Exhibit 10.25

Execution Version

 

 

QUEST RESOURCE MANAGEMENT GROUP, LLC

 

 

 

 

 

 

LOAN, SECURITY AND GUARANTY AGREEMENT

Dated: February 24, 2017

$22,000,000

 

 

 

 

 

 

CITIZENS BANK, NATIONAL ASSOCIATION,

Individually and as Administrative Agent and Collateral Agent

for any Lender which is or becomes a party hereto

 

 

Citizens Bank, National Association, as Sole Arranger and Sole Bookrunner

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TABLE OF CONTENTS

 

          Page   SECTION 1. DEFINED TERMS      1  

1.1

   Definitions      1  

1.2

   Other Terms      26  

1.3

   Certain Matters of Construction      26  

1.4

   Changes in GAAP      26  

SECTION 2. CREDIT FACILITY

     27  

2.1

   Revolving Credit Loans      27  

2.2

   Letters of Credit      29  

2.3

   Term Loan      29  

SECTION 3. INTEREST, FEES AND CHARGES

     30  

3.1

   Interest      30  

3.2

   Computation of Interest and Fees      31  

3.3

   Fee Letter      31  

3.4

   Letter of Credit Fees      31  

3.5

   Unused Line Fee      32  

3.6

   [Reserved]      32  

3.7

   Reimbursement of Expenses      32  

3.8

   Bank Charges      32  

3.9

   Audits; Appraisals      33  

3.10

   Payment of Charges      33  

3.11

   Taxes      33  

3.12

   Acknowledgement and Consent to Bail-In of EEA Financial Institutions      35
 

SECTION 4. LOAN ADMINISTRATION

     36  

4.1

   Procedures for Borrowing and LIBOR Option      36  

4.2

   Payments      39  

4.3

   Mandatory and Optional Prepayments      40  

4.4

   Application of Payments and Collections      42  

4.5

   All Loans to Constitute One Obligation      43  

4.6

   Loan Account      44  

4.7

   Statements of Account      44  

4.8

   Increased Costs      44  

4.9

   Basis for Determining Interest Rate Inadequate      44  

4.10

   Sharing of Payments, Etc.      45  

4.11

   Defaulting Lender      45  

SECTION 5. TERM AND TERMINATION

     47  

5.1

   Term of Agreement      47  

 

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TABLE OF CONTENTS

(continued)

 

          Page  

5.2

   Termination      47   SECTION 6. SECURITY INTERESTS      48  

6.1

   Security Interest in Collateral      48  

6.2

   Other Collateral      50  

6.3

   Lien Perfection; Further Assurances      51  

6.4

   Lien on Realty      51   SECTION 7. COLLATERAL ADMINISTRATION      52  

7.1

   General      52  

7.2

   Administration of Accounts      53  

7.3

   [Reserved]      55  

7.4

   Administration of Equipment      55  

7.5

   Payment of Charges      55   SECTION 8. REPRESENTATIONS AND WARRANTIES     
55  

8.1

   General Representations and Warranties      55  

8.2

   Continuous Nature of Representations and Warranties      62  

8.3

   Survival of Representations and Warranties      63  

SECTION 9. COVENANTS AND CONTINUING AGREEMENTS

     63  

9.1

   Affirmative Covenants      63  

9.2

   Negative Covenants      68  

9.3

   Specific Financial Covenants      75  

SECTION 10. CONDITIONS PRECEDENT

     75  

10.1

   Initial Loans      75  

10.2

   Conditions Precedent to All Loans and Credit Accommodations      78  
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT      78  

11.1

   Events of Default      78  

11.2

   Acceleration of the Obligations      81  

11.3

   Other Remedies      81  

11.4

   Setoff and Sharing of Payments      82  

11.5

   Remedies Cumulative; No Waiver      83   SECTION 12. AGENTS      83  

12.1

   Authorization and Action      83  

12.2

   Agents’ Reliance, Etc.      84  

12.3

   Citizens and Affiliates      85  

12.4

   Lender Credit Decision      85  

12.5

   Indemnification      85  

12.6

   Rights and Remedies to Be Exercised by Administrative Agent Only      86  

 

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TABLE OF CONTENTS

(continued)

 

          Page  

12.7

   Agency Provisions Relating to Collateral      86  

12.8

   Resignation of Agent; Appointment of Successor      87  

12.9

   Audit and Examination Reports; Disclaimer by Lenders      87  

12.10

   Administrative Agent’s Right to Purchase Commitments      88  

SECTION 13. MISCELLANEOUS

     88  

13.1

   Power of Attorney      88  

13.2

   Indemnity      89  

13.3

   Amendment and Waivers      89  

13.4

   Severability      91  

13.5

   Right of Sale; Assignment; Participations      91  

13.6

   Cumulative Effect; Conflict of Terms      93  

13.7

   Execution in Counterparts      94  

13.8

   Notices and Communications      94  

13.9

   Consent      95  

13.10

   Credit Inquiries      96  

13.11

   Time of Essence      96  

13.12

   Entire Agreement      96  

13.13

   Interpretation      96  

13.14

   Confidentiality      96  

13.15

   GOVERNING LAW; CONSENT TO JURISDICTION, FORUM AND SERVICE OF PROCESS      96
 

13.16

   WAIVERS BY THE LOAN PARTIES      97  

13.17

   Advertisement      98  

13.18

   Patriot Act Notice      98  

SECTION 14. CROSS-GUARANTY BY BORROWERS.

     98  

14.1

   Cross-Guaranty      98  

14.2

   Waivers by Borrowers      99  

14.3

   Benefit of Guaranty      99  

14.4

   Waiver of Subrogation, Etc.      99  

14.5

   Election of Remedies      99  

14.6

   Limitation      100  

14.7

   Contribution with Respect to Guaranty Obligations      100  

14.8

   Liability Cumulative      101  

14.9

   Keepwell      101  

SECTION 15. GUARANTY

     101  

15.1

   Guaranty of the Obligations      101  

15.2

   Contribution by Guarantors      102  

15.3

   Payment by Guarantors      102  

15.4

   Liability of Guarantors Absolute      103  

 

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TABLE OF CONTENTS

(continued)

 

          Page  

15.5

   Waivers by Guarantors      104  

15.6

   Guarantors’ Rights of Subrogation, Contribution, etc.      105  

15.7

   Subordination of Other Obligations      106  

15.8

   Continuing Guaranty      106  

15.9

   Authority of Guarantors or Borrowers      106  

15.10

   Financial Condition of Borrowers      106  

15.11

   Bankruptcy, etc.      107  

 

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit 2.1

  

Form of Revolving Credit Note

Exhibit 2.3

  

Form of Term Loan Note

Exhibit 3.11

  

Form of U.S. Tax Compliance Certificate

Exhibit 9.1.3

  

Form of Compliance Certificate

Exhibit 9.1.4

  

Form of Borrowing Base Certificate

Exhibit 13.5

  

Form of Assignment and Acceptance

Exhibit 13.17

  

Form of Release Form – Corporate Name/Logo Reuse

Schedule 6.1

  

Commercial Tort Claims

Schedule 7.1.1

  

Business Locations

Schedule 8.1.1

  

Jurisdictions in which any Borrower is Authorized to do Business

Schedule 8.1.4

  

Capital Structure

Schedule 8.1.5

  

Names; Organization

Schedule 8.1.13

  

Brokers’ Fees

Schedule 8.1.14

  

Patents, Trademarks, Copyrights and Licenses

Schedule 8.1.16

  

Environmental

Schedule 8.1.17

  

Contracts Restricting Right to Incur Debts

Schedule 8.1.18

  

Litigation

Schedule 8.1.20

  

Pension Plans

Schedule 8.1.22

  

Labor Relations

Schedule 8.1.23

  

Leases

Schedule 9.2.2

  

Existing Indebtedness

Schedule 9.2.4

  

Existing Liens

Schedule 9.2.10

  

Existing Investments

Schedule 9.2.14

  

Existing Restrictive Agreements

List of Exhibits and Schedules

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LOAN, SECURITY AND GUARANTY AGREEMENT

THIS LOAN, SECURITY AND GUARANTY AGREEMENT (this “Agreement”) is made as of this
24th day of February, 2017, by and among Citizens Bank, National Association
(“Citizens”), individually as a Lender, as administrative agent (in such
capacity, “Administrative Agent”) for itself and any other financial institution
which is or becomes a party hereto as a lender (each such financial institution,
including Citizens, is referred to hereinafter individually as a “Lender” and
collectively as the “Lenders”), and as collateral agent (in such capacity,
“Collateral Agent”) for the Lenders, Quest Resource Management Group, LLC, a
Delaware limited liability company (“Quest”), Landfill Diversion Innovations,
L.L.C., a Delaware limited liability company (“Landfill”, and together with
Quest and each hereafter arising Subsidiary of any Borrower and each other
Person joined hereto as a “Borrower”, individually a “Borrower” and collectively
“Borrowers”), and each of Quest Resource Holding Corporation, a Nevada
corporation (“Holding”), and Earth911, Inc., a Delaware corporation (“Parent”,
and together with Holding, individually a “Guarantor” and collectively,
“Guarantors”).

SECTION 1.DEFINED TERMS

1.1    Definitions. When used herein: (a) the terms Account, Certificated
Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document,
Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of
Credit Rights, Payment Intangibles, Proceeds, Security, Security Entitlement,
Software, Supporting Obligations, Tangible Chattel Paper and Uncertificated
Security have the respective meanings assigned thereto under the UCC; (b) all
terms reflecting Collateral having the meanings assigned thereto under the UCC
shall be deemed to mean such Property, whether now owned or hereafter created or
acquired by any Loan Party or in which such Loan Party now has or hereafter
acquires any interest; and (c) the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):

Account Debtor – any Person who is or may become obligated under or on account
of any Account, Contract Right, Chattel Paper or General Intangible.

Adjusted EBITDA - for any period, Consolidated Net Income for such period, plus
or minus, as applicable, to the extent deducted or added in determining such
Consolidated Net Income, the sum, without duplication, of:

(i) Interest Expense,

(ii) income taxes, net of any tax credits or other tax benefits received,

(iii) depreciation, amortization and, to the extent they do not result in a cash
charge or expense in any future period, other non-cash charges and expenses,

(iv) non-cash stock-based compensation,

(v) charges related to the impairment of goodwill,

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(vi) unusual or non-recurring expenses or losses and charges related to any
restructuring, including severance charges not to exceed $500,000 during such
period,

(vii) non-cash deductions or charges to net income attributable to purchase
accounting adjustments reasonably acceptable to Administrative Agent and made in
accordance with GAAP,

(viii) transaction expenses related to the Closing Date Transactions in an
aggregate amount not to exceed $500,000 during such period, and

(ix) non-recurring costs, fees, expenses and charges related to any consummated
Permitted Acquisition in an aggregate amount not to exceed $1,000,000 during
such period.

For the purposes of calculating Adjusted EBITDA during any period in which a
Permitted Acquisition has occurred, Adjusted EBITDA for such period shall be
calculated after giving pro forma effect thereto as if such Permitted
Acquisition occurred on the first day of such period.

Administrative Agent – as defined in the preamble to this Agreement and any
successor in that capacity appointed pursuant to Section 12.8.

Affiliate – a Person (other than a Subsidiary): (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, a Person; (ii) which beneficially owns or holds 10% or more
of any class of the Voting Stock of a Person; or (iii) 10% or more of the Voting
Stock (or in the case of a Person which is not a corporation, 10% or more of the
equity interest) of which is beneficially owned or held by a Person or a
Subsidiary of a Person.

Agent – each of Administrative Agent and Collateral Agent, both individually and
collectively.

Aggregate Loan Commitment – with respect to any Lender, the amount of such
Lender’s Revolving Credit Commitment plus such Lender’s Term Loan Commitment.

Aggregate Payments – as defined in Section 15.2.

Aggregate Percentage – with respect to each Lender, the percentage equal to the
quotient of (i) such Lender’s Aggregate Loan Commitment divided by (ii) the
total of all Aggregate Loan Commitments.

Aggregate Revolving Extensions – at any time, the sum of (i) the outstanding
principal balance of all Revolving Credit Loans plus (ii) the LC Amount.

Agreement – as defined in the preamble to this Agreement, including all Exhibits
and Schedules thereto, as each of the same may be amended from time to time.

ALTA Survey – a survey prepared in accordance with the standards adopted by the
American Land Title Association and the American Congress on Surveying and
Mapping in 1997, known as the “Minimum Standard Detail Requirements of Land
Title Surveys” and

 

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certified to Administrative Agent in a manner reasonably acceptable to
Administrative Agent. The ALTA Survey shall be in sufficient form to satisfy the
requirements of the applicable title insurance company to provide extended
coverage over survey defects and shall also show the location of all easements,
utilities, and covenants of record, dimensions of all improvements,
encroachments from any adjoining property, and certify as to the location of any
flood plain area affecting the subject real estate.

Anti-Terrorism Laws – any laws relating to terrorism or money laundering,
including the Patriot Act.

Applicable Law – all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.

Applicable Margin – (i) as to Revolving Credit Loans, from the Closing Date to,
but not including, the first Adjustment Date (as hereinafter defined) the
percentages set forth below as Level I and thereafter as hereinafter specified,
and (ii) as to the Term Loan, 3.00% as to Term LIBOR Loans and 2.00% as to Term
Base Rate Loans.

The Applicable Margin as to Revolving Credit Loans will be adjusted on the first
day of each fiscal quarter, commencing on October 1, 2017 (each such date an
“Adjustment Date”), effective prospectively, by reference to the applicable
“Financial Measurement” (as defined below) for the quarter most recently ending
in accordance with the following:

 

Level

  

Financial Measurement

   Base Rate
Revolving
Credit Loans   LIBOR Revolving
Credit Loans

I

   less than 33.3%    1.50%   2.50%

II

   greater than or equal to 33.3% but not greater than 66.7%    1.25%   2.25%

III

   equal to or greater than 66.7%    1.00%   2.00%

For purposes hereof, “Financial Measurement” shall mean the Quarterly Average
Availability Percentage

Assignment and Acceptance Agreement – an assignment and acceptance agreement in
substantially the form of Exhibit 13.5 hereto pursuant to which a Lender assigns
to another Lender all or any portion of any of such Lender’s Revolving Credit
Commitment or Term Loan Commitment, as permitted pursuant to the terms hereof.

 

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Availability – the difference derived when the amount of the Aggregate Revolving
Extensions at any time is subtracted from the Line Cap at such time.

Bail-In Action - the exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

Bail-In Legislation - with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

Bank – Citizens Bank, National Association.

Bankruptcy Code – Title 11 of the United States Code.

Base Rate – for any day the greatest of: (i) the rate of interest announced or
otherwise established by Administrative Agent from time to time as its prime
commercial rate, or its equivalent, for U.S. Dollar loans to borrowers located
in the United States as in effect on such day, with any change in the Base Rate
resulting from a change in such prime commercial rate to be effective as of the
date of the relevant change in such prime commercial rate (it being acknowledged
and agreed that such rate may not be Administrative Agent’s best or lowest
rate), (ii) the sum of (x) the rate determined by Administrative Agent to be the
average (rounded upward, if necessary, to the next higher of 1/100 of 1%) of the
rates per annum quoted to Administrative Agent at approximately 10:00 a.m. (New
York time) (or as soon thereafter as is practicable) on such day (or, if such
day is not a Business Day, on the immediately preceding Business Day) by two or
more Federal funds brokers selected by Administrative Agent for sale to
Administrative Agent at face value of Federal funds in the secondary market in
an amount equal or comparable to the principal amount owed to Administrative
Agent for which such rate is being determined, plus (y) 0.50% and (iii) the sum
of (x) the then applicable LIBOR Lending Rate for one month interest periods and
(y) 1.00%.

Base Rate Loans – the Base Rate Revolving Credit Loan and/or the Base Rate Term
Loan.

Base Rate Revolving Credit Loan – any Revolving Credit Loan for the periods when
the rate of interest applicable to such Revolving Credit Loan is calculated by
reference to the Base Rate.

Base Rate Term Loan – that portion of the Term Loan for the periods when the
rate of interest applicable to such portion of the Term Loan is calculated by
reference to the Base Rate.

Borrower(s) – as defined in the preamble to this Agreement and each other Person
who is joined as a “Borrower” hereto.

Borrower Representative – Quest.

Borrowing Base – as at any date of determination thereof, an amount equal to the
sum of:

 

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(i)    85% of the net amount of Eligible Accounts; plus

(ii)    85% of the net amount of Eligible Unbilled Accounts; provided that the
amount included in the Borrowing Base pursuant to this clause (ii) shall not at
any time constitute more than 20% of the aggregate Borrowing Base; minus

(iii)    Reserves.

For purposes hereof, the net amount of Eligible Accounts or Eligible Unbilled
Accounts at any time shall be the face amount of such Eligible Accounts or
Eligible Unbilled Accounts less any and all returns, rebates, discounts (which
may, at Collateral Agent’s option, be calculated on shortest terms), credits,
allowances or excise taxes of any nature at any time issued, owing, claimed by
Account Debtors, granted, outstanding or payable in connection with such
Accounts at such time.

Borrowing Base Certificate – a certificate by a responsible officer of Borrower
Representative, on its own behalf and on behalf of all other Loan Parties,
substantially in the form of Exhibit 9.1.4 setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to Collateral Agent. All calculations
of the Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Loan Parties and certified to
Collateral Agent; provided that Collateral Agent shall have the right to review
and adjust, in the exercise of its reasonable credit judgment, any such
calculation after giving notice thereof to the Loan Parties, (1) to reflect its
reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that Collateral Agent determines that such
calculation is not in accordance with this Agreement.

Business Day – any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws the State of New York or is a day on which banking
institutions located in the State of New York are closed and, when used in
connection with LIBOR Loans, shall also exclude any day on which banks are
closed for dealings in U.S. dollar deposits in the London interbank market.

Capital Expenditures – expenditures made (including any capitalized software
development costs) or liabilities incurred for the acquisition of any fixed
assets or improvements, replacements, substitutions or additions thereto which
have a useful life of more than one year, including the total principal portion
of Capitalized Lease Obligations.

Capitalized Lease Obligation – any obligations under a lease that is required to
be capitalized for financial reporting purposes in accordance with GAAP.

Cash Dominion Suspension Period – any period after the first anniversary of the
Closing Date (i) which shall begin on the date each of the following is true and
accurate: (a) Excess Liquidity Percentage has been at least 20% for thirty
(30) consecutive Business Days, (b) Excess Liquidity has been at least
$4,000,000 on each of such thirty (30) consecutive Business Days, (c) the Fixed
Charge Coverage Ratio for the most recently ended trailing twelve calendar month
period shall be equal to or greater than 1.10 to 1.00, and (d) no Default or
Event of Default shall exist on the last Business Day of such consecutive thirty
(30) Business Day period, and (ii)

 

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which shall end on the date which is earliest to occur of: (a) Excess Liquidity
Percentage being less than 20%; (b) Excess Liquidity is less than $4,000,000;
(c) the Fixed Charge Coverage Ratio for the most recently ended trailing twelve
calendar month period shall be less than 1.10 to 1.00; or (d) the occurrence of
a Default or Event of Default.

Cash Equivalents – (i) direct obligations of the United States of America, or
any agency thereof or obligations guaranteed by the United States of America;
provided that such obligations mature within one year from the date of
acquisition thereof, (ii) certificates of deposit, time deposits and bankers’
acceptances maturing within one year from the date of acquisition and overnight
bank deposits, in each case, which are issued by a commercial bank organized
under the laws of the United States or any state or district thereof, rated A-1
(or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and
(unless issued by a Lender) not subject to offset rights, (iii) commercial paper
rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of
acquisition and maturing not more than two hundred seventy (270) days from the
date of creation thereof, (iv) fully collateralized repurchase obligations with
a term of not more than thirty (30) days for underlying investments of the types
described in clause (i) and entered into with any bank meeting the
qualifications specified in clause (ii), and (v) shares of any money market fund
that has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, has net assets of at
least $500,000,000 and has the highest rating obtainable from either Moody’s or
S&P.

CERCLA – the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).

CFC – a Person that is a controlled foreign corporation under Section 957 of the
Code.

Change in Law – the adoption of any Applicable Law (whether or not having the
force of law), or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Administrative Agent or any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency. Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law” regardless of the date enacted, adopted or issued.

Citizens – as defined in the preamble to this Agreement.

Closing Date – the date on which all of the conditions precedent in Section 10
are satisfied or waived and the initial Loan is made or the initial Letter of
Credit is issued under this Agreement.

Closing Date Transactions – the initial incurrence of the Loans and other
Obligations hereunder and under the other Loan Documents.

 

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Code – the Internal Revenue Code of 1986.

Collateral – all of the Property and interests in Property described in
Section 6, and all other Property and interests in Property that now or
hereafter secure the payment and performance of any of the Obligations.

Collateral Agent – as defined in the preamble to this Agreement and any
successor in that capacity appointed pursuant to Section 12.8.

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

Compliance Certificate – as defined in subsection 9.1.3.

Computer Hardware and Software – all of any Borrower’s rights (including rights
as licensee and lessee) with respect to (i) computer and other electronic data
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever);
(iii) any firmware associated with any of the foregoing; and (iv) any
documentation for hardware, Software and firmware described in clauses (i), (ii)
and (iii) above, including flow charts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes.

Consolidated – the consolidation in accordance with GAAP of the accounts or
other items as to which such term applies.

Consolidated Net Income - with respect to any fiscal period, the net income (or
loss) of Holding determined in accordance with GAAP on a Consolidated basis;
provided, however, Consolidated Net Income shall not include: (a) the income (or
loss) of any Person (other than a Subsidiary of a Loan Party) in which the Loan
Parties or any of their wholly-owned Subsidiaries has an ownership interest
unless received in a cash distribution; (b) the income (or loss) of any Person
accrued prior to the date it became a Subsidiary of a Loan Party or is merged
into or consolidated with such Loan Party; (c) all amounts included in
determining net income (or loss) in respect of the write-up of assets on or
after the Closing Date, including the subsequent amortization or expensing of
the written-up portion of the assets; (d) extraordinary gains or losses as
defined under GAAP; and (e) gains or losses from asset dispositions (other than
sales of inventory).

Contract Right – any right of any Borrower to payment under a contract for the
sale or lease of goods or the rendering of services, which right is at the time
not yet earned by performance.

Contributing Guarantor – as defined in Section 15.2.

 

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Default – an event or condition the occurrence of which would, with the lapse of
time or the giving of notice, or both, become an Event of Default.

Default Rate – as defined in subsection 3.1.2.

Defaulting Lender – subject to Section 4.11, any Lender that (i) has failed to
(a) fund all or any portion of its Loans within two (2) Business Days of the
date such Loans were required to be funded hereunder, or (b) pay to
Administrative Agent, Issuing Bank, Swingline Lender or any other Lender any
other amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit or Swingline Loans) within two (2) Business
Days of the date when due, (ii) has notified the Loan Parties, Administrative
Agent, Issuing Bank or Swingline Lender in writing that it does not intend to
comply with its funding obligations hereunder, or has made a public statement to
that effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable Default or Event of Default,
shall be specifically identified in such writing or public statement) cannot be
satisfied), (iii) has failed, within three (3) Business Days after written
request by Administrative Agent or the Loan Parties, to confirm in writing to
Administrative Agent and the Loan Parties that it will comply with its
prospective funding obligations hereunder; provided, that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (iii) upon receipt of
such written confirmation by Administrative Agent and the Loan Parties, or
(iv) has, or has a direct or indirect parent company that has, (a) become the
subject of a proceeding under any Insolvency Law or (b) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance
Corporation or any other Governmental Authority acting in such a capacity or
(c) become the subject of a Bail-In Action; provided, that a Lender shall not be
a Defaulting Lender solely by virtue of the ownership or acquisition of any
equity interest in that Lender or any direct or indirect parent company thereof
by a Governmental Authority so long as such ownership interest does not result
in or provide such Lender with immunity from the jurisdiction of courts within
the United States of America or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender. Any determination by Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (i) through (iv) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 4.11) upon delivery of written
notice of such determination to the Loan Parties, Issuing Bank, Swingline Lender
and each Lender.

Derivative Obligations – every obligation of a Person under any forward
contract, futures contract, exchange contract, swap, option or other financing
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreement), the value of which is dependent upon interest rates,
currency exchange rates, commodities or other indices.

Derivative Obligations Provider – Administrative Agent, Bank, any Lender or any
Affiliate of Administrative Agent, Bank or any Lender to whom a Derivative
Obligation is owed from any Loan Party.

 

8

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Derivative Obligations Reserve – the aggregate amount of Reserves established by
Collateral Agent from time to time in respect of Derivative Obligations.

Distribution – in respect of any Person means and includes: (i) the payment of
any dividends or other distributions on Equity Interests and (ii) the redemption
or acquisition of Equity Interests of such Person, as the case may be, unless
made contemporaneously from the net proceeds of the sale of Equity Interests.

Domestic Subsidiary – any Subsidiary of any Loan Party that is organized under
the laws of a jurisdiction located in the United States of America and that is
not a CFC.

EEA Financial Institution - (i) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (ii) any entity established in an EEA Member Country
which is a parent of an institution described in clause (i) of this definition,
or (iii) any financial institution established in an EEA Member Country which is
a subsidiary of an institution described in clauses (i) or (ii) of this
definition and is subject to consolidated supervision with its parent.

EEA Member Country - any of the member states of the European Union, Iceland,
Liechtenstein and Norway.

EEA Resolution Authority - any public administrative authority or any person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

Eligible Account – an Account arising in the ordinary course of the business of
any of the Borrowers from the sale of goods or rendition of services which
Collateral Agent, in its reasonable credit judgment, deems to be an Eligible
Account. Without limiting the generality of the foregoing, no Account shall be
an Eligible Account if:

(i)    it arises out of a sale made or services rendered by a Borrower to a
Subsidiary of a Loan Party or an Affiliate of a Loan Party or to a Person
controlled by an Affiliate of a Loan Party; or

(ii)    it remains unpaid more than ninety (90) days after the original invoice
date shown on the invoice; or

(iii)    the total unpaid Accounts of (a) any Account Debtor which has a rating
of “BBB-” or better from S&P exceeds 40% of the net amount of all Eligible
Accounts, but only to the extent of such excess, or (b) any other Account Debtor
exceeds 20% of the net amount of all Eligible Accounts, but only to the extent
of such excess; or

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

(v)    the Account Debtor is also a creditor or supplier of a Loan Party or any
Subsidiary of a Loan Party, or the Account Debtor has disputed liability with
respect to such Account, or the Account Debtor has made any claim with respect
to any other Account due from

 

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such Account Debtor to a Loan Party or any Subsidiary of a Loan Party, or the
Account otherwise is or may become subject to right of setoff by the Account
Debtor; provided that any such Account shall be eligible to the extent such
amount thereof exceeds such contract, dispute, claim, setoff or similar right;
or

(vi)    the Account Debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an assignment
for the benefit of creditors, or a decree or order for relief has been entered
by a court having jurisdiction in the premises in respect of the Account Debtor
in an involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other petition or other application for relief under
the federal bankruptcy laws, as now constituted or hereafter amended, has been
filed against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs; or

(vii)    it arises from a sale made or services rendered to an Account Debtor
outside the United States, unless the sale is either (a) to an Account Debtor
located in Ontario or any other province of Canada in which the Personal
Property Security Act has been adopted in substantially the same form as
currently in effect in Ontario or (b) backed by a letter of credit from an
issuer acceptable to Collateral Agent; or

(viii)    (a) it arises from a sale to the Account Debtor on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment, or any other
repurchase or return basis; or (b) it is subject to a reserve established by a
Borrower for potential returns or refunds, to the extent of such reserve or
(c) it arises from a sale to an Account Debtor that is subject to
cash-on-delivery terms; or

(ix)    the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless the applicable Borrower assigns its
right to payment of such Account to Collateral Agent, in a manner satisfactory
to Collateral Agent, in its reasonable credit judgment, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq., as amended); or

(x)    it is not at all times subject to Administrative Agent’s duly perfected,
first priority security interest or is subject to a Lien that is not a Permitted
Lien; or

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

(xii)    the applicable Borrower has not sent a bill or invoice for the goods or
services giving rise to such Account to the applicable Account Debtor; or

(xiii)    the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or

 

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(xiv)    the applicable Borrower has made any agreement with the Account Debtor
for any extension, compromise, settlement or modification of the Account or
deduction therefrom, except for discounts or allowances which are made in the
ordinary course of business for prompt payment and which discounts or allowances
are reflected in the calculation of the face value of each invoice related to
such Account; or

(xv)    50% or more of the Accounts owing from the Account Debtor are not
Eligible Accounts hereunder; or

(xvi)    the applicable Borrower has made an agreement with the Account Debtor
to extend the time of payment thereof; or

(xvii)    it represents service charges, late fees or similar charges; or

(xviii)    the relevant underlying documentation relating to such Account and
payment of such Account provides or otherwise specifies that all or any portion
of the payment regarding such Account is to be made by a Borrower to or is for
the benefit of any vendor of or contractor for such Borrower creates an express
trust on such Borrower for the benefit of any vendor of or contractor for such
Borrower or any express obligation on such Borrower to pay all or any portion of
the payment of the Account to any vendor of or contractor for such Borrower;
provided that any such Account shall be eligible to the extent of any such
amount thereof which exceeds such express trust or express obligation; or

(xix)     it is an Account owing from an Account Debtor located in a state where
the applicable Borrower is not qualified to do business so long as such failure
to so qualify prevents such Borrower from bringing an action in such state to
seek judicial recovery of such Account; or

(xx)    it is not otherwise acceptable to Collateral Agent in its reasonable
credit judgment.

Eligible Machinery and Equipment – as of any date of determination, all
Equipment that:

(i) is owned by a Borrower free and clear of all Liens other than (a) Liens in
favor of Administrative Agent securing the Obligations and (b) Permitted Liens;

(ii) is installed in a facility owned or leased by the applicable Borrower in
the United States and, if installed at a leased location, either (a) a
satisfactory landlord waiver has been delivered to Administrative Agent or
(b) Reserves reasonably satisfactory to Collateral Agent have been established
with respect thereto;

(iii) is in good operating condition (ordinary wear and tear excepted);

(iv) is not obsolete or surplus Equipment;

(v) is covered by casualty and liability insurance required by this Agreement;

(vi) is subject to a first priority perfected Lien in favor of Administrative
Agent;

 

11

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(vii) does not consist of automobiles or other Equipment subject to a
certificate of title statute;

(viii) has an estimated remaining useful life of at least five years; and

(ix) as to which an appraisal has been completed (which may be a desktop or
other similar, short-form appraisal, to the extent determined by Collateral
Agent) on such Equipment, prepared by an appraiser retained by Collateral Agent.

Eligible Unbilled Accounts - an Account of any Borrower (i) for which the
applicable Borrower intends to send a bill or invoice for the goods or services
giving rise to such Account within thirty (30) days of the date of the
applicable Borrowing Base Certificate, (ii) which would otherwise constitute an
Eligible Account but for the fact that such Account does not comply with clause
(xii) of the definition thereof and (iii) the eligibility of which to be billed
within such period of thirty (30) days is not subject to completion of any
further performance by the applicable Borrower.

Environmental Laws – all federal, state, local or foreign laws, rules,
regulations, ordinances, orders and consent decrees relating to health, safety
and environmental matters.

Environmental Notice – a notice (whether written or oral) from any Governmental
Authority or other Person with credible knowledge of any possible noncompliance
with, investigation of a possible violation of, litigation relating to, or
potential fine or liability under any Environmental Law, or with respect to any
Environmental Release, environmental pollution or hazardous materials, including
any complaint, summons, citation, order, claim, demand or request for
correction, remediation or otherwise.

Environmental Release – a release as defined in CERCLA or under any other
Environmental Law.

Equity Interests – all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.

ERISA – the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute, and all rules and regulations from time to time promulgated
thereunder.

EU Bail-In Legislation Schedule - the EU Bail-In Legislation Schedule published
by the Loan Market Association (or any successor person), as in effect from time
to time.

Event of Default – as defined in Section 11.1.

Excess Derivative Obligations – Derivative Obligations in excess of the
Derivative Obligations Reserve.

Excess Liquidity – on any specific date, the difference derived when the amount
of the Aggregate Revolving Extensions is subtracted from the sum of (i) the Line
Cap plus (ii) unrestricted cash in accounts of any Borrower maintained with
Administrative Agent or any

 

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Affiliate of Administrative Agent in which Administrative Agent has first
priority perfected Lien pursuant to an executed deposit account control
agreement in form and substance satisfactory to Administrative Agent, in its
sole discretion, provided that for the purposes of this definition, the amount
in this clause (ii) shall not at any time be considered to be greater than
$1,500,000 (even if the amount in such accounts totals over $1,500,000).

Excess Liquidity Percentage – at any particular date, the Excess Liquidity on
such date, divided by the Line Cap on such date.

Excluded Deposit Account – (i) Deposit accounts the balance of which consists
exclusively of withheld income taxes and federal, state or local employment
taxes, (ii) all deposit accounts constituting (and the balance of which consists
solely of funds set aside in connection with) payroll accounts, trust accounts,
and accounts dedicated to the payment of accrued employee benefits, medical,
dental and employee benefits claims to employees of any Borrower, (iii) zero
balance disbursement accounts, and (iv) that certain deposit account in the name
of Landfill numbered 00005732385225 and held at Capital One Bank, National
Association and other deposit accounts maintained in the ordinary course of
business, provided cash amounts do not exceed at any time $100,000 in the
aggregate for all such accounts under this clause (iv).

