Execution Version

 

 

 

 

CREDIT AGREEMENT

 

by and among

 

MULTIBAND CORPORATION,

Multiband Field Services, Incorporated,

Multiband MDU Incorporated,

Multiband Engineering and Wireless, Midwest, Inc.,

Multiband Engineering and Wireless, Southeast, Inc.,

MULTIBAND SUBSCRIBER SERVICES, INC.,

minnesota digital universe, inc.,

and

multiband special purpose, llc,

as Borrowers,

 

FIFTH THIRD BANK,
as Agent,

 

and

 

THE LENDERS PARTY HERETO

 

Dated as of March 20, 2013

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page 1. DEFINITIONS. 1         1.1. General Terms. 1   1.2. Accounting
Terms. 23   1.3. Other Terms Defined in the Security Agreement or the UCC. 24  
1.4. Other Definitional or Interpretive Provisions. 24         2. CREDIT. 24  
2.1. Revolving Loan and Letter of Credit Facilities. 24   2.2. Term Loan
Facilities. 26   2.3. Mandatory Payments; Prepayments. 26   2.4. Loan Account.
28   2.5. Statements. 29   2.6. Interest and Fees. 29   2.7. General Provisions
re Payments. 31   2.8. Termination of Revolving Commitment. 31   2.9. Loan
Types. 31   2.10. Notices re LIBOR Advances, Etc. 32   2.11. Determination of
Interest Period. 32   2.12. Additional Costs, Etc. With Respect to LIBOR
Advances. 33   2.13. Indemnification for Losses. 34   2.14. Payments to be Free
of Deductions. 35   2.15. Capital Adequacy. 36   2.16. Certificate. 37   2.17.
Mitigation of Circumstances;Replacement of Lenders. 37   2.18. Additional
Provisions Regarding Letters of Credit. 38   2.19. Borrower Representative. 40  
2.20. Joint and Several Liability of Borrowers. 40         3. CONDITIONS OF
ADVANCES. 41   3.1. Borrower Representative's Written Request - Revolving Loan
and Letters of Credit. 41   3.2. Financial Condition. 41   3.3. No Event of
Default. 41   3.4. Representations and Warranties True and Correct. 42   3.5.
Conditions to Effectiveness of the Agreement. 42   3.6. Regulatory Information.
42   3.7. Other Requirements. 42

 

ii

 

 

4. REPRESENTATIONS AND WARRANTIES, ETC. 42         4.1. Existence and Power. 43
  4.2. Authorization; No Contravention. 43   4.3. Governmental Authorization. 44
  4.4. Binding Effect. 44   4.5. Litigation. 44   4.6. No Event of Default. 44  
4.7. ERISA Compliance. 45   4.8. Use of Proceeds; Margin Regulations. 45   4.9.
Title to Properties. 45   4.10. Taxes. 45   4.11. Financial Condition. 46  
4.12. Environmental Matters. 46   4.13. Collateral Documents. 47   4.14.
Regulated Entities. 47   4.15. Labor Relations. 47   4.16. Copyrights, Patents,
Trademarks and Licenses, Etc. 47   4.17. Brokers' Fees; Transaction Fees. 48  
4.18. Insurance. 48   4.19. Full Disclosure. 48   4.20. Anti-Terrorism Laws. 49
  4.21. Solvency. 49   4.22. Employees. 50   4.23. DirecTV Agreements. 50   4.24
Survival. 50         5. AFFIRMATIVE COVENANTS. 50         5.1. Financial
Statements. 51   5.2. Borrowing Base Certificates; Reporting. 52   5.3.
Certificates; Other Information. 54   5.4. Notices. 56   5.5. Preservation of
Existence, Etc. 57   5.6. Maintenance of Property. 57   5.7. Borrower
Representative's Property Insurance and Business Interruption Insurance. 58  
5.8. Payment of Liabilities. 59   5.9. Compliance with Laws. 60   5.10.
Inspection of Property and Books and Records. 60   5.11. Use of Proceeds. 60  
5.12. Further Assurances. 60   5.13. Primary Depository. 61   5.14. Bank
Accounts. 61   5.15. Anti-Terrorism Laws. 62

 

iii

 

 

6. NEGATIVE COVENANTS. 63         6.1. Encumbrances. 63   6.2. Indebtedness. 63
  6.3. Disposition of Assets. 64   6.4. Consolidations and Mergers. 64   6.5.
Loans and Investments. 64   6.6. Transactions with Affiliates. 65   6.7. Use of
Proceeds. 65   6.8. Contingent Obligations. 65   6.9. Compliance with ERISA. 65
  6.10. Restricted Payments. 66   6.11. Change in Business. 66   6.12. Change in
Structure. 66   6.13. Accounting Changes; Fiscal Year. 66   6.14. Subsidiaries.
67   6.15. Subordinated Debt. 67   6.16. Environmental. 67   6.17. Limits on
Restrictive Agreements. 68   6.18. DirecTV Agreements. 68         7. FINANCIAL
COVENANTS. 68         7.1. Fixed Charge Coverage Ratio. 68   7.2. Total Leverage
Ratio. 68   7.3. Capital Expenditures 69         8. DEFAULT, RIGHTS AND REMEDIES
OF AGENT. 69   8.1. Defaults. 69   8.2. Rights and Remedies Generally. 73   8.3.
Set-off. 73   8.4. Cash Collateral. 74   8.5. Waiver of Demand. 74         9.
AGENCY. 74         9.1. Appointment of Agent. 74   9.2. Nature of Duties of
Agent. 75   9.3. Lack of Reliance on Agent. 75   9.4. Certain Rights of Agent.
75   9.5. Reliance by Agent. 76   9.6. Indemnification of Agent. 76   9.7. Agent
in its Individual Capacity. 76   9.8. Holders of Notes. 77   9.9. Successor
Agent. 77   9.10. Collateral Matters. 77   9.11. Actions with Respect to
Defaults. 79   9.12. Delivery of Information. 79   9.13. Demand. 79   9.14.
Notice of Default. 80

 

iv

 

 

10. SETTLEMENTS, DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS. 80       11.
MISCELLANEOUS. 81         11.1. Waiver. 81   11.2. Costs and Attorneys' Fees. 82
  11.3. Amendments, Etc. 82   11.4. Expenditures by Agent. 83   11.5. Custody
and Preservation of Collateral. 84   11.6. Reliance. 84   11.7. Assignments and
Participations. 84   11.8. CHOICE OF LAW. 86   11.9. CONSENT TO JURISDICTION. 87
  11.10. SERVICE OF PROCESS. 87   11.11. WAIVER OF JURY TRIAL. 87   11.12.
ADVICE OF COUNSEL. 88   11.13. Severability. 88   11.14. Application of
Payments. 88   11.15. Marshaling; Payments Set Aside. 88   11.16. Section
Titles. 89   11.17. Continuing Effect. 89   11.18. Notices. 89   11.19.
Equitable Relief. 90   11.20. Indemnification. 91   11.21. Counterparts. 91  
11.22. Security Interests, Etc. 92   11.23. Patriot Act Notice. 92

 

v

 

 

EXHIBITS AND SCHEDULES

 

EXHIBITS       Exhibit 2.1 Form of Revolving Note Exhibit 2.2 Form of Term Note
Exhibit 2.3(c) Form of Excess Cash Flow Certificate Exhibit 2.10 Form of LIBOR
Rate Borrowing/Continuation/Conversion Exhibit 3.1 Form of Notice of Borrowing
Exhibit 3.5 Closing Conditions to Effectiveness of Agreement Exhibit 5.2(a) Form
of Borrowing Base Certificate Exhibit 5.3(a) Form of Compliance Certificate
Exhibit 5.7 Form of Loss Payable Endorsement Exhibit 11.7 Form of Assignment and
Acceptance     SCHEDULES       Schedule 4.2 Equity Ownership Schedule 4.5
Litigation Schedule 4.7 Plans Schedule 4.16 Patent, Trademark, Copyright and
Service Marks Schedule 4.22 Employees Schedule 6.1 Liens Schedule 6.2
Indebtedness Schedule 6.6 Affiliate Transactions

 

vi

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, together with all exhibits and schedules attached hereto
and hereby made a part hereof (this "Agreement"), dated as of March 20, 2013, by
and among Multiband Corporation, a Minnesota corporation ("Multiband"),
Multiband Field Services, Incorporated, a Delaware corporation ("Field
Services"), Multiband MDU Incorporated, a Delaware corporation ("MDU"),
Multiband Engineering and Wireless, Midwest, Inc., a Missouri corporation
("MW"), Multiband Engineering and Wireless, Southeast, Inc., a Florida
corporation ("SE"), Multiband Subscriber Services, Inc., a Minnesota corporation
("Subscriber Services"), Minnesota Digital Universe, Inc., a Minnesota
corporation ("Digital Universe") and Multiband Special Purpose, LLC, a Minnesota
limited liability company ("MSP", and together with Multiband, Field Services,
MDU, MW, SE, Subscriber Services and Digital Universe, each a "Borrower", and
collectively, the "Borrowers"), the financial institutions from time to time
party hereto ("Lenders") and Fifth Third Bank, an Ohio banking corporation (in
its individual capacity, "Fifth Third"), as agent for Lenders (in such capacity,
"Agent").

 

W I T N E S S E T H:

 

WHEREAS, pursuant hereto Lenders are willing to make loans and to extend credit
to Borrowers in an aggregate amount of up to Thirty Million Dollars
($30,000,000) upon the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and of any loans or extensions of credit heretofore, now or hereafter made to or
for the benefit of Borrowers by Agent and Lenders, and for other consideration
the receipt and adequacy of which are hereby acknowledged, Borrowers, Agent and
Lenders hereby agree as follows:

 

1          DEFINITIONS.

 

1.1     General Terms.

 

When used herein, the following terms shall have the following meanings:

 

"Account Debtor" means the party who is obligated on or under an Account.

 

"Accounts" means all accounts (as defined in the UCC) and all other present and
future rights of Borrowers and their Subsidiaries to payment for goods sold or
leased or for services rendered, which are not evidenced by instruments or
chattel paper, and whether or not they have been earned by performance.

 

"Accounts Trial Balance" shall have the meaning given such term in
Section 5.2(b).

 

"Acquisition" means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of fifty percent (50%) of the
Equity Interests of any Person or otherwise causing any Person to become a
Subsidiary of any Borrower, or (c) a merger or consolidation or any other
combination with another Person.

 

-1-

 

 

“Adjusted EBITDA” means, for any Computation Period, (a) Net Income for such
period, plus (b) to the extent deducted in determining such Net Income, Interest
Expense, net income tax expense, depreciation and amortization, all as
determined for Borrower Representative and its Subsidiaries on a consolidated
basis in accordance with GAAP; provided, that for each of the months or other
periods specified below, Adjusted EBITDA shall be deemed to be the amount set
forth below for such period.

 

Period  Adjusted EBITDA  Fiscal Quarter ended March 31, 2012  $2,183,383.00 
Fiscal Quarter ended June 30, 2012  $2,040,569.00  Fiscal Quarter ended
September 30, 2012  $6,888,461.00  Fiscal Quarter ended December 31, 2012 
$3,870,587.00 

 

"Advance" means an Index Rate Advance or a LIBOR Advance, which shall consist of
all or a portion of the Revolving Loan or the Term Loan; that portion of any
Loan that is not a LIBOR Advance for an Interest Period shall be an Index Rate
Advance.

 

"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting Equity Interests, by contract or otherwise.
Without limitation, any director, executive officer or beneficial owner of ten
percent (10%) or more of the Equity Interests of a Person shall, for the
purposes of this Agreement, be deemed to control the other Person.
Notwithstanding the foregoing, neither Agent nor any Lender shall be deemed an
"Affiliate" of Borrower Representative or of any Subsidiary of Borrower
Representative.

 

"Agent" shall have the meaning given such term in the preamble hereto, and such
term shall include Agent's successors and assigns.

 

"Agent Advance" shall have the meaning given such term in Section 2.1(a).

 

"Agreement" means this Credit Agreement, together with all exhibits and
schedules attached hereto, as amended, modified, supplemented or restated from
time to time.

 

-2-

 

 

"Anti-Terrorism Laws" shall have the meaning given such term in Section 4.20(a).

 

"Applicable Margin" means, with respect to each Loan and Type of Advance, the
percentage per annum opposite such Loan and below such Type of Advance in the
appropriate row and column of the table below:

 

   Index Rate Advances   LIBOR Advances  Revolving Loan   2.50%   5.00% Term
Loan   3.00%   5.50%

 

"Assignment and Acceptance" shall have the meaning given such term in Section
11.7(c).

 

"Bank" means Fifth Third Bank.

 

"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §
101, et seq.), as amended, reformed or modified from time to time and any rules
or regulations issued from time to time thereunder.

 

"Borrower Representative" shall have the meaning given such term in Section
2.19.

 

"Borrowers" shall have the meaning given such term in the preamble hereto.

 

"Borrowing Base" means, at any time, the sum of (a) up to 80% of the face amount
(less maximum discounts, credits and allowances which may be taken by or granted
to Account Debtors in connection therewith) then outstanding under Borrowers’
existing Eligible Accounts plus (b) up to 50% of the value of Borrowers’
existing Eligible Inventory, valued at the lower of cost or market (on a
"first-in, first-out" basis), minus (c) the aggregate amount of all LC
Obligations at such time, minus (d)  such reserves as Agent in its reasonable
credit judgment elects to establish (provided, that if no Event of Default has
occurred and is continuing, Agent shall notify Borrower Representative prior to
instituting any new reserve pursuant to this clause (d)).

 

"Borrowing Base Certificate" shall have the meaning given such term in Section
5.2(a).

 

"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois, Cincinnati, Ohio or Minneapolis,
Minnesota are authorized or required by law to close and, if the applicable
Business Day relates to any LIBOR Advance, a day on which dealings are carried
on in the London interbank market.

 

"Capital Expenditures" means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of Borrower Representative and its Subsidiaries including Capital Leases, but
excluding expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (a) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets
being replaced or restored, or (b) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced.

 

-3-

 

 

"Capital Lease" means any leasing or similar arrangement which, in accordance
with GAAP, is or should be classified as a capital lease.

 

"Capital Lease Obligations" means all monetary obligations under any Capital
Leases.

 

"Cash Equivalents" means: (a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof having maturities of not
more than six (6) months from the date of acquisition; (b) certificates of
deposit, time deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than six (6)
months, issued by any U.S. commercial bank or any branch or agency of a non-U.S.
bank licensed to conduct business in the U.S. having combined capital and
surplus of not less than $250,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors
Service Inc. and in either case having a tenor of not more than three (3)
months.

 

"Change in Control" means (a) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the SEC under the Securities Exchange Act of 1934) of 30% or more of
the outstanding shares of voting stock of Borrower Representative, (b) during
any period of 12 consecutive months, a majority of the members of the board of
directors of Borrower Representative cease to be composed of individuals (i) who
were members of the board of directors on the first day of such period, (ii)
whose election or nomination to the board of directors was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of the board of directors or (iii)
whose election or nomination to the board of directors was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of the board of directors, or
(c) any Person or two or more Persons acting in concert will have acquired by
contract or otherwise, or will have entered into a contract or arrangement that,
upon consummation thereof, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the management
or policies of Borrower Representative, or control over the equity securities of
Borrower Representative entitled to vote for members of the board of directors
or equivalent governing body of Borrower Representative on a fully-diluted basis
(and taking into account all such securities that such Person or group has the
right to acquire pursuant to any option right) representing 30% or more of the
combined voting power of such securities. For purposes of this definition,
actions taken by DirecTV in the ordinary course of business pursuant to any
DirecTV Agreement, consistent with past practices, shall not be considered an
event or circumstance triggering a Change in Control pursuant to clause (c)
above.

 

"Claims Act" means the Assignment of Claims Act of 1940 (31 U.S.C. §3727 and 41
et seq. U.S.C. §15 et seq.), as amended and in effect from time to time, and any
rules and regulations issued from time to time thereunder.

 

-4-

 

 

"Closing Date" means March 20, 2013.

 

"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rules or regulations issued from
time to time thereunder.

 

"Collateral" means all Property and interests in Property and proceeds thereof
now owned or hereafter arising or acquired by any Borrower or any other Person
and their respective Subsidiaries in or upon which a Lien now or hereafter
exists in favor of Agent for the benefit of Agent and the Lenders, whether under
this Agreement or under any other documents executed by any such Persons and
delivered to Agent to secure any part or all of the Liabilities.

 

"Collateral Documents" means, collectively, this Agreement, the Security
Agreement, the Pledge Agreement, the Control Agreements, the Mortgages, any
patent, copyright, license and trademark security agreement, any assignment of
life insurance policies as collateral for all or any portion of the Liabilities,
and all other security agreements, lease assignments, guarantees and other
similar agreements which secure or guaranty all or any portion of the
Liabilities, and all amendments, restatements, modifications or supplements
thereof or thereto, now or hereafter delivered to Agent pursuant to or in
connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the UCC or comparable law) against Borrower Representative or its Subsidiaries,
as debtor, in favor of Agent, as secured party for the benefit of Agent and
Lenders, for purposes of perfecting any Liens securing all or any portion of the
Liabilities, in each case as amended, restated, supplemented or otherwise
modified from time to time.

 

"Compliance Certificate" shall have the meaning given such term in
Section 5.3(b).

 

"Computation Period" means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter.

 

"Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of such Person: (a) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (b) with
respect to any letter of credit issued for the account of such Person or as to
which such Person is otherwise liable for reimbursement of drawings; (c) under
any Rate Contracts; (d) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or
(e) for the obligations of another through any agreement to purchase, repurchase
or otherwise acquire such obligation or any Property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another Person. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or, if not
a fixed and determined amount, the maximum amount so guaranteed or supported.

 

-5-

 

 

"Contractual Obligations" means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its Property is bound.

 

"Control Agreements" means, collectively, each Account Control Agreement among
Agent, any Borrower and the applicable holder of deposit accounts of any
Borrower, in each case as amended, modified, supplemented or restated from time
to time.

 

"Controlled Group" means Borrower Representative and all Persons (whether or not
incorporated), trades or businesses under common control or treated as a single
employer with Borrower Representative pursuant to Section 414 of the Code.

 

"Credit Extension" shall have the meaning given such term in Section 3.4.

 

"Default" means the occurrence or existence of any one or more of the events
described in Section 8.1 hereof.

 

"Defaulting Lender" shall have the meaning given such term in Section 10.

 

"Designated Portion" means, at any particular time, that portion of the Term
Loan or the Revolving Loan selected by Borrower Representative for any single
Interest Period to bear interest based on LIBOR.

 

“DirecTV” means DIRECTV, LLC.

 

“DirecTV Agreements” means, collectively, (a) that certain 2012 Home Services
Provider Agreement, dated as of October 15, 2012, by and between DirecTV and
Borrower Representative, as amended by that certain First Amendment, dated as of
January 1, 2013, by and between DirecTV and Borrower Representative and that
certain Second Amendment, dated as of March 15, 2013, by and between DirecTV and
Borrower Representative, (b) that certain Directv MDU Master System Operator
Agreement, dated as of August 22, 2011, by and between DirecTV and Subscriber
Services and (c) in each case, any other agreement entered into as a replacement
or substitution thereof.

 

“DirecTV Inventory” means, all Inventory purchased by Borrower Representative or
any Subsidiary of the Borrower Representative pursuant to an in connection with
the DirecTV Agreements that is subject to a Lien in favor of DIRECTV, LLC
created under the DirecTV Agreements and in which, pursuant to the terms and
conditions of the DirecTV Agreements, no Liens may be created in favor of any
Person other than DIRECTV, LLC.

 

"Disposition" means (a) the sale, lease, conveyance or other disposition of
Property (excluding sales, leases or other dispositions expressly permitted
under clauses (a) or (c) of Section 6.3), and (b) the sale or transfer by
Borrower Representative or any Subsidiary of any Equity Interests issued by any
Subsidiary, but specifically excluding (i) the granting of Liens to the extent
otherwise permitted under Section 6.1 and (ii) the making or liquidation of
Investments to the extent permitted under Section 6.5.

 

-6-

 

 

"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.

 

“Domestic Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of a State within the United States of America or the District of
Columbia.

 

"EBITDA" means, for any Computation Period, (a) Net Income, plus (b) to the
extent deducted in determining such Net Income, (i) Interest Expense, (ii)
income tax expense, (iii) expenses incurred in connection with the execution and
delivery of this Agreement, (iv) depreciation and amortization, (v) gains or
non-cash losses from the sale or disposition of assets not in the Ordinary
Course of Business, (vi) gains or non-cash losses from discontinued operations,
(vii) unrealized gains and losses with respect to Rate Contracts for such
period, to the extent not included in Interest Expenses and (viii) other
extraordinary gains or non-cash losses, all determined for Borrower
Representative and its Subsidiaries on a consolidated basis in accordance with
GAAP.

 

"Eligible Accounts" means Accounts of Borrower Representative and its Domestic
Subsidiaries other than the following:

 

(a) Accounts which are payable in Dollars and which remain unpaid more than
ninety (90) days after the original date of the applicable invoice;

 

(b) all Accounts owing by a single Account Debtor (other than DirecTV),
including a currently scheduled Account, if twenty percent (20%) or more of the
aggregate balance owing by such Account Debtor to Borrower Representative or the
applicable Subsidiary are not Eligible Accounts as a result of the application
of the provisions of the preceding clause (a);

 

(c) Accounts with respect to which the Account Debtor is a natural person or a
director, officer, employee, Subsidiary or Affiliate of Borrower Representative;

 

(d) Accounts with respect to which the Account Debtor is a Governmental
Authority, unless the Account Debtor the United States of America or any
department, agency or instrumentality thereof and with respect to any such
Account, the Borrower Representative has complied to Agent's reasonable
satisfaction with the provisions of the Claims Act, including executing and
delivering to Agent all statements of assignment and/or notification which are
in form and substance acceptable to Agent and which are deemed necessary by
Agent to effectuate the assignment to Agent of such Accounts;

 

(e) Accounts with respect to which the Account Debtor is not a resident of the
United States or Canada, unless the Account Debtor has supplied the Borrower
Representative or the applicable Subsidiary with an irrevocable letter of
credit, issued by a financial institution reasonably satisfactory to Agent,
sufficient to cover such Account and in form and substance reasonably
satisfactory to Agent, or such Account is subject to credit insurance reasonably
satisfactory to Agent which has been satisfactorily assigned to Agent, or unless
Agent shall otherwise consent to the inclusion of such Account as an Eligible
Account;

 

-7-

 

 

(f) Accounts with respect to which the Account Debtor has a counterclaim or a
right of set-off (but only to the extent of such counterclaim or set off unless
the Account Debtor is disputing the Account or otherwise refusing to pay);

 

(g) Accounts for which the prospect of payment or performance by the Account
Debtor is or may be impaired as determined by Agent in its reasonable credit
judgment, or as to which any Borrower has knowledge of any facts, events or
occurrences which in any way impair the validity or enforcement thereof or tend
to materially reduce the amount payable thereunder;

 

(h) Accounts with respect to which Agent does not have a first and valid fully
perfected Lien;

 

(i) Accounts with respect to which the Account Debtor is the subject of
bankruptcy or a similar insolvency proceeding or has made an assignment for the
benefit of creditors or whose assets have been conveyed to a receiver or
trustee;

 

(j) Accounts arising from sales made on a bill-and-hold, guaranteed sale,
sale-or-return, sale on approval or consignment basis or Accounts with respect
to which the Account Debtor's obligation to pay the Account is conditional upon
the Account Debtor's approval or is otherwise subject to any repurchase
obligation or return right or are otherwise contingent or not actually and
absolutely owing to Borrower Representative or the applicable Subsidiary;

 

(k) Accounts to the extent that the Account Debtor's indebtedness to Borrower
Representative or the applicable Subsidiary exceeds a credit limit, if any,
determined by Agent in Agent's reasonable credit judgment;

 

(l) Accounts with respect to an Account Debtor that is located in any
jurisdiction which has adopted a statute or other requirement with respect to
which any Person that obtains business from within such jurisdiction must file a
notice of business activities report or make any other required filings in a
timely manner in order to enforce its claims in such jurisdiction's courts
unless such notice of business activities report has been duly and timely filed
or Borrower Representative or the applicable Subsidiary is exempt from filing
such report and has provided Agent with satisfactory evidence of such exemption;

 

(m) Accounts representing progress billing, pre-billing or billing prior to
completion of the contract giving rise to the Account;

 

(n) Accounts to the extent the representations and warranties set forth in the
Financing Agreements are not true and correct in all material respects;

 

(o) Accounts with respect to which there is a contra account or an accrued
rebate, allowance or credit that may be paid to the applicable Account Debtor in
the future, but only to the extent of such contra account or accrued rebate,
allowance or credit;

 

-8-

 

 

(p) Accounts owing by an Account Debtor for which Borrower Representative or the
applicable Subsidiary holds any type of cash deposit, but only to the extent of
such cash deposit;

 

(q) Accounts evidenced by an instrument or chattel paper; and

 

(r) Accounts which are otherwise unacceptable to Agent in its reasonable credit
judgment.

 

Notwithstanding the foregoing, if any rebate, allowance or credit has been
applied by Borrower Representative or the applicable Subsidiary to an Account
that is not an Eligible Account as a result of the application of the provisions
of the foregoing clause (a), then the other Accounts of the applicable Account
Debtor which are Eligible Accounts shall be reduced by the amount of such
rebate, allowance or credit.

 

“Eligible Inventory” means all raw materials and finished goods Inventory of
Borrower Representative or any Domestic Subsidiary other than the following:

 

(a) Inventory which is obsolete, not in good condition or of merchantable
quality, free from material defects, slow moving or not either currently usable
or currently salable in the Ordinary Course of Business;

 

(b) Inventory which Agent determines, in Agent's reasonable credit judgment and
in accordance with Agent's customary business practices, to be unacceptable due
to age, type, category and/or quantity; such Inventory shall include, but not be
limited to, packaging materials, supplies, pallets, skids, trays and bags;

 

(c) Inventory which is not subject to internal control and management procedures
acceptable to Agent in its reasonable credit judgment;

 

(d) Inventory with respect to which Agent does not have a first and valid fully
perfected Lien;

 

(e) Inventory delivered to Borrower Representative or the applicable Subsidiary
on consignment;

 

(f) any goods sold or subject to a sale on a bill and hold basis;

 

(g) Inventory which is not located in the United States or at one of the
locations in the United States designated on Schedule 3.1 to the Security
Agreement or is in transit;

 

(h) perishable Inventory;

 

(i) Inventory consisting of work-in-process or supplies; and

 

(j) Inventory which is otherwise unacceptable to Agent in its reasonable credit
judgment.

 

-9-

 

 

"Environmental Claims" means all claims by any Governmental Authority or other
Person alleging potential liability or responsibility for violation of any
Environmental Law, or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal, remedial
or response costs, restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon the presence, placement,
discharge, emission or release (including intentional and unintentional,
negligent and non-negligent, sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks, discharges, emissions or releases) of any Hazardous
Material at, in, or from Property, whether or not owned by Borrower
Representative or a Subsidiary of Borrower Representative.

 

"Environmental Laws" means all applicable federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters and the control, shipment, storage or disposal of Hazardous Materials or
hazardous substances; including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, and/or
the Emergency Planning and Community Right-to-Know Act.

 

"Environmental Permits" shall have the meaning given such term in Section 4.12.

 

"Equipment" shall have the meaning given to such term in the Security Agreement.

 

"Equity Interests" means the membership interests, partnership interests,
capital stock of any class or any other equity interest of any Person and
options, warrants and other rights to acquire membership interests, partnership
interests, capital stock of any class or any other equity interest of such
Person.

 

"Equity Sale" means any issuance, sale, conveyance, transfer or other
disposition of any Equity Interests by any Person or any other change in the
capital structure of such Person (other than Indebtedness), including all
capital contributions to such Person.

 

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and regulations promulgated thereunder.

 

"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with Borrower Representative within the meaning of Section
414(b), 414(c) or 414(m) of the Code.

 

-10-

 

 

"ERISA Event" means (a) a Reportable Event with respect to a Plan or a
Multiemployer Plan; (b) a withdrawal by Borrower Representative or any ERISA
Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal (as defined in Sections 4203 and 4205 of
ERISA) by Borrower Representative or any ERISA Affiliate from a Multiemployer
Plan; (d) the filing of a notice of intent to terminate with the PBGC, the
treatment by the PBGC of a plan amendment as a termination under Section 4041 or
4041A of ERISA of, or the commencement of proceedings by the PBGC to terminate,
a Title IV Plan or Multiemployer Plan; (e) a failure by Borrower Representative
or any ERISA Affiliate to make contributions to a Plan or Multiemployer Plan
required by ERISA; (f) an event or condition which might reasonably be expected
to constitute grounds under Section 4041A or 4042 of ERISA for the termination
by the PBGC of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan; (g) the imposition by the PBGC of any liability under Title
IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA, upon Borrower Representative or any ERISA Affiliate; (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Title IV Plan; (i) a
non-exempt prohibited transaction occurs with respect to any Plan for which
Borrower Representative or any ERISA Affiliate may be directly or indirectly
liable; (j) an accumulated funding deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code) exists with respect to any Title IV Plan as
of the last day of any plan year, (k) a violation of the applicable requirements
of Section 404 or 405 of ERISA or the exclusive benefit rule under Section
401(a)(2) of the Code by any fiduciary or disqualified person with respect to
any Plan for which Borrower Representative and its Subsidiaries or any ERISA
Affiliate may be directly or indirectly liable, or (l) as of the last day of any
plan year the Unfunded Benefit Liabilities of any Title IV Plan exceed $150,000.

 

"Event of Default" means a Default or an event or condition which with the
passage of time or the giving of notice or both would, unless cured or waived,
become a Default.

 

"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property; or (b) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.

