants, waivers and agreements
contained herein shall survive termination hereof until all Obligations are
indefeasibly paid and performed in full.

XIV.   REGARDING AGENT.

14.1   Appointment.  Each Lender hereby designates PNC to act as Agent for such
Lender under this Agreement and the Other Documents.  Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
2.8(b), Section 3.4 and the Fee Letter), charges and collections received
pursuant to this Agreement, for the ratable benefit of

117

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

 

Lenders.  Agent may perform any of its duties hereunder by or through its agents
or employees.  As to any matters not expressly provided for by this Agreement
(including collection of the Note) Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of Required Lenders, and such instructions shall be
binding; provided, however, that Agent shall not be required to take any action
which, in Agent’s discretion, exposes Agent to liability or which is contrary to
this Agreement or the Other Documents or Applicable Law unless Agent is
furnished with an indemnification reasonably satisfactory to Agent with respect
thereto.

14.2   Nature of Duties.  Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Other Documents.  Neither
Agent nor any of its officers, directors, employees or agents shall be (i)
liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
due execution, enforceability or sufficiency of this Agreement, or any of the
Other Documents or for any failure of any Borrower to perform its obligations
hereunder.  Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any of the Other Documents, or
to inspect the properties, books or records of any Borrower.  The duties of
Agent as respects the Advances to Borrowers shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligations in respect of this Agreement or the transactions described
herein except as expressly set forth herein.

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

118

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

 

14.4   Resignation of Agent; Successor Agent.  Agent may resign on sixty (60)
days written notice to each Lender and Borrowing Agent and upon such
resignation, Required Lenders will promptly designate a successor Agent
reasonably satisfactory to Borrowers (provided that no such approval by
Borrowers shall be required (i) in any case where the successor Agent is one of
the Lenders or (ii) after the occurrence and during the continuance of any Event
of Default).  Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and shall in particular succeed to all of Agent’s right, title
and interest in and to all of the Liens in the Collateral securing the
Obligations created hereunder or any Other Document (including the Mortgages,
the Pledge Agreement and all account control agreements), and the term “Agent”
shall mean such successor agent effective upon its appointment, and the former
Agent’s rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent.  However,
notwithstanding the foregoing, if at the time of the effectiveness of the new
Agent’s appointment, any further actions need to be taken in order to provide
for the legally binding and valid transfer of any Liens in the Collateral from
former Agent to new Agent and/or for the perfection of any Liens in the
Collateral as held by new Agent or it is otherwise not then possible for new
Agent to become the holder of a fully valid, enforceable and perfected Lien as
to any of the Collateral, former Agent shall continue to hold such Liens solely
as agent for perfection of such Liens on behalf of new Agent until such time as
new Agent can obtain a fully valid, enforceable and perfected Lien on all
Collateral, provided that Agent shall not be required to or have any liability
or responsibility to take any further actions after such date as such agent for
perfection to continue the perfection of any such Liens (other than to forego
from taking any affirmative action to release any such Liens).  After any
Agent’s resignation as Agent, the provisions of this Article XIV, and any
indemnification rights under this Agreement, including without limitation,
rights arising under Section 16.5 hereof, shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement (and in the event resigning Agent continues to hold any Liens pursuant
to the provisions of the immediately preceding sentence, the provisions of this
Article XIV and any indemnification rights under this Agreement, including
without limitation, rights arising under Section 16.5 hereof, shall inure to its
benefit as to any actions taken or omitted to be taken by it in connection with
such Liens).

14.5   Certain Rights of Agent.  If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from Required Lenders; and Agent shall not incur liability
to any Person by reason of so refraining.  Without limiting the foregoing,
Lenders shall not have any right of action whatsoever against Agent as a result
of its acting or refraining from acting hereunder in accordance with the
instructions of Required Lenders.

14.6   Reliance.  Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, statement, certificate,
email, facsimile, telex, teletype or telecopier message, cablegram, order or
other document or telephone message believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to this Agreement and the Other
Documents and its duties hereunder, upon advice of counsel selected by
it.  Agent may employ agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
Agent with reasonable care.

119

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

 

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

14.8   Indemnification.  To the extent Agent is not reimbursed and indemnified
by Borrowers, each Lender will reimburse and indemnify Agent in proportion to
its respective portion of the outstanding Advances and its respective
Participation Commitments in the outstanding Letters of Credit and outstanding
Swing Loans (or, if no Advances are outstanding, pro rata according to the
percentage that its Revolving Commitment Amount  constitute of the total
aggregate Revolving Commitment Amounts), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, or in any way relating to or arising out of this Agreement or any
Other Document; provided that Lenders shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent’s gross (not mere)
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment).

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

14.10   Delivery of Documents.  To the extent Agent receives financial
statements required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing
Base Certificates from any Borrower pursuant to the terms of this Agreement
which any Borrower is not obligated to deliver to each Lender, Agent will
promptly furnish such documents and information to Lenders.

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

120

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

 

14.12   No Reliance on Agent’s Customer Identification Program.  To the extent
the Advances or this Agreement is, or becomes, syndicated in cooperation with
other Lenders, each Lender acknowledges and agrees that neither such Lender, nor
any of its Affiliates, participants or assignees, may rely on Agent to carry out
such Lender's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti‑Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of Loan Parties, their
Affiliates or their agents, the Other Documents or the transactions hereunder or
contemplated hereby: (i) any identity verification procedures, (ii) any
recordkeeping, (iii) comparisons with government lists, (iv) customer notices or
(v) other procedures required under the CIP Regulations or such Anti-Terrorism
Laws.

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

XV.   BORROWING AGENCY.

15.1   Borrowing Agency Provisions.

(a)   Each Borrower hereby irrevocably designates Borrowing Agent to be its
attorney and agent and in such capacity, whether verbally, in writing or through
electronic methods (including, without limitation, an Approved Electronic
Communication) to (i) borrow, (ii) request advances, (iii) request the issuance
of Letters of Credit, (iv) sign and endorse notes, (v) execute and deliver all
instruments, documents, applications, security agreements, reimbursement
agreements and letter of credit agreements for Letters of Credit and all other
certificates, notice, writings and further assurances now or hereafter required
hereunder, (vi) make elections regarding interest rates, (vii) give instructions
regarding Letters of Credit and agree with Issuer upon any amendment, extension
or renewal of any Letter of Credit and (viii) otherwise take action under and in
connection with this Agreement and the Other Documents, all on behalf of and in
the name such Borrower or Borrowers, and hereby authorizes Agent to pay over or
credit all loan proceeds hereunder in accordance with the request of Borrowing
Agent.

(b)   The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request.  Neither Agent nor any Lender
shall incur liability to Borrowers as a result thereof.  To induce Agent and
Lenders to do so and in consideration thereof, each Borrower hereby indemnifies
Agent and each Lender and holds Agent and each Lender harmless from and against
any and all liabilities, expenses, losses, damages and claims of damage or

121

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

 

injury asserted against Agent or any Lender by any Person arising from or
incurred by reason of the handling of the financing arrangements of Borrowers as
provided herein, reliance by Agent or any Lender on any request or instruction
from Borrowing Agent or any other action taken by Agent or any Lender with
respect to this Section 15.1 except due to willful misconduct or gross (not
mere) negligence by the indemnified party (as determined by a court of competent
jurisdiction in a final and non-appealable judgment).

(c)   All Obligations shall be joint and several, and each Borrower shall make
payment upon the maturity of the Obligations by acceleration or otherwise, and
such obligation and liability on the part of each Borrower shall in no way be
affected by any extensions, renewals and forbearance granted by Agent or any
Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Borrower, the release by Agent or any
Lender of any Collateral now or thereafter acquired from any Borrower, and such
agreement by each Borrower to pay upon any notice issued pursuant thereto is
unconditional and unaffected by prior recourse by Agent or any Lender to the
other Borrowers or any Collateral for such Borrower’s Obligations or the lack
thereof.  Each Borrower waives all suretyship defenses.

15.2   Waiver of Subrogation.  Each Loan Party expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Loan Party may now or hereafter have against the
other Loan Parties or any other Person directly or contingently liable for the
Obligations hereunder, or against or with respect to any other Loan Parties’
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until termination of this Agreement and repayment in full of the Obligations
(other than (i) contingent indemnification obligations to the extent no claim
giving rise thereto has been asserted and (ii) Letters of Credit so long as
Agent has received the cash collateral with respect to the Letters of Credit to
the extent required pursuant to this Agreement).

XVI.   MISCELLANEOUS.

16.1   Governing Law.  This Agreement and each Other Document (unless and except
to the extent expressly provided otherwise in any such Other Document), and all
matters relating hereto or thereto or arising herefrom or therefrom (whether
arising under contract law, tort law or otherwise) shall, be governed by and
construed in accordance with the laws of the State of Michigan.  Any judicial
proceeding brought by or against any Loan Party with respect to any of the
Obligations, this Agreement, the Other Documents or any related agreement may be
brought in any court of competent jurisdiction in the State of Michigan, United
States of America, and, by execution and delivery of this Agreement, each Loan
Party accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement.  Each Loan Party hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified or registered mail (return receipt requested) directed to Borrowing
Agent at its address set forth in Section 16.6 and service so made shall be
deemed completed five (5) days after the same shall have been so deposited in
the mails of the United States of America, or, at Agent’s option, by service
upon Borrowing Agent which each Loan Party irrevocably appoints as such Loan
Party’s

122

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

 

Agent for the purpose of accepting service within the State of
Michigan.  Nothing herein shall affect the right to serve process in any manner
permitted by Law or shall limit the right of Agent or any Lender to bring
proceedings against any Loan Party in the courts of any other
jurisdiction.  Each Loan Party waives any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens.  Each Loan Party
waives the right to remove any judicial proceeding brought against such Loan
Party in any state court to any federal court.  Any judicial proceeding by any
Loan Party against Agent or any Lender involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or state
court located in, or whose district encompasses and includes, the County of
Macomb, State of Michigan.

16.2   Entire Understanding.

(a)   This Agreement and the documents executed concurrently herewith contain
the entire understanding between each Loan Party, Agent and each Lender and
supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof.  Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by each Loan Party’s, Agent’s and each Lender’s respective
officers.  Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.  Notwithstanding the
foregoing, Agent may modify this Agreement for the purposes of completing
missing content or correcting erroneous content of an administrative nature,
without the need for a written amendment, provided that the Agent shall send a
copy of any such modification to the Borrowers and each Lender (which copy may
be provided by electronic mail).  Each Borrower acknowledges that it has been
advised by counsel in connection with the execution of this Agreement and Other
Documents and is not relying upon oral representations or statements
inconsistent with the terms and provisions of this Agreement.

(b)   Required Lenders, Agent with the consent in writing of Required Lenders,
and Borrowers may, subject to the provisions of this Section 16.2(b), from time
to time enter into written supplemental agreements to this Agreement or the
Other Documents executed by Borrowers, for the purpose of adding or deleting any
provisions or otherwise changing, varying or waiving in any manner the rights of
Lenders, Agent or Loan Parties thereunder or the conditions, provisions or terms
thereof or waiving any Event of Default thereunder, but only to the extent
specified in such written agreements; provided, however, that no such
supplemental agreement shall:

(i)   increase the Revolving Commitment Percentage, the Maximum Revolving
Advance Amount or the Term Loan Commitment Percentage, as applicable, of any
Lender without the consent of such Lender directly affected thereby (it being
understood and agreed that a waiver of any condition precedent set forth in
Section 8.01 or of any Default or Event of Default is not considered an
extension or increase in the Revolving Commitment Percentage, Maximum Revolving
Advance Amount or the Term Loan Commitment Percentage) of any Lender;

123

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

 

(ii)   whether or not any Advances are outstanding, extend the Term Loan
Maturity Date, extend the Term or the time for payment of principal or interest
of any Advance (excluding the due date of any mandatory prepayment of an
Advance), or any fee payable to any Lender, or reduce the principal amount of or
the rate of interest borne by any Advances or reduce any fee payable to any
Lender, without the consent of each Lender directly affected thereby (except
that Required Lenders may elect to waive or rescind any imposition of the
Default Rate under Section 3.1 or of default rates of Letter of Credit fees
under Section 3.2 (unless imposed by Agent));

(iii)   except in connection with any increase pursuant to Section 2.24 hereof,
increase the Maximum Revolving Advance Amount without the consent of all
Lenders;

(iv)   alter the definition of the term Required Lenders or alter, amend or
modify this Section 16.2(b) without the consent of all Lenders;

(v)   alter, amend or modify the provisions of Section 11.5 without the consent
of all Lenders;

(vi)   release any Collateral during any calendar year (other than in accordance
with the provisions of this Agreement) having an aggregate value in excess of
$1,000,000 without the consent of all Lenders;

(vii)   change the rights and duties of Agent without the consent of all
Lenders;

(viii)   subject to clause (e) below, permit any Revolving Advance to be made if
after giving effect thereto the total of Revolving Advances outstanding
hereunder would exceed the Formula Amount for more than sixty (60) consecutive
Business Days or exceed one hundred and ten percent (110%) of the Formula Amount
without the consent of all Lenders;

(ix)   increase the Advance Rates above the Advance Rates in effect on the
Closing Date without the consent of all Lenders; or

(x)   release any Guarantor or Borrower (other than in accordance with the
provisions of this Agreement) without the consent of all Lenders.

(c)   Any such supplemental agreement shall apply equally to each Lender and
shall be binding upon Borrowers, Guarantors, Lenders and Agent and all future
holders of the Obligations.  In the case of any waiver, Borrowers, Guarantors,
Agent and Lenders shall be restored to their former positions and rights, and
any Event of Default waived shall be deemed to be cured and not continuing, but
no waiver of a specific Event of Default shall extend to any subsequent Event of
Default (whether or not the subsequent Event of Default is the same as the Event
of Default which was waived), or impair any right consequent thereon.

124

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

 

(d)   In the event that Agent requests the consent of a Lender pursuant to this
Section 16.2 and such consent is denied, then Agent may, at its option, require
such Lender to assign its interest in the Advances to Agent or to another Lender
or to any other Person designated by Agent (the “Designated Lender”), for a
price equal to (i) the then outstanding principal amount thereof plus (ii)
accrued and unpaid interest (including any accrued PIK Interest) and fees due
such Lender, which interest and fees shall be paid when collected from
Borrowers.  In the event Agent elects to require any Lender to assign its
interest to Agent or to the Designated Lender, Agent will so notify such Lender
in writing within forty five (45) days following such Lender’s denial, and such
Lender will assign its interest to Agent or the Designated Lender no later than
five (5) days following receipt of such notice pursuant to a Commitment Transfer
Supplement executed by such Lender, Agent or the Designated Lender, as
appropriate, and Agent.