Excluded Property – (i) any rights or interests in any contract, lease,
sublease, permit, license, charter or similar agreement covering real,
intangible or personal property, as such, if under the terms of such contract,
lease, sublease, permit, license, charter or similar agreement, or Applicable
Law with respect thereto, the valid grant of a security interest or lien therein
to Administrative Agent is prohibited (or would render such contract, lease,
sublease, permit, license, charter or similar agreement cancelled, invalid or
unenforceable) and such prohibition has not been or is not waived or the consent
of the other party to such contract, lease, sublease, permit, license, charter
or similar agreement has not been or is not otherwise obtained or under
Applicable Law such prohibition cannot be waived; provided, that, the foregoing
exclusion shall in no way be construed (a) to apply if any such prohibition is
unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or other
Applicable Law or (b) so as to limit, impair or otherwise affect Administrative
Agent’s unconditional continuing security interests in and liens upon any rights
or interests of any Loan Party in or to monies due or to become due under any
such contract, lease, permit, license, charter or similar agreement; (ii) Equity
Interests of any Foreign Subsidiary in excess of 65% of the total combined
voting power of all classes of Equity Interests of such Foreign Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section 1.956-2);
(iii) Equity Interests of any Unrestricted Subsidiary; (iv) motor vehicles and
other assets subject to certificates of title; (v) any leasehold interest in
real Property; (vi) fee owned real estate with a value less than $1,000,000,
(vii) intent-to-use trademark applications prior to the filing of a statement of
use except in connection with the transfer of the business to which the mark
pertains, and (viii) those assets which Administrative Agent and the Loan
Parties agree that the costs of obtaining a Lien thereon are excessive in
relation to the value of the Lien created thereby.

Excluded Swap Obligation – with respect to any Loan Party, any guarantee of any
Swap Obligations if, and only to the extent that and for so long as, all or a
portion of the guarantee of such Loan Party of, or the grant by such Loan Party
of a security interest to secure, such Swap Obligation (or any guarantee
thereof) is or becomes illegal under the Commodity Exchange Act

 

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or any rule, regulation or order of the Commodity Futures Trading Commission (or
the application or official interpretation of any thereof) by virtue of such
Loan Party’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act at the time the guarantee
of such Loan Party or the grant of such security interest becomes effective with
respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guarantee or security interest is or becomes illegal.

Excluded Taxes – (i) taxes imposed on the income of Administrative Agent or any
Lender by the jurisdiction of Administrative Agent’s or such Lender’s applicable
lending office or any political subdivision thereof, (ii) franchise taxes
imposed by the jurisdiction under the laws of which Administrative Agent or any
Lender is organized or doing business or any political subdivision thereof,
(iii) any withholding taxes attributable to a Lender’s failure to comply with
subsection 3.11.3 and (iv) any United States federal withholding taxes imposed
under FATCA.

Fair Share Contribution Amount – as defined in Section 15.2.

FATCA – Sections 1471, 1472, 1473 and 1474 of the Code, or any regulations
promulgated thereunder or published administrative guidance implementing such
sections.

Fee Letter – as defined in Section 3.3.

Fixed Charge Coverage Ratio – with respect to any period, the ratio of
(i) Adjusted EBITDA for such period, minus the sum of (a) cash income taxes
paid, plus (b) cash Capital Expenditures during such period that are not
financed (other than with proceeds of Revolving Credit Loans), plus (c) cash
Distributions made to holders of Equity Interests of Holding during such period,
to (ii) Fixed Charges for such period, all as determined for Holding and its
Subsidiaries on a Consolidated basis and in accordance with GAAP.

Fixed Charges – with respect to any period, the sum of: (i) scheduled principal
payments required to be made during such period with respect to Funded Debt
(including the principal portion of Capitalized Lease Obligations), plus
(ii) Interest Expense required to be paid in cash for such period, all as
determined for Holding and its Subsidiaries on a Consolidated basis and in
accordance with GAAP.

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

Foreign Subsidiary – a Subsidiary that is a CFC such that a guaranty by such
Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to
secure the Obligations would result in material tax liability to the Loan
Parties.

Funded Debt – (i) Indebtedness arising from the lending of money by any Person
to any Loan Party or any of its Restricted Subsidiaries; (ii) Indebtedness,
whether or not in any such case arising from the lending by any Person of money
to any Loan Party or any of its Restricted Subsidiaries, (a) which is
represented by notes payable or drafts accepted that evidence

 

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extensions of credit, (b) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, (c) upon which interest charges are
customarily paid (other than accounts payable) or (d) that was issued or assumed
as full or partial payment for Property; (iii) Capitalized Lease Obligations;
(iv) reimbursement obligations with respect to letters of credit or guaranties
of letters of credit; and (v) Indebtedness of any Loan Party or any of its
Restricted Subsidiaries under any guaranty of obligations that would constitute
Funded Debt under clauses (i) through (iv) hereof, if owed directly by a Loan
Party or any of its Restricted Subsidiaries. Funded Debt shall not include trade
payables or accrued expenses.

Funding Guarantor – as defined in Section 15.2.

GAAP – generally accepted accounting principles in the United States of America
in effect from time to time.

Governmental Authority – any federal, state, municipal, foreign, multinational,
transnational or other governmental department, agency, commission, board,
bureau, court, tribunal, instrumentality, political subdivision, or other entity
or officer exercising executive, legislative, judicial, regulatory or
administrative functions for or pertaining to any government or court, in each
case whether associated with the United States, a state, district or territory
thereof, or a foreign entity or government.

Guarantors – Holding, Parent, and each other Person who now or hereafter
guarantees payment or performance of the whole or any part of the Obligations.

Guaranty Agreements – each guaranty agreement (including this Agreement)
executed by a Guarantor in favor of Administrative Agent guaranteeing payment or
performance of the whole or any part of the Obligations.

Holding – as defined in the preamble to this Agreement.

Indebtedness – as applied to a Person means, without duplication (i) all Funded
Debt and other items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as at the date as of which Indebtedness is to be determined;
(ii) all obligations of other Persons which such Person has guaranteed; and
(iii) Derivative Obligations.

Indemnified Person – as defined in Section 13.2.

Indemnified Taxes – as defined in subsection 3.11.1.

Insolvency Law – collectively, the Bankruptcy Code, and any other insolvency,
debtor relief or debt adjustment or similar law (whether state, provincial,
territorial, federal or foreign).

Insolvency Proceeding – any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
Insolvency Law; (b) the appointment of a receiver, trustee, liquidator,
administrator, conservator or other custodian for such Person or any part of its
Property; or (c) an assignment or trust mortgage for the benefit of creditors.

 

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Intellectual Property – all past, present and future: trade secrets, know-how
and other proprietary information; trademarks, internet domain names, service
marks, trade dress, trade names, business names, designs, logos, slogans (and
all translations, adaptations, derivations and combinations of the foregoing)
indicia and other source and/or business identifiers, and the goodwill of the
business relating thereto and all registrations or applications for
registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.

Intellectual Property Security Agreement – any intellectual property collateral
assignment pursuant to which any Loan Party grants to Administrative Agent, for
the benefit of Lenders, a Lien on such Loan Party’s interest in its Intellectual
Property as security for the Obligations.

Interest Expense - with respect to any period, interest expense paid or accrued
for such period, including without limitation the interest portion of
Capitalized Lease Obligations, plus the Letter of Credit fees owing for such
period, all as determined for the Loan Parties and their Restricted Subsidiaries
on a Consolidated basis and in accordance with GAAP.

Interest Payment Date – (a) (i) as to any Base Rate Revolving Credit Loan, the
first day of each month, and (ii) as to any Base Rate Term Loan, the first day
of each month, and (b) as to any LIBOR Loan, the last day of each Interest
Period for such LIBOR Loan, and in addition, where the applicable Interest
Period exceeds three months, the date every three months after the beginning of
such Interest Period. If an Interest Payment Date falls on a date that is not a
Business Day, such Interest Payment Date shall be deemed to be the immediately
succeeding Business Day.

Interest Period – relative to any LIBOR Loans: (a) initially, the period
beginning on (and including) the date on which such LIBOR Loan is made or
continued as, or converted into, a LIBOR Loan and ending on (but excluding) the
day which numerically corresponds to such date one, two, or three months
thereafter (or, if such month has no numerically corresponding day, on the last
Business Day of such month), in each case as Borrower Representative may select
in its notice pursuant to Section 4.1; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such LIBOR Loan and ending one, two, or three months thereafter, as selected by
Borrower Representative in accordance with Section 4.1; provided, however, that
(i) all Interest Periods of the same duration which commence on the same date
shall end on the same date; (ii) Interest Periods commencing on the same date
for LIBOR Loans comprising part of the same advance under this Agreement shall
be of the same duration; (iii) Interest Periods for LIBOR Loans in connection
with which Borrowers have or may incur Derivative Obligations with
Administrative Agent shall be of the same duration as the

 

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relevant periods set under the applicable underlying agreements; (iv) if such
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day unless such day
falls in the next calendar month, in which case such Interest Period shall end
on the first preceding Business Day; and (v) no Interest Period may end later
than the termination of this Agreement.

Issuing Bank – Administrative Agent, Bank or any other Affiliate of
Administrative Agent or a Lender that issues a Letter of Credit hereunder.

Landfill – as defined in the preamble to this Agreement.

LC Amount – at any time, the aggregate undrawn available amount of all Letters
of Credit then outstanding plus the amount of LC Obligations that have not been
reimbursed by Borrowers or funded with a Revolving Credit Loan.

LC Obligations – any Obligations that arise from any draw against any Letter of
Credit.

LC Sublimit – $2,000,000.

Lender(s) – as defined in the preamble to this Agreement and each other Person
who becomes a “Lender” hereunder, whether by assignment or otherwise, including
(unless the context otherwise requires) Swingline Lender.

Letter of Credit – any standby or documentary letter of credit issued by Issuing
Bank for the account of any Loan Party.

LIBOR – relative to any Interest Period for LIBOR Loans, the offered rate for
deposits of U.S. Dollars in an amount approximately equal to the amount of the
requested LIBOR Loans for a term coextensive with the designated Interest Period
which the ICE Benchmark Administration fixes as its LIBOR rate as of 11:00 a.m.
London time on the day which is two London Banking Days prior to the beginning
of such Interest Period.

LIBOR Lending Rate – relative to any LIBOR Loan to be made, continued or
maintained as, or converted into, a LIBOR Loan for any Interest Period, a rate
per annum determined pursuant to the following formula:

 

        LIBOR Lending Rate   =   

            LIBOR

    

(1.00 – LIBOR Reserve Percentage)

LIBOR Loans – the LIBOR Revolving Credit Loans and/or the LIBOR Term Loans.

LIBOR Loan Prepayment Fee – as defined in subsection 4.1.9.

LIBOR Option – the option granted pursuant to Section 4.1 to have the interest
on all or any portion of the principal amount of the Revolving Credit Loans or
any Term Loan Advance based on LIBOR.

 

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LIBOR Reserve Percentage – relative to any day of any Interest Period for LIBOR
Loans, the maximum aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board of Governors of the Federal Reserve System
(the “Board”) or other Governmental Authority having jurisdiction with respect
thereto as issued from time to time and then applicable to assets or liabilities
consisting of “Eurocurrency Liabilities,” as currently defined in Regulation D
of the Board, having a term approximately equal or comparable to such Interest
Period.

LIBOR Revolving Credit Loan – any Revolving Credit Loan for the periods when the
rate of interest applicable to such Revolving Credit Loan is calculated by
reference to the LIBOR Lending Rate.

LIBOR Term Loan – any portion of the Term Loan for the periods when the rate of
interest applicable to such portion of the Term Loan is calculated by reference
to the LIBOR Lending Rate.

Lien – any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on
common law, statute or contract. The term “Lien” shall also include rights of
seller under conditional sales contracts or title retention agreements,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of this Agreement, a Loan Party shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

Line Cap – at any time, the lesser of (i) the Revolving Credit Maximum Amount
and (ii) the Borrowing Base.

Loan Account – as defined in Section 4.6.

Loan Documents – this Agreement, the Other Agreements and the Security
Documents.

Loan Parties – means collectively, Borrowers and Guarantors and Loan Party means
any one of them.

Loans – all loans and advances of any kind made by Administrative Agent, any
Lender, or any Affiliate of Administrative Agent or any Lender, pursuant to this
Agreement.

London Banking Day – any day on which banks are open for dealings in U.S. dollar
deposits in the London Interbank Market.

Majority Lenders – as of any date, Lenders holding more than 50% of the Term
Loan and Revolving Credit Commitments determined on a combined basis and
following the termination of the Revolving Credit Commitments, Lenders holding
more than 50% of the outstanding Loans and LC Obligations; provided that (i) if
there are two or more Lenders which are not Affiliates,

 

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then at least two Lenders which are not Affiliates shall be required to
constitute Majority Lenders and (ii) the Loans, Revolving Credit Commitments and
LC Obligations held by any Defaulting Lender shall be excluded for purposes of
determining Majority Lenders.

Margin Stock – as defined in Regulation U of the Board of Governors.

Material Adverse Effect – (i) a material adverse effect on the business,
financial condition, operation, performance or properties of the Loan Parties
and their Restricted Subsidiaries taken as a whole, (ii) a material adverse
effect on the rights and remedies of Administrative Agent or Lenders under the
Loan Documents, or (iii) the material impairment of the ability of any Loan
Party to perform its obligations under this Agreement or under any other Loan
Document.

Moody’s – Moody’s Investors Service, Inc., and its successors.

Mortgages – each mortgage, security deed or deed of trust executed by a Borrower
in favor of Administrative Agent, for the benefit of itself and Lenders, by
which such Borrower grants to Administrative Agent, as security for the
Obligations, a Lien upon the real Property of such Borrower described therein.

Multiemployer Plan – has the meaning set forth in Section 4001(a)(3) of ERISA.

NOLV – the net orderly liquidation value of Equipment, expressed as a dollar
value for Equipment, to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of Borrower’s Equipment performed by an appraiser and
on terms satisfactory to Collateral Agent in its reasonable discretion.

Notes – the Revolving Credit Notes and the Term Loan Notes.

Obligations – all Loans, LC Obligations, reimbursement and other obligations
with respect to Letters of Credit and all other advances, debts, liabilities,
obligations, covenants and duties, together with all interest, fees and other
charges thereon (including all interest, fees and other charges accruing after
the commencement of any Insolvency Proceeding), of any kind or nature, present
or future, owing, arising, due or payable from any Borrower or any other Loan
Party to Administrative Agent, any Lender, Issuing Bank, Bank or any of their
respective Affiliates, arising under this Agreement or any of the other Loan
Documents, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, including without limitation all
Product Obligations; provided, that Obligations of any Loan Party shall not
include any Excluded Swap Obligations solely of such Loan Party.

Obligee Guarantor – as defined in Section 15.7.

Organizational I.D. Number – with respect to any Person, the organizational
identification number assigned to such Person by the applicable governmental
unit or agency of the jurisdiction of organization of such Person.

 

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Other Agreements – each Borrowing Base Certificate, each Compliance Certificate,
and any and all agreements, instruments and documents (other than this Agreement
and the Security Documents), heretofore, now or hereafter executed by any Loan
Party, any Subsidiary of a Loan Party or any other third party and delivered to
Administrative Agent, any Lender or any Affiliate of any Agent or any Lender in
respect of the transactions contemplated by this Agreement, including, without
limitation, all agreements, instruments and documents relating to Product
Obligations.

Overadvance – as defined in subsection 2.1.2.

Parent – as defined in the preamble to this Agreement.

Participant – as defined in subsection 13.5.2.

Participation Register – as defined in subsection 13.5.2.

Patriot Act – the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).

Payment Conditions – with respect to any applicable transaction, (i) no Default
or Event of Default shall exist immediately after giving effect to such
transaction, (ii) the average of the Excess Liquidity amounts (calculated on a
pro forma basis to include the making of any Loans or the issuance of any
Letters of Credit in connection with such transaction) for each Business Day in
the thirty (30) day period prior to such transaction shall be greater than or
equal to the greater of (x) $4,000,000 and (y) 20% of the Line Cap, (iii) Excess
Liquidity (calculated as set forth above) on the date of such proposed
transaction shall be greater than or equal to the greater of (x) $4,000,000 and
(y) 20% of the Line Cap and (iv) the Fixed Charge Coverage Ratio (calculated on
a pro forma basis after giving effect to such transaction) for the most recently
ended trailing twelve calendar month period shall not be less than 1.10 to 1.00.

Permitted Acquisitions – each acquisition of all or a substantial part of the
assets, property or Equity Interests of any Person or any business unit or
division of any Person (the “Target”) by a Loan Party, subject to the
satisfaction of each of the following conditions:

(i)    Administrative Agent shall receive at least ten (10) Business Days’ prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;

(ii)    at or prior to the closing thereof, Administrative Agent will be granted
a first priority perfected Lien in all assets and Equity Interests of the Target
on the same terms and conditions set forth in subsection 6.1.1, and the
Collateral shall not be subject to any liens or encumbrances other than
Permitted Liens, and the Loan Parties and, if applicable, the Target shall have
executed such documents and taken such actions as may be reasonably required by
Administrative Agent in connection therewith;

(iii)    concurrently with delivery of the notice referred to in clause
(i) above, Administrative Agent shall have received a pro forma consolidated
balance sheet, income

 

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statement and cash flow statement of Borrower Representative and its
Subsidiaries, based on the most recent financial statements then available;

(iv)    on or prior to the closing date thereof, Administrative Agent shall have
received, in form and substance reasonably satisfactory to Administrative Agent,
copies of the acquisition agreement and related agreements and instruments, and
all opinions, certificates, lien search results and other documents reasonably
requested by Administrative Agent;

(v)    Administrative Agent shall have received a copy of the proposed capital
structure after giving effect to such Permitted Acquisition;

(vi)    Administrative Agent shall be satisfied with the results of a field
exam, conducted at the Loan Parties’ expense, prior to the inclusion of any
Accounts of the Target in the Borrowing Base;

(vii)    the Payment Conditions shall have been satisfied;

(viii)    the board of directors or similar governing body of the Target shall
have approved the Permitted Acquisition; and

(ix)    concurrently with consummation of the Permitted Acquisition, Borrower
Representative shall have delivered to Administrative Agent a certificate
stating that the foregoing conditions have been satisfied.

Permitted Liens – any Lien permitted under subsection 9.2.4.

Permitted Purchase Money Indebtedness – Purchase Money Indebtedness and
Capitalized Lease Obligations of any Loan Party incurred after the date hereof
which is secured by a Purchase Money Lien and the principal amount of which,
when aggregated with the principal amount of all other such Purchase Money
Indebtedness and Capitalized Lease Obligations of the Loan Parties and their
Restricted Subsidiaries at the time outstanding, does not exceed $750,000. For
the purposes of this definition, the principal amount of any Purchase Money
Indebtedness consisting of capitalized leases (as opposed to operating leases)
shall be computed as a Capitalized Lease Obligation.

Person – an individual, partnership, corporation, limited liability company,
joint stock company, land trust, business trust, or unincorporated organization,
or a government or agency or political subdivision thereof.

Plan – an employee benefit plan now or hereafter maintained for employees of any
Loan Party or any of their Subsidiaries that is covered by Title IV of ERISA.

Pledge Agreements – each pledge agreement executed by the Loan Parties or any
one of them, as applicable, granting in favor of Administrative Agent, for the
benefit of itself and Lenders, a Lien on the Equity Interests of the
Subsidiaries of such Loan Party or Loan Parties.

Pro Rata Percentage – (i) with respect to each Revolving Credit Lender, the
percentage equal to its Revolving Credit Commitment divided by the aggregate of
all Revolving Credit

 

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Commitments and (ii) with respect to each Term Loan Lender, the percentage equal
to its Term Loan Commitment divided by the aggregate of all Term Loan
Commitments.

Product Obligations – every obligation of any Borrower or any other Loan Party
under and in respect of any one or more of the following types of services or
facilities extended to such Borrower or any other Loan Party by Bank,
Administrative Agent, any Lender or any of their respective Affiliates:
(i) credit cards, (ii) cash management or related services including the
automatic clearing house transfer of funds for the account of such Borrower or
any other Loan Party pursuant to agreement or overdraft, (iii) treasury
management, including controlled disbursement services, (iv) Derivative
Obligations and (v) supply chain financing and supply chain finance services
(including, without limitation, trade payable services and supplier accounts
receivable purchases).

Projections – for Holding and its Subsidiaries forecasted Consolidated
(i) balance sheets, (ii) profit and loss statements, (iii) cash flow statements,
and (iv) capitalization statements, prepared on a consistent basis with the
historical financial statements of Holding and its Subsidiaries, together with
appropriate supporting details and a statement of underlying assumptions.

Property – any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

Purchase Money Indebtedness – includes (i) Indebtedness (other than the
Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (ii) any Indebtedness (other than the Obligations) incurred at the
time of or within ten (10) days prior to or after the acquisition of any fixed
assets for the purpose of financing all or any part of the purchase price
thereof, and (iii) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time.

Purchase Money Lien – a Lien upon fixed assets which secures Purchase Money
Indebtedness or a Capitalized Lease Obligation, but only if such Lien shall at
all times be confined solely to the fixed assets the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness or
Capitalized Lease Obligation secured by such Lien.

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

Quarterly Average Availability – for any fiscal quarter, the average of the
Availability amounts for each Business Day during such fiscal quarter.

Quarterly Average Availability Percentage – for any fiscal quarter, Quarterly
Average Availability for such fiscal quarter divided by the Revolving Credit
Maximum Amount as at the end of such fiscal quarter.

 

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Quest – as defined in the preamble to this Agreement.

Register – as defined in subsection 13.5.5.

Related Parties – with respect to any specified Person, such Person’s Affiliates
and the respective directors, trustees, officers, employees, agents and advisors
of such Person and such Person’s Affiliates.

Related Real Estate Documents – with respect to any real Property that
constitutes Collateral, the following: (i) a Mortgage in form and substance
satisfactory to Administrative Agent; (ii) a mortgagee title policy (or binder
therefor) covering Administrative Agent’s interest under the Mortgage, in a form
and amount and by an insurer acceptable to Administrative Agent, which must be
fully paid on such effective date; (iii) a current ALTA Survey in form and
substance satisfactory to Administrative Agent; and (iv) a life-of-loan flood
hazard determination and, if the real Property is located in a flood plain,
flood insurance in an amount, with endorsements and by an insurer acceptable to
Administrative Agent.

Reportable Event – any of the events set forth in Section 4043(c) of ERISA.

Reserves – reserves in such amounts, and with respect to such matters, as
Collateral Agent shall deem necessary or appropriate in its reasonable credit
judgment exercised in good faith, against the Borrowing Base or Availability,
including without limitation with respect to (i) price adjustments, damages,
unearned discounts, returned products or other matters for which credit
memoranda are issued in the ordinary course of any Loan Party’s business;
(ii) potential dilution related to Accounts; (iii) other sums chargeable against
Borrowers’ Loan Account as Revolving Credit Loans under any section of this
Agreement; (iv) amounts owing by any Loan Party to any Person to the extent
secured by a Lien on, or trust over, any Property of any Loan Party which
constitutes Collateral; (v) amounts owing by any Loan Party in connection with
Product Obligations, including, without limitation, the Derivative Obligations
Reserve; (vi) rent for locations at which books, records, or Equipment is stored
and as to which Administrative Agent has not received a satisfactory landlord’s
agreement or bailee letter, as applicable, and (vii) such other specific events,
conditions or contingencies as to which Collateral Agent, in its reasonable
credit judgment exercised in good faith, determines reserves should be
established from time to time hereunder; provided, that, notwithstanding the
foregoing, Collateral Agent shall not establish any Reserves in respect of any
matters relating to any items of Collateral that have been taken into account in
determining Eligible Accounts or Eligible Unbilled Accounts, as applicable.

Restricted Subsidiary – Parent and Borrowers, and Subsidiaries of Borrowers, and
each Subsidiary that pursuant to the definition of “Unrestricted Subsidiary” or
subsection 9.1.8 hereof hereafter becomes a Restricted Subsidiary.

Restrictive Agreement – an agreement (other than a Loan Document) that
conditions or restricts the right of any Loan Party or any Restricted Subsidiary
of any Loan Party to incur or repay Indebtedness, to grant Liens on any assets,
to declare or make Distributions, to modify, extend or renew any agreement
evidencing Indebtedness, or to repay any intercompany Indebtedness.

 

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Revolving Credit Commitment – with respect to any Lender, the amount of such
Lender’s Revolving Credit Commitment pursuant to subsection 2.1.1, as set forth
next to such Lender’s name on Schedule 1 hereto, or any Assignment and
Acceptance Agreement executed by such Lender. “Revolving Credit Commitments”
shall mean the aggregate amount of such commitments of all Lenders.

Revolving Credit Lender – a Lender with a Revolving Credit Commitment.

Revolving Credit Loan – a Loan made by any Revolving Credit Lender pursuant to
Section 2.1, including (unless the context otherwise requires) Overadvances and
Swingline Loans.

Revolving Credit Maturity Date – February 24, 2022.

Revolving Credit Maximum Amount – $20,000,000, as such amount may be increased
or reduced from time to time pursuant to the terms hereof.

Revolving Credit Notes – any promissory notes executed by Borrowers in favor of
each Revolving Credit Lender that requests a Revolving Credit Note to evidence
its Revolving Credit Loans, which shall be in the form of Exhibit 2.1 to this
Agreement, together with any replacement or successor notes therefor.

S&P – Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

Security Documents – the Guaranty Agreements, the Pledge Agreements, the
Mortgages, the Intellectual Property Security Agreement and all other
instruments and agreements now or at any time hereafter securing the whole or
any part of the Obligations.

Solvent – as to any Person, that such Person (i) owns Property whose fair
saleable value is greater than the amount required to pay all of such Person’s
Indebtedness (including contingent debts), (ii) is able to pay all of its
Indebtedness as such Indebtedness matures and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage.

Subordinated Debt – Indebtedness of any Loan Party or any Restricted Subsidiary
of any Loan Party that is subordinated to the Obligations in a manner
satisfactory to Administrative Agent, and contains terms, including without
limitation, payment terms, satisfactory to Administrative Agent.

Subsidiary – any Person of which another Person owns, directly or indirectly
through one or more intermediaries, more than 50% of the Voting Stock at the
time of determination.

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

Swingline Lender – Citizens in its capacity as the lender of Swingline Loans.

 

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Swingline Loan Sublimit – $2,000,000.

Swingline Loans – as defined in subsection 2.1.3.

Term – as defined in Section 5.1.

Term Loan – the Loan described in subsection 2.3.

Term Loan Advances – as defined in subsection 2.3

Term Loan Commitment – with respect to any Lender, the amount of such Lender’s
Term Loan Commitment pursuant to subsection 2.3, as set forth next to such
Lender’s name on Schedule 1 hereto or any Assignment and Acceptance Agreement
executed by such Lender, minus all Term Loan payments paid to such Lender.

Term Loan Draw Period – the period from the Closing Date up to an including the
second anniversary of the Closing Date.

Term Loan Lender – a Lender with a Term Loan Commitment.

Term Loan Maturity Date – February 24, 2022.

Term Loan Notes – any promissory notes executed by Borrowers in favor of each
Term Loan Lender that requests a Term Loan Note to evidence its Term Loans,
which shall be in the form of Exhibit 2.3 to this Agreement, together with any
replacement or successor notes therefor.

Total Credit Facility – prior to the expiration of the Term Loan Draw Period,
$22,000,000 and thereafter, the sum of the Revolving Credit Maximum Amount and
the Term Loan Advances outstanding, as increased or reduced from time to time
pursuant to the terms hereof.

Type of Organization – with respect to any Person, the kind or type of entity by
which such Person is organized, such as a corporation or limited liability
company.

Unrestricted Subsidiary – each Subsidiary of Holding which is not a Restricted
Subsidiary. As of the Closing Date, each Subsidiary of Holding other than Parent
and Borrowers are Unrestricted Subsidiaries; provided, however an Unrestricted
Subsidiary shall cease to be an Unrestricted Subsidiary and shall become a
Borrower hereunder upon either (i) Quest’s written request that such Subsidiary
become a Borrower hereunder or (ii) the Adjusted EBITDA of such Subsidiary
(determined on a stand-alone basis rather than on a consolidated basis with
Holding and its Subsidiaries) is equal to or greater than $500,000 for the most
recently ended trailing twelve-month period, provided that in either case each
of the following conditions precedent are satisfied in a manner satisfactory to
Administrative Agent: (a) each of Administrative Agent and the Lenders shall
have completed its respective compliance procedures for applicable “know your
customer” and anti-money laundering and foreign corrupt practices rules for such
Subsidiary and for any direct or indirect parent of such Subsidiary which is not
already a Loan Party, (b) such Subsidiary shall have executed a joinder to this
Agreement and such other documentation required of a Borrower by subsection
9.1.8 hereof, and (c) unless already a Loan

 

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Party, each direct and indirect parent of such Subsidiary shall have executed a
joinder to this Agreement and such other documentation required of a Guarantor
by subsection 9.1.8 hereof. In no event shall a Borrower or a Subsidiary of a
Borrower be an Unrestricted Subsidiary. Once a Subsidiary becomes a Restricted
Subsidiary, it may not thereafter become an Unrestricted Subsidiary.

UCC – the Uniform Commercial Code as in effect in the State of New York on the
date hereof, as it may be amended or otherwise modified.

Unused Line Fee – as defined in Section 3.5.

Unused Line Fee Margin – 0.375%.

Unused Revolving Credit Maximum Amount – the difference derived when the amount
of the Aggregate Revolving Extensions at any time is subtracted from the
Revolving Credit Maximum Amount at such time.

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

U.S. Tax Compliance Certificate – as defined in subsection 3.11.3.

Voting Stock – Equity Interests of any class or classes of a corporation,
limited partnership or limited liability company or any other entity the holders
of which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of directors (or Persons performing similar functions).

Write-Down and Conversion Powers - with respect to any EEA Resolution Authority,
the write-down and conversion powers of such EEA Resolution Authority from time
to time under the Bail-In Legislation for the applicable EEA Member Country,
which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

1.2    Other Terms. All other terms contained in this Agreement shall have, when
the context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein. Accounting terms not otherwise specifically
defined herein shall be construed in accordance with GAAP consistently applied.

1.3    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. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits and schedules appear as a matter of convenience only and shall
not affect the interpretation of this Agreement. All references to statutes and
related regulations shall include any amendments of same and any successor
statutes and regulations. All references to any of the Loan Documents shall
include any and all modifications thereto and any and all extensions or renewals
thereof.

1.4    Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio, requirement or covenant in this Agreement or
any related

 

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definition, and either the Loan Parties or Majority Lenders shall so request,
Administrative Agent, the Lenders and the Loan Parties shall negotiate in good
faith to amend such ratio, requirement, covenant or definition to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of Majority Lenders); provided that, until so amended, (i) such ratio,
requirement, covenant or definition shall continue to be computed in accordance
with GAAP prior to such change therein and (ii) the Loan Parties shall provide
to Administrative Agent and Lenders financial statements and other documents
required under this Agreement setting forth a reconciliation between
calculations of such ratio, requirement, covenant or definition made before and
after giving effect to such change in GAAP.

SECTION 2.CREDIT FACILITY

Subject to the terms and conditions of, and in reliance upon the representations
and warranties made in, this Agreement and the other Loan Documents, Lenders
agree to make a Total Credit Facility of up to $22,000,000 as increased or
decreased from time to time pursuant to the terms hereof, available upon
Borrowers’ request therefor, as follows:

2.1    Revolving Credit Loans.

2.1.1    Revolving Credit Commitments. Each Revolving Credit Lender agrees,
severally and not jointly, to make Revolving Credit Loans to Borrowers from time
to time during the period from the date hereof to but not including the
Revolving Credit Maturity Date, as requested by Borrower Representative, on its
own behalf and on behalf of all other Borrowers in the manner set forth in
subsection 4.1.1 hereof, up to a maximum principal amount at any time
outstanding equal to the lesser of (i) such Revolving Credit Lender’s Revolving
Credit Commitment and (ii) the product of such Revolving Credit Lender’s Pro
Rata Percentage and the amount of the Line Cap at such time, minus, in each
case, the product of such Revolving Credit Lender’s Pro Rata Percentage and an
amount equal to the sum of the LC Amount and the amount of Swingline Loans
outstanding. Within the foregoing limits, Borrowers may borrow, repay and
reborrow Revolving Credit Loans. The Revolving Credit Loans shall be secured by
all of the Collateral.

2.1.2    Overadvances. Insofar as (i) Borrower Representative, on its own behalf
and on behalf of all other Borrowers, may request and Administrative Agent (as
provided below) may be willing in its sole and absolute discretion to make
Revolving Credit Loans to Borrowers or (ii) Administrative Agent, in its sole
discretion, makes Revolving Credit Loans on behalf of Lenders, if Administrative
Agent, in its reasonable credit judgment, deems that such Revolving Credit Loans
are necessary or desirable (a) to protect all or any portion of the Collateral,
(b) to enhance the likelihood, or maximize the amount of, repayment of the Loans
and the other Obligations, or (c) to pay any other amount chargeable to
Borrowers pursuant to this Agreement, including without limitation costs, fees
and expenses as described in Sections 3.7 and 3.8, in each case, at a time when
the unpaid balance of Revolving Credit Loans plus the LC Amount exceeds, or
would exceed with the making of any such Revolving Credit Loan, the Borrowing
Base (such Loan or Loans being herein referred to individually as an
“Overadvance” and collectively, as “Overadvances”), Administrative Agent shall
enter such Overadvances as debits in the Loan Account; provided, that the
aggregate amount of Overadvances outstanding at any time shall not exceed the
lesser of (x) 10% of the Borrowing Base or (y) 10% of the

 

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Revolving Credit Commitments. All Overadvances shall be repaid on demand, shall
be secured by the Collateral and shall bear interest as provided in this
Agreement for Revolving Credit Loans generally. Any Overadvance made pursuant to
the terms hereof shall be made by all Revolving Credit Lenders ratably in
accordance with their respective Pro Rata Percentages. The foregoing
notwithstanding, (i) unless otherwise consented to by Majority Lenders,
Overadvances shall not be outstanding for more than sixty (60) consecutive days,
and (ii) unless otherwise consented to by all Lenders, no Overadvances shall be
permitted to the extent that such Overadvances would cause the Aggregate
Revolving Extensions to exceed the Revolving Credit Maximum Amount.

2.1.3    Swingline Loans.

(i)    In order to reduce the frequency of transfers of funds from Revolving
Credit Lenders to Administrative Agent for making Revolving Credit Loans,
Swingline Lender shall be permitted (but not required) to make Revolving Credit
Loans to Borrowers upon request by Borrowers (such Revolving Credit Loans to be
designated as “Swingline Loans”) provided that the aggregate amount of Swingline
Loans outstanding at any time will not (a) exceed the Swingline Loan Sublimit or
(b) when added to the principal amount of all other Revolving Credit Loans then
outstanding plus the LC Amount, exceed the Line Cap. Within the foregoing
limits, Borrowers may borrow, repay and reborrow Swingline Loans. All Swingline
Loans shall be treated as Revolving Credit Loans for purposes of this Agreement,
except that all Swingline Loans shall be Base Rate Revolving Credit Loans and,
except as provided in paragraph (ii) of this subsection 2.1.3, all principal and
interest paid with respect to Swingline Loans shall be for the sole account of
Swingline Lender.