 

"Excess Cash Flow" means, for any period, the remainder of (a) EBITDA for such
period, less (b) the sum, without duplication, of (i) all scheduled payments of
principal on all Indebtedness (including payments on Capital Leases), plus
(ii) Capital Expenditures for such period to the extent (x) not financed with
purchase money Indebtedness provided by third parties or (y) not representing
the incurrence of Capital Leases, plus (iii) all state, local and foreign income
taxes paid in cash during such period, plus (iv) Interest Expense paid in cash
during such period, plus (vi) voluntary prepayments of the Term Loan made during
such period in accordance with the provisions of this Agreement, all as
determined for Borrower Representative and its Subsidiaries on a consolidated
basis in accordance with GAAP (or, in the case of EBITDA, as otherwise
calculated or determined in accordance with the definition thereof).

 

"Excess Cash Flow Certificate" means a certificate, duly executed on behalf of
Borrowers by a Responsible Officer of Borrower Representative, appropriately
completed and substantially in the form of Exhibit 2.3(c).

 

"Excluded Issuance" means the sale or issuance of equity securities (a) to
directors and managers of Borrower Representative or (b) the proceeds of which
do not exceed $500,000 in any Fiscal Year of Borrower Representative and are
used in the business of Borrower Representative during such Fiscal Year.

 

-11-

 

 

"Executive Order" shall have the meaning given such term in Section 4.20(a).

 

“Existing Debt” means, collectively, (i) indebtedness incurred pursuant to that
certain Debenture Purchase Agreement, dated as of May 27, 2009, among Multiband
NE Incorporated, Multiband SC Incorporated, Multiband EC Incorporated, Multiband
NC Incorporated, Multiband DV Incorporated and Convergent Capital Partners II,
L.P., (ii) that certain promissory note issued by Multiband to DirecTECH Holding
Co, Inc. on January 2, 2008 and due January 15, 2014, (iii) that certain
promissory note issued by Multiband to Comvest Capital on January 1, 2013 and
due January 15, 2014 and (iv) that certain promissory note issued by Multiband
to J. Basil Mattingly on February 1, 2013 and due in February on 2014.

 

“Federal Funds Rate” means for any day the rate determined by the Agent to be
the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of
the rates per annum quoted to the Agent at approximately 10:00 a.m. (Cincinnati
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 the Agent for sale to the Agent at face value
of Federal funds in the secondary market in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined.

 

"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

"Financing Agreements" means this Agreement, the Notes, the Collateral
Documents, the LC Applications, the LC Agreements, the Guaranties, the
Perfection Certificate, any Subordination Agreement, any Rate Contracts entered
into by any Borrower with Agent or a Lender or any Affiliate of Agent or a
Lender and all documents, instruments and agreements delivered to Agent in
connection therewith, in each case as amended, restated, supplemented or
otherwise modified from time to time.

 

"Fiscal Month" means a calendar month.

 

"Fiscal Quarter" means a fiscal quarter of a Fiscal Year comprised of three (3)
consecutive Fiscal Months.

 

"Fiscal Year" means the fiscal year of Borrower Representative ending on
December 31 of each year.

 

“Fixed Charge Coverage Ratio” means, for any Computation Period, Free Cash Flow
divided by Fixed Charges, all as determined for Borrower Representative and its
Subsidiaries on a consolidated basis in accordance with GAAP.

 

"Fixed Charges" means, for any Computation Period, the sum of (a) cash Interest
Expense for such Computation Period and (b) any payments of principal on all
Indebtedness that are scheduled during such Computation Period, plus all
scheduled permanent revolving credit commitment reductions on all Indebtedness
during such Computation Period, plus payments on all Capital Leases that are
scheduled during such Computation Period, each as paid or payable for such
period and all as determined for Borrower Representative and its Subsidiaries on
a consolidated basis in accordance with GAAP; provided, that for each of the
months or other periods specified below, Fixed Charges shall be deemed to be the
amount set forth below for such period.

 

-12-

 

 

Period  Fixed Charges  Fiscal Quarter ended March 31, 2012  $1,717,916.00 
Fiscal Quarter ended June 30, 2012  $2,026,653.00  Fiscal Quarter ended
September 30, 2012  $3,047,408.00  Fiscal Quarter ended December 31, 2012 
$1,253,127.00 

 

“Free Cash Flow” means, for any Computation Period, (a) Adjusted EBITDA, less
(b) Capital Expenditures (other than Capital Expenditures financed with the
proceeds of purchase money Indebtedness or Capital Leases to the extent
permitted hereunder), less (c) income taxes and dividends (including, without
limitation, Permitted Preferred Distributions) paid in cash, all as determined
for Borrower Representative and its Subsidiaries on a consolidated basis in
accordance with GAAP.

 

"GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

 

"Guaranties" means, collectively, (a) that certain Guaranty and Collateral
Agreement dated as of the Closing Date made by the Subsidiaries in favor of
Agent and Lenders, and (b) any other guaranty of the Liabilities now or
hereafter executed and delivered by any Person to Agent and Lenders, each as
amended, restated, supplemented or otherwise modified from time to time.

 

-13-

 

 

"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law.

 

"Indebtedness" of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of Property or services (other than trade payables
incurred in the Ordinary Course of Business or accrued expenses paid on
customary terms in the Ordinary Course of Business); (c) all reimbursement or
payment obligations (whether or not contingent) with respect to letters of
credit which are not fully cash-collateralized, surety bonds and other similar
instruments, including without limitation any and all LC Obligations; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of Property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to Property acquired by such Person (even
though the rights and remedies of the seller or the Person providing financing
under such agreement in the event of default are limited to repossession or sale
of such Property); (f) all Capital Lease Obligations; (g) all equity securities
of such Person subject to repurchase or redemption other than at the sole option
of such Person except to the extent expressly permitted by this Agreement;
(h) "earnouts" and similar payment obligations; (i) all obligations under Rate
Contracts; (j) all Indebtedness and obligations referred to in clauses (a)
through (h) above secured by (or for which the holder of such Indebtedness or
obligations has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in Property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness or obligations; and (k) all Contingent Obligations
described in clause (a) of the definition thereof in respect of Indebtedness or
obligations of others of the kinds referred to in clauses (a) through (j) above.

 

"Indemnified Matters" shall have the meaning given such term in Section 11.20.

 

"Indemnitees" shall have the meaning given such term in Section 11.20.

 

"Indemnity Payment" shall have the meaning given such term in Section 2.3(d).

 

"Index Rate" means for any day the greater of: (i) the rate of interest
announced by the Agent from time to time as its “prime rate” as in effect on
such day (it being acknowledged that such rate may not be the Agent’s best or
lowest rate) and (ii) the sum of (x) the Federal Funds Rate, plus (y) 1/2 of 1%,
with any change in the Index Rate resulting from a change in said prime rate or
Federal Funds Rate to be effective as of the date of the relevant change in said
prime rate or Federal Funds Rate.

 

"Index Rate Advance" means that portion of the Revolving Loan or the Term Loan
bearing interest calculated by reference to the Index Rate.

 

"Interest Expense" means, for any period, interest expense for such period
(including all imputed interest on Capital Leases), including cash costs (or net
of income) associated with Rate Contracts, all as determined for Borrower
Representative and its Subsidiaries on a consolidated basis in accordance with
GAAP.

 

-14-

 

 

"Interest Period" means any period relating to LIBOR Advances, the commencement
of which shall be determined in accordance with Section 2.11 and expiring one,
two or three months thereafter, as specified by Borrower Representative in
accordance with Section 2.10.

 

"Inventory" means all inventory (as defined in the UCC) and any and all other
goods, including goods in transit, wherever located, whether now owned or
hereafter acquired by Borrower Representative and its Subsidiaries, which are
held for sale or lease, furnished under any contract of service or held as raw
materials, work-in-process or supplies, and all materials used or consumed in
any such Person’s business, and shall include such Property the sale or other
disposition of which has given rise to Accounts and which has been returned to
or repossessed or stopped in transit by any such Person.

 

"Investments" shall have the meaning given such term in Section 6.5.

 

"Knowledge" or "aware" means and includes the actual knowledge or awareness of a
Borrower or a Subsidiary (which shall include the actual knowledge and awareness
of each of the directors, president, chief executive officer, chief financial
officer, any vice president or any other executive officer of such Person),
including, their successors in their respective capacities.

 

"LC Agreement" means any document, instrument or agreement pursuant to which
Agent or any of its Affiliates requests or applies for the issuance of a Letter
of Credit at Borrower Representative’s request or Agent or any of its Affiliates
assures an LC Issuer of any Borrower’s payment or performance of all or any
portion of any Borrower’s obligations in connection with such Letter of Credit
(including any obligations of reimbursement), which term shall include any
reimbursement agreement or application entered into by Agent or any of its
Affiliates (whether with or without a Borrower or any other Person as a
co-signer, joint or primary obligor or otherwise), or any guaranty or
participation agreement entered into by Agent or any of its Affiliates.

 

"LC Application" shall have the meaning given such term in Section 2.18.

 

"LC Facility" shall have the meaning given such term in Section 2.1(b).

 

"LC Fee" shall have the meaning given such term in Section 2.6(d).

 

"LC Issuer" means Agent or any other bank or financial institution which is
approved by Agent and which issues one or more Letters of Credit for the account
of any Borrower at the request of Agent or any of its Affiliates.

 

"LC Issuer Fees" shall have the meaning given such term in Section 2.6(d).

 

"LC Obligations" means, at any time, the sum, without duplication, of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time, plus
(b) the aggregate amount of all drawings under Letters of Credit for which the
LC Issuer has not at such time been reimbursed (either by Borrowers or Agent),
plus (c) the aggregate amount of all payments made by Agent or its Affiliates to
the LC Issuer in connection with Letters of Credit for which Borrower has not at
such time reimbursed Agent, whether by way of an Advance under the Revolving
Loan or otherwise.

 

-15-

 

 

"LC Request" shall have the meaning given such term in Section 2.18.

 

"Lender" shall have the meaning given to such term in the preamble hereto, and
such term shall include Lender's successors and assigns.

 

"Lending Affiliate" means (a) each office and branch of Agent and each Lender,
and (b) each entity which, directly or indirectly, is controlled by or under
common control with Agent or any Lender or which controls Agent or any Lender
and each office and branch thereof.

 

"Letter of Credit" means a letter of credit now or at any time hereafter issued
by an LC Issuer for the account of a Borrower as to which Agent or any of its
Affiliates has issued an LC Agreement.

 

"Liabilities" means, collectively, all of Borrowers’ liabilities, obligations,
and indebtedness to Agent and Lenders of any and every kind and nature, whether
heretofore, now or hereafter owing, arising, due or payable and howsoever
evidenced, created, incurred, acquired, or owing, whether individually or
collectively, direct or indirect, joint or several, absolute or contingent,
primary or secondary, fixed or otherwise (including obligations of performance)
and whether arising or existing under written agreement, oral agreement or
operation of law, including the LC Obligations, all of Borrowers’ reimbursement
obligations, whether contingent or liquidated, with respect to any Letter of
Credit or LC Obligation, and all of Borrowers’ other indebtedness and
obligations to Agent or Lenders or any of their respective Affiliates under or
in respect of this Agreement and the other Financing Agreements and any Rate
Contract between any Borrower and Agent or any Lender or an Affiliate of Agent
or any Lender.

 

"LIBOR" means, for any Interest Period, a rate of interest equal to (a) the per
annum rate of interest at which United States dollar deposits for a period equal
to the relevant Interest Period are offered in the London Interbank Eurodollar
market at 11:00 a.m. (London time) two Business Days prior to the commencement
of such Libor Interest Period (or three Business Days prior to the commencement
of such Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed on Reuters Screen LIBOR01 Page (or any successor page), divided by (b)
a percentage equal to 100% minus the LIBOR Reserve Percentage for such Interest
Period, or as LIBOR is otherwise determined by the Agent in its sole and
absolute discretion consistent with the foregoing. The Agent's determination of
LIBOR shall be conclusive, absent demonstrable error.

 

"LIBOR Advances" means that portion of the Revolving Loan or the Term Loan
bearing interest calculated by reference to LIBOR.

 

"LIBOR Reserve Percentage" for any Interest Period for any LIBOR Advance means
the then stated maximum reserve percentage for determining reserves to be
maintained by member banks of the Federal Reserve System for Eurocurrency
funding or liabilities as defined in Regulation D of the Federal Reserve Board
(or any successor or similar regulation relating to such reserve requirement).

 

-16-

 

 

"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, encumbrance, lien (statutory or other) or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including, but not limited to, those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law), and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under a lease which is not a Capital Lease.

 

"Loan Account" shall have the meaning given such term in Section 2.4.

 

"Loans" means, collectively, the Revolving Loan and the Term Loan.

 

"Loss" shall have the meaning given such term in Section 8.1(f).

 

"Margin Stock" means "margin stock" as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

 

"Material Adverse Effect" means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of Borrower Representative and its Subsidiaries, taken
as a whole; (b) a material impairment of the ability of Borrower Representative
or any of its Subsidiaries to perform in any material respect its obligations
under any Financing Agreement; or (c) a material adverse effect upon (i) the
legality, validity, binding effect or enforceability of any Financing Agreement,
or (ii) the perfection or priority of any Lien granted to Agent on any material
Property under any Collateral Document.

 

"Maximum Revolving Facility" means $10,000,000.

 

“Mortgage” means a mortgage, deed of trust, leasehold mortgage or similar
instrument granting Agent a Lien on a real property interest of Borrower
Representative or any of its Subsidiaries, each as amended, restated or
otherwise modified from time to time.

 

"Multiemployer Plan" means a "multiemployer plan" (within the meaning of Section
4001(a)(3) of ERISA) and to which Borrower Representative or any ERISA Affiliate
is making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.

 

"Net Income" means for any period for Borrower Representative and its
Subsidiaries, the consolidated net income (or loss) of Borrower Representative
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.

 

-17-

 

 

"Net Proceeds" means proceeds in cash, checks or other cash equivalent financial
instruments (including Cash Equivalents) as and when received by the Person
making a Disposition, net of (without duplication): (a) the direct costs
incurred in connection with such Disposition excluding amounts payable to such
Person, (b) sale, use or other transaction taxes, including income taxes, paid
or payable as a result thereof, (c) amounts required to be applied by such
Person to repay Indebtedness consisting of a Capital Lease Obligation or
purchase money Indebtedness that is secured by a Lien on the asset which is the
subject of such Disposition, in each case only to the extent that such Lien has
priority over the Lien securing the Liabilities, and (d) amounts required to be
maintained as a reserve against liabilities associated with such Disposition in
accordance with GAAP (but only for so long as such amounts are required under
GAAP to be so maintained). "Net Proceeds" shall also include proceeds received
on account of any Event of Loss net of (i)  all of the costs and expenses
reasonably incurred in connection with the collection of such proceeds, award or
other payments, (ii) any amounts retained by or paid to parties having superior
rights to such proceeds, awards or other payments, and (iii) any taxes paid or
payable in respect of amounts so received on account of such Event of Loss. "Net
Proceeds" shall also include the aggregate cash proceeds paid or payable to
Borrower Representative or any of its Subsidiaries in connection with any Equity
Sale or capital contribution, after deduction of all documented fees, costs and
expenses paid to any third party in connection with such Equity Sale.

 

"New Lending Office" shall have the meaning given such term in Section 2.14(b).

 

"Non-U.S. Lender" shall have the meaning given such term in Section 2.14(b).

 

"Notes" means, collectively, the Revolving Notes and the Term Notes.

 

"OFAC" shall have the meaning given such term in Section 4.20(b).

 

"Ordinary Course of Business" means, in respect of any transaction involving
Borrower Representative or any Subsidiary, the ordinary course of such Person's
business, as conducted by any such Person in accordance with past practice and
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Financing Agreement.

 

"Organization Documents" means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of designations or
instrument relating to the rights of shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement and, if applicable, certificate of
limited partnership, or (c) for any limited liability company, the operating
agreement, limited liability company agreement or other similar agreement and
articles or certificate of formation, and all applicable resolutions of the
board of managers (or any committee thereof) of such limited liability company.

 

"Other Taxes" shall have the meaning given such term in Section 2.14(a).

 

-18-

 

 

"Payment Account" means, at any particular time, Agent's bank account at such
time as to which Agent has given Borrower Representative notice to make payments
pursuant to this Agreement.

 

"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any of its principal functions under ERISA.

 

"Perfection Certificate" means that certain Perfection Certificate of even date
herewith executed by Borrower Representative in favor of Agent and Lenders.

 

"Permitted Liens" shall have the meaning given such term in Section 6.1.

 

“Permitted Preferred Distributions” means dividends on preferred stock of
Multiband paid to the holders of such preferred stock in accordance with Section
6.10 hereof.

 

"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

"Plan" means any pension plan (as defined in Section 3(2) of ERISA) which
Borrower Representative or any ERISA Affiliate sponsors or maintains or to which
Borrower or any ERISA Affiliate makes, is making or is obligated to make
contributions.

 

"Pledge Agreement" means that certain Pledge Agreement, dated as of the Closing
Date, made by Borrower in favor of Agent and Lenders, as amended, restated,
supplemented or otherwise modified from time to time.

 

"Pledgors" means, collectively, Borrower and any other Person party to the
Pledge Agreement or any other pledge agreement that is executed and delivered to
Agent as security for the Liabilities.

 

"Post-Default Rate" shall have the meaning given such term in Section 2.6(a).

 

“Preferred Equity” means, collectively, the Class A, Class C, Class F and Class
G shares of preferred stock of Multiband as described on Schedule 4.2 attached
hereto and any other class of preferred stock issued by Multiband pursuant to
Section 6.12 hereof.

 

"Pre-Settlement Determination Date" shall have the meaning given such term in
Section 10.

 

"Property" means any property or interest of any type in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.

 

“Pro Rata Revolving Share” means, as to any Lender, the percentage equal to such
Lender's share of the Revolving Loan Commitment, or if the Revolving Loan
Commitment has terminated, its share of the Revolving Loan, in each case as set
forth on the signature pages hereto or an executed Assignment and Acceptance.

 

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"Pro Rata Share" means as to any Lender, the fraction (expressed as a
percentage) the numerator of which is the sum of such Lender's portion of the
Revolving Commitment, as set forth on the signature pages hereto or an executed
Assignment and Acceptance, plus the amount of the outstanding principal balance
of the Term Loan owing to such Lender (the initial amount of which is set forth
on the signature pages hereto or in an executed Assignment and Acceptance), and
the denominator of which is the sum of the aggregate Revolving Commitment plus
the aggregate outstanding principal balance of the Term Loan, provided that if
the Revolving Commitment has been terminated, the numerator shall be the unpaid
amount of such Lender's Loans and its interest in the undrawn face amount of any
outstanding Letters of Credit and the denominator shall be the aggregate amount
of all unpaid Loans and the undrawn face amount of any outstanding Letters of
Credit.

 

“Pro Rata Term Loan Share” means, as to any Lender, the percentage equal to such
Lender's share of the Term Loan Commitment, or if the Term Loan Commitment has
terminated, its share of the Term Loan, in each case as set forth on the
signature pages hereto or an executed Assignment and Acceptance.

 

"Qualified Plan" means a Plan intended to be tax-qualified under Section 401(a)
of the Code and which Borrower Representative or any ERISA Affiliate sponsors,
maintains, or to which Borrower Representative or any ERISA Affiliate makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.

 

"Rate Contracts" means swap agreements (as such term is defined in Section 101
of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates,
including any agreement or arrangement which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

 

"Register" shall have the meaning given such term in Section 11.7(e).

 

"Remittance Account" has the meaning ascribed thereto in Section 5.14.

 

“Replacement Lender” has the meaning given such term in Section 2.18(b).

 

"Reportable Event" means, as to any Plan, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived.

 

"Required Lenders" means (a) so long as there are two or fewer Lenders, all
Lenders and (b) so long as there are three or more Lenders, Lenders holding
sixty-six and two-thirds percent (66 2/3%) or more of the sum of the Revolving
Commitment and the outstanding principal balance of the Term Loan or if the
Revolving Commitment has been terminated, Lenders holding sixty-six and
two-thirds percent (66 2/3%) or more of the sum of the then aggregate
outstanding principal balance of the Loans plus the then aggregate amount of
Letter of Credit Liabilities.

 

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"Requirement of Law" means, as to any Person, any law (statutory or common),
ordinance, treaty, rule, regulation, order, policy, other legal requirement or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.

 

"Responsible Officer" means the chief executive officer, chief financial
officer, vice president of finance or the president of Borrower Representative,
or any other officer having substantially the same authority and responsibility;
or, with respect to compliance with financial covenants or delivery of financial
information, the chief financial officer or the treasurer of Borrower
Representative, or any other officer having substantially the same authority and
responsibility, and each other person designated by any of the foregoing or
authorized to request Loans or Advances under this Agreement.

 

"Restricted Payments" shall have the meaning given such term in Section 6.10.

 

"Revolving Commitment" means (a)  as to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Letters of Credit issued
for the account of a Borrower hereunder in an aggregate principal or face amount
at any one time outstanding not to exceed the amount set forth under such
Lender's name on signature pages to this Agreement as its Revolving Commitment,
as the same may be reduced or modified at any time or from time to time pursuant
to the terms hereof, and (b) as to all Lenders, means the sum of all Lenders
Revolving Commitments.

 

"Revolving Loan" shall have the meaning given such term in Section 2.1(a).

 

"Revolving Note" shall have the meaning given such term in Section 2.1(a).

 

"SEC" means the Securities and Exchange Commission, or any entity succeeding to
any of its principal functions.

 

"Security Agreement" means that certain Guarantee and Collateral Agreement,
dated as of the Closing Date, among Borrower Representative and its Subsidiaries
and Agent, as from time to time amended, modified, supplemented or restated from
time to time.

 

"Settlement Date" shall have the meaning given such term in Section 10.

 

"SPC" shall have the meaning given such term in Section 11.22.

 

"Subordinated Debt" means any Indebtedness of Borrower Representative or any
Subsidiary incurred in accordance with this Agreement that is subordinated to
the Liabilities and on terms and conditions approved by Agent in its reasonable
judgment.

 

-21-

 

 

"Subordinated Debt Documents" means, collectively, any and all agreements,
documents and instruments executed and delivered thereunder or in connection
therewith, or in connection with any Subordinated Debt, each as amended,
modified, supplemented or restated, except to the extent prohibited by the terms
of this Agreement or the applicable Subordination Agreement.

 

"Subordination Agreements" means any subordination agreement or subordination
provisions relating to any Subordinated Debt.

 

"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(a) if a corporation, a majority of the total voting power of Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (b) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control (or have the power to be or control) a managing director,
manager or general partner of such limited liability company, partnership,
association or other business entity. In the absence of designation to the
contrary, reference to a Subsidiary or Subsidiaries shall be deemed to be a
reference to Subsidiaries of Borrower Representative.

 

"Taxes" shall have the meaning given such term in Section 2.14(a).

 

"Term" shall have the meaning given such term in Section 2.8.

 

"Term Loan" shall have the meaning given to such term in Section 2.2.

 

"Term Loan Commitment" means, as to any Lender, the obligation of such Lender to
make the Term Loan described in Section 2.2, with the amount thereof being set
forth under such Lender's name on the signature pages to this Agreement.
Borrowers and Lenders acknowledge and agree that the Term Loan Commitment of the
Lenders in the aggregate is $20,000,000 on the date hereof.

 

"Term Note" shall have the meaning given such term in Section 2.2.

 

"Termination Date" shall have the meaning given such term in Section 2.8.

 

"Title IV Plan" means any Plan subject to the provisions of Title IV of ERISA.

 

“Total Funded Debt” means, all Indebtedness of Borrower Representative and its
Subsidiaries (other than outstanding principal amounts under Preferred Equity
that is classified as Indebtedness), plus any Unpaid Preferred Return, all as
determined for Borrower Representative and its Subsidiaries on a consolidated
basis in accordance with GAAP. Notwithstanding any provision of GAAP to the
contrary, Total Funded Debt shall include the face amount of any promissory
notes (or, if amounts previously paid on any promissory note cannot be
reborrowed, the outstanding principal balance of any such promissory note) and
other instruments evidencing Indebtedness (including, without limitation, any
Note) of Borrower Representative and its Subsidiaries on a consolidated basis.

 

-22-

 

 

"Total Leverage Ratio" means, as of the last day of any Computation Period, the
ratio of (a) Total Funded Debt as of such day to (b) Adjusted EBITDA for such
Computation Period, all as determined for Borrower Representative and its
Subsidiaries on a consolidated basis in accordance with GAAP (or, in the case of
Adjusted EBITDA, as otherwise calculated or determined in accordance with the
definition thereof).

 

"Type" means, with respect to any Advance or Loan or portion thereof at any
time, the classification of such Loan, Advance or portion thereof by the type of
interest rate it then bears, whether an interest rate based upon the Index Rate
or LIBOR.

 

"UCC" shall have the meaning given such term in Section 1.3.

 

"UFCA" shall have the meaning given such term in Section 4.21.

 

"UFTA" shall have the meaning given such term in Section 4.21.

 

"Unfunded Benefit Liabilities" means the excess of a Title IV Plan's benefit
liabilities under Section 4001(a)(18) of ERISA, over the current value of that
Title IV Plan's assets, determined in accordance with the actuarial assumptions
used by the Plan's actuaries for Plan termination purposes for the applicable
plan year.

 

"United States" and "U.S." each means the United States of America.

 

“Unpaid Preferred Return” means any dividend on any Preferred Equity which was
declared but remains unpaid at the time of determination.

 

"Unused Fee" shall have the meaning given such term in Section 2.6(e).

 

"Unused Fee Rate" means one-half of one percent (0.50%) per annum.

 

"USA Patriot Act" shall have the meaning given such term in Section 4.20(a).

 

"Withdrawal Liabilities" means, as of any determination date, the amount of the
liabilities, if any, pursuant to Section 4201 of ERISA if Borrower
Representative or any ERISA Affiliate made a complete or partial withdrawal from
a Multiemployer Plan under Section 4203 or 4205 of ERISA and any increase in
contributions pursuant to Section 4243 of ERISA.

 

1.2     Accounting Terms.

 

Calculations and determinations of financial and accounting terms used and not
otherwise specifically defined under this Agreement (including the Exhibits
hereto) shall be made and determined, both as to classification of items and as
to amount, in accordance with GAAP. If any changes in accounting principles or
practices from GAAP are occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successor thereto or agencies with similar functions), which results in a change
in the method of accounting in the calculation of financial covenants, standards
or terms contained in this Agreement or any other Financing Agreement, the
parties hereto agree to enter into negotiations to amend such provisions so as
equitably to reflect such changes to the end that the criteria for evaluating
Borrowers’ financial condition and performance will be the same after such
changes as they were before such changes; and if the parties fail to agree on
the amendment of such provisions, Borrowers shall continue to provide
calculations for all financial covenants, perform all financial covenants and
otherwise observe all financial standards and terms in the Financing Agreements
in accordance with GAAP as in effect immediately prior to such changes.
Calculations with respect to financial covenants required to be stated in
accordance with applicable accounting principles and practices in effect
immediately prior to such changes shall be reviewed and certified by Borrowers’
independent certified public accountants.

 

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1.3     Other Terms Defined in the Security Agreement or the UCC.

 

All capitalized terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings given such terms in the
Security Agreement. All capitalized terms contained in this Agreement (and which
are not otherwise specifically defined herein or in the Security Agreement)
shall have the meanings provided in the Uniform Commercial Code as the same is
in effect on the date hereof in the State of Illinois (the "UCC") to the extent
the same are used or defined therein.

 

1.4     Other Definitional or Interpretive Provisions.

 

Whenever the context so requires, the neuter gender includes the masculine and
feminine, the singular number includes the plural, and vice versa. The words
"include," "includes" and "including" shall in any event be deemed to be
followed by the phrase "without limitation." All references in this Agreement to
"this Agreement", "herein", "hereunder", "hereof" shall be deemed to refer to
this Agreement and the Exhibits hereto (including their annexes) unless the
context requires otherwise. Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context requires otherwise.

 

2          CREDIT.

 

2.1     Revolving Loan and Letter of Credit Facilities.

 

(a) Revolving Loan Facility. From and after the Closing Date, subject to the
provisions of Section 3 below and subject to the other provisions and conditions
of this Agreement, each Lender severally (and not jointly) shall, in accordance
with its Pro Rata Share, advance to any Borrower from time to time prior to the
Termination Date on a revolving credit basis (collectively, the "Revolving
Loan") up to the amount of such Lender's Revolving Commitment; provided,
however, the sum of the aggregate outstanding principal amount of Revolving
Loans at any time outstanding shall not exceed the lesser of (i) the Maximum
Revolving Facility and (ii) the Borrowing Base at such time minus, in each case,
the aggregate outstanding amount of the LC Obligations at the time any
particular advance is made. Each Advance to a Borrower under this Section 2.1(a)
shall be in a minimum amount of $100,000 and in integral multiples of $50,000 in
excess thereof (or such other amounts as Agent may agree in its discretion),
subject to Section 2.9 regarding LIBOR Advances, and shall, on the day of such
Advance, be transferred in immediately available funds to such Borrower to such
account as Borrower Representative may, from time to time, designate. The
portion of the Revolving Loan made by each Lender under this Section 2.1(a)
shall be evidenced, in part, by a promissory note of even date herewith in the
form attached hereto as Exhibit 2.1 (the "Revolving Note") with the blanks
appropriately filled. The Liabilities evidenced by the Revolving Notes shall
become immediately due and payable as provided in Section 8.1 hereof, and,
without notice or demand, upon the termination of the Revolving Commitment
pursuant to Section 2.8 hereof. Neither Agent nor any Lender shall be
responsible for any failure by any other Lender to perform its obligations to
make Revolving Loans hereunder, and the failure of any Lender to make its Pro
Rata Share of any Revolving Loan hereunder shall not relieve any other Lender of
its obligation, if any, to make its Pro Rata Share of any Revolving Loans
hereunder.