(e)   Notwithstanding (i) the existence of a Default or an Event of Default,
(ii) that any of the other applicable conditions precedent set forth in Section
8.2 hereof have not been satisfied or the commitments of Lenders to make
Revolving Advances hereunder have been terminated for any reason, or (iii) any
other contrary provision of this Agreement, Agent may at its discretion and
without the consent of any Lender, voluntarily permit the outstanding Revolving
Advances at any time to exceed an amount equal to Formula Amount at such time by
up to ten percent (10%) of the Formula Amount for up to sixty (60) consecutive
Business Days (the “Out-of-Formula Loans”).  If Agent is willing in its sole and
absolute discretion to permit such Out-of-Formula Loans, Lenders holding the
Revolving Commitments shall be obligated to fund such Out-of-Formula Loans in
accordance with their respective Revolving Commitment Percentages, and such
Out-of-Formula Loans shall be payable on demand and shall bear interest at the
Default Rate for Revolving Advances consisting of Domestic Rate Loans; provided
that, if Agent does permit Out-of-Formula Loans, neither Agent nor Lenders shall
be deemed thereby to have changed the limits of Section 2.1(a) nor shall any
Lender be obligated to fund Revolving Advances in excess of its Revolving
Commitment Amount.  For purposes of this paragraph, the discretion granted to
Agent hereunder shall not preclude involuntary overadvances that may result from
time to time due to the fact that the Formula Amount was unintentionally
exceeded for any reason, including, but not limited to, Collateral previously
deemed to be “Eligible Receivables” becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral.  In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount by more than ten percent (10%),
Agent shall use its efforts to have Borrowers decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess.  Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances and shall be decreased in accordance with the
preceding sentence.  To the extent any Out-of-Formula Loans are not actually
funded by the other Lenders as provided for in this Section 16.2(e), Agent may
elect in its discretion to fund such Out-of-Formula Loans and any such
Out-of-Formula Loans so funded by Agent shall be deemed to be Revolving Advances
made by and owing to Agent, and Agent shall be entitled to all rights (including
accrual of interest) and remedies of a Revolving Lenders under this Agreement
and the Other Documents with respect to such Revolving Advances.

125

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

 

(f)   In addition to (and not in substitution of) the discretionary Revolving
Advances permitted above in this Section 16.2, Agent is hereby authorized by
Borrowers and Lenders, at any time in Agent’s sole discretion, regardless of (i)
the existence of a Default or an Event of Default, (ii) whether any of the other
applicable conditions precedent set forth in Section 8.2 hereof have not been
satisfied or the commitments of Lenders to make Revolving Advances hereunder
have been terminated for any reason, or (iii) any other contrary provision of
this Agreement, to make Revolving Advances (“Protective Advances”) to Borrowers
on behalf of Lenders which Agent, in its reasonable business judgment, deems
necessary or desirable (a) to preserve or protect the Collateral, or any portion
thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment
of the Advances and other Obligations, or (c) to pay any other amount chargeable
to Borrowers pursuant to the terms of this Agreement (the “Protective
Advances”); such Protective Advances, the outstanding Revolving Advances, Swing
Loans Maximum Undrawn Amount of all outstanding Letters of Credit do not exceed
the Maximum Revolving Advance Amount.  Lenders holding the Revolving Commitments
shall be obligated to fund such Protective Advances and effect a settlement with
Agent therefor upon demand of Agent in accordance with their respective
Revolving Commitment Percentages.  To the extent any Protective Advances are not
actually funded by the other Lenders as provided for in this Section 16.2(f),
any such Protective Advances funded by Agent shall be deemed to be Revolving
Advances made by and owing to Agent, and Agent shall be entitled to all rights
(including accrual of interest) and remedies of Revolving Lenders under this
Agreement and the Other Documents with respect to such Revolving Advances.

16.3   Successors and Assigns; Participations; New Lenders.

(a)   This Agreement shall be binding upon and inure to the benefit of Loan
Parties, Agent, each Lender, all future holders of the Obligations and their
respective successors and assigns, except that no Loan Party may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Agent and each Lender.

(b)   Each Loan Party acknowledges that in the regular course of commercial
banking business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other Persons (each such transferee
or purchaser of a participating interest, a “Participant”).  Each Participant
may exercise all rights of payment (including rights of set-off) with respect to
the portion of such Advances held by it or other Obligations payable hereunder
as fully as if such Participant were the direct holder thereof provided that
(i) Borrowers shall not be required to pay to any Participant more than the
amount which it would have been required to pay to Lender which granted an
interest in its Advances or other Obligations payable hereunder to such
Participant had such Lender retained such interest in the Advances hereunder or
other Obligations payable hereunder unless the sale of the participation to such
Participant is made with Borrower’s prior written consent, and (ii) in no event
shall Borrowers be required to pay any such amount arising from the same
circumstances and with respect to the same Advances or other Obligations payable
hereunder to both such Lender and such Participant.  Each Loan Party hereby
grants to any Participant a continuing security interest in any deposits, moneys
or other property actually or constructively held by such Participant as
security for the Participant’s interest in the Advances.

126

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

 

(c)   Any Lender, with the consent of Agent, may sell, assign or transfer all or
any part of its rights and obligations under or relating to Revolving Advances
and/or Term Loans under this Agreement and the Other Documents to one or more
additional Persons and one or more additional Persons may commit to make
Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less
than $1,000,000, pursuant to a Commitment Transfer Supplement, executed by a
Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for
recording.  Upon such execution, delivery, acceptance and recording, from and
after the transfer effective date determined pursuant to such Commitment
Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have the
rights and obligations of a Lender thereunder with a Revolving Commitment
Percentage and/or Term Loan Commitment Percentage as set forth therein, and (ii)
the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Agreement, the Commitment Transfer Supplement creating a novation for that
purpose.  Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the Revolving
Commitment Percentages and/or Term Loan Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents.  Each Loan Party hereby consents to the addition of such Purchasing
Lender and the resulting adjustment of the Revolving Commitment Percentages
and/or Term Loan Commitment Percentage arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents.  Loan Parties
shall execute and deliver such further documents and do such further acts and
things in order to effectuate the foregoing provided, however, that the consent
of Borrowers (such consent not to be unreasonably withheld or delayed) shall be
required unless (x) an Event of Default has occurred and is continuing at the
time of such assignment or (y) such assignment is to a Permitted Assignee;
provided that Borrowers shall be deemed to have consented to any such assignment
unless it shall object thereto by written notice to Agent within five (5)
Business Days after having received prior notice thereof.

(d)   Any Lender, with the consent of Agent which shall not be unreasonably
withheld or delayed, may directly or indirectly sell, assign or transfer all or
any portion of its rights and obligations under or relating to Revolving
Advances and/or Term Loans under this Agreement and the Other Documents to an
entity, whether a corporation, partnership, trust, limited liability company or
other entity that (i) is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each
Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned (“Modified Commitment
Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder

127

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

 

shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose.  Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO.  Each Loan Party hereby consents to the addition of such
Purchasing CLO.  Loan Parties shall execute and deliver such further documents
and do such further acts and things in order to effectuate the foregoing.

(e)   Agent shall maintain at its address a copy of each Commitment Transfer
Supplement and Modified Commitment Transfer Supplement delivered to it and a
register (the “Register”) for the recordation of the names and addresses of each
Lender and the outstanding principal, accrued and unpaid interest (including any
and all PIK Interest) and other fees due hereunder.  The entries in the Register
shall be conclusively presumed to be correct in the absence of demonstrable
error, and each Borrower, Agent and Lenders may treat each Person whose name is
recorded in the Register as the owner of the Advance recorded therein for the
purposes of this Agreement.  The Register shall be available for inspection by
Borrowing Agent or any Lender at any reasonable time and from time to time upon
reasonable prior notice.  Agent shall receive a fee in the amount of $3,500
payable by the applicable Purchasing Lender and/or Purchasing CLO upon the
effective date of each transfer or assignment (other than to an intermediate
purchaser) to such Purchasing Lender and/or Purchasing CLO.

(f)   Each Loan Party authorizes each Lender to disclose to any Transferee and
any prospective Transferee any and all financial information in such Lender’s
possession concerning such Loan Party which has been delivered to such Lender by
or on behalf of such Loan Party pursuant to this Agreement or in connection with
such Lender’s credit evaluation of such Loan Party.

(g)   Notwithstanding anything to the contrary contained in this Agreement, any
Lender may at any time and from time to time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

16.4   Application of Payments.  Agent shall have the continuing and exclusive
right to apply or reverse and re-apply any payment and any and all proceeds of
Collateral to any portion of the Obligations.  To the extent that any Loan Party
makes a payment or Agent or any Lender receives any payment or proceeds of the
Collateral for any Loan Party’s benefit, which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party under
any bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.

16.5   Indemnity.  Each Borrower shall defend, protect, indemnify, pay and save
harmless Agent, Issuer, each Lender and each of their respective officers,
directors, Affiliates, attorneys, employees and agents (each an “Indemnified
Party”) for and from and against any and all claims,

128

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

 

demands, liabilities, obligations, losses, damages, penalties, fines, actions,
judgments, suits, costs, charges, expenses and disbursements of any kind or
nature whatsoever (including reasonable fees and disbursements of counsel
(including reasonable allocated costs of internal counsel)) (collectively,
“Claims”) which may be imposed on, incurred by, or asserted against any
Indemnified Party in arising out of or in any way relating to or as a
consequence, direct or indirect, of: (i) this Agreement, the Other Documents,
the Advances and other Obligations and/or the transactions contemplated hereby
including the Transactions, (ii) any action or failure to act or action taken
only after delay or the satisfaction of any conditions by any Indemnified Party
in connection with and/or relating to the negotiation, execution, delivery or
administration of the Agreement and the Other Documents, the credit facilities
established hereunder and thereunder and/or the transactions contemplated hereby
including the Transactions, (iii) any Borrower’s or any Guarantor’s failure to
observe, perform or discharge any of its covenants, obligations, agreements or
duties under or breach of any of the representations or warranties made in this
Agreement and the Other Documents, (iv) the enforcement of any of the rights and
remedies of Agent, Issuer or any Lender under the Agreement and the Other
Documents, (v) any threatened or actual imposition of fines or penalties, or
disgorgement of benefits, for violation of any Anti-Terrorism Law by any
Borrower, any Affiliate or Subsidiary of any Borrowers, or any Guarantor, and
(vi) any claim, litigation, proceeding or investigation instituted or conducted
by any Governmental Body or instrumentality, or any other Person with respect to
any aspect of, or any transaction contemplated by, or referred to in, or any
matter related to, this Agreement or the Other Documents, whether or not Agent
or any Lender is a party thereto.  Without limiting the generality of any of the
foregoing, each Borrower shall defend, protect, indemnify, pay and save harmless
each Indemnified Party from (x) any Claims which may be imposed on, incurred by,
or asserted against any Indemnified Party arising out of or in any way relating
to or as a consequence, direct or indirect, of the issuance of any Letter of
Credit hereunder and (y) any Claims which may be imposed on, incurred by, or
asserted against any Indemnified Party under any Environmental Laws with respect
to or in connection with the real property owned, leased or occupied by any Loan
Party, any Hazardous Discharge, the presence of any Hazardous Materials
affecting the real property owned, leased or occupied by any Loan Party (whether
or not the same originates or emerges from the real property owned, leased or
occupied by any Loan Party or any contiguous real estate), including any Claims
consisting of or relating to the imposition or assertion of any Lien on any of
the Real Property under any Environmental Laws and any loss of value of the Real
Property as a result of the foregoing except to the extent such loss, liability,
damage and expense is attributable to any Hazardous Discharge resulting from
actions on the part of Agent or any Lender.  Loan Parties’ obligations under
this Section 16.5 shall arise upon the discovery of the presence of any
Hazardous Materials at the real property owned, leased or occupied by any Loan
Party, whether or not any federal, state, or local environmental agency has
taken or threatened any action in connection with the presence of any Hazardous
Materials, in each such case except to the extent that any of the foregoing
arises out of the gross negligence or willful misconduct of the Indemnified
Party (as determined by a court of competent jurisdiction in a final and
non-appealable judgment).  Without limiting the generality of the foregoing,
this indemnity shall extend to any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including fees and disbursements of counsel) asserted
against or incurred by any of the Indemnified Parties by any Person under any
Environmental Laws or similar Laws by reason of any Loan Party’s or any other
Person’s failure to comply with Laws applicable to solid or hazardous waste
materials,

129

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

 

including Hazardous Materials and Hazardous Waste, or other Toxic
Substances.  Additionally, if any taxes (excluding taxes imposed upon or
measured solely by the net income of Agent and Lenders, but including any
intangibles taxes, stamp tax, recording tax or franchise tax) shall be payable
by Agent, Lenders or Loan Parties on account of the execution or delivery of
this Agreement, or the execution, delivery, issuance or recording of any of the
Other Documents, or the creation or repayment of any of the Obligations
hereunder, by reason of any Applicable Law now or hereafter in effect, Loan
Parties will pay (or will promptly reimburse Agent and Lenders for payment of)
all such taxes, including interest and penalties thereon, and will indemnify and
hold the Indemnified Parties harmless from and against all liability in
connection therewith.

16.6   Notice.  Any notice or request hereunder may be given to Borrowing Agent
or any Borrower or Guarantor or to Agent or any Lender at their respective
addresses set forth below or at such other address as may hereafter be specified
in a notice designated as a notice of change of address under this Section.  Any
notice, request, demand, direction or other communication (for purposes of this
Section 16.6 only, a “Notice”) to be given to or made upon any party hereto
under any provision of this Agreement shall be given or made by telephone or in
writing (which includes by means of electronic transmission (i.e., “e-mail”) or
facsimile transmission or by setting forth such Notice on a website to which
Borrowers are directed (an “Internet Posting”) if Notice of such Internet
Posting (including the information necessary to access such site) has previously
been delivered to the applicable parties hereto by another means set forth in
this Section 16.6) in accordance with this Section 16.6.  Any such Notice must
be delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names in this Section 16.6 or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 16.6.  Any Notice shall be effective:

(a)   In the case of hand-delivery, when delivered;

(b)   If given by mail, four (4) days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;

(c)   In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, an
Internet Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);

(d)   In the case of a facsimile transmission, when sent to the applicable
party’s facsimile machine’s telephone number, if the party sending such Notice
receives confirmation of the delivery thereof from its own facsimile machine;

(e)   In the case of electronic transmission, when actually received;

(f)   In the case of an Internet Posting, upon delivery of a Notice of such
posting (including the information necessary to access such site) by another
means set forth in this Section 16.6; and

(g)   If given by any other means (including by overnight courier), when
actually received.

130

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

 

Any Lender giving a Notice to Borrowing Agent or any Borrower or Guarantor shall
concurrently send a copy thereof to Agent, and Agent shall promptly notify the
other Lenders of its receipt of such Notice.

(A)   If to Agent or PNC at:

PNC Bank, National Association
PNC Business Credit
1900 East Ninth Street, 9th Floor
Cleveland, Ohio 44114
Attention:   John. A. Wenzinger
                        Senior Vice President/Team Leader
Telephone:   216-222-9388
Facsimile:   216-222-8155

with a copy to:   

PNC Bank, National Association
PNC Agency Services
PNC Firstside Center
500 First Avenue (Mailstop: P7-PFSC-04-1)
Pittsburgh, Pennsylvania 15219
Attention: Lori Killmeyer
Telephone: (412) 807.7002
Facsimile: (412) 762-8672]

with an additional copy to:

Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn:  Lawrence F. Flick II

Telephone:  (212) 885-5556

Facsimile:  (215) 832-5556

 

(B)   If to a Lender other than Agent, as specified on the signature pages
hereof

(C)   If to Borrowing Agent, any Borrower or any Guarantor:

c/o Borrowing Agent
12755 E Nine Mile
Warren, MI 48089
Attention: Treasurer
Telephone: (586) 920-0100
Facsimile: (586) 920-0258

131

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

 

with a copy to:   

c/o Borrowing Agent
12755 E Nine Mile
Warren, MI 48089
Attention: President
Telephone: (586) 920-0100
Facsimile: (586) 920-0258

16.7   Survival.  The obligations of Loan Parties under Sections 2.2(f), 2.2(g),
2.2(h), 3.7, 3.8, 3.9, 3.10, 16.5 and 16.9 and the obligations of Lenders under
Sections 2.2, 2.15(b), 2.16, 2.18, 2.19, 14.8 and 16.5, shall survive
termination of this Agreement and the Other Documents and payment in full of the
Obligations (other than (i) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (ii) Letters of Credit so
long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to this Agreement).