(ii)    Swingline Lender may, in its sole discretion (but not less frequently
than weekly), provide written notice to Administrative Agent that it shall
require the Revolving Credit Lenders to make Revolving Credit Loans to repay all
or a portion of the Swingline Loans outstanding or, if Revolving Credit Lenders
are prohibited from making Revolving Credit Loans at such time, to acquire
participations in all or a portion of the Swingline Loans outstanding; provided
that such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under subsection 11.1.7.
Administrative Agent will, promptly upon receipt of such notice, give notice to
each Revolving Credit Lender, specifying in such notice such Revolving Credit
Lender’s Pro Rata Percentage of such Swingline Loan. In furtherance of the
foregoing, each Revolving Credit Lender hereby irrevocably, absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
Administrative Agent, for the account of Swingline Lender, such Revolving Credit
Lender’s Pro Rata Percentage of such Swingline Loan. Each Revolving Credit
Lender acknowledges and agrees that its obligation to make Revolving Credit
Loans to repay Swingline Loans and/or to acquire participations in Swingline
Loans pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Revolving Credit Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the

 

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same manner as provided in subsection 4.1.3 with respect to Loans made by such
Lender, and Administrative Agent shall promptly pay to Swingline Lender the
amounts so received by it from the Revolving Credit Lenders. Administrative
Agent shall notify Borrowers of any Revolving Credit Loans made or
participations in any Swingline Loan acquired pursuant to this paragraph and
thereafter payments by Borrowers in respect of such Swingline Loan shall be made
to Administrative Agent and not to Swingline Lender. Any amounts received by
Swingline Lender from Borrowers (or other Person on behalf of Borrowers) in
respect of a Swingline Loan after receipt by Swingline Lender of the proceeds of
Revolving Credit Loans to repay such Swingline Loan or a sale of participations
therein shall be promptly remitted to Administrative Agent and any such amounts
received by Administrative Agent shall be promptly remitted by Administrative
Agent to the Revolving Credit Lenders that shall have made their payments
pursuant to this paragraph and to Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve Borrowers (or any other Person liable for any
obligations of Borrowers) of any default in the payment thereof.

2.2    Letters of Credit. If requested by Borrower Representative, on its own
behalf or on behalf of any other Borrower, in accordance with the procedures set
forth in subsection 4.1.5, Administrative Agent agrees to cause Issuing Bank to
issue Letters of Credit for the account of Borrowers; provided that the LC
Amount shall not exceed the LC Sublimit at any time. No Letter of Credit may
have an expiration date after the Revolving Credit Maturity Date or that is more
than one year after the date of issuance; provided that a Letter of Credit may
provide for automatic extensions of its expiry date for one or more successive
one-year periods so long as the Issuing Bank has the right to terminate such
Letter of Credit on each such annual expiration date and no renewal term may
extend the term of any Letter of Credit to a date that is later than the
Revolving Credit Maturity Date. Notwithstanding anything to the contrary
contained herein, Borrowers, Administrative Agent and Lenders hereby agree that
all LC Obligations and all obligations of Borrowers relating thereto shall be
satisfied by the prompt issuance of one or more Revolving Credit Loans that are
Base Rate Revolving Credit Loans, which Borrowers hereby acknowledge are
requested and Revolving Credit Lenders hereby agree to fund. In the event that
Revolving Credit Loans are not, for any reason, promptly made to satisfy all
then existing LC Obligations, each Revolving Credit Lender hereby agrees to pay
to Administrative Agent, on demand, for the benefit of Issuing Bank, an amount
equal to such LC Obligations multiplied by such Revolving Credit Lender’s Pro
Rata Percentage, and until so paid, such amount shall be secured by the
Collateral and shall bear interest and be payable at the same rate and in the
same manner as Base Rate Revolving Credit Loans. Immediately upon the issuance
of a Letter of Credit under this Agreement, each Revolving Credit Lender shall
be deemed to have irrevocably and unconditionally purchased and received from
Issuing Bank, without recourse or warranty, an undivided interest and
participation therein equal to such LC Obligations multiplied by such Revolving
Credit Lender’s Pro Rata Percentage. In connection with its administration of
and enforcement of rights or remedies under any Letters of Credit,
Administrative Agent and its Related Parties shall be entitled to act, and shall
be fully protected in acting, upon any certification, notice or other
communication in whatever form believed by any of them, in good faith, to be
genuine and correct and to have been signed, sent or made by a proper Person.

2.3    Term Loan.

 

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2.3.1    Term Loan Commitments. Subject to the terms and conditions of this
Agreement and the other Loan Documents, each Term Lender agrees, severally and
not jointly, so long as no Default or Event of Default exists, to make one or
more advances to Borrower from time to time during the Term Loan Draw Period
(each a “Term Loan Advance”, and all such Term Loan Advances the “Term Loan”) in
an aggregate principal amount not to exceed the lesser of (i) eighty percent
(80%) of the cost of Eligible Machinery and Equipment of Borrower specifically
identified by Borrower as constituting the basis for the requested Term Loan
Advance, or (ii) eighty-five percent (85%) of the NOLV of such specifically
identified Eligible Machinery and Equipment, in each case which Equipment must
constitute Eligible Machinery and Equipment and which Equipment must not have
been specifically identified by Borrower with an earlier existing Term Loan
Advance; provided, however, that the aggregate amount advanced for all such Term
Loan Advances shall not exceed $2,000,000. Amounts repaid with respect to the
Term Loan may not be reborrowed.

2.3.2    Procedures. Borrower shall comply with the following procedures in
requesting a Term Loan Advance:

(i)    All requests for a Term Loan Advance must be in writing to Administrative
Agent and must include a description of the relevant Equipment, the amount of
the requested Term Loan Advance, and all other documents, agreements and
information as reasonably required by Administrative Agent.

(ii)    Each Term Loan Advance must be in a minimum amount of at least $250,000.

(iii)    All requests for a Term Loan Advance must be made in advance of and
provide sufficient time for the Administrative Agent to receive an appraisal
satisfactory to it in its sole discretion prior to the requested date of such
Term Loan Advance.

(iv)    There may not be more than three (3) Term Loan Advances at any time
outstanding.

(v)    All requests for a Term Loan Advance must be made during the Term Loan
Draw Period.

SECTION 3. INTEREST, FEES AND CHARGES

3.1    Interest.

3.1.1    Rates of Interest. Interest shall accrue on the principal amount of the
Base Rate Loans outstanding at the end of each day at a fluctuating rate per
annum equal to the Applicable Margin then in effect plus the Base Rate. Such
rate of interest shall increase or decrease by an amount equal to any increase
or decrease in the Base Rate, effective as of the opening of business on the day
that any such change in the Base Rate occurs. If Borrower Representative, on its
own behalf and on behalf of all other Borrowers, exercises the LIBOR Option as
provided in Section 4.1, interest shall accrue on the principal amount of the
LIBOR Loans outstanding at the end of each day at a rate per annum equal to the
Applicable Margin then

 

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in effect plus the LIBOR Lending Rate applicable to each LIBOR Loan for the
corresponding Interest Period; provided that in no event shall LIBOR at any time
be less than 0% per annum. Notwithstanding the foregoing, but subject to the
provisions of subsection 3.1.3. the amount of annual interest payable by
Borrower during each twelve (12) month period from and after March 1, 2017 on
the Loans shall in no event be less than the amount equal to $240,000 minus the
sum of the following amounts paid by Borrower in such twelve (12) month period:
(i) any Letter of Credit fees, (ii) the Unused Line Fee, and (iii) fees owing
under the Fee Letter; provided however, that such minimum annual amount shall
only apply during the periods from March 1, 2017 through February 28, 2019.

3.1.2    Default Rate of Interest. At the option of Administrative Agent, upon
and after the occurrence of an Event of Default, and during the continuation
thereof, all Obligations shall bear interest or earn fees at a rate per annum
equal to 2.0% plus the rate otherwise applicable thereto (the “Default Rate”).

3.1.3    Maximum Interest. In no event whatsoever shall the aggregate of all
amounts deemed interest hereunder and charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto (the “Maximum Rate”). If any provisions of this Agreement are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto. If at any time, the amount of interest paid hereunder is
limited by the Maximum Rate, and the amount at which interest accrues hereunder
is subsequently below the Maximum Rate, the rate at which interest accrues
hereunder shall remain at the Maximum Rate, until such time as the aggregate
interest paid hereunder equals the amount of interest that would have been paid
had the Maximum Rate not applied.

3.2    Computation of Interest and Fees. Interest with respect to LIBOR Loans,
Letter of Credit fees and Unused Line Fees hereunder shall be calculated daily
and shall be computed on the actual number of days elapsed over a year of 360
days. Interest with respect to Base Rate Loans hereunder shall be calculated
daily and shall be computed on the actual number of days elapsed over a year of
365 days or 366 days, as applicable.

3.3    Fee Letter. Borrowers shall pay to Administrative Agent certain fees and
other amounts in accordance with the terms of the fee letter between Borrowers
and Administrative Agent (the “Fee Letter”).

3.4    Letter of Credit Fees. Borrowers shall pay to Administrative Agent
(i) for the ratable benefit of Revolving Credit Lenders, a per annum fee equal
to the Applicable Margin then in effect for LIBOR Revolving Credit Loans
multiplied by the aggregate undrawn available amount of such Letters of Credit
outstanding from time to time during the term of this Agreement, (ii) for the
benefit of Issuing Bank, all normal and customary charges associated with the
issuance, processing and administration thereof, which fees and charges shall be
deemed fully earned upon issuance of each such Letter of Credit or as advised by
Administrative Agent or Issuing Bank, and (iii) for the benefit of Issuing Bank,
a per annum fronting fee equal to 0.125% of the aggregate face amount of such
Letters of Credit outstanding from time to time during the term of this
Agreement. Such fees and charges shall be payable quarterly in arrears on the
first Business Day of each fiscal quarter or as advised by Administrative Agent
or Issuing

 

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Bank and shall not be subject to rebate or proration upon the termination of
this Agreement for any reason.

3.5    Unused Line Fee. Borrowers shall pay to Administrative Agent, for the
ratable benefit of Lenders, a fee (the “Unused Line Fee”) equal to the Unused
Line Fee Margin per annum multiplied by the average daily amount by which the
Total Credit Facility exceeds the Aggregate Revolving Extensions and the Term
Loan Advances outstanding; provided that, outstanding Swingline Loans shall not
be included as part of the outstanding balance of the Revolving Credit Loans for
purposes of calculating the Unused Line Fee. The Unused Line Fee shall be
payable monthly in arrears on the first Business Day of each month hereafter.

3.6    [Reserved]

3.7    Reimbursement of Expenses. If, at any time or times regardless of whether
or not an Event of Default then exists, (i) any Agent incurs legal or accounting
expenses or any other costs or out-of-pocket expenses in connection with (a) the
negotiation and preparation of this Agreement or any of the other Loan
Documents, any amendment of or modification of this Agreement or any of the
other Loan Documents, or any syndication or attempted syndication of the
Obligations (including, without limitation, printing and distribution of
materials to prospective Lenders and all costs associated with bank meetings,
but excluding any closing fees paid to Lenders in connection therewith) or
(b) the administration of this Agreement or any of the other Loan Documents and
the transactions contemplated hereby and thereby, or (ii) any Agent or any
Lender incurs legal or accounting expenses or any other costs or out-of-pocket
expenses in connection with (a) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by any Agent, any Lender, any Borrower
or any other Person) relating to the Collateral, this Agreement or any of the
other Loan Documents or any Borrower’s, any of its Subsidiaries’ or any
Guarantor’s affairs, (b) any attempt to enforce any rights of Administrative
Agent or any Lender against any Borrower or any other Person which may be
obligated to Administrative Agent or any Lender by virtue of this Agreement or
any of the other Loan Documents or (c) any attempt to inspect, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral, including, without limitation, any excise, property, sales,
and use taxes imposed by any state, federal, or local authority on any of the
Collateral or in respect of the sale thereof; then all such legal and accounting
expenses, other costs and out-of-pocket expenses of Administrative Agent or any
Lender, as applicable, shall be charged to Borrowers; provided, that, in the
case of each of clauses (i) and (ii), any such legal expenses shall be limited
to one counsel for Administrative Agent and one local counsel in each
appropriate jurisdiction, if necessary, and, in the case of clause (ii), one
additional counsel for all Lenders other than Administrative Agent. All amounts
chargeable to Borrowers under this Section 3.7 shall be Obligations secured by
all of the Collateral, shall be payable on demand to Administrative Agent or
such Lender, as the case may be, and shall bear interest from the date such
demand is made until paid in full at the rate applicable to Base Rate Revolving
Credit Loans from time to time. Borrowers shall also reimburse Administrative
Agent for expenses incurred by any Agent to the extent and in the manner
provided in Sections 3.8 and 3.9 hereof.

3.8    Bank Charges. Borrowers shall pay to Administrative Agent, on demand, any
and all fees, costs or expenses which Administrative Agent or any Lender pays to
a bank or other similar institution arising out of or in connection with (i) the
forwarding to any Borrower or any

 

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other Person on behalf of any Borrower, by Administrative Agent or any Lender,
of proceeds of Loans made to Borrowers pursuant to this Agreement and (ii) the
depositing for collection by Administrative Agent or any Lender of any check or
item of payment received or delivered to Administrative Agent or any Lender on
account of the Obligations.

3.9    Audits. Collateral Agent may, at Borrowers’ expense, conduct up to two
audits per year of the books, records and Properties of Borrowers and such other
matters as Collateral Agent shall deem appropriate in its reasonable credit
judgment, which audits may be conducted by employees of Collateral Agent or by
third parties hired by Collateral Agent. In addition, Collateral Agent may
conduct (i) one additional audit per year at the Lenders’ expense and (ii) such
additional audits, at Borrowers’ expense, as Collateral Agent shall require if
an Event of Default has occurred and is continuing. Administrative Agent may, in
its discretion upon prior notice to Borrowers, provide for the payment of such
amounts by making appropriate Revolving Credit Loans to Borrowers and charging
Borrowers’ Loan Account therefor.

3.10    Payment of Charges. All amounts chargeable to Borrowers under this
Agreement shall be Obligations secured by all of the Collateral, shall be,
unless specifically otherwise provided, payable on demand and shall bear
interest from the date demand was made or such amount is due, as applicable,
until paid in full at the rate applicable to Base Rate Revolving Credit Loans
from time to time.

3.11    Taxes.

3.11.1    No Deductions. Any and all payments or reimbursements made hereunder
shall be made free and clear of and without deduction for any and all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, other than Excluded Taxes (collectively, “Indemnified Taxes”).
If Applicable Law requires a deduction for any such Indemnified Taxes from or in
respect of any sum payable hereunder to Administrative Agent, Issuing Bank or
any Lender, then the sum payable hereunder shall be increased as may be
necessary so that, after all required deductions are made, Administrative Agent,
Issuing Bank or such Lender receives an amount equal to the sum it would have
received had no such deductions been made.

3.11.2    Indemnification for Taxes. The Loan Parties shall jointly and
severally indemnify Administrative Agent, Issuing Bank and each Lender, within
ten (10) days after demand therefor, for the full amount of any Indemnified
Taxes payable or paid by Administrative Agent, Issuing Bank or such Lender or
required to be withheld or deducted from a payment to Administrative Agent,
Issuing Bank or such Lender and any reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability prepared in good faith
and delivered to the Loan Parties by Issuing Bank or a Lender (with a copy to
Administrative Agent), or by Administrative Agent on its own behalf or on behalf
of Issuing Bank or a Lender, shall be conclusive absent manifest error.
Notwithstanding any contrary provision in this Agreement, the obligation of the
Loan Parties under this Section 3.11 shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

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3.11.3    Status of Lenders. Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to any payments made hereunder or
under any other Loan Document shall deliver to Borrowers and Administrative
Agent, at the time or times reasonably requested by the Loan Parties or
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Loan Parties or Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Loan
Parties or Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Loan Parties or
Administrative Agent as will the Loan Parties Borrowers or Administrative Agent
to determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Without limiting the generality of the
foregoing:

(i)    each U.S. Lender shall deliver to the Loan Parties and Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such U.S. Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Loan Parties or Administrative Agent), executed originals of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding;

(ii)    each Foreign Lender shall deliver to the Loan Parties and Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Loan Parties or Administrative Agent), whichever of the following is applicable:

(a)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party, executed originals of IRS Form
W-8BEN (or any successor forms) establishing an exemption from, or reduction of,
U.S. federal withholding, and such other documentation as required by the Code;

(b)    executed originals of IRS Form W-8ECI (or any successor forms);

(c)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 871(h) or Section 881(c) of the Code,
(x) certificates substantially in the form of Exhibit 3.11 (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN (or any
successor form); or

(d)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY (or any successor form), accompanied by IRS Form
W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or
other certification documents (or successor forms) from each beneficial owner,
as applicable; provided, that if the Foreign Lender is a partnership (and not a
participating lender) and one or more direct or indirect partners of such
Foreign Lender are claiming the portfolio interest exemption, a U.S. Tax
Compliance Certificate may be provided by such Foreign Lender on behalf of each
such direct and indirect partner;

 

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

(iv)    if a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Loan Parties and Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Loan
Parties or Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Loan Parties or
Administrative Agent as may be necessary for the Loan Parties and Administrative
Agent to comply with their obligations under FATCA, to determine whether such
Lender has complied with such Lender’s obligations under FATCA and/or to
determine the amount, if any, to deduct and withhold from such payment.

Each Lender agrees that if any documentation it previously delivered expires or
becomes obsolete or inaccurate in any respect, it shall promptly update such
documentation or promptly notify the Loan Parties and Administrative Agent in
writing of its inability to do so. Notwithstanding any other provisions of this
subsection 3.11.3, a Lender shall not be required to deliver any documentation
that such Lender is not legally eligible to deliver.

3.12    Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Documents, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(i)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(ii)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(a)    a reduction in full or in part or cancellation of any such liability;

 

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(b)    a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(c)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

SECTION 4. LOAN ADMINISTRATION

4.1    Procedures for Borrowing and LIBOR Option. Borrowings under the credit
facility established pursuant to Section 2 hereof shall be as follows:

4.1.1    Loan Requests. Requests for a Revolving Credit Loan shall be made, or
shall be deemed to be made, in the following manner:

(i)    Borrower Representative, on its own behalf and on behalf of all other
Borrowers, may give Administrative Agent notice of its intention to borrow, in
which notice Borrower Representative shall specify the amount of the proposed
borrowing of a Revolving Credit Loan (which shall be no less than $500,000 or an
integral multiple of $100,000 in excess thereof in the case of Base Rate
Revolving Credit Loans which are not Swingline Loans (with respect to which
there shall be no minimum borrowing amount)) and the proposed borrowing date,
which shall be a Business Day, no later than 11:00 a.m. (New York time) on the
proposed borrowing date (or in accordance with subsection 4.1.7 or 4.1.8, as
applicable, in the case of a request for a LIBOR Loan). There shall be no
minimum borrowing amount for Base Rate Revolving Credit Loans during the period
of time Cash Dominion is in effect. Notwithstanding the foregoing, a notice of
its intention to borrow shall not be required to be delivered if the Borrowers
and Administrative Agent have implemented automatic sweep to line functionality
such that Revolving Credit Loans are automatically funded to the Borrowers’
operating account to fund the payments of disbursements from such operating
account.

(ii)    On the date on which any amount required to be paid under this
Agreement, whether as interest, repayment of Swingline Loans pursuant to
subsection 2.1.3, repayment of LC Obligations pursuant to Section 2.2, or for
any other Obligation, becomes due and payable, Borrower Representative, on its
own behalf and on behalf of all other Borrowers, shall be deemed irrevocably to
have made a request for a Revolving Credit Loan on such due date in the amount
required to pay such interest or other Obligation.

4.1.2    Disbursement. The proceeds of each Revolving Credit Loan requested
pursuant to subsection 4.1.1(i) shall be disbursed by Administrative Agent in
lawful money of the United States of America in immediately available funds, in
the case of the initial requested borrowing, in accordance with the terms of the
written disbursement letter from Borrower

 

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Representative, on its own behalf and on behalf of all other Borrowers, and in
the case of each subsequent requested borrowing, by wire transfer to such bank
account as may be agreed upon by Borrowers and Administrative Agent from time to
time or elsewhere if pursuant to a written direction from Borrower
Representative. The proceeds of each Revolving Credit Loan that is deemed
requested pursuant to subsection 4.1.1(ii) shall be disbursed by Administrative
Agent in lawful money of the United States of America in immediately available
funds by way of direct payment of the relevant interest or other Obligation. If
at any time any Loan is funded by Administrative Agent or Lenders in excess of
the amount requested or deemed requested by Borrowers, Borrowers agree to repay
the excess to Administrative Agent immediately upon the earlier to occur of
(a) any Borrower’s discovery of the error and (b) notice thereof to Borrowers
from Administrative Agent or any Lender.

4.1.3    Payment by Lenders. Administrative Agent shall give to each Lender
prompt written notice by facsimile, e-mail or otherwise of the receipt by
Administrative Agent from Borrower Representative of any request for a Revolving
Credit Loan. Each such notice shall specify the requested date and amount of
such Revolving Credit Loan, whether such Revolving Credit Loan shall be subject
to the LIBOR Option, and the amount of each Lender’s advance thereunder (in
accordance with its applicable Pro Rata Percentage). Each Lender shall, not
later than 12:00 p.m. (New York time) on such requested date, wire to a bank
designated by Administrative Agent the amount of that Lender’s Pro Rata
Percentage of the requested Revolving Credit Loan. The failure of any Lender to
make the Revolving Credit Loans to be made by it shall not release any other
Lender of its obligations hereunder to make its Revolving Credit Loan. Neither
Administrative Agent nor any other Lender shall be responsible for the failure
of any other Lender to make the Revolving Credit Loan to be made by such other
Lender. The foregoing notwithstanding, Administrative Agent, in its sole
discretion, may from its own funds make a Revolving Credit Loan on behalf of any
Lender. In such event, the Lender on behalf of whom Administrative Agent made
the Revolving Credit Loan shall reimburse Administrative Agent for the amount of
such Revolving Credit Loan made on its behalf, on a weekly (or more frequent, as
determined by Administrative Agent in its sole discretion) basis. On each such
settlement date, Administrative Agent will pay to each Lender the net amount
owing to such Lender in connection with such settlement, including without
limitation amounts relating to Loans, fees, interest and other amounts payable
hereunder. The entire amount of interest attributable to such Revolving Credit
Loan for the period from the date on which such Revolving Credit Loan was made
by Administrative Agent on such Lender’s behalf until Administrative Agent is
reimbursed by such Lender, shall be paid to Administrative Agent for its own
account.

4.1.4    Authorization. Borrowers hereby irrevocably authorize Administrative
Agent, in Administrative Agent’s sole discretion, to advance to Borrowers, and
to charge to Borrowers’ Loan Account hereunder as a Revolving Credit Loan (which
shall be a Base Rate Revolving Credit Loan), a sum sufficient to pay all
interest accrued on the Obligations during the immediately preceding month or
quarter, as the case may be, and to pay all fees, costs and expenses and other
Obligations at any time owed by any Borrower to Administrative Agent or any
Lender hereunder.

4.1.5    Letter of Credit Requests. A request for a Letter of Credit shall be
made in the following manner: Borrower Representative, on its own behalf and on
behalf of all

 

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other Borrowers, may give Administrative Agent and Issuing Bank a written notice
of its request for the issuance of a Letter of Credit, not later than 11:00 a.m.
(New York time), one Business Day before the proposed issuance date thereof, in
which notice Borrower Representative shall specify the issuance date and format
and wording for the Letter of Credit being requested (which shall be
satisfactory to Administrative Agent and the Person being asked to issue such
Letter of Credit). Such request shall be accompanied by an executed application
and reimbursement agreement in form and substance satisfactory to Administrative
Agent and the Person being asked to issue the Letter of Credit, as well as any
required resolutions and other documents.

4.1.6    Method of Making Requests. As an accommodation to Borrowers, unless a
Default or an Event of Default is then in existence, (i) Administrative Agent
shall permit telephonic or electronic requests for Revolving Credit Loans to
Administrative Agent, (ii) Administrative Agent and Issuing Bank may, in their
discretion, permit electronic transmittal of requests for Letters of Credit to
them, and (iii) Administrative Agent may, in Administrative Agent’s discretion,
permit electronic transmittal of instructions, authorizations, agreements or
reports to Administrative Agent. Unless Borrower Representative, on its own
behalf and on behalf of all other Borrowers specifically directs Administrative
Agent or Issuing Bank in writing not to accept or act upon telephonic or
electronic communications from any Borrower, neither Administrative Agent nor
Issuing Bank shall have any liability to Borrowers for any loss or damage
suffered by any Borrower as a result of Administrative Agent’s or Issuing Bank’s
honoring of any requests, execution of any instructions, authorizations or
agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Administrative Agent or
Issuing Bank by any Borrower, and neither Administrative Agent nor Issuing Bank
shall have any duty to verify the origin of any such communication or the
authority of the Person sending it. Each telephonic request for a Revolving
Credit Loan or Letter of Credit accepted by Administrative Agent and Issuing
Bank, if applicable, hereunder shall be promptly followed by a written
confirmation of such request from Borrower Representative to Administrative
Agent and Issuing Bank, if applicable.

4.1.7    LIBOR Loan Request. By delivering a borrowing request to Administrative
Agent on or before 10:00 a.m., New York time, on a Business Day, Borrower
Representative, on its own behalf and on behalf of each other Borrower, may from
time to time irrevocably request, on not less than three nor more than five
Business Days’ notice, that a LIBOR Loan be made in a minimum amount of $500,000
and integral multiples of $100,000, with an Interest Period of one, two or three
months. On the terms and subject to the conditions of this agreement, each LIBOR
Loan shall be made available to Borrowers no later than 11:00 a.m. New York time
on the first day of the applicable Interest Period by deposit to the account of
the applicable Borrower as shall have been specified in its borrowing request.
In no event shall Borrowers be permitted to have outstanding at any one time
LIBOR Loans with more than six different Interest Periods.

4.1.8    Continuation and Conversion Elections. By delivering a
continuation/conversion notice to Administrative Agent on or before 10:00 a.m.,
New York time, on a Business Day, Borrower Representative, on its own behalf and
on behalf of each other Borrower, may from time to time irrevocably elect, on
not less than three nor more than five Business Days’ notice, that all, or any
portion in an aggregate minimum amount of $500,000 and integral multiples of
$100,000, of any LIBOR Loan be converted on the last day of an Interest

 

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Period into a LIBOR Loan with a different Interest Period, or continued on the
last day of an Interest Period as a LIBOR Loan with a similar Interest Period,
provided, however, that no portion of the outstanding principal amount of any
LIBOR Loans may be converted to, or continued as, LIBOR Loans when any Default
or Event of Default has occurred and is continuing, and no portion of the
outstanding principal amount of any LIBOR Loans may be converted to LIBOR Loans
of a different duration if such LIBOR Loans relate to any Derivative
Obligations. If any Default or Event of Default has occurred and is continuing,
or in the absence of delivery of a continuation/conversion notice with respect
to any LIBOR Loan at least three Business Days before the last day of the then
current Interest Period with respect thereto, each maturing LIBOR Loan shall
automatically be continued as a Base Rate Loan.

4.1.9    Voluntary Prepayment of LIBOR Loans. LIBOR Loans may be prepaid upon
the terms and conditions set forth herein. For LIBOR Loans in connection with
which Borrowers have or may incur Derivative Obligations, additional obligations
may be associated with prepayment, in accordance with the terms and conditions
of the applicable underlying agreements relating to such Derivative Obligations.
Borrower Representative, on its own behalf and on behalf of each other Borrower,
shall give Administrative Agent, no later than 10:00 a.m., New York time, at
least four (4) Business Days’ notice of any proposed prepayment of any LIBOR
Loan, specifying the proposed date of payment of such LIBOR Loan, and the
principal amount to be paid. Each partial prepayment of the principal amount of
any such LIBOR Loan shall be in a minimum amount of $500,000 and integral
multiples of $100,000 and accompanied by the payment of all charges outstanding
on such LIBOR Loans and of all accrued interest on the principal repaid to the
date of payment. Borrowers acknowledge that prepayment or acceleration of a
LIBOR Loan during an Interest Period applicable thereto shall result in Lenders
incurring additional costs, expenses and/or liabilities and that it is extremely
difficult and impractical to ascertain the extent of such costs, expenses and/or
liabilities. Therefore, all full or partial prepayments of LIBOR Loans shall be
accompanied by, and Borrowers hereby promise to pay, on each date a LIBOR Loan
is prepaid or the date all sums payable hereunder become due and payable, by
acceleration or otherwise, in addition to all other sums then owing, an amount
equal to the loss, cost and expense incurred by each Lender attributable to such
event (including any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its LIBOR Loans and any loss, expense or liability relating to any
currency swap entered into by such Lender to fund such LIBOR Loan, but excluding
loss of anticipated profits) (“LIBOR Loan Prepayment Fee”). A certificate of any
Lender setting forth in reasonable detail any amount or amounts that such Lender
is entitled to receive pursuant to this subsection 4.1.9 shall be delivered to
Borrower Representative (with a copy to Administrative Agent) and shall be
conclusive and binding absent manifest error.

4.2    Payments. The Obligations shall be payable as follows:

4.2.1    Principal.

(i)    Revolving Credit Loans. Principal on account of Revolving Credit Loans
shall be payable by Borrowers to Administrative Agent for the ratable benefit of
Lenders immediately upon the earliest of (i) the occurrence of an Event of
Default in consequence of which Administrative Agent or Majority Lenders elect
to accelerate the maturity and payment of the Obligations, or (ii) termination
of this Agreement pursuant

 

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to Section 5 hereof; provided, however, that, if an Overadvance shall exist at
any time, Borrowers shall, on demand, repay the Overadvance. Each payment by
Borrowers on account of principal of the Revolving Credit Loans shall be applied
first to Base Rate Revolving Credit Loans and then to LIBOR Revolving Credit
Loans.

(ii)    Term Loan. Beginning on the first day of the second full month following
each Term Loan Advance, and on the first day of each month thereafter, principal
payable on account of such Term Loan Advance shall be paid in equal monthly
installments equal to an amount sufficient to fully amortize the aggregate
outstanding principal balance of such Term Loan Advance over an assumed term
ending on the date which is sixty (60) months after the first payment on such
Term Loan Advance. The entire remaining principal amount then outstanding,
together with any and all other amounts due in respect of the Term Loan, shall
be due and payable on the Term Loan Maturity Date.

4.2.2    Interest Provisions. Interest on the outstanding principal amount of
any Loan shall be payable on each applicable Interest Payment Date.

4.2.3    Costs, Fees and Charges. Costs, fees and charges payable pursuant to
this Agreement shall be payable by Borrowers to Administrative Agent, as and
when provided to Administrative Agent, Issuing Bank or a Lender, as applicable,
or to any other Person designated by Administrative Agent, Issuing Bank or such
Lender in writing.

4.2.4    Other Obligations. The balance of the Obligations requiring the payment
of money, if any, shall be payable by Borrowers to Administrative Agent for
distribution to Issuing Bank and Lenders, as applicable, as and when provided in
this Agreement or the other Loan Documents.

4.2.5    LIBOR Loans. If the application of any payment made in accordance with
the provisions of this Agreement would result in the prepayment, in whole or in
part, of a LIBOR Loan prior to the last day of the Interest Period for such
LIBOR Loan, Borrowers shall pay to each Lender on the date of each such
prepayment any applicable LIBOR Loan Prepayment Fees of such Lender; provided,
that, if no Event of Default has occurred and is continuing at the time such
payment is to be applied, the amount of such prepayment shall not be applied to
such LIBOR Loan, but will, at Borrowers’ option, be held by Administrative Agent
in a non-interest-bearing account at Bank, which account is in the name of
Administrative Agent and from which account only Administrative Agent can make
any withdrawal, in each case to be applied as such amount would otherwise have
been applied hereunder at the earlier to occur of (i) the last day of the
relevant Interest Period or (ii) the occurrence of an Event of Default, in which
case, the LIBOR Loan Prepayment Fees shall be payable upon the occurrence of
such Event of Default.

4.3    Mandatory and Optional Prepayments.

4.3.1    Proceeds of Sale, Loss, Destruction or Condemnation of Collateral. If
any Loan Party sells any of the Collateral (other than any sales or dispositions
permitted under any clause of subsection 9.2.8, except clause (ix) thereof) or
if any of the Collateral is lost or

 

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destroyed or taken by condemnation, Borrowers shall pay to Administrative Agent,
for the ratable benefit of Lenders, as and when received by any Loan Party and
as a mandatory prepayment of the Loans, as herein provided, a sum equal to 100%
of the proceeds (including insurance payments but net of costs and taxes
incurred in connection with such sale or event) received by such Loan Party from
such sale, loss, destruction or condemnation. To the extent that the Collateral
sold, lost, destroyed or condemned consists of Equipment, real Property,
Inventory, or other Property other than Accounts, the applicable prepayment
shall be applied first, to the installments of principal due under the Term Loan
ratably, to be applied to future installment payments in inverse order of
maturity until paid in full, and second to repay outstanding principal of
Revolving Credit Loans without a reduction of the Revolving Credit Commitments.
To the extent that the Collateral sold, lost, destroyed or condemned consists of
Accounts, the applicable prepayment shall be applied to reduce the outstanding
principal balance of the Revolving Credit Loans, without a reduction of the
Revolving Credit Commitments. Notwithstanding the foregoing, if the proceeds of
insurance (net of costs and taxes incurred) with respect to any loss or
destruction of Equipment (other than Eligible Machinery and Equipment which
constitutes the basis for any outstanding Term Loan Advance), or real Property
(i) are less than $250,000, unless an Event of Default is then in existence,
Administrative Agent shall remit such proceeds to Borrowers for use in replacing
or repairing the damaged Collateral or (ii) are equal to or greater than
$250,000 and Borrowers have requested that Administrative Agent agree to permit
Borrowers or the applicable Loan Party to repair or replace the damaged
Collateral, such amounts shall be provisionally applied to reduce the
outstanding principal balance of the Revolving Credit Loans until the earlier of
Administrative Agent’s decision with respect thereto or the expiration of one
hundred eighty (180) days from such request. If Administrative Agent agrees, in
its reasonable judgment, to permit such repair or replacement under such
clause (ii), such amount shall, unless an Event of Default is in existence, be
remitted to Borrowers for use in replacing or repairing the damaged Collateral;
if Administrative Agent declines to permit such repair or replacement or does
not respond to Borrowers within such one hundred eighty (180) day period, such
amount shall be applied to the Loans in the manner specified in the second or
third sentence of this subsection 4.3.1, as applicable, until payment thereof in
full.