 

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(b) Letter of Credit Facility. Subject to the provisions of Section 3 hereof and
subject to the other provisions and conditions of this Agreement, Agent may in
its discretion at Borrower Representative’s request and for the account of any
Borrower, cause the LC Issuer to issue one or more Letters of Credit, provided
that the aggregate outstanding amount of LC Obligations shall not at any time
exceed $3,000,000 (the "LC Facility") and the sum of the aggregate outstanding
amount of LC Obligations and the aggregate principal amount of the Revolving
Loans shall not at any time exceed the lesser of (i) the Maximum Revolving
Facility and (ii) the Borrowing Base. The LC Facility is a sublimit of the
Maximum Revolving Facility. The Letters of Credit shall be of a tenor and in
form and substance, and shall contain terms and conditions, satisfactory to
Agent and the LC Issuer. Borrowers shall, jointly and severally, reimburse Agent
and/or Lenders, immediately upon demand, for any payments made by Agent and/or
Lenders or any of their respective Affiliates to the LC Issuer or to any other
Person with respect to any Letter of Credit and for any other reasonable
out-of-pocket costs, fees and expenses incurred by Agent in connection with the
application for, issuance of or amendment to any Letter of Credit, and until
Agent and/or Lenders shall be so reimbursed by Borrowers, such payments by Agent
and/or any Lender or any of their respective Affiliates shall be deemed to be
part of the Revolving Loan. In addition to being subject to the satisfaction of
the applicable conditions precedent contained in Section 3 hereof, no Letter of
Credit shall be available unless as of the date of issuance, no order of any
court, arbitrator or other Governmental Authority shall purport by its terms to
enjoin or restrain money center banks generally from issuing letters of credit
of the type and in the amount of the proposed Letter of Credit, and no law, rule
or regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed issuer of such Letter of Credit refrain from, the
issuance of letters of credit generally or the issuance of such Letters of
Credit. Any rights, remedies, duties or obligations granted or undertaken by
Borrowers to any issuer or correspondent in any application for any Letter of
Credit, or any other agreement in favor of any issuer or correspondent relating
to any Letter of Credit, shall be deemed to have been granted or undertaken by
Borrowers to Agent. Any duties or obligations undertaken by Agent to any issuer
or correspondent in any application for any Letter of Credit, or any other
agreement by Agent in favor of any issuer or correspondent relating to any
Letter of Credit, shall be deemed to have been undertaken by Borrowers to Agent
and to apply in all respects to Borrowers. The applicable Borrower shall execute
each of Agent's and the LC Issuer's standard form of application and/or
reimbursement agreement for each Letter of Credit. No Letter of Credit shall
have an expiration date after the Termination Date and the term of any Letter of
Credit shall not exceed 360 days from the date of issuance, subject to any
discretionary extensions agreed to by the LC Issuer thereof at least thirty days
before the expiration thereof. All Letters of Credit (including the issuance
thereof) shall be subject to the limitations and conditions set forth in Section
2.18. Immediately upon the issuance of a Letter of Credit in accordance with
this Agreement, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Agent, without recourse or warranty,
an undivided interest and participation therein to the extent of such Lender's
Pro Rata Share (including, without limitation, all obligations of Borrowers with
respect thereto). Borrowers hereby, jointly and severally, indemnify Agent and
each Lender against any and all liability and expense it may incur in connection
with any Letter of Credit (except to the extent such liability of Agent or any
Lender is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from Agent's or such Lender's gross negligence or
willful misconduct).

 

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2.2     Term Loan Facilities.

 

On the Closing Date, subject to the provisions of Section 3 below and subject to
the other provisions and conditions of this Agreement, each Lender severally
(and not jointly) agrees to lend to Borrowers its Pro Rata Share based on such
Lender's Term Loan Commitment of a term loan, the aggregate principal amount of
which shall be $20,000,000 (the "Term Loan"). The portion of the Term Loan made
by each Lender shall be evidenced by and shall be repayable in accordance with
the terms hereof and the terms of an installment note in the form attached
hereto as Exhibit 2.2 (each, a "Term Note") with the blanks appropriately
filled. The provisions of each Term Note notwithstanding, the Liabilities
evidenced by each Term Note shall become immediately due and payable as provided
in Section 8.1 hereof, and, without notice or demand, upon the termination of
this Agreement pursuant to Section 2.8 hereof.

 

2.3     Mandatory Payments; Prepayments.

 

(a) The aggregate outstanding principal balance of the Revolving Loan shall not
at any time exceed the lesser of (i) the Maximum Revolving Facility minus the
aggregate outstanding amount of the LC Obligations and (ii) the amount of the
Borrowing Base. Borrowers shall, if at any time any such excess shall arise,
immediately pay to Agent such amount for application to the Revolving Loan as
may be necessary to eliminate the excess or, if requested by Agent post cash
collateral therefor in accordance with the provisions of Section 8.4. Borrowers
shall pay the Revolving Loan in accordance with the terms of this Agreement.

 

(b) Borrowers shall pay the unpaid principal balance of the Term Loan as
follows: (i) for each Fiscal Quarter commencing with the Fiscal Quarter ending
March 31, 2013, equal quarterly principal installments of $1,000,000 each, and
(ii) one final payment in an aggregate amount equal to the unpaid principal
balance of the Term Loan on the Termination Date. Each quarterly payment shall
be due and payable on the first Business Day following the end of the applicable
Fiscal Quarter.

 

-26-

 

 

(c) Within fifteen (15) days after the annual financial statements are delivered
in accordance with Section 5.1(b) hereof, commencing with the annual financial
statements that are delivered to Agent for the Fiscal Year ending on December
31, 2012 and so long as any principal amount is outstanding under the Term Loan,
Borrower Representative shall deliver to Agent a written calculation of Excess
Cash Flow for such Fiscal Year in the form of Exhibit 2.3(c) and certified as
correct on behalf of Borrower Representative by a Responsible Officer of
Borrower Representative and concurrently therewith Borrowers shall pay to Agent,
for application to the Term Loan in accordance with the provisions of Section
2.3(e) hereof, an amount equal to fifty percent (50%) of such Excess Cash Flow.

 

(d) If Borrower Representative or any of its Subsidiaries shall at any time or
from time to time make any Equity Sale (other than an Excluded Issuance) or
Disposition, incur Indebtedness not permitted under Section 6.2, suffer an Event
of Loss or receive payments in respect of any indemnity or similar claim (an
"Indemnity Payment") and the aggregate amount of the Net Proceeds received by
Borrower Representative and its Subsidiaries in connection with such Equity
Sale, such Disposition, such incurrence of Indebtedness, such Event of Loss or
such Indemnity Payment and all other Equity Sales, Dispositions, incurrence of
Indebtedness, Events of Loss and Indemnity Payments occurring during the then
current Fiscal Year exceeds $100,000, then (i) Borrower Representative shall
promptly notify Agent of such Equity Sale, Disposition or incurrence of
Indebtedness or the occurrence of any Event of Loss or Indemnity Payment
(including the amount of the estimated Net Proceeds to be received by Borrower
Representative or such Subsidiaries in respect thereof) and (ii) immediately
upon receipt by Borrower Representative or such Subsidiary of the Net Proceeds
of such Equity Sale, Disposition or incurrence of Indebtedness or the occurrence
of any Event of Loss or Indemnity Payment, Borrower Representative shall deliver
such Net Proceeds which exceed $100,000 for the then current Fiscal Year to
Agent as a prepayment of the Loans, which prepayment shall be applied in
accordance with Section 2.3(e) hereof. Notwithstanding the foregoing, if no
Event of Default has occurred and is continuing, such prepayment shall not be
required to the extent Borrower Representative or the applicable Subsidiary
(x) reinvests the Net Proceeds of a Disposition or Event of Loss in productive
assets of a kind then used or usable in the business of such Borrower or such
Subsidiary within ninety (90) days after the date on which such Borrower
receives the Net Proceeds of such Disposition or Event of Loss or (y) enters
into a binding commitment to reinvest the Net Proceeds of a Disposition or Event
of Loss in productive assets of a kind then used or usable in the business of
Borrower Representative or such Subsidiary within ninety (90) days after the
date on which Borrower Representative or such Subsidiary receives the Net
Proceeds of such Disposition or Event of Loss and actually reinvests such Net
Proceeds in such assets within one hundred twenty (120) days of the receipt of
such Net Proceeds.

 

(e) Any prepayments made pursuant to Section 2.3(c) shall be applied to reduce
the unpaid principal installments of the Term Loan in inverse order of their
maturity until the Term Loan is paid in full. Any prepayments made pursuant to
Section 2.3(d) (other than prepayments resulting from Indemnity Payments which
are reimbursements for expenses previously incurred by Borrower Representative
or any of its Subsidiaries) and proceeds of key-man insurance received by Lender
shall be applied, first to reduce the unpaid principal installments of the Term
Loan in inverse order of their maturity until the Term Loan is paid in full,
and, after the Term Loan has been repaid in full, to reduce the outstanding
principal balance of the Revolving Loans (but not as a permanent reduction of
the Revolving Commitment), subject in each case to Agent's right to otherwise
apply such prepayments to the Liabilities in such order as it may determine in
its discretion after the occurrence and during the continuance of a Default. To
the extent permitted by this Section 2.3(e), amounts prepaid shall be applied
first to any Index Rate Advances then outstanding and then to outstanding LIBOR
Advances with the shortest Interest Periods remaining.

 

-27-

 

 

(f) Subject to Section 2.13, Borrowers may voluntarily prepay the Liabilities in
full or in part upon three (3) day's prior irrevocable written notice (or
telephonic notice promptly confirmed in writing) to Agent for LIBOR Advances and
upon the same day as irrevocable written notice (or telephonic notice promptly
confirmed in writing) is provided to Agent for Index Rate Advances, provided,
however, that to the extent the same is not received by Agent together with
notice thereof prior to 1:00 p.m. (Chicago time) on a Business Day, the same
shall be deemed to be received on the following Business Day. Borrowers may
voluntarily reduce or terminate the Maximum Revolving Facility (which, in the
case of a reduction to the Maximum Revolving Facility, shall result in a
reduction of each the Revolving Commitment of each Lender with a Revolving
Commitment based on each such Lender's Pro Rata Share of the total Revolving
Commitment, and in the case of a reduction of the Maximum Revolving Facility to
zero, shall result in the termination of each Lender's Revolving Commitment)
upon one (1) day's prior irrevocable notice to Agent so long as (i) in the case
of a reduction of the Maximum Revolving Facility and of the Revolving Commitment
to an amount that is greater than $0, the sum of the outstanding principal
amount of Revolving Loans plus outstanding LC Obligations is reduced by
Borrowers to an amount equal to or less than such reduced Maximum Revolving
Facility and aggregate Revolving Commitment pursuant to the preceding sentence,
and (ii) in the case of a reduction of the Maximum Revolving Facility to $0 and
a termination of the Revolving Commitments, Borrowers prepay in full all
outstanding Revolving Loans pursuant to the preceding sentence and provides cash
collateral for any outstanding Letters of Credit in an amount equal to 105% of
the aggregate outstanding amount of the LC Obligations with respect thereto.
Notwithstanding anything herein to the contrary, in the event that, (i) on or
prior to the first anniversary of the Closing Date, Borrowers terminate the
Revolving Commitments and repay the Loans in whole or in part, Borrowers shall
pay to Agent for the account of Lenders a prepayment penalty in the amount of
2.00% of the sum of the portion of the Revolving Commitments and the principal
amount of the Term Loan so terminated and/or prepaid and (ii) after the first
anniversary of the Closing Date but on or prior to the second anniversary of the
Closing Date, Borrowers terminate the Revolving Commitments and repay the Loans
in whole or in part, Borrowers shall pay to Agent for the account of Lenders a
prepayment penalty in the amount of 1.00% of the sum of the portion of the
Revolving Commitments and the principal amount of the Term Loan so terminated
and/or prepaid.

 

2.4     Loan Account.

 

Agent shall maintain a loan account (the "Loan Account") on its internal data
control system in which shall be recorded (a) all Loans and Advances made by
Agent and Lenders to Borrowers pursuant to this Agreement, including all
payments made by Agent and Lenders under any Letter of Credit, (b) all payments
made by Borrowers on all such Loans and Advances, and (c) all other appropriate
debits and credits as provided in this Agreement, including all fees, charges,
expenses and interest. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time to
time. Borrowers shall pay to Agent the amount reflected as owing by Borrowers
under the Loan Account (which amount shall be conclusive and binding for all
purposes, absent demonstrable error) and all of its other obligations hereunder
and under any other Financing Agreements as such amounts become due or are
declared due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) pursuant to the terms of this Agreement and the other
Financing Agreements.

 

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2.5     Statements.

 

Until such time as Agent shall have rendered to Borrowers written statements of
account as provided herein, the balance in the Loan Account, as set forth on
Agent's most recent printout, shall be rebuttably presumptive evidence of the
amounts due and owing Agent by Borrowers.

 

2.6     Interest and Fees.

 

(a) Interest. Borrowers shall pay to Agent, for the ratable benefit of Lenders,
interest on the outstanding principal balance of each Loan, other than the
outstanding principal amount of LIBOR Advances, at a per annum rate equal to the
Index Rate plus the Applicable Margin with respect to such Loan. Borrowers shall
pay to Agent, for the ratable benefit of Lenders, interest on the outstanding
balance of all other Liabilities (other than the Loans) at the rate applicable
to Index Rate Advances comprising the Revolving Loan. Borrowers shall pay to
Agent, for the ratable benefit of Lenders, interest on the outstanding principal
balance of each LIBOR Advance at a per annum rate equal to LIBOR for the
Interest Period applicable to such Advance plus the Applicable Margin with
respect to such Advance, it being expressly understood and agreed that interest
shall be computed by charging for the first day in each Interest Period but not
for the last day in such Interest Period. Accrued interest shall be payable by
Borrowers (i) monthly in arrears on the first Business Day of each calendar
month, (ii) with respect to the Revolving Loan, upon termination of the
Revolving Commitment, (iii) with respect to a Term Loan, upon payment in full of
the principal amount thereof, and (iv) at any time after the occurrence and
during the continuance of a Default, upon demand. In addition, Borrowers shall
pay interest accrued on each LIBOR Advance on the last day of its applicable
Interest Period. All interest and fees provided for under this Agreement shall
be computed on the basis of a 360-day year for the actual number of days
elapsed. Following the occurrence of a Default and during the continuance
thereof, and (except in the case of a Default under Section 8.1(h) as to which
no notice shall be required) upon notice to Borrowers by Agent, Borrowers shall
pay to Agent, for the ratable benefit of Lenders, interest from the date of such
Default at a rate (the "Post-Default Rate") equal to the applicable rate set
forth above for each of the Liabilities plus two percent (2%) per annum on the
outstanding principal balance of all of the Liabilities.

 

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(b) Fee Letter. Borrowers shall jointly and severally pay to Agent, for their
own use and benefit, the fees agreed to between Agent and Borrower
Representative in a fee letter dated the date hereof, or as thereafter amended
in writing between them.

 

(c) Audit Fee. Borrowers shall jointly and severally pay to Agent, upon demand
therefor, (i) with respect to any field audit, inventory analysis or other
business analysis performed by Agent, an audit fee in the amount of $1,000 per
day for each Person employed by Lender to perform such audit or analysis, plus
all reasonable out-of-pocket costs or expenses (including costs and expenses
related to travel) incurred by Agent in the performance of such audit or
analysis, and (ii) with respect to any field audit, inventory analysis or other
business analysis performed by an independent contractor for the benefit of
Agent, the customary amount such independent contractor charges Agent to perform
such audit or analysis, plus all reasonable out-of-pocket costs or expenses
(including costs and expenses related to travel) incurred by such independent
contractor in the performance of such audit or analysis. Notwithstanding the
foregoing, unless an Event of Default has occurred and is continuing, Borrowers
shall be required to pay the foregoing fees, costs and expenses with respect to
no more than two (2) of such field audits per calendar year.

 

(d) LC Fee. For each Letter of Credit, Borrowers shall jointly and severally pay
to Agent, for the ratable benefit of Lenders, a fee (the "LC Fee") at a rate per
annum equal to two percent per annum (2.00%), plus, at any time after the
occurrence and during the continuance of a Default, and (except in the case of a
Default under Section 8.1(h) as to which no notice shall be required) upon
notice to Borrowers by Agent, two percent (2%) per annum, of the aggregate
outstanding amount of LC Obligations. The LC Fee shall be payable (i) monthly in
arrears on the first Business Day of each calendar month, (ii) upon termination
of the Revolving Commitment, and (iii) at any time after the occurrence of a
Default or the Termination Date, upon demand. Agent is also hereby irrevocably
authorized to charge to the Loan Account as and when incurred by Agent, any
charges, fees, costs and expenses charged to Agent for Borrowers’ account by any
LC Issuer (the "LC Issuer Fees") in connection with any Letter of Credit,
including the LC Issuer's customary issuing, administrative and negotiating fees
(each Lender hereby agreeing that, to the extent that it acts as an LC Issuer in
respect of a Letter of Credit hereunder, it shall not impose any charges, fees,
costs and expenses in respect of such Letter of Credit other than those that are
reasonable and customary).

 

(e) Unused Fee. Borrowers shall jointly and severally pay to Agent, ratably for
the benefit of each Lender with a Revolving Commitment, an unused fee (the
"Unused Fee") on the average daily unused portion of the Maximum Revolving
Facility at a per annum rate equal to the Unused Fee Rate. The Unused Fee shall
be payable (i) monthly in arrears on the first Business Day of each calendar
month, (ii) upon termination of the Revolving Commitment, and (iii) at any time
after the occurrence of a Default, upon demand.

 

(f) Account Fees. Borrowers shall jointly and severally pay to Agent on demand
all of Agent's customary account maintenance and related charges.

 

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2.7     General Provisions re Payments.

 

All payments to be made by any Borrower under any Financing Agreement, including
payments of principal and interest on the Notes, and all fees, expenses,
indemnities and reimbursements, shall be made without set off or counterclaim,
in lawful money of the United States of America and in immediately available
funds. If any payment hereunder becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. Borrowers shall make all
payments in immediately available funds to the Payment Account before 12:00 p.m.
(Cincinnati time) on the date when due (and, if received on such day after 12:00
p.m. (Cincinnati time), shall be deemed received on the next Business Day).
Notwithstanding anything to the contrary set forth in this Section 2.7, Agent
shall be permitted, in its sole discretion to satisfy all payments which
Borrowers are required to make to Agent or Lenders under this Agreement or under
any of the other Financing Agreements by appropriate debits to the Loan Account
and the making of a Revolving Advance, which shall be deemed to be requested by
Agent and Lenders regardless of the satisfaction of any conditions thereto.
Agent may in its sole discretion elect to bill Borrowers for such amounts in
which case the amount shall be immediately due and payable when otherwise due
and payable hereunder.

 

2.8     Termination of Revolving Commitment.

 

The Revolving Commitment shall be effective until, and shall terminate on April
30, 2016, unless sooner terminated by Borrowers pursuant to Section 2.3(f) or
otherwise (the "Term"). Upon expiration of the Term or earlier termination of
the Revolving Commitment, including pursuant to Section 8.1 (the "Termination
Date"), all of the Liabilities shall become immediately due and payable without
notice (except as provided in Section 8.1 to extent notice is required
thereunder) or demand. Notwithstanding any termination, until all of the
Liabilities (other than unasserted contingent indemnity obligations) shall have
been fully paid and satisfied, any commitments to lend hereunder have been
terminated, and all of the Letters of Credit and LC Obligations shall have
expired, been canceled, terminated or cash collateralized (as required by
Section 8.4 and pursuant to such agreements as Agent may require in form and
substance satisfactory to Agent), and all Financing Agreements between
Borrowers, Agent and Lenders shall have been terminated, all of Agent's rights
and remedies under this Agreement and the other Financing Agreements shall
survive and Agent shall be entitled to retain its Liens on and to all existing
and future Collateral. All of Agent's and each Lender's rights and remedies
under this Agreement and all of Agent's Liens shall survive such termination
until all of the Liabilities have been fully paid and satisfied (including,
without limiting the generality of the foregoing, the termination, expiration or
cash collateralization of all Letters of Credit and LC Obligations, the
presentment of all drafts issued or accepted thereunder and the termination or
expiration of all Rate Contracts with Agent or any of its Affiliates) and all
Financing Agreements shall have been terminated.

 

2.9     Loan Types.

 

The Revolving Loan and each Term Loan, or (in the case of LIBOR Advances,
subject to the provisions of this Agreement regarding the amount and
availability of LIBOR Advances) any portion thereof, shall consist of either
LIBOR Advances, as duly requested by Borrower Representative pursuant to this
Agreement, or Index Rate Advances. In addition, at any time (other than after
the occurrence and during the continuance of a Default or an Event of Default,
except to the extent that Agent in its discretion determines to continue making
any LIBOR Advances available to Borrowers) Borrower Representative may request
the conversion of any portion of the Revolving Loan or any Term Loan from one
Type to another pursuant to this Agreement or the continuation of a LIBOR
Advance from one Interest Period to another Interest Period; provided, however,
that conversions of all or any portion, and continuations, of a LIBOR Advance
may be made only as of the last date of the Interest Period applicable thereto;
provided, further, that such conversion or continuation would not violate any
other provisions of this Agreement. LIBOR Advances, continuations of LIBOR
Advances, and any conversions to LIBOR Advances shall be in a minimum aggregate
principal amount of $100,000 and in integral multiples of $50,000 in excess
thereof (or such other amount as Agent may agree in its discretion). In the
absence of a request for a LIBOR Advance complying with the terms and conditions
of LIBOR Advances under this Agreement, each request for an Advance shall be
deemed to be a request for an Index Rate Advance.

 

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2.10     Notices re LIBOR Advances, Etc.

 

The making of any LIBOR Advance, the continuation of any LIBOR Advance or the
conversion of any portion of the Revolving Loan or any Term Loan from one Type
to another may be made upon irrevocable (except in the case of a determination
by Agent that LIBOR Advances are unavailable due to illegality or increased
costs) written notice in the form of Exhibit 2.10 (or in the case of the making
of a LIBOR Advance, Exhibit 3.1) given to Agent by Borrower Representative no
later than 12:00 p.m. (Cincinnati time) three (3) Business Days prior to the
commencement of the Interest Period specified in such notice. In each such
notice, Borrower Representative shall specify, as to conversions, the Designated
Portion relating thereto, as to new LIBOR Advances, the requested principal
amount thereof, and in any case the applicable Interest Period and the first day
of the Interest Period, which shall be a Business Day. In the event that Index
Rate Advances are to be converted to LIBOR Advances, such conversion shall be
automatic on the date specified by Borrower Representative. LIBOR Advances shall
automatically convert to Index Rate Advances at the end of the applicable
Interest Period unless Borrower Representative gives the requisite notice in
accordance with the procedures set forth above to continue the same as LIBOR
Advances. Borrower Representative shall not be entitled to elect any Interest
Period with respect to a LIBOR Advance if the provisions of this Agreement would
require Borrowers to repay or prepay any portion of such LIBOR Advance prior to
the end of such Interest Period.

 

2.11     Determination of Interest Period.

 

By giving notice to Agent as set forth in Section 2.10 above with respect to a
borrowing of a LIBOR Advance, or with respect to a conversion into or
continuation of a LIBOR Advance, Borrower Representative shall, subject to the
other provisions of this Section 2, specify the applicable Interest Period. The
determination of the Interest Period shall be subject to the following
provisions: (a) the initial Interest Period for any LIBOR Advance shall commence
on the date of such LIBOR Advance which shall be a Business Day and each
Interest Period (if any) occurring thereafter for such LIBOR Advance shall
commence on the day on which the next preceding Interest Period for such LIBOR
Advance expires; (b) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any such Interest Period
would otherwise expire on a day which is after the last Business Day of the last
month of such Interest Period, such Interest Period shall expire on the next
preceding Business Day; (c) there shall be no more than five (5) Interest
Periods in the aggregate in effect at any one time; and (d) no Interest Period
may be selected which extends beyond the Term.

 

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2.12     Additional Costs, Etc. With Respect to LIBOR Advances.

 

(a) If, in the reasonable determination of Agent or any Lender, any applicable
"law" (which expression, as used in this Section 2, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to Agent, any Lender or any Lending Affiliate by any central
bank or other fiscal, monetary, or other authority (whether or not having the
force of law)) adopted, becoming effective, or any change in the interpretation
or administration thereof, or compliance by Agent, any Lender or any Lending
Affiliate therewith, in each case after the date hereof, shall in the case of
LIBOR Advances:

 

(i) subject Agent, any Lender or any Lending Affiliate to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect to LIBOR
Advances (other than taxes imposed on or measured by the overall net income of
Agent, such Lender or such Lending Affiliate), or

 

(ii) change the taxation of payments to Agent or any Lender of principal or
interest on or any other amount relating to any LIBOR Advances (other than taxes
imposed on or measured by the overall net income or capital of Agent or any
Lender and doing business and franchise taxes), or

 

(iii) impose or increase or render applicable any special deposit, assessment,
insurance charge, reserve or liquidity or other similar requirement (whether or
not having the force of law) against assets held by, or deposits in or for the
account of, or loans by Agent, any Lender or any Lending Affiliate, or

 

(iv) impose on Agent, any Lender or any Lending Affiliate any other conditions
or requirements with respect to LIBOR Advances, and the result of any of the
foregoing is:

 

(x) to increase the cost to Agent or any Lender of making, funding or
maintaining its LIBOR Advances, or

 

(y) to reduce the amount of principal, interest or other amount payable to Agent
or any Lender hereunder on account of LIBOR Advances, or

 

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(z) to require Agent or any Lender to make any payment or to forego any interest
or other sum payable under this Agreement,

 

then, and in each such case, Borrowers shall, after demand made by Agent or any
Lender at any time and from time to time and as often as the occasion therefor
may arise, pay to Agent or such Lender such additional amounts as will be
sufficient to compensate Agent or such Lender for such additional cost,
reduction, payment or foregone interest or other sum. The foregoing shall not be
deemed to apply to any change in the LIBOR Reserve Percentage applied in the
calculation of LIBOR.

 

(b) Agent shall not in any event be responsible to Borrowers in any way if Agent
is not able for any reason beyond its control to quote LIBOR with respect to any
proposed Interest Period. If, on any proposed date of determination of LIBOR,
Agent shall reasonably determine (which determination shall be conclusive and
binding on Borrowers) that it is unable to determine the requested LIBOR with
respect to any proposed Interest Period, Agent shall promptly notify Borrower
Representative of such determination. In such event, any then pending notice
requesting the making of a LIBOR Advance, or conversion of any portion of any
Loan to a LIBOR Advance, shall be deemed and shall constitute a request for the
making of an Index Rate Advance or the conversion of such portion of such Loan
to an Index Rate Advance, as the case may be.

 

(c) If Agent or any Lender determines that either maintenance of a LIBOR Advance
would violate any applicable law, or that deposits of a type and maturity
appropriate to match fund any LIBOR Advance do not accurately reflect the cost
of making or maintaining such a LIBOR Advance, then Agent or such Lender shall
suspend the availability of proposed LIBOR Advances for the affected Interest
Period so long as any such condition exists, and all affected LIBOR Advances
outstanding shall be immediately repaid by Borrowers upon notice to Borrower
Representative from Agent to do so; provided, however, that if otherwise
permitted under this Agreement, Borrowers may reborrow, as an Index Rate
Advance, an amount equal to the principal amount of all such affected LIBOR
Advances so repaid.

 

2.13     Indemnification for Losses.

 

Without limiting any of the other provisions of this Agreement, Borrowers shall,
on demand by Agent, at any time and from time to time and as often as the
occasion therefor may arise, jointly and severally, indemnify Agent and each
Lender against any losses, costs or expenses which Agent or any Lender may at
any time or from time to time sustain or incur with respect to LIBOR Advances as
a consequence of: (a) the failure by any Borrower to borrow any LIBOR Advance on
the date of borrowing designated by Borrower Representative or (b) the failure
by Borrowers to pay, punctually on the due date thereof, any amount payable by
Borrowers under this Agreement, or (c) the accelerated payment of any or all of
the Liabilities, or (d) any voluntary repayment or prepayment of any principal
of any LIBOR Advance, or the conversion of such LIBOR Advance, on a date other
than the last day of the Interest Period relating to the principal so repaid or
prepaid or so converted. Such losses, costs or expenses will include, but will
not be limited to, the reimbursement for any loss (including lost profits),
expense or cost in liquidating or employing deposits acquired to fund any
affected LIBOR Advance. For purposes of calculating amounts payable to Agent or
any Lender under this section, Agent and Lenders shall be deemed to have
actually funded its relevant LIBOR Advance through the purchase of a deposit
bearing interest at LIBOR in an amount equal to the amount of that LIBOR Advance
and having a maturity and repricing characteristics comparable to the relevant
Interest Period; provided, however, that Agent and each Lender may fund each of
its LIBOR Advances in any manner it sees fit, and the foregoing assumption shall
be utilized only for the calculation of amounts payable under this section.

 

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2.14     Payments to be Free of Deductions.

 

(a) All payments by Borrowers on the Liabilities (including LIBOR Advances)
shall be made without set-off or counterclaim, and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any country or any political subdivision thereof
or taxing or other authority therein (unless any Borrower is required by law to
make such deduction or withholding), excluding, in the case of Agent and each
Lender, taxes that are imposed on its overall net income by the United States
and taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Person is organized or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions in respect of
payments on the Liabilities being hereinafter referred to as "Taxes"). If any
such obligation is imposed upon any Borrower with respect to any amount payable
by it hereunder, Borrowers shall pay to Agent for their benefit and the benefits
of the Lenders on the date on which such amount becomes due and payable
hereunder and in United States Dollars, such additional amount as shall be
necessary to enable Agent and each Lender to receive the same net amount which
it would have received on such due date had no such obligation been imposed upon
Borrowers. If any Borrower shall be required by law to make such deduction or
withholding it will deliver to Agent or such Lender, as applicable, tax receipts
or other appropriate evidence of payment. In addition, Borrowers shall pay any
present or future stamp, documentary, excise, property, intangible, mortgage
recording or similar taxes, charges or levies that arise from any payment made
by any Borrower on the Liabilities or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this Agreement
or the other Financing Agreements (hereinafter referred to as "Other Taxes").
Borrowers shall, after demand by Agent or any Lender, jointly and severally
indemnify such Person for and hold such Person harmless against the full amount
of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed
or asserted by any jurisdiction on amounts payable under this Section 2.14,
imposed on or paid by Lender and any liability (including penalties, additions
to tax, interest and expenses) arising therefrom or with respect thereto.