16.8   Severability.  If any part of this Agreement is contrary to, prohibited
by, or deemed invalid under Applicable Laws, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.

16.9   Expenses.  Borrowers shall pay (i) all out-of-pocket expenses incurred by
Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for Agent), and shall pay all fees and time charges and
disbursements for attorneys who may be employees of Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
Other Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all out-of-pocket expenses incurred by
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all out-of-pocket
expenses incurred by Agent, any Lender or Issuer (including the fees, charges
and disbursements of any counsel for Agent, any Lender or Issuer), and shall pay
all fees and time charges for attorneys who may be employees of Agent, any
Lender or Issuer, in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the Other Documents, including its
rights under this Section, or (B) in connection with the Advances made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit, and (iv) subject to the limitations set forth in
Section 3.4 hereof, all reasonable out-of-pocket expenses of Agent’s regular
employees and agents engaged periodically to perform audits of the any
Borrower’s or any Borrower’s Affiliate’s or Subsidiary’s books, records and
business properties.

16.10   Injunctive Relief.  Each Loan Party recognizes that, in the event any
Loan Party fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefor, Agent, if Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.

132

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

 

16.11   Consequential Damages.  Neither Agent nor any Lender, nor any agent or
attorney for any of them, shall be liable to any Borrower, or any Guarantor (or
any Affiliate of any such Person) for indirect, punitive, exemplary or
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other
Document.

16.12   Captions.  The captions at various places in this Agreement are intended
for convenience only and do not constitute and shall not be interpreted as part
of this Agreement.

16.13   Counterparts; Facsimile Signatures.  This Agreement may be executed in
any number of and by different parties hereto on separate counterparts, all of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement.  Any signature delivered by a party
by facsimile or electronic transmission (including email transmission of a PDF
image) shall be deemed to be an original signature hereto.

16.14   Construction.  The parties acknowledge that each party and its counsel
have reviewed this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.

16.15   Confidentiality; Sharing Information.  Agent, each Lender and each
Transferee shall hold all non-public information obtained by Agent, such Lender
or such Transferee pursuant to the requirements of this Agreement in accordance
with Agent’s, such Lender’s and such Transferee’s customary procedures for
handling confidential information of this nature; provided, however, Agent, each
Lender and each Transferee may disclose such confidential information (a) to its
examiners, Affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees, and (c) as
required or requested by any Governmental Body or representative thereof or
pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, Agent, each Lender and each Transferee shall use
its reasonable best efforts prior to disclosure thereof, to notify the
applicable Loan Party of the applicable request for disclosure of such
non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the financial
condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant
to legal process and (ii) in no event shall Agent, any Lender or any Transferee
be obligated to return any materials furnished by any Loan Party other than
those documents and instruments in possession of Agent or any Lender in order to
perfect its Lien on the Collateral once the Obligations have been paid in full
and this Agreement has been terminated.  Each Loan Party acknowledges that from
time to time financial advisory, investment banking and other services may be
offered or provided to such Loan Party or one or more of its Affiliates (in
connection with this Agreement or otherwise) by any Lender or by one or more
Subsidiaries or Affiliates of such Lender and each Loan Party hereby authorizes
each Lender to share any information delivered to such Lender by such Loan Party
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such Subsidiary or
Affiliate of such Lender, it being understood that any such Subsidiary or
Affiliate of any Lender receiving such information shall be bound by the
provisions of this Section 16.15 as if it were a Lender hereunder.  Such
authorization shall

133

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

 

survive the repayment of the other Obligations and the termination of this
Agreement.  Notwithstanding any non-disclosure agreement or similar document
executed by Agent in favor of any Loan Party or any of any Loan Party’s
affiliates, the provisions of this Agreement shall supersede such agreements.

16.16   Publicity.  Each Loan Party and each Lender hereby authorizes Agent to
make appropriate announcements of the financial arrangement entered into among
Borrowers, Guarantors, Agent and Lenders, including announcements which are
commonly known as tombstones, in such publications and to such selected parties
as Agent shall in its sole and absolute discretion deem appropriate.

16.17   Certifications From Banks and Participants; USA PATRIOT Act.

(a)   Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA PATRIOT Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country, and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to the Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA PATRIOT Act
and the applicable regulations: (1) within ten (10) days after the Closing Date,
and (2) as such other times as are required under the USA PATRIOT Act.

(b)   The USA PATRIOT Act requires all financial institutions to obtain, verify
and record certain information that identifies individuals or business entities
which open an "account" with such financial institution.  Consequently, any
Lender may from time to time request, and each Loan Party shall provide to such
Lender, such Loan Party's name, address, tax identification number and/or such
other identifying information as shall be necessary for such Lender to comply
with the USA PATRIOT Act and any other Anti-Terrorism Law.

16.18   Anti-Terrorism Laws.

(a)   Each Loan Party represents and warrants that (i) no Covered Entity is a
Sanctioned Person and (ii) no Covered Entity, either in its own right or through
any third party, (A) has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (B) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (C) engages in any dealings or
transactions prohibited by any Anti-Terrorism Law.

(b)   Each Loan Party covenants and agrees that (i) no Covered Entity will
become a Sanctioned Person, (ii) no Covered Entity, either in its own right or
through any third party, will (A) have any of its assets in a Sanctioned Country
or in the possession, custody or control of a Sanctioned Person in violation of
any Anti-Terrorism Law; (B) do business in or with, or derive any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; (C) engage in any

134

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

 

dealings or transactions prohibited by any Anti-Terrorism Law or (D) use the
Advances to fund any operations in, finance any investments or activities in,
or, make any payments to, a Sanctioned Country or Sanctioned Person in violation
of any Anti-Terrorism Law, (iii) the funds used to repay the Obligations will
not be derived from any unlawful activity, (iv) each Covered Entity shall comply
with all Anti-Terrorism Laws and (v) the Loan Parties shall promptly notify the
Agent in writing upon the occurrence of a Reportable Compliance Event.

16.19   Amended and Restated; No Novation.  This Agreement amends, restated and
replaces the Original Credit Agreement, but does not extinguish the obligations
for the payment of money outstanding under the Original Credit Agreement or
otherwise discharge or release the Borrowers from their obligations (including
the Obligations, as defined in the Original Credit Agreement) arising
thereunder, Agent’s Liens created thereby or the priority of any mortgage,
pledge, security agreement or any other security therefor.  Nothing herein
contained shall be construed as a substitution or novation of the obligations
outstanding under the Original Credit Agreement or instruments securing the
same, which shall remain in full force and effect, except as expressly modified
hereby or by instruments executed concurrently herewith.

XVII.   GUARANTY PROVISIONS

17.1   Guaranty of Obligations.  The Guarantors hereby, jointly and severally,
unconditionally guarantee, and become surety for, the prompt payment and
performance of all Obligations, including, without limitation, all costs and
expenses of the Secured Parties incurred in the documentation, negotiation,
modification, enforcement, collection and otherwise in connection with this
Guaranty and each Other Document to which any Guarantor is party, including
reasonable attorneys’ fees and expenses.

17.2   Nature of Guaranty; Waivers.

17.2.1   This is a guaranty of payment and not of collection and no Secured
Party shall be required or obligated, as a condition of any Guarantor’s
liability, to make any demand upon or to pursue any of its rights against any
Borrower, any other Loan Party or any other Person, or to pursue any rights
which may be available to it with respect to any other Person who may be liable
for the payment of the Obligations.

17.2.2   This is an absolute, unconditional, irrevocable and continuing guaranty
and will remain in full force and effect until payment in full of the
Obligations (other than (i) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (ii) Letters of Credit so
long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to this Agreement) and termination of
this Agreement and the Guarantor Security Agreement.  This guaranty will remain
in full force and effect even if there is no principal balance outstanding under
the Obligations at a particular time or from time to time.  This guaranty will
not be affected by any surrender, exchange, acceptance, compromise or release by
any Secured Party of any other Person, or any other guaranty or any security
held by it for any of the Obligations, by any failure of any Secured Party to
take any steps to perfect or maintain its Lien or security interest in or to
preserve its rights to any security or other Collateral for any of the
Obligations or any other guaranty, or by any irregularity, unenforceability or
invalidity of any of the Obligations with respect to any Borrower or any other
Person, or any part thereof or any security or other guaranty thereof.  The
Guarantors’

135

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

 

obligations hereunder shall not be affected, modified or impaired by any
counterclaim, set-off recoupment, deduction or defense based upon any claim any
Guarantor may have (directly or indirectly) against any Borrower, any other Loan
Party, any Secured Party or any other Person, except satisfaction and payment in
full in cash of the Obligations (other than (i) contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted and
(ii) Letters of Credit so long as Agent has received the cash collateral with
respect to the Letters of Credit to the extent required pursuant to this
Agreement) as required under the Credit Agreement.

17.2.3   No the extent permitted by law, notice of acceptance of this guaranty,
notice of extensions of credit to the Borrowers from time to time, notice of
default, diligence, presentment, notice of dishonor, protest, demand for
payment, and any defense based upon any Secured Party’s failure to comply with
the notice requirements under any Applicable Law are hereby waived.  Each
Guarantor waives all defenses based on suretyship or impairment of any of the
Collateral.

17.2.4   To the extent permitted by law, the Secured Parties at any time and
from time to time, without notice to or the consent of any Guarantor, and
without impairing or releasing, discharging or modifying the Guarantors’
liabilities hereunder, may (i) change the manner, place, time or terms of
payment or performance of or interest rates on, or other terms relating to, any
of the Obligations; (ii) renew, substitute, modify, amend or alter, or grant
consents or waivers relating to any of the Obligations, any other guaranties, or
any security for any Obligations or guaranties; (iii) apply any and all payments
by whomever paid or however realized including any proceeds of any collateral,
to any Obligations in such order, manner and amount as the Secured Parties may
determine in their sole discretion; (iv) settle, compromise or deal with any
other Person, including any Borrower or any other Loan Party, with respect to
any Obligations in such manner as the Secured Parties deem appropriate in their
sole discretion; (v) substitute, exchange or release any security or guaranty;
or (vi) take such actions and exercise such remedies hereunder as provided
herein.

17.2.5   Without limiting any of the foregoing, each Guarantor waives, to the
maximum extent permitted by law, (i) all rights and defenses arising out of an
election of remedies by any of the Secured Parties, even though that election of
remedies, such as a non-judicial foreclosure with respect to security for a
guaranteed obligation, has destroyed such Guarantor’s rights of subrogation and
reimbursement against any Borrower, any other Loan Party or any other Person
under any Applicable Law and (ii) all rights and defenses that such Guarantor
may have because the Obligations are or become secured by Real Property, which
means, among other things: (x) the Secured Parties may collect from such
Guarantor without first foreclosing on any Real Property collateral or personal
property collateral pledged by any Loan Party or any other Person and (y) if any
Secured Party forecloses on any Real Property pledged by any Loan Party or any
other Person: (i) the amount of the Obligations may be reduced only by the price
for which such Real Property is sold at the foreclosure sale, even if such Real
Property is worth more than the sale price; and (ii) the Secured Parties may
collect from such Guarantor even if the Secured Parties, by foreclosing on such
Real Property, have destroyed any right such Guarantor may have to collect from
any Loan Party or any other Person.  The foregoing is an unconditional and
irrevocable waiver of any rights and defenses such Guarantor may have because
the Obligations are secured by Real Property.

136

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

 

17.3   Repayments or Recovery.  If the incurrence or payment of the Obligations
by any Loan Party or any other Person or the transfer to any Secured Party of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights, including
provisions of Title 11 of the United States Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (each, a “Voidable Transfer”), and if any Secured Party is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that such Secured Party is
required or elects to repay or restore, and as to all costs, expenses, and
attorneys’ fees of such Secured Parties related thereto, the liability of each
Guarantor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made and any Liens held by
any Secured Party previously released or terminated with respect to any
Collateral shall be reinstated as of the date on which such Secured Party repays
or restores such Voidable Transfer.  The provisions of this Section 17.3 will be
and remain effective notwithstanding any contrary action which may have been
taken by any Guarantor in reliance upon such payment, and any such contrary
action so taken will be without prejudice to any Secured Parties’ rights
hereunder and will be deemed to have been conditioned upon the provisions of
this Section 17.3.

17.4   Enforceability of Obligations.  To the extent permitted by Applicable
Law, (a) no modification, limitation or discharge of the Obligations arising out
of or by virtue of any bankruptcy, reorganization or similar proceeding for
relief of debtors under federal or state law will affect, modify, limit or
discharge any Guarantor’s liability in any manner whatsoever and this Guaranty
will remain and continue in full force and effect and will be enforceable
against each Guarantor to the same extent and with the same force and effect as
if any such proceeding had not been instituted, (b) each Guarantor waives all
rights and benefits which might accrue to it by reason of any such proceeding
and will be liable to the full extent hereunder, irrespective of any
modification, limitation or discharge of the liability of any Loan Party that
may result from any such proceeding and (c) each Guarantor expressly waives the
effect of any statute of limitations or other limitations on any actions under
this Guaranty.

17.5   Postponement of Subrogation.  Until payment in full of the Obligations
(other than (i) contingent indemnification obligations to the extent no claim
giving rise thereto has been asserted and (ii) Letters of Credit so long as
Agent has received the cash collateral with respect to the Letters of Credit to
the extent required pursuant to this Agreement) and termination of this
Agreement and the Guarantor Security Agreement, to the extent permitted by law,
each Guarantor hereby (a) expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution of any other claim which
such Guarantor may now or hereafter have against the any Loan Party or any other
Person directly or contingently liable for the Obligations hereunder, or against
or with respect to any other Loan Parties’ property (including, without
limitation, any property which is Collateral for the Obligations), arising from
the existence or performance of this Guaranty, and (b) agrees that all
obligations owing by any Borrower to any Guarantor are subordinated in right of
payment to the Obligations and (i) if notified by Agent, no Guarantor shall
accept any payment of any such obligations and (ii) if an Event of Default shall
have occurred and be continuing, exercise any right or remedy with respect
thereto.

137

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

 

17.6   Limitation on Contingent Liability of UTSI Finance, Inc.  Notwithstanding
anything to the contrary contained in this Article XVII, in no event shall the
contingent liability of UTSI Finance, Inc., a Michigan corporation (“UTSI”), in
its capacity as a Guarantor, arising under this Article XVII, for the principal
amount of the Obligations (exclusive of interests and costs and expenses of
collection) exceed the aggregate amount of indebtedness which it is permitted to
incur as a guarantor pursuant to the mortgage financing agreements between UTSI
and Flagstar Bank, F.S.B identified in Schedule 1.4 hereto, as in effect on any
date of determination, which amount, as of the Closing Date, equals $2,000,000.