4.3.2    [Reserved]

4.3.3    Proceeds from Additional Indebtedness or Equity. If any Borrower
receives proceeds of any additional Indebtedness incurred by such Borrower
(other than Indebtedness permitted pursuant to subsection 9.2.2) or if any
Borrower receives proceeds of any additional equity issued by such Borrower,
Borrowers shall pay to Administrative Agent, for the ratable benefit of Lenders,
when and as received by such Borrower and as a mandatory prepayment of the
Obligations, a sum equal to 100% of the net proceeds to such Borrower of the
incurrence of such Indebtedness or the issuance of such equity. Any such
prepayment shall be applied to repay outstanding principal of Revolving Credit
Loans without a reduction of the Revolving Credit Commitments.

4.3.4    Excess Revolving Credit Extensions. If at any time the Aggregate
Revolving Extensions exceed the Line Cap at such time (except as a result of
Overadvances permitted under subsection 2.1.2), Borrowers shall immediately
repay the Revolving Credit Loans and/or cash collateralize the Letters of Credit
in an aggregate amount equal to such excess.

 

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4.3.5    Optional Reductions of Revolving Credit Commitments. Borrowers may, at
their option from time to time but not more than once in any 12-month period
upon not less than three (3) Business Days’ prior written notice to
Administrative Agent, permanently reduce ratably in part, the unused portion of
the Revolving Credit Commitments, provided, however, that (i) each such optional
reduction shall be in an amount of $2,000,000 or integral multiples of
$1,000,000 in excess thereof and (ii) the aggregate of all optional reductions
to the Revolving Credit Commitments may not exceed $5,000,000 during the Term.
Except for charges under subsection 4.1.9, such prepayments shall be without
premium or penalty.

4.3.6    Optional Prepayments. Borrowers may, at their option from time to time
upon not less than three (3) days prior written notice to Administrative Agent,
prepay installments of the Term Loan. Each such prepayment shall be applied to
the installments of principal due under the Term Loan in the order of
application designated by Borrower. Except for charges under subsection 4.1.9,
such prepayments shall be without premium or penalty.

4.4    Application of Payments and Collections.

4.4.1    Collections. All items of payment received by Administrative Agent by
12:00 noon, New York time, on any Business Day shall be deemed received on that
Business Day. All items of payment received after 12:00 noon, New York time, on
any Business Day, in Administrative Agent’s discretion, shall be deemed received
on the following Business Day. If as the result of collections of Accounts as
authorized by subsection 7.2.4 hereof or otherwise, a credit balance exists in
the Loan Account, such credit balance shall not accrue interest in favor of
Borrowers, but shall be disbursed to Borrowers or otherwise at Borrower
Representative’s direction in the manner set forth in subsection 4.1.2, upon
Borrower Representative’s request at any time, so long as no Default or Event of
Default then exists. Administrative Agent may at its option, offset such credit
balance against any of the Obligations upon and during the continuance of an
Event of Default.

4.4.2    Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among Lenders (according to the
unpaid principal balance of the Loans to which such payments relate held by each
Lender). Prior to the occurrence of an Event of Default, all proceeds of
Collateral shall be applied by Administrative Agent against the outstanding
Obligations as otherwise provided in this Agreement. Anything contained herein
or in any other Loan Document to the contrary notwithstanding, all payments and
collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by Administrative Agent or any Lender
after the occurrence and during the continuance of an Event of Default and the
resultant declaration that all Obligations are immediately due and payable shall
be remitted to Administrative Agent and distributed as follows:

(i)    first, to the payment of any outstanding costs and expenses incurred by
any Agent in monitoring, verifying, protecting, preserving or enforcing the
Liens on the Collateral, and in protecting, preserving or enforcing rights under
this Agreement or any of the other Loan Documents, and payable by Borrowers
under this Agreement, including, without limitation, under Sections 3.7, 3.9 and
13.2 hereof (such funds to be retained by the applicable Agent for its own
account unless it has previously

 

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been reimbursed for such costs and expenses by Lenders, in which event such
amounts shall be remitted to Lenders to reimburse them for payments theretofore
made to such Agent);

(ii)    second, to the payment of any outstanding interest or fees due under the
Loan Documents to be allocated pro rata in accordance with the aggregate unpaid
amounts owing to each holder thereof;

(iii)    third, to the payment of the principal balance of the Swingline Loans;

(iv)    fourth, to the payment of principal on the Revolving Credit Loans, the
Term Loan, unpaid reimbursement obligations in respect of Letters of Credit,
together with amounts to be held by Administrative Agent as collateral security
for any outstanding Letters of Credit pursuant to subsection 11.3.5 hereof,
amounts owing with respect to Derivative Obligations (other than Excess
Derivative Obligations), the aggregate amount paid to, or held as collateral
security for, Lenders (and their Affiliates, as applicable in the case of
Derivative Obligations) to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof;

(v)    fifth, to the payment of all other unpaid Obligations (including, without
limitation, all Product Obligations not included in any of the preceding clauses
of this subsection 4.4.2) and all other indebtedness, obligations, and
liabilities of the Loan Parties to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof; and

(vi)    finally, to Borrowers or otherwise as required by law or court order.

Except as otherwise specifically provided for herein, Borrowers hereby
irrevocably waive the right to direct the application of payments and
collections at any time received by Administrative Agent or any Lender from or
on behalf of Borrowers or any Guarantor, and Borrowers hereby irrevocably agree
that Administrative Agent shall have the continuing exclusive right to apply and
reapply any and all such payments and collections received at any time by
Administrative Agent or any Lender against the Obligations in the manner
described above. In the event that the amount of any Derivative Obligation is
not fixed and determined at the time proceeds of Collateral are received which
are to be allocated thereto, the proceeds of Collateral so allocated shall be
held by Administrative Agent as collateral security (in a non-interest bearing
account) until such Derivative Obligation is fixed and determined and then the
same shall (if and when, and to the extent that, payment of such liability is
required by the terms of the relevant contractual arrangements) be applied to
such liability.

4.5    All Loans to Constitute One Obligation. The Loans and LC Obligations
shall constitute one general Obligation of Borrowers and shall be secured by
Administrative Agent’s Lien upon all of the Collateral.

 

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4.6    Loan Account. Administrative Agent shall enter all Loans as debits to a
loan account (the “Loan Account”) and shall also record in the Loan Account all
payments made by Borrowers on any Obligations and all proceeds of Collateral
which are finally paid to Administrative Agent, and may record therein, in
accordance with customary accounting practice, other debits and credits,
including interest and all charges and expenses properly chargeable to
Borrowers.

4.7    Statements of Account. Administrative Agent will account to Borrower
Representative monthly with a statement of Loans, charges and payments made
pursuant to this Agreement during the immediately preceding month, and such
account rendered by Administrative Agent shall be deemed final, binding and
conclusive upon Borrowers absent demonstrable error unless Administrative Agent
is notified by Borrowers in writing to the contrary within thirty (30) days of
the date each accounting is received by Borrowers. Such notice shall be deemed
an objection only to those items specifically objected to therein.

4.8    Increased Costs. If any Change in Law on or after the date hereof
(i) shall subject any Agent or any Lender to any tax, duty or other charge with
respect to its Loans or its obligation to make Loans, or shall change the basis
of taxation of payments to any Agent or any Lender of the principal of or
interest on its Loans or any other amounts due under this Agreement in respect
of its Loans or its obligation to make Loans (except for the introduction of, or
change in the rate of, tax on the overall net income of any Agent or any Lender
or franchise taxes, imposed by the jurisdiction (or any political subdivision or
taxing authority thereof) under the laws of which any Agent or any Lender is
organized or in which any Agent’s or such Lender’s principal executive office is
located); or (ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System of
the United States) against assets of, deposits with or for the account of, or
credit extended by, any Agent or any Lender or shall impose on any Agent or any
Lender or on the London interbank market any other condition affecting its Loans
or its obligation to make Loans; and the result of any of the foregoing in
clause (i) or (ii) is to increase the cost to an Agent or any Lender of making
or maintaining any Loan, or to reduce the amount of any sum received or
receivable by Administrative Agent or any Lender under this Agreement with
respect thereto, then, within fifteen (15) days after demand by such Agent or
such Lender, Borrowers shall pay to such Agent, for its own account or the
account of the applicable Lender, such additional amount or amounts as will
compensate such Agent or such Lender for such increased cost or reduction.

4.9    Basis for Determining Interest Rate Inadequate. In the event that
Administrative Agent or any Lender shall have determined that (i) reasonable
means do not exist for ascertaining LIBOR for any Interest Period; or
(ii) dollar deposits in the relevant amount and for the relevant maturity are
not available in the London interbank market with respect to a proposed LIBOR
Loan, or a proposed conversion of a Base Rate Loan into a LIBOR Loan; then
Administrative Agent or such Lender shall give Borrowers prompt written,
telephonic or electronic notice of the determination of such effect. If such
notice is given, (x) any such requested LIBOR Loan shall be made as a Base Rate
Loan, unless Borrower Representative, on its own behalf and on behalf of all
other Borrowers, shall notify Administrative Agent no later than 10:00 a.m. (New
York time) three (3) Business Days’ prior to the date of such proposed borrowing
that the request for such borrowing shall be canceled or made as an unaffected
type of

 

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LIBOR Loan, and (y) any Base Rate Loan which was to have been converted to an
affected type of LIBOR Loan shall be continued as or converted into a Base Rate
Loan, or, if Borrowers shall notify Administrative Agent, no later than
10:00 a.m. (New York time) three (3) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of LIBOR Loan.

4.10    Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any Loan made by it in excess of its ratable share of
payments on account of Loans made by all Lenders, such Lender shall forthwith
purchase from each other Lender such participation in such Loan as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each other Lender; provided that, if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lenders the purchase price to the extent of such recovery, together with an
amount equal to such Lender’s ratable share (according to the proportion of
(i) the amount of such Lender’s required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.10 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrowers in the amount of such participation. Notwithstanding
anything to the contrary contained herein, all purchases and repayments to be
made under this Section 4.10 shall be made through Administrative Agent.

4.11    Defaulting Lender. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

4.11.1    The Unused Line Fee shall cease to accrue on the Revolving Credit
Commitment of such Lender so long as it is a Defaulting Lender (except to the
extent it is payable to an Issuing Bank pursuant to subsection 4.11.2(v) below);

4.11.2    If any Swingline Loans or Letters of Credit are outstanding at the
time a Lender becomes a Defaulting Lender then:

(i)    (A) the exposure under all or any part of any such Swingline Loans or
Letters of Credit shall be reallocated among the applicable non-Defaulting
Lenders that are Revolving Credit Lenders in accordance with their respective
Pro Rata Percentages but only to the extent the sum of all such non-Defaulting
Lenders’ Revolving Credit Loans outstanding, plus the LC Amount, plus the
aggregate amount of Swingline Loans outstanding does not exceed the total of all
such non-Defaulting Lenders’ Revolving Credit Commitments; and (B) with respect
to any such exposure so reallocated, each applicable non-Defaulting Lender shall
be deemed to have irrevocably and unconditionally purchased from the applicable
Swingline Lender or Issuing Bank an undivided interest and participation in the
portion of each Swingline Loan or Letter of Credit so reallocated, in accordance
with the applicable provisions of subsection 2.1.3 and Section 2.2. Subject to
Section 3.12, no reallocation hereunder shall constitute a

 

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waiver or release of any claim of any party hereunder against a Defaulting
Lender arising from that Lender having become a Defaulting Lender, including any
claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation;

(ii)    if the reallocations described in clause (i) above cannot, or can only
partially, be effected, Borrowers shall within one (1) Business Day following
notice by Administrative Agent (after giving effect to any partial reallocation
pursuant to clause (i) above) (x) first, prepay Swingline Loans in an amount
equal to the product of such Defaulting Lender’s Pro Rata Percentage times the
Swingline Loans outstanding, and (y) second, cash collateralize Letters of
Credit in an amount equal to the product of such Defaulting Lender’s Pro Rata
Percentage times the total LC Amount;

(iii)    if any portion of the Letters of Credit is cash collateralized pursuant
to clause (ii) above, Borrowers shall not be required to pay the Letter of
Credit fee described in clause (i) of Section 3.4 with respect to such portion
so long as it is cash collateralized;

(iv)    if any portion of the exposure under Letters of Credit of such
Defaulting Lender is reallocated to the non-Defaulting Lenders pursuant to
clause (i) above, then the Letter of Credit fee described in clause (i) of
Section 3.4 with respect to such portion so reallocated to each such
non-Defaulting Lender shall be paid to such non-Defaulting Lender; and

(v)    if any portion of the exposure under Letters of Credit of such Defaulting
Lender is neither cash collateralized nor reallocated pursuant to this
subsection 4.11.2, then, without prejudice to any rights or remedies of Issuing
Bank or any Lender hereunder, the Unused Line Fee that otherwise would have been
payable to such Defaulting Lender (with respect to the portion of such
Defaulting Lender’s Revolving Credit Commitment that was utilized by such
Letters of Credit) and the Letter of Credit fee described in clause (i) of
Section 3.4 payable with respect to such Letters of Credit shall be payable to
Issuing Bank until such Letters of Credit are fully cash collateralized and/or
reallocated.

4.11.3    So long as any Lender is a Defaulting Lender, Swingline Lender shall
not be required to fund any Swingline Loan and no Issuing Bank shall be required
to issue, amend or increase any Letter of Credit, unless it is satisfied that
the related exposure will be 100% covered by the Revolving Credit Commitments of
the non-Defaulting Lenders and/or cash collateralized in accordance with
subsection 4.11.2, and participations in any such newly issued or increased
Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in accordance with their respective Pro Rata Percentages
(and Defaulting Lenders shall not participate therein).

4.11.4    Any amount payable to a Defaulting Lender hereunder (whether on
account of principal, interest, fees or otherwise but excluding subsection
13.5.6) may, in lieu of being distributed to such Defaulting Lender, be retained
by Administrative Agent in a segregated non-interest bearing account and,
subject to any Applicable Law, be applied at such time or

 

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times as may be determined by Administrative Agent (i) first, to the payment of
any amounts owing by such Defaulting Lender to Administrative Agent hereunder,
(ii) second, pro rata, to the payment of any amounts owing by such Defaulting
Lender to Issuing Bank or Swingline Lender hereunder, (iii) third, to the
funding of any Loan or the funding or cash collateralization of any
participation in any Swingline Loan or Letter of Credit in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by Administrative Agent, (iv) fourth, if so determined
by Administrative Agent and Borrowers, held in such account as cash collateral
for future funding obligations of the Defaulting Lender under this Agreement,
(v) fifth, pro rata, to the payment of any amounts owing to Borrowers or the
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Borrower or any Lender against such Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this
Agreement and (vi) sixth, to such Defaulting Lender or as otherwise directed by
a court of competent jurisdiction; provided, that if such payment is a
prepayment of the principal amount of any Loans or LC Obligations in respect of
which a Defaulting Lender has funded its participation obligations, such payment
shall be applied solely to prepay the Loans of, and LC Obligations owed to, all
non-Defaulting Lenders pro rata prior to being applied to the prepayment of any
Loans of, or LC Obligations owed to, any Defaulting Lender.

4.11.5    In the event that Administrative Agent, Borrowers, Issuing Bank and
Swingline Lender agree that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the exposure of
the Lenders under the Swingline Loans and Letters of Credit shall be readjusted
to reflect the inclusion of such Lender’s Revolving Credit Commitment and on
such date such Lender shall purchase at par such of the Revolving Credit Loans
of the other Lenders as Administrative Agent shall determine may be necessary in
order for such Lender to hold such Revolving Credit Loans in accordance with its
Pro Rata Percentage. The rights and remedies against a Defaulting Lender under
this Section 4.11 are in addition to other rights and remedies that Borrowers,
Administrative Agent, Issuing Bank, Swingline Lender and the non-Defaulting
Lenders may have against such Defaulting Lender. The arrangements permitted or
required by this Section 4.11 shall be permitted under this Agreement,
notwithstanding any limitation on Liens or the pro rata sharing provisions or
otherwise.

SECTION 5. TERM AND TERMINATION

5.1    Term of Agreement. Subject to the right of Lenders to cease making Loans
to Borrowers during the continuance of any Default or Event of Default, this
Agreement shall be in effect for a period of five years from the date hereof,
through and including February 24, 2022 (the “Term”), unless terminated as
provided herein.

5.2    Termination.

5.2.1    Termination by Lenders. Administrative Agent may, and at the direction
of Majority Lenders shall, terminate this Agreement without notice after the
occurrence and during the continuance of an Event of Default.

 

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5.2.2    Termination by Borrowers. Upon at least three (3) Business Days’ prior
written notice to Administrative Agent and Lenders, Borrowers may, at their
option, terminate this Agreement; provided, however, that no such termination
shall be effective until Borrowers have paid or collateralized to Administrative
Agent’s reasonable satisfaction all of the Obligations (including any
obligations in connection with Derivative Obligations of any Loan Party but
excluding indemnity Obligations for which no claim has been made) in immediately
available funds, all Letters of Credit have expired, terminated or have been
cash collateralized or supported by a backstop letter of credit, in the case of
any such cash collateralization or backstop letter of credit, at 105% of the
face amount thereof to Administrative Agent’s reasonable satisfaction and
Borrowers have complied with Section 3.6 and subsection 4.1.9. Any notice of
termination given by Borrowers shall be irrevocable unless all Lenders otherwise
agree in writing and no Lender shall have any obligation to make any Loans or
issue or procure any Letters of Credit on or after the termination date stated
in such notice; provided, that a notice of termination may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by Borrowers (by notice to Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.

5.2.3    Effect of Termination. All of the Obligations shall be immediately due
and payable upon the termination date stated in any notice of termination of
this Agreement, or, if later, upon the expiration of the Term. All undertakings,
agreements, covenants, warranties and representations of Borrowers contained in
the Loan Documents shall survive any such termination and Administrative Agent
shall retain its Liens in the Collateral and Administrative Agent and each
Lender shall retain all of its rights and remedies under the Loan Documents
notwithstanding such termination until all Obligations (other than indemnity
Obligations for which no claim has been made) have been discharged or paid, in
full, in immediately available funds, including, without limitation, all
Obligations under Section 3.6 and subsection 4.1.9 resulting from such
termination and all Letters of Credit have expired, terminated or have been cash
collateralized or supported by a backstop letter of credit, in the case of any
such cash collateralization or backstop letter of credit, at 105% of the face
amount thereof to Administrative Agent’s reasonable satisfaction.
Notwithstanding the foregoing or the payment in full of the Obligations,
Administrative Agent shall not be required to terminate its Liens in the
Collateral unless, with respect to any loss or damage Administrative Agent may
incur as a result of dishonored checks or other items of payment received by
Administrative Agent from any Borrower or any Account Debtor and applied to the
Obligations, Administrative Agent shall, at its option, (i) have received a
written agreement satisfactory to Administrative Agent, executed by any Borrower
and by any Person whose loans or other advances to Borrowers are used in whole
or in part to satisfy the Obligations, indemnifying Administrative Agent and
each Lender from any such loss or damage or (ii) have retained cash Collateral
or other Collateral for such period of time as Administrative Agent, in its
reasonable discretion, may deem necessary to protect Administrative Agent and
each Lender from any such loss or damage.

SECTION 6. SECURITY INTERESTS

6.1    Security Interest in Collateral.

6.1.1    Grant of Security Interest by Borrowers. To secure the prompt payment
and performance to Administrative Agent and each Lender of the Obligations, each

 

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Borrower hereby grants to Administrative Agent for the benefit of itself and
each Lender a continuing Lien upon all of such Borrower’s assets, including all
of the following Property and interests in Property of such Borrower (other than
Excluded Property), whether now owned or existing or hereafter created, acquired
or arising and wheresoever located:

(i)    Accounts;

(ii)    Certificated Securities;

(iii)    Chattel Paper;

(iv)    Commercial Tort Claims, including, without limitation, any Commercial
Tort Claims set forth on Schedule 6.1 hereto;

(v)    Computer Hardware and Software and all rights with respect thereto,
including any and all licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications, and any substitutions, replacements,
additions or model conversions of any of the foregoing;

(vi)    Contract Rights;

(vii)    Deposit Accounts;

(viii)    Documents;

(ix)    Equipment;

(x)    Financial Assets;

(xi)    Fixtures;

(xii)    General Intangibles, including Payment Intangibles;

(xiii)    Goods (including all of its Equipment, Fixtures and Inventory), and
all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;

(xiv)    Instruments;

(xv)    Intellectual Property;

(xvi)    Inventory;

(xvii)    Investment Property;

(xviii)    money (of every jurisdiction whatsoever);

(xix)    Letter of Credit Rights;

 

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(xx)    Payment Intangibles;

(xxi)    Security Entitlements;

(xxii)    Supporting Obligations;

(xxiii)    Uncertificated Securities; and

(xxiv)    to the extent not included in the foregoing, all other personal
property of any kind or description;

together with all books, records, writings, databases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing.

6.1.2    Grant of Security Interest by Holding. To secure prompt payment and
performance to Administrative Agent and each Lender of the Obligations, Holding
hereby grants to Administrative Agent, for the benefit of itself and each
Lender, a continuing Lien upon all Equity Interests, whether certificated or
uncertificated, in Parent and in each other immediate Subsidiary of Holding
which becomes a Loan Party hereunder, whether now owned or existing or hereafter
created, together with all books, records, evidence of ownership and other
property relating to, used or useful in connection with or evidencing the
foregoing, and all Proceeds of the foregoing. Reference is hereby made to that
certain Pledge Agreement, dated on or about the date hereof, executed by
Holding, in favor of Administrative Agent, for further provisions of this grant
by Holding of a security interest in such Equity Interests and Administrative
Agent’s rights and remedies in connection therewith.

6.1.3    Grant of Security Interest by Parent. To secure prompt payment and
performance to Administrative Agent and each Lender of the Obligations, Parent
hereby grants to Administrative Agent, for the benefit of itself and each
Lender, a continuing Lien upon all Equity Interests, whether certificated or
uncertificated, in Quest, whether now owned or existing or hereafter created,
together with all books, records, evidence of ownership and other property
relating to, used or useful in connection with or evidencing the foregoing, and
all Proceeds of the foregoing. Reference is hereby made to that certain Pledge
Agreement, dated on or about the date hereof, executed by Parent, in favor of
Administrative Agent, for further provisions of this grant by Parent of a
security interest in such Equity Interests and Administrative Agent’s rights and
remedies in connection therewith.

6.2    Other Collateral.

6.2.1    Commercial Tort Claims. The Borrowers shall promptly notify
Administrative Agent in writing upon any Borrower incurring or otherwise
obtaining a Commercial Tort Claim after the Closing Date against any third party
and, upon request of Administrative Agent, promptly enter into an amendment to
this Agreement and do such other acts or things deemed appropriate by
Administrative Agent to give Administrative Agent a security interest in any
such Commercial Tort Claim. The Borrowers represent and warrant that

 

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as of the date of this Agreement, except as set forth on Schedule 6.1 hereto, to
their knowledge, no Borrower possesses any Commercial Tort Claims.

6.2.2    Other Collateral. The Borrowers shall promptly notify Administrative
Agent in writing upon acquiring or otherwise obtaining any Collateral after the
date hereof consisting of Deposit Accounts, Investment Property, Letter of
Credit Rights or Electronic Chattel Paper and, upon the request of
Administrative Agent, promptly execute such other documents, and do such other
acts or things deemed appropriate by Administrative Agent to deliver to
Administrative Agent control with respect to such Collateral; promptly notify
Administrative Agent in writing upon acquiring or otherwise obtaining any
Collateral after the date hereof consisting of Documents or Instruments and,
upon the request of Administrative Agent, will promptly execute such other
documents, and do such other acts or things deemed appropriate by Administrative
Agent to deliver to Administrative Agent possession of such Documents which are
negotiable and Instruments, and, with respect to nonnegotiable Documents, to
have such nonnegotiable Documents issued in the name of Administrative Agent;
and with respect to Collateral in the possession of a third party, other than
Certificated Securities and Goods covered by a Document, obtain an
acknowledgment from the third party that it is holding the Collateral for the
benefit of Administrative Agent.

6.3    Lien Perfection; Further Assurances. The Loan Parties authorize the
filing of such UCC-1 financing statements as are required by the UCC and shall
execute such other instruments, assignments or documents as are necessary to
perfect Administrative Agent’s Lien upon any of the Collateral and shall take
such other action as may be required to perfect or to continue the perfection of
Administrative Agent’s Lien upon the Collateral, including, without limitation,
as to the Borrowers, the filing of UCC-1 financing statements that indicate the
Collateral (i) as all assets of such Borrower or words of similar effect, or
(ii) as being of an equal or lesser scope, or with greater or lesser detail,
than as set forth in Section 6.1, on such Borrower’s behalf. Each Loan Party
also hereby ratifies its authorization for Administrative Agent to have filed in
any jurisdiction any such UCC-1 financing statements or amendments thereto if
filed prior to the date hereof. At Administrative Agent’s request, each Loan
Party shall also promptly execute or cause to be executed and shall deliver to
Administrative Agent any and all documents, instruments and agreements deemed
necessary by Administrative Agent, to give effect to or carry out the terms or
intent of the Loan Documents.

6.4    Lien on Realty. The due and punctual payment and performance of the
Obligations shall also be secured by the Lien created by the Mortgages upon all
real Property of the Borrowers described therein. If any Borrower shall acquire
at any time or times hereafter any interest in other real Property (other than
Excluded Property), such Borrower agrees promptly to execute and deliver to
Administrative Agent, for its benefit and the benefit of Lenders, as additional
security and Collateral for the Obligations, a Mortgage covering such real
Property, which Mortgage shall be reasonably satisfactory in form and substance
to Administrative Agent. Each Mortgage shall be duly recorded (at the Loan
Parties’ expense) in each office where such recording is required to constitute
a valid Lien on the real Property covered thereby. In respect of any real
Property subject to a Mortgage, the Borrowers shall deliver to Administrative
Agent, at the Borrowers’ expense, each of the other Related Real Estate
Documents.

 

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SECTION 7. COLLATERAL ADMINISTRATION

7.1    General.

7.1.1    Location of Collateral. Set forth on Schedule 7.1.1 hereto are (i) each
Loan Party’s chief executive office, (ii) the locations at which each Borrower
maintains its books and records relating to Accounts and General Intangibles,
(iii) each other business location of the Loan Parties and (iv) each location
(including bailees, warehouses, consignees and similar parties) at which
Collateral, other than Inventory in transit and motor vehicles are located. All
Collateral, other than Inventory in transit and motor vehicles, will at all
times be kept by the Loan Parties at one or more of the business locations set
forth in Schedule 7.1.1 hereto, as updated by the Loan Parties providing prior
written notice to Administrative Agent of any new location.

7.1.2    Insurance of Collateral. The Borrowers shall at all times maintain and
pay for insurance upon all Collateral wherever located and with respect to the
business of the Borrowers, covering casualty, hazard, public liability, workers’
compensation and such other risks in such amounts and with such insurance
companies as are reasonably satisfactory to Administrative Agent. The Borrowers
shall provide that such policies shall include satisfactory endorsements, naming
Administrative Agent as a loss payee or additional insured, as appropriate, as
its interest may appear. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than ten (10) days’ prior written
notice to Administrative Agent in the event of cancellation of the policy for
nonpayment of premium and not less than thirty (30) days’ prior written notice
to Administrative Agent in the event of cancellation of the policy for any other
reason whatsoever and a clause specifying that the interest of Administrative
Agent shall not be impaired or invalidated by any act or neglect of any
Borrower, any of their Subsidiaries or the owner of the Property or by the
occupation of the premises for purposes more hazardous than are permitted by
such policy. All proceeds of business interruption insurance (if any) of the
Borrowers shall be remitted to Administrative Agent for application to the
outstanding balance of the Revolving Credit Loans.

Unless the Borrowers provide Administrative Agent with evidence of the insurance
coverage required by this Agreement, Administrative Agent may purchase insurance
at the Borrowers’ expense to protect Administrative Agent’s interests in the
Properties of the Borrowers. This insurance may, but need not, protect the
interests of the Borrowers. The coverage that Administrative Agent purchases may
not pay any claim that any Borrower makes or any claim that is made against any
Borrower in connection with such Property. The Borrowers may later cancel any
insurance purchased by Administrative Agent, but only after providing
Administrative Agent with evidence that the Borrowers have obtained insurance as
required by this Agreement. If Administrative Agent purchases insurance, the
Borrowers will be responsible for the costs of that insurance, including
interest and any other charges Administrative Agent may impose in connection
with the placement of insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Obligations. The costs of the insurance may be more than the cost of insurance
that the Borrowers may be able to obtain on their own.

 

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7.1.3    Protection of Collateral. Neither Administrative Agent nor any Lender
shall be liable or responsible in any way for the safekeeping of any of the
Collateral or for any loss or damage thereto (except for reasonable care in the
custody thereof while any Collateral is in Administrative Agent’s or any
Lender’s actual possession) or for any diminution in the value thereof, or for
any act or default of any warehouseman, carrier, forwarding agency or other
person whomsoever, but the same shall be at the Loan Parties’ sole risk.

7.2    Administration of Accounts.

7.2.1    Records, Schedules and Assignments of Accounts. The Borrowers shall
keep records that are accurate and complete, in all material respects, of their
Accounts and all payments and collections thereon and shall submit to Collateral
Agent on such periodic basis as Collateral Agent shall request, in its
reasonable credit judgment, a sales and collections report for the preceding
period, in form acceptable to Collateral Agent, in its reasonable credit
judgment, and consistent with the reports currently prepared by the Borrowers
with respect to such information/acceptable to Collateral Agent. Concurrently
with the delivery of each Borrowing Base Certificate described in
subsection 9.1.4, or more frequently as requested by Collateral Agent or during
the existence of an Event of Default, from and after the date hereof, the
Borrowers shall deliver to Collateral Agent a detailed aged trial balance of all
of their Accounts and a detailed description with respect to any unbilled
Accounts, specifying the names, addresses, face values, dates of invoices and
due dates for each Account Debtor obligated on an Account so listed in a form
consistent with reports currently prepared by the Borrowers with respect to such
information (“Schedule of Accounts”), and upon Collateral Agent’s written
request therefor, copies of proof of delivery and the original copy of all
documents, including, without limitation, repayment histories and present status
reports relating to the Accounts so scheduled and such other matters and
information relating to the status of then existing Accounts as Collateral Agent
shall request, in its reasonable credit judgment. If requested by Collateral
Agent in writing, upon the occurrence and during the continuation of an Event of
Default, the Borrowers shall execute and deliver to Collateral Agent formal
written assignments of all of their Accounts weekly or daily, which shall
include all Accounts that have been created since the date of the last
assignment, together with copies of invoices or invoice registers related
thereto and a detailed description with respect to any unbilled Accounts.

7.2.2    Discounts; Allowances; Disputes. If any Borrower grants any discounts,
allowances or credits that are not shown on the face of the invoice for the
Account involved, the Borrowers shall report such discounts, allowances or
credits, as the case may be, to Collateral Agent as part of the next required
Schedule of Accounts.

7.2.3    Account Verification. Any of Collateral Agent’s officers, employees or
agents shall have the right, at any time or times if an Event of Default has
occurred and is continuing, in the name of Collateral Agent, any designee of
Collateral Agent or any Borrower, to verify the validity, amount or any other
matter relating to any Accounts by mail, telephone, electronic communication or
otherwise. The Borrowers shall cooperate fully with Collateral Agent in an
effort to facilitate and promptly conclude any such verification process.

7.2.4    Maintenance of Blocked Accounts. Within sixty (60) days of the Closing
Date, or such later date as shall be agreed to by Administrative Agent, in its
sole

 

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discretion, Quest and the other Loan Parties will maintain their primary
depository, blocked account and cash management relationship with Administrative
Agent or its affiliate. The Administrative Agent shall have control of all
deposit and securities accounts of all Borrowers pursuant to executed control
agreements and other executed documentation as shall be required by
Administrative Agent, in its sole discretion, such documentation to be in form
and substance satisfactory to Administrative Agent and delivered to
Administrative Agent, it being understood and agreed that, other than with
respect to any Excluded Deposit Account, Quest and the other Borrowers will
cause or direct all cash to be transferred daily to, or otherwise maintained in,
accounts subject to a blocked account agreement and that, unless a Cash Dominion
Suspension Period is in effect, Administrative Agent shall at all times require
that all such cash be swept on a daily basis to an account of Administrative
Agent to be applied by Administrative Agent to repay outstanding Revolving
Credit Loans, Swingline Loans, LC Obligations, other amounts then due and
payable, and, if an Event of Default exists, to cash collateralize outstanding
Letters of Credit in an amount equal to 105% of the face amount thereof (“Cash
Dominion”). With respect to any deposit accounts not maintained with
Administrative Agent or its affiliate, Borrowers shall maintain blocked deposit
accounts pursuant to lockbox and blocked account arrangements reasonably
acceptable to Administrative Agent with such banks as may be selected by the
Borrowers and be reasonably acceptable to Administrative Agent; provided, that
Administrative Agent hereby agrees that it shall not institute or otherwise
require a control agreement and/or blocked account agreement with regard to any
Excluded Deposit Account maintained by any Borrower. Administrative Agent shall
have control over and a Lien on all funds deposited in any blocked account, for
the ratable benefit of Lenders, and, with respect to deposit accounts not
maintained with Administrative Agent or its affiliate, the Borrowers shall
obtain the agreement by such banks in favor of Administrative Agent to waive any
recoupment, setoff rights, and any security interest in, or against, the funds
so deposited (except to the extent of any such bank’s customary fees). Such
lockbox and blocked account arrangements shall include irrevocable instructions
directing such banks to remit all payments or other remittances received in the
blocked accounts on a daily basis to an account of Administrative Agent for
application on account of the Obligations to the extent provided for herein. At
any time Cash Dominion is in existence, Administrative Agent shall have the
right to issue to any such banks irrevocable instructions directing such banks
to remit all payments or other remittances received in the blocked accounts to
an account of Administrative Agent for application on account of the Obligations
as provided herein. Administrative Agent assumes no responsibility for such
lockbox and blocked account arrangements, including, without limitation, any
claim of accord and satisfaction or release with respect to deposits accepted by
any bank thereunder.