 

(b) Each Lender, and/or transferee that is organized under the laws of a
jurisdiction outside the United States (a "Non-U.S. Lender") agrees that it
shall, no later than the date hereof (or, in the case of a Lender which becomes
a party hereto after the date hereof, promptly after the date upon which such
Lender becomes a party hereto) deliver to Borrower Representative two properly
completed and duly executed copies of whichever of the following forms is
applicable: (i) Internal Revenue Service Form W-8BEN, certifying that such
Non-U.S. Lender is entitled to benefits under an income tax treaty to which the
United States is a party that reduces to zero the rate of withholding on
payments of interest; (ii) Internal Revenue Service Form W-8ECI; (iii) Internal
Revenue Service Form W-8IMY (including all appropriate attachments); (iv) in the
case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (A) a certificate to the effect that
such Non-U.S. Lender is not (1) a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (2) a "10 percent shareholder" of Borrower
Representative within the meaning of Section 881(c)(3)(B) of the Code, or (3) a
"controlled foreign corporation" described in Section 881(c)(3)(C) of the Code
and (B) duly completed copies of Internal Revenue Service Form W-8BEN; or (v)
any other form or certificate required by any taxing authority (including any
certificate required by Section 871(h) of the Code), certifying that such
Non-U.S. Lender is entitled to an exemption from tax on payments pursuant to
this Agreement or any other Financing Agreement, and such Non-U.S. Lender agrees
that it shall promptly notify Borrower Representative in the event any such
representation is no longer accurate. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement and
on or before the date, if any, such Non-U.S. Lender changes its applicable
lending office by designating a different lending office (a "New Lending
Office"). Notwithstanding any other provision of this Section 2.14, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section 2.14
that such Non-U.S. Lender is not legally able to deliver.

 

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(c) Borrowers shall not be required to indemnify any Non-U.S. Lender, or pay any
additional amounts to any Non-U.S. Lender, in respect of United States Federal
withholding tax pursuant to this Agreement to the extent that (i) the obligation
to withhold amounts with respect to United States Federal withholding tax
existed on the date such Non-U.S. Lender became a party to this Agreement (or in
the case of a transferee on the date such Person became a transferee hereunder)
or, with respect to payments to a New Lending Office, the date such Non-U.S.
Lender designated such New Lending Office with respect to a Loan; provided,
however, that this clause (i) shall not apply to the extent the indemnity
payment or additional amounts any transferee, or any Lender through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the Person making
the assignment or transfer to transferee, or Lender making the designation of
such New Lending Office, would have been entitled to receive in the absence of
such assignment, transfer or designation, or (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions in paragraph (d) above.

 

2.15     Capital Adequacy.

 

If, after the date hereof, either (a) the introduction of or any change in or in
the interpretation of any law or (b) compliance by Agent, any Lender or any of
their respective Affiliates with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law),
(i) affects or would affect the amount of capital required or expected to be
maintained by Agent, any Lender or any of their respective Affiliates, and Agent
or such Lender reasonably determines that the amount of such capital is
increased by or based upon the existence of LIBOR Advances then, upon demand by
Agent or such Lender, Borrowers shall immediately pay to Agent, from time to
time as specified by Agent or such Lender, additional amounts sufficient to
compensate Agent or such Lender in light of such circumstances, to the extent
that Agent or such Lender reasonably determines such increase in capital to be
allocable to the existence of LIBOR Advances or (ii) has or would have the
effect of reducing the rate of return on the capital or assets of Agent or such
Lender or any Person controlling Agent or such Lender as a consequence of, as
determined by Agent or such Lender in its discretion, the existence of Agent's
or such Lender's commitments or obligations under this Agreement or any of the
other Financing Agreements, then, upon demand by Agent or such Lender, Borrowers
shall immediately pay to Agent, from time to time as specified by Agent or such
Lender, additional amounts sufficient to compensate Agent or such Lender in
light of such circumstances.

 

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2.16     Certificate.

 

A certificate signed by an officer of Agent or any Lender, setting forth any
additional amount required to be paid by Borrowers to Agent or such Lender under
any provision of Sections 2.12 through 2.15 and the computations made by Agent
or such Lender to determine such additional amount, shall be submitted by Agent
or such Lender to Borrowers in connection with each demand made at any time by
Agent or such Lender upon Borrowers under any of such provisions. Such
certificate, in the absence of demonstrable error, shall be conclusive as to the
additional amount owed.

 

2.17     Mitigation of Circumstances; Replacement of Lenders.

 

(a) Each Lender shall promptly notify Borrower Representative and Agent of

any event of which it has knowledge which will result in, and will use
reasonable commercial efforts available to it (and not, in such Lender's sole
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation by Borrowers to pay any amount pursuant to Section 2.12, 2.14 or
2.15 or (ii) the occurrence of any circumstances described in Section 2.12, 2.14
or 2.15 (and, if any Lender has given notice of any such event described in
clause (i) or (ii) above and thereafter such event ceases to exist, such Lender
shall promptly so notify Borrower Representative and Agent). Without limiting
the foregoing, each Lender will designate a different funding office if such
designation will avoid (or reduce the cost to Borrowers of) any event described
in clause (i) or (ii) above and such designation would not, in such Lender's
sole judgment, be otherwise disadvantageous to such Lender.

 

(b) If (i) Borrowers become obligated to pay additional amounts to any

Lender pursuant to Section 2.12, 2.14 or 2.15, or any Lender gives notice of the
occurrence of any circumstances described in Section 2.12, 2.14 or 2.15, (ii)
any Lender does not consent to any matter requiring its consent under Section
11.1 or 11.3 when the Required Lenders have otherwise consented to such matter
or (iii) any Lender is a Defaulting Lender and the circumstances causing such
status have not been cured or waived, then Borrower Representative may within 90
days thereafter designate another Person engaged primarily in the business of
making loans which is acceptable to Agent in its reasonable discretion (such
other Person being called a "Replacement Lender") to purchase the Loans of such
Lender and such Lender's rights hereunder, without recourse to or warranty by,
or expense to, such Lender, for a purchase price equal to the outstanding
principal amount of the Loans payable to such Lender plus any accrued but unpaid
interest on such Loans and all accrued but unpaid fees owed to such Lender and
any other amounts payable to such Lender under this Agreement, and to assume all
the obligations of such Lender hereunder, all in compliance with Section 11.7.
Upon such purchase and assumption (pursuant to an Assignment and Acceptance),
such Lender shall no longer be a party hereto or have any rights hereunder
(other than rights with respect to indemnities and similar rights applicable to
such Lender prior to the date of such purchase and assumption) and shall be
relieved from all obligations to Borrowers hereunder, and the Replacement Lender
shall succeed to the rights and obligations of such Lender hereunder.

 

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2.18     Additional Provisions Regarding Letters of Credit.

 

(a) Whenever a Borrower desires the issuance of a Letter of Credit, Borrower
Representative shall deliver to (i) Agent a written notice no later than 10:00
a.m. (Cincinnati time) at least five (5) Business Days (or such shorter period
as may be agreed to by Agent) in advance of the proposed date of issuance of a
letter of credit request substantially in a form reasonably required by Agent
(an "LC Request"), and (ii) to the LC Issuer, such Person's standard form of
application for a Letter of Credit (each, an "LC Application"). The transmittal
by Borrower Representative of each LC Request shall be deemed to be a
representation and warranty by Borrower that the Letter of Credit may be issued
in accordance with and will not violate any of the requirements of Section 2.3,
this Section 2.18, Section 3, and the other provisions of this Agreement. Prior
to the date of issuance of each Letter of Credit, Borrower Representative shall
provide to Agent a precise description of the documents and the text of any
certificate to be presented by the beneficiary of such Letter of Credit which,
if presented by such beneficiary on or prior to the expiration date of such
Letter of Credit, would require the LC Issuer to make payment under such Letter
of Credit. Agent, in its reasonable judgment, may require changes in any such
documents and certificates. No Letter of Credit shall require payment against a
conforming draft to be made thereunder prior to the second Business Day after
the date on which such draft is presented. Each Lender hereby agrees that, to
the extent that it acts as an LC Issuer in respect of a Letter of Credit
hereunder, in the event of a conflict between the applicable LC Application and
the terms of this Agreement, the terms of this Agreement shall govern and
control.

 

(b) Upon any request for a drawing under any Letter of Credit by the beneficiary
thereof, Borrower Representative shall be deemed to have given a Borrowing
Notice to Agent and Lenders for an Index Rate Advance under the Revolving Loan
on the date on which such drawing is honored in an amount equal to the amount of
such drawing and, without regard to satisfaction of the applicable conditions
specified in Section 3 and the other terms and conditions of Loans and Advances
contained in this Agreement, Agent may in its discretion, on the date of such
drawing, make an Advance under the Revolving Loan comprised of an Index Rate
Advance in the amount of such drawing, the proceeds of which shall be applied
directly by Agent to reimburse the LC Issuer for the amount of such drawing or
payment. Agent shall promptly notify Lenders of any such deemed request and each
Lender with a Revolving Commitment hereby agrees to make available to Agent not
later than 11:00 a.m. (Cincinnati time) on the Business Day following such
notification from Agent such Lender's Pro Rata Share of such Revolving Loan.
Each Lender with a Revolving Commitment hereby absolutely and unconditionally
agrees to fund such Lender's Pro Rata Share of the Loan described in the
immediately preceding sentence, unaffected by any circumstance whatsoever,
including (without limitation) (i) the occurrence and continuance of a Event of
Default, (ii) the fact that, whether before or after giving effect to the making
of any such Revolving Loan, the Revolving Loan outstandings exceed or will
exceed the Revolving Commitment and/or (iii) the non-satisfaction of any
conditions set forth in Section 3. In any event, Borrowers shall reimburse
Agent, on the Business Day of such drawing if notified prior to 10:00 a.m.
(Cincinnati time) or, if after, on the next Business Day, in an amount in same
day funds equal to the amount of such drawing, plus accrued interest on such
amount after the date Borrowers are so required to reimburse at the interest
rate applicable to Index Rate Advances under the Revolving Loan.

 

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(c) As between Borrowers and Agent, Borrowers assume all risks of the acts and
omissions of the LC Issuer or misuse of the Letters of Credit by the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, Agent shall not be responsible (i) for the accuracy, genuineness
or legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under such Letters of
Credit even if it should in fact prove to be in any or all respects invalid,
inaccurate, fraudulent or forged, (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit, or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason, (iii) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy or
otherwise, whether or not they be in cipher, (iv) for errors in interpretation
of technical terms, (v) for any loss or delay in the transmission or otherwise
of any document required to make a drawing under any such Letter of Credit, or
of the proceeds thereof, (vi) for the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing honored under such Letter
of Credit, and (vii) for any consequences arising from causes beyond the control
of the LC Issuer or Agent, provided that the foregoing shall not release the LC
Issuer for any liability for its gross negligence or willful misconduct. Any
action taken or omitted to be taken by Agent under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct of Agent, shall not create any liability of Agent to
Borrowers.

 

(d) The obligation of Borrowers to reimburse Agent for drawings honored under
the Letters of Credit and other LC Liabilities shall be joint and several and
unconditional and irrevocable and shall be paid on demand by Borrowers, strictly
in accordance with the terms of this Agreement under all circumstances,
including: (i) any lack of validity or enforceability of this Agreement, any
Letter of Credit, any LC Agreement or any other agreement or instrument relating
thereto; (ii) the existence of any claim, set-off, defense or other right which
Borrowers or any Affiliate of Borrowers may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), Agent or
any other Person, whether in connection with this Agreement, the other Financing
Agreements, the transactions contemplated herein or therein or any unrelated
transaction; (iii) any draft, demand, certificate or other documents presented
under any Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Financing Agreements; (v) failure
of any drawing under a Letter of Credit or any non-application or misapplication
by the beneficiary of the proceeds of any drawing; or (vi) that an Event of
Default shall have occurred and be continuing. Borrowers shall be irrevocably
and unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse Agent for any amounts paid by Agent
or its Affiliates with respect to each LC Agreement, including all amounts paid
by Agent upon any draw with respect to a Letter of Credit, any guaranty or
reimbursement obligation paid by Agent to any Person upon any draw upon a Letter
of Credit and all fees, costs and expenses paid by Agent to any LC Issuer.
Anything contained herein to the contrary notwithstanding, Borrowers shall not
be precluded from asserting any claim for direct damages suffered by Borrowers
to the extent such damages are found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the Agent's bad faith,
gross negligence or willful misconduct in (i) determining whether a request
presented under any Letter of Credit issued by it complied with the terms of
such Letter of Credit or (ii) failing to pay under any Letter of Credit issued
by it after the presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit.

 

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(e) Agent and its Affiliates shall be authorized to execute, deliver and perform
on behalf of Borrowers such LC Agreements, LC Applications, shipping
indemnities, letter of credit modifications and consents and other undertakings
for the benefit of the LC Issuer as may be reasonably necessary or appropriate
in connection with the issuance or modification of Letters of Credit requested
by Borrower Representative hereunder. Borrowers’ unconditional obligations to
Agent hereunder as to LC Obligations shall not be modified or diminished for any
reason or in any manner whatsoever, except as otherwise provided herein.
Borrowers agree that any charges made to Agent or its Affiliates for the account
of Borrowers by any LC Issuer shall be conclusive as between such Persons and
Borrowers absent demonstrable error and may be charged to the Loan Account. All
obligations under this Section 2.18 shall survive termination of this Agreement.

 

2.19 Borrower Representative.

 

Each Borrower hereby designates, appoints and authorizes Multiband as its
representative and agent on its behalf (“Borrower Representative”) for the
purposes of issuing Notices of Borrowings, Notices of LIBOR Rate
Borrowing/Continuation/Conversion and LC Requests, delivering certificates
including Compliance Certificates, Borrowing Base Certificates and Excess Cash
Flow Certificates (and giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, giving and receiving
all other notices and consents hereunder or under any of the other Financing
Agreements and taking all other actions (including in respect of compliance with
covenants) on behalf of any Borrower or the Borrowers under the Financing
Agreements. Borrower Representative hereby accepts such appointment. Agent and
each Lender may regard any notice or other communication pursuant to any
Financing Agreement from Borrower Representative as a notice or communication
from all Borrowers. Each warranty, covenant, agreement and undertaking made on
behalf of a Borrower by Borrower Representative shall be deemed for all purposes
to have been made by such Borrower and shall be binding upon and enforceable
against such Borrower to the same extent as if the same had been made directly
by such Borrower.

 

2.20 Joint and Several Liability of Borrowers.

 

Each Borrower shall be jointly and severally liable hereunder with respect to
all Loans, Advances and all other obligations hereunder and under each of the
other Financing Agreements, regardless of which Borrower actually receives the
proceeds of the Loans or Advances or the benefit of any other extensions of
credit hereunder, or the manner in which Borrowers, Agent or Lenders account
therefor in their respective books and records.

 

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3          CONDITIONS OF ADVANCES.

 

Notwithstanding any other provisions contained in this Agreement, the making of
any Loan or Advance and the issuance of any Letter of Credit, including the
continuation of any LIBOR Advance from one Interest Period to another or
conversion of an Index Rate Advance into a LIBOR Advance, shall be conditioned
upon the following:

 

3.1     Borrower Representative’s Written Request - Revolving Loan and Letters
of Credit.

 

(a) As to any LIBOR Advance (including the continuation of any LIBOR Advance and
the conversion of an Index Rate Advance to a LIBOR Advance), Agent shall have
received written notice of the type required by Section 2.10 prior to the time
specified in Section 2.10, (b) as to any Index Rate Advance, Agent shall have
received by 12:00 p.m. (Cincinnati time) on the date such Advance is to be made
a written request (or telephonic request promptly confirmed in writing) from
Borrower Representative for such an Advance specifying the principal amount
thereof, and (c) with respect to a request by Borrower Representative for a
Letter of Credit to be issued hereunder, Agent shall have received the notices
and agreements set forth in Section 2.18(a) on or before the time specified in
such Section 2.18(a), together with a written request in a specific amount. In
addition, prior to making any Advance or Loan or issuing any Letter of Credit,
Agent shall have received copies of all documents required to have been
delivered to Agent pursuant to this Agreement. Advances under the Revolving Loan
may be made upon irrevocable written notice in the form of Exhibit 3.1 given to
Agent by Borrower Representative for Index Rate Advances no later than 12:00
p.m. (Cincinnati time) on the date such Advance is to be made, and for LIBOR
Advances, no later than 12:00 p.m. (Cincinnati time) three (3) Business Days
prior to the commencement of the Interest Period specified therein. Agent shall
give prompt telephonic or facsimile notice to the Lenders of any notice from
Borrower received pursuant to this Section.

 

3.2     Financial Condition.

 

No change in the consolidated financial condition or operations of Borrower
Representative shall have occurred at any time or times subsequent to December
31, 2011 which has a Material Adverse Effect, as determined by Agent in its
reasonable discretion.

 

3.3     No Event of Default.

 

There shall not have occurred any Event of Default which is then continuing, nor
shall any Event of Default occur after giving effect to the Advance, Loan or
Letter of Credit, as the case may be.

 

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3.4     Representations and Warranties True and Correct.

 

The representations and warranties of Borrowers contained in this Agreement
shall be true and correct in all material respects on and as of the date of
(each, a "Credit Extension") (a) any Advance or Loan, (b) each notice given
pursuant to Section 2.10, or (c) the issuance of any Letter of Credit, as the
case may be, as though made on and as of such date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier
date).

 

3.5     Conditions to Effectiveness of the Agreement.

 

Prior to the effectiveness of this Agreement, each of the conditions precedent
set forth on annexed Exhibit 3.5 shall have been satisfied.

 

3.6     Regulatory Information.

 

Agent shall have received all documentation and other information required by
bank regulatory authorities under applicable "know your customer" and anti-money
laundering rules and regulations, including the USA Patriot Act, as Agent shall
have reasonably requested.

 

3.7     Other Requirements.

 

Agent shall have received, in form and substance reasonably satisfactory to
Agent and Lenders, all certificates, orders, authorities, consents, affidavits,
applications, schedules, opinions, instruments, security agreements, financing
statements, mortgages and other documents which are provided for hereunder or
under the Financing Agreements, or which Agent may at any time reasonably
request.

 

Each request by Borrower Representative for a Credit Extension shall be deemed
to be a representation and warranty that the conditions set forth in Sections
3.2, 3.3 and 3.4 have been satisfied on and as of the date of such Credit
Extension. Agent shall be entitled to rely and act upon any notices (including
telephonic requests for a Credit Extension) purportedly given by or on behalf of
Borrower Representative, even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. Borrowers shall, jointly and
severally, indemnify Agent from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of Borrowers. All telephonic notices to and other telephonic
communications with Agent may be recorded by Agent, and each of the parties
hereto hereby consents to such recording.

 

4          REPRESENTATIONS AND WARRANTIES, ETC.

 

Each Borrower represents and warrants on a joint and several basis that as of
the date of the execution of this Agreement, and continuing so long as any of
Liabilities remain outstanding, and (even if there shall be no Liabilities
outstanding) so long as this Agreement remains in effect as follows:

 

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4.1     Existence and Power.

 

Borrower Representative and each of the Subsidiaries of Borrower Representative:
(a) is a corporation, limited liability company or limited partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, as applicable; (b) has
the corporate, limited liability company or limited partnership power, as
applicable, and authority and all governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business, and
(ii) execute, deliver, and perform its obligations under, the Financing
Agreements to which it is a party; (c) is duly qualified as a foreign
corporation, limited liability company or limited partnership, as applicable,
and licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification or license; and (d) is in compliance with all
Requirements of Law; except, in each case referred to in clauses (c) or (d), to
the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

4.2     Authorization; No Contravention.

 

(a) The execution, delivery and performance by Borrower Representative of this
Agreement and the Subsidiaries of Borrower Representative of any other Financing
Agreement to which such Person is party, have been duly authorized by all
necessary action, and do not: (i) contravene the terms of any of such Person's
Organization Documents; (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
Contractual Obligation to which such Person is a party or any order, injunction,
writ or decree of any Governmental Authority to which such Person or its
Property is subject; or (iii) violate any Requirement of Law.

 

(b) Schedule 4.2 sets forth the authorized Equity Interests of Borrower
Representative and Borrower Representative’s Subsidiaries as of the Closing
Date. All issued and outstanding Equity Interests of Borrower Representative and
the Subsidiaries of Borrower Representative are duly authorized and validly
issued and fully paid, and where applicable, non-assessable, and, with respect
to the Equity Interests of the Subsidiaries of Borrower Representative, free and
clear of all Liens other than those in favor of Agent on behalf of itself and
Lenders, and such securities were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. Except as set forth on
Schedule 4.2, as of the Closing Date, there are no pre-emptive or other
outstanding rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition of any Equity
Interests of any such Person.

 

4.3     Governmental Authorization.

 

No approval, consent, authorization, or other action by, or notice to, or filing
with, any Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Borrower
Representative or any of the Subsidiaries of Borrower Representative of this
Agreement, any other Financing Agreement except (a) for recordings and filings
in connection with the Liens granted to Agent on behalf of itself and Lenders
under the Collateral Documents, and (b) those obtained or made on or prior to
the Closing Date. Borrower Representative, and each of its Subsidiaries is in
compliance with all laws, orders, regulations and ordinances of all Governmental
Authorities relating to its business, operations and assets, except for laws,
orders, regulations and ordinances the violation of which could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.

 

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4.4     Binding Effect.

 

This Agreement and each other Financing Agreement to which Borrower
Representative or any Subsidiaries of Borrower Representative is a party
constitute the legal, valid and binding obligations of Borrower Representative
and each Subsidiary of Borrower Representative which is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

 

4.5     Litigation.

 

Except as specifically disclosed in Schedule 4.5, there are no actions, suits,
proceedings, claims or disputes pending, or to the knowledge of Borrowers,
threatened in writing, at law, in equity, in arbitration or before any
Governmental Authority, against Borrower Representative, any Subsidiaries of
Borrower Representative or any of their respective Properties which: (a) purport
to affect or pertain to this Agreement, any other Financing Agreement, or any of
the transactions contemplated hereby; or (b) if adversely determined, could
reasonably be expected to result in equitable relief or monetary judgments
against Borrower Representative or any Subsidiaries, individually or in the
aggregate, in excess of $250,000 (excluding for purposes of this clause (b) any
actions, suits, proceedings, claims or disputes that do not have any reasonable
likelihood of resulting in liability against Borrower Representative or any
Subsidiaries). No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement, any other Financing Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

 

4.6     No Event of Default.

 

No Event of Default exists or would result from the incurring of any Liabilities
by any Borrower or the grant or perfection of Agent's Liens on the Collateral.
None of Borrower Representative or any Subsidiaries of Borrower Representative
is in default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect. Borrowers do not know of any dispute
regarding any Contractual Obligation which could have a Material Adverse Effect.

 

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4.7     ERISA Compliance.

 

Schedule 4.7 lists all Plans. Except as disclosed on Schedule 4.7, neither
Borrower Representative nor any ERISA Affiliate participates or has participated
in, or has any liability, including contingent liability, to, any Plan or
Multiemployer Plan. Except as disclosed on Schedule 4.7, Borrower Representative
and each ERISA Affiliate is in compliance in all material respects with all
requirements of each Plan, and each Plan complies in all material respects, and
is operated in compliance in all material respects, with all applicable
provisions of law. Borrowers are not aware, after due inquiry, of any item of
non-compliance which could potentially result in the loss of Qualified Plan
tax-qualification or tax-exempt status, or give rise to a material excise tax or
other penalty imposed by a Governmental Authority. No material proceeding,
claim, lawsuit and/or investigation is pending concerning any Plan. All required
contributions have been and will be made in accordance with the provisions of
each Plan and, if applicable, each Multiemployer Plan, and with respect to
Borrower Representative or any ERISA Affiliate, there are, and have been, no
material Withdrawal Liabilities. No ERISA Event has occurred or is expected to
occur with respect to any Plan or, if applicable and to Borrowers’ knowledge,
any Multiemployer Plan. Borrower Representative and all ERISA Affiliates
currently comply and have complied in all material respects with the notice and
continuation health coverage requirements of Section 4980B of the Code and
applicable state law. No liability to the PBGC has been incurred, or is expected
to be incurred, by Borrower Representative or any ERISA Affiliate with respect
to any Title IV Plan. PBGC has not instituted any proceedings, and there exists
no event or condition which would constitute grounds for institution of
proceedings by PBGC, to terminate any Title IV Plan under Section 4042 of ERISA.
As to each Title IV Plan, as of the date hereof, there is no Unfunded Benefit
Liability as determined by such Plan's independent actuaries.

 

4.8     Use of Proceeds; Margin Regulations.

 

The proceeds of the Loans are intended to be and shall be used solely for the
purposes set forth in and permitted by Section 5.11, and are intended to be and
shall be used in compliance with this Agreement. None of Borrower Representative
or any Subsidiaries of Borrower Representative is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. Proceeds of the Loans shall not
be used for the purpose of purchasing or carrying Margin Stock.

 

4.9     Title to Properties.

 

Borrower Representative and each of its Subsidiaries have good record and
marketable title in fee simple to, or valid leasehold interests in, all real
Property necessary for, or used in the ordinary conduct of, their respective
businesses, subject only to Permitted Liens. No Property of Borrower
Representative and its Subsidiaries is subject to any Liens, other than
Permitted Liens.

 

4.10     Taxes.

 

Borrower Representative and each of the Subsidiaries of Borrower Representative
have filed all Federal and all material state or local tax returns and reports
required to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their Properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
prosecuted and for which adequate reserves have been provided in accordance with
GAAP. There is no proposed tax assessment against Borrower Representative or any
of the Subsidiaries of Borrower Representative which could, if the assessment
was made, have a Material Adverse Effect.

 

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4.11     Financial Condition.

 

Each of the financial statements with respect to Borrower Representative and its
Subsidiaries delivered by Borrowers to Agent pursuant to this Agreement (x) were
prepared in conformity with GAAP applied on a basis consistent with prior years,
subject to, in the case of the unaudited interim financial statements, normal
year-end adjustments and the lack of footnote disclosures; and (y) present
fairly in all material respects the financial condition of Borrower
Representative and its Subsidiaries as of the dates thereof and the results of
operations for the periods covered thereby. Since December 31, 2011, there has
been no Material Adverse Effect. Borrower Representative and the Subsidiaries of
Borrower Representative have no Indebtedness other than Indebtedness permitted
pursuant to Section 6.2 and have no Contingent Obligations other than Contingent
Obligations permitted pursuant to Section 6.8.

 

4.12     Environmental Matters.

 

Except as described on Schedule 4.12, the operations of Borrower Representative
and each of its Subsidiaries comply in all respects with all Environmental Laws,
except such non-compliance which could not (if enforced in accordance with
applicable law) reasonably be expected to result in, either individually or in
the aggregate, a Material Adverse Effect. Except as described on Schedule 4.12,
Borrower Representative and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective Ordinary Course of
Business, all such Environmental Permits are in good standing, and Borrower
Representative and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits, except where the failure to
obtain, to maintain in good standing, or to be in compliance with such
Environmental Permits could not reasonably be expected to result in material
liability to Borrower Representative or any of its Subsidiaries and could not
reasonably be expected to result in, either individually or in the aggregate, a
Material Adverse Effect. None of Borrower Representative, any of its
Subsidiaries or any of their respective present Property or operations, is
subject to any outstanding written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.
Except as described on Schedule 4.12, there are no Hazardous Materials or other
conditions or circumstances existing with respect to any Property owned, leased
or operated by Borrower Representative or any of its Subsidiaries, or, to
Borrowers’ knowledge, arising from operations thereon prior to the Closing Date,
that could reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. In addition, except as described on
Schedule 4.12, neither Borrower Representative nor any of its Subsidiaries has
any underground storage tanks that are (a) not properly registered or permitted
under applicable Environmental Laws or (b) to Borrowers’ knowledge, leaking or
releasing Hazardous Materials from any such storage tank into the surrounding
environment.

 

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4.13     Collateral Documents.

 

All representations and warranties of Borrower Representative, any of the
Subsidiaries of Borrower Representative or any other party (other than Agent) to
any Collateral Document, contained in any Collateral Document are true and
correct in all material respects (except to the extent such representations and
warranties expressly refer to a specific date, in which case they shall be true
and correct in all material respects as of such date).

 

4.14     Regulated Entities.

 

None of Borrower Representative, any Person controlling Borrower Representative,
or any Subsidiary of Borrower Representative, is (a) an "investment company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Federal Power Act, the Interstate Commerce Act, any state
public utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.

 

4.15     Labor Relations.

 

There are no strikes, lockouts or other general labor disputes against Borrower
Representative or any of its Subsidiaries, or, to Borrowers’ knowledge,
threatened against or affecting Borrower Representative or any of its
Subsidiaries, in any case which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and no significant
unfair labor practice complaint is pending against Borrower Representative or
any of its Subsidiaries or, to the knowledge of Borrowers, threatened against
any of them before any Governmental Authority in any case which could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect. Borrower Representative and its Subsidiaries have at all times operated
their businesses in compliance in all material respects with all applicable
provisions of the Federal Fair Labor Standards Act, as amended.

 

4.16     Copyrights, Patents, Trademarks and Licenses, Etc.

 

Schedule 4.16 identifies all United States and foreign patents, trademarks,
service marks, trade names and copyrights, and all registrations and
applications for registration thereof and all licenses thereof, owned or held by
Borrower Representative or any of Borrowers Representative’s Subsidiaries on the
Closing Date, and identifies the jurisdictions in which such registrations and
applications have been filed. Except as otherwise disclosed in Schedule 4.16,
Borrower Representative and Borrower Representative’s Subsidiaries are the sole
beneficial owners of, or have the right to use, free from any Lien or other
restrictions, claims, rights, encumbrances or burdens, the intellectual property
identified on Schedule 4.16 and all other processes, designs, formulas, computer
programs, computer software packages, trade secrets, inventions, product
manufacturing instructions, technology, research and development, know-how and
all other intellectual property that are necessary for the operation of Borrower
Representative’s and its Subsidiaries' businesses as being operated on the
Closing Date. Each patent, trademark, service mark, trade name, copyright and
license listed on Schedule 4.16 is in full force and effect except to the extent
the failure to be in effect will not and could not reasonably be expected to
have a Material Adverse Effect. Except as set forth in Schedule 4.16, to the
knowledge of Borrowers, (a) none of the present or contemplated products or
operations of Borrower Representative or its Subsidiaries infringes any patent,
trademark, service mark, trade name, copyright, license of intellectual property
or other right owned by any other Person, and (b) there is no pending or, to the
knowledge of Borrowers, threatened claim or litigation against or affecting
Borrower Representative or any of its Subsidiaries contesting the right of any
of them to manufacture, process, sell or use any such product or to engage in
any such operation except for claims and/or litigation which will not and could
not reasonably be expected to have a Material Adverse Effect. None of the
trademark registrations set forth on Schedule 4.16 is an "intent-to-use"
registration.