 

(Signatures appear on next pages)

 

 

138

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

 

Each of the parties has signed this Agreement as of the day and year first above
written.

 

 

BORROWERS:

 

 

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

 

 

 

By:

/s/ Mark Limback  

 

Name:

Mark Limback

 

Title

President

 

 

 

 

 

 

 

UNIVERSAL DEDICATED, INC.

 

 

 

 

By:

/s/ Darren W. Coast  

 

Name:

Darren W. Coast

 

Title:

President

 

 

 

 

MASON DIXON INTERMODAL, INC.

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

President

 

 

 

 

 

 

 

LOGISTICS INSIGHT CORP.

 

 

 

 

By:

/s/ Michael S. Bautch  

 

Name:

Michael S. Bautch

 

Title:

President

 

 

 

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

 

 

 

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

 

 

 

By:

/s/ Michael S. Bautch  

 

Name:

Michael S. Bautch

 

Title:

President

 

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

 

 

 

By:

/s/ Mark Limback  

 

Name:

Mark Limback

 

Title:

President

 

 

 

 

CAVALRY LOGISTICS, LLC

 

 

 

 

By:

/s/ Robert King  

 

Name:

Robert King

 

Title:

President

 

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

FORE TRANSPORTATION INC.

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

President

 

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

FORE TRANSPORT, INC.

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

President

 

 

 

 

4 CARGO LLC

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

President

 

 

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

 

 

 

By:

/s/ Timothy Phillips   

 

Name:

Timothy Phillips

 

Title:

Vice President

 

 

 

 

AQUARIUS FINANCIAL, INC.

 

 

 

 

By:

/s/ Jude M. Beres  

 

Name:

Jude M. Beres

 

Title:

President

 

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

GUARANTORS:

 

 

 

 

GREEN FLEET, INC.

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

Vice President

 

 

 

 

GREEN FLEET, LLC

 

 

 

 

BY: SOUTHERN COUNTIES EXPRESS, INC., ITS SOLE MANAGER

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

Vice President

 

 

 

 

SOUTHERN COUNTIES EXPRESS, LLC

 

 

 

 

BY: SOUTHERN COUNTIES EXPRESS, INC., ITS SOLE MANAGER

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

Vice President

 

 

 

 

LINC LOGISTICS LLC

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

LINC OF MICHIGAN, LLC

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

DIVERSIFIED CONTRACT SERVICES, INC.

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

UT RENT A CAR, INC.

 

 

 

 

By:

/s/ Jude M. Beres  

 

Name:

Jude M. Beres

 

Title:

President

 

 

 

 

UTS REALTY, LLC

 

 

 

 

By:

/s/ Jude M. Beres    

 

Name:

Jude M. Beres

 

Title:

Manager

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

LGSI EQUIPMENT OF INDIANA, LLC

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

UTSI FINANCE, INC.

 

 

 

 

By:

/s/ Jeffrey A. Rogers  

 

Name:

Jeffrey A. Rogers

 

Title:

President

 

 

 

 

APA HOLDINGS LLC

 

 

 

 

By:

/s/ Timothy Phillips  

 

Name:

Timothy Phillips

 

Title:

President

 

 

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

PNC BANK, NATIONAL ASSOCIATION,

 

 

as Agent and as a Revolving Lender

 

 

 

 

By:

/s/ John Wenzinger

 

Name:

John Wenzinger

 

Title:

Senior Vice President

 

 

Address:

 

 

1900 East Ninth Street

 

 

9th Floor

 

 

Cleveland, OH 44114

 

 

 

 

 

Revolving Commitment Percentage:  100%

 

 

Revolving Commitment Amount $150,000,000

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

 

 

STEEL CITY CAPITAL FUNDING,

 

 

a division of PNC Bank, National Association.

 

 

as a Term Loan Lender

 

 

 

 

By:

/s/ Philip B. Fues

 

Name:

Philip B. Fues

 

Title:

Vice President, Relationship Manager

 

 

Address:

 

 

1600 Market Street

 

 

Philadelphia, PA 19103

 

 

 

 

 

Term Loan Commitment Percentage:  100%

 

 

Term Loan Commitment Amount $30,000,000

 

 

 

Signature page to Amended and Restated Revolving Credit, Term Loan and Security
Agreement

 

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

 

EXHIBIT 1.2

FORM OF BORROWING BASE CERTIFICATE

(see attached)

 

 

 

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

 

EXHIBIT A

 

FORMULA AMOUNT

 

(see attached)

 

 

 

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

 

EXHIBIT 1.2(a)

FORM OF COMPLIANCE CERTIFICATE

 

 

__________________, ____

 

The undersigned, the treasurer of Universal Management Services, Inc., a
corporation organized under the laws of the State of Michigan (“Borrowing
Agent”) hereby makes the certifications set forth below, in his capacity as an
officer of Borrowing Agent and not in his individual capacity, to PNC Bank,
National Association, in its capacity as Agent (“Agent”) in accordance with the
requirements of Section [9.7], [9.8], [9.9] of that certain Amended and Restated
Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”),
dated as of August [__], 2018 by and among Borrowing Agent, Universal Logistics
Holdings, Inc., Universal Truckload, Inc., Universal Dedicated, Inc., Mason
Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics Solutions
International, Inc., Universal Specialized, Inc., Cavalry Logistics, LLC, Fore
Transportation Inc., Fore Transport, Inc., 4 Cargo LLC, Southern Counties
Express, Inc., and Aquarius Financial, Inc. (collectively the “Borrowers” and
each a “Borrower”), each Person party thereto as guarantor from time to time
(collectively, the “Guarantors”, and each a “Guarantor”) PNC Bank, National
Association (“PNC”), as a Revolving Lender and as a Term Loan Lender, Steel City
Capital Funding, a division of PNC (“SCCF”), as a Term Loan Lender, the other
financial institutions which are now or which hereafter become a party thereto
as Revolving Lenders or Term Loan Lenders (collectively with Revolving Lenders
and Term Loan Lenders, the “Lenders” and each, individually, a
“Lender”).  Capitalized terms used in this Compliance Certificate, unless
otherwise defined herein, shall have the meanings ascribed to them in the Credit
Agreement.

Based upon my review of the financial statements delivered pursuant to Section
[9.7], [9.8], [9.9] of the Borrowers for the [__________] period ending
_______________, ____, copies of which are attached hereto, I hereby certify
that:

 

1.

Such financial statements were prepared in accordance with GAAP and fairly
present in all material respects the financial position and results of
operations of the Borrowers for such [fiscal year][fiscal quarter], subject only
to changes from audit and year-end adjustments and except that such statements
need not contain notes.

 

2.

No Default or Event of Default exists on the date hereof [, other than:
________________________________________________________________]1.

 

3.

[As of ____________________, the Fixed Charge Coverage Ratio is not less than
1.00 to 1.00]2

 

1 

Specify the details of any Default or Event of Default that is continuing, if
any, and any action taken or proposed to be taken with respect thereto.

2 

Applicable only during a Trigger Period. To be tested immediately upon the
commencement of any Trigger Period occurring after the Covenant Date and on the
last day of each fiscal quarter during the continuance of such Trigger Period.

 

 

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

 

 

4.

The Leverage Ratio is not greater than [3.75 to 1.00],[3.50 to 1.00] or [3.25 to
1.00] for the trailing twelve month period ending on the last day of [Month].

 

Very truly yours,

 

 

 

UNIVERSAL MANAGEMENT SOLUTIONS, INC.

 

 

 

By:

 

 

Name:

 

 

Its:

 

Treasurer

 

 

 

 

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

 

EXHIBIT 1.3

 

FORM OF COLLATERAL PLEDGE AGREEMENT

 

 

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

 

COLLATERAL PLEDGE AGREEMENT

This Collateral Pledge Agreement (this “Agreement”) dated as of August 10, 2018,
is made by (1) Universal Logistics Holdings, Inc., a Michigan corporation with
an address at 12755 E. 9 Mile Road, Warren, MI 48089, (2) Mason Dixon
Intermodal, Inc., a Michigan corporation with an address at 12755 E. 9 Mile
Road, Warren, MI 48089, (3) Fore Transportation, Inc., an Illinois corporation
with an address at 12755 E. 9 Mile Road, Warren, MI 48089, (4) LINC Logistics,
LLC, a Michigan limited liability company with an address at 12755 E. 9 Mile
Road, Warren, MI 48089, (5) LINC of Michigan, LLC, a Michigan limited liability
company with an address at 12755 E. 9 Mile Road, Warren, MI 48089, (6)
Diversified Contract Services, Inc., a Michigan corporation with an address at
12755 E. 9 Mile Road, Warren, MI 48089, (7) UTSI Finance, Inc., a
Michigan  corporation with an address at 12755 E. 9 Mile Road, Warren, MI 48089,
and (8) Southern Counties Express, Inc., a California corporation with an
address at 9750 Norwalk Boulevard, Santa Fe Springs, CA 90670 (collectively the
“Pledgors” and each a “Pledgor”), in favor of PNC Bank, National Association, as
agent for the benefit of Lenders (“Secured Party”).

Background

A.To induce Lenders (as defined below) to extend credit to Borrowers (as defined
below) pursuant to that certain Amended and Restated Revolving Credit, Term Loan
and Security Agreement dated as of even date herewith among Universal Logistics
Holdings, Inc., a corporation organized under the laws of the State of Michigan
(“Holdings”), Universal Truckload, Inc., a corporation organized under the laws
of the State of Delaware (“UTI”), Universal Dedicated, Inc., a corporation
organized under the laws of the State of Michigan (“UDI”), Mason Dixon
Intermodal, Inc. (dba Universal Intermodal Services, Inc.), a corporation
organized under the laws of the State of Michigan (“Mason Dixon”), Logistics
Insight Corp., a corporation organized under the laws of the State of Michigan
(“Logistics”), Universal Logistics Solutions International, Inc., a corporation
organized under the laws of the State of Illinois (“Solutions”), Universal
Specialized, Inc., a corporation organized under the laws of the State of
Michigan (“Specialized”), Cavalry Logistics, LLC, a limited liability company
organized under the laws of the State of Tennessee (“Cavalry”), Universal
Management Services, Inc., a corporation organized under the laws of the State
of Michigan (“Management Services”), Fore Transportation Inc., a corporation
organized under the laws of the State of Illinois (“Fore Transportation”), Fore
Transport, Inc., a corporation organized under the laws of the State of Illinois
(“Fore Transport”), 4 Cargo LLC, a limited liability company organized under the
laws of the State of Illinois (“4 Cargo”), Southern Counties Express, Inc., a
corporation organized under the laws of the State of California (“Southern
Counties Inc.”), and Aquarius Financial, Inc., a limited liability company
organized under the laws of the State of California (“Aquarius” and, together
with Holdings, UTI, UDI, Mason Dixon, Logistics, Solutions, Specialized,
Calvary, Management Services, Fore Transportation, Fore Transport, 4 Cargo,
Southern Counties Inc., and each Person joined thereto as a borrower from time
to time, collectively, the “Borrowers”, and each a “Borrower”), each Person
party thereto as a guarantor from time to time (collectively, the “Guarantors”,
and each a “Guarantor”), PNC BANK, NATIONAL ASSOCIATION (“PNC”) as a Revolving
Lender, STEEL CITY CAPITAL FUNDING, A DIVISION OF PNC BANK, NATIONAL ASSOCIATION
(“SCCF”), as a Term Loan Lender, the other financial institutions which are now
or which hereafter become a party thereto as

2

 

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

 

Revolving Lenders or Term Loan Lenders (collectively with all Revolving Lenders
and Term Loan Lenders party thereto as of the date hereof, the “Lenders” and
each, individually, a “Lender”) and Secured Party, as agent for the Lenders and
a Lender (as amended, restated, supplemented, or replaced from time to time, the
“Credit Agreement”), each Pledgor executes and delivers this Agreement to
Secured Party.  All capitalized terms used herein and not otherwise defined
shall have the same meanings assigned to such terms in the Credit Agreement.

B.This Agreement is given and is intended to provide additional security for the
Obligations.

C.Each Pledgor will derive economic benefit from the making of loans and
extension of credit to Borrowers under the Credit Agreement.

NOW THEREFORE, for other good and sufficient consideration, the receipt of which
is hereby acknowledged, each Pledgor, intending to be legally bound hereby,
covenants and agrees as follows:

I.To secure the payment and performance of the Obligations, each Pledgor does
hereby grant to Secured Party and Secured Party’s successors and assigns, for
the benefit of Lenders, a continuing lien on, and security interest in, the
Equity Interests described on Schedule I attached hereto and made a part hereof,
together with any additions, exchanges, replacements, and substitutions
therefor, dividends and distributions with respect thereto, and the proceeds
thereof, including, without limitation, all of the stock and/or membership
interests or units in the corporations and/or  limited liability companies
listed on Schedule I attached hereto, whether now owned or hereafter acquired by
Pledgor or in which Pledgor now or hereafter has any rights, options or
warrants, together with any certificates representing such interest and all
rights (but none of the obligations) under or arising out of the applicable
Organizational Documents of such corporation and/or limited liability company
(collectively, the “Pledged Collateral”).

II.The pledge and security interest described herein shall continue in effect to
secure all Obligations from time to time incurred or arising unless and until
all Obligations (other than (i) contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted and (ii) Letters of Credit
so long as Agent has received the cash collateral with respect to the Letters of
Credit to the extent required pursuant to the Credit Agreement), have been
indefeasibly paid and satisfied in full in cash, the Lenders’ commitment to make
Advances has been terminated and the Credit Agreement has been terminated.