7.2.5    Collection of Accounts; Proceeds of Collateral. Each Borrower agrees
that all invoices rendered and other requests made by any Borrower for payment
in respect of Accounts shall contain a written statement directing payment in
respect of such Accounts to be paid to a lockbox or blocked account established
pursuant to subsection 7.2.4. To expedite collection, each Borrower shall
endeavor in the first instance to make collection of its Accounts for
Administrative Agent. All remittances received by any Borrower in respect of
Accounts, together with the proceeds of any other Collateral, shall be held as
Administrative Agent’s property, for its benefit and the benefit of Lenders, by
such Borrower as trustee of an express trust for Administrative Agent’s benefit
and such Borrower shall immediately deposit the same in a blocked account
established pursuant to subsection 7.2.4. Administrative Agent retains the right
at all times after the occurrence and during the continuance of a Default or an
Event of

 

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Default to notify Account Debtors that the Borrowers’ Accounts have been
assigned to Administrative Agent and to collect the Borrowers’ Accounts directly
in its own name, or in the name of Administrative Agent’s agent, and to charge
the collection costs and expenses, including attorneys’ fees, to the Borrowers.

7.2.6    Taxes. If an Account includes a charge for any tax payable to any
Governmental Authority, Administrative Agent is authorized, in its sole
discretion, to pay the amount thereof to the proper Governmental Authority for
the account of the Borrowers and to charge the Borrowers therefor, except for
taxes that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which the Borrowers maintain reasonable reserves
on its books therefor and (ii) would not reasonably be expected to result in any
Lien other than a Permitted Lien. In no event shall Administrative Agent or any
Lender be liable for any taxes to any Governmental Authority that may be due by
any Borrower.

7.3    [Reserved]

7.4    Administration of Eligible Machinery and Equipment. The Borrowers shall
keep records of their Eligible Machinery and Equipment which shall be complete
and accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Eligible Machinery and Equipment, and
the Borrowers shall, and shall cause each of their Subsidiaries to, furnish
Administrative Agent with a current schedule containing the foregoing
information on at least an annual basis and more often if reasonably requested
by Administrative Agent. Promptly after the request therefor by Administrative
Agent, the Borrowers shall deliver to Administrative Agent any and all evidence
of ownership, if any, of any of their Eligible Machinery and Equipment.

7.5    Payment of Charges. All amounts chargeable to the Loan Parties under
Section 7 hereof shall be Obligations secured by all of the Collateral, shall be
payable on demand and shall bear interest from the date such advance was made
until paid in full at the rate applicable to Base Rate Revolving Credit Loans
from time to time.

SECTION 8. REPRESENTATIONS AND WARRANTIES

8.1    General Representations and Warranties. To induce Administrative Agent
and each Lender to enter into this Agreement and to make advances hereunder, the
Loan Parties represent and warrant to Administrative Agent and each Lender, on a
joint and several basis, that:

8.1.1    Qualification. Each Loan Party and each of its Restricted Subsidiaries
is a corporation, limited partnership or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization. Each Loan Party and each of
its Restricted Subsidiaries is duly qualified and is authorized to do business
and is in good standing as a foreign limited liability company, limited
partnership or corporation, as applicable, in each state or jurisdiction listed
on Schedule 8.1.1 hereto and in all other states and jurisdictions in which the
failure of any Borrower to be so qualified could reasonably be expected to have
a Material Adverse Effect.

 

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8.1.2    Power and Authority. Each Loan Party and each of its Restricted
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each of the
other Loan Documents have been duly authorized by all necessary corporate or
other relevant action and do not and will not: (i) require any consent or
approval of the shareholders, partners or members, as the case may be, of any
Loan Party or any of the shareholders, partners or members, as the case may be,
of any Restricted Subsidiary of any Loan Party; (ii) contravene any Loan Party’s
or any of its Restricted Subsidiaries’ charter, articles or certificate of
incorporation, partnership agreement, articles or certificate of formation,
by-laws, limited liability agreement, operating agreement or other
organizational documents (as the case may be); (iii) violate, or cause any Loan
Party or any of its Restricted Subsidiaries to be in default under, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to such Loan Party
or any of its Restricted Subsidiaries, the violation of which could reasonably
be expected to have a Material Adverse Effect; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which any Loan Party or any of its
Restricted Subsidiaries is a party or by which it or its Properties may be bound
or affected, the breach of or default under which could reasonably be expected
to have a Material Adverse Effect; or (v) result in, or require, the creation or
imposition of any Lien (other than Permitted Liens) upon or with respect to any
of the Properties now owned or hereafter acquired by any Loan Party or any of
its Restricted Subsidiaries.

8.1.3    Legally Enforceable Agreement. This Agreement is, and each of the other
Loan Documents when delivered under this Agreement will be, a legal, valid and
binding obligation of each Loan Party and each of its Restricted Subsidiaries
party thereto, enforceable against it in accordance with its respective terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally.

8.1.4    Capital Structure. Schedule 8.1.4 hereto states, as of the date hereof,
(i) the number, nature and holder of all outstanding Equity Interests of each
Loan Party and each Subsidiary of any Loan Party, and (ii) the name of each Loan
Party’s and each of its Subsidiaries’ joint venture relationships and the nature
of the relationship. Each Loan Party has good title to all of the Equity
Interests it purports to own of each of such Subsidiaries, free and clear in
each case of any Lien other than Permitted Liens. All such Equity Interests have
been duly issued and are fully paid and non-assessable. As of the date hereof,
there are no outstanding options to purchase, or any rights or warrants to
subscribe for, or any commitments or agreements to issue or sell any Equity
Interests or obligations convertible into, or any powers of attorney relating to
any Equity Interests of any Loan Party or any of its Subsidiaries. Except as set
forth on Schedule 8.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of any Loan Party’s or any of its
Subsidiaries’ partners, members or shareholders, as the case may be, relating to
the ownership of its Equity Interests.

8.1.5    Names; Organization. Within the five (5) years prior to the Closing
Date, neither any Loan Party nor any of their respective Subsidiaries has been
known as or has used any legal, fictitious or trade names except those listed on
Schedule 8.1.5 hereto. Within the five (5) years prior to the Closing Date,
except as set forth on Schedule 8.1.5, neither any Loan Party nor any of their
respective Subsidiaries has been the surviving entity of a merger or

 

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consolidation or has acquired all or substantially all of the assets of any
Person. The exact legal name, jurisdiction of incorporation or organization,
Type of Organization and Organizational I.D. Number of each Loan Party and each
of their respective Subsidiaries is set forth on Schedule 8.1.5.

8.1.6    Title to Properties; Priority of Liens. Each Loan Party and each of its
Restricted Subsidiaries has good, indefeasible and marketable title to and fee
simple ownership of, or valid and subsisting leasehold interests in, all of its
real Property, and good title to all of the Collateral and all of its other
Property, in each case, free and clear of all Liens except Permitted Liens. Each
Loan Party and each of its Restricted Subsidiaries has paid or discharged all
lawful claims which, if unpaid, might become a Lien against any of such Loan
Party’s or such Restricted Subsidiary’s Properties that is not a Permitted Lien.
The Liens granted to Administrative Agent under Section 6 hereof are first
priority Liens, subject only to Permitted Liens.

8.1.7    Accounts. Administrative Agent may rely, in determining which Accounts
are Eligible Accounts or Eligible Unbilled Accounts, on all statements and
representations made by the with respect to any Account or Accounts. With
respect to each of the Borrower’s Accounts, whether or not such Account is an
Eligible Account or an Eligible Unbilled Account, unless otherwise disclosed to
Administrative Agent in writing:

(i)    It is genuine and in all respects what it purports to be, and it is not
evidenced by a judgment;

(ii)    It arises out of a completed, bona fide sale and delivery of goods or
rendition of services by a Borrower, in the ordinary course of its business and
in accordance with the terms and conditions of all purchase orders, contracts or
other documents relating thereto and forming a part of the contract between such
Borrower and the Account Debtor;

(iii)    It is for a liquidated amount maturing as stated in the duplicate
invoice covering such sale or rendition of services, a copy of which (other than
in the case of an Eligible Unbilled Account) has been furnished or is available
to Administrative Agent;

(iv)    There are no facts, events or occurrences which in any way impair the
validity or enforceability of any Accounts or tend to reduce the amount payable
thereunder from the face amount of the invoice and statements delivered or made
available to Administrative Agent with respect thereto;

(v)    To the best of such Borrower’s knowledge, the Account Debtor thereunder
(a) had the capacity to contract at the time any contract or other document
giving rise to the Account was executed and (b) such Account Debtor is Solvent;
and

(vi)    To the best of such Borrower’s knowledge, there are no proceedings or
actions which are threatened or pending against the Account Debtor thereunder
which might result in any material adverse change in such Account Debtor’s
financial condition or the collectability of such Account.

 

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8.1.8    Equipment. The Equipment of each Borrower is in good operating
condition and repair, and all necessary replacements of and repairs thereto
shall be made so that the operating efficiency thereof shall be maintained and
preserved, reasonable wear and tear expected. No Borrower will permit any
Equipment to become affixed to any real Property leased to any Borrower so that
an interest arises therein under the real estate laws of the applicable
jurisdiction unless the landlord of such real Property has executed a landlord
waiver or leasehold mortgage in favor of and in form reasonably acceptable to
Administrative Agent, and the Borrowers will not permit any of the Equipment of
any Borrower to become an accession to any personal Property other than
Equipment that is subject to first priority (except for Permitted Liens) Liens
in favor of Administrative Agent.

8.1.9    Financial Statements; Fiscal Year. The audited Consolidated balance
sheets of Holding and its Subsidiaries as of December 31, 2015, and the related
statements of income, changes in shareholder’s equity, and changes in financial
position for the periods ended on such dates, have been prepared in accordance
with GAAP and present fairly in all material respects the financial positions of
Holding and such Persons at such dates and the results of Holding’s and such
Persons’ operations for such periods. As of the date hereof, since December 31,
2015, there has been no material adverse change in the financial position of
Holding and such other Persons, taken as a whole, as reflected in the
Consolidated balance sheet as of such date. As of the date hereof, the fiscal
year of Holding and each of its Subsidiaries ends on December 31 of each year.

8.1.10    Full Disclosure. The financial statements referred to in
subsection 8.1.9 hereof do not, nor does this Agreement or any other written
statement of the Loan Parties to Administrative Agent or any Lender, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements contained therein or herein not misleading. There is no fact
which the Loan Parties have failed to disclose to Administrative Agent or any
Lender in writing which could reasonably be expected to have a Material Adverse
Effect.

8.1.11    Solvent Financial Condition. Each Loan Party and each of its
Restricted Subsidiaries is now and, after giving effect to the initial Loans to
be made and the initial Letters of Credit to be issued hereunder and the
consummation of each other Closing Date Transaction, will be, Solvent.

8.1.12    Taxes. Each Loan Party and each of its Restricted Subsidiaries has
filed all federal, state and local tax returns and other reports relating to
taxes it is required by law to file, and has paid, or made provision for the
payment of, all taxes, assessments, fees, levies and other governmental charges
upon it, its income and Properties as and when such taxes, assessments, fees,
levies and charges are due and payable, unless and to the extent any thereof are
being actively contested in good faith and by appropriate proceedings, and each
Loan Party and each of its Restricted Subsidiaries maintains reasonable reserves
on its books therefor. The provision for taxes on the books of each Loan Party
and each of its Restricted Subsidiaries is adequate for all years not closed by
applicable statutes, and for the current fiscal year.

 

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8.1.13    Brokers. Except as shown on Schedule 8.1.13 hereto, there are no
claims for brokerage commissions, finder’s fees or investment banking fees in
connection with the transactions contemplated by this Agreement or any other
Closing Date Transactions.

8.1.14    Patents, Trademarks, Copyrights and Licenses. Each Borrower owns,
possesses or licenses or has the right to use all the patents, trademarks,
service marks, trade names, copyrights, licenses and other Intellectual Property
necessary for the present and planned future conduct of its business without any
known conflict with the rights of others, except for such conflicts as could not
reasonably be expected to have a Material Adverse Effect. All such patents,
trademarks, service marks, trade names, copyrights, licenses and other similar
rights are listed on Schedule 8.1.14 hereto. No claim has been asserted to any
Borrower which is currently pending that their use of their Intellectual
Property or the conduct of their business does or may infringe upon the
Intellectual Property rights of any third party. To the knowledge of the
Borrowers and except as set forth on Schedule 8.1.14 hereto, as of the date
hereof, no Person is engaging in any activity that infringes in any material
respect upon any Borrower’s material Intellectual Property. Except as set forth
on Schedule 8.1.14, each Borrower’s (i) material patents, trademarks, service
marks and copyrights are registered with the U.S. Patent and Trademark Office or
in the U.S. Copyright Office, as applicable and (ii) material license agreements
and similar arrangements relating to its Inventory (a) permit, and do not
restrict, the assignment by any Borrower to Administrative Agent, or any other
Person designated by Administrative Agent, of all of such Borrower’s rights,
title and interest pertaining to such license agreement or such similar
arrangement and (b) would permit the continued use by such Borrower, or
Administrative Agent or its assignee, of such license agreement or such similar
arrangement and the right to sell Inventory subject to such license agreement
for a period of no less than 6 months after a default or breach of such
agreement or arrangement. The consummation and performance of the transactions
and actions contemplated by this Agreement and the other Loan Documents,
including, without limitation, the exercise by Administrative Agent of any of
its rights or remedies under Section 11, will not result in the termination or
impairment of any of such Borrower’s ownership or rights relating to its
Intellectual Property, except for such Intellectual Property rights the loss or
impairment of which could not reasonably be expected to have a Material Adverse
Effect. Except as listed on Schedule 8.1.14 and except as could not reasonably
be expected to have a Material Adverse Effect, (i) no Borrower is in breach of,
or default under, any term of any license or sublicense with respect to any of
its Intellectual Property and (ii) to the knowledge of the Borrowers, no other
party to such license or sublicense is in breach thereof or default thereunder,
and such license is valid and enforceable.

8.1.15    Governmental Consents. Each Loan Party and each of its Restricted
Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it, except where the failure to possess or
so maintain such rights could not reasonably be expected to have a Material
Adverse Effect.

8.1.16    Compliance with Laws; Environmental.

(i)    Each Loan Party and each of its Restricted Subsidiaries has duly
complied, and its Properties, business operations and leaseholds are in
compliance with,

 

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the provisions of all federal, state, local and foreign laws, rules and
regulations applicable to such Loan Party or such Subsidiary, as applicable, its
Properties or the conduct of its business, except for such non-compliance as
could not reasonably be expected to have a Material Adverse Effect, and there
have been no citations, notices or orders of non-compliance issued to any Loan
Party or any of its Restricted Subsidiaries under any such law, rule or
regulation, except where such non-compliance could not reasonably be expected to
have a Material Adverse Effect. Each Loan Party and each of its Restricted
Subsidiaries has established and maintains an adequate monitoring system to
insure that it remains in compliance in all material respects with all federal,
state, local and foreign rules, laws and regulations applicable to it. No
Inventory has been produced in violation of the Fair Labor Standards Act
(29 U.S.C. §201 et seq.), as amended.

(ii)    Except as disclosed on Schedule 8.1.16, none of the past or present
operations or real Properties of any Loan Party or any of its Restricted
Subsidiaries are subject to any federal, state, local or foreign investigation
to determine whether any remedial action is needed to address any environmental
pollution, hazardous material or environmental clean-up. Except as disclosed on
Schedule 8.1.16, no Loan Party or any of their Restricted Subsidiaries has
received any Environmental Notice. No Loan Party or any of their Restricted
Subsidiaries has any contingent liability with respect to any Environmental
Release, environmental pollution or hazardous material on any real Properties
now or previously owned, leased or operated by it, except as could not
reasonably be expected to have a Material Adverse Effect.

8.1.17    Restrictions. Neither any Loan Party nor any of its Restricted
Subsidiaries is a party or subject to any contract or agreement which restricts
its right or ability to incur Indebtedness, other than as set forth on
Schedule 8.1.17 hereto, none of which prohibits the execution of or compliance
with this Agreement or the other Loan Documents by any Loan Party or any of its
Restricted Subsidiaries, as applicable.

8.1.18    Litigation. Except as set forth on Schedule 8.1.18 hereto, there are
no actions, suits, proceedings or investigations pending, or to the knowledge of
the Loan Parties, threatened, against or affecting any Loan Party or any of its
Restricted Subsidiaries, or the business, operations, Properties, prospects,
profits or condition of any Loan Party or any of its Restricted Subsidiaries
which, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither any Loan Party nor any of its Restricted
Subsidiaries is in default with respect to any order, writ, injunction,
judgment, decree or rule of any Governmental Authority, which, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

8.1.19    No Defaults. No event has occurred and no condition exists which
would, upon or after the execution and delivery of this Agreement or any Loan
Party’s performance hereunder, constitute a Default or an Event of Default.

8.1.20    Pension Plans. Except as disclosed on Schedule 8.1.20 hereto, neither
any Loan Party nor any of its Restricted Subsidiaries has any Plan. Each Loan
Party and each of its Restricted Subsidiaries is in compliance with the
requirements of ERISA and the regulations promulgated thereunder with respect to
each Plan, except where the failure to so comply could

 

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not reasonably be expected to have a Material Adverse Effect. No fact or
situation that could reasonably be expected to result in a material adverse
change in the financial condition of the Loan Parties and their Restricted
Subsidiaries exists in connection with any Plan. Neither any Loan Party nor any
of their Restricted Subsidiaries has any withdrawal liability in connection with
a Multiemployer Plan.

8.1.21    Trade Relations. There exists no actual or, to the Loan Parties’
knowledge, threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any Loan Party or
any of its Restricted Subsidiaries and any customer or any group of customers
whose purchases individually or in the aggregate are material to the business of
the Loan Parties and their Restricted Subsidiaries, or with any material
supplier, except in each case, where the same could not reasonably be expected
to have a Material Adverse Effect, and there exists no present condition or
state of facts or circumstances which would prevent any Loan Party or any of its
Restricted Subsidiaries from conducting such business after the consummation of
the transactions contemplated by this Agreement in substantially the same manner
in which it has heretofore been conducted.

8.1.22    Labor Relations. Except as described on Schedule 8.1.22 hereto, as of
the date hereof, neither any Loan Party nor any of its Restricted Subsidiaries
is a party to any collective bargaining agreement. There are no material
grievances, disputes or controversies with any union or any other organization
of any Loan Party’s or any of its Restricted Subsidiaries’ employees, or threats
of strikes, work stoppages or any asserted pending demands for collective
bargaining by any union or organization, except those that could not reasonably
be expected to have a Material Adverse Effect.

8.1.23    Leases. Schedule 8.1.23 hereto is a complete listing of all
capitalized leases of the Loan Parties and their Restricted Subsidiaries and all
real property leases of the Loan Parties and their Restricted Subsidiaries. Each
Loan Party and each of its Restricted Subsidiaries is in full compliance with
all of the terms of each of its respective capitalized and operating leases,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.

8.1.24    [Reserved.]

8.1.25    Related Businesses. As of the Closing Date, the Loan Parties are
engaged in the business of providing businesses with one-step management
programs to reuse, recycle and dispose of a wide variety of waste streams and
recyclables generated by their business. These operations require financing on a
basis such that the credit supplied can be made available from time to time to
the Loan Parties, as required for the continued successful operation of the Loan
Parties taken as a whole. Each Loan Party and each Restricted Subsidiary of each
Loan Party expects to derive benefit (and the Board of Directors or equivalent
governing body of each Loan Party and each Restricted Subsidiary of each Loan
Party has determined that such Loan Party or Restricted Subsidiary may
reasonably be expected to derive benefit), directly or indirectly, from a
portion of the credit extended by Lenders hereunder, both in its separate
capacity and as a member of the group of companies, since the successful
operation and condition of each Loan Party and each Restricted Subsidiary of
each Loan Party is dependent on the continued successful performance of the
functions of the group as a whole. Each Loan Party

 

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acknowledges that, but for the agreement of each of the other Loan Parties to
execute and deliver this Agreement, Administrative Agent and Lenders would not
have made available the credit facilities established hereby on the terms set
forth herein.

8.1.26    Not a Regulated Entity. No Loan Party is an “investment company” or a
“person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940.

8.1.27    Margin Stock. No Loan Party or any of their Restricted Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
Loan proceeds or Letters of Credit will be used by the Loan Parties to purchase
or carry, or to reduce or refinance any Indebtedness incurred to purchase or
carry, any Margin Stock or for any related purpose governed by Regulations T, U
or X of the Board of Governors.

8.1.28    Foreign Assets Control Regulations and Anti-Money Laundering.

(i)    No Loan Party nor any Subsidiary is (i) a Person whose property or
interest in property is blocked or subject to blocking pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Party and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), (ii) a Person who engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any such Person in any manner violative of such Section 2, or
(iii) a Person on the list of Specially Designated Nationals and Blocked Persons
or subject to the limitations or prohibitions under any other U.S. Department of
Treasury’s Office of Foreign Assets Control regulation or executive order.

(ii)    Each of the Loan Parties and their Subsidiaries are in compliance, in
all material respects, with the Patriot Act. No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

8.1.29    EEA Financial Institution. No Borrower is an EEA Financial
Institution.

8.2    Continuous Nature of Representations and Warranties. Each representation
and warranty contained in this Agreement and the other Loan Documents shall be
continuous in nature and shall remain accurate, complete and not misleading at
all times during the term of this Agreement, except for changes in the nature of
any Loan Party’s or one of any Loan Party’s Restricted Subsidiary’s business or
operations that would render the information in any Schedule attached hereto or
to any other Loan Document either inaccurate, incomplete or misleading, so long
as Majority Lenders have consented to such changes, such changes are expressly
permitted by this Agreement or such changes do not have or evidence a Material
Adverse Effect. Without limiting the generality of the foregoing, each Loan
request made or deemed made pursuant to

 

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subsection 4.1.1 hereof shall constitute a reaffirmation, as of the date of each
such Loan request, of each representation or warranty made or furnished to
Administrative Agent or any Lender by or on behalf of any Loan Party or any
Subsidiary of any Loan Party in this Agreement, any of the other Loan Documents,
or any instrument, certificate or financial statement furnished in compliance
with or in reference thereto.

8.3    Survival of Representations and Warranties. All representations and
warranties of the Loan Parties contained in this Agreement or any of the other
Loan Documents shall survive the execution, delivery and acceptance thereof by
Administrative Agent and each Lender and the parties thereto and the closing of
the transactions described therein or related thereto.

SECTION 9. COVENANTS AND CONTINUING AGREEMENTS

9.1    Affirmative Covenants. During the Term, and thereafter for so long as
there are any Obligations outstanding (other than indemnity Obligations for
which no claim has been made), the Loan Parties covenant that they shall:

9.1.1    Visits and Inspections; Lender Meeting. Permit (i) representatives of
each Agent, and during the continuation of any Default or Event of Default any
Lender, from time to time, as often as may be reasonably requested, but only
during normal business hours, to visit and inspect the Properties of each Loan
Party and each of its Restricted Subsidiaries, inspect, audit and make extracts
from its books and records, and discuss with its officers, its employees and its
independent accountants, each Loan Party’s and each of its Restricted
Subsidiaries’ business, assets, liabilities, financial condition, business
prospects and results of operations and (ii) auditors engaged pursuant to
Section 3.9 (whether or not personnel of any Agent), from time to time, as often
as may be reasonably requested, but only during normal business hours, to visit
and inspect the Properties of each Loan Party and each of its Restricted
Subsidiaries, for the purpose of completing audits pursuant to Section 3.9. Each
Agent, if no Default or Event of Default then exists, shall give the Loan
Parties reasonable prior notice of any such inspection or audit. Without
limiting the foregoing, the Loan Parties will participate and will cause their
key management personnel to participate in a meeting with Administrative Agent
and Lenders periodically during each year (except that during the continuation
of an Event of Default such meetings may be held more frequently as requested by
Administrative Agent or Majority Lenders), which meeting(s) shall be held at
such times and such places as may be reasonably requested by Administrative
Agent.

9.1.2    Notices.

(i)    Notify Administrative Agent, for itself and on behalf of Lenders, in
writing, promptly after a Loan Party’s obtaining knowledge thereof, of any of
the following that affects a Loan Party: (a) the threat or commencement of any
proceeding or investigation, whether or not covered by insurance, if an adverse
determination could reasonably be expected to have a Material Adverse Effect;
(b) any pending or threatened labor dispute, strike or walkout, or the
expiration of any material labor contract; (c) the existence of any Default or
Event of Default; (d) any judgment in an amount exceeding $500,000; (e) the
assertion of any claim in respect of material Intellectual Property, if an
adverse resolution could reasonably be expected to have a Material Adverse
Effect;

 

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(f) any violation or asserted violation of any (1) Anti-Terrorism Law or (2) any
other Applicable Law if an adverse resolution could reasonably be expected to
have a Material Adverse Effect; (g) any Environmental Release by a Loan Party or
on any Property owned, leased or occupied by a Loan Party; or receipt of any
Environmental Notice; (h) the discharge of or any withdrawal or resignation by
Loan Parties’ independent accountants; (i) any material change in accounting or
financial reporting practices; (j) the filing of any documentation with the IRS
or any other Governmental Authority outside the ordinary course of business, or
(k) actual termination, cancellation or material limitation of or any actual
material negative modification in or material change in the business
relationship or agreements with any Account Debtor whose business with Borrowers
constitutes more than 20% of Borrowers’ total revenue.

(ii)    Promptly notify Administrative Agent in writing of the occurrence of any
event or the existence of any fact which renders any representation or warranty
in this Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect as of the date made or remade. In addition,
the Loan Parties agree to provide Administrative Agent with prompt written
notice of any change in the information disclosed in any Schedule hereto, as
required under this Agreement, in each case after giving effect to the
materiality limits and Material Adverse Effect qualifications contained therein.

9.1.3    Financial Statements. Keep, and cause each of their Restricted
Subsidiaries to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with
customary accounting practices reflecting all its financial transactions; and
cause to be prepared and furnished to Administrative Agent and each Lender, the
following, all to be prepared in accordance with GAAP applied on a consistent
basis:

(i)    not later than one hundred twenty (120) days after the close of each
fiscal year of Holding, unqualified (except for a qualification for a change in
accounting principles with which the accountant concurs) audited financial
statements of Holding and its Subsidiaries as of the end of such year, on a
Consolidated basis, certified by a firm of independent certified public
accountants of recognized standing reasonably acceptable to Administrative Agent
(it being acknowledged by Administrative Agent that Semple, Marchal & Cooper,
LLP is acceptable) and, within a reasonable time thereafter a copy of any
management letter issued in connection therewith;

(ii)    not later than forty five (45) days after the end of each fiscal quarter
(but not including the last fiscal quarter of Holding’s fiscal year), unaudited
interim financial statements of Holding and its Subsidiaries as of the end of
such fiscal quarter and of the portion of the fiscal year then elapsed, on a
Consolidated basis, certified by the principal financial officer of Holding as
prepared in accordance with GAAP and fairly presenting in all material respects
the financial position and results of operations of Holding and its Subsidiaries
for such fiscal quarter and period subject only to changes from audit and
year-end or quarterly adjustments;

 

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(iii)    not later than forty five (45) days after the end of the last fiscal
quarter, unaudited preliminary financial statements (balance sheet, income
statement and cash flow statement without notes) of Holding and its Subsidiaries
as of the end of such fiscal quarter and the fiscal year then elapsed, on a
Consolidated basis, presenting the financial position and results of operations
of Holding and its Subsidiaries for such fiscal quarter and period subject to
changes from audit and year-end or quarterly adjustments;

(iv)    not later than forty-five (45) days after the end of each month
hereafter, unaudited interim financial statements of Holding and its
Subsidiaries (balance sheet, income statement and cash flow statement without
notes) as of the end of such month and of the portion of the fiscal year then
elapsed, on a Consolidated basis, presenting the financial position and results
of operations of Holding and its Subsidiaries for such month and period subject
to changes from audit and year-end, quarterly or monthly adjustments;

(v)    together with each delivery of financial statements pursuant to clauses
(i) and (ii) of this subsection 9.1.3, a management report (a) setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the most recent
Projections for the current fiscal year delivered pursuant to subsection 9.1.7
and (b) identifying the reasons for any significant variations;

(vi)    together with each delivery of financial statements pursuant to
clauses (i), (ii), and (iii) of this subsection 9.1.3, or more frequently if
reasonably requested by Administrative Agent, Holding shall cause to be prepared
and furnished to Administrative Agent a Compliance Certificate in the form of
Exhibit 9.1.3 hereto (a “Compliance Certificate”);

(vii)    together with each delivery of financial statements pursuant to
clauses (i), (ii), and (iii) of this subsection 9.1.3, a management report
setting forth the individual consolidating amounts for Holding and its
Subsidiaries and eliminations that reconcile to the financial statements
pursuant to clauses (i), (ii), and (iii) of this subsection 9.1.3;

(viii)    promptly after the sending or filing thereof, as the case may be,
copies of any proxy statements, financial statements or reports which any Loan
Party has made available to holders of its public Equity Interests and copies of
any regular, periodic and special reports or registration statements which any
Loan Party or any of its Restricted Subsidiaries files with the Securities and
Exchange Commission or any Governmental Authority which may be substituted
therefor or any national securities exchange;

(ix)    upon request of Administrative Agent, copies of any annual report to be
filed with ERISA in connection with each Plan; and

(x)    such other data and information (financial and otherwise) as
Administrative Agent or any Lender, from time to time, may reasonably request,
bearing

 

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upon or related to the Collateral or the Loan Parties’ or any of their
Restricted Subsidiaries’ financial condition or results of operations.

9.1.4    Borrowing Base Certificates. On or before the last day of each month
from and after the date hereof, the Borrowers shall deliver to Collateral Agent,
in form acceptable to Collateral Agent, a Borrowing Base Certificate as of the
last day of the immediately preceding month, with such supporting materials as
Collateral Agent shall reasonably request. Notwithstanding the foregoing, the
Borrowing Base Certificate as of January 31, 2017, will be due March 3, 2017. If
Collateral Agent shall request at any time (i) an Event of Default has occurred
and is continuing or (ii) Excess Liquidity Percentage is less than 20% or
(iii) Excess Liquidity is less than $4,000,000, the Borrowers shall execute and
deliver to Collateral Agent Borrowing Base Certificates on or before the third
(3rd) Business Day of each week, provided that any referenced amounts with
respect to unbilled Accounts will continue to be updated monthly. Together with
each delivery of a Borrowing Base Certificate, the Borrower Representative shall
deliver to Collateral Agent, in the form reasonably acceptable to Collateral
Agent, (i) reconciliations of the Accounts as shown on the month-end Borrowing
Base Certificate for the immediately preceding month to each Borrower’s accounts
receivable agings, to such Borrower’s general ledger and to such Borrower’s most
recent financial statements and all with supporting materials as Collateral
Agent shall reasonably request.

9.1.5    Landlord, Processor and Storage Agreements. Provide Administrative
Agent with copies of all agreements between any Loan Party or any of its
Restricted Subsidiaries and any landlord which owns or is the lessee of any
premises at which any books and records may, from time to time, be kept. In the
event the Borrowers do not provide Administrative Agent with a landlord waiver
with respect to any such leased location within thirty (30) days of the Closing
Date, the Borrowers acknowledge that Collateral Agent may, in Collateral Agent’s
reasonable credit judgment, establish a Reserve in the amount of three months’
rent for such location.

9.1.6    Guarantor Financial Statements. Deliver or cause to be delivered to
Administrative Agent financial statements, if any, for each Guarantor (to the
extent not consolidated with the financial statements delivered to
Administrative Agent under subsection 9.1.3) in form and substance satisfactory
to Administrative Agent at such intervals and covering such time periods as
Administrative Agent may request.

9.1.7    Projections. No later than thirty (30) days after the end of each
fiscal year of Holding, deliver to Administrative Agent the Projections of each
of Holding and each of its Subsidiaries for the forthcoming fiscal year, month
by month.

9.1.8    Subsidiaries. Cause (i) each Subsidiary of each Loan Party (other than
an Unrestricted Subsidiary) hereafter acquired or created, or (ii) each
Unrestricted Subsidiary which hereafter ceases to be an Unrestricted Subsidiary
because of the provisions of the definition of “Unrestricted Subsidiary”, to
execute and deliver to Administrative Agent a joinder agreement in form and
substance reasonably acceptable to Administrative Agent whereby such Subsidiary
would become either an additional Borrower or Guarantor hereunder, the
determination as to whether such Subsidiary shall be a Borrower or a Guarantor
in the case of clause (i) above to be made by Administrative Agent, in its sole
discretion, and the determination

 

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as to whether such Subsidiary shall be a Borrower or a Guarantor in the case of
clause (ii) above, to be made pursuant to the relevant provisions of the
definition of “Unrestricted Subsidiary”. A Subsidiary which becomes a Borrower
hereunder shall by such joinder become a party to this Agreement as a “Borrower”
and subject to the terms, conditions and provisions of this Agreement, which
shall include, without limitation, a grant to Administrative Agent pursuant to
subsection 6.1.1 hereof of a first priority Lien (subject only to Permitted
Liens) on all of its Properties of the types described in subsection 6.1.1;
provided, however, prior to the inclusion of any Accounts of such Borrower in
the Borrowing Base, Administrative Agent shall be satisfied with the results of
a field exam, conducted at the Loan Parties’ expense, as to such Accounts. A
Subsidiary which becomes a Guarantor hereunder shall by such joinder become a
party to this Agreement as a “Guarantor” and subject to the terms, conditions
and provisions of this Agreement, and in addition to but not in limitation of
the foregoing, shall grant to Administrative Agent, for the benefit of itself
and each Lender, a continuing Lien upon all Equity Interests, whether
certificated or uncertificated, in each of its Subsidiaries which are Loan
Parties, and comply with the provisions of subsection 6.1.3 hereof as if it were
an original party to this Agreement, except that the reference to “Parent” shall
be construed to be a reference to such Guarantor and the reference to “Quest”
shall be construed to be a reference to such Subsidiary and the reference to
“Pledge Agreement” shall be construed to be a reference to the Pledge Agreement
in form and substance satisfactory to Administrative Agent, Guarantor shall be
required to execute in connection with becoming a Guarantor hereunder.