 

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4.17     Brokers' Fees; Transaction Fees.

 

Except as set forth on Schedule 4.17, none of Borrower Representative or any of
Borrower Representative’s Subsidiaries has any obligation to any Person in
respect of any finder's, broker's or investment banker's fee or other fee in
connection with the transactions contemplated hereby.

 

4.18     Insurance.

 

Borrower Representative and its Subsidiaries and their respective Properties are
insured with financially sound and reputable insurance companies which are not
Affiliates of Borrower Representative, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Properties in localities where Borrower
Representative or such Subsidiary operates. A true and complete listing of such
insurance as of the Closing Date, including issuers, coverages and deductibles,
has been provided to Agent.

 

4.19     Full Disclosure.

 

None of the representations or warranties made by Borrower Representative or any
of its Subsidiaries in the Financing Agreements as of the date such
representations and warranties were made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of Borrower or any of the Subsidiaries of Borrower
Representative in connection with the Financing Agreements (including the
offering and disclosure materials, if any, delivered by or on behalf of Borrower
Representative to Agent or any Lender prior to the Closing Date) contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading as of the time when
made or delivered in light of the circumstances at the time made; provided, that
with respect to any projections delivered to Agent and the Lenders, Borrowers
represent only that such information was prepared in good faith based upon
assumptions believed to be fair and reasonable at the time in light of current
market conditions and that such projections are not to be viewed as facts, and
that the actual results during such period or periods covered by any such
projections may differ significantly from projected results.

 

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4.20     Anti-Terrorism Laws.

 

(a) Neither Borrower Representative nor, to Borrowers’ knowledge, any of
Borrower Representative’s Affiliates, is in violation of any laws relating to
terrorism or money laundering ("Anti-Terrorism Laws"), including Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 (the "Executive
Order"), and the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public
Law 107-56, signed into law October 26, 2001 (the "USA Patriot Act").

 

(b) Neither Borrower Representative nor, to Borrowers’ knowledge, any of
Borrower Representative’s Affiliates, or brokers or other agents of such Person
acting or benefiting in any capacity in connection with the Loans hereunder, is
any of the following:

 

(i) a Person that it listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

 

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;

 

(iii) a Person with which Agent or any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv) a Person that commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive Order; or

 

(v) a Person that is named as a "specially designated national and blocked
person" on the most current list published by the USA Treasury Department Office
of Foreign Assets Control ("OFAC") at its official website or any replacement
website or other replacement official publication of such list.

 

(c) Neither Borrower Representative nor, to Borrowers’ knowledge, any of
Borrower Representative’s Affiliates, or brokers or other agents of such Person
acting or benefiting in any capacity in connection with the Loans hereunder
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Person described in clause
(b) above, (ii) deals in, or otherwise engages in any transaction relating to,
any Property or interests in Property blocked pursuant to the Executive Order,
or (iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.

 

4.21     Solvency.

 

None of the Borrowers (a) is "insolvent" as that term is defined in Section
101(32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act
("UFTA") or Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (b) has
"unreasonably small capital," as that term is used in Section 548(a)(2)(B)(ii)
of the Bankruptcy Code or Section 5 of the UFCA, (c) is engaged or about to
engage in a business or a transaction for which its remaining Property is
"unreasonably small" in relation to such business or transaction as that term is
used in Section 4 of the UFTA, (d) is unable to pay its debts as they mature or
become due, within the meaning of Section 548(a)(2)(B)(iii) of the Bankruptcy
Code, Section 4 of the UFTA and Section 6 of the UFCA, or (e) does not now own
assets having a value both at "fair valuation" and at "present fair salable
value" on a going concern basis greater than or equal to the amount required to
pay such Person's "debts" as such terms are used in Section 2 of the UFTA and
Section 2 of the UFCA. None of the Borrowers shall be rendered insolvent (as
such term is defined above) by the execution and delivery of this Agreement or
any of the other Financing Agreements or by the transactions contemplated
hereunder or thereunder.

 

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4.22     Employees.

 

Except as set forth on Schedule 4.22, as of the Closing Date, Borrowers are not
aware that any executive or key employee of Borrower Representative or any
Subsidiary or any group of employees of Borrower Representative or any
Subsidiary has any plans to terminate employment with Borrower Representative or
any of Subsidiary. As of the Closing Date, each of Borrower Representative and
any Subsidiary has complied in all material respects with all laws relating to
the employment of labor (including, without limitation, provisions thereof
relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other Taxes). Except as set forth on
Schedule 4.22, as of the Closing Date, neither Borrower Representative nor any
Subsidiary or, to the best of each Borrower’s knowledge, any of their employees,
is subject to any noncompete, nondisclosure, confidentiality, employment,
consulting or similar agreements relating to, affecting or in conflict with the
present or proposed business activities of Borrower Representative or any
Subsidiary.

 

4.23     DirecTV Agreements.

 

Each DirecTV Agreement remains in full force and effect as of the Closing Date.
True, correct and complete copies of all DirecTV Agreements, as in effect on the
Closing Date, have previously been delivered to the Agent.

 

4.24     Survival.

 

All representations and warranties contained in this Agreement or any of the
other Financing Agreements shall survive the execution and delivery of this
Agreement.

 

5          AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, on a joint and several basis so long as
Agent or any Lender shall have any Revolving Commitment hereunder, or any Loan
or other Liability shall remain unpaid or unsatisfied (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted), unless Required Lenders waive compliance in writing:

 

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5.1     Financial Statements.

 

(a) Borrower Representative shall maintain, and shall cause each of its
Subsidiaries to maintain, a system of accounting established and administered in
accordance with sound business practices to permit the preparation of financial
statements in conformity with GAAP (provided that monthly financial statements
shall not be required to have footnote disclosure and are subject to normal
year-end adjustments).

 

(b) Borrower Representative shall deliver to Agent and each Lender in form and
detail reasonably satisfactory to Agent:

 

(i) as soon as available, but not later than one hundred twenty (120) days after
the end of each Fiscal Year commencing with the Fiscal Year ended December 31,
2012, a copy of the audited consolidated and consolidating balance sheet of
Borrower Representative and its Subsidiaries as at the end of such year and the
related consolidated and consolidating statements of income or operations,
shareholders' equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year (if any), and
accompanied by (A) the opinion of Ernst & Young or any regionally-recognized
independent public accounting firm reasonably acceptable to Agent which report
shall state that such consolidated and consolidating financial statements
present fairly in all material respects the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior years
and (B) a schedule of the outstanding Indebtedness for borrowed money of
Borrower Representative and its Subsidiaries describing in reasonable detail
each such debt issue or loan outstanding and the principal amount and amount of
accrued and unpaid interest with respect to each such debt issue or loan. Such
opinion shall not be qualified or limited because of a restricted or limited
examination by such accountant, beyond an accountant's standard limitation for
an audit conducted in accordance with GAAP, of any material portion of the
records of Borrower Representative or any of the Subsidiaries of Borrower
Representative; and

 

(ii) as soon as available, but not later than thirty (30) days after the end of
each Fiscal Month, a copy of the unaudited consolidated and consolidating
balance sheets of Borrower Representative and its Subsidiaries, and the related
consolidated and consolidating statements of income, shareholders' equity and
cash flows as of the end of such Fiscal Month and for the portion of the Fiscal
Year then ended, and setting forth in each case comparisons to Borrower
Representative’s most recent projections and to the corresponding periods in the
preceding Fiscal Year all certified on behalf of Borrower Representative by an
appropriate Responsible Officer of Borrower Representative as being complete and
correct and fairly presenting in all material respects, in accordance with GAAP,
the financial position and the results of operations of Borrower Representative
and its Subsidiaries, subject to normal year-end adjustments and absence of
footnote disclosure, accompanied by a schedule of the outstanding Indebtedness
for borrowed money of Borrower Representative and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan.

 

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(c) Agent and each Lender shall exercise reasonable efforts to keep such
information, all information acquired as a result of any inspection conducted in
accordance with Section 5.10 hereof, confidential, provided that Agent and each
Lender may communicate such information and any other information received
pursuant to this Agreement and the other Financing Agreements (i) to any other
Person in accordance with the customary practices of commercial lenders relating
to routine trade inquiries, (ii) to any regulatory authority having jurisdiction
over Agent or any Lender, (iii) to any other Person in connection with Agent's
or any Lender's sale of any participations in the Liabilities or assignment of
any rights and obligations of Agent or such Lender under this Agreement and the
other Financing Agreements, (including to a Person that is an investor or
prospective investor in a Securitization that agrees that its access to
information regarding Borrowers and the Liabilities is solely for purposes of
evaluating an investment in such Securitization, or to a Person that is a
trustee, collateral manager, servicer, noteholder or secured party in a
Securitization in connection with the administration, servicing and reporting on
the assets serving as collateral for such Securitization; for the purposes of
this clause, "Securitization" means a public or private offering by Agent, any
Lender or any of their respective Affiliates or their respective successors and
assigns, of securities which represent an interest in, or which are
collateralized, in whole or in part, by the Liabilities), (iv) to any other
Person in connection with the exercise of Agent's, any Lender's or any
Indemnitee's rights hereunder or under any of the other Financing Agreements,
(v) to any Person in any litigation in which Agent or any Lender is a party, or
(vi) to any Person if Agent or any Lender believes in its discretion that
disclosure is necessary or appropriate to comply with any applicable law, rule
or regulation or in response to a subpoena, order or other legal process or
informal investigative demand, whether issued by a court, judicial or
administrative or legislative body or committee or other Governmental Authority.
Notwithstanding the foregoing, information shall not be deemed to be
confidential to the extent such information (x) is available in the public
domain, (y) becomes available in the public domain other than as a result of
unauthorized disclosure by Agent or any Lender or (z) is acquired from a Person
not known by Agent and each Lender to be in breach of an obligation of
confidentiality to Borrowers. Borrowers authorize Agent to discuss the financial
condition of Borrowers with Borrowers’ independent certified public accountants
and agrees that such discussion or communication shall be without liability to
Agent, any Lender or Borrowers’ independent certified public accountants.

 

5.2     Borrowing Base Certificates; Reporting.

 

(a) Borrower Representative shall submit to Agent for delivery to each Lender,
not later than thirty (30) days after the last day of each calendar month (or
more frequently as requested by Agent or provided by Borrower Representative), a
Borrowing Base Certificate (the "Borrowing Base Certificate") as of the last
Business Day of such calendar month (or such other date as may be requested by
Lender in accordance with the foregoing parenthetical), in the form attached
hereto as Exhibit 5.2(a) or such other form as Agent may require, which shall be
signed by a Responsible Officer or the controller of Borrower Representative,
and which shall be accompanied by a written report describing or including, in a
form and with such specificity as is satisfactory to Agent:

 

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(i) all Eligible Accounts and Eligible Inventory created or acquired by Borrower
Representative and its Subsidiaries subsequent to the immediately preceding
Borrowing Base Certificate, together with copies of any other reports or
information, in a form and with such specificity as is satisfactory to Agent,
concerning Accounts and/or Inventory included, described or referred to in the
Borrowing Base Certificate and any other documents in connection therewith
requested by Agent, including but only if specifically requested by Agent,
copies of all invoices and bills of lading prepared in connection with such
Accounts;

 

(ii) information in connection with (w) any Inventory which has ceased to be
Eligible Inventory since the most recent Borrowing Base Certificate, (x) any
Account which has ceased to be an Eligible Account since the most recent
Borrowing Base Certificate, and (y) any other Account with respect to which any
setoff, counterclaim or dispute has been asserted by any Account Debtor or any
allegation of delayed performance or nonperformance has been made by any Account
Debtor accompanied by a statement of any modification, adjustment or compromise
with respect to any such Account which affects the amount due or the time when
payment of such Account is to be made;

 

(iii) information on all amounts collected on Accounts subsequent to the
immediately preceding Borrowing Base Certificate;

 

(iv) a calculation of the Borrowing Base, including, no less than once during
each month, information on all credits issued by Borrower Representative and its
Subsidiaries and all complaints and claims against any Borrower; and

 

(v) such additional information as Agent shall reasonably require, including, if
requested by Agent, an itemized statement of the amount of raw materials, work
in process or finished goods owned by other Persons in Borrower Representative’s
or a Subsidiary’s possession.

 

(b) Borrower Representative shall submit to Agent (and Agent shall deliver to
any Lender requesting copies), not later than thirty (30) days after the last
day of each calendar month, as of the last Business Day of such month:

 

(i) an aged trial balance of Accounts of Borrower Representative and its
Subsidiaries ("Accounts Trial Balance") prepared in a manner reasonably
acceptable to Agent;

 

(ii) an aged trial balance of accounts payable of Borrower Representative and
its Subsidiaries aged by invoice date and prepared in a manner reasonably
acceptable to Agent and showing the name of each party to whom a payable is due
and the amounts, including an aging thereof, in such form as Agent may
reasonably request;

 

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(iii) a report of sales of Borrower Representative and its Subsidiaries for such
month and a reconciliation of Accounts of Borrower Representative and its
Subsidiaries between the amount shown on books of Borrower Representative and
its Subsidiaries and collateral reports of Borrower Representative and its
Subsidiaries delivered to Agent;

 

(iv) the outstanding principal balance of the Liabilities (other than the Term
Loan);

 

(v) at the request of Agent, names, contact names, addresses and phone numbers
of Account Debtors of Borrower Representative and its Subsidiaries;

 

(vi) a statement that there exists no Event of Default, or, if any Event of
Default exists, a specific description of the nature and the period of existence
thereof and the action Borrowers have taken and propose to take with respect
thereto; and

 

(vii) a statement that no Equipment has been sold, damaged, destroyed,
abandoned, become obsolete or has otherwise diminished in value (except for
(x) ordinary depreciation and wear and tear and (y) damage to or the destruction
or retirement of Equipment with a book value not in excess of $100,000 in the
aggregate in any Fiscal Year) since the later of the date of the last Borrowing
Base Certificate or the schedule of Equipment most recently delivered to Agent
by Borrowers or, if any such events have occurred, describing the same with such
specificity as is satisfactory to Agent.

 

5.3     Certificates; Other Information.

 

Borrowers shall furnish to Agent and each Lender:

 

(a) concurrently with the delivery of the financial statements referred to in
clause (i) of Section 5.1(b), and concurrently with the delivery of the
financial statements referred to in clause (ii) of Section 5.1(b) for any Fiscal
Month which is the last month of a Fiscal Quarter, a fully and properly
completed Compliance Certificate in the form of Exhibit 5.3(a) (each, a
"Compliance Certificate"), certified on behalf of Borrowers by a Responsible
Officer of Borrower Representative;

 

(b) promptly after the same are sent, copies of all financial statements and
reports which Borrower Representative sends to the holders of its Equity
Interests; and promptly after the same are filed, copies of all financial
statements and regular, periodic or special reports which Borrower
Representative may make to, or file with, the SEC or any successor or similar
Governmental Authority;

 

(c) at the same time such reports or information are provided to the board of
directors or similar governing body of Borrower Representative a copy of any
financial management reports or similar financial information or report of
operations delivered to the board of directors or similar governing body of
Borrower Representative, including any agenda and other information or materials
distributed to any Borrower's boards for regular board meetings, together with
each delivery of financial statements pursuant to Section 5.1(b), a management
report, in reasonable detail, signed on behalf of Borrower Representative by a
Responsible Officer of Borrower Representative, describing the operations and
financial condition of Borrower Representative and its Subsidiaries for the
month and the portion of the Fiscal Year then ended (or for the Fiscal Year then
ended in the case of annual financial statements), and together with each
delivery of financial statements pursuant to Section 5.1(b), a report discussing
the reasons for any significant variations from projections for the period
covered thereby or the same period in the prior Fiscal Year;

 

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(d) as soon as available and in any event no later than fifteen (15) days prior
to the beginning of each Fiscal Year, projections of Borrower Representative’s
and its Subsidiaries' consolidated and consolidating financial performance for
such Fiscal Year (prepared on a month by month basis);

 

(e) promptly upon receipt thereof, copies of any reports submitted by Borrower
Representative’s certified public accountants in connection with each annual,
interim or special audit or review of any type of the financial statements or
internal control systems of Borrower Representative made by such accountants,
including any comment letters submitted by such accountants to management of
Borrower Representative in connection with their services;

 

(f) from time to time, if Agent reasonably determines that obtaining appraisals
is necessary in order for Agent to comply with applicable laws or regulations,
and at any time if a Default or an Event of Default shall have occurred and be
continuing, Agent may, or may require Borrowers to, in any such case at
Borrowers’ expense, obtain appraisals in form and substance and from appraisers
reasonably satisfactory to Agent stating the then current fair market value of
all or any portion of the real or personal Property of Borrower Representative
or any of its Subsidiaries;

 

(g) promptly upon receipt thereof, copies of any notices of any breach of or
default under any Subordinated Debt Document and of any other material
deliveries under any Subordinated Debt Document;

 

(h) prompt written notice of (i) the execution or filing with any Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any tax liabilities,
assessments or governmental charges or levies by Borrower Representative or any
of its Subsidiaries and (ii) any agreement by Borrower Representative or any of
its Subsidiaries or request directed to Borrower Representative or any of its
Subsidiaries to make any adjustment under Code §481(a), by reason of a change in
accounting method or otherwise, which could reasonably be expected to have a
Material Adverse Effect (provided, that nothing in this clause (i) shall require
Borrower Representative to give written notice or to be otherwise restricted
from extending the due date for filing a tax return in the normal course of
business and in accordance with applicable laws for the filing of such tax
return);

 

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(i) prompt written notice of any information received by Borrower Representative
or any of the Subsidiaries of Borrower Representative, whether written or oral,
that any material supplier or customer intends to cease, alter or decrease the
rate of business done with Borrower Representative or any such Subsidiary,
together with a copy of any written notice received from such supplier or
customer if it could reasonably be expected to have a Material Adverse Effect;

 

(j) promptly, such additional business, financial, corporate affairs and other
information as Agent may from time to time reasonably request; and

 

(k) prompt written notice of any information received by Borrower Representative
regarding the occurrence of any breach of or default under any DirecTV
Agreement, and promptly upon receipt thereof, copies of any written notices of
any such breach or default and any other material deliveries under any DirecTV
Agreement. In addition, Borrower Representative shall direct DirecTV to provide
a copy to Agent of any notice provided to it with respect to any circumstances
described in Section 8.1(t)(iii) hereof.

 

5.4     Notices.

 

Borrower Representative shall promptly notify Agent of any of the following (and
in no event later than three (3) days after a Responsible Officer becoming aware
thereof): (a) the occurrence or existence of any Event of Default; (b) any
breach or non-performance of, or any default under, any Contractual Obligation
of Borrower Representative or any of the Subsidiaries of Borrower
Representative, or any violation of, or non-compliance with, any Requirement of
Law, which, in either case, could reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect, including a
description of such breach, non-performance, default, violation or
non-compliance and the steps, if any, Borrower Representative or such Subsidiary
of Borrower Representative has taken, is taking or proposes to take in respect
thereof; (c) any dispute, litigation, investigation, proceeding or suspension
which may exist at any time between Borrower Representative or any of its
Subsidiaries and any Governmental Authority which could reasonably be expected
to result, either individually or in the aggregate, in a Material Adverse
Effect; (d) the commencement of, or any material adverse development in, any
litigation or proceeding affecting Borrower Representative or any Subsidiary of
Borrower Representative (i) in which the amount of damages claimed is $100,000
(or its equivalent in another currency or currencies) or more, (ii) in which
injunctive or similar relief is sought and which could reasonably be expected to
have a Material Adverse Effect, or (iii) in which the relief sought is an
injunction or other stay of the performance of this Agreement or any Financing
Agreement; (e) any of the following if the same could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect:
(i) any enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Borrower Representative or
any of its Subsidiaries or any of their respective Properties pursuant to any
applicable Environmental Laws, (ii) any other Environmental Claims, and
(iii) any environmental or similar condition on any real Property adjoining the
Property of Borrower Representative or any Subsidiary that could reasonably be
anticipated to cause Borrower Representative’s or any of its Subsidiaries'
Property or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use of such Property under any
Environmental Laws; (f) any of the following if the same could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, together with a copy of any notice with respect to such event that may
be required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to Borrower Representative or any member of its
Controlled Group with respect to such event: (i) an ERISA Event; (ii) the
adoption of any new, or the commencement of contributions to, any Title IV Plan
by Borrower Representative or any ERISA Affiliate; (iii) the adoption of any
amendment to a Title IV Plan, if such amendment results in a material increase
in benefits or unfunded liabilities; or (iv) the commencement of contributions
by Borrower Representative or any ERISA Affiliate to any Title IV Plan; (g) any
Material Adverse Effect subsequent to the date of the most recent audited
financial statements of Borrower Representative delivered to Agent or any Lender
pursuant to this Agreement; (h) any material change in accounting policies or
financial reporting practices by Borrower Representative or any of its
Subsidiaries; (i) any labor controversy resulting in or threatening to result in
any strike, work stoppage, boycott, shutdown or other labor disruption against
or involving Borrower Representative or any of its Subsidiaries if the same
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect; and (j) the creation, establishment or acquisition of
any Subsidiary. Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer of Borrower Representative on behalf
of Borrowers setting forth details of the occurrence referred to therein, and
stating what action Borrower Representative proposes to take with respect
thereto and at what time. Each notice of a Default or of an Event of Default
shall describe with particularity any and all clauses or provisions of this
Agreement or other Financing Agreement that have been breached or violated.

 

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5.5     Preservation of Existence, Etc.

 

Borrower Representative shall, and shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate, partnership,
limited liability company or other existence and good standing under the laws of
its state or jurisdiction of incorporation or formation; (b) preserve and
maintain in full force and effect all rights, privileges, qualifications,
permits, licenses and franchises necessary in the normal conduct of its business
and except as could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect; (c) use its reasonable efforts, in
the Ordinary Course of Business, to preserve its business organization and
preserve the goodwill and business of the customers, suppliers and others having
material business relations with it; and (d) preserve or renew all of its
registered trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. This Section 5.5 shall not operate to
prevent (i) the merger of a Subsidiary of Borrower Representative with and into
Borrower Representative so long as Borrower Representative is the surviving
entity in such merger or (ii) the merger of any Subsidiary with and into a
domestic wholly-owned Subsidiary.

 

5.6     Maintenance of Property.

 

Borrower Representative shall maintain and preserve, and shall cause each of its
Subsidiaries to maintain and preserve, all its Property which is used or useful
in its business in good working order and condition (ordinary wear and tear
excepted) and make all necessary repairs thereto and renewals and replacements
thereof.

 

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5.7     Borrower Representative’s Property Insurance and Business Interruption
Insurance.

 

Borrower Representative shall maintain, and Borrower Representative shall cause
each of its Subsidiaries to maintain, at its expense, such public liability and
third party property damage insurance with financially sound and reputable
insurers in such amounts and with such deductibles as is acceptable to Agent in
its discretion. Borrower Representative shall maintain, and Borrower
Representative shall cause each of its Subsidiaries to maintain, at Borrower
Representative’s expense, business interruption insurance (in amounts reasonably
satisfactory to Agent) and keep and maintain its Property insured against loss
or damage by fire, theft, burglary, pilferage, loss in transit, explosion,
spoilage and all other hazards and risks ordinarily insured against by other
owners or users of such properties in similar businesses, in an amount at least
equal to the greater of the full insurable value of all such Property or the
amount which is necessary to avoid the application of co-insurance provisions.
All such policies of insurance shall be in form and substance reasonably
satisfactory to Agent and Borrower Representative shall not, and Borrower
Representative shall not permit any of its Subsidiaries to, amend or otherwise
change any such policies in any way which may adversely affect Agent without the
prior written consent of Agent. Borrower Representative shall deliver to Agent
the original (or a certified) copy of each policy of insurance and evidence of
payment of all premiums therefor. Such policies of property insurance shall
contain an endorsement, in substantially the form of Exhibit 5.7 hereto or such
other form as agreed to by Agent, showing all loss payable to Agent, for the
benefit of Agent and each Lender, as provided below in this Section 5.7 and such
policies of liability insurance shall name Agent as an additional insured, for
the benefit of Agent and each Lender. Borrowers hereby direct all insurers under
such policies of insurance to pay all proceeds of insurance policies directly to
Agent. Borrowers irrevocably make, constitute and appoint Agent (and all
officers, employees or agents designated by Agent) as Borrowers’ true and lawful
attorney-in-fact for the purpose of making, settling and adjusting claims under
all such policies of insurance endorsing the name of any Borrower on any check,
draft, instrument or other item of payment pertaining to the Collateral received
by such Borrower or Agent pursuant to any such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance as they relate to the Collateral. Without limiting the foregoing,
Borrowers will (a) keep all of their physical Property insured with casualty or
physical hazard insurance on an "all risks" basis, with broad form flood
coverage (if any real property owned or leased by any Borrower is located in a
special flood hazard area) and electronic data processing coverage, with a full
replacement cost endorsement and an "agreed amount" clause in an amount equal to
100% of the full replacement cost of such property, (b) maintain all such
workers' compensation or similar insurance as may be required by law,
(c) maintain, in amounts and with deductibles equal to those generally
maintained by businesses engaged in similar activities in similar geographic
areas, general public liability insurance against claims of bodily injury, death
or property damage occurring, on, in or about the Properties of Borrowers, and
(d) maintain product liability insurance. All policies of insurance shall
provide for at least 30 days prior written cancellation notice to Agent.
Borrowers shall furnish Agent with certificates of insurance and policies
evidencing compliance with this Section 5.7. Borrowers shall provide Agent with
prompt written notice of any change, amendment or modification to any insurance
policy. If the proceeds of insurance insuring any Collateral with respect to any
claim exceed $250,000, Agent is authorized to collect such proceeds and apply
such proceeds in a manner consistent with Section 2.3(e).

 

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Unless Borrower Representative and its Subsidiaries provide Agent with evidence
of the insurance coverage required by this Agreement, or if Borrower
Representative or any Subsidiary, at any time or times hereafter, shall fail to
obtain or maintain any of the policies of insurance required above or to pay any
premium in whole or in part relating thereto, then Agent, without waiving or
releasing any obligation or default by Borrowers hereunder, may at any time or
times thereafter (but shall be under no obligation to do so) purchase and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which Agent deems advisable. This insurance may, but
need not, protect the interests of Borrowers. The coverage that Agent purchases
may not pay any claim that Borrowers or their Subsidiaries or Agent may make or
any claim that is made against Borrowers or any Subsidiary in connection with
the Collateral. Borrowers may later cancel any insurance purchased by Agent, but
only after providing Agent with evidence that Borrowers have obtained insurance
as required by this Agreement. If Agent purchases insurance for the Collateral,
Borrowers will be responsible for the costs of that insurance, on a joint and
several basis, including interest and any other charges that may be imposed in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to the Liabilities. The costs of the insurance may be more than the cost
of insurance that Borrower Representative or any Subsidiary may be able to
obtain on its own.

 

5.8     Payment of Liabilities.

 

Borrower Representative shall, and shall cause its Subsidiaries to, pay,
discharge and perform as the same shall become due and payable or required to be
performed, all of their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings diligently prosecuted which stay the enforcement of
any Lien and for which adequate reserves in accordance with GAAP are being
maintained by Borrower Representative or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its Property unless the same
are being contested in good faith by appropriate proceedings diligently
prosecuted which stay the imposition or enforcement of the Lien and for which
adequate reserves in accordance with GAAP are being maintained by Borrower
Representative or such Subsidiary; (c) all Indebtedness, as and when due and
payable, but subject to any restrictions contained in this Agreement or
provisions in the applicable Subordination Agreement or any instrument or
agreement evidencing such Indebtedness, in each case where failure to so pay
could reasonably be expected to have a Material Adverse Effect; and (d) the
performance of all obligations under any Contractual Obligation to which
Borrower Representative or any of the Subsidiaries of Borrower Representative is
bound, or to which it or any of its Properties is subject, in each case where
failure to so perform could reasonably be expected to have a Material Adverse
Effect.

 

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5.9     Compliance with Laws.

 

Borrower Representative shall comply, and shall cause each of its Subsidiaries
to comply with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including all Environmental Laws), except
(a) such as may be contested in good faith by appropriate proceedings diligently
prosecuted without risk of loss of any material portion of the Collateral,
(b) as to which a bona fide dispute exists, (c) for which appropriate reserves
have been established on Borrower Representative’s financial statements, or
(d) where the failure to comply could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

5.10     Inspection of Property and Books and Records.

 

Borrower Representative shall maintain and shall cause each of its Subsidiaries
to maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of Borrower
Representative and such Subsidiaries. Borrower Representative shall permit, and
shall cause each of its Subsidiaries to permit, representatives and independent
contractors of Agent to visit and inspect any of their respective Properties, to
examine their respective organizational, corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants, at such reasonable times during
normal business hours and as often as may be reasonably desired.

 

5.11     Use of Proceeds.

 

Borrowers shall use the proceeds of the Term Loan solely to refinance the
Existing Debt and to pay transaction costs and fees in connection therewith.
Borrowers shall use the proceeds of the Revolving Loan solely for working
capital and other general corporate purposes not in contravention of any
Requirement of Law and not in violation of this Agreement.