III.Each Pledgor hereby represents and warrants to and covenants with Secured
Party that:

A.Except as pledged herein and except as permitted by the Credit Agreement,
Pledgor has not sold, assigned, transferred, pledged or granted any option or
security interest in or otherwise hypothecated the Pledged Collateral in any
manner whatsoever and the Pledged Collateral is pledged herewith free and clear
of any and all liens, security interests, encumbrances, claims, pledges,
restrictions, legends, and options other than Permitted Encumbrances;

B.Each Pledgor has the full power and authority to execute, deliver, and perform
under this Agreement and to pledge the Pledged Collateral hereunder;

3

 

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

 

C.This Agreement constitutes the legal, valid and binding obligation of each
Pledgor, enforceable against Pledgor in accordance with its terms, except as
such enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar Laws affecting creditors’ rights generally, and the pledge
of the Pledged Collateral referred to herein is not in violation of and shall
not (i) create any default under any agreement, undertaking or obligation of
such Pledgor or (ii) conflict with or violate any Applicable Law, regulation,
judgment, order or decree of any Governmental Body binding upon such Pledgor;

D.The Pledged Collateral has been duly and validly authorized and issued by each
issuer thereof and such Pledged Collateral is fully paid for and non-assessable;

E.Each Pledgor is pledging hereunder all of Pledgor’s interest and ownership in
the Equity Interests described on Schedule I attached hereto;

F.Except as permitted by the Credit Agreement, simultaneously upon execution and
delivery hereof, each Pledgor shall deliver to Secured Party all certificates
representing or evidencing the Pledged Collateral in the corporations and
limited liability companies listed on Schedule I hereto, accompanied by duly
executed instruments of transfer or assignments in blank, to be held by Secured
Party in accordance with the terms hereof, together with a copy of each
shareholder, member or operating agreement, as applicable in effect as of the
date hereof with respect to the Pledged Collateral;

G.Each Pledgor hereby confirms that Secured Party is authorized to file all
UCC-1 financing statements that are required under the UCC (as defined below) to
perfect any security interest granted hereunder;

H.There are no restrictions upon the voting rights associated with, or the
transfer of, any of the Pledged Collateral, except as provided by applicable
federal and state laws, the terms of the Organizational Documents of the
respective issuers and the Other Documents;

I.Each Pledgor has delivered to each entity listed on Schedule I attached
hereto, a Pledge Instruction, substantially in the form of Exhibit A attached
hereto, and has caused such entity to register the security interest granted
hereunder on its books and records and to deliver to Secured Party an
Acknowledgment of Registration Statement, substantially in the form of Exhibit B
attached hereto. Notwithstanding the foregoing, any failure of Pledgor to comply
with its understanding in this paragraph shall not impair, reduce or affect the
validity, enforceability or effectiveness of the pledge described herein; and

J.With respect to any Pledged Collateral that is issued from an entity that is
not a corporation (a “Non-Corporate Issuer”), either (x) such Non-Corporate
Issuer has not “opted-in” to Article 8 of the UCC with respect to the Equity
Interests issued by it or any other part of the Pledged Collateral by providing
in any of its certificate or articles of organization, partnership agreement,
operating agreement, limited liability company agreement or any other entity
governance document or any other document governing or evidencing the equity
interests issued by it or any other part of the Pledged Collateral that the
equity interests issued by it or any other part of the Pledged Collateral shall
be “securities” as governed by and defined in Article 8 of the UCC, or (y) such
Non-

4

 

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

 

Corporate Issuer has “opted-in” to Article 8 of the UCC, and such Pledgor shall
deliver to Secured Party all certificates evidencing the Equity Interests issued
by such Non-Corporate Issuer, together with an original executed instrument of
transfer endorsed in blank, within two (2) Business Days of the date first
written above.

IV.If an Event of Default occurs and is continuing under the Credit Agreement
then Secured Party may, at its sole option, or shall at the direction of
Required Lenders, exercise from time to time with respect to the Pledged
Collateral any and/or all rights and remedies available to it hereunder, under
the Credit Agreement and/or under the Uniform Commercial Code, or otherwise
available to Secured Party, at law or in equity, including, without limitation,
the right to dispose of the Pledged Collateral at public or private sale(s) or
other proceedings, and each Pledgor agrees that, if permitted by law, Secured
Party or Secured Party’s nominee(s) may become the purchaser at any such sale(s)
at any prices and upon such terms as the Secured Party deems advisable, in its
discretion. To the extent permitted by Applicable Law, each Pledgor hereby
waives all of its rights of redemption from any such sale(s).

V.In addition to all other rights granted to Secured Party herein or otherwise
available at law or in equity, Secured Party shall have the following rights,
each of which may be exercised in Secured Party’s sole discretion (but without
any obligation to do so), or at the direction of Required Lenders, at any time
during the continuance of an Event of Default under the Credit Agreement,
without further consent of Pledgors: (i) the right to transfer the whole or any
part of the Pledged Collateral into the name of itself or its nominee or to
conduct a sale of the Pledged Collateral pursuant to the UCC or pursuant to any
other Applicable Law; (ii) the right to vote the Pledged Collateral (including
the right to vote for board members or the equivalent thereof); (iii) the right
to notify , in the name of such Pledgor, the Persons obligated on any of the
Pledged Collateral to make payment to Secured Party of any amounts due or to
become due thereon; (iv) the right to release, surrender or exchange any of the
Pledged Collateral at any time, or to compromise any dispute with respect to the
same, (v) the right to exercise all management rights with respect to such
Issuer, (vi) in the case of any Pledged Collateral consisting of a general
partner interest in a partnership, the right to exercise all powers and rights
as a general partner with respect to the management, operations and control of
the business and affairs of the applicable Issuer, and (vii) in the case of any
Pledged Collateral consisting of the membership/limited liability company
interests of a managing member in a limited liability company, the right to
exercise all powers and rights as a managing member with respect to the
management, operations and control of the business and affairs of the applicable
Issuer.  Secured Party may proceed against the Pledged Collateral, or any other
collateral securing the Obligations, in any order, and against such Pledgor and
any other obligor (including, without limitation, the Borrowers, jointly and/or
severally), in any order to satisfy the Obligations.  To the extent permitted by
Applicable Law, each Pledgor waives and releases any right to require Secured
Party to first collect any of the Obligations secured hereby from any other
collateral of Pledgors or any other party (including, without limitation, the
Borrowers) securing the Obligations under any theory of marshalling of assets,
or otherwise.  All rights and remedies of Secured Party are cumulative, not
alternative.

VI.Each Pledgor hereby irrevocably appoints Secured Party,  Secured Party’s
nominee, or any other Person whom the Secured Party may designate, as Pledgors’
attorney-in-fact, subject to the terms hereof, during the continuance of an
Event of Default under the Credit Agreement at Secured Party’s option: (i) to
effectuate the transfer of the Pledged Collateral on

5

 

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

 

the books of the issuer thereof to the name of Secured Party or to the name of
Secured Party’s nominee, designee or assignee; (ii) to endorse and collect
checks , notes, drafts, money orders and other forms of payment or security
payable to such Pledgor representing distributions or other payments on the
Pledged Collateral; (iii) to demand, collect, receive and sue for any and all
sums or properties which may become due or payable in respect of the Pledged
Collateral of such Pledgor with full power to settle, adjust or compromise any
claim thereunder as fully as such Pledgor could do itself; and (iv) to carry out
the terms and provisions hereof. Each Pledgor hereby ratifies and approves all
acts of such attorney-in-fact made in accordance with this Agreement and agrees
that such attorney-in-fact will not be liable for any such acts, omissions,
errors of judgment or mistakes of law or fact other than by such Person’s bad
faith, gross negligence or willful misconduct.

VII.The proceeds of any Pledged Collateral received by Secured Party at any time
during the continuance of an Event of Default, whether from the sale of Pledged
Collateral or otherwise, may be applied to or on account of the Obligations in
accordance with the Credit Agreement.  In addition, Secured Party may, in its
discretion, apply any such proceeds to or on account of the payment of all
reasonable costs, fees and expenses (including, without limitation, reasonable
attorneys’ fees) which may be incurred by Secured Party to the extent so
provided in the Credit Agreement.

VIII.Each Pledgor recognizes that Secured Party may be unable to effect, or may
effect only after such delay which would adversely affect the value that might
be realized from the Pledged Collateral, a public sale of all or part of the
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (“Securities Act”) and may be compelled to resort to one
or more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof.  Each
Pledgor agrees that any such private sale may be at prices and on terms less
favorable to Secured Party or the seller than if sold at public sales, and
therefore recognizes and confirms that such private sales shall not be deemed to
have been made in a commercially unreasonable manner solely because they were
made privately.  Each Pledgor agrees that Secured Party has no obligation to
delay the sale of any such securities for the period of time necessary to permit
the issuer of such securities to register such securities for public sale under
the Securities Act.

IX.In the event that any reclassification, readjustment or other change is made
or declared in the capital structure of any entity listed on Schedule I attached
hereto or Pledgor acquires or in any other manner receives additional Equity
Interests in any such entity, or any option included within the Pledged
Collateral is exercised, any and all new, substituted or additional Equity
Interests, or other securities, issued by reason of any such change or exercise,
shall be delivered to and held by Secured Party under the terms hereof in the
same manner as the Pledged Collateral originally pledged hereunder; provided,
however, that with respect to any entity listed on Schedule I attached hereto
that is a Foreign Subsidiary, the Pledged Collateral shall not in any case
represent more than 66% (or such greater percentage that, due to a change in
Applicable Law after the date hereof, (x) could not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Pledgor and (y) could not reasonably be expected to cause any material
adverse tax consequences) of such Equity Interests in such entity.  No
distribution on account of Pledged Collateral may be paid to or retained by
Pledgor unless expressly permitted in the Credit Agreement.

6

 

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

 

X.So long as no Event of Default has occurred and is continuing under the Credit
Agreement, and, until Secured Party notifies Pledgors in writing of its intent
to exercise its rights hereunder, each Pledgor shall retain the sole right to
vote the Pledged Collateral and exercise all rights of ownership with respect to
all corporate or company questions for all purposes not inconsistent with the
terms hereof.

XI.Secured Party shall have no obligation to take any steps to preserve, protect
or defend the rights of Pledgors or Secured Party in the Pledged Collateral
against other parties.  Secured Party shall have no obligation to sell or
otherwise deal with the Pledged Collateral at any time for any reason, whether
or not upon request of a Pledgor, and whether or not the value of the Pledged
Collateral, in the opinion of Secured Party or such Pledgor, is more or less
than the aggregate amount of the Obligations secured hereby, and any such
refusal or inaction by Secured Party shall not be deemed a breach of any duty
which Secured Party may have under law to preserve the Pledged
Collateral.  Except as provided by Applicable Law, no duty, obligation or
responsibility of any kind is intended to be delegated to or assumed by Secured
Party at any time with respect to the Pledged Collateral.

XII.To the extent Secured Party is required by law to give a Pledgor prior
notice of any public or private sale, or other disposition of the Pledged
Collateral, such Pledgor agrees that ten (10) Business Days prior written notice
to such Pledgor shall be a commercially reasonable and sufficient notice of such
sale or other intended disposition.  Each Pledgor further recognizes and agrees
that if the Pledged Collateral, or a portion thereof, threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Pledgor shall not be entitled to any prior notice of sale or other intended
disposition. Each Pledgor agrees that, in connection with any sale or other
disposition of the Pledged Collateral, Secured Party may, at Secured Party’s
option, disclaim any and all warranties regarding the Pledged Collateral and
that any such disclaimer shall constitute commercially reasonable conduct on the
part of Secured Party.

XIII.Each Pledgor shall defend, protect, indemnify, pay and save harmless
Secured Party and its officers, directors, Affiliates, attorneys, employees, and
agents in accordance with Section 16.5 of the Credit Agreement, which Section is
incorporated herein in its entirety by reference, mutatis mutandis.

XIV.For purposes hereof, to the extent permitted by Applicable Law, each Pledgor
hereby waives notice of (a) acceptance of this Agreement, (b) the existence and
incurrence from time to time of any Obligations under the Credit Agreement, (c)
the existence of any Event of Default, the making of demand, or the taking of
any action by Secured Party under the Credit Agreement and (d) demand and
default hereunder.

XV.To the extent permitted by Applicable Law, each Pledgor hereby consents and
agrees that Secured Party may at any time or from time to time pursuant to the
Credit Agreement (a) extend or change the time of payment and/or the manner,
place or terms of payment of any and all Obligations, (b) supplement, amend,
restate, supersede, or replace the Credit Agreement or any Other Documents, (c)
renew, extend, modify, increase or decrease loans and extensions of credit under
the Credit Agreement, (d) modify the terms and conditions under which loans and
extensions of credit may be made under the Credit Agreement, (e) settle,
compromise or grant releases for any Obligations and/or any person or persons
liable for payment of any Obligations, (f) exchange, release, surrender, sell,
subordinate or compromise any collateral of any party now or hereafter securing
any of the Obligations and (g) apply any and all payments received from

7

 

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

 

any source by Secured Party at any time against the Obligations in accordance
with the Credit Agreement; all of the foregoing in such manner and upon such
terms as Secured Party may determine and without notice to or further consent
from Pledgor and without impairing or modifying the terms and conditions of this
Agreement which shall remain in full force and effect.

XVI.This Agreement shall remain in full force and effect and shall not be
limited, impaired or otherwise affected in any way by reason of (a) any delay in
making demand on any Pledgor or  Borrower for, or delay in enforcing or failure
to enforce, performance or payment of the Obligations or such Pledgor’s
obligations hereunder, (b) any failure, neglect or omission on Secured Party’s
part to perfect any lien upon, protect, exercise rights against, or realize on,
any property of Pledgors or any other party securing the Obligations, (c) any
failure to obtain, retain or preserve, or the lack of prior enforcement of, any
rights against any Person or Persons (including any Borrower or any Pledgor) or
in any property, (d) the invalidity or unenforceability of any Obligations or
rights in any Collateral under the Credit Agreement, (e) the existence or
nonexistence of any defenses which may be available to Borrowers, or any of
them, with respect to the Obligations other than payment in full, (f) the
commencement of any bankruptcy, reorganization, liquidation, dissolution or
receivership proceeding or case filed by or against any Borrower, or (g) any
acceptance by Secured Party of any other security for guaranty upon any of the
Obligations.

XVII.Each Pledgor covenants and agrees that such Pledgor shall not, without the
prior written consent of Secured Party, sell, encumber or grant any lien,
security interest or option on or with respect to any of the Pledged Collateral
unless and to the extent permitted by the Credit Agreement.

XVIII.Each Pledgor hereby authorizes and instructs each issuer of the Pledged
Collateral to comply with any instruction received by it from Secured Party in
writing that states that an Event of Default has occurred and is continuing and
without any other or further instructions from such Pledgor, and such Pledgor
agrees that each such issuer shall be fully protected in so complying.

XIX.Unless Pledgor and a Non-Corporate Issuer comply with Section 3(j)(y), each
Pledgor covenants and agrees that such Pledgor shall not permit any
Non-Corporate Issuer to either (a) adopt any amendments or modifications to any
of its certificate or articles of organization, partnership agreement, operating
agreement or any other entity governance document or any other document
governing or evidencing the membership interests or equity interests issued by
such Non-Corporate Issuer (or any other part of the Pledged Collateral related
thereto) to provide that such membership interests or equity interest (or any
other part of the Pledged Collateral related thereto) shall be “securities” as
governed by and defined in Article 8 of the UCC or (b) issue any certificates to
evidence the membership interests or equity interests issued by any such
Non-Corporate Issuer (or any other part of the Pledged Collateral related
thereto).

XX.Any failure of or delay by Secured Party to exercise any right or remedy
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right or remedy at any other time.

XXI.This Agreement together with the Credit Agreement and the Other Documents
constitutes the entire agreement between the parties hereto regarding the
subject matter hereof and may be modified only by a written instrument signed by
each Pledgor and Secured Party.

8

 

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

 

XXII.This Agreement shall be governed by and construed in accordance with the
laws of the State of Michigan.  Any judicial proceeding brought by or against
Pledgors with respect to any of the Obligations, this Agreement, the Other
Documents or any related agreement may be brought in any court of competent
jurisdiction in the State of Michigan, United States of America, and, by
execution and delivery of this Agreement, each Pledgor accepts for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement.  Each Pledgor
hereby waives personal service of any and all process upon it and consents that
all such service of process may be made by certified or registered mail (return
receipt requested) directed to such Pledgor at its address set forth in the
preamble above and service so made shall be deemed completed five (5) days after
the same shall have been so deposited in the mails of the United States of
America, or, at the Secured Party’s option, by service upon Borrowing Agent
which each Pledgor irrevocably appoints as Pledgors’ agent for the purpose of
accepting service within the State of Michigan.  Nothing herein shall affect the
right to serve process in any manner permitted by law or shall limit the right
of Secured Party or any Lender to bring proceedings against Pledgors in the
courts of any other jurisdiction.  Each Pledgor waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  Each Pledgor waives the right to remove any judicial proceeding
brought against such Pledgor in any state court to any federal court.  Any
judicial proceeding by a Pledgor against Secured Party or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in, or whose district encompasses and
includes, the County of Macomb, State of Michigan.