9.1.9    Deposit and Brokerage Accounts. For each deposit account or brokerage
account that any Borrower at any time opens after the Closing Date, the
Borrowers shall cause the depository bank or securities intermediary, as
applicable, to enter into a control agreement and/or blocked account agreement
in accordance with subsection 7.2.4, except to the extent any such agreement is
not required thereunder.

9.1.10    Use of Proceeds. The Revolving Credit Loans and Term Loans shall be
used solely for (i) the satisfaction of existing Indebtedness of Quest to
Regions Bank, Regions Equipment Finance Corporation and Regions Commercial
Equipment Finance, LLC, (ii) the Loan Parties’ general operating capital needs
and general corporate purposes in a manner consistent with the provisions of
this Agreement and all Applicable Law, and (iii) other purposes permitted under
this Agreement.

9.1.11    Compliance with Laws. Comply with all (i) Anti-Terrorism Laws and
(ii) other Applicable Laws if the failure to comply with such other Applicable
Laws could reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, if any Environmental Release occurs at
or on any Properties of any Loan Party or Restricted Subsidiary, it shall act
promptly and diligently to investigate and report to Administrative Agent and
all appropriate Governmental Authorities the extent of, and to make appropriate
remedial action to eliminate, such Environmental Release, whether or not
directed to do so by any Governmental Authority.

9.1.12    Payment of Obligations. Pay, discharge or otherwise satisfy as the
same shall become due and payable (i) all material Tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, which,
if unpaid, could reasonably be expected to result in the creation of a Lien upon
its Property, unless the same are being contested

 

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in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained and (ii) all material
lawful claims which, if unpaid, would by law become a Lien upon its property,
unless such claims would not become a Lien on the Collateral and the same are
being contested in good faith by appropriate proceedings diligently conducted
and adequate reserves in accordance with GAAP are being maintained.

9.1.13    Preservation of Existence. Preserve, renew and maintain in full force
and effect its legal existence under the Applicable Law of the jurisdiction of
its organization, other than as a result of a transaction expressly permitted
hereunder.

9.1.14    Maintenance of Properties, Permits, Etc. (i) Maintain, preserve and
protect all of its material properties and equipment necessary in the operation
of its business in good working order, repair and condition, ordinary wear and
tear and casualty or condemnation excepted, and make all necessary renewals,
replacements, modifications, improvements, upgrades, extensions and additions
thereof or thereto in accordance with prudent industry practice, (ii) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect, and (iii) preserve or renew all of its registered
patents, trademarks, service marks and copyrights, the non-preservation of which
could reasonably be expected to have a Material Adverse Effect.

9.1.15    Post-Closing Covenants. (i) Comply with the requirements set forth in
Section 7.2.4 and Section 9.1.5, on or before the date specified therein, time
being of the essence and (ii) within thirty (30) days of the Closing Date, or
such later date as shall be agreed to by Administrative Agent, in its sole
discretion, deliver to Administrative Agent lender loss payee, additional
insured, and any other insurance endorsements required herein, in each case in
favor of Administrative Agent and in forma and substance acceptable to
Administrative Agent, in its sole discretion.

9.2    Negative Covenants. During the Term, and thereafter for so long as there
are any Obligations outstanding (other than indemnity Obligations for which no
claim has been made), the Loan Parties covenant that they shall not:

9.2.1    Mergers; Consolidations; Acquisitions; Structural Changes. Merge or
consolidate, or permit any Restricted Subsidiary of any Loan Party to merge or
consolidate, with any Person; nor change its or any of its Restricted
Subsidiaries’ state of incorporation or organization, Type of Organization or
Organizational I.D. Number; nor change its or any of its Restricted
Subsidiaries’ legal name; nor acquire, nor permit any of its Restricted
Subsidiaries to acquire, all or any substantial part of the Properties of any
Person, except for:

(i)    any merger or consolidation of a Loan Party or any Restricted Subsidiary
of a Loan Party with another Loan Party or another wholly-owned Restricted
Subsidiary of a Loan Party; provided, that a Borrower shall be the surviving
entity in any merger or consolidation involving a Borrower;

(ii)    acquisitions of assets consisting of fixed assets or real Property that
constitute Capital Expenditures permitted under subsection 9.2.7; and

 

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(iii)    Permitted Acquisitions.

9.2.2    Indebtedness. Create, incur, assume, or suffer to exist, or permit any
Restricted Subsidiary of any Loan Party to create, incur or suffer to exist, any
Indebtedness, except:

(i)    the Obligations;

(ii)    [Reserved];

(iii)    Indebtedness existing on the date of this Agreement and listed on
Schedule 9.2.2;

(iv)    Permitted Purchase Money Indebtedness;

(v)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business and other Indebtedness in respect of
obligations under any agreement or arrangement to provide cash management
services, including treasury, depository, overdraft, return items, purchasing
card, travel and entertainment card, credit or debit card, electronic funds
transfer, automated clearing house transfers of funds and other cash management
arrangements in the ordinary course of business;

(vi)    Guaranties of any Indebtedness permitted hereunder;

(vii)    Indebtedness in respect of intercompany loans permitted under
subsection 9.2.10(viii);

(viii)    trade payables, accruals and accounts payable in the ordinary course
of business (in each case to the extent not overdue) not for Funded Debt;

(ix)    Indebtedness arising from any Swap Obligations incurred in the ordinary
course of business, for bona fide hedging purposes and not for speculation;

(x)    Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(xi)    [Reserved];

(xii)    Indebtedness consisting of insurance premiums accrued but not yet due;

(xiii)    Indebtedness of any Person that becomes a Loan Party or Restricted
Subsidiary after the date hereof which was incurred prior to the time such
Person becomes a Loan Party or Restricted Subsidiary; provided that (i) such
Indebtedness is not created in contemplation of or in connection with such
acquisition or

 

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such Person becoming a Loan Party or Restricted Subsidiary, as the case may be
and (ii) such Indebtedness shall not be assumed or guaranteed by any other Loan
Party or Restricted Subsidiary;

(xiv)    unsecured earn-outs, seller promissory notes and payment obligations in
respect of non-competition agreements incurred in connection with any
acquisition permitted hereunder; provided that each such earnout, seller note
and agreement shall be subordinated to the Obligations on terms reasonably
acceptable to Administrative Agent; and

(xv)    other Indebtedness not to exceed $750,000 in the aggregate at any time
outstanding.

9.2.3    Affiliate Transactions. Enter into, or be a party to, or permit any
Restricted Subsidiary of any Loan Party to enter into or be a party to, any
transaction with any Affiliate of any Loan Party or any holder of any Equity
Interests of any Loan Party or any Restricted Subsidiary of any Loan Party,
including without limitation any management, consulting or similar fees, except:

(i)    in the ordinary course of and pursuant to the reasonable requirements of
such Loan Party’s or such Restricted Subsidiary’s business and upon fair and
reasonable terms which are fully disclosed to Administrative Agent and are no
less favorable to such Loan Party or such Restricted Subsidiary than would be
obtained in a comparable arm’s-length transaction with a Person not an Affiliate
or holder of Equity Interests of any Loan Party;

(ii)    transactions expressly permitted by this Agreement or any other Loan
Document between a Loan Party or any Restricted Subsidiary of a Loan Party and
their respective Affiliates; and

(iii)    intercompany Indebtedness expressly permitted hereunder and repayment
of intercompany indebtedness expressly permitted hereunder.

9.2.4    Limitation on Liens. Create or suffer to exist, or permit any
Restricted Subsidiary of any Loan Party to create or suffer to exist, any Lien
upon any of its Property, income or profits, whether now owned or hereafter
acquired, except:

(i)    Liens at any time granted in favor of Administrative Agent securing the
Obligations;

(ii)    [Reserved];

(iii)    Liens for taxes, assessments or governmental charges (excluding any
Lien imposed pursuant to any of the provisions of ERISA) not yet due, or being
contested in the manner described in subsection 9.1.12 hereto, if such Lien
would not reasonably be expected to materially adversely affect Administrative
Agent’s rights or the priority of Administrative Agent’s Lien on any Collateral;

 

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(iv)    Liens arising in the ordinary course of the business of any Loan Party
or any of its Restricted Subsidiaries by operation of law or regulation, but
only if payment in respect of any such Lien is not at the time required and such
Liens do not, in the aggregate, materially detract from the value of the
Property of such Loan Party or any of its Restricted Subsidiaries or materially
impair the use thereof in the operation of the business of such Loan Party or
any of its Restricted Subsidiaries;

(v)    Purchase Money Liens securing Permitted Purchase Money Indebtedness;

(vi)    such other Liens as appear on Schedule 9.2.4 hereto;

(vii)    Liens incurred or deposits made in the ordinary course of business in
connection with (a) worker’s compensation, social security, unemployment
insurance and other like laws or (b) sales contracts, leases, statutory
obligations, work-in-progress advances and other similar obligations not
incurred in connection with Funded Debt;

(viii)    reservations, covenants, zoning and other land use regulations, title
exceptions or encumbrances granted in the ordinary course of business, affecting
real Property owned or leased by a Loan Party or one of its Restricted
Subsidiaries; provided that such exceptions do not in the aggregate materially
interfere with the use of such Property in the ordinary course of any Loan
Party’s or such Restricted Subsidiary’s business;

(ix)    judgment Liens that do not give rise to an Event of Default under
subsection 11.1.14;

(x)    Liens of carriers, warehousemen, mechanics and materialmen, and other
like Liens arising in the ordinary course of business, which are not delinquent
for more than ninety (90) days or remain payable without penalty or which are
being contested in good faith and by appropriate proceedings diligently
prosecuted, which proceedings have the effect of presenting the forfeiture or
sale of the Property subject thereto and for which adequate reserves in
accordance with GAAP are being maintained;

(xi)    rights of set-off or customary bankers’ Liens upon deposit account in
favor of banks or other depositing institutions; and

(xii)    other Liens securing Indebtedness in an amount not to exceed $750,000
in the aggregate at any time outstanding.

9.2.5     Payments of Certain Debt and Amendments of Certain Agreements.

(i)    Make or permit any Restricted Subsidiary of any Loan Party to make any
payment of any part or all of any Subordinated Debt, except in accordance with
the subordination agreement relative thereto or the subordination provisions
thereof; or

 

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(ii)    amend or modify any agreement, instrument or document evidencing or
relating to any Subordinated Debt, except in accordance with the subordination
agreement relative thereto or the subordination provisions thereof.

9.2.6    Distributions. Declare or make, or permit any Restricted Subsidiary of
any Loan Party to declare or make, any Distributions, except for:

(i)    Distributions by any Restricted Subsidiary of a Loan Party to a Loan
Party other than Parent and Holding;

(ii)    Distributions paid solely in Equity Interests of a Loan Party or any of
its Restricted Subsidiaries;

(iii)    Distributions by the Loan Parties to Holding in amounts necessary to
permit Holding to repurchase Equity Interests of Holding from employees of any
Loan Party or any of its Subsidiaries upon the termination of their employment,
so long as no Default or Event of Default exists at the time of or would be
caused by the making of such Distributions and the aggregate cash amount of such
Distributions, measured at the time when made, does not exceed $250,000 in any
fiscal year;

(iv)    Distributions by the Loan Parties to Holding which are used by Holding
to pay the Consolidated tax liabilities of the Loan Parties or, if Holding is a
pass-through entity for income tax purposes, distributed to the direct and
indirect owners of Holding to pay the Consolidated tax liabilities of the Loan
Parties which are allocable to such direct or indirect owners;

(v)    Distributions by the Borrowers to Holding or Parent to the extent
necessary to permit to Holding or Parent to pay their respective administrative
costs and expenses; and

(vi)    other Distributions not provided for in any other clause of this
subsection 9.2.6 so long as the Payment Conditions are satisfied at the time
such loan or advance is made.

9.2.7    [Reserved]

9.2.8    Disposition of Assets. Sell, lease or otherwise dispose of any of, or
permit any Restricted Subsidiary of any Loan Party to sell, lease or otherwise
dispose of any of, its Properties, including any disposition of Property as part
of a sale-and-leaseback transaction, to or in favor of any Person, except for:

(i)    sales of Inventory in the ordinary course of business;

(ii)    transfers of Property (a) to a Loan Party by (x) a Loan Party (other
than by a Borrower to a Loan Party that is not a Borrower, provided that the
foregoing shall not limit Distributions permitted by Section 9.2.6 hereof) or
(y) a Restricted Subsidiary of a Loan Party (other than by a Borrower to such
Restricted Subsidiary,

 

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provided that the foregoing shall not limit Distributions permitted by
Section 9.2.6 hereof) or (b) to a Borrower by a Borrower;

(iii)    dispositions of Property that is substantially worn, damaged,
uneconomic or obsolete;

(iv)    dispositions of Cash Equivalents;

(v)    licenses of Intellectual Property granted in the ordinary course of
business;

(vi)    the lapse of immaterial Intellectual Property that is no longer useful
to its business;

(vii)    the termination, surrender or sublease of a real estate lease in the
ordinary course of business;

(viii)    other dispositions expressly authorized by this Agreement; and

(ix)    so long as no Default or Event of Default exists and is continuing,
other dispositions not provided for in any other clause of this subsection 9.2.8
in an amount not to exceed $750,000 in the aggregate during any consecutive
twelve-month period.

9.2.9    Equity Interests of Subsidiaries. Permit any of their Restricted
Subsidiaries to issue any additional Equity Interests except to a Loan Party or
other Restricted Subsidiary of a Loan Party and except for director’s qualifying
Equity Interests to the extent required under Applicable Law.

9.2.10    Investments. Make or have, or permit any Restricted Subsidiary of any
Loan Party to make or have, any investment in cash or by delivery of Property to
any Person, whether by acquisition of Equity Interests, Indebtedness or other
obligation or by loan, advance or capital contribution, or otherwise, except:

(i)    investments by a Loan Party (other than a Borrower) in another Loan
Party;

(ii)    investments in Cash Equivalents;

(iii)    transactions permitted under subsection 9.2.1 of this Agreement;

(iv)    salary advances, travel expense advances, advances against commissions
and other similar advances to employees in the ordinary course of business;

(v)    extensions of trade credit in the ordinary course of business;

(vi)    deposits with financial institutions permitted under this Agreement;

 

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(vii)    prepaid expenses;

(viii)    intercompany loans from (a) a Loan Party to another Loan Party, or
(b) any Loan Party to any Subsidiary of Holding that is not a Loan Party, in a
net amount as to all such Subsidiaries of Holdings not Loan Parties not to
exceed in the aggregate $250,000 at any time after the Closing Date;

(ix)    [Reserved];

(x)    investments existing on the date hereof and listed on Schedule 9.2.10
hereto;

(xi)    deposit accounts maintained in the ordinary course of business in
compliance with this Agreement; and

(xii)    [Reserved];

(xiii)    [Reserved]; and

(xiv)    other investments not provided for in any other clause of this
subsection 9.2.10 so long as the Payment Conditions are satisfied at the time
such investment is made.

9.2.11    Tax Consolidation. File or consent to the filing of any consolidated
income tax return with any Person other than Holding, the Loan Parties and the
Subsidiaries of the Loan Parties.

9.2.12    Organizational Documents. Agree to, or suffer to occur, any amendment,
supplement or addition to its or any of their Restricted Subsidiaries’ charter,
articles or certificate of incorporation, certificate of formation, limited
partnership agreement, bylaws, limited liability agreement, operating agreement
or other organizational documents (as the case may be) in any manner which is
adverse to the interests of Administrative Agent or Lenders.

9.2.13    Fiscal Year End. Change, or permit any Restricted Subsidiary of any
Loan Party to change, its fiscal year end.

9.2.14    Restrictive Agreements. Become a party to any Restrictive Agreement,
except (a) a Restrictive Agreement as in effect on the Closing Date and shown on
Schedule 9.2.14; (b) a Restrictive Agreement relating to secured Indebtedness
permitted hereunder, if such restrictions apply only to the collateral for such
Indebtedness; and (c) customary provisions in leases, Licenses and other
contracts restricting assignment thereof.

9.2.15    OFAC. (i) Become a Person whose property or interests in property are
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Party and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49079(2001)), (ii)
engage in any dealings or transactions prohibited by Section 2 of such executive
order, or be otherwise associated with any such Person in any manner violative
of such Section 2, or (iii) become a Person on the list of

 

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Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

9.2.16    Bill-and-Hold Sales, Etc. Make, or permit any Restricted Subsidiary of
any Loan Party to make, a sale to any customer on a bill-and-hold, guaranteed
sale, sale and return, sale on approval, repurchase or return or consignment
basis.

9.2.17    Conduct of Business. (i) As to any Loan Party other than Holding,
engage in any business, other than the business of any Loan Party as conducted
on the Closing Date and any business reasonably related, ancillary or
complementary to the business in which any Loan Party is engaged on the date
hereof and (ii) as to Holding, engage in any trade or business other than acting
as a holding company for the Equity Interests of the Loan Parties and any
activities reasonably incidental thereto.

9.3    Specific Financial Covenants.

9.3.1    Financial Covenants. During the Term, and thereafter for so long as
there are any Obligations outstanding (other than indemnity Obligations for
which no claim has been made), the Borrowers covenant that they shall comply
with all of the following financial covenants.

(i)    Excess Liquidity. The Borrowers shall not permit at any date (x) prior to
the earlier of (1) May 15, 2018 or (2) the election of Borrowers (the “Initial
FC Period”), the Excess Liquidity for the Borrowers to be less than $5,000,000,
or (y) after the expiration of the Initial FC Period, the Excess Liquidity for
the Borrowers to be less than the greater of (a) 10% of the Line Cap or (b)
$1,500,000.

(ii)    Fixed Charge Coverage Ratio. As of the last day of each calendar
quarter, beginning with the first calendar quarter ended immediately before the
expiration of the Initial FC Period for which the financial statements have
become due pursuant to subsection 9.1.3(iii), Holding shall not permit the Fixed
Charge Coverage Ratio to be less than 1.10 to 1.00 for the most recently ended
trailing twelve calendar month period.

SECTION 10. CONDITIONS PRECEDENT

10.1    Initial Loans. Notwithstanding any other provision of this Agreement or
any of the other Loan Documents, and without affecting in any manner the rights
of Agents or any Lender under the other sections of this Agreement, no Lender
shall be required to make the Loans, nor shall Issuing Bank be required to issue
any Letter of Credit to be made or issued on the Closing Date unless and until
each of the following conditions has been and continues to be satisfied or
waived by Majority Lenders:

10.1.1    Documentation. Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent and its counsel, a duly executed
copy of this Agreement and the other Loan Documents, together with such
additional documents, instruments, opinions and certificates as Administrative
Agent and its counsel shall require in

 

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connection therewith from time to time, all in form and substance satisfactory
to Administrative Agent and its counsel.

10.1.2    Excess Liquidity. Administrative Agent shall have determined that
immediately after Lenders have made the initial Loans and after Administrative
Agent has issued or procured the initial Letters of Credit contemplated hereby,
and the Loan Parties have paid (or, if accrued, treated as paid), all closing
costs incurred in connection with the Closing Date Transactions, and has
reserved an amount sufficient to pay all trade payables greater than sixty
(60) days past due, Excess Liquidity shall not be less than $7,500,000.

10.1.3    No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of, this Agreement or the
consummation of the Closing Date Transactions.

10.1.4    [Reserved]

10.1.5    Repayment of Existing Indebtedness. (i) Administrative Agent shall
have received evidence that all Indebtedness (including any commitments
therefor) not permitted under subsection 9.2.2 shall have been terminated and
all outstanding amounts therefor shall have been paid in full pursuant to
documentation in form and substance satisfactory to Administrative Agent and
(ii) satisfactory arrangements shall have been made for the termination of all
Liens granted in connection therewith.

10.1.6    Material Adverse Effect. As of the Closing Date, since December 31,
2015, there has not been any material adverse change in the business, assets,
financial condition, income, performance or operations of any Loan Party and no
event or condition exists which would be reasonably likely to result in any
Material Adverse Effect.

10.1.7    UCC Filings and Lien Perfection. Administrative Agent shall have
received acknowledgments of all filings, notifications or recordations necessary
to perfect its Liens in the Collateral, as well as UCC, intellectual property
and other Lien searches and other evidence satisfactory to Administrative Agent
that such Liens are the only Liens upon the Collateral, except Permitted Liens.
Administrative Agent shall have received all possessory collateral required to
be delivered to Administrative Agent pursuant to the Loan Documents, duly
endorsed in a manner satisfactory to Administrative Agent indicating
Administrative Agent’s security interest therein.

10.1.8    Officer’s Certificate. Administrative Agent shall have received a
certificate, in form and substance satisfactory to it, from a duly authorized
officer of the Loan Parties certifying that (a) each Loan Party is now and,
after giving effect to the initial Loans to be made and the initial Letters of
Credit to be issued hereunder and the consummation of each other Closing Date
Transaction, will be, Solvent; (b) no Default or Event of Default exists or
would result after giving effect to the Closing Date Transactions; (c) the
representations and warranties set forth in Section 8 are true and correct; and
(d) the Loan Parties have complied with all agreements and conditions to be
satisfied by them under the Loan Documents.

 

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10.1.9    Resolutions, Organizational Documents, Incumbency Certificate.
Administrative Agent shall have received a certificate of a duly authorized
officer of each Loan Party, certifying (a) that attached copies of such Loan
Party’s Organizational Documents are true and complete, and in full force and
effect, without amendment except as shown, (b) that an attached copy of
resolutions authorizing execution and delivery of the Loan Documents is true and
complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this credit facility, and (c) to the title,
name and signature of each Person authorized to sign the Loan Documents.
Administrative Agent may conclusively rely on this certificate until it is
otherwise notified by the applicable Loan Party in writing.

10.1.10    Legal Opinion. Administrative Agent shall have received a written
opinion of Greenberg Traurig LLP, counsel to the Loan Parties, each in form and
substance satisfactory to Administrative Agent.

10.1.11    Good Standing Certificates. Administrative Agent shall have received
copies of the charter documents of each Loan Party, certified as appropriate by
the Secretary of State or another official of such Loan Party’s jurisdiction of
organization. Administrative Agent shall have received good standing
certificates for each Loan Party, issued by the Secretary of State or other
appropriate official of (a) such Loan Party’s jurisdiction of organization and
(b) each jurisdiction where such Loan Party’s conduct of business or ownership
of Property necessitates qualification, except where failure to maintain such
qualification could not reasonably be expected to result in a Material Adverse
Effect.

10.1.12    Insurance. Administrative Agent shall have received evidence of the
insurance and additional insured, lender loss payee and other endorsements
required hereunder and under the other Loan Documents, and certificates of such
insurance policies and/or endorsements naming Administrative Agent, all in form
and substance reasonably satisfactory to Administrative Agent.

10.1.13    Due Diligence Financial Statements and Projections. Administrative
Agent shall have completed its business, financial and legal due diligence of
Loan Parties, including:

(i)    Administrative Agent or its Affiliates shall have conducted a field
examination of the Borrowers’ assets, liabilities, cash management systems,
books and records, and the results of such field examination shall be reasonably
satisfactory to Administrative Agent in all respects; and

(ii)    Administrative Agent shall have received copies of (a) the internally
prepared monthly financial statements of Holding and its Subsidiaries on a
Consolidated basis for the calendar month ending December 31, 2016, (b) the
audited Consolidated financial statements of Holding and its Subsidiaries for
the fiscal year ended December 31, 2015, (c) the Projections of Holding and its
Subsidiaries (1) on a monthly basis for the fiscal year ending December 31,
2017, and (2) on an annual basis for the fiscal years ending December 31, 2018
through December 31, 2021, and (d) evidence and materials satisfactory to
Administrative Agent demonstrating after

 

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giving effect to the Closing Date Transactions, pro forma compliance with all
covenants of this Agreement.

10.1.14    Payment of Fees. The Loan Parties shall have paid all fees and
expenses, including the reasonable and documented fees and expenses of legal
counsel, to be paid to Administrative Agent and Lenders on the Closing Date.

10.1.15    Borrowing Base Certificate. Collateral Agent shall have received a
Borrowing Base Certificate prepared as of the Closing Date or as of such other
date as Collateral Agent may elect.

10.1.16    Third Party Waivers and Consents. Administrative Agent shall have
received, in form and substance reasonably satisfactory to Administrative Agent,
all consents, waivers, acknowledgments and other agreements from third persons
(including, without limitation, customs brokers) and Governmental Authorities
which Administrative Agent may deem necessary in order to permit, protect and
perfect its Lien upon the Collateral or to effectuate the provisions or purposes
of this Agreement and the other Loan Documents.

10.1.17    USA PATRIOT Act. The Lenders shall have received all documentation
and other information required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the
Patriot Act.

10.1.18    [Reserved]

10.1.19    Perfection Certificate. Administrative Agent shall have received a
Questionnaire and Perfection Certificate duly executed by the Loan Parties, in
form and substance acceptable to the Agent.

10.2    Conditions Precedent to All Loans and Credit Accommodations. No Lender
shall be required to make any Loan, nor shall Issuing Bank be required to issue
any Letter of Credit unless and until the following conditions are satisfied:

10.2.1    No Default or Event of Default. No Default or Event of Default shall
exist at the time of, or result from, such funding, issuance or grant; and

10.2.2    Representations and Warranties. The representations and warranties of
each Loan Party and its Restricted Subsidiaries in the Loan Documents shall be
true and correct in all material respects (or, as to any representations and
warranties which are subject to a materiality or Material Adverse Effect
qualifier, true and correct in all respects) on the date of, and upon giving
effect to, such funding, issuance or grant (except for representations and
warranties that expressly relate to an earlier date or for such changes as
provided in Section 8.2).

SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

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

 

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11.1.1    Payment of Obligations. The Loan Parties shall fail to pay any of the
Obligations hereunder or under any Note (i) consisting of principal on the due
date thereof or (ii) consisting of interest, fees or any other amount, within
five (5) days after the due date thereof (in each instance, whether due at
stated maturity, on demand, upon acceleration or otherwise).

11.1.2    Misrepresentations. Any representation, warranty or other statement
made or furnished to Administrative Agent or any Lender by or on behalf of any
Loan Party in this Agreement, any of the other Loan Documents or any instrument,
certificate or financial statement furnished in compliance with or in reference
thereto proves to have been false or misleading in any material respect when
made, furnished or reaffirmed pursuant to Section 8.2 hereof.

11.1.3    Breach of Specific Covenants. Any Loan Party shall fail or neglect to
perform, keep or observe any covenant contained in any of the following
Sections or subsections: 6.2 (Other Collateral), 6.3 (Lien Perfection; Further
Assurances), 7.1.1 (Location of Collateral), 7.1.2 (Insurance of Collateral),
7.2.4 (Maintenance of Blocked Accounts), 7.2.5 (Collection of Accounts; Proceeds
of Collateral), 9.1.1 (Visits and Inspections; Lender Meeting), 9.1.3 (Financial
Statements), 9.1.4 (Borrowing Base Certificates), 9.1.7 (Projections), 9.1.9
(Deposit and Brokerage Accounts), 9.1.10 (Use of Proceeds), 9.1.13 (Preservation
of Existence), 9.1.16 (Post-Closing Covenants), 9.2 (Negative Covenants), or 9.3
(Specific Financial Covenants) hereof on the date that the Loan Parties are
required to perform, keep or observe such covenant.

11.1.4    Breach of Other Covenants. The Loan Parties shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically elsewhere in Section 11.1 hereof) or
any other Loan Document and the breach of such other covenant is not cured to
Administrative Agent’s satisfaction within thirty (30) days after the sooner to
occur of any Loan Party’s receipt of notice of such breach from Administrative
Agent or the date on which such failure or neglect first becomes known to any
officer of any Loan Party.

11.1.5    Other Defaults. There shall occur any default or event of default on
the part of any Loan Party under any agreement, document or instrument to which
such Loan Party is a party or by which such Loan Party or any of its Property is
bound, evidencing or relating to any Indebtedness (other than the Obligations)
with an outstanding principal balance in excess of $750,000, if the payment or
maturity of such Indebtedness is or could be accelerated in consequence of such
event of default or demand for payment of such Indebtedness is made or could be
made in accordance with the terms thereof.

11.1.6    Uninsured Losses. Any material loss, theft, damage or destruction of
any portion of the Collateral having a fair market value of $750,000, in the
aggregate, if not fully covered (subject to such deductibles and self-insurance
retentions as Administrative Agent shall have permitted) by insurance.

11.1.7    Insolvency and Related Proceedings. An Insolvency Proceeding is
commenced by a Loan Party; a Loan Party makes an offer of settlement, extension
or composition to its unsecured creditors generally; a trustee is appointed to
take possession of any

 

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substantial Property of or to operate any of the business of a Loan Party; or an
Insolvency Proceeding is commenced against a Loan Party and such Loan Party
consents to institution of the proceeding, the petition commencing the
proceeding is not timely contested by such Loan Party, the petition is not
dismissed within sixty (60) days after filing, or an order for relief is entered
in the proceeding.

11.1.8    Business Disruption; Condemnation. There shall occur a cessation of a
substantial part of the business of Loan Party which could reasonably be
expected to have a Material Adverse Effect; or any Loan Party shall suffer the
loss or revocation of any material license or permit now held or hereafter
acquired by any Loan Party which loss could reasonably be expected to have a
Material Adverse Effect; or any Loan Party shall be enjoined, restrained or in
any way prevented by court, governmental or administrative order from conducting
all or any material part of its business affairs which injunction, restraint or
other prevention could reasonably be expected to have a Material Adverse Effect;
or any material lease or agreement pursuant to which any Loan Party leases, uses
or occupies any Property shall be canceled or terminated prior to the expiration
of its stated term, the cancellation or termination of which could not
reasonably be expected to have a Material Adverse Effect; or any portion of the
Collateral shall be taken through condemnation or the value of such Property
shall be impaired through condemnation which condemnation or impairment could
reasonably be expected to have a Material Adverse Effect.

11.1.9    Change of Control. (a) Any Person, other than Mitchell A. Saltz (or
any Person controlled by Mitchell A. Saltz), obtains more than fifty percent
(50%) of the Equity Interests in Holding or direct or indirect control of the
appointment of the majority of the directors of Holding; (b) Holding ceases to
own and control, beneficially and of record, directly or indirectly, all Equity
Interests in Parent (other than as a result of a transaction permitted by
Section 9.2.1 hereof); (c) Parent ceases to own and control, beneficially and of
record, directly or indirectly, all Equity Interests in Quest (other than as a
result of a transaction permitted by Section 9.2.1 hereof); (d) Quest ceases to
own and control, beneficially and of record, directly or indirectly, all Equity
Interests in any Subsidiary of Quest (other than as a result of a transaction
permitted by Section 9.2.1 hereof); (e) a change in the majority of the
directors of Holding during any 24 month period, unless approved by the majority
of directors serving at the beginning of such period; or (f) the sale or
transfer of all or substantially all assets of any Borrower (other than as a
result of a transaction permitted by Section 9.2.8 hereof).

11.1.10    ERISA. A Reportable Event shall occur which, in Administrative
Agent’s determination, constitutes grounds for the termination by the Pension
Benefit Guaranty Corporation of any Plan or for the appointment by the
appropriate United States district court of a trustee for any Plan, or any Plan
shall be terminated or any such trustee shall be requested or appointed, or if
any Loan Party is in “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from such Loan Party’s
complete or partial withdrawal from such Plan and any such event could
reasonably be expected to have a Material Adverse Effect.

11.1.11    Challenge to Agreement. Any Loan Party shall challenge or contest in
any action, suit or proceeding the validity or enforceability of this Agreement
or any of the other Loan Documents, the legality or enforceability of any of the
Obligations or the perfection or

 

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priority of any Lien granted to Administrative Agent or this Agreement or any of
the other Loan Documents, Obligations or perfection or priority of any Lien
granted to Administrative Agent shall cease to actually be legal and enforceable
(other than as a result of any action or inaction by Administrative Agent or any
Lender).

11.1.12    Repudiation of or Default Under Guaranty Agreement. Any Guarantor
shall revoke or attempt to revoke the Guaranty Agreement signed by such
Guarantor or shall repudiate such Guarantor’s liability thereunder or shall be
in default under the terms thereof.

11.1.13    Criminal Forfeiture. Any Loan Party shall be criminally indicted or
convicted under any law that could lead to a forfeiture of any Property of any
Loan Party.

11.1.14    Judgments. Any money judgment, writ of attachment or similar process
(collectively, “Judgments”) is issued or rendered against any Loan Party, or any
of their respective Property (i) in the case of money judgments, in an amount of
$750,000 or more for all such judgments, attachments or processes in the
aggregate, in each case in excess of any applicable insurance with respect to
which the insurer has admitted liability, and (ii) in the case of non-monetary
Judgments, such Judgment or Judgments (in the aggregate) could reasonably be
expected to have a Material Adverse Effect, in each case which Judgment is not
stayed, released or discharged within thirty (30) days.

11.1.15    Material Adverse Effect. Any event occurs which reasonably could be
expected to have a Material Adverse Effect.

11.2    Acceleration of the Obligations. Upon or at any time after the
occurrence and during the continuance of an Event of Default, (i) the Revolving
Credit Commitments shall, at the option of Administrative Agent or Majority
Lenders, be terminated and/or (ii) Administrative Agent or Majority Lenders may
declare all or any portion of the Obligations at once due and payable without
presentment, demand protest or further notice by Administrative Agent or any
Lender, and the Loan Parties shall forthwith pay to Administrative Agent the
full amount of such Obligations, provided that, upon the occurrence of an Event
of Default specified in subsection 11.1.7 hereof, the Revolving Credit
Commitments shall automatically be terminated and all of the Obligations shall
become automatically due and payable, in each case without declaration, notice
or demand by Administrative Agent or any Lender.