 

5.12     Further Assurances.

 

Borrowers shall ensure that all written information, exhibits and reports
furnished to Agent or any Lender do not and will not contain any untrue
statement of a material fact and do not and will not omit to state any material
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to Agent and each
Lender and correct any defect or error that may be discovered therein or in any
Financing Agreement or in the execution, acknowledgment or recordation thereof.
Promptly upon request by Agent, Borrower Representative shall (and shall cause
each of its Subsidiaries to) take such additional actions as Agent may
reasonably require from time to time in order (a) to carry out more effectively
the purposes of this Agreement or any other Financing Agreement, (b) to subject
to the Liens created by any of the Collateral Documents any of the Properties,
rights or interests intended to be covered by any of the Collateral Documents,
(c) to perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and the Liens intended to be created thereby, and
(d) to better assure, convey, grant, assign, transfer, preserve, protect and
confirm to Agent and Lenders the rights granted or now or hereafter intended to
be granted to Agent and Lenders under any Financing Agreement or under any other
document executed in connection therewith. Without limiting the generality of
the foregoing and except as otherwise approved in writing by Agent and Required
Lenders, (i) Borrowers shall cause each of their Subsidiaries to guaranty the
Liabilities and to cause each such Person to grant to Agent, for the benefit of
Agent and Lenders, a security interest in, and Lien on, all of such Person's
Property to secure such guaranty and (ii) except as otherwise approved in
writing by Agent and Required Lenders, Borrowers shall pledge the stock or other
equity interests of each of its Subsidiaries. In connection with each pledge of
stock or other equity interests, Borrowers shall deliver, or cause to be
delivered, to Agent, such documents, instruments and agreements as Agent may
reasonably require.

 

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5.13     Primary Depository.

 

(a) No later than May 20, 2013 (the “Banking Transition Date”), Borrower
Representative shall, and shall cause its Subsidiaries to, (i) close any deposit
account maintained by Borrower Representative or any of its Subsidiaries with a
depositary bank other than Bank and transfer any funds on deposit therein to a
deposit account for which the Bank is the depositary bank, and (ii) from and
after such date at all times cause Bank to act as the primary depository and
remittance bank for Borrower Representative and any Subsidiaries of Borrower
Representative. If average demand deposit balances fall short of the level
required to cover the Bank's cost of services in accordance with Bank's
customary charges and balance credit formula in any given calendar quarter, Bank
may charge the deficiency in the cost of services to Borrower Representative’s
and each Subsidiary's operating accounts. Borrowers agree that, from and after
the Banking Transition Date, neither Borrower Representative nor any other
Subsidiary of Borrower Representative will maintain any deposit, investment,
custodial or other account of any kind whatsoever with any other bank, brokerage
house or financial institution, other than deposit accounts specially and
exclusively used for petty cash needs, where a local branch of Bank is not
conveniently located, with an aggregate balance not to exceed $50,000 in all
such deposit accounts at any time.

 

(b) For each deposit account that Borrower Representative or any Subsidiary of
Borrower Representative at any time opens or maintains in accordance with
paragraph (a) above or otherwise, Borrower Representative shall, at Agent's
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to Agent, either: (i) cause the depositary bank to comply at any
time with instructions from Agent to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without
further consent of Borrower Representative or any Subsidiary of Borrower
Representative, or (ii) arrange for Agent to become the customer of the
depositary bank with respect to the deposit account, with Borrower
Representative or such Subsidiary being permitted, only with the consent of
Bank, to exercise rights to withdraw funds from such deposit account.

 

5.14     Bank Accounts.

 

(a) Borrowers shall at all times maintain an account (the "Remittance Account")
with Bank for the deposit of payments received on Accounts. No later than the
end of the Business Day immediately following the Business Day of Borrowers’
receipt thereof, (i) Borrowers shall deposit all amounts received from Account
Debtors on Accounts to the Remittance Account and (ii) Borrowers shall deposit
to the Remittance Account all cash and other payments made for Inventory and
other payments constituting proceeds of its Collateral, in each case in the
identical form in which each such payment was made, whether by cash or check.

 

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(b) All payments made to the Remittance Account or otherwise received by Agent
whether on the Accounts or as proceeds of other Collateral or otherwise will be
the sole and exclusive property of Agent and may be applied by Agent in its
discretion on account of the Liabilities as follows: (i) for collection of
checks and other instruments (including automatic clearing house electronic
funds transfers and depository transfer checks) received by Agent at its offices
in Chicago, Illinois, Agent will credit (conditional upon final collection) all
such payments to the Revolving Loan on or before the second Business Day after
such checks and other instruments are received by Agent, and (ii) all cash
payments received by Agent at its offices in Chicago, Illinois, including,
without limitation, payments made by wire transfer of immediately available
funds received by Agent in time for posting to the account of Agent on the date
received, will be credited to the Revolving Loan on the same Business Day such
payments are received by Agent; provided, however, at any time that the
outstanding principal amount of the Revolving Loan is zero: (x) if no Default
has occurred and is continuing, such payments shall be applied to the operating
account of Borrower Representative maintained at Bank, or (y) if a Default has
occurred and is continuing, such payments shall be applied to the Liabilities in
such order as Agent shall determine in its sole discretion. After the occurrence
and during the continuance of a Default, Borrower Representative and all of its
Affiliates, Subsidiaries, shareholders, directors, officers, employees, agents
or those Persons acting for or in concert with Borrowers shall, acting as
trustee for Agent, receive, as the sole and exclusive property of Agent, any
monies, checks, notes, drafts or any other payment relating to and/or proceeds
of Borrowers’ Accounts or the other Collateral which come into the possession or
under the control of Borrower Representative or any of its Affiliates,
Subsidiaries, shareholders, directors, officers, employees, agents or those
Persons acting for or in concert with Borrower Representative and immediately
upon receipt thereof, Borrower Representative shall remit the same or cause the
same to be remitted, in kind, to Agent, at Agent's address set forth below.
Borrowers jointly and severally agree to pay to Agent any and all fees, costs
and expenses which Agent incurs in connection with opening and maintaining the
Remittance Account and depositing for collection by Agent any check or item of
payment received and/or delivered to Agent on account of the Liabilities.

 

5.15     Anti-Terrorism Laws.

 

Borrower Representative shall (a) ensure and cause each of its Subsidiaries to
ensure that no Person that directly or indirectly owns a controlling interest in
or otherwise controls Borrower Representative or any Affiliate is or shall be
listed in any of the listings described in Section 4.20, (b) not use or permit
the use of the proceeds of the Loans to violate any of the foreign asset control
regulations of OFAC or any enabling statute or order relating thereto or the
Executive Order and (c) comply in all material respects and cause each of its
Subsidiaries to comply in all material respects with all applicable Bank Secrecy
Act laws and regulations.

 

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6          NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees on a joint and several basis, that, so long
as Agent or any Lender shall have any Revolving Commitment hereunder, or any
Loan or other Liability shall remain unpaid or unsatisfied (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted), unless Required Lenders waive compliance in writing:

 

6.1     Encumbrances.

 

Borrower Representative shall not, and Borrower Representative shall not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on
any of its assets, including the Collateral, other than the following
(collectively, "Permitted Liens"): (a) Liens securing the payment of taxes
either not yet due or the validity of which is being contested in good faith by
appropriate proceedings, and as to which Borrower Representative shall, if
appropriate under GAAP, have set aside on its books and records adequate
reserves; (b) deposits under workmen's compensation, unemployment insurance,
social security and other similar laws, or to secure the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure indemnity, performance or other similar bonds for the performance of
bids, tenders or contracts (other than for the repayment of borrowed money) or
to secure statutory obligations or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the Ordinary Course of
Business; (c) Liens in favor of Agent for the benefit of Agent and Lenders;
(d) Liens which arise by operation of law, other than Liens which arise by
operation of Environmental Laws; (e) zoning restrictions, building codes,
easements, rights of way, licenses, covenants and other similar restrictions
affecting the use of real Property; (f) liens described on Schedule 6.1 hereof,
(g) Liens on equipment securing purchase money Indebtedness or Capital Leases
incurred to finance the purchase of such equipment permitted by Section 6.2(b)
and (h) Liens on DirecTV Inventory created under the DirecTV Agreements.
Borrower Representative shall not, and Borrower Representative shall not permit
any of its Subsidiaries to, permit the filing of any financing statement naming
Borrower Representative or any Subsidiary as debtor, except for financing
statements filed with respect to Liens expressly permitted by this Agreement.

 

6.2     Indebtedness.

 

Borrower Representative shall not, and Borrower Representative shall not permit
any of its Subsidiaries to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any obligations, payables. or
Indebtedness, except for any of the following: (a) the Liabilities, (b) Capital
Leases and purchase money Indebtedness not to exceed $1,500,000 in the aggregate
(including any Capital Leases or such Indebtedness listed on Schedule 6.2) at
any time outstanding, (c) trade obligations and normal accruals in the Ordinary
Course of Business not yet due and payable, or with respect to which Borrower
Representative or applicable Subsidiary is contesting in good faith the amount
or validity thereof by appropriate proceedings, and then only to the extent that
Borrower Representative has set aside on its books adequate reserves therefor,
if appropriate under GAAP, (d) Indebtedness incurred in connection with
insurance premium financing arrangements undertaken in the Ordinary Course of
Business consistent with past practices and (e) Indebtedness described on
Schedule 6.2. Except as otherwise permitted by this Agreement, Borrower
Representative shall not, and Borrower Representative shall not permit any of
its Subsidiaries to, pay any obligations or indebtedness before the same is due,
except for the early payment of trade obligations in the Ordinary Course of
Business.

 

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6.3     Disposition of Assets.

 

Agent does not authorize Borrower Representative to, and Borrower Representative
shall not, and shall not suffer or permit any of its Subsidiaries to, directly
or indirectly, sell, assign, license, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) any Property (including
accounts and notes receivable, with or without recourse) or enter into any
agreement to do any of the foregoing, except: (a) dispositions of Inventory in
the Ordinary Course of Business; (b) dispositions not otherwise permitted
hereunder which are made for fair market value and the mandatory prepayment in
the amount of the Net Proceeds of such disposition is made as and to the extent
required in Section 2.3(d); provided, that (i) at the time of any disposition,
no Event of Default shall exist or shall result from such disposition, (ii) the
aggregate sales price from such disposition shall be paid in cash, (iii) the
aggregate value of all assets so sold by Borrower Representative and its
Subsidiaries, together, shall not exceed $250,000 in any twelve month period,
and (iv) after giving effect to such disposition, Borrowers are in compliance on
a pro forma basis with the covenants set forth in Section 7 recomputed as of the
last day of the most recent month for which financial statements have been
delivered; and (c) the sale or discount, in each case without recourse, of
accounts receivable past due arising in the Ordinary Course of Business, but
only in connection with the compromise or collection thereof.

 

6.4     Consolidations and Mergers.

 

Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to or in favor of any Person. This Section 6.4 shall not operate to prevent (a)
the merger of a Subsidiary of Borrower Representative with and into Borrower
Representative so long as Borrower Representative is the surviving entity in
such merger, or (b) the merger of any Subsidiary with and into a domestic
wholly-owned Subsidiary.

 

6.5     Loans and Investments.

 

Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to (a) purchase or acquire, or make any commitment therefor, any
capital stock, equity interest, or any obligations or other securities of, or
any interest in, any Person, including the establishment or creation of a
Subsidiary or enter into any joint ventures, or (b) make or commit to make any
Acquisitions, or any other acquisition of all or substantially all of the assets
of another Person, or of any business or division of any Person, including, by
way of merger, consolidation or other combination, or (c) make or commit to make
any advance, loan, extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of Borrower Representative
(the items described in clauses (a), (b) and (c) are referred to as
"Investments"), except for: (i) Investments in cash and Cash Equivalents;
(ii) loans and advances to employees in the Ordinary Course of Business not to
exceed $100,000 in the aggregate at any time outstanding; and (iii) Investments
in securities of Account Debtors received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such Account
Debtors.

 

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6.6     Transactions with Affiliates.

 

Except as specifically described on Schedule 6.6, and except for Restricted
Payments expressly permitted by Section 6.10, Borrower Representative shall not,
and shall not suffer or permit any of its Subsidiaries to, enter into any
transaction with any Affiliate of Borrower Representative, or any Affiliate of
any Subsidiary other than: (a) as expressly permitted by this Agreement;
(b) pursuant to terms no less favorable to Borrower Representative or such
Subsidiary than would be obtained in a comparable arm's length transaction with
a Person not an Affiliate of Borrower Representative or such Subsidiary; and
(c) advances and loans to officers and employees of Borrower Representative and
its Subsidiaries, to the extent permitted under Section 6.5.

 

6.7     Use of Proceeds.

 

Borrowers shall not and shall not suffer or permit any of their Subsidiaries to
use any portion of the Loan proceeds, directly or indirectly, to purchase or
carry Margin Stock or repay or otherwise refinance Indebtedness of any Borrower
or others incurred to purchase or carry Margin Stock, or otherwise in any manner
which is in contravention of any Requirement of Law or in violation of this
Agreement.

 

6.8     Contingent Obligations.

 

Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Contingent
Obligations except in respect of the Liabilities and except: (a) endorsements
for collection or deposit in the Ordinary Course of Business; (b) Rate Contracts
entered into in the Ordinary Course of Business to hedge interest rate exposure;
(c) Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar
obligations; and (d) guaranties in favor of Agent for the benefit of Agent and
Lenders.

 

6.9     Compliance with ERISA.

 

Borrower Representative shall not, and shall not suffer or permit any ERISA
Affiliates to (a) cause or permit to exist any ERISA Event or any other event or
condition, which could reasonably be expected to have a Material Adverse Effect;
or (b) permit any Title IV Plan to have vested Unfunded Benefit Liabilities
(using the actuarial assumptions utilized by the PBGC upon termination of the
Title IV Plan), all determined as of the most recent valuation date for each
such Title IV Plan.

 

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6.10     Restricted Payments.

 

Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to, (a) declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock or other Equity Interests, partnership
interests, membership interests or other Equity Interests (including warrants),
or (b) purchase, redeem or otherwise acquire for value any shares of its capital
stock, partnership interests, membership interests or other Equity Interests or
any warrants, rights or options to acquire such shares, Equity Interests or
securities now or hereafter outstanding (the conduct and actions described in
clauses (a) and (b) being referred to as "Restricted Payments"), other than (i)
dividend payments or other distributions payable solely in its common stock or
other equity securities, (ii) payments made to redeem common stock of Borrower
Representative issued to management or director stockholders that are no longer
members of the board of directors or employed by Borrower Representative or one
of its Subsidiaries, provided all of the following conditions are satisfied: (x)
no Event of Default has occurred and is continuing or would arise as a result of
such Restricted Payment and (y) the aggregate amount of such payments made
pursuant to this clause (ii) shall not exceed $100,000 in any Fiscal Year of
Borrower Representative, and (iii) dividend payments in respect of Borrower
Representative’s Preferred Equity, so long as no Event of Default has occurred
and is continuing or would arise as a result thereof.

 

6.11     Change in Business.

 

Borrower Representative shall not, and shall not permit any of its Subsidiaries
to, engage in any material line of business substantially different from those
lines of business carried on by it on the date hereof.

 

6.12     Change in Structure.

 

Borrower Representative shall not and shall not permit any of its Subsidiaries
to amend any of its Organization Documents if such amendment could reasonably be
expected to result in a Material Adverse Effect. Borrower Representative shall
not and shall not permit any of its Subsidiaries to make any changes in its
equity capital structure (including in the terms of its outstanding Equity
Interests); provided, that Borrower Representative may issue Preferred Equity
yielding gross proceeds of up to $12,000,000 in the aggregate on terms and
conditions satisfactory to Agent.

 

6.13     Accounting Changes; Fiscal Year.

 

Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP. Borrower Representative shall
not change its Fiscal Year.

 

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6.14     Subsidiaries.

 

Borrower Representative shall not form, acquire or permit to exist any
Subsidiaries absent 10 days prior written notice to Agent and subject to
compliance with Section 5.12 hereof.

 

6.15     Subordinated Debt.

 

(a) Borrower Representative shall not, and shall not suffer or permit any of its
Subsidiaries to, make any payment of principal or interest on any Subordinated
Debt except as expressly permitted pursuant to the terms of the applicable
Subordination Agreement; purchase any Subordinated Debt or take any other action
with respect to such Subordinated Debt in contravention of any applicable
Subordinated Debt Document or the applicable Subordination Agreement; take or
omit to take any action whereby the subordination of the Indebtedness or any
part thereof evidenced by any of the Subordinated Debt Documents to the
Liabilities might be terminated, impaired or adversely affected; or fail to give
Agent prompt written notice of any notice received from any holder of any
Subordinated Debt, including any notice of any default under any agreement or
instrument relating thereto by reason whereof such indebtedness might become or
be declared to be due or payable. Borrower Representative shall not, and shall
not suffer or permit any of its Subsidiaries to, enter into or consent to any
modification or alteration of any Subordinated Debt Document or otherwise amend,
modify, cancel or supplement in any respect any provisions of any Subordinated
Debt Document in violation of the applicable Subordination Agreement. Agent may
from time to time give such notices to any holder of any Subordinated Debt as
are contemplated by the applicable Subordination Agreement and Agent may
otherwise, in its discretion, furnish any holder of any Subordinated Debt
information without any liability to Borrower Representative or a Subsidiary.

 

(b) Borrower Representative shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly change or amend, modify or waive any
provision of the terms of any of its Indebtedness permitted by clause (b) or
clause (e) of Section 6.2 if the effect of such amendment is to: (i) increase
the interest rate on such Indebtedness; (ii) change the dates upon which
payments of principal or interest are due on or principal amount of such
Indebtedness; (iii) change any event of default or add or make more restrictive
any covenant with respect to such Indebtedness; (iv) change the redemption or
prepayment provisions of such Indebtedness; (v) change the subordination
provisions thereof (or the subordination terms of any guaranty thereof); (vi)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner adverse to Borrower Representative,
any of its Subsidiaries or Agent or any Lender; or (vii) increase the portion of
interest payable in cash with respect to any Indebtedness for which interest is
payable by the issuance of payment-in-kind notes or is permitted to accrue.

 

6.16     Environmental.

 

Borrower Representative shall not, and Borrower Representative shall not permit
any of its Subsidiaries to, fail to conduct its business so as to comply in all
material respects with all Environmental Laws as the same may be amended from
time to time; provided, however, that nothing contained in this Section 6.16
shall prevent Borrower Representative or any Subsidiary from contesting, in good
faith by appropriate legal proceedings, any such law, regulation, interpretation
thereof or application thereof, provided, further, that no such Person shall
fail to comply with the order of any court or other Governmental Authority of
applicable jurisdiction relating to such laws unless it shall currently be
prosecuting an appeal or proceedings for review and shall have secured a stay of
enforcement or execution or other arrangement postponing enforcement or
execution pending such appeal or proceedings for review.

 

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6.17     Limits on Restrictive Agreements.

 

Borrower Representative shall not, and Borrower Representative shall not permit
any of its Subsidiaries to enter into, become subject to, amend, modify or waive
any agreement or instrument which by its terms would (under any circumstances)
restrict (a) the right of any of its Subsidiaries to make loans or advances or
pay dividends to, transfer property to, or repay any Indebtedness owed to,
Borrower Representative or another Subsidiary of Borrower Representative or
(b) any such Person's right to perform any of the provisions of any of the
Financing Agreements, as applicable.

 

6.18     DirecTV Agreements.

 

Borrower Representative shall not and shall not permit any of its Subsidiaries
to, enter into any amendment to or modification of, or grant any waiver of, any
material provision of, any DirecTV Agreement, other than any provision thereof
related to rates paid by DirecTV thereto.

 

7          FINANCIAL COVENANTS.

 

Each Borrower covenants and agrees that, so long as Agent or any Lender shall
have any Revolving Commitment hereunder, or any Loan or other Liability shall
remain unpaid or unsatisfied (other than contingent indemnification obligations
to the extent no claim giving rise thereto has been asserted), unless Required
Lenders waive compliance in writing:

 

7.1     Fixed Charge Coverage Ratio.

 

Borrowers shall not permit the Fixed Charge Coverage Ratio as of the last day of
any Computation Period to be less than 1.25:1.00.

 

7.2     Total Leverage Ratio.

 

Borrowers shall not permit the Total Leverage Ratio as of the last day of any
Computation Period to be greater than the ratio set forth below for the
corresponding period:

 

Period  Total Leverage Ratio         Closing Date through March 30, 2014 
 2.50:1.00  March 31, 2014 through March 30, 2015   2.25:1.00  March 31, 2015
through March 30, 2016   2.00:1.00  March 31, 2016 and thereafter   1.75:1.00 

 

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7.3     Capital Expenditures.

 

Borrowers shall not permit the aggregate amount of Capital Expenditures
(excluding Capital Expenditures funded or reimbursed with cash proceeds of
insurance that are permitted to be applied for such purpose under the terms of
this Agreement), as determined for Borrower Representative and its Subsidiaries
on a consolidated basis in accordance with GAAP, to exceed $5,000,0000 in any
Fiscal Year.

 

8          DEFAULT, RIGHTS AND REMEDIES OF AGENT.

 

8.1     Defaults.

 

If any of the following events (each, a "Default") shall occur:

 

(a) Borrowers fail to pay any of the principal of the Liabilities or any of its
other Liabilities when such Liabilities are due or are declared due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);

 

(b) Borrower Representative, any of its Subsidiaries, any Pledgor or any
guarantor of any of the Liabilities fails or neglects to perform, keep or
observe any of its covenants, conditions or agreements contained in any of the
other Financing Agreements within any applicable grace period provided thereby
or any Borrower fails or neglects to perform, keep or observe any of its
covenants, conditions or agreements contained in:

 

(i) Sections 5.1, 5.2, or 5.8 above and such failure shall continue for five (5)
days;

 

(ii) Section 5.6 or 5.9 and such failure shall continue for thirty (30) days; or

 

(iii) any other covenant, condition or agreement contained in this Agreement;

 

(c) any warranty or representation now or hereafter made by Borrower
Representative, any of its Subsidiaries, any Pledgor or any guarantor of any of
the Liabilities is untrue or incorrect in any material respect when made, or any
schedule, certificate, written statement, report, financial data, written
notice, or writing furnished at any time by Borrower Representative, any of its
Subsidiaries, any Pledgor or any guarantor of any of the Liabilities to Agent or
Lenders is untrue or incorrect in any material respect on the date as of which
the facts set forth therein are stated or certified or any of the foregoing
omits to state a fact necessary to make the statements therein contained not
misleading in any material respect;

 

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(d) judgments or orders requiring payment in excess of $250,000 in the aggregate
(except for judgments which are not a Lien on personal Property and which are
being contested by Borrower Representative or any Subsidiary in good faith)
shall be rendered against Borrower Representative, any of its Subsidiaries, any
Pledgor or any guarantor of any of the Liabilities and such judgment or order
shall remain unsatisfied or undischarged and in effect for thirty (30)
consecutive days without a stay of enforcement or execution, provided that this
Section 8.1(d) shall not apply to any judgment for which Borrower
Representative, any of its Subsidiaries, any Pledgor or any guarantor of any of
the Liabilities is fully insured (except for normal deductibles in connection
therewith) and with respect to which the insurer has assumed the defense and is
not defending under reservation of right and with respect to which Agent
reasonably believes the insurer will pay the full amount thereof (except for
normal deductibles in connection therewith);

 

(e) a notice of Lien, levy or assessment is filed or recorded with respect to
all or a substantial part of the assets of Borrower Representative, any of its
Subsidiaries, any Pledgor or any guarantor of any of the Liabilities by the
United States, or any department, agency or instrumentality thereof, or by any
state, county, municipality or other governmental agency or any taxes or debts
owing at any time or times hereafter to any one or more of them become a Lien
upon all or a substantial part of Borrower Representative’s Collateral or the
assets of or collateral provided by any such Subsidiary, and (i) such Lien, levy
or assessment is not discharged or released or the enforcement thereof is not
stayed within thirty (30) days of the notice or attachment thereof, or (ii) if
the enforcement thereof is stayed, such stay shall cease to be in effect,
provided that this Section 8.1(e) shall not apply to any Liens, levies or
assessments which relate to current taxes not yet due and payable;

 

(f) there shall occur any loss, theft, substantial damage or destruction of any
item or items of Collateral which is not fully insured as required by this
Agreement, the other Financing Agreements or any guarantee (a "Loss"), to the
extent the amount of such Loss not fully covered by insurance (including any
deductible in connection therewith), together with the amount of all other
Losses not fully covered by insurance (including any deductibles in connection
therewith) occurring in the same Fiscal Year, exceeds $250,000;

 

(g) all or any part of the Collateral is attached, seized, subjected to a writ
or distress warrant, or is levied upon, or comes within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors and on or
before the thirtieth (30th) day thereafter such assets are not returned to
and/or such writ, distress warrant or levy is not dismissed, stayed or lifted
and if the amount of such Collateral or assets or collateral, together with any
other such Collateral, assets and collateral that is so attached, seized,
subjected to writ or distress warrant or levied upon, exceeds $100,000 at any
time;

 

(h) a proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed
(i) against Borrower Representative or any of its Subsidiaries and an
adjudication or appointment is made or order for relief is entered, or such
proceeding remains undismissed for a period in excess of thirty (30) days, or
(ii) by Borrower Representative or any of its Subsidiaries or Borrower
Representative or any of its Subsidiaries makes an assignment for the benefit of
creditors Borrower Representative or any of its Subsidiaries takes any
corporate, limited liability company or partnership action, as applicable, to
authorize any of the foregoing;

 

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(i) a proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed
(i) against any Pledgor or any guarantor of any of the Liabilities and an
adjudication or appointment is made or order for relief is entered, or such
proceeding remains undismissed for a period in excess of thirty (30) days, or
(ii) by any Pledgor or any guarantor of any of the Liabilities or any guarantor
of any of the Liabilities makes an assignment for the benefit of creditors or
any Pledgor or any guarantor of any of the Liabilities takes any corporate,
limited liability company or partnership action, as applicable, to authorize any
of the foregoing;

 

(j) Borrower Representative, any of its Subsidiaries, any Pledgor or any
guarantor of any of the Liabilities voluntarily or involuntarily dissolves or is
dissolved, terminates or is terminated;

 

(k) Borrower Representative, any of its Subsidiaries, any Pledgor or any
guarantor of any of the Liabilities becomes insolvent or fails generally to pay
its debts as they become due;

 

(l) Borrower Representative, any of its Subsidiaries, any Pledgor or any
guarantor of any of the Liabilities is enjoined, restrained, or in any way
prevented by the order of any court or any administrative or regulatory agency
from conducting all or any material part of its business affairs;

 

(m) a breach, which could reasonably be expected to have a Material Adverse
Effect, by Borrower Representative, any of its Subsidiaries or any guarantor of
any of the Liabilities shall occur under any agreement, document or instrument
(other than an agreement, document or instrument evidencing the lending of
money), whether heretofore, now or hereafter existing between Borrower
Representative, any of its Subsidiaries or such guarantor and any other Person,
and such breach continues unwaived for more than thirty (30) days after such
breach first occurs, provided that such grace period shall not apply, and a
Default shall be deemed to have occurred promptly upon such breach, if such
breach cannot, in Agent's reasonable determination, be cured by Borrower
Representative, such Subsidiary or such guarantor during such thirty (30) day
grace period;

 

(n) (i) any event of default occurs under any of the Subordinated Debt
Documents, or (ii) as to more than $250,000 in Indebtedness in the aggregate at
any time (other than the Subordinated Debt), (x) Borrower Representative, any of
its Subsidiaries, or any guarantor of any of the Liabilities shall fail to make
any payment due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) on any such Indebtedness and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; (y) any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or (z) any such Indebtedness shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled required
payment) prior to the stated maturity thereof;

 

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(o) any guarantor of any of the Liabilities shall, or shall attempt to,
terminate or revoke any of its obligations under the applicable guarantee
agreement or breach any of the terms of such guarantee agreement, or any Person
executing a fidelity guaranty in favor of Agent or Lenders in connection with
the Liabilities shall, or shall attempt to, terminate or revoke such guaranty;

 

(p) a Change in Control shall occur;

 

(q) Borrower Representative or any Subsidiary of Borrower Representative shall,
or shall attempt to, terminate, discontinue or revoke any of its obligations
under any of the Financing Agreements to which it is a party;

 

(r) (i) Borrower Representative or any ERISA Affiliate shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its Withdrawal Liability under a Multiemployer Plan;
(ii) the occurrence of an ERISA Event; (iii) a Qualified Plan shall lose its
qualification; or (iv) Borrower Representative or any ERISA Affiliate is
assessed a tax under Section 4980B of the Code or incurs a liability under
Section 601 et seq. of ERISA or applicable state law with respect to continued
health coverage; and, the occurrence of any such event listed in clauses (i)
through (iv), or the occurrence of any combination of events listed in clauses
(i) through (iv) results in, or could reasonably be expected to result in, a
Material Adverse Effect or result in exposure to Borrower Representative or its
Subsidiaries in an amount in excess of $150,000;

 

(s) any provision of this Agreement or any Note affecting the ability of any
Borrower to pay or perform its obligations hereunder or thereunder shall cease
to be in full force and effect or shall be declared to be null and void by a
court of competent jurisdiction; or

 

(t) (i)any material breach occurs under any DirecTV Agreement, (ii) any DirecTV
Agreement is terminated or fails to remain in full force and effect or (iii)
Borrower Representative or any of its Subsidiaries has received notice from
DirecTV that the performance of Borrower Representative or any of its
Subsidiaries in any Designated Market Area (“DMA”) under any DirecTV Agreement
has failed to meet specified performance standards for two (2) consecutive
months and the related 30-day cure period has been implemented;

 

then Agent may, and if requested by Required Lenders, shall, upon notice to
Borrower Representative, do any one or more of the following: (x) terminate
Agent's and each Lender's obligation to make Loans and Advances pursuant to
Section 2.1 hereof or cause the issuance of Letters of Credit pursuant to this
Agreement, or (y) declare all of the Liabilities, including all of Borrowers’
contingent liabilities with respect to any Letters of Credit, to be immediately
due and payable, whereupon all of the Liabilities, including all of Borrowers’
contingent liabilities with respect to any Letters of Credit, shall become
immediately due and payable, except that, in the event a Default described in
Section 8.1(h) hereof shall exist or occur, the obligations of the Lenders to
make Loans and the obligation and power of the LC Issuer to issue Letters of
Credit shall automatically terminate and all of the Liabilities, including all
of Borrowers’ contingent liabilities with respect to any Letters of Credit,
shall automatically, without notice of any kind, be immediately due and payable
without any election or action on the part of Agent, LC Issuer or any Lender.
Anything in this Section 8.1 to the contrary notwithstanding, the Agent shall,
at the request of the Required Lenders, rescind and annul any acceleration of
the Loans and the termination of the obligation to make Advances by written
instrument filed with Borrower Representative.