XXIII.All communications which Secured Party may provide to each Pledgor herein
shall be sent to such Pledgor at the address set forth in the preamble above,
and will be delivered in the same fashion as required by Section 16.6 of the
Credit Agreement.

XXIV.This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.

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

9

 

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

 

XXVI.This Agreement may be executed in original counterparts each of which
counterpart shall be deemed an original document but all of which counterparts
together shall constitute the same agreement.  Execution and delivery via
facsimile or PDF shall bind the parties.

 

 

[Remainder of Page Intentionally Left Blank]

 

10

 

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

 

IN WITNESS WHEREOF, this Collateral Pledge Agreement has been executed and
delivered as of the date first set forth above.

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

MASON DIXON INTERMODAL, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

FORE TRANSPORTATION, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

LINC LOGISTICS, LLC

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

LINC OF MICHIGAN, LLC

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

DIVERSIFIED CONTRACT SERVICES, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

[SIGNATURE PAGE TO COLLATERAL PLEDGE AGREEMENT]

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

 

 

UTSI FINANCE, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

[SIGNATURE PAGE TO COLLATERAL PLEDGE AGREEMENT]

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

 

SCHEDULE I

Pledged Collateral

The following Pledged Collateral is hereby pledged by each Pledgor to Secured
Party pursuant to the Collateral Pledge Agreement to which this Schedule is
attached:

 

Pledged Shares

 

Name of Entity

State of Incorporation

Certificate No. of Shares to be Pledged

Number of Shares Pledged

Percentage of Shares Pledged

Number of Shares Issued and Outstanding

Class of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pledged Membership Interests

 

Name of Entity

State of Formation

Certificate No. of Units to be Pledged

Number of Units Pledged

Percentage of Interests Pledged

Number of Units Issued and Outstanding

Class of Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Schedule I to Collateral Pledge Agreement]

074658.18056/109966529v.5

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

 

EXHIBIT A

Pledge Instruction

BY THIS PLEDGE INSTRUCTION, dated as of the [__] day of August, 2018,
[____________________], a _________________ corporation (“Pledgor”), hereby
instructs _________________, a _________________ (the “Company”), to register a
pledge and security interest in, of and to all of Pledgor’s right, title and
interest in the Equity Interests of the Company now and hereafter owned by
Pledgor and pledged (“Interests”) in favor of PNC Bank, National Association, as
agent for the benefit of lenders (“Secured Party”) in accordance with that
certain Collateral Pledge Agreement dated as of August [__], 2018 by Pledgor in
favor of Secured Party.

Pledge Instructions.  The Company is hereby instructed by Pledgor to register
all of Pledgor’s right, title and interest in and to all of Pledgor’s Interests
as subject to a pledge and security interest in favor of Secured Party who, upon
such registration of pledge, shall become a registered pledgee of the Interests
with all rights incident thereto.

Acknowledgment of Registration Statement.  The Company is hereby instructed by
Pledgor to promptly inform Secured Party of the registration of the pledge by
sending an Acknowledgment of Registration Statement, substantially in the form
of Exhibit B attached hereto, to Secured Party at the address of Secured Party
set forth in that certain Amended and Restated Revolving Credit, Term Loan and
Security Agreement dated as of August [__], 2018, among Universal Logistics
Holdings, Inc., a corporation organized under the laws of the State of Michigan
(“Holdings”), Universal Truckload, Inc., a corporation organized under the laws
of the State of Delaware (“UTI”), Universal Dedicated, Inc., a corporation
organized under the laws of the State of Michigan (“UDI”), Mason Dixon
Intermodal, Inc. (dba Universal Intermodal Services, Inc.), a corporation
organized under the laws of the State of Michigan (“Mason Dixon”), Logistics
Insight Corp., a corporation organized under the laws of the State of Michigan
(“Logistics”), Universal Logistics Solutions International, Inc., a corporation
organized under the laws of the State of Illinois (“Solutions”), Universal
Specialized, Inc., a corporation organized under the laws of the State of
Michigan (“Specialized”), Cavalry Logistics, LLC, a limited liability company
organized under the laws of the State of Tennessee (“Cavalry”), Universal
Management Services, Inc., a corporation organized under the laws of the State
of Michigan (“Management Services”), Fore Transportation Inc., a corporation
organized under the laws of the State of Illinois (“Fore Transportation”), Fore
Transport, Inc., a corporation organized under the laws of the State of Illinois
(“Fore Transport”), 4 Cargo LLC, a limited liability company organized under the
laws of the State of Illinois (“4 Cargo”), Southern Counties Express, Inc., a
corporation organized under the laws of the State of California (“Southern
Counties Inc.”), and Aquarius Financial, Inc., a limited liability company
organized under the laws of the State of California (“Aquarius” and, together
with Holdings, UTI, UDI, Mason Dixon, Logistics, Solutions, Specialized,
Calvary, Management Services, Fore Transportation, Fore Transport, 4 Cargo,
Southern Counties Inc., and each Person joined thereto as a borrower from time
to time, collectively, the “Borrowers”, and each a “Borrower”), each Person
party thereto as a guarantor from time to time (collectively, the “Guarantors”,
and each a “Guarantor”), the financial institutions party thereto as lenders and
Secured Party, as agent for the benefit of Lenders and as a Lender (as amended,
restated, supplemented, or replaced from time to time, the “Credit
Agreement”).  All capitalized terms used herein and not otherwise defined shall
have the same meanings assigned to such terms in the Credit Agreement.

Warranties of Pledgor.  Pledgor hereby represents and warrants to Secured Party
that Pledgor is (i) an appropriate Person to originate this instruction, and
(ii) entitled to effect the instruction here given.

[signature page follows]

 

(Exhibit A to Collateral Pledge Agreement)

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

 

IN WITNESS WHEREOF, Pledgor has caused this Pledge Instruction to be duly
executed and delivered as of the date first above written.

 

[__________________]

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

(Pledge Instruction)

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

EXHIBIT B

Acknowledgment of Registration Statement

THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE TIME
OF ISSUANCE.  DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHTS ON THE
RECIPIENT.  THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.

 

PNC Bank, National Association

__________________

__________________

 

On the [__] day of August, 2018, the undersigned (the “Company”), caused the
pledge of the Interests (as defined in Exhibit A of that certain Collateral
Pledge Agreement dated as of the date hereof and executed by Pledgor in favor of
PNC Bank, National Association (“Secured Party”) in the Company, which as of the
date hereof is ___% of the total outstanding Equity Interests of the Company,
pledged by [_________________] (the “Pledgor”), in favor of Secured Party, to be
registered on the books and records of the Company.  There are no other liens,
restrictions or adverse claims to which the interests identified herein are, or
may be subject, as of the date hereof except to the extent permitted by that
certain Amended and Restated Revolving Credit, Term Loan and Security Agreement
dated as of August [__], 2018 among Universal Logistics Holdings, Inc., a
corporation organized under the laws of the State of Michigan (“Holdings”),
Universal Truckload, Inc., a corporation organized under the laws of the State
of Delaware (“UTI”), Universal Dedicated, Inc., a corporation organized under
the laws of the State of Michigan (“UDI”), Mason Dixon Intermodal, Inc. (dba
Universal Intermodal Services, Inc.), a corporation organized under the laws of
the State of Michigan (“Mason Dixon”), Logistics Insight Corp., a corporation
organized under the laws of the State of Michigan (“Logistics”), Universal
Logistics Solutions International, Inc., a corporation organized under the laws
of the State of Illinois (“Solutions”), Universal Specialized, Inc., a
corporation organized under the laws of the State of Michigan (“Specialized”),
Cavalry Logistics, LLC, a limited liability company organized under the laws of
the State of Tennessee (“Cavalry”), Universal Management Services, Inc., a
corporation organized under the laws of the State of Michigan (“Management
Services”), Fore Transportation Inc., a corporation organized under the laws of
the State of Illinois (“Fore Transportation”), Fore Transport, Inc., a
corporation organized under the laws of the State of Illinois (“Fore
Transport”), 4 Cargo LLC, a limited liability company organized under the laws
of the State of Illinois (“4 Cargo”), Southern Counties Express, Inc., a
corporation organized under the laws of the State of California (“Southern
Counties Inc.”), and Aquarius Financial, Inc., a limited liability company
organized under the laws of the State of California (“Aquarius” and, together
with Holdings, UTI, UDI, Mason Dixon, Logistics, Solutions, Specialized,
Calvary, Management Services, Fore Transportation, Fore Transport, 4 Cargo,
Southern Counties Inc., and each Person joined thereto as a borrower from time
to time, collectively, the “Borrowers”, and each a “Borrower”), each Person
party thereto as a guarantor from time to time (collectively, the “Guarantors”,
and each a “Guarantor”), the financial institutions party thereto from time to
time as lenders (the “Lenders”) and Secured Party, as agent for the benefit of
the Lenders and as a Lender.

[signature page follows]

 

(Exhibit B to Collateral Pledge Agreement)

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

 

The Company hereby agrees that it will comply with instructions originated by
Secured Party, in accordance with that certain Collateral Pledge Agreement dated
as of August [__], 2018 executed by Pledgor in favor of Secured Party, without
further consent by or from Pledgor.

 

[__________________]

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

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

EXHIBIT 2.1(a)

FORM OF AMENDED AND RESTATED REVOLVING CREDIT NOTE

 

$150,000,000

 

Date:___________ ___, 20__

This Amended and Restated Revolving Credit Note (this "Note") is executed and
delivered under and pursuant to the terms of that certain Amended and Restated
Revolving Credit, Term Loan and Security Agreement, dated the date hereof (as
amended, restated, supplemented or modified from time to time, the "Credit
Agreement"), by and among Universal Logistics Holdings, Inc., Universal
Truckload, Inc., Universal Dedicated, Inc., Mason Dixon Intermodal, Inc.,
Logistics Insight Corp., Universal Logistics Solutions International, Inc.,
Universal Specialized, Inc., Cavalry Logistics, LLC, Universal Management
Services, Inc., Fore Transportation Inc., Fore Transport, Inc., 4 Cargo LLC,
Southern Counties Express, Inc., and Aquarius Financial Inc. (collectively the
“Borrowers” and each a “Borrower”), each Person party thereto as a guarantor
from time to time (collectively, the “Guarantors”, and each a “Guarantor”), PNC
Bank, National Association ("PNC"), as a Revolving Lender and as a Term Loan
Lender, Steel City Capital Funding, a division of PNC (“SCCF”), as a Term Loan
Lender, the other financial institutions which are now or which hereafter become
a party thereto as Revolving Lenders or Term Loan Lenders (collectively with
Revolving Lenders and Term Loan Lenders, the “Lenders” and each, individually, a
“Lender”) and PNC, as agent for the Lenders (PNC, in such capacity, the
“Agent”).  Capitalized terms not otherwise defined herein shall have the
meanings provided in the Credit Agreement.

FOR VALUE RECEIVED, Borrowers hereby jointly and severally promise to pay to the
order of PNC Bank, National Association, at the office of Agent located at 1900
East Ninth Street, 9th Floor, Cleveland, Ohio 44114, or at such other place as
Agent may from time to time designate to the Borrowers in writing:

(i)the principal sum of ONE HUNDRED FIFTY MILLION and 00/100 Dollars
($150,000,000) or, if different from such amount, the unpaid principal balance
of PNC Bank, National Association's Commitment Percentage of the Revolving
Advances as may be due and owing under the Credit Agreement, payable in
accordance with the provisions of the Credit Agreement and subject to
acceleration upon the occurrence of an Event of Default under the Credit
Agreement or earlier termination of the Credit Agreement pursuant to the terms
thereof; and

(ii)interest on the principal amount of this Note from time to time outstanding
until such principal amount is paid in full at the applicable Revolving Interest
Rate in accordance with the provisions of the Credit Agreement.  In no event,
however, shall interest exceed the maximum interest rate permitted by law.  Upon
and after the occurrence of an Event of Default, and during the continuance
thereof, at the option of Agent or at the direction of Required Lenders,
interest shall be payable at the Default Rate.

This Note is one of the Notes referred to in the Credit Agreement and is secured
by the Liens granted pursuant to the Credit Agreement and the Other Documents,
is entitled to the benefits of the Credit Agreement and the Other Documents and
is subject to all of the agreements, terms and conditions therein contained.

 

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

This Note is subject to mandatory prepayment and may be voluntarily prepaid, in
whole or in part, on the terms and conditions set forth in the Credit Agreement.

If an Event of Default under Section 10.7 of the Credit Agreement shall occur,
then this Note shall become immediately due and payable, without notice,
together with reasonable attorneys' fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.  If any other
Event of Default shall occur under the Credit Agreement or any of the Other
Documents, then this Note may, as provided in the Credit Agreement, be declared
to be immediately due and payable, without notice, together with reasonable
attorneys' fees, if the collection hereof is placed in the hands of an attorney
to obtain or enforce payment hereof.

This Note shall be construed and enforced in accordance with the laws of the
State of Michigan.

To the extent permitted by applicable law, each Borrower expressly waives any
presentment, demand, protest, notice of protest, or notice of any kind except as
expressly provided in the Credit Agreement.

Lender may at any time pledge all or any portion of its rights under the Credit
Agreement or any of the Other Documents including any portion of this Note to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. § 341.  No such pledge or enforcement thereof
shall release Lender from its obligations under the Credit Agreement or any of
the Other Documents.

WAIVER OF TRIAL BY JURY.  THE UNDERSIGNED HEREBY EXPRESSLY, KNOWINGLY AND
VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY,
AND THE UNDERSIGNED WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THIS NOTE, THE CREDIT AGREEMENT OR ANY OF THE
OTHER DOCUMENTS.

This Note amends, restates and replaces, but does not extinguish the obligations
under or constitute a novation of, that certain Revolving Credit Note dated
December 23, 2015 executed by Universal Truckload, Inc., Universal Dedicated,
Inc., Mason Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics
Solutions International, Inc., Universal Specialized, Inc., Cavalry Logistics,
LLC, and Universal Management Services, Inc., in favor of Agent in the original
principal amount of $120,000,000 (the “Existing Note”).  All obligations under
the Existing Note shall continue as obligations under this Note.

 

[INTENTIONALLY LEFT BLANK]

 

 

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

 

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned hereby
executed this Note on the date set forth above.