11.3    Other Remedies. Upon the occurrence and during the continuance of an
Event of Default, Administrative Agent shall have and may exercise from time to
time the following other rights and remedies:

11.3.1    All of the rights and remedies of a secured party under the UCC or
under other Applicable Law, and all other legal and equitable rights to which
Administrative Agent or Lenders may be entitled, all of which rights and
remedies shall be cumulative and shall be in addition to any other rights or
remedies contained in this Agreement or any of the other Loan Documents, and
none of which shall be exclusive.

11.3.2    The right to take immediate possession of the Collateral, and to
(i) require each Loan Party and each of its Restricted Subsidiaries to assemble
the Collateral, at the Loan Parties’ expense, and make it available to
Administrative Agent at a place designated

 

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by Administrative Agent which is reasonably convenient to both parties, and
(ii) enter any premises where any of the Collateral shall be located and to keep
and store the Collateral on such premises until sold (and if such premises are
owned by any Loan Party or Restricted Subsidiary of a Loan Party, the Loan
Parties shall not, and shall not permit any of their Restricted Subsidiaries to,
charge Administrative Agent for such entry and storage).

11.3.3    The right to sell or otherwise dispose of all or any Collateral in its
then current condition, or after any further manufacturing or processing
thereof, at public or private sale or sales, with such notice as may be required
by law, in lots or in bulk, for cash or on credit, all as Administrative Agent,
in its sole discretion, may deem advisable. Administrative Agent may, at
Administrative Agent’s option, disclaim any and all warranties regarding the
Collateral in connection with any such sale. The Loan Parties agree that ten
(10) days’ prior written notice of any public or private sale or other
disposition of Collateral shall be reasonable notice thereof, and such sale
shall be at such locations as Administrative Agent may designate in such notice.
Administrative Agent shall have the right to conduct such sales on any Loan
Party’s or any of its Subsidiaries’ premises, without charge therefor, and such
sales may be adjourned from time to time in accordance with Applicable Law.
Administrative Agent shall have the right to sell, lease or otherwise dispose of
the Collateral, or any part thereof, for cash, credit or any combination
thereof, and Administrative Agent, on behalf of Lenders, may purchase all or any
part of the Collateral at public or, if permitted by law, private sale and, in
lieu of actual payment of such purchase price, may set off the amount of such
price against the Obligations. The proceeds realized from the sale of any
Collateral shall be applied in accordance with subsection 4.4.2. If any
deficiency shall arise, the Loan Parties shall remain jointly and severally
liable to Administrative Agent and Lenders therefor.

11.3.4    Administrative Agent is hereby granted a license or other right to
use, without charge, each Loan Party’s and each of its Restricted Subsidiaries’
labels, patents, copyrights, licenses, rights of use of any name, trade secrets,
trade names, trademarks and advertising matter, or any Property of a similar
nature, as it pertains to the Collateral, in completing, advertising for sale
and selling any Collateral and each Loan Party’s and each of its Restricted
Subsidiaries’ rights under all licenses and all franchise agreements shall inure
to Administrative Agent’s benefit.

11.3.5    Administrative Agent may, at its option, require the Loan Parties to
deposit with Administrative Agent funds equal to 105% of the LC Amount and, if
the Loan Parties fail to promptly make such deposit, Administrative Agent may
advance such amount as a Revolving Credit Loan (whether or not an Overadvance is
created thereby). Each such Revolving Credit Loan shall be secured by all of the
Collateral and shall constitute a Base Rate Revolving Credit Loan. Any such
deposit or advance shall be held by Administrative Agent as a reserve to fund
future drawings against such Letters of Credit. At such time as all Letters of
Credit have been drawn upon or expired, any amounts remaining in such reserve
shall be applied against any outstanding Obligations, or, if all Obligations
have been indefeasibly paid in full, returned to the Loan Parties.

11.4    Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
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time or from time to time, with prior written consent of Administrative Agent
and with reasonably prompt subsequent notice to the Loan Parties (any prior or
contemporaneous notice to the Loan Parties being hereby expressly waived) to
setoff and to appropriate and to apply any and all (i) balances held by such
Lender at any of its offices for the account of any Loan Party or any of its
Restricted Subsidiaries (regardless of whether such balances are then due to a
Loan Party or its Restricted Subsidiaries), and (ii) other property at any time
held or owing by such Lender to or for the credit or for the account of any Loan
Party or any of its Restricted Subsidiaries, against and on account of any of
the Obligations. Except with respect to setoff amounts applied to Product
Obligations, any Lender exercising a right to setoff shall, to the extent the
amount of any such setoff exceeds its Pro Rata Percentage of the amount set off,
purchase for cash (and the other Lenders shall sell) interests in each such
other Lender’s pro rata share of the Obligations as would be necessary to cause
such Lender to share such excess with each other Lender in accordance with their
respective Pro Rata Percentages. Each Loan Party agrees, to the fullest extent
permitted by law, that any Lender may exercise its right to setoff with respect
to amounts in excess of its pro rata share of the Obligations and upon doing so
shall deliver such excess to Administrative Agent for the benefit of all Lenders
in accordance with the Pro Rata Percentages.

11.5    Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of the Loan Parties
contained in this Agreement and the other Loan Documents, or in any document
referred to herein or contained in any agreement supplementary hereto or in any
schedule or in any Guaranty Agreement or Pledge Agreement given to
Administrative Agent or any Lender or contained in any other agreement between
any Lender and the Loan Parties or between Administrative Agent and the Loan
Parties heretofore, concurrently, or hereafter entered into, shall be deemed
cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of the Loan Parties herein contained. The
failure or delay of Administrative Agent or any Lender to require strict
performance by the Loan Parties of any provision of this Agreement or to
exercise or enforce any rights, Liens, powers, or remedies hereunder or under
any of the aforesaid agreements or other documents or security or Collateral
shall not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and other Obligations owing or
to become owing from the Loan Parties to Administrative Agent and each Lender
have been fully satisfied. None of the undertakings, agreements, warranties,
covenants and representations of the Loan Parties contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by the Loan
Parties under this Agreement or any other Loan Documents shall be deemed to have
been suspended or waived by Lenders, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is signed by a
duly authorized representative of Administrative Agent and directed to the Loan
Parties.

SECTION 12. AGENTS

12.1    Authorization and Action. Each Lender hereby appoints and authorizes
Administrative Agent and Collateral Agent to take such action on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
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Each Lender hereby acknowledges that Agents shall not have by reason of this
Agreement assumed a fiduciary relationship in respect of any Lender. In
performing its functions and duties under this Agreement, each Agent shall act
solely as agent of Lenders and shall not assume, or be deemed to have assumed,
any obligation toward, or relationship of agency or trust with or for, the Loan
Parties. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including without limitation enforcement and collection of
the Notes), each Agent may, but 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 Majority Lenders (or a greater or lesser number of
Lenders as required in this Agreement), whenever such instruction shall be
requested by such Agent or required hereunder, or a greater or lesser number of
Lenders if so required hereunder, and such instructions shall be binding upon
all Lenders; provided that each Agent shall be fully justified in failing or
refusing to take any action which exposes such Agent to any liability or which
is contrary to this Agreement, the other Loan Documents or Applicable Law,
unless such Agent is indemnified to its satisfaction by the other Lenders
against any and all liability and expense which it may incur by reason of taking
or continuing to take any such action. If any Agent seeks the consent or
approval of Majority Lenders (or a greater or lesser number of Lenders as
required in this Agreement), with respect to any action hereunder, such Agent
shall send notice thereof to each Lender and shall notify each Lender at any
time that Majority Lenders (or such greater or lesser number of Lenders) have
instructed such Agent to act or refrain from acting pursuant hereto.

12.2    Agents’ Reliance, Etc. Neither Agent nor any of its respective Related
Parties shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the other Loan Documents,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent and its Related
Parties: (i) may treat each Lender party hereto as the holder of Obligations
until such Agent receives written notice of the assignment or transfer of such
Lender’s portion of the Obligations signed by such Lender and in form reasonably
satisfactory to Agent; (ii) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranties or
representations to any Lender and shall not be responsible to any Lender for any
recitals, statements, warranties or representations made in or in connection
with this Agreement or any other Loan Documents; (iv) shall not have any duty
beyond such Agent’s customary practices in respect of loans in which such Agent
is the only lender, to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Loan Documents on the part of the Loan Parties, to inspect the property
(including the books and records) of the Loan Parties, to monitor the financial
condition of the Loan Parties or to ascertain the existence or possible
existence or continuation of any Default or Event of Default; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (vi) shall not be liable to any Lender for any action taken, or
inaction, by such Agent upon the instructions of Majority Lenders (or a greater
or lesser number of Lenders as required in this Agreement) pursuant to
Section 12.1 hereof or refraining to take any action pending such instructions;
(vii) shall not be liable for any apportionment or distributions of payments
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Section 4 hereof; (viii) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate, message or other instrument or writing (which may be by telephone,
facsimile, telegram, cable, e-mail transmission or telex) believed in good faith
by it to be genuine and signed or sent by the proper party or parties; and
(ix) may assume that no Event of Default has occurred and is continuing, unless
such Agent has actual knowledge of the Event of Default, has received notice
from the Loan Parties or the Loan Parties’ independent certified public
accountants stating the nature of the Event of Default, or has received notice
from a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing. In the
event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.

12.3    Citizens and Affiliates. With respect to its commitment hereunder to
make Loans, Citizens shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not an Agent; and the terms “Lender,” “Lenders” or “Majority
Lenders” shall, unless otherwise expressly indicated, include Citizens in its
individual capacity as a Lender. Citizens and its Affiliates may lend money to,
and generally engage in any kind of business with, the Loan Parties, and any
Person who may do business with or own Equity Interests of any Loan Party, all
as if Citizens were not an Agent and without any duty to account therefor to any
other Lender.

12.4    Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to herein and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any 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 this Agreement. No Agent shall have any duty or responsibility, either
initially or on an ongoing basis, to provide any Lender with any credit or other
similar information regarding the Loan Parties.

12.5    Indemnification. Lenders agree to indemnify Agents (to the extent not
reimbursed by the Loan Parties), in accordance with their respective Aggregate
Percentages, 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 such Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by such
Agent under this Agreement; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent’s
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse each Agent promptly upon demand for its ratable
share, as set forth above, of any out-of-pocket expenses (including attorneys’
fees) incurred by such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiation, legal proceedings or otherwise) of, or legal advice in
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each other Loan Document, to the extent that such Agent is not reimbursed for
such expenses by the Loan Parties. If after payment and distribution of any
amount by any Agent to Lenders, any Lender or any other Person, including the
Loan Parties, any creditor of any Loan Party, a liquidator, administrator or
trustee in bankruptcy, recovers from such Agent any amount found to have been
wrongfully paid to such Agent or disbursed by such Agent to Lenders, then
Lenders, in accordance with their respective Aggregate Percentages, shall
reimburse such Agent for all such amounts. The obligations of Lenders under this
Section 12.5 shall survive the payment in full of all Obligations and the
termination of this Agreement.

12.6    Rights and Remedies to Be Exercised by Administrative Agent Only. Each
Lender agrees that, except as set forth in Section 11.4, no Lender shall have
any right individually (i) to realize upon the security created by this
Agreement or any other Loan Document, (ii) to enforce any provision of this
Agreement or any other Loan Document, or (iii) to make demand under this
Agreement or any other Loan Document.

12.7    Agency Provisions Relating to Collateral. Each Lender authorizes and
ratifies each Agent’s entry into this Agreement and the Security Documents for
the benefit of Lenders. Each Lender agrees that any action taken by any Agent
with respect to the Collateral in accordance with the provisions of this
Agreement or the Security Documents, and the exercise by any Agent of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all Lenders.
Administrative Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender to take any action
with respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected Administrative Agent’s Liens upon the Collateral,
for its benefit and the ratable benefit of Lenders. Lenders hereby irrevocably
authorize Administrative Agent, at its option and in its discretion, to release
any Lien granted to or held by Administrative Agent upon any Collateral (i) upon
termination of this Agreement and payment and satisfaction of all Obligations;
or (ii) constituting property being sold or disposed of if the Loan Parties
certify to Administrative Agent that the sale or disposition is made in
compliance with subsection 9.2.8 hereof (and Administrative Agent may rely
conclusively on any such certificate, without further inquiry); or
(iii) constituting property in which no Loan Party owned any interest at the
time the Lien was granted or at any time thereafter; or (iv) in connection with
any foreclosure sale or other disposition of Collateral after the occurrence and
during the continuation of an Event of Default; or (v) if approved, authorized
or ratified in writing by Administrative Agent at the direction of all Lenders.
Upon request by Administrative Agent at any time, Lenders will confirm in
writing Administrative Agent’s authority to release particular types or items of
Collateral pursuant hereto. No Agent shall have any obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by any Loan Party or is cared for, protected or insured or has been encumbered
or that the Liens granted to Administrative Agent herein or pursuant to the
Security Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of its rights,
authorities and powers granted or available to each Agent in this Section 12.7
or in any of the Loan Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, each Agent may
act in any manner it may deem appropriate, in its sole discretion, but
consistent with the provisions of this Agreement, including given each

 

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Agent’s own interest in the Collateral as a Lender and that no Agent shall have
any duty or liability whatsoever to any Lender.

12.8    Resignation of Agent; Appointment of Successor. Each Agent may resign as
Administrative Agent or Collateral Agent by giving not less than thirty
(30) days’ prior written notice to Lenders and the Loan Parties. If
Administrative Agent shall resign under this Agreement, then, (i) subject to the
consent of the Loan Parties (which consent shall not be unreasonably withheld
and which consent shall not be required during any period in which a Default or
an Event of Default exists), Majority Lenders shall appoint from among Lenders a
successor Administrative Agent for Lenders or (ii) if a successor Administrative
Agent shall not be so appointed and approved within the thirty (30) day period
following Administrative Agent’s notice to Lenders and the Loan Parties of its
resignation, then Administrative Agent shall appoint a successor agent who shall
serve as Administrative Agent until such time as Majority Lenders appoint a
successor agent, subject to the Loan Parties’ consent as set forth above. Upon
its appointment, such successor agent shall succeed to the rights, powers and
duties of Administrative Agent and the term “Administrative Agent” shall mean
such successor effective upon its appointment, and the former Administrative
Agent’s rights, powers and duties as Administrative Agent shall be terminated
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. If Collateral
Agent shall resign under this Agreement, then Administrative Agent shall assume
the rights, powers and duties of Collateral Agent hereunder; provided, that,
Administrative Agent may, in its discretion, appoint another Lender as the
successor Collateral Agent, in which case such successor Collateral Agent shall
assume the rights, powers and duties of Collateral Agent hereunder. After the
resignation of any Agent hereunder, the provisions of this Section 12 shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.

12.9    Audit and Examination Reports; Disclaimer by Lenders. By signing this
Agreement, each Lender:

(i)    is deemed to have requested that each Agent furnish such Lender, promptly
after it becomes available, a copy of each audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or on behalf of such Agent;

(ii)    expressly agrees and acknowledges that Agents (i) do not make any
representation or warranty as to the accuracy of any Report and (ii) shall not
be liable for any information contained in any Report;

(iii)    expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that any Agent or other party performing
any audit or examination will inspect only specific information regarding the
Loan Parties and will rely significantly upon the Loan Parties’ books and
records as well as on representations of the Loan Parties’ personnel;

 

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(iv)    agrees to keep all Reports confidential and strictly for its internal
use, and not to distribute except to its participants, or use any Report in any
other manner, in accordance with the provisions of Section 13.14; and

(v)    without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (a) to hold each Agent and any such other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to the Loan Parties, or the indemnifying Lender’s
participation in, or the indemnifying Lender’s purchase of, any loan or other
obligation of the Loan Parties; and (b) to pay and protect, and indemnify,
defend and hold each Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including attorneys’ fees and expenses) incurred by such Agent
and any such other Lender preparing a Report as the direct or indirect result of
any third parties who might obtain all or part of any Report through the
indemnifying Lender.

12.10    Administrative Agent’s Right to Purchase Commitments. Administrative
Agent shall have the right, but shall not be obligated, at any time upon written
notice to any Lender and with the consent of such Lender, which may be granted
or withheld in such Lender’s sole discretion, to purchase for Administrative
Agent’s own account all of such Lender’s interests in this Agreement, the other
Loan Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.

SECTION 13. MISCELLANEOUS

13.1    Power of Attorney. Each Loan Party hereby irrevocably designates, makes,
constitutes and appoints Administrative Agent (and all Persons designated by
Administrative Agent) as such Loan Party’s true and lawful attorney (and
agent-in-fact), solely with respect to the matters set forth in this
Section 13.1, and Administrative Agent, or Administrative Agent’s agent, may,
without notice to any Loan Party and in any Loan Party’s or Administrative
Agent’s name, but at the cost and expense of the Loan Parties:

13.1.1    At such time or times as Administrative Agent or such agent, in its
sole discretion, may determine, endorse any Loan Party’s name on any checks,
notes, acceptances, drafts, money orders or any other evidence of payment or
proceeds of the Collateral which come into the possession of Administrative
Agent or under Administrative Agent’s control.

13.1.2    At such time or times upon or after the occurrence and during the
continuance of an Event of Default, as Administrative Agent or its agent in its
sole discretion may determine: (i) demand payment of the Accounts from the
Account Debtors, enforce payment of the Accounts by legal proceedings or
otherwise, and generally exercise all of any Loan Party’s rights and remedies
with respect to the collection of the Accounts; (ii) settle, adjust, compromise,
discharge or release any of the Accounts or other Collateral or any legal
proceedings brought to collect any of the Accounts or other Collateral;
(iii) sell or assign any of

 

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the Accounts and other Collateral upon such terms, for such amounts and at such
time or times as Administrative Agent deems advisable, and at Administrative
Agent’s option, with all warranties regarding the Collateral disclaimed;
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral; (v) prepare, file and sign any Loan Party’s name to a proof of
claim in bankruptcy or similar document against any Account Debtor or to any
notice of lien, assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to any Loan Party and notify postal authorities to change the
address for delivery thereof to such address as Administrative Agent may
designate; (vii) endorse the name of any Loan Party upon any of the items of
payment or proceeds relating to any Collateral and deposit the same to the
account of Administrative Agent on account of the Obligations; (viii) endorse
the name of any Loan Party upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to the Accounts, Inventory and any other Collateral; (ix) use any Loan Party’s
stationery and sign the name of any Loan Party to verifications of the Accounts
and notices thereof to Account Debtors; (x) use the information recorded on or
contained in any data processing equipment and Computer Hardware and Software
relating to the Accounts, Inventory, Equipment and any other Collateral;
(xi) make and adjust claims under policies of insurance; and (xii) do all other
acts and things necessary, in Administrative Agent’s determination, to fulfill
any Loan Party’s obligations under this Agreement.

The power of attorney granted hereby shall constitute a power coupled with an
interest and shall be irrevocable.

13.2    Indemnity. Each Loan Party hereby agrees to indemnify each Agent,
Issuing Bank and each Lender and their respective Related Parties (each an
“Indemnified Person”) and hold each Indemnified Person harmless from and against
any liability, loss, damage, suit, action, claim, expense or proceeding ever
suffered or incurred by any such Indemnified Person (including reasonable
attorneys’ fees and legal expenses) arising out of or relating to this
Agreement, the other Loan Documents, the Collateral, the Loan Parties’ use of
the proceeds of the Loans or the Revolving Credit Commitments, or the Loan
Parties’ failure to observe, perform or discharge their duties hereunder, except
those found by a final, non-appealable judgment of a court of competent
jurisdiction to be resulting from the gross negligence, bad faith or willful
misconduct of such Indemnified Person. Without limiting the generality of the
foregoing, these indemnities shall extend to any claims asserted against any
Indemnified Person by any Person under any Environmental 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 or other toxic substances. Notwithstanding
any contrary provision in this Agreement, the obligation of the Loan Parties
under this Section 13.2 shall survive the payment in full of the Obligations and
the termination of this Agreement.

13.3    Amendment and Waivers.

13.3.1    No amendment or waiver of any provision of this Agreement or any other
Loan Document (including without limitation any Note), nor consent to any
departure by the Loan Parties therefrom, shall in any event be effective unless
the same shall be in writing and signed by Majority Lenders and the Loan
Parties, and then such waiver or consent shall be

 

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effective only in the specific instance and for the specific purpose for which
given; provided that no amendment, waiver or consent shall be effective to:

(i)    (a) increase any Lender’s Revolving Credit Commitment or Term Loan
Commitment; (b) reduce the principal of, interest on, or fees due in respect to
any amount payable hereunder to any Lender; or (c) postpone any date fixed for
any payment of principal of, or interest on, any amounts payable hereunder to
any Lender, in each case, without the written consent of each Lender directly
affected thereby;

(ii)    (a) amend the number of Lenders that shall be required for Lenders or
any of them to take any action hereunder; (b) except as otherwise expressly
permitted herein or in any other Loan Document, release or discharge any Person
liable for the performance of any obligations of any Loan Party hereunder or
under any of the Loan Documents; (c) amend the definition of the term Majority
Lenders; (d) amend this Section 13.3; (e) amend subsection 4.4.2; or (f) except
as otherwise expressly permitted herein or in any other Loan Document, release
any substantial portion of the Collateral, in each case, without the written
consent of each Lender;

(iii)    change any definitions or any other provision in a manner that would
alter the nature of the secured position of any Derivative Obligation Provider
or its entitlement to a pro rata allocation among Lenders of assets upon
termination or acceleration of Obligations, without the written consent of each
Lender and Derivative Obligation Provider directly affected thereby; or

(iv)    affect the rights or duties of any Agent, Issuing Bank or Swingline
Lender (as applicable) under this Agreement or any other Loan Document, without
the written consent of such Agent, Issuing Bank or Swingline Lender (as
applicable).

13.3.2    Notwithstanding the foregoing provisions of this Section 13.3:

(i)    no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except to the extent the consent of such
Lender would be required under clause (i) of subsection 13.3.1;

(ii)    technical and conforming modifications to the Loan Documents may be made
with the consent of the Loan Parties and Administrative Agent to the extent
necessary to integrate any Incremental Revolving Credit Commitments in
accordance with Section 2.4; and

(iii)    Administrative Agent and the Loan Parties may amend any Loan Document
to correct an obvious, immaterial or administrative error or omission, or to
effect administrative changes that are not adverse to any Lender, and such
amendment shall become effective without any further consent of any other party
to such Loan Document if the same is not objected to in writing by Majority
Lenders within five (5) Business Days following receipt of notice thereof.

13.3.3    If a fee is to be paid by the Loan Parties in connection with any
waiver or amendment hereunder, the agreement evidencing such amendment or waiver
may, at the

 

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discretion of Administrative Agent (but shall not be required to), provide that
only Lenders executing such agreement by a specified date may share in such fee
(and in such case, such fee shall be divided among the applicable Lenders on a
pro rata basis without including the interests of any Lenders who have not
timely executed such agreement).

13.4    Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Agreement shall be prohibited by or invalid under
Applicable Law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

13.5    Right of Sale; Assignment; Participations. This Agreement, the Other
Agreements and the Security Documents shall be binding upon and inure to the
benefit of the successors and assigns of each Loan Party, Administrative Agent
and each Lender; provided, however, that, no Loan Party may sell, assign or
transfer any interest in this Agreement, any of the other Loan Documents, or any
of the Obligations, or any portion thereof, including, without limitation, such
Loan Party’s rights, title, interests, remedies, powers and duties hereunder or
thereunder. The Loan Parties hereby consent to any Lender’s participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender’s rights, title, interests,
remedies, powers and duties hereunder or thereunder subject to the terms and
conditions set forth in this Section 13.5; provided, that no such participation,
sale, assignment, transfer or other disposition shall be made to (i) a
Defaulting Lender, (ii) any Loan Party or any Subsidiary of a Loan Party,
(iii) an Affiliate of a Loan Party or (iv) any direct competitor of any Loan
Party or any Subsidiary of a Loan Party.

13.5.1    Sales; Assignments. Each Lender hereby agrees that, with respect to
any sale or assignment (i) no such sale or assignment shall be for an amount of
less than $5,000,000, (ii) each such sale or assignment shall be made on terms
and conditions which are customary in the industry at the time of the
transaction, (iii) each such sale or assignment shall include an equal
percentage of the Revolving Credit Commitments and Term Loan Commitments of the
assigning Lender, (iv) with respect to each such assignment to a Person that is
not a Lender or an Affiliate of a Lender, (a) Administrative Agent, (b) in the
case of assignments of Revolving Credit Commitments, Issuing Bank and Swingline
Lender, and (c) in the absence of a Default or Event of Default, Borrower
Representative shall have consented thereto, such consent not to be unreasonably
withheld or delayed, (iv)/(v) the assigning Lender shall pay to Administrative
Agent a processing and recordation fee of $3,500; provided, that, Administrative
Agent may waive such fee in its discretion, and (vi) Administrative Agent, the
assigning Lender and the assignee Lender shall each have executed and delivered
an Assignment and Acceptance Agreement. After such sale or assignment has been
consummated (x) the assignee Lender thereupon shall become a “Lender” for all
purposes of this Agreement and (y) the assigning Lender shall have no further
liability for funding the portion of Revolving Credit Commitments assumed by
such other Lender.

13.5.2    Participations. Any Lender may grant participations in its extensions
of credit hereunder to any other Lender or other lending institution (a
“Participant”), provided that (i) no such participation shall be for an amount
of less than $5,000,000, (ii) no Participant

 

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shall thereby acquire any direct rights under this Agreement, except that each
Participant shall be entitled to the benefits of Section 3.11 (subject to the
requirements and limitations therein, including the requirements of subsection
3.11.3 (it being understood that the documentation required under subsection
3.11.3 shall be delivered to the originating Lender)), subsection 4.1.9 and
Section 4.8 to the same extent as if it were a Lender and had acquired its
interest by assignment; provided however that such Participant (a) shall be
subject to the provisions of subsection 13.5.6 as if it were an assignee and
(b) shall not be entitled to receive any greater payment under Section 3.11,
subsection 4.1.9 or Section 4.8, with respect to any participation, than its
originating Lender would have been entitled to receive, except to the extent
such entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation, (iii) no
Participant shall be granted any right to consent to any amendment, except to
the extent any of the same pertain to (a) reducing the aggregate principal
amount of, or interest rate on, or fees applicable to, its participation
interest or (b) extending the final stated maturity of its participation
interest or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of its participation interest; provided
that the rights described in this subclause (b) shall not be deemed to include
the right to consent to any amendment with respect to or which has the effect of
requiring any mandatory prepayment of any portion of any Loan or any amendment
or waiver of any Default or Event of Default, (iv) no sale of a participation in
extensions of credit shall in any manner relieve the originating Lender of its
obligations hereunder, (v) the originating Lender shall remain solely
responsible for the performance of such obligations, (vi) the Loan Parties and
Administrative Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, and (vii) all
amounts payable by the Loan Parties hereunder shall be determined as if the
originating Lender had not sold any such participation. Each Lender, acting for
this purpose as an agent of Borrowers, shall maintain at its offices a record of
each agreement or instrument effecting any participation and a register (each a
“Participation Register”) meeting the requirements of 26 C.F.R. §5f.103-1(c) for
the recordation in book entry form of the names and addresses of its
Participants and their rights with respect to principal amounts (and stated
interest) of each Participant’s interest in the Loans from time to time. The
entries in each Participation Register shall be conclusive absent manifest
error.

13.5.3    Certain Agreements of the Loan Parties. The Loan Parties agree that
(i) they will use their best efforts to assist and cooperate with each Lender in
any manner reasonably requested by such Lender to effect the sale of
participation in or assignments of any of the Loan Documents or any portion
thereof or interest therein, including, without limitation, assisting in the
preparation of appropriate disclosure documents and making members of management
available at reasonable times to meet with and answer questions of potential
assignees and Participants; and (ii) subject to the provisions of Section 13.14
hereof, such Lender may disclose credit information regarding the Loan Parties
to any potential Participant or assignee.

13.5.4    Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) 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

 

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such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.

13.5.5    Register. Administrative Agent, acting for this purpose as an agent of
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the recordation
in book entry form of the names and addresses of the Lenders, and the commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time. The entries in the Register shall be conclusive
absent manifest error. The Register shall be available for inspection by
Borrowers, at any reasonable time and from time to time upon reasonable prior
notice. Notwithstanding anything to the contrary contained in this Agreement,
the Loans are registered obligations for tax purposes and the right, title and
interest of the Lenders in and to such Loans shall be transferable only in
accordance with the terms of this Agreement. This subsection 13.5.5 shall be
construed so that the Loans are at all times maintained in “registered form”
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

13.5.6    Replacement of Lenders. If (i) any Lender requests compensation under
Section 4.8, or (ii) a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.11, or (iii) any Lender, whose consent is required in connection with
any proposed amendment, waiver, or consent hereunder that requires the consent
of all Lenders or all affected Lenders and as to which the consent of Majority
Lenders is obtained, does not consent to such proposed amendment, waiver, or
consent, or (iv) any Lender is a Defaulting Lender, then the Loan Parties may,
at their sole expense and effort (including any processing and recordation fee
required to be paid in accordance with this Section 13.5), upon notice to such
Lender and Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in this Section 13.5), all of its interests, rights and obligations under this
Agreement to an assignee selected by the Loan Parties that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (a) the Loan Parties shall have received the prior
written consents of Administrative Agent and, in the event of an assignment of
Revolving Credit Commitments, Issuing Bank and Swingline Lender, which consents
shall not unreasonably be withheld, (b) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder from the
assignee (to the extent of such outstanding principal, accrued interest and
fees) or the Loan Parties (in the case of all other amounts), (c) in the case of
any such assignment resulting pursuant to clause (i) or (ii) above, such
assignment will result in a material reduction in such compensation or payments,
(d) in the case of any such assignment resulting pursuant to clause (iii) above,
all such non-consenting Lenders shall be replaced and, at the time of such
replacement, each such new Lender consents to the proposed amendment, waiver, or
consent and (e) the assignor under an assignment pursuant to this subsection
13.5.6 need not execute an Assignment and Acceptance Agreement. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Loan Parties to require such assignment and delegation cease to apply.

13.6    Cumulative Effect; Conflict of Terms. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement.

 

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Except as otherwise provided in any of the other Loan Documents by specific
reference to the applicable provision of this Agreement, if any provision
contained in this Agreement is in direct conflict with, or inconsistent with,
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control.

13.7    Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which counterparts taken together shall constitute but one and the same
instrument. Any executed counterpart of this Agreement delivered by fax or as a
PDF file contained in an e-mail transmission to the other parties hereto shall
constitute an original counterpart of this Agreement.

13.8    Notices and Communications.

13.8.1    Notices. Except as otherwise provided herein, all notices, requests
and demands to or upon a party hereto, to be effective, shall be in writing, and
shall be sent by certified or registered mail, return receipt requested, by
personal delivery against receipt, by overnight courier or by facsimile and,
unless otherwise expressly provided herein, shall be deemed to have been validly
served, given, delivered or received immediately when delivered against receipt,
three (3) Business Days after deposit in the mail, postage prepaid, one
(1) Business Day after deposit with an overnight courier or, in the case of
facsimile notice, when sent with respect to machine confirmed, addressed as
follows:

 

(A)   If to Administrative Agent:

  

Citizens Bank, National Association

1215 Superior Avenue

Cleveland, Ohio 44144

Attention: Jim Zamborsky

Phone: (216) 277-7507

Facsimile: (216) 277-7500

With a copy to:   

Holland & Knight

200 Crescent Court, Suite 1600

Dallas, Texas 75201

Attention: Kenneth Vesledahl

Phone: (214) 964-9470

Facsimile: (214) 964-9501

(B)   If to the Loan Parties:

  

Quest Resource Management Group, LLC

3481 Plano Parkway

The Colony, Texas 75056

Attention: Laurie L. Latham

Phone: (972) 464-0011
Facsimile: (866) 492-7478

 

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With a copy to:   

Greenberg Traurig, LLP

2375 East Camelback Road, Suite 700

Phoenix, Arizona 85016

Attention: Karl A. Freeburg

Phone: (602) 445-8214

Facsimile: (602) 445-8100

(C) If to any Lender, at its address indicated on the administrative detail
forms delivered to Administrative Agent,

or to such other address as each party may designate for itself by notice given
in accordance with this Section 13.8; provided, however, that any notice,
request or demand to or upon Administrative Agent or a Lender pursuant to
subsection 4.1.1, 4.1.5 or 5.2.2 hereof shall not be effective until received by
Administrative Agent or such Lender.

13.8.2    The Platform. Each Loan Party hereby acknowledges that Administrative
Agent will make available to the Lenders and Issuing Bank materials and/or
information provided by or on behalf of the Loan Parties hereunder
(collectively, “Loan Party Materials”) by posting Loan Party Materials on
SyndTrak, IntraLinks or another similar electronic system (the “Platform”). THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” ADMINISTRATIVE AGENT AND ITS
RELATED PARTIES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE LOAN PARTY
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE LOAN PARTY MATERIALS. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT IN CONNECTION
WITH THE LOAN PARTY MATERIALS OR THE PLATFORM. In no event shall any Agent or
any of its Related Parties have any liability to any Loan Party, any Lender, any
Issuing Bank or any other Person for losses, claims, damages, liabilities or
expenses of any kind (whether in tort, contract or otherwise) arising out of a
Loan Party’s or Agent’s transmission of the Loan Party Materials through the
internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent or any of its Related Parties; provided, however, that
in no event shall any Agent or any of its Related Parties have any liability to
any Loan Party, any Lender, any Issuing Bank or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or
actual damages).

13.9    Consent. Whenever Administrative Agent’s, Collateral Agent’s, Majority
Lenders’ or all Lenders’ consent is required to be obtained under this
Agreement, any of the Other Agreements or any of the Security Documents as a
condition to any action, inaction, condition or event, except as otherwise
specifically provided herein, Administrative Agent, Collateral Agent, Majority
Lenders or all Lenders, as applicable, shall be authorized to give or withhold
such consent in its or their sole and absolute discretion and to condition its
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consent upon the giving of additional Collateral security for the Obligations,
the payment of money or any other matter.