 

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8.2     Rights and Remedies Generally.

 

If a Default shall have occurred and be continuing, Agent may, and if requested
by Required Lenders, shall, exercise, without any other notice to or demand upon
Borrowers, in any jurisdiction in which enforcement hereof is sought, in
addition to any other rights and remedies contained in this Agreement or in any
of the other Financing Agreements, all of the rights and remedies of a secured
party under the Uniform Commercial Code or other applicable laws and any
additional rights and remedies which may be provided to a secured party in any
jurisdiction in which any Collateral is located. All such rights and remedies
shall be cumulative, and non-exclusive, to the extent permitted by law.

 

8.3     Set-off.

 

Each Borrower agrees that Agent, each Lender and each of their respective
Affiliates have all rights of set-off and banker's lien provided by applicable
law and, in addition thereto, each Borrower agrees that (in addition to Agent's
rights with respect to proceeds of Collateral) at any time (a) any amount owing
by it under this Agreement or any other Financing Agreement is then due or
(b) any Default exists, Agent, any Lender and any of their respective Affiliates
may apply to the payment of the Liabilities any and all balances, credits,
deposits, accounts or monies of Borrowers then or thereafter with Agent, such
Lender or such Affiliate. Without limitation of the foregoing and in addition to
Agent's rights with respect to the proceeds of the Collateral, each Borrower
agrees that upon and after the occurrence and during the continuance of a
Default, Agent and each Lender and each of their respective branches and offices
are hereby authorized, at any time and from time to time, without notice, (i) to
set-off against, and to appropriate and apply to the payment of, the Liabilities
(whether matured or unmatured, fixed or contingent or liquidated or
unliquidated) any and all amounts owing by Agent, any Lender or any such office
or branch to Borrowers (whether matured or unmatured, and, in the case of
deposits, whether general or special, time or demand and however evidenced) and
(ii) pending any such action, to the extent necessary, to hold such amounts as
collateral to secure such Liabilities and to return as unpaid for insufficient
funds any and all checks and other items drawn against any deposits so held as
Agent may elect in its sole discretion.

 

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8.4     Cash Collateral.

 

In the event that there are any outstanding LC Obligations, Agent may demand, at
any time after (a) the occurrence and during the continuance of a Default,
(b) this Agreement shall terminate for any reason pursuant to Section 2.8
hereof, or (c) the amount of (i) the aggregate outstanding principal balance of
the Revolving Loan plus the aggregate outstanding amount of LC Obligations,
shall exceed the amount of (ii) the Borrowing Base plus the aggregate
outstanding amount of LC Obligations, and Borrower Representative thereupon
shall deliver to Agent, cash collateral for any Letter of Credit in an amount
equal to 105% the aggregate outstanding amount of the LC Obligations. If
Borrower Representative fails to deliver such cash to Agent promptly upon
Agent's request therefor, Agent may, without limiting Agent's rights or remedies
arising from such failure to deliver cash, retain, as cash collateral, cash
proceeds of the Collateral in an amount equal to the aggregate outstanding
amount of LC Obligations then outstanding. Agent may at any time apply any or
all of such cash and cash collateral to the payment of any or all of the
Liabilities, including to the payment of any or all of Borrowers’ reimbursement
obligations with respect to any Letter of Credit. Pending such application,
Agent may (but shall not be obligated to) (x) invest the same in a savings
account, under which deposits are available for immediate withdrawal, with such
bank as Agent may, in its sole discretion, select, or (y) hold the same as a
credit balance in an account with Agent in Borrower Representative’s name.
Interest payable on any such savings account described in the foregoing sentence
shall be collected by Agent and shall be paid to Borrower Representative as it
is received by Agent, less any fees owing by Borrowers to Agent with respect to
any Letter of Credit and less any amounts necessary to pay any of the
Liabilities which may be due and payable at such time. Agent shall have no
obligation to pay interest on any credit balances in any account opened for
Borrower Representative pursuant to this Agreement. This Section 8.4 shall
survive termination of this Agreement.

 

8.5     Waiver of Demand.

 

Demand, presentment, protest and notice of nonpayment are hereby waived by each
Borrower. Each Borrower also waives the benefit of all valuation, appraisal and
exemption laws.

 

9          AGENCY.

 

9.1     Appointment of Agent.

 

(a) Each Lender hereby designates Fifth Third as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes Agent to take such action
on its behalf under the provisions of this Agreement and the Notes and any other
instruments and agreements referred to herein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Except as otherwise provided herein, Agent shall
hold all Collateral and all payments of principal, interest, fees, charges and
expenses received pursuant to this Agreement or any of the Financing Agreements
for the benefit of Lenders. Agent may perform any of its duties hereunder by or
through its agents or employees.

 

(b) The provisions of this Article 9 are solely for the benefit of Agent and
Lenders, and Borrower Representative and its Subsidiaries shall not have any
rights as third party beneficiaries of any of the provisions hereof. In
performing its functions and duties under this Agreement, Agent shall act solely
as agent of Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for Borrower
Representative or any of Borrower Representative’s Subsidiaries.

 

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9.2     Nature of Duties of Agent.

 

Agent shall not have duties, obligations or responsibilities except those
expressly set forth in this Agreement and the Financing Agreements. Neither
Agent nor any of its officers, directors, employees or agents shall be liable
for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful misconduct.
The duties of Agent shall be mechanical and administrative in nature; Agent
shall not have by reason of this Agreement or the Financing Agreements a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or the Financing Agreements, expressed or implied, is intended to or shall be so
construed as to impose upon Agent any obligations in respect of this Agreement
or the Financing Agreements except as expressly set forth herein.

 

9.3     Lack of Reliance on Agent.

 

(a) Independently and without reliance upon Agent, each Lender, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial or other condition and affairs of Agent and any
other Lender in connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of Agent
and any other Lender, and, except as expressly provided in this Agreement, Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the initial
Revolving Loans and the Term Loan or at any time or times thereafter.

 

(b) Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
priority or sufficiency of this Agreement or the Financing Agreements or any
notes or the financial or other condition of Borrower Representative or any of
Borrower Representative’s Subsidiaries. Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or the Financing Agreements, or the
financial condition of Borrower Representative and its Subsidiaries, or the
existence or possible existence of any Event of Default.

 

9.4     Certain Rights of Agent.

 

Agent shall have the right to request instructions from Required Lenders or all
Lenders, as applicable, pursuant to this Agreement, by notice to each Lender. If
Agent shall request instructions from Required Lenders or all Lenders, as
applicable, with respect to any act or action (including the failure to act) in
connection with this Agreement, Agent shall be entitled to refrain from such act
or taking such action unless and until Agent shall have received instructions
from Required Lenders or all Lenders, as applicable, and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting hereunder in accordance with
the instructions of Required Lenders or all Lenders, as applicable.

 

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9.5     Reliance by Agent.

 

Agent shall be under no duty to examine, inquire into, or pass upon the
validity, effectiveness or genuineness of this Agreement, any of the Financing
Agreements or any instrument, document or communication furnished pursuant
hereto or thereto or in connection herewith or therewith. Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order, facsimile, PDF, electronic mail
or other documentary, teletransmission or telephone message believed by it to be
genuine and correct and to have been signed, sent or made by the proper person.
Agent may consult with legal counsel (including counsel for Borrowers or any
Guarantor with respect to matters concerning any Borrower or any Guarantor),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

 

9.6     Indemnification of Agent.

 

To the extent Agent is not promptly reimbursed and indemnified by Borrowers,
each Lender will reimburse and indemnify Agent, in proportion to its Pro Rata
Share, for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against Agent in performing its duties
hereunder, in any way relating to or arising out of 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 Agent's gross negligence or willful misconduct. If
any indemnity furnished to Agent for any purpose shall, in the opinion of Agent,
be insufficient or become impaired, Agent may call for additional indemnities
and cease to do, or not commence, the acts to be indemnified against, even if so
directed by Required Lenders or all Lenders, as applicable, until such
additional indemnification is provided. The obligations of Lenders under this
Section 9.6 shall survive the payment in full of the Liabilities and the
termination of this Agreement.

 

9.7     Agent in its Individual Capacity.

 

With respect to the Loans made by it pursuant hereto, Agent shall have the same
rights and powers hereunder as any other Lender or holder of a note or
participation interest and may exercise the same as though it was not performing
the duties specified herein; and the terms "Lenders," "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity. Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisor or other business with Borrower Representative or any of
Borrower Representative’s Subsidiaries or any Affiliate of Borrower
Representative or any of Borrower Representative’s Subsidiaries as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower Representative or any of Borrower Representative’s
Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders, to the extent such activities
are not in contravention of the terms of this Agreement.

 

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9.8     Holders of Notes.

 

Agent may deem and treat the payee of any promissory note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any promissory note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such promissory
note or of any promissory note or notes issued in exchange therefor.

 

9.9     Successor Agent.

 

(a) Agent may, upon thirty (30) days' notice to Lenders and Borrower
Representative, resign at any time (effective upon the appointment of a
successor Agent) pursuant to the provisions of this Section 9.9 by giving
written notice thereof to Lenders and Borrower Representative. Upon any such
resignation, Required Lenders shall have the right, upon five (5) days' notice,
to appoint a successor Agent which, if no Default is continuing, is acceptable
to Borrower Representative (such approval not to be unreasonably withheld). If
no successor Agent shall have been so appointed by Required Lenders and approved
by Borrower Representative, if applicable, and accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of resignation,
then, upon five (5) days' notice, the retiring Agent may, on behalf of Lenders,
appoint a successor Agent, which shall be a bank or a trust company or other
financial institution which maintains an office in the United States, or a
commercial bank organized under the laws of the United States of America or of
any State thereof, or any affiliate of such bank or trust company or other
financial institution which is engaged in the banking business, having a
combined capital and surplus of at least $500,000,000 and which, if there is no
Default continuing, is acceptable to Borrower Representative (such approval not
to be unreasonably withheld).

 

(b) Upon the acceptance of any appointment as an Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Agent under this Agreement.

 

9.10     Collateral Matters.

 

(a) Each Lender authorizes and directs Agent to enter into the Financing
Agreements for the benefit of Lenders. Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by Required Lenders in accordance
with the provisions of this Agreement or the Financing Agreements, and the
exercise by the Required Lenders 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. 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 Financing Agreements
which may be necessary to perfect and maintain perfected the security interest
in and liens upon the Collateral granted pursuant to this Agreement and the
Financing Agreements.

 

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(b) Agent will not, without the verbal consent of all Lenders, which consent
shall (a) be confirmed promptly thereafter in writing and (b) not be
unreasonably withheld or delayed, execute any release of Agent's security
interest in any Collateral except for releases relating to dispositions of
Collateral (x) permitted by this Agreement or (y) in connection with the
repayment in full of all of the Liabilities (other than contingent
indemnification Liabilities not yet asserted) and the termination of all
obligations of Agent and Lenders under this Agreement and the Financing
Agreements; provided, that with the consent of Required Lenders, Agent may
release its liens on Collateral having a book value not greater than ten percent
(10%) of the total book value of all Collateral, as determined by Agent, either
in a single transaction or series of related transactions, not to exceed twenty
percent (20%) of the book value of all Collateral in any Fiscal Year. Upon
payment in full of all of the Liabilities (other than unasserted contingent
indemnification Liabilities), and termination of the Revolving Commitment, Agent
shall release the Liens. Agent shall not be required to execute any such release
on terms which, in Agent's opinion, would expose Agent to liability or create
any obligation or entail any consequence other than the release of such liens
and execution or filing of termination statements and releases without recourse
or warranty. In the event of any sale or transfer of any of the Collateral,
Agent shall be authorized to deduct all of the expenses reasonably incurred by
Agent from the proceeds of any such sale or transfer.

 

(c) Lenders hereby agree that the lien granted to Agent in any property sold or
disposed of in accordance with the provisions of the Agreement shall be
automatically released; provided, however that Agent's lien shall attach to and
continue for the benefit of Agent and Lenders in the proceeds and products of
such property arising from any such sale or disposition.

 

(d) To the extent, pursuant to the provisions of this Section 9.10, Agent's
execution of a release is required (i) to release its lien upon any permitted
sale and transfer of Collateral or (ii) to release Liens on all Collateral in
connection with the payment in full of all of the Liabilities (other than
unasserted contingent indemnification Liabilities) and the termination of the
Revolving Commitment hereunder, Agent shall (and is hereby irrevocably
authorized by Lenders to) promptly execute such documents as may be necessary to
evidence the release of the liens granted to Agent for the benefit of Lenders
herein or pursuant hereto upon the Collateral that was sold or transferred.

 

(e) Agent shall not have any obligation whatsoever to Lenders or to any other
Person to assure that the Collateral exists or is owned by Borrower
Representative or any of Borrower Representative’s Subsidiaries or is cared for,
protected or insured or that the liens granted to Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
or to continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to Agent in this Article 9 or in any of the Financing Agreements, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, given Agent's own interest in the
Collateral as one of Lenders and that Agent shall have no duty or liability
whatsoever to Lenders, except for its gross negligence or willful misconduct.

 

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(f) In the event that any Lender receives any proceeds of any Collateral by
setoff, exercise of any banker's lien or otherwise, in an amount in excess of
such Lender's Pro Rata Share of such proceeds, such Lender shall purchase for
cash (and other Lenders shall sell) interests in each of such other Lender's Pro
Rata Share of the Liabilities as would be necessary to cause all Lenders to
share the amount so set off or otherwise received with each other Lender in
accordance with their respective Pro Rata Shares. No Lender shall exercise any
right of set off or banker's lien without the prior written consent of Agent.

 

9.11     Actions with Respect to Defaults.

 

In addition to Agent's right (where applicable) to take actions on its own
accord as permitted under this Agreement, Agent shall take such action with
respect to an Event of Default as shall be directed by Required Lenders or all
Lenders, as applicable, under this Agreement; provided, that until Agent shall
have received such directions, Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable and in the best interests of Lenders. No
Lender shall have any right individually to enforce or seek to enforce this
Agreement or any Financing Agreement or to realize upon any Collateral, unless
instructed to do so by Agent.

 

9.12     Delivery of Information.

 

Agent shall not be required to deliver to any Lender originals or copies of any
documents, instruments, notices, communications or other information received by
Agent from Borrower Representative or any of Borrower Representative’s
Subsidiaries, Required Lenders, any Lender or any other Person under or in
connection with this Agreement or any Financing Agreement except (i) as
specifically provided in this Agreement or any Financing Agreement and (ii) as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of Agent at the time of receipt of such
request and then only in accordance with such specific request. Agent shall
deliver to each Lender each Borrowing Base Certificate received from Borrower
Representative. Upon request from any Lender for additional business, financial,
company affairs and other information relating to Borrower Representative or its
Subsidiaries, Agent shall make such request of Borrower Representative pursuant
to Section 5.3(i) hereof.

 

9.13     Demand.

 

Subject to the terms of this Agreement, Agent shall make demand for repayment by
Borrowers of all Liabilities owing by Borrowers hereunder, after the occurrence
of an Event of Default, upon the written request of Required Lenders. Agent
shall make such demand in such manner as it deems appropriate, in its sole
discretion, to effectuate the request of the Required Lenders. Nothing contained
herein shall limit the discretion of Agent to take reserves, to deem certain
Accounts and Inventory ineligible, or to exercise any other discretion granted
to Agent in this Agreement.

 

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9.14     Notice of Default.

 

Agent shall not be deemed to have knowledge or notice of the occurrence of any
Event of Default or any Default, except with respect to Events of Default
arising as a result of Borrowers’ failure to pay principal, interest or fees
required to be paid to Agent for the benefit of Lenders, unless Agent shall have
received written notice from a Lender or Borrower Representative describing such
Event of Default, and which identifies such event as a "notice of default". Upon
receipt of any such notice or Agent becoming aware of Borrowers’ failure to pay
principal, interest or fees required to be paid to Agent for the benefit of
Lenders, Agent will notify each Lender of such receipt or event.

 

10          SETTLEMENTS, DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS.

 

Not later than 2:00 p.m. (Cincinnati time) on the date of any requested Advance
of a Loan, subject to the provisions set forth below, each Lender shall make
available its portion of the Loan in funds immediately available at the
principal office of the Agent in Cincinnati, Ohio. On a weekly basis (or more
frequently if requested by Agent) (a "Settlement Date"), Agent shall provide
each Lender with a statement of the outstanding balance of the Liabilities as of
the end of the Business Day immediately preceding the Settlement Date (the
"Pre-Settlement Determination Date") and the current balance of the Loans funded
by each Lender. If such statement discloses that such Lender's current balance
of the Loans as of the Pre-Settlement Determination Date exceeds such Lender's
Pro Rata Share of the Liabilities outstanding as of the Pre-Settlement
Determination Date, then Agent shall, on the Settlement Date, transfer, by wire
transfer, the net amount due to such Lender in accordance with such Lender's
instructions, and if such statement discloses that such Lender's current balance
of the Loans as of the Pre-Settlement Determination Date is less than such
Lender's Pro Rata Share of the Liabilities outstanding as of the Pre-Settlement
Determination Date, then such Lender shall, on the Settlement Date, transfer, by
wire transfer the net amount due to Agent in accordance with Agent's
instructions. In addition, payments actually received by Agent with respect to
the following items shall be distributed by Agent to Lenders as follows:

 

(i) Within two (2) Business Days of receipt thereof by Agent, payments to be
applied to interest on the Loans shall be paid to each Lender in proportion to
its Pro Rata Share;

 

(ii) Within two (2) Business Days of receipt thereof by Agent, payments to be
applied to the L/C Fee set as provided in Section 2.6(d) hereof shall be paid to
each Lender in proportion to its Pro Rata Share; and

 

(iii) Within two (2) Business Days of receipt thereof by Agent, payments to be
applied to the Unused Fee as provided in Section 2.6(e) shall be paid to each
Lender in proportion to its Pro Rata Share.

 

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Notwithstanding the foregoing, Agent shall not be obligated to transfer to any
Defaulting Lender any payment made by Borrowers to Agent, nor shall such
Defaulting Lender be entitled to share any interest, fees or other payment
hereunder, until payment is made by such Defaulting Lender to Agent as required
in this Agreement.

 

Unless the Agent shall have been notified by a Lender prior to (or, in the case
of an Index Rate Advance, by 1:00 p.m. (Cincinnati time) on) the date on which
such Lender is scheduled to make payment to the Agent of the proceeds of a
Revolving Loan (which notice shall be effective upon receipt) that such Lender
does not intend to make such payment, the Agent may assume that such Lender has
made such payment when due and the Agent may in reliance upon such assumption
(but shall not be required to) make available to Borrowers the proceeds of the
Revolving Loan to be made by such Lender.

 

If and to the extent that a Lender does not settle with Agent as required under
this Agreement (a "Defaulting Lender") Borrowers and Defaulting Lender severally
agree to repay to Agent forthwith on demand such amount required to be paid by
such Defaulting Lender to Agent, together with interest thereon, for each day
from the date such amount is made available to Borrowers until the date such
amount is repaid to Agent (x) in the case of a Defaulting Lender at the rate
published by the Federal Reserve Bank of New York on the next succeeding Banking
Day as the "Federal Funds Rate" or if no such rate is published for any Banking
Day, at the average rate quoted for such day for such transactions from three
(3) federal funds brokers of recognized standing selected by Agent, and (y) in
the case of Borrowers, at the interest rate applicable at such time for such
Loans; provided, that Borrowers’ obligation to repay such advance to Agent shall
not relieve such Defaulting Lender of its liability to Agent for failure to
settle as provided in this Agreement.

 

11          MISCELLANEOUS.

 

11.1     Waiver.

 

Agent's or Lenders' failure, at any time or times hereafter, to require strict
performance by Borrowers of any provision of this Agreement shall not waive,
affect or diminish any right of Agent or any Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Agent or any
Lender of a Event of Default under this Agreement or any of the other Financing
Agreements shall not suspend, waive or affect any other Event of Default under
this Agreement or any of the other Financing Agreements, whether the same is
prior or subsequent thereto and whether of the same or of a different kind or
character. None of the undertakings, agreements, warranties, covenants and
representations of Borrowers contained in this Agreement or any of the other
Financing Agreements and no Event of Default under this Agreement or any of the
other Financing Agreements shall be deemed to have been suspended or waived by
Agent and Lenders unless such suspension or waiver is in writing signed by an
officer of Agent and Required Lenders, and directed to Borrower Representative
specifying such suspension or waiver. All Defaults shall continue until the same
are waived by Agent and Required Lenders in accordance with the preceding
sentence.

 

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11.2     Costs and Attorneys' Fees.

 

Borrowers shall jointly and severally reimburse Agent on demand for all
reasonable expenses and fees paid or incurred in connection with the analysis,
documentation, negotiation and closing of the Loans and other extensions of
credit described herein, including lien search, filing and recording fees and
the reasonable fees and expenses of Agent's attorneys and paralegals and
consultants (whether such attorneys and paralegals are employees of Agent or are
separately engaged by Agent), whether such expenses and fees are incurred prior
to or after the date hereof; all costs and expenses incurred by Agent in
connection therewith or with respect to the negotiation, documentation,
enforcement, collection and protection of Agent's and Lenders' interests in the
Collateral shall be payable on demand, together with interest following demand
for payment thereof at the from time to time rate applicable to Index Rate
Advances under the Revolving Loan prescribed in Section 2.6(a) hereof, and shall
be part of the Liabilities, and secured by the Collateral. If at any time or
times hereafter Agent (or, after the occurrence and during the continuance of an
Event of Default, any Lender) employs counsel in connection with protecting or
perfecting Agent's Liens on the Collateral or in connection with any matters
contemplated by or arising out of this Agreement or any of the other Financing
Agreements, whether (a) to prepare, negotiate or execute (i) any amendment to or
modification or extension of this Agreement, any other Financing Agreements or
any instrument, document or agreement executed by any Person in connection with
the transactions contemplated by this Agreement, (ii) any new or supplemental
Financing Agreements, or any instrument, document or agreement to be executed by
any Person in connection with the transactions contemplated by this Agreement,
or (iii) any instrument, document or agreement in connection with any sale or
attempted sale of any interest herein to any participant, (b) to commence,
defend, or intervene in any litigation or to file a petition, complaint, answer,
motion or other pleadings, (c) to take any other action in or with respect to
any suit or proceeding (bankruptcy or otherwise), (d) to consult with officers
of Agent to advise Agent, (e) to protect, collect, lease, sell, take possession
of, release or liquidate any of the Collateral, or (f) to attempt to enforce or
to enforce any Liens on any of the Collateral, or to enforce any rights of Agent
and Lenders, including Agent's and Lenders' rights to collect any of the
Liabilities, then in any of such events, all of the reasonable attorneys' fees
arising from such services, and any expenses, costs and charges relating
thereto, including all reasonable fees of all paralegals and other staff
employed by such attorneys, together with interest following demand for payment
thereof at the from time to time rate applicable to Index Rate Advances under
the Revolving Loan prescribed in Section 2.6(a) hereof, shall be part of the
Liabilities, payable by Borrowers on demand and secured by the Collateral.

 

11.3     Amendments, Etc.

 

No amendment, modification, termination or waiver of any provision of this
Agreement or any Financing Agreement or consent to any departure by Borrowers
therefrom or any release of a Lien shall be effective unless the same shall be
in writing and signed by Agent and the Required Lenders and by Borrowers;
except, that, no such amendment, waiver, discharge or termination shall:

 

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(i) reduce any interest rate or any fees or extend the time of payment, or
waive, payment of any interest or any fees, or reduce or extend the time for, or
waive, any payment of the principal amount of any Loan or Letters of Credit, or
reduce the amount of any final maturity payment or defer or extend the final
maturity date of any Loan, in each case without the consent of each Lender
directly affected thereby and Borrowers,

 

(ii) increase the Revolving Commitment of any Lender or in the aggregate, or
increase the Term Loan Commitment of any Lender, over the amount thereof then in
effect or provided hereunder, in each case without the consent of all Lenders
and Borrowers,

 

(iii) release any Collateral (except as required or permitted hereunder or under
any of the other Financing Agreements or applicable law and except as permitted
under Section 9.10(b) hereof), without the consent of Agent, all Lenders and
Borrowers,

 

(iv) amend or modify the definitions of Required Lenders or Pro Rata Share,
without the consent of Agent, all Lenders and Borrowers,

 

(v) consent to the assignment or transfer by any Borrower of any of its rights
and obligations under this Agreement, without the consent of Agent, all Lenders
and Borrowers,

 

(vi) amend, modify or waive any terms of this Section 11.3 hereof, without the
consent of Agent, all Lenders and Borrowers, or

 

(vii) increase the advance rates constituting part of the Borrowing Base without
the consent of Agent, all Lenders and Borrowers.

 

Any waiver or consent provided hereunder shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand on
Borrowers in any case shall entitle Borrowers to any other or further notice or
demand in similar or other circumstances. The consent of Agent and Borrowers
shall be required for any amendment, waiver or consent affecting the rights or
duties of Agent hereunder or under any of the other Financing Agreements, in
addition to the consent of the Lenders otherwise required by this Section 11.3.

 

11.4     Expenditures by Agent.

 

In the event Borrower Representative shall fail to pay taxes, insurance,
assessments, costs or expenses which Borrower Representative is, under any of
the terms hereof, required to pay, or fails to keep the Collateral free from
Liens, except as permitted herein, Agent may, in its sole discretion, make
expenditures for any or all of such purposes, and the amount so expended,
together with interest thereon following demand for the payment thereof at the
rate applicable to Index Rate Advances under the Revolving Loan prescribed in
Section 2.6(a) hereof, shall be part of the Liabilities, payable by Borrowers on
demand and secured by the Collateral.

 

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11.5     Custody and Preservation of Collateral.

 

Agent shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Collateral in its possession if it takes such action
for that purpose as Borrower Representative shall request in writing, but
failure by Agent to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure by Agent to preserve or
protect any right with respect to such Collateral against prior parties, or to
do any act with respect to the preservation of such Collateral not so requested
by Borrower Representative shall of itself be deemed a failure to exercise
reasonable care in the custody or preservation of such Collateral.

 

11.6     Reliance.

 

All covenants, agreements, representations and warranties made herein by
Borrowers shall, notwithstanding any investigation by Agent or any Lender, be
deemed to be material to and to have been relied upon by Agent and each Lender.

 

11.7     Assignments and Participations.

 

(a) Borrowers shall not have the right to assign this Agreement or any interest
therein except with the prior written consent of Agent and all Lenders.
Notwithstanding the foregoing, whenever in this Agreement there is reference
made to any of the parties hereto, such reference shall be deemed to include,
wherever applicable, a reference to the successors and assigns of Borrowers, the
successors and assigns of Agent, and the successors and assigns of any Lender,
and the provisions of this Agreement shall be binding upon and shall inure to
the benefit of said successors and assigns.

 

(b) Any Lender may make, carry or transfer Loans at, to or for the account of,
any of its branch offices or the office of an Affiliate of such Lender except to
the extent such transfer would result in increased costs to Borrowers.

 

(c) Each Lender may, with the consent of Agent and, so long as no Event of
Default is then continuing, with the consent of Borrower Representative, which
consent shall not be unreasonably withheld, but without the consent of any other
Lender, assign to one or more banks or other financial institutions all or a
portion of its rights and obligations under this Agreement and the Financing
Agreements; provided, that (i) for each such assignment, the parties thereto
shall execute and deliver to Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance Agreement in the form
attached hereto as Exhibit 11.7 (the "Assignment and Acceptance"), and a
processing and recordation fee of $3,500 to be paid by the assignee, and (ii) no
such assignment shall be for less than $3,000,000 (or, if less, the entire
remaining balance of the Loans and commitments of a Lender hereunder). Upon such
execution and delivery of the Assignment and Acceptance to Agent, from and after
the date specified as the effective date in the Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto, and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, such assignee shall have the rights and obligations
of a Lender hereunder and (y) the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than any indemnification
rights it may have pursuant to this Agreement which will survive) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

 

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(d) By executing and delivering an Assignment and Acceptance, the assignee
thereunder confirms and agrees as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement and
the Financing Agreements or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the Financing
Agreements, (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Borrower
Representative or any of its Subsidiaries or the performance or observance by
Borrower Representative or any of its Subsidiaries of its obligations under this
Agreement and the Financing Agreements, (iii) such assignee confirms that it has
received a copy of this Agreement and the Financing Agreements, together with
copies of the financial statements referred to in this Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance, (iv) such
assignee will, independently and without reliance upon Agent, such assigning
Lender 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, (v) such assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

 

(e) Agent shall maintain a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of Lenders and the Revolving Commitment and the Term Loan of, and principal
amount of the Loans owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrowers, Agent and Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register and copies of each Assignment and Acceptance shall
be available for inspection by Borrower Representative, Agent or any Lender at
any reasonable time and from time to time upon reasonable prior notice.

 

(f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender, Agent shall, if such Assignment and Acceptance has been completed and is
in substantially the form of Exhibit 11.7 hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to Borrower Representative. Within five (5)
Business Days after its receipt of such notice, Borrowers shall execute and
deliver to Agent in exchange for the surrendered promissory note or notes, a new
promissory note or notes to the assignee in amounts equal to such assignee's
commitments and outstanding Loans hereunder and, if the assigning Lender has
retained a portion of the Loans, a new promissory note or notes to the assigning
Lender in an amount equal to the remaining commitments and outstanding loans
hereunder of such assigning Lender under the terms of this Agreement. Such new
promissory note or notes shall re-evidence the indebtedness outstanding under
the old promissory note or notes and shall be in the aggregate principal amount
of such surrendered promissory note or notes, shall be dated of even date
herewith and shall otherwise be in substantially the form of the promissory note
or notes subject to such assignment.