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL DEDICATED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

MASON DIXON INTERMODAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

LOGISTICS INSIGHT CORP.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

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

 

CAVALRY LOGISTICS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORTATION, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORT, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

4 CARGO LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

AQUARIUS FINANCIAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

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

EXHIBIT 2.3

FORM OF TERM NOTE

 

$30,000,000

 

Date:___________ ___, 20__

 

This Term Note (this "Note") is executed and delivered under and pursuant to the
terms of that certain Amended and Restated Revolving Credit, Term Loan and
Security Agreement, dated the date hereof (as amended, restated, supplemented or
modified from time to time, the "Credit Agreement"), by and among Universal
Logistics Holdings, Inc., Universal Truckload, Inc., Universal Dedicated, Inc.,
Mason Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics
Solutions International, Inc., Universal Specialized, Inc., Cavalry Logistics,
LLC, Universal Management Services, Inc., Fore Transportation Inc., Fore
Transport, Inc., 4 Cargo LLC, Southern Counties Express, Inc., and Aquarius
Financial Inc. (collectively the “Borrowers” and each a “Borrower”), each Person
party thereto as a guarantor from time to time (collectively, the “Guarantors”,
and each a “Guarantor”), PNC Bank, National Association ("PNC"), as a Revolving
Lender and as a Term Loan Lender, Steel City Capital Funding, a division of PNC
(“SCCF”), as a Term Loan Lender, the other financial institutions which are now
or which hereafter become a party thereto as Revolving Lenders or Term Loan
Lenders (collectively with Revolving Lenders and Term Loan Lenders, the
“Lenders” and each, individually, a “Lender”) and PNC, as agent for the Lenders
(PNC, in such capacity, the “Agent”).  Capitalized terms not otherwise defined
herein shall have the meanings provided in the Credit Agreement.

FOR VALUE RECEIVED, Borrowers hereby jointly and severally promise to pay to the
order of Steel City Capital Funding, at the office of Agent located at 1900 East
Ninth Street, 9th Floor, Cleveland, Ohio 44114, or at such other place as Agent
may from time to time designate to the Borrowers in writing:

(i)the principal sum of THIRTY MILLION and 00/100 Dollars ($30,000,000) or, if
different from such amount, the unpaid principal balance of Steel City Capital
Funding's Commitment Percentage of the Term Loan as may be due and owing under
the Credit Agreement, payable in accordance with the provisions of the Credit
Agreement and subject to acceleration upon the occurrence of an Event of Default
under the Credit Agreement or earlier termination of the Credit Agreement
pursuant to the terms thereof; and

(ii)interest payable in cash on the principal amount of this Note from time to
time outstanding until such principal amount is paid in full at the applicable
Alternative Base Rate or LIBOR Rate in accordance with the provisions of the
Credit Agreement.  In no event, however, shall interest exceed the maximum
interest rate permitted by law.  Upon and after the occurrence of an Event of
Default, and during the continuance thereof, at the option of Agent or at the
direction of Required Lenders, interest shall be payable at the Default Rate.

(iii)interest payable in kind which shall accrue daily at a rate equal to two
(2%) per annum and shall be compounded monthly on an amount equal to the sum of
(x) the aggregate principal amount of the Term Loan as of the last day of the
preceding month and (y) the aggregate sum of all PIK Interest accrued from the
Closing Date through and including the last day of such month.

 

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

This Note is one of the Notes referred to in the Credit Agreement and is secured
by the Liens granted pursuant to the Credit Agreement and the Other Documents,
is entitled to the benefits of the Credit Agreement and the Other Documents and
is subject to all of the agreements, terms and conditions therein contained.

This Note is subject to mandatory prepayment and may be voluntarily prepaid, in
whole or in part, on the terms and conditions set forth in the Credit Agreement.

If an Event of Default under Section 10.7 of the Credit Agreement shall occur,
then this Note shall become immediately due and payable, without notice,
together with reasonable attorneys' fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.  If any other
Event of Default shall occur under the Credit Agreement or any of the Other
Documents, then this Note may, as provided in the Credit Agreement, be declared
to be immediately due and payable, without notice, together with reasonable
attorneys' fees, if the collection hereof is placed in the hands of an attorney
to obtain or enforce payment hereof.

This Note shall be construed and enforced in accordance with the laws of the
State of Michigan.

To the extent permitted by applicable law, each Borrower expressly waives any
presentment, demand, protest, notice of protest, or notice of any kind except as
expressly provided in the Credit Agreement.

Lender may at any time pledge all or any portion of its rights under the Credit
Agreement or any of the Other Documents including any portion of this Note to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. § 341.  No such pledge or enforcement thereof
shall release Lender from its obligations under the Credit Agreement or any of
the Other Documents.

WAIVER OF TRIAL BY JURY.  THE UNDERSIGNED HEREBY EXPRESSLY, KNOWINGLY AND
VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY,
AND THE UNDERSIGNED WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THIS NOTE, THE CREDIT AGREEMENT OR ANY OF THE
OTHER DOCUMENTS.

 

[INTENTIONALLY LEFT BLANK]

 

 

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

 

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned hereby
executed this Note on the date set forth above.

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL DEDICATED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

MASON DIXON INTERMODAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

LOGISTICS INSIGHT CORP.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

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

CAVALRY LOGISTICS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORTATION, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORT, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

4 CARGO LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

AQUARIUS FINANCIAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

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

EXHIBIT 2.4(a)

FORM OF AMENDED AND RESTATED SWING LOAN NOTE

 

$15,000,000

 

Date:___________ ___, 20__

 

This Amended and Restated Swing Loan Note (this "Note") is executed and
delivered under and pursuant to the terms of that certain Amended and Restated
Revolving Credit, Term Loan and Security Agreement, dated the date hereof (as
amended, restated, supplemented or modified from time to time, the "Credit
Agreement"), by and among Universal Logistics Holdings, Inc., Universal
Truckload, Inc., Universal Dedicated, Inc., Mason Dixon Intermodal, Inc.,
Logistics Insight Corp., Universal Logistics Solutions International, Inc.,
Universal Specialized, Inc., Cavalry Logistics, LLC, Universal Management
Services, Inc., Fore Transportation Inc., Fore Transport, Inc., 4 Cargo LLC,
Southern Counties Express, Inc., and Aquarius Financial Inc. (collectively the
“Borrowers” and each a “Borrower”), each Person party thereto as a guarantor
from time to time (collectively, the “Guarantors”, and each a “Guarantor”), PNC
Bank, National Association ("PNC"), as a Revolving Lender and as a Term Loan
Lender, Steel City Capital Funding, a division of PNC (“SCCF”), as a Term Loan
Lender, the other financial institutions which are now or which hereafter become
a party thereto as Revolving Lenders or Term Loan Lenders (collectively with
Revolving Lenders and Term Loan Lenders, the “Lenders” and each, individually, a
“Lender”) and PNC, as agent for the Lenders (PNC, in such capacity, the
“Agent”).  Capitalized terms not otherwise defined herein shall have the
meanings provided in the Credit Agreement.

FOR VALUE RECEIVED, Borrowers hereby jointly and severally promise to pay to the
order of PNC Bank, National Association, at the office of Agent located at 1900
East Ninth Street, 9th Floor, Cleveland, Ohio 44114, or at such other place as
Agent may from time to time designate to the Borrowers in writing:

(i)the principal sum of FIFTEEN MILLION and 00/100 Dollars ($15,000,000) or, if
different from such amount, the unpaid principal balance of PNC Bank, National
Association's Commitment Percentage of the Revolving Advances as may be due and
owing under the Credit Agreement, payable in accordance with the provisions of
the Credit Agreement and subject to acceleration upon the occurrence of an Event
of Default under the Credit Agreement or earlier termination of the Credit
Agreement pursuant to the terms thereof; and

(ii)interest on the principal amount of this Note from time to time outstanding
until such principal amount is paid in full at the applicable Revolving Interest
Rate for Domestic Rate Loans in accordance with the provisions of the Credit
Agreement.  In no event, however, shall interest exceed the maximum interest
rate permitted by law.  Upon and after the occurrence of an Event of Default,
and during the continuance thereof, at the option of Agent or at the direction
of Required Lenders, interest shall be payable at the Default Rate.

This Note is the Swing Line Note as defined in the Credit Agreement and is
secured by the Liens granted pursuant to the Credit Agreement and the Other
Documents, is entitled to the benefits of the Credit Agreement and the Other
Documents and is subject to all of the agreements, terms and conditions therein
contained.

 

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

This Note is subject to mandatory prepayment and may be voluntarily prepaid, in
whole or in part, on the terms and conditions set forth in the Credit Agreement.

If an Event of Default under Section 10.7 of the Credit Agreement shall occur,
then this Note shall become immediately due and payable, without notice,
together with reasonable attorneys' fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.  If any other
Event of Default shall occur under the Credit Agreement or any of the Other
Documents, then this Note may, as provided in the Credit Agreement, be declared
to be immediately due and payable, without notice, together with reasonable
attorneys' fees, if the collection hereof is placed in the hands of an attorney
to obtain or enforce payment hereof.

This Note shall be construed and enforced in accordance with the laws of the
State of Michigan.

To the extent permitted by applicable law, each Borrower expressly waives any
presentment, demand, protest, notice of protest, or notice of any kind except as
expressly provided in the Credit Agreement.

Lender may at any time pledge all or any portion of its rights under the Credit
Agreement or any of the Other Documents including any portion of this Note to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. § 341.  No such pledge or enforcement thereof
shall release Lender from its obligations under the Credit Agreement or any of
the Other Documents.

WAIVER OF TRIAL BY JURY.  THE UNDERSIGNED HEREBY EXPRESSLY, KNOWINGLY AND
VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY,
AND THE UNDERSIGNED WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THIS NOTE, THE CREDIT AGREEMENT OR ANY OF THE
OTHER DOCUMENTS.

This Note amends, restates and replaces, but does not extinguish the obligations
under or constitute a novation of, that certain Swing Line Note dated December
23, 2015 executed by Universal Truckload, Inc., Universal Dedicated, Inc., Mason
Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics Solutions
International, Inc., Universal Specialized, Inc., Cavalry Logistics, LLC, and
Universal Management Services, Inc., in favor of Agent in the original principal
amount of $10,200,000 (the “Existing Note”).  All obligations under the Existing
Note shall continue as obligations under this Note.

 

[INTENTIONALLY LEFT BLANK]

 

 

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

 

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned hereby
executed this Note on the date set forth above.

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL DEDICATED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

MASON DIXON INTERMODAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

LOGISTICS INSIGHT CORP.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

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

 

CAVALRY LOGISTICS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORTATION, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORT, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

4 CARGO LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

AQUARIUS FINANCIAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

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

EXHIBIT 2.24

 

FORM OF LENDER JOINDER AGREEMENT

 

This LENDER JOINDER AGREEMENT (this “Agreement”), dated as of              ,
20___, to the Credit Agreement (as defined below) is by and among the party
identified as “New Lender” on the signature pages hereto (the “New Lender”),
Universal Logistics Holdings, Inc., Universal Truckload, Inc., Universal
Dedicated, Inc., Mason Dixon Intermodal, Inc., Logistics Insight Corp.,
Universal Logistics Solutions International, Inc., Universal Specialized, Inc.,
Cavalry Logistics, LLC, Universal Management Services, Inc., Fore Transportation
Inc., Fore Transport, Inc., 4 Cargo LLC, Southern Counties Express, Inc., and
Aquarius Financial, Inc. (collectively the “Borrowers” and each a “Borrower”),
each Person party thereto as a guarantor from time to time (collectively, the
“Guarantors”, and each a “Guarantor”), PNC Bank, National Association ("PNC"),
as a Revolving Lender and as a Term Loan Lender, Steel City Capital Funding, a
division of PNC (“SCCF”), as a Term Loan Lender, the other financial
institutions which are now or which hereafter become a party thereto as
Revolving Lenders or Term Loan Lenders (collectively with Revolving Lenders and
Term Loan Lenders, the “Lenders” and each, individually, a “Lender”) and PNC, as
agent for the Lenders (PNC, in such capacity, the “Agent”).  Capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Borrowers, the Lenders party thereto and the Agent entered into
that certain Amended and Restated Revolving Credit, Term Loan and Security
Agreement dated as of August [__], 2018 (as amended and modified from time to
time, the "Credit Agreement");

 

WHEREAS, the Borrowers have requested that the Revolving Commitments be
increased by $_____________ such that the Maximum Revolving Advance Amount will
be $________________;

 

WHEREAS, the New Lender has agreed to provide a Revolving Commitment on the
terms and conditions set forth herein and to become a Lender under the Credit
Agreement in connection therewith.

 

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

AGREEMENT

 

1.New Lender hereby agrees to provide a Revolving Commitment in the amount set
forth opposite such New Lender's name on Annex A hereto and the initial
Revolving Commitment Amount of such New Lender shall be as set forth therein.

 

2.New Lender (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Agreement and to consummate the

 

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

transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it is a Person to which assignments are permitted under Section
16.3 of the Credit Agreement, (iii) from and after the date of this Agreement,
it shall be bound by the provisions of the Credit Agreement as a Revolving
Lender thereunder and shall have the obligations of a Revolving Lender
thereunder, (iv) it has received a copy of the Credit Agreement, and has
received or has been accorded the opportunity to receive copies of the most
recent financial statements delivered pursuant to Section 9.7, 9.8, or 9.9
thereof, as applicable, and such other documents and information as it deems
appropriate to make its own credit analysis and decision to enter into this
Agreement, (v) it has, independently and without reliance upon the Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, and (vi) if it is a Foreign Lender, it has delivered any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the New Lender; and (b) agrees that
(i) it will, independently and without reliance on the 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 decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

3.The Borrowers agree that, as of the date hereof, New Lender shall (a) be a
party to the Credit Agreement and the other Loan Documents, (b) be a "Revolving
Lender" for all purposes of the Credit Agreement and the other Loan Documents,
and (c) have the rights and obligations of a Revolving Lender under the Credit
Agreement and the other Loan Documents.

 

4.The applicable address, facsimile number and electronic mail address of the
New Lender for purposes of Section 16.6 of the Credit Agreement are as set forth
in the New Lender's Administrative Questionnaire delivered by the New Lender to
the Agent on or before the date hereof or to such other address, facsimile
number and electronic mail address as shall be designated by the New Lender in a
notice to the Agent.

 

5.This Agreement shall become effective as of the date set forth above upon
satisfaction of the following conditions precedent:

 

(a)The Agent shall have received counterparts of this Agreement duly executed by
the Borrowers, the New Lender and Agent.

 

(b)The Agent shall have received all fees and other amounts required to be paid
on or prior to the date of this Agreement.

 

6.This Agreement may be executed in any number of counterparts and by the
various parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one contract. Delivery of an executed counterpart of this Agreement
by facsimile or other secure electronic format (.pdf) shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

 

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

7.This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Michigan.

 

 

[remainder of page intentionally left blank]

 

 

 

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

 

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

 

[NEW LENDER]

 

By:

 

 

Name:

 

 

Title:

 

 

 

PNC BANK, NATIONAL ASSOCIATION

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL DEDICATED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

MASON DIXON INTERMODAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

LOGISTICS INSIGHT CORP.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

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

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

CAVALRY LOGISTICS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORTATION, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORT, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

4 CARGO LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

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

 

SOUTHERN COUNTIES EXPRESS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

AQUARIUS FINANCIAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

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

 

EXHIBIT 5.5(b)

FINANCIAL PROJECTIONS

 

 

 

 

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

EXHIBIT 8.1(d)

FORM OF FINANCIAL CONDITION CERTIFICATE

Each of the undersigned, being first duly sworn on oath, hereby makes the
certifications set forth below, as of _____________, 20___, in their respective
capacities as authorized officers of Universal Logistics Holdings, Inc.,
Universal Truckload, Inc., Universal Dedicated, Inc., Mason Dixon Intermodal,
Inc., Logistics Insight Corp., Universal Logistics Solutions International,
Inc., Universal Specialized, Inc., Cavalry Logistics, LLC, Universal Management
Services, Inc., Fore Transportation, Inc., Fore Transport, Inc., 4 Cargo LLC,
Southern Counties Express, Inc., or Aquarius Financial, Inc., as applicable
(collectively the “Borrowers” and each a “Borrower”), as specified on the
signature page hereto:

1.I am the duly elected, qualified and acting Chief Financial Officer or
Treasurer of the applicable Borrower as specified on the signature page
hereto.  Such Borrower is a corporation or limited liability company, as the
case may be, duly organized, existing and in good standing under the laws of the
State of its incorporation or organization, as the case may be.