13.10    Credit Inquiries. The Loan Parties hereby authorize and permit
Administrative Agent and each Lender to respond to usual and customary credit
inquiries from third parties concerning any Loan Party or any of its
Subsidiaries.

13.11    Time of Essence. Time is of the essence of this Agreement, the Other
Agreements and the Security Documents.

13.12    Entire Agreement. This Agreement and the other Loan Documents, together
with all other instruments, agreements and certificates executed by the parties
in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.

13.13    Interpretation. No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any
party hereto by any Governmental Authority by reason of such party having or
being deemed to have structured or dictated such provision.

13.14    Confidentiality. Each Agent and each Lender shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement in
accordance with such Agent’s and such Lender’s customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this
Section 13.14.

13.15    GOVERNING LAW; CONSENT TO JURISDICTION, FORUM AND SERVICE OF PROCESS.

13.15.1    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
APPLICABLE LAW THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.

13.15.2    CONSENT TO JURISDICTION, FORUM AND SERVICE OF PROCESS. AS PART OF THE
CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE
DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY LOAN PARTY, ADMINISTRATIVE AGENT
OR ANY LENDER, EACH LOAN PARTY HEREBY CONSENTS AND AGREES THAT THE SUPREME COURT
OF NEW YORK COUNTY, STATE OF NEW YORK OR, AT ADMINISTRATIVE AGENT’S OPTION, THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
LOAN PARTIES ON THE ONE HAND AND ADMINISTRATIVE AGENT OR ANY LENDER ON THE OTHER
HAND

 

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PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH LOAN PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH LOAN PARTY HEREBY WAIVES ANY
OBJECTION WHICH ANY LOAN PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH LOAN PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF
SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO THE LOAN PARTIES AT THE ADDRESS SET FORTH IN THIS AGREEMENT
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT THEREOF BY A LOAN PARTY OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY
ADMINISTRATIVE AGENT OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.

13.16    WAIVERS BY THE LOAN PARTIES. EACH LOAN PARTY WAIVES (i) THE RIGHT TO
TRIAL BY JURY (WHICH ADMINISTRATIVE AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN
ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;
(ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST,
DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR
RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE
AGENT OR ANY LENDER ON WHICH THE LOAN PARTIES MAY IN ANY WAY BE LIABLE AND
HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT OR ANY LENDER MAY DO
IN THIS REGARD; (iii) NOTICE PRIOR TO ADMINISTRATIVE AGENT’S TAKING POSSESSION
OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY
ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT TO EXERCISE ANY OF
ADMINISTRATIVE AGENT’S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF; AND (vi) EXCEPT AS
PROHIBITED BY APPLICABLE LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH LOAN PARTY ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S AND EACH LENDER’S

 

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ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE AGENT AND EACH LENDER IS
RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH THE LOAN PARTIES.
EACH LOAN PARTY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

13.17    Advertisement. The Loan Parties hereby authorize Administrative Agent
to publish the name and logo of any Loan Party and the amount and transaction
details of the credit facility provided hereunder in any “tombstone” or
comparable advertisement or other marketing materials which Administrative Agent
elects to publish. Upon request of the Administrative Agent, the Loan Parties
shall execute and deliver a release form in the form of Exhibit 13.17 hereto.

13.18    Patriot Act Notice. Administrative Agent and Lenders hereby notify the
Loan Parties that pursuant to the requirements of the Patriot Act,
Administrative Agent and Lenders are required to obtain, verify and record
information that identifies each Loan Party, including its legal name, address,
tax ID number and other information that will allow Administrative Agent and
Lenders to identify it in accordance with the Patriot Act. Administrative Agent
and Lenders will also require information regarding each personal guarantor, if
any, and may require information regarding any Loan Party’s management and
owners, such as legal name, address, social security number and date of birth.

SECTION 14. CROSS-GUARANTY BY BORROWERS.

14.1    Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Administrative Agent and Lenders and their respective successors
and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to Administrative Agent and Lenders by each other Borrower. Each Borrower
agrees that its guaranty obligation hereunder is a continuing guaranty of
payment and performance and not of collection, that its obligations under this
Section 14 shall not be discharged until payment and performance, in full, of
the Obligations has occurred, and that its obligations under this Section 14
shall be absolute and unconditional, irrespective of, and unaffected by, (i) the
genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this Agreement, any other Loan Document or any other agreement,
document or instrument to which any Borrower is or may become a party; (ii) the
absence of any action to enforce this Agreement (including this Section 14) or
any other Loan Document or the waiver or consent by Administrative Agent and
Lenders with respect to any of the provisions thereof; (iii) the existence,
value or condition of, or failure to perfect its Lien against, any security for
the Obligations or any action, or the absence of any action, by Administrative
Agent and Lenders in respect thereof (including the release of any such
security); (iv) the insolvency of any Loan Party; or (v) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor. Each Borrower shall be regarded, and

 

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shall be in the same position, as principal debtor with respect to the
Obligations guaranteed hereunder.

14.2    Waivers by Borrowers. Each Borrower expressly waives all rights it may
have now or in the future under any statute, or at common law, or at law or in
equity, or otherwise, to compel Administrative Agent or Lenders to marshal
assets or to proceed in respect of the Obligations guaranteed hereunder against
any other Loan Party, any other party or against any security for the payment
and performance of the Obligations before proceeding against, or as a condition
to proceeding against, such Borrower. It is agreed among each Borrower,
Administrative Agent and Lenders that the foregoing waivers are of the essence
of the transaction contemplated by this Agreement and the other Loan Documents
and that, but for the provisions of this Section 14 and such waivers,
Administrative Agent and Lenders would decline to enter into this Agreement.

14.3    Benefit of Guaranty. Each Borrower agrees that the provisions of this
Section 14 are for the benefit of Administrative Agent and Lenders and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Borrower and Administrative Agent
or Lenders, the obligations of such other Borrower under the Loan Documents.

14.4    Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in
this Agreement or in any other Loan Document, and except as set forth in
Section 14.7, each Borrower hereby expressly and irrevocably waives any and all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor. Each Borrower acknowledges and
agrees that this waiver is intended to benefit Administrative Agent and Lenders
and shall not limit or otherwise affect such Borrower’s liability hereunder or
the enforceability of this Section 14, and that Administrative Agent, Lenders
and their respective successors and assigns are intended third party
beneficiaries of the waivers and agreements set forth in this Section 14.4.

14.5    Election of Remedies. If Administrative Agent or any Lender may, under
Applicable Law, proceed to realize its benefits under any of the Loan Documents
giving Administrative Agent or such Lender a Lien upon any Collateral, whether
owned by any Borrower or by any other Person, either by judicial foreclosure or
by non-judicial sale or enforcement, Administrative Agent or any Lender may, at
its sole option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Section 14. If, in the
exercise of any of its rights and remedies, Administrative Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Person, whether because of
any Applicable Laws pertaining to “election of remedies” or the like, each
Borrower hereby consents to such action by Administrative Agent or such Lender
and waives any claim based upon such action, even if such action by
Administrative Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Administrative Agent or such Lender. Any election of remedies
that results in the denial or impairment of the right of Administrative Agent or
any Lender to seek a deficiency judgment against any Borrower shall not impair
any other Borrower’s obligation to pay the full amount of the Obligations. In
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event Administrative Agent or any Lender shall bid at any foreclosure or
trustee’s sale or at any private sale permitted by law or the Loan Documents,
Administrative Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Administrative Agent
or such Lender but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Administrative Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 14, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Administrative Agent or
any Lender might otherwise be entitled but for such bidding at any such sale.

14.6    Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower’s liability under this Section 14 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under any other provision of this Agreement) shall be limited to an amount not
to exceed as of any date of determination the greater of: (i) the net amount of
all Loans advanced to any other Borrower under this Agreement and then re-loaned
or otherwise transferred to, or for the benefit of, such Borrower; and (ii) the
amount that could be claimed by Administrative Agent and Lenders from such
Borrower under this Section 14 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower’s right of contribution and indemnification from each
other Borrower under Section 14.7.

14.7    Contribution with Respect to Guaranty Obligations.

14.7.1    To the extent that any Borrower shall make a payment under this
Section 14 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a “Guarantor Payment”) that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower’s “Allocable Amount”
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each Borrower as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Revolving Credit Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.

14.7.2    As of any date of determination, the “Allocable Amount” of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Section 14 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.

 

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14.7.3    This Section 14.7 is intended only to define the relative rights of
Borrowers and nothing set forth in this Section 14.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 14.1. Nothing contained in this
Section 14.7 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, fees and expenses
with respect thereto for which such Borrower shall be primarily liable.

14.7.4    The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of Borrowers to which such
contribution and indemnification is owing.

14.7.5    The rights of the indemnifying Borrowers against other Loan Parties
under this Section 14.7 shall be exercisable upon the full and indefeasible
payment of the Obligations and the termination of the Revolving Credit
Commitments.

14.8    Liability Cumulative. The liability of Borrowers under this Section 14
is in addition to and shall be cumulative with all liabilities of each Borrower
to Administrative Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrowers, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

14.9    Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations hereunder or under the Security Documents in
respect of Swap Obligations; provided, that each Qualified ECP Guarantor shall
only be liable under this Section 14.9 for the maximum amount of such liability
that can be hereby incurred without rendering its obligations under this
Section 14.9, or otherwise hereunder or under the Security Documents, voidable
under applicable requirements of law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount. The obligations of each
Qualified ECP Guarantor under this Section 14.9 shall remain in full force and
effect until the guarantees in respect of Swap Obligations have been discharged,
or otherwise released or terminated in accordance with the terms of this
Agreement. Each Qualified ECP Guarantor intends that this Section 14.9
constitute, and this Section 14.9 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Credit Party for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

SECTION 15. GUARANTY

15.1    Guaranty of the Obligations. Subject to the provisions of Section 15.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Administrative Agent and Lenders the due and punctual payment in full of all
Obligations (other than Excluded Swap Obligations) when the same shall become
due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code) (collectively, the “Guaranteed Obligations”).

 

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15.2    Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal
its Fair Share as of such date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to
(a) the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor, to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by, (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair
Share Contribution Amount” means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
comparable applicable provisions of state law; provided, solely for purposes of
calculating the “Fair Share Contribution Amount” with respect to any
Contributing Guarantor for purposes of this Section 15.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. “Aggregate Payments” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to
(1) the aggregate amount of all payments and distributions made on or before
such date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 15.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 15.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 15.2 shall not be construed in
any way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third-party beneficiary to the contribution agreement set forth
in this Section 15.2.

15.3    Payment by Guarantors. Subject to Section 15.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which Administrative Agent or any Lender may have
at law or in equity against any Guarantor by virtue hereof, that upon the
failure of any Borrower to pay any of the Guaranteed Obligations when and as the
same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code), Guarantors will upon demand pay, or cause to be paid, in
cash, to Administrative Agent, for the benefit of itself and the Lenders, an
amount equal to the sum of the unpaid principal amount of all Guaranteed
Obligations then due as aforesaid, accrued and unpaid interest on such
Guaranteed Obligations (including interest which, but for any Borrower’s
becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against such
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bankruptcy case) and all other Guaranteed Obligations then owed to Agent and
Lenders as aforesaid.

15.4    Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:

15.4.1    this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;

15.4.2    Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between any
Borrower and Administrative Agent or any Lender with respect to the existence of
such Event of Default;

15.4.3    the obligations of each Guarantor hereunder are independent of the
obligations of Borrowers and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrowers, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against any Borrower or any of such other guarantors and
whether or not any Borrower is joined in any such action or actions;

15.4.4    payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor’s
liability for any portion of the Guaranteed Obligations which has not been paid.
Without limiting the generality of the foregoing, if Administrative Agent or any
Lender is awarded a judgment in any suit brought to enforce any Guarantor’s
covenant to pay a portion of the Guaranteed Obligations, such judgment shall not
be deemed to release such Guarantor from its covenant to pay the portion of the
Guaranteed Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit, affect,
modify or abridge any other Guarantor’s liability hereunder in respect of the
Guaranteed Obligations;

15.4.5    Administrative Agent and/or Lenders, upon such terms as they deem
appropriate, without notice or demand and without affecting the validity or
enforceability hereof or giving rise to any reduction, limitation, impairment,
discharge or termination of any Guarantor’s liability hereunder, from time to
time may (i) renew, extend, accelerate, increase the rate of interest on, or
otherwise change the time, place, manner or terms of payment of the Guaranteed
Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the
payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guaranteed
Obligations, any other guaranties of the Guaranteed Obligations, or any other
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other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of Administrative
Agent for the benefit of itself and the Lenders in respect hereof or the
Guaranteed Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Administrative Agent may have against
any such security, in each case as Administrative Agent in its discretion may
determine consistent herewith or any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
any Borrower or any security for the Guaranteed Obligations; and (vi) exercise
any other rights available to it under the Loan Documents; and

15.4.6    this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guaranteed Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) hereof, any of the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guaranteed Obligations, in each case whether or not in accordance with the terms
hereof or such Loan Document, or any agreement relating to such other guaranty
or security; (iii) the Guaranteed Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than
payments received pursuant to the other Loan Documents or from the proceeds of
any security for the Guaranteed Obligations, except to the extent such security
also serves as collateral for indebtedness other than the Guaranteed
Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though Administrative Agent or Lenders might have elected to
apply such payment to any part or all of the Guaranteed Obligations;
(v) Administrative Agent’s or Lenders’ consent to the change, reorganization or
termination of the corporate structure or existence of any Borrower and to any
corresponding restructuring of the Guaranteed Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or
counterclaims which any Borrower may allege or assert against Administrative
Agent or any Lender in respect of the Guaranteed Obligations, including failure
of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act or
thing or omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor as an obligor in
respect of the Guaranteed Obligations.

15.5    Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of
Administrative Agent and each Lender: (a) any right to require Administrative
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Lender, as a condition of payment or performance by such Guarantor, to
(i) proceed against any Borrower, any other guarantor (including any other
Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from any Borrower, any such other guarantor
or any other Person, (iii) proceed against or have resort to any balance of any
Deposit Account, securities account or commodities account or credit on the
books of Administrative Agent or any Lender in favor of any Borrower or any
other Person, or (iv) pursue any other remedy in the power of Administrative
Agent or any Lender whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of any Borrower
or any other Guarantor including any defense based on or arising out of the lack
of validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of any Borrower or any other Guarantor from any cause other than
payment in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon Administrative Agent’s or any Lender’s
errors or omissions in the administration of the Guaranteed Obligations; (e) (i)
any principles or provisions of law, statutory or otherwise, which are or might
be in conflict with the terms hereof and any legal or equitable discharge of
such Guarantor’s obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and
(iv) promptness, diligence and any requirement that Administrative Agent or any
Lender protect, secure, perfect or insure any security interest or lien or any
property subject thereto; (f) notices, demands, presentments, protests, notices
of protest, notices of dishonor and notices of any action or inaction, including
acceptance hereof, notices of default hereunder or any agreement or instrument
related thereto, notices of any renewal, extension or modification of the
Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to Borrowers and notices of any of the matters referred to
in Section 15.4 and any right to consent to any thereof; and (g) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof.

15.6    Guarantors’ Rights of Subrogation, Contribution, etc. Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Credit Commitment shall have terminated and all Letters of Credit
shall have expired or been cancelled, each Guarantor hereby waives any claim,
right or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against any Borrower or any other Guarantor or any of its assets
in connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against any
Borrower with respect to the Guaranteed Obligations, (b) any right to enforce,
or to participate in, any claim, right or remedy that Administrative Agent or
any Lender now has or may hereafter have against any Borrower, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by Administrative Agent or any Lender. In addition, until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Credit Commitment shall have terminated and all Letters of Credit
shall have expired or been cancelled, each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the

 

105

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Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 15.2. Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against any Borrower or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
Administrative Agent or any Lender may have against any Borrower, to all right,
title and interest Administrative Agent or Lender may have in any such
collateral or security, and to any right Administrative Agent or any Lender may
have against such other guarantor. If any amount shall be paid to any Guarantor
on account of any such subrogation, reimbursement, indemnification or
contribution rights at any time when all Guaranteed Obligations shall not have
been finally and indefeasibly paid in full, such amount shall be held in trust
for Administrative Agent and Lenders and shall forthwith be paid over to
Administrative Agent to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.

15.7    Subordination of Other Obligations. Any indebtedness of any Borrower or
any Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”)
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent and Lenders and shall forthwith be paid over to
Administrative Agent to be credited and applied against the Guaranteed
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision hereof.

15.8    Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Credit Commitment shall have
terminated and all Letters of Credit shall have expired or been cancelled. Each
Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guaranteed Obligations.

15.9    Authority of Guarantors or Borrowers. It is not necessary for
Administrative Agent or any Lender to inquire into the capacity or powers of any
Guarantor or any Borrower or the officers, directors or any agents acting or
purporting to act on behalf of any of them.

15.10    Financial Condition of Borrowers. Any Loan may be made to Borrowers or
continued from time to time, without notice to or authorization from any
Guarantor regardless of the financial or other condition of Borrowers at the
time of any such grant or continuation. Neither Administrative Agent nor any
Lender shall have any obligation to disclose or discuss with any Guarantor its
assessment, or any Guarantor’s assessment, of the financial condition of any
Borrower. Each Guarantor has adequate means to obtain information from each
Borrower on a continuing basis concerning the financial condition of such
Borrower and its ability to perform its obligations under the Loan Documents,
and each Guarantor assumes the responsibility for being and keeping informed of
the financial condition of Borrowers and of all circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives
and relinquishes any duty on the part of Administrative Agent or any

 

106

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Lender to disclose any matter, fact or thing relating to the business,
operations or conditions of any Borrower now known or hereafter known by
Administrative Agent or any Lender.

15.11    Bankruptcy, etc. So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent, commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency case or proceeding of or against any
Borrower or any other Guarantor.

15.11.1    The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of any Borrower or any
other Guarantor or by any defense which any Borrower or any other Guarantor may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.

15.11.2    Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in Section 15.11.1 above (or, if interest on
any portion of the Guaranteed Obligations ceases to accrue by operation of law
by reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Administrative Agent
and Lenders that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order
which may relieve any Borrower of any portion of such Guaranteed Obligations.
Guarantors will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Administrative Agent and Lenders, or allow the claim of Administrative Agent and
Lenders in respect of, any such interest accruing after the date on which such
case or proceeding is commenced.

15.11.3    In the event that all or any portion of the Guaranteed Obligations
are paid by any Borrower, the obligations of Guarantors hereunder shall continue
and remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from Administrative Agent or any Lender as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

(Signature Page Follows)

 

107

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(Signature Page to Loan, Security and Guaranty Agreement)

IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year
specified at the beginning of this Agreement.

 

BORROWERS:     QUEST RESOURCE MANAGEMENT GROUP, LLC     By:  

/s/ Laurie L. Latham

      Name:   Laurie L. Latham       Title:   Chief Financial Officer,
Secretary, and Treasurer     LANDFILL DIVERSION INNOVATIONS, L.L.C.     By:  

/s/ Laurie L. Latham

    Name:   Laurie L. Latham     Title:   Chief Financial Officer, Secretary,
and Treasurer GUARANTORS:     QUEST RESOURCE HOLDING CORPORATION     By:  

/s/ Laurie L. Latham

      Name:   Laurie L. Latham       Title:   Senior Vice President, Chief
Financial Officer, Secretary, and Treasurer     EARTH911, INC.     By:  

/s/ Laurie L. Latham

      Name:   Laurie L. Latham       Title:   Chief Financial Officer,
Secretary, and Treasurer

[Signature Page to Loan, Security and Guaranty Agreement]

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

CITIZENS BANK, NATIONAL ASSOCIATION, as Administrative Agent, Collateral Agent
and as a Lender By:  

/s/ Brian Baker

  Name: Brian Baker   Title:   Senior Vice President CITIZENS BANK, NATIONAL
ASSOCIATION, as Issuing Bank By:  

/s/ Brian Baker

  Name: Brian Baker   Title:   Senior Vice President

[Signature Page to Loan, Security and Guaranty Agreement]

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

EXHIBIT 2.1

FORM OF REVOLVING CREDIT NOTE

 

$20,000,000.00    February 24, 2017

FOR VALUE RECEIVED, the undersigned (hereinafter “Borrowers”), hereby, jointly
and severally, PROMISE TO PAY to Citizens Bank, National Association,
(“Lender”), or its registered assigns, at the principal office of Citizens Bank,
National Association, as agent for such Lender, or at such other place in the
United States of America as the holder of this Note may designate from time to
time in writing, in lawful money of the United States of America and in
immediately available funds, the principal amount of Twenty Million and
no/100ths Dollars ($20,000,000.00), or such lesser principal amount as may be
outstanding pursuant to the Loan and Security Agreement (as hereinafter defined)
with respect to the Revolving Credit Loan, together with interest on the unpaid
principal balance outstanding from time to time.

This Note is one of the Revolving Credit Notes referred to in, and issued
pursuant to, that certain Loan, Security and Guaranty Agreement dated as of
February 24, 2017, by and among Borrowers, the other Loan Parties party thereto,
the lender signatories thereto (including Lender) and Citizens Bank, National
Association, a New York corporation, as Administrative Agent for such lenders
(as hereinafter amended from time to time, the “Loan and Security Agreement”),
and is entitled to all of the benefits and security of the Loan and Security
Agreement. All capitalized terms used herein, unless otherwise specifically
defined in this Note, shall have the meanings ascribed to them in the Loan and
Security Agreement.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan and Security
Agreement. Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times as are specified in the Loan and
Security Agreement.

Upon the occurrence and during the continuation of an Event of Default, this
Note shall or may, as provided in the Loan and Security Agreement, become or be
declared immediately due and payable.

The right to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan and Security
Agreement.

Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrowers.

 

 

Exhibit 2.1 - Page 1

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

This Note shall be interpreted, governed by, and construed in accordance with,
the internal laws of the State of New York.

 

BORROWERS:   QUEST RESOURCE MANAGEMENT GROUP, LLC   By:  

 

    Name:                                                                   
Title:                                                                   
LANDFILL DIVERSION INNOVATIONS, L.L.C.   By:  

 

    Name:                                                                   
Title:                                                                 

 

 

Exhibit 2.1 - Page 2

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

EXHIBIT 2.3

FORM OF TERM LOAN NOTE

 

$2,000,000.00    February 24, 2017

FOR VALUE RECEIVED, the undersigned (hereinafter “Borrowers”), hereby, jointly
and severally, PROMISE TO PAY to Citizen Bank, National Association (hereinafter
“Lender”), or its registered assigns at the office of Citizens Bank, National
Association, as agent for such Lender, or at such other place in the United
States of America as the holder of this Note may designate from time to time in
writing, in lawful money of the United States, in immediately available funds,
at the time of payment, the principal sum of Two Million and no/100ths Dollars
($2,000,000.00), or such lesser principal amount as may be outstanding pursuant
to the Loan and Security Agreement (as hereinafter defined) with respect to the
Term Loan, together with interest from and after the date hereof on the unpaid
principal balance outstanding from time to time.

This Note is one of the Term Loan Notes referred to in, and is issued pursuant
to, that certain Loan, Security and Guaranty Agreement dated as of February 24,
2017, by and among Borrowers, the other Loan Parties party thereto the lender
signatories thereto (including Lender) and Citizens Bank, National Association,
a New York corporation, as Administrative Agent for such lenders (as hereinafter
amended from time to time, the “Loan and Security Agreement”), and is entitled
to all of the benefits and security of the Loan and Security Agreement. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan and Security
Agreement.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan and Security Agreement and is
subject to prepayment as provided in the Loan and Security Agreement. Interest
thereon shall be paid until such principal amount is paid in full at such
interest rates and at such times as are specified in the Loan and Security
Agreement.

Upon the occurrence and during the continuation of an Event of Default, this
Note shall or may, as provided in the Loan and Security Agreement, become or be
declared immediately due and payable.

The right to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan and Security
Agreement.

Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrowers.

This Note shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York.

 

Exhibit 2.3 - Page 1

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

BORROWERS:  

QUEST RESOURCE MANAGEMENT

GROUP, LLC

  By:  

 

    Name:                                                                   
Title:                                                                   

LANDFILL DIVERSION

INNOVATIONS, L.L.C.

  By:  

 

    Name:                                                                   
Title:                                                                 

 

Exhibit 2.3 - Page 2

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EXHIBIT 3.11

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

Reference is hereby made to the Loan, Security and Guaranty Agreement, dated as
of February 24, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”), among
Quest Resource Management Group, LLC and Landfill Diversion Innovations, L.L.C,
as Borrowers, the other Loan Parties party thereto, the Lenders from time to
time party thereto, and Citizens Bank, National Association, as Administrative
Agent.

(For Foreign Lenders and Participants that are not treated as partnerships for
U.S. federal income tax purposes, insert the next two paragraphs)

Pursuant to the provisions of subsection 3.11.3 of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of [the Loan(s) (as well as any Note(s) evidencing such
Loan(s)) / the participation] in respect of which it is providing this
certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of
the Code, (iii) it is not a ten percent shareholder of any Borrower within the
meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a “controlled
foreign corporation” related to any Borrower as described in Section
881(c)(3)(C) of the Code, and (v) no payments in connection with any Loan
Document are effectively connected with the undersigned’s conduct of a U.S.
trade or business.

The undersigned has furnished [Administrative Agent and Borrowers / its
originating Lender] with a certificate of its non-U.S. Person status on IRS Form
W-8BEN. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform [Administrative Agent and Borrowers / such Lender], and (2) the
undersigned shall have at all times furnished [Administrative Agent and
Borrowers / such Lender] with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

(For Foreign Lenders and Participants that are treated as partnerships for U.S.
federal income tax purposes, insert the next two paragraphs)

Pursuant to the provisions of subsection 3.11.3 of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of [the Loan(s) (as well as any Note(s) evidencing such Loan(s)) / the
participation] in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
[Loan(s) (as well as any Note(s) evidencing such Loan(s)) / participation],
(iii) neither the undersigned nor any of its direct or indirect partners/members
is a bank within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of any
Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to any Borrower as described in Section 881(c)(3)(C) of the Code, and
(vi) no payments in

 

Exhibit 3.11 - Page 1

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

connection with any Loan Document are effectively connected with the
undersigned’s or its direct or indirect partners/members’ conduct of a U.S.
trade or business.

The undersigned has furnished [Administrative Agent and Borrowers / its
originating Lender] with IRS Form W-8IMY accompanied by one of the following
forms from each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an
IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform [Administrative Agent and
Borrowers / such Lender], and (2) the undersigned shall have at all times
furnished [Administrative Agent and Borrowers / such Lender] with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan and Security
Agreement and used herein shall have the meanings given to them in the Loan and
Security Agreement.

[NAME OF LENDER / PARTICIPANT]

 

By:

 

 

  Name:   Title:  

Date:                          , 20[    ]

 

Exhibit 3.11 - Page 2

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

EXHIBIT 9.1.3

FORM OF COMPLIANCE CERTIFICATE

[                                         ]

                    ,                     

Citizens Bank, National Association

[Address]

Reference is hereby made to the Loan, Security and Guaranty Agreement, dated as
of February 24, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”), among
Quest Resource Management Group, LLC and Landfill Diversion Innovations, L.L.C,
as Borrowers, the other Loan Parties party thereto, the Lenders from time to
time party thereto, and Citizens Bank, National Association, as Administrative
Agent. Capitalized terms used in this Certificate, unless otherwise defined
herein, shall have the meanings ascribed to them in the Loan and Security
Agreement.

1.    Based upon my review of the balance sheets and statements of income of
Holding and its Subsidiaries for the [annual/fiscal] period ending
                    ,     , copies of which are attached hereto, I hereby
certify in my capacity as an officer of Holding that Loan Parties are in
compliance with the covenants set forth in subsection 9.3.1 of the Loan and
Security Agreement. Calculations with reasonable detail with respect to each of
such covenants are also attached hereto.

2.    No Default exists on the date hereof, other
than:                                        
                                                                     
                                         
                                                                 [if none, so
state]; and

3.    No Event of Default exists on the date hereof, other
than                                        
                                                       
                                         
                                                                         [if
none, so state].

 

Very truly yours,

Quest Resource Holding Corporation

 

Name:

Title:

 

Exhibit 9.1.3 - Page 1

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

EXHIBIT 9.1.4

FORM OF BORROWING BASE CERTIFICATE

Citizens Bank, National Association,

as Administrative Agent

[Address]

                         , 20                    

Ladies and Gentlemen:

Reference is hereby made to the Loan, Security and Guaranty Agreement, dated as
of February 24, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”), among
Quest Resource Management Group, LLC and Landfill Diversion Innovations, L.L.C,
as Borrowers, the other Loan Parties party thereto, the Lenders from time to
time party thereto, and Citizens Bank, National Association, as Administrative
Agent. Capitalized terms used in this Borrowing Base Certificate, unless
otherwise defined herein, shall have the meanings ascribed to them in the Loan
and Security Agreement.

In accordance with subsection 9.1.4 of the Loan and Security Agreement, Borrower
Representative, on behalf of each of the Loan Parties, hereby certifies that:
(i) the information set forth in this Borrowing Base Certificate and the
Borrowing Base calculations set forth on the schedule hereto are true and
correct and (ii) this Borrowing Base Certificate and the schedule hereto have
been prepared in accordance with the applicable provisions of the Loan and
Security Agreement.

[Signature Page Follows]

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

 

QUEST RESOURCE MANAGEMENT GROUP, LLC By:  

 

  Name:                                                                       
Title:                                                                       

[Signature Page to Borrowing Base Certificate]

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

Schedule to Borrowing Base Certificate

(see attached)

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

EXHIBIT 13.5

FORM OF ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Loan and Security Agreement (defined below),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan and Security Agreement, as of the Effective Date,
(i) all of the Assignor’s rights and obligations in its capacity as a Lender
under the Loan and Security Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including
participations in any Letters of Credit included in such facilities) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of the Assignor (in its capacity as a
Lender) against any person, whether known or unknown, arising under or in
connection with the Loan and Security Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Acceptance, without representation or warranty by the Assignor.

 

1. Assignor:                                 
                                                  

 

2. Assignee:                                 
                                                  

 

3. Borrowers: Quest Resource Management Group, LLC and Landfill Diversion
Innovations, L.L.C

 

4. Administrative Agent: Citizens Bank, National Association

 

5.

Loan and Security Agreement: The Loan, Security and Guaranty Agreement, dated as
of February 24, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”), among
Borrowers, the

 

Exhibit 13.5 – Page 1

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

  other Loan Parties party thereto, the Lenders from time to time party thereto,
and Administrative Agent.

 

6. Assigned Interest:

 

Facility Assigned

   Aggregate Amount of
Commitments/
Loans for all Lenders    Amount of
Commitments/
Loans Assigned    Percentage Assigned of
Commitments/
Loans1

Term Loan

   $                        $                                    %

Revolving Credit Commitment

   $                        $                                    %

 

7. Effective Date:                          , 20    

 

1 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

Exhibit 13.5 – Page 2

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

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:

 

 

  Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:

 

 

  Title:

 

Exhibit 13.5 – Page 3

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

Consented to and Accepted:

[NAME OF BORROWER REPRESENTATIVE]2

 

By:

 

 

 

Name:

 

Title:

[CITIZENS BANK, NATIONAL ASSOCIATION, as Administrative Agent and Swingline
Lender]3

 

By:  

 

  Name:   Title:

[CITIZENS BANK, NATIONAL ASSOCIATION,

as Issuing Bank]4

 

By:  

 

  Name:   Title:

 

2  To be completed to the extent consent is required under Section 13.5.

3  To be completed to the extent consent is required under Section 13.5.

4  To be completed to the extent consent is required under Section 13.5.

 

Exhibit 13.5 – Page 4

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

ANNEX 1 to Assignment and Acceptance

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1.    Representations and Warranties.

1.1    Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby, and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan
and Security Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
Borrowers, any other Loan Party or any other person obligated in respect of any
Loan Document or (iv) the performance or observance by Borrowers, any other Loan
Party or any other person of any of their respective obligations under any Loan
Document.

1.2.    Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Loan and Security Agreement, (ii) it
meets all requirements for a permitted assignee under the Loan and Security
Agreement (subject to receipt of such consents as may be required under the Loan
and Security Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Loan and Security Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the Person exercising discretion in making its decision to acquire
the Assigned Interest, is experienced in acquiring assets of such type, (v) it
has received a copy of the Loan and Security Agreement, and has received, or has
been accorded the opportunity to receive, copies of the most recent financial
statements delivered pursuant to subsection 8.1.9 or 9.1.3 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance and to purchase the Assigned Interest, (vi) it has,
independently and without reliance upon Administrative 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 Assignment and
Acceptance and to purchase the Assigned Interest, (vii) it has duly completed
such administrative detail forms as Administrative Agent shall have requested,
unless it is already a Lender under the Loan and Security Agreement, (viii) it
is not a Borrower, Loan Party or any Subsidiary or Affiliate of a Loan Party or
a direct competitor of any Borrower, Loan Party or any Subsidiary of a Loan
Party, (ix) it has delivered to Borrowers and Administrative Agent any
documentation required to be delivered by it pursuant to subsection 3.11.3 of
the Loan and Security Agreement, duly completed and executed by the Assignee and
(x) it is not a Defaulting Lender; and (b) agrees that (i) it will,
independently and without reliance on Administrative

 

Annex I to Exhibit 13.5 – Page 1

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Agent, the Assignor 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 that
by the terms of the Loan Documents are required to be performed by it as a
Lender.

2.    Payments. From and after the Effective Date, Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued to but excluding the Effective Date and to the Assignee for amounts
that have accrued from and after the Effective Date.

3.    General Provisions. This Assignment and Acceptance shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy or electronic transmission shall be effective as delivery of a manually
executed counterpart of this Assignment and Acceptance. This Assignment and
Acceptance shall be construed in accordance with and governed by, the law of the
State of New York without regard to conflicts of principles of law that would
require the application of the laws of another jurisdiction.

 

Annex I to Exhibit 13.5 – Page 2

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EXHIBIT 13.17

RELEASE FORM -

CORPORATE NAME/LOGO REUSE

I give Citizens Bank, National Association approval to use my company’s name
logo and transaction details in its marketing materials.

 

Name:                                                              

Title:                                                                

Company Name:

Date:                                                                

 

Exhibit 13.17