2.I am fully familiar with all of the business and financial affairs of such
Borrower, including, without limiting the generality of the foregoing, all of
the matters hereinafter described.

3.This Certificate is made and delivered to PNC BANK, NATIONAL ASSOCIATION
(“PNC”), each of the other financial institutions (together with PNC,
collectively, the “Lenders”) named in or which hereafter become a party to the
Credit Agreement (as hereinafter defined) and PNC, as agent for Lenders (in such
capacity, “Agent”) pursuant to the terms of an Amended and Restated Revolving
Credit, Term Loan and Security Agreement among Borrowers, Guarantors, Agent and
Lenders (as amended, modified, restated or supplemented from time to time, the
“Credit Agreement”), for the purpose of inducing Agent and Lenders, now and from
time to time hereafter, to advance monies and extend credit and other financial
accommodations to Borrowers pursuant to the Credit Agreement (the Credit
Agreement, together with all notes, security agreements, mortgages, agreements,
guarantees, instruments and documents heretofore now and from time to time
hereafter executed by Borrowers and delivered to Agent and/or any Lender,
collectively, the “Loan Documents”).  I understand that you are relying on this
Certificate.  All capitalized terms used and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement.

4.I have reviewed the following and am fully familiar with the process pursuant
to which they were generated:

 

A.

Balance Sheet of Universal Logistics Holdings, Inc., and its consolidated
Subsidiaries attached hereto as Exhibit A (the “Balance Sheet”).

 

B.

Cash Flow Projections for the Borrowers attached hereto as Exhibit B
(“Projections”).

The Balance Sheet is accurate, complete and correct and fairly reflects in all
material respects the assets, liabilities and financial condition of Borrowers
as of the date prepared.  The Projections are based on underlying assumptions
which provide a reasonable basis for the

 

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

Projections and which reflect the Borrowers’ judgment, based on present
circumstances, of the most likely set of conditions and the Borrowers’ most
likely course of action for the period projected (it being acknowledged by Agent
and Lenders that projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by such projections
may differ from the projected results).  The Projections demonstrate that
Borrowers will have sufficient cash flow to enable it to pay their debts as they
mature.

5.Immediately following the execution of the Loan Documents and the consummation
of the transactions contemplated in connection therewith, the assets of Loan
Parties (taken as a whole) at a fair valuation and at their present fair
saleable value, will be in excess of the total amount of the liabilities of the
Loan Parties (take as a whole), the Loan Parties (taken as a whole) will be able
to pay their debts as they become due and the Loan Parties (taken as a whole)
will not have unreasonably small capital in order to carry on their businesses.3

6.The Loan Documents were and will be executed and delivered by Borrowers to
Agent and Lenders in good faith and in exchange for reasonably equivalent value
and fair consideration.

7.I have reviewed the relevant terms of the Loan Documents and have made or have
caused to be made under my supervision a review of the transactions and
conditions of Borrowers from the beginning of the accounting period covered by
the documents set forth in Paragraph 4 hereof to the date of this Certificate
and that such review has not disclosed the existence during such period of any
condition or event which constitutes or would constitute a Default or Event of
Default.

 

 

(Remainder of page intentionally left blank)

 

 

3 

Deleted language not required by Section 5.8(a).

 

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

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL TRUCKLOAD, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL DEDICATED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

MASON DIXON INTERMODAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

LOGISTICS INSIGHT CORP.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL LOGISTICS SOLUTIONS INTERNATIONAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL SPECIALIZED, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

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

 

CAVALRY LOGISTICS, LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

UNIVERSAL MANAGEMENT SERVICES, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORTATION, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

FORE TRANSPORT, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

4 CARGO LLC

 

By:

 

 

Name:

 

 

Title:

 

 

 

SOUTHERN COUNTIES EXPRESS, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

AQUARIUS FINANCIAL, INC.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

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

EXHIBIT A

BALANCE SHEET

 

 

 

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

 

EXHIBIT B

PROJECTIONS

 

 

 

 

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

EXHIBIT 16.3

FORM OF COMMITMENT TRANSFER SUPPLEMENT

COMMITMENT TRANSFER SUPPLEMENT, dated as of ______________ __, 201_, among
________________ (the "Transferor Lender"), each Purchasing Lender executing
this Commitment Transfer Supplement (each, a "Purchasing Lender"), and PNC Bank,
National Association ("PNC") as agent for the Lenders (as defined below) under
the Credit Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, in accordance with Section 16.3 of the Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated August [__], 2018 (as from time
to time further amended, restated, supplemented or otherwise modified in
accordance with the terms thereof, the "Credit Agreement") among Universal
Logistics Holdings, Inc., Universal Truckload, Inc., Universal Dedicated, Inc.,
Mason Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics
Solutions International, Inc., Universal Specialized, Inc., Cavalry Logistics,
LLC, Universal Management Services, Inc., Fore Transportation Inc., Fore
Transport, Inc., 4 Cargo LLC, Southern Counties Express, Inc., and Aquarius
Financial, Inc. (collectively the “Borrowers” and each a “Borrower”), each
Person party thereto as a guarantor from time to time (collectively, the
“Guarantors”, and each a “Guarantor”), PNC Bank, National Association ("PNC"),
as a Revolving Lender and as a Term Loan Lender, Steel City Capital Funding, a
division of PNC (“SCCF”), as a Term Loan Lender, the other financial
institutions which are now or which hereafter become a party thereto as
Revolving Lenders or Term Loan Lenders (collectively with Revolving Lenders and
Term Loan Lenders, the “Lenders” and each, individually, a “Lender”) and PNC, as
agent for the Lenders (PNC, in such capacity, the “Agent”), this Commitment
Transfer Supplement is being executed and delivered by the Transferor Lender and
each Purchasing Lender, and consented to by Agent [and Borrowing Agent]4 in
accordance with Section 16.3 of the Credit Agreement;

WHEREAS, each Purchasing Lender wishes to become a Revolving Lender party to the
Credit Agreement; and

WHEREAS, the Transferor Lender is selling and assigning to each Purchasing
Lender, rights, obligations and commitments under the Credit Agreement.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1.All capitalized terms used herein which are not defined shall have the
meanings given to them in the Credit Agreement,

2.Upon receipt by Agent of four (4) counterparts of this Commitment Transfer
Supplement, to each of which is attached a fully completed Schedule I, and each
of which has been executed by the Transferor Lender and Agent, Agent will
transmit to Transferor Lender and each Purchasing Lender a Transfer Effective
Notice, substantially in the form of Schedule II to

 

4 

If required by the terms of the Credit Agreement.

 

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

this Commitment Transfer Supplement (a "Transfer Effective Notice"). Such
Transfer Effective Notice shall set forth, inter alia, the date on which the
transfer effected by this Commitment Transfer Supplement shall become effective
(the "Transfer Effective Date"), which date shall not be earlier than the first
(1st) Business Day following the date such Transfer Effective Notice is
received. From and after the Transfer Effective Date, each Purchasing Lender
shall be a Lender party to the Credit Agreement for all purposes thereof.

3.At or before 12:00 Noon (________, ________ time) on the Transfer Effective
Date each Purchasing Lender shall pay to Transferor Lender, in immediately
available funds, an amount equal to the purchase price, as agreed between
Transferor Lender and such Purchasing Lender (the "Purchase Price"), of the
portion of the Revolving Advances being purchased by such Purchasing Lender
(such Purchasing Lender's "Purchased Percentage") of the outstanding Revolving
Advances and other amounts owing to the Transferor Lender under the Credit
Agreement and the Other Documents. Effective upon receipt by Transferor Lender
of the Purchase Price from a Purchasing Lender, Transferor Lender hereby
irrevocably sells assigns and transfers to such Purchasing Lender, without
recourse, representation or warranty, and each Purchasing Lender hereby
irrevocably purchases, takes and assumes from Transferor Lender, such Purchasing
Lender's Purchased Percentage of the Revolving Advances and other amounts owing
to the Transferor Lender under the Credit Agreement and the Other Documents
together with all instruments, documents and collateral security pertaining
thereto.

4.Transferor Lender has made arrangements with each Purchasing Lender with
respect to (i) the portion, if any, to be paid, and the date or dates for
payment, by Transferor Lender to such Purchasing Lender of any fees heretofore
received by Transferor Lender pursuant to the Credit Agreement prior to the
Transfer Effective Date and (ii) the portion, if any, to be paid, and the date
or dates for payment, by such Purchasing Lender to Transferor Lender of fees or
interest received by such Purchasing Lender pursuant to the Credit Agreement
from and after the Transfer Effective Date.

5.(a)  All principal payments that would otherwise be payable from and after the
Transfer Effective Date to or for the account of Transferor Lender pursuant to
the Credit Agreement and the Other Documents with regard to the Revolving
Advances shall, instead, be payable to or for the account of Transferor Lender
and Purchasing Lender, as the case may be, in accordance with their respective
interests as reflected in this Commitment Transfer Supplement.

 (b)  All interest, fees and other amounts that would otherwise accrue for the
account of Transferor Lender from and after the Transfer Effective Date pursuant
to the Credit Agreement and the Other Documents with regard to the Revolving
Advances shall, instead, accrue for the account of, and be payable to,
Transferor Lender and Purchasing Lender, as the case may be, in accordance with
their respective interests as reflected in this Commitment Transfer Supplement.
In the event that any amount of interest, fees or other amounts with regard to
the Revolving Advances accruing prior to the Transfer Effective Date was
included in the Purchase Price paid by any Purchasing Lender, Transferor Lender
and each Purchasing Lender will make appropriate arrangements for payment by
Transferor Lender to such Purchasing Lender of such amount upon receipt thereof
from the Borrowers.

 

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

6.Concurrently with the execution and delivery hereof, Transferor Lender will
provide to each Purchasing Lender conformed copies of the Credit Agreement and
all related documents delivered to Transferor Lender.

7.Each of the parties to this Commitment Transfer Supplement agrees that at any
time and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the purposes of
this Commitment Transfer Supplement.

8.By executing and delivering this Commitment Transfer Supplement, Transferor
Lender and each Purchasing Lender confirm to and agree with each other and Agent
and Lenders as follows: (i) other than the representation and warranty that it
is the legal and beneficial owner of the interest being assigned hereby free and
clear of any adverse claim, Transferor Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, the Other Documents or any other instrument or
document furnished pursuant thereto; (ii) Transferor Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Loan Parties or the performance or observance by Loan
Parties of any of their Obligations under the Credit Agreement, the Other
Documents or any other instrument or document furnished pursuant hereto; (iii)
each Purchasing Lender confirms that it has received a copy of the Credit
Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment Transfer Supplement; (iv)
each Purchasing Lender will, independently and without reliance upon Agent,
Transferor Lender or any other Lenders and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (v)
each Purchasing Lender appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to Agent by the terms thereof; (vi) each Purchasing Lender agrees
that it will perform all of its respective obligations as set forth in the
Credit Agreement to be performed by each as a Lender; and (vii) each Purchasing
Lender represents and warrants to Transferor Lender, Lenders, Agent and the
Borrowers that it is either (x) entitled to the benefits of an income tax treaty
with the United States of America that provides for an exemption from the United
States withholding tax on interest and other payments made by Loan Parties under
the Credit Agreement and the Other Documents or (y) is engaged in trade or
business within the United States of America.

9.Schedule I hereto sets forth the revised Commitment Percentages of Transferor
Lender and the Commitment Percentage of each Purchasing Lender as well as
administrative information with respect to each Purchasing Lender.

10.This Commitment Transfer Supplement shall be governed by, and construed in
accordance with, the laws of the State of Michigan.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

 

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

IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed and delivered by their respective duly authorized
officers on the date set forth above.

 

as Transferor Lender

 

By:

 

 

Name:

 

 

Title:

 

 

 

as a Purchasing Lender

 

By:

 

 

Name:

 

 

Title:

 

 

 

Consented to as of the date set forth above:

 

PNC BANK, NATIONAL ASSOCIATION
as Agent

 

By:

 

 

Name:

 

 

Title:

 

 

 

[UNIVERSAL MANAGEMENT SERVICES, INC.

as Borrowing Agent

 

By:

 

 

Name:

 

 

Title:

 

]5

 

 

 

 

 

 

5 

If required by the terms of the Credit Agreement.

 

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

SCHEDULE I TO COMMITMENT TRANSFER SUPPLEMENT

LIST OF OFFICES, ADDRESSES FOR NOTICES AND COMMITMENT AMOUNTS

(Transferor Lender)

Revised Revolving Commitment Amount

$

 

 

 

 

 

 

 

 

 

 

Revised Revolving Commitment Percentage

 

 

%

 

 

 

 

 

 

 

(Purchasing Lender)

Revolving Commitment Amount

$

 

 

 

 

 

 

 

 

 

 

Revolving Commitment Percentage

 

 

%

 

 

 

 

 

 

 

Purchasing Lender's Address for Notices

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

Telephone:

 

Telecopier:

 

 

 

 

 

 

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

 

SCHEDULE II TO COMMITMENT TRANSFER SUPPLEMENT

(Form of Transfer Effective Notice)

To:  ___________________________________________, as Transferor Lender and
________________________________, as Purchasing Lender:

The undersigned, as Agent under the Amended and Restate Revolving Credit, Term
Loan and Security Agreement dated August [__], 2018 (as from time to time
further amended, restated, supplemented or otherwise modified in accordance with
the terms thereof, the "Credit Agreement") among Universal Logistics Holdings,
Inc., Universal Truckload, Inc., Universal Dedicated, Inc., Mason Dixon
Intermodal, Inc., Logistics Insight Corp., Universal Logistics Solutions
International, Inc., Universal Specialized, Inc., Cavalry Logistics, LLC,
Universal Management Services, Inc., Fore Transportation Inc., Fore Transport,
Inc., 4 Cargo LLC, Southern Counties Express, Inc., and Aquarius Financial, Inc.
(collectively the “Borrowers” and each a “Borrower”),the Guarantors party
thereto, PNC Bank, National Association ("PNC") and various other financial
institutions from time to time (PNC and such other financial institutions are
each, a "Lender" and collectively, the "Lenders"), and PNC, as administrative
and collateral agent for the Lenders (in such capacity, the "Agent"),
acknowledges receipt of four (4) executed counterparts of a completed Commitment
Transfer Supplement in the form attached hereto. [Note: Attach copy of
Commitment Transfer Supplement].  Terms defined in such Commitment Transfer
Supplement are used herein as therein defined.

Pursuant to such Commitment Transfer Supplement, you are advised that the
Transfer Effective Date will be ___________ ___, 201_.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

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

 

PNC BANK, NATIONAL ASSOCIATION

as Agent

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACCEPTED FOR RECORDATION

IN REGISTER:

 

 

 

 

 

 

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

 

EXHIBIT 16.4

FORM OF DOVER AGREEMENT

(see attached)