 

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(g) Each Lender may sell participations (without the consent of Agent, Borrowers
or any other Lender) to one or more parties, in or to all (or a portion) of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Revolving Commitment and the Loans owing to it); provided,
that (i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) Borrowers, Agent, and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(iv) such Lender shall not transfer, grant, assign or sell any participation
under which the participant shall have rights to approve any amendment or waiver
of this Agreement. A Lender granting a participation shall keep a sub-register
(acting solely for this purpose as an agent of the Borrowers) in which it
records the names, addresses of, and principal amount(s) of the Loan
participated to, each participant. The sub-register shall be available for
inspection by the Borrowers and the Agent at any reasonable time upon reasonable
prior notice to the Lender.

 

(h) Each Lender agrees that, without the prior written consent of Borrowers and
Agent, it will not make any assignment hereunder in any manner or under any
circumstances that would require registration or qualification of, or filings in
respect of, any Loan or other Liabilities under the securities laws of the
United States of America or of any jurisdiction.

 

(i) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding Borrower Representative or any of its
Subsidiaries.

 

11.8     CHOICE OF LAW.

 

THIS AGREEMENT SHALL BE DEEMED TO BE EXECUTED AND HAS BEEN DELIVERED AND
ACCEPTED IN CHICAGO, ILLINOIS BY SIGNING AND DELIVERING IT THERE. ANY DISPUTE
BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW
PROVISIONS OF THE STATE OF ILLINOIS.

 

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11.9     CONSENT TO JURISDICTION.

 

(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SECTION 11.9(b), AGENT, EACH
LENDER AND EACH BORROWER AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED BY STATE OR FEDERAL COURTS LOCATED IN
COOK COUNTY, ILLINOIS, AND AGENT, EACH LENDER AND EACH BORROWER WAIVE ANY
OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN, BUT AGENT, EACH LENDER AND EACH BORROWER ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
COOK COUNTY, ILLINOIS. EACH BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

 

(b) OTHER JURISDICTIONS. EACH BORROWER AGREES THAT AGENT AND LENDERS SHALL HAVE
THE RIGHT TO PROCEED AGAINST SUCH BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE AGENT OR ANY LENDER TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE LIABILITIES, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF AGENT. EACH BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY AGENT TO REALIZE ON
PROPERTY, COLLATERAL OR ANY OTHER SECURITY FOR THE LIABILITIES, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT OR ANY LENDER. EACH BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH
AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SECTION 11.9(b).

 

11.10     SERVICE OF PROCESS.

 

EACH BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF THE COURTS
REFERRED TO IN SECTION 11.9 HEREOF IN ANY SUCH ACTION OR PROCEEDING BY MAILING
COPIES OF SUCH SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID TO SUCH BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 11.18. NOTHING IN THIS AGREEMENT SHALL AFFECT
THE RIGHT OF AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW BUT ANY
FAILURE TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS.

 

11.11     WAIVER OF JURY TRIAL.

 

EACH BORROWER, EACH LENDER AND AGENT WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
BETWEEN AGENT, EACH LENDER AND EACH BORROWER ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
THERETO. EACH BORROWER, EACH LENDER AND AGENT HEREBY AGREE AND CONSENT THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

-87-

 

 

11.12     ADVICE OF COUNSEL.

 

EACH BORROWER ACKNOWLEDGES AND REPRESENTS TO AGENT AND EACH LENDER THAT IT HAS
DISCUSSED THIS AGREEMENT WITH ITS LAWYERS.

 

11.13     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.

 

11.14     Application of Payments.

 

Notwithstanding any contrary provision contained in this Agreement or in any of
the other Financing Agreements, each Borrower hereby irrevocably waives the
right to direct the application of any and all payments at any time or times
hereafter received by Agent from Borrowers or with respect to any of the
Collateral during the existence of a Default, and each Borrower hereby
irrevocably agrees that during the existence of a Default Agent shall have the
continuing exclusive right to apply and reapply any and all payments received at
any time or times hereafter, whether with respect to the Collateral or
otherwise, against the Liabilities in such manner as Agent may deem advisable
notwithstanding any entry by Agent upon any of its books and records.

 

11.15     Marshaling; Payments Set Aside.

 

Neither Agent nor any Lender shall be under any obligation to marshal any assets
in favor of Borrowers or any other party or against or in payment of any or all
of the Liabilities. To the extent that any Borrower makes a payment or payments
to Agent or any Lender or Agent enforces its Liens or exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or set-off had not occurred.

 

-88-

 

 

11.16     Section Titles.

 

Article, section and subsection titles contained in this Agreement shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties.

 

11.17     Continuing Effect.

 

This Agreement, Agent's Liens on the Collateral, and all of the other Financing
Agreements shall continue in full force and effect so long as any Liabilities
shall be owed to Agent, and (even if there shall be no Liabilities outstanding)
so long as this Agreement has not been terminated as provided in Section 2.8
hereof.

 

11.18     Notices.

 

(a) Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered (i) three (3)
Business Days after deposit in the United States mails, with proper postage
prepaid, (ii) when sent after receipt of confirmation or answerback if sent by
telecopy, or other similar facsimile transmission, (iii) one (1) Business Day
after deposited with a reputable overnight courier with all charges prepaid, or
(iv) when delivered, if hand-delivered by messenger, all of which shall be
properly addressed to the party to be notified and sent to the address or number
indicated as follows:

 

If to Borrowers or Borrower Representative, at:

Multiband Corporation
9449 Science Center Drive
New Hope, MN 55428
Attention:  James Mandel, CEO
Electronic Mail:  jim.mandel@multibandusa.com
Facsimile: 763-504-3060

 

with a copy to:

 

Multiband Corporation
9449 Science Center Drive
New Hope, MN 55428
Attention:  Steven Bell, General Counsel
Electronic Mail:  steve.bell@multibandusa.com
Facsimile: 763-504-3060

 

-89-

 

 

If to Agent, at:

Fifth Third Bank
222 S. Riverside Plaza,
30th Floor
Chicago, Illinois 60606
Attention:  Philip Renwick
Electronic Mail:  Philip.Renwick@53.com
Facsimile:  312-704-4127

 

or to such other address or number as each party designates to the other in the
manner herein prescribed.

 

(b) Notices and other communications under Section 5 of this Agreement may be
delivered or furnished in a pdf file (representing a copy of the designated
document) attached to electronic mail to the electronic mail address specified
in Section 11.18(a) and, if so delivered or furnished, shall be deemed received
on the date upon which the sender receives an acknowledgement from the intended
recipients (such as by the "return receipt requested" function, as available,
return electronic mail or other similar written acknowledgement); provided that
if such notice or other communication is not sent during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been received at the opening of business on the next Business Day for the
recipient; provided, further, that: the sender shall deliver paper copies of
such notice or other communication to the recipient pursuant to Section
11.18(a). In no event shall Agent, any Lender or any of their respective
Affiliates or any of their respective officers, directors, employees, agents,
advisors or representatives have any liability to Borrowers or any other Person
or entity for damages of any kind, including any direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of Borrower Representative’s, any Lender's or
Agent's delivery of any notices, requests, financial statements, financial and
other reports, certificates or other information, materials or communications
through the internet, except to the extent the liability of Agent or any Lender
is found in a final non-appealable judgment by a court of competent jurisdiction
to have resulted from Agent's or such Lender's gross negligence or willful
misconduct.

 

11.19     Equitable Relief.

 

Each Borrower recognizes that, in the event any Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy at law may prove to be inadequate relief to Agent and Lenders;
therefore, each Borrower agrees that Agent and Lenders, if Agent so requests,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages and the granting of any such
relief shall not preclude Agent from pursuing any other relief or remedies for
such breach.

 

-90-

 

 

11.20     Indemnification.

 

Borrowers, jointly and severally, agree to defend, protect, indemnify and hold
harmless Agent, each Lender and each of their respective Affiliates, officers,
directors, employees, attorneys, consultants and agents (collectively, the
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for and consultants of such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect, or consequential and whether based on any federal or state
laws or other statutory regulations, including securities, environmental and
commercial laws and regulations, under common law or at equitable cause or on
contract or otherwise) in any manner relating to or arising out of the
Liabilities, the Letters of Credit, this Agreement or any of the other Financing
Agreements, or any act, event or transaction related or attendant thereto, the
agreements of Agent contained herein, the making of the Loans, the incurrence of
any Liabilities, the issuance of any Letter of Credit (and any documents, drafts
or acceptances relating thereto) or any LC Agreement, the management of such
Loans, Letters of Credit, or the Collateral (including any liability under
federal, state or local environmental laws or regulations) or the use or
intended use of the proceeds of such Loans or use of such Letters of Credit
(collectively, the "Indemnified Matters"); provided, however, that Borrowers
shall have no obligation to any Indemnitee hereunder with respect to Indemnified
Matters caused by or resulting from the willful misconduct or gross negligence
of such Indemnitee. Without limitation of the foregoing, "Indemnified Matters"
shall include any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever relating to or arising out of (i) any presence, release,
threatened release or disposal of any hazardous or toxic substance or petroleum
by Borrower Representative or any of its Subsidiaries or otherwise occurring on
or with respect to its Property (whether owned or leased), (ii) the operation or
violation of any Environmental Law by Borrower Representative or any of its
Subsidiaries or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iii) the inaccuracy or breach of any environmental
representation, warranty or covenant by Borrower Representative or any of its
Subsidiaries made herein or in any other Financing Agreement evidencing or
securing any Liabilities or setting forth terms and conditions applicable
thereto or otherwise relating thereto. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 11.20 may be
unenforceable because it is violative of any law or public policy, Borrowers
shall contribute the maximum portion which they are permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees.

 

11.21     Counterparts.

 

This Agreement may be executed and accepted in any number of counterparts, each
of which shall be an original with the same effect as if the signatures were on
the same instrument. The delivery of an executed counterpart of a signature page
to this Agreement by facsimile or PDF shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

-91-

 

 

11.22     Security Interests, Etc.

 

Notwithstanding any other provision set forth in this Agreement: (a) Agent and
each Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including the Liabilities and the other
Financing Agreements) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board; (b) if Agent or any Lender is a fund
that invests in bank loans, Agent and such Lender may create a security interest
in all or any portion of the Advances owing to it and the Note or Notes held by
it to the trustee for holders of obligations owed, or securities issued, by such
fund as security for such obligations or securities, provided, however, that
(i) no such pledge shall release Agent or any Lender from any of its obligations
under the Financing Agreements and (ii) such trustee shall not be entitled to
exercise any of the rights of Agent or such Lender under the Financing
Agreements even though such trustee may have acquired ownership rights with
respect to the pledged interest through foreclosure or otherwise; and (c) Agent
and each Lender may grant to a special purpose funding vehicle identified as
such in writing from time to time by Agent or such Lender to Borrower
Representative (an "SPC") the option to provide all or any part of any Advance
that Agent or such Lender would otherwise be obligated to make pursuant to this
Agreement; provided, however, that (i) nothing herein shall constitute a
commitment by any SPC to fund any Advance, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Advance,
the Agent or such Lender shall be obligated to make such Advance pursuant to the
terms hereof. The making of an Advance by an SPC hereunder shall utilize the
Revolving Commitment of the Agent or such Lender to the same extent, and as if,
such Advance were made by such Agent or such Lender. Each party hereto hereby
agrees that (i) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which Agent or any Lender would be liable,
(ii) no SPC shall be entitled to the benefits of Section 2.12, 2.13, 2.14 or
2.15 to the extent that Agent or the applicable Lender would not be entitled
thereto, and (iii) the Agent and each Lender shall for all purposes, including
the approval of any amendment or waiver of any provision of any Financing
Agreement, remain the Agent and Lenders, respectively, of record hereunder. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior Indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained in this Agreement, Agent, each Lender and any SPC may
disclose on a confidential basis any non-public information relating to its
funding of Advances to any rating agency, commercial paper dealer or provider of
any surety or guarantee or credit or liquidity enhancement to Agent, such Lender
or such SPC in the ordinary course of business.

 

11.23     Patriot Act Notice.

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each Person that opens an account, including any
deposit account, treasury management account, loan, other extension of credit,
or other financial services product. What this means for Borrowers: Agent will
ask for each Borrower's name, employer identification number, business address,
and other information that will allow Agent to identify each Borrower. Agent may
also ask to see the driver's license or other identifying documents relating to
officers, directors and interestholders of each Borrower, and to see each
Borrower's legal organizational documents or other identifying documents.

 

[Signatures appear on next page]

 

-92-

 

 

IN WITNESS WHEREOF, this Credit Agreement has been duly executed as of the day
and year first above written.

 

  BORROWERS:         MULTIBAND CORPORATION         By: /s/ James Mandel   Name:
James Mandel   Title: Chief Executive Officer         MULTIBAND FIELD SERVICES,
INCORPORATED         By: /s/ James Mandel   Name: James Mandel   Title: Chief
Executive Officer         MULTIBAND MDU INCORPORATED         By: /s/ James
Mandel   Name: James Mandel   Title: Chief Executive Officer         MULTIBAND
ENGINEERING AND WIRELESS, MIDWEST, INC.         By: /s/ James Mandel   Name:
James Mandel   Title: Chief Executive Officer         MULTIBAND ENGINEERING AND
WIRELESS, SOUTHEAST, INC.         By: /s/ James Mandel   Name: James Mandel  
Title: Chief Executive Officer         MULTIBAND SUBSCRIBER SERVICES, INC.      
  By: /s/ James Mandel   Name: James Mandel   Title: Chief Executive Officer    
 

 

Signature Page to Credit Agreement

 

 

 

 

  MINNESOTA DIGITAL UNIVERSE, INC.         By: /s/ James Mandel   Name: James
Mandel   Title: Chief Executive Officer         MULTIBAND SPECIAL PURPOSE, LLC  
      By: /s/ James Mandel   Name: James Mandel   Title: Chief Executive Officer

 

 

Signature Page to Credit Agreement

 

 

 

 

  AGENT AND LENDERS:         FIFTH THIRD BANK, as a Lender and as Agent        
      By: /s/ Philip Renwick   Name: Philip Renwick   Title: Vice President    
    Pro Rata Share:  100%         Revolving Commitment: $10,000,000   Term Loan
Commitment: $20,000,000   TOTAL: $30,000,000

 

 

Signature Page to Credit Agreement

 

 

 

 

EXHIBIT 2.1
TO CREDIT AGREEMENT

 

FORM OF REVOLVING NOTE

 

 

  Chicago, Illinois $_____________ ____________, 20__

 

FOR VALUE RECEIVED, MULTIBAND CORPORATION, a Minnesota corporation, Multiband
Field Services, Incorporated, a Delaware corporation, Multiband MDU
Incorporated, a Delaware corporation, Multiband Engineering and Wireless,
Midwest, Inc., a Missouri corporation, Multiband Engineering and Wireless,
Southeast, Inc., a Florida corporation, Multiband Subscriber Services, Inc., a
Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company (collectively, "Borrowers"), hereby jointly and severally promise to pay
to _____________, ("Lender"), or its registered assigns, in such coin or
currency of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, the principal sum of
________________ DOLLARS ($_________), or, if less, the aggregate unpaid
principal amount of all advances made to Borrowers pursuant to Section 2.1(a) of
the Credit Agreement (as hereinafter defined), together with interest from and
after the date hereof on the unpaid principal balance outstanding at the rates
provided for in, and calculated in accordance with the terms of, the Credit
Agreement.

 

This Revolving Note (the "Note") is one of the Revolving Notes referred to in,
and is issued pursuant to, that certain Credit Agreement dated as of March 20,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") by and among Borrowers, the financial institutions
from time to time party thereto ("Lenders") and Fifth Third Bank, an Ohio
banking corporation, as agent for Lenders ("Agent"), and is entitled to all of
the benefits and security of the Credit Agreement and the Collateral Documents.
All capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Credit Agreement.

 

Time is of the essence of this Note. To the fullest extent permitted by
applicable law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.

 

Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of Agent or any Lender in the exercise of
any right or remedy hereunder or under the Credit Agreement shall operate as a
waiver thereof, nor as an acquiescence in any Default, nor shall any single or
partial exercise by Agent or any Lender of any right or remedy preclude any
other right or remedy. Agent, at its option, may enforce its rights against any
Collateral securing this Note without enforcing its rights against any Borrower,
any guarantor of the Indebtedness evidenced hereby or any other Property or
Indebtedness due or to become due to any Borrower. Each Borrower agrees that,
without releasing or impairing such Borrower's liability hereunder, Agent and
Lenders may at any time release, surrender, substitute or exchange any
Collateral securing this Note and may at any time release any party primarily or
secondarily liable for the Indebtedness evidenced by this Note.

 

Exhibit 2.1 - Page 1

 

 

The outstanding principal balance of the Revolving Loan evidenced hereby and
interest on the unpaid principal balance of the Revolving Loan evidenced hereby
shall be due and payable on the dates, for the number of days, at the rates and
in the manner set forth in the Credit Agreement. In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest hereunder in excess of the highest rate applicable hereto,
Lender shall promptly refund such excess interest to Borrowers.

 

This Note is secured by the Collateral described in the Credit Agreement and the
Collateral Documents.

 

This Note shall be governed by, and construed and enforced in accordance with,
the internal laws and not the conflicts of law provisions of the State of
Illinois.

 

[Signature Page Follows]

 

 

Exhibit 2.1 - Page 2

 

 

IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and
delivered on the date first above written.

 

  MULTIBAND CORPORATION               By:     Name:     Title:                
MULTIBAND FIELD SERVICES, INCORPORATED               By:     Name:     Title:  
              MULTIBAND MDU INCORPORATED               By:     Name:     Title:
                MULTIBAND ENGINEERING AND WIRELESS, MIDWEST, INC.              
By:     Name:     Title:                 MULTIBAND ENGINEERING AND WIRELESS
SOUTHEAST, INC.               By:     Name:     Title:              

 

Exhibit 2.1 - Page 3

 

 

  MULTIBAND SUBSCRIBER SERVICES, INC.               By:     Name:     Title:    
            MULTIBAND DIGITAL UNIVERSE, INC.               By:     Name:    
Title:                 MULTIBAND SPECIAL PURPOSE, LLC               By:    
Name:     Title:  

 

Exhibit 2.1 - Page 4

 

 

EXHIBIT 2.2

TO CREDIT AGREEMENT

 

FORM OF TERM NOTE

 

  Chicago, Illinois $_____________ ____________, 20__

  

FOR VALUE RECEIVED, MULTIBAND CORPORATION, a Minnesota corporation, Multiband
Field Services, Incorporated, a Delaware corporation, Multiband MDU
Incorporated, a Delaware corporation, Multiband Engineering and Wireless,
Midwest, Inc., a Missouri corporation, Multiband Engineering and Wireless,
Southeast, Inc., a Florida corporation, Multiband Subscriber Services, Inc., a
Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company (collectively, "Borrowers"), hereby jointly and severally promise to pay
to _____________ ("Lender"), in such coin or currency of the United States which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment, the principal sum of ________________ DOLLARS
($___________) together with interest from and after the date hereof on the
unpaid principal balance outstanding at the rates provided for in, and
calculated in accordance with the terms of, the Credit Agreement (as hereinafter
defined).

 

This Term Note (the "Note") is one of the Term Notes referred to in, and is
issued pursuant to, that certain Credit Agreement dated as of March 20, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among Borrowers, the financial institutions from time
to time party thereto ("Lenders") and Fifth Third Bank, an Ohio banking
corporation, as agent for Lenders ("Agent"), and is entitled to all of the
benefits and security of the Credit Agreement and the Collateral Documents. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Credit Agreement.

 

Time is of the essence of this Note. To the fullest extent permitted by
applicable law, each Borrower, for itself and its successors and assigns,
expressly waives presentment, demand, protest, notice of dishonor, notice of
non-payment, notice of maturity, notice of protest, presentment for the purpose
of acceleration of maturity, diligence in collection, and the benefit of any
exemption or insolvency laws.

 

Wherever possible each provision of this Note shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of Agent or any Lender in the exercise of
any right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any Default, nor shall any single or partial exercise by Agent
or any Lender of any right or remedy preclude any other right or remedy. Agent,
at its option, may enforce its rights against any Collateral securing this Note
without enforcing its rights against any Borrower, any guarantor of the
Indebtedness evidenced hereby or any other Property or Indebtedness due or to
become due to any Borrower. Each Borrower agrees that, without releasing or
impairing such Borrower's liability hereunder, Agent and Lenders may at any time
release, surrender, substitute or exchange any Collateral securing this Note and
may at any time release any party primarily or secondarily liable for the
Indebtedness evidenced by this Note.

 

Exhibit 2.2 - Page 1

 

 

The outstanding principal balance of the Term Loan evidenced hereby and interest
on the unpaid principal balance of the Term Loan evidenced hereby shall be due
and payable on the dates, for the number of days, at the rates and in the manner
set forth in the Credit Agreement. In no contingency or event whatsoever shall
interest charged hereunder, however such interest may be characterized or
computed, exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall promptly
refund such excess interest to Borrowers.

 

This Note is secured by the Collateral described in the Credit Agreement and the
Collateral Documents.

 

This Note shall be governed by, and construed and enforced in accordance with,
the internal laws and not the conflicts of law provisions of the State of
Illinois.

 

[Signature Page Follows]

 

 

Exhibit 2.2 - Page 2

 

 

IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and
delivered as of the date first above written.

 

  MULTIBAND CORPORATION               By:     Name:       Title:                
  MULTIBAND FIELD SERVICES, INCORPORATED               By:     Name:      Title:
                  MULTIBAND MDU INCORPORATED               By:     Name:      
Title:                   MULTIBAND ENGINEERING AND WIRELESS, MIDWEST, INC.      
        By:     Name:       Title:                   MULTIBAND ENGINEERING AND
WIRELESS SOUTHEAST, INC.               By:     Name:       Title:              
 

 

Exhibit 2.2 - Page 3

 

 

 

  MULTIBAND SUBSCRIBER SERVICES, INC.               By:     Name:     Title:    
            MULTIBAND DIGITAL UNIVERSE, INC.               By:     Name:    
Title:                 MULTIBAND SPECIAL PURPOSE, LLC               By:    
Name:     Title:  

 

 

Exhibit 2.2 - Page 4

 

 

EXHIBIT 2.3(c)
TO
CREDIT AGREEMENT

 

FORM OF EXCESS CASH FLOW CERTIFICATE

 

[Date]

 

Fifth Third Bank, as Agent
222 S. Riverside Plaza
30th Floor
Chicago, Illinois 60606

 

Ladies and Gentlemen:

 

The undersigned, Multiband Corporation, a Minnesota corporation ("Borrower
Representative"), pursuant to Section 2.3(c) of that certain Credit Agreement
dated as of March 20, 2013 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") by and among Borrower
Representative, Multiband Field Services, Incorporated, a Delaware corporation,
Multiband MDU Incorporated, a Delaware corporation, Multiband Engineering and
Wireless, Midwest, Inc., a Missouri corporation, Multiband Engineering and
Wireless, Southeast, Inc., a Florida corporation, Multiband Subscriber Services,
Inc., a Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company, the financial institutions from time to time party thereto ("Lenders")
and Fifth Third Bank, an Ohio banking corporation, as agent for Lenders
("Agent"), hereby delivers this Excess Cash Flow Certificate on behalf of
Borrowers. All capitalized terms used herein, unless otherwise specifically
defined, shall have the meanings ascribed to them in the Credit Agreement.

 

Borrower Representative hereby certifies and warrants on behalf of Borrowers to
Agent and Lenders that the following is a true and complete computation in all
material respects of Excess Cash Flow, as such term is defined in Section 1.1 of
the Credit Agreement (each of the line items to be computed in accordance with
the provisions more particularly set forth in the Credit Agreement):

 

Exhibit 2.3(c) - Page 1

 

 

Net Income   $__________   Plus: Interest Expense $__________     Plus: Income
tax expense $__________     Plus: Expenses incurred in connection with the
execution and delivery of the Credit Agreement $__________     Plus:
Depreciation $__________     Plus: Amortization $__________     Plus: Gains or
non-cash losses from the sale or disposition of assets not in the Ordinary
Course of Business $__________     Plus: Gains or non-cash losses from
discontinued operation $__________     Plus: Unrealized gains and losses with
respect to Rate Contracts for such period, to the extent not included in
Interest Expense $__________     Plus: Other extraordinary gains or non-cash
losses $__________     Equals: EBITDA   $__________ Deductions:   Scheduled
payments of principal on all Indebtedness (including payments on Capital Leases)
$__________     Plus: Capital Expenditures (excluding those financed with
purchase money Indebtedness provided by third parties and Capital Leases)
$__________     Plus: Federal, state, local and foreign income taxes paid in
cash $__________     Plus: Interest Expense paid in cash $__________     Plus:
Voluntary prepayments of the Term Loan made in accordance with Credit Agreement
$__________   Equals: Total Deductions $__________ EBITDA Minus Total Deductions
Equals Excess Cash Flow $__________

 

Exhibit 2.3(c) - Page 2

 

 

IN WITNESS WHEREOF, Borrower Representative has caused this Excess Cash Flow
Certificate to be executed and delivered by its authorized officer on
__________, 20__.

 

  MULTIBAND CORPORATION               By:     Name:     Title:  

 

Exhibit 2.3(c) - Page 3

 

 

EXHIBIT 2.10
TO
CREDIT AGREEMENT

 

FORM OF NOTICE OF LIBOR RATE BORROWING CONTINUATION/CONVERSION

 

[Date]

 

Fifth Third Bank, as Agent
222 S. Riverside Plaza
30th Floor
Chicago, Illinois 60606

 

Ladies and Gentlemen:

 

The undersigned, Multiband Corporation, a Minnesota corporation ("Borrower
Representative"), pursuant to Section 2.10 of that certain Credit Agreement
dated as of March 20, 2013 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") by and among Borrower
Representative, Multiband Field Services, Incorporated, a Delaware corporation,
Multiband MDU Incorporated, a Delaware corporation, Multiband Engineering and
Wireless, Midwest, Inc., a Missouri corporation, Multiband Engineering and
Wireless, Southeast, Inc., a Florida corporation, Multiband Subscriber Services,
Inc., a Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company, the financial institutions from time to time party thereto ("Lenders")
and Fifth Third Bank, an Ohio banking corporation, as agent for Lenders
("Agent"), hereby gives irrevocable notice to Agent that the undersigned
requests [a conversion to an Index Rate Advance] [a conversion to a LIBOR Rate
Advance] [a continuation of a LIBOR Rate Advance] under the Credit Agreement for
the [Revolving Loan] [Term Loan] as described below:

 

11.23.1     the Business Day to convert or continue such advance shall be
____________________________ (the "Effective Date");

 

11.23.2     the amount of the advance to be converted or continued on the
Effective Date is $__________;

 

11.23.3     the advance to be converted or continued is [an Index Rate Advance]
[a LIBOR Rate Advance with an Interest Period of [one] [two] [three] month[s]
expiring on the Effective Date]; and

 

11.23.4     of such advance [$_________ is to be converted to an Index Rate
Advance] [and] [$__________ is to be [converted] [continued] as a LIBOR Rate
Advance with an Interest Period of [one] [two] [three] month[s] beginning on the
Effective Date and expiring on __________, 20__].

 

All capitalized terms used herein, unless otherwise specifically defined, shall
have the meanings ascribed to them in the Credit Agreement.

 

Exhibit 2.10 - Page 1

 

 

  MULTIBAND CORPORATION               By:     Name:     Title:  

 

 

 

Exhibit 2.10 - Page 2

 

 

 

EXHIBIT 3.1
TO
CREDIT AGREEMENT

 

FORM OF NOTICE OF BORROWING

 

[Date]

 

Fifth Third Bank, as Agent
222 S. Riverside Plaza
30th Floor
Chicago, Illinois 60606

 

Ladies and Gentlemen:

 

The undersigned, Multiband Corporation, a Minnesota corporation ("Borrower
Representative"), pursuant to Section 3.1 of that certain Credit Agreement dated
as of March 20, 2013 (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") by and among Borrower Representative,
Multiband Field Services, Incorporated, a Delaware corporation, Multiband MDU
Incorporated, a Delaware corporation, Multiband Engineering and Wireless,
Midwest, Inc., a Missouri corporation, Multiband Engineering and Wireless,
Southeast, Inc., a Florida corporation, Multiband Subscriber Services, Inc., a
Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company, the financial institutions from time to time party thereto ("Lenders")
and Fifth Third Bank, an Ohio banking corporation, as agent for Lenders
("Agent"), hereby gives irrevocable notice to Agent that the undersigned
requests an advance under the Credit Agreement as described below:

 

(i) the Business Day on which such advance is to be made is
____________________________ (the "Borrowing Date").

 

(ii) the amount of the advance to be made on the Borrowing Date is $__________.

 

(iii) the advance shall be [an Index Rate Advance] [a LIBOR Rate Advance with an
Interest Period of [one] [two] [three] month[s] beginning on the Borrowing Date
and expiring on __________, 20__].

 

Borrower hereby certifies that on the date hereof and on the Borrowing Date,
immediately before and after giving effect to the advance requested hereby, the
conditions set forth in Section 3 have been satisfied.

 

All capitalized terms used herein, unless otherwise specifically defined, shall
have the meanings ascribed to them in the Credit Agreement.

 

Exhibit 3.1

 

 

  MULTIBAND CORPORATION               By:     Name:     Title:  

 

 

 

 

 

EXHIBIT 3.5
TO
CREDIT AGREEMENT

 

CONDITIONS TO EFFECTIVENESS OF AGREEMENT

 

 

The effectiveness of the Agreement is subject to the following conditions:

 

1     Documents. Agent shall have received on or before the Closing Date all of
the following, in form and substance satisfactory to Agent and Lenders and
(except for the Notes) in sufficient counterparts, duly executed by all parties
thereto:

 

(a) Credit Agreement; Notes. The Agreement, including all exhibits and schedules
thereto, executed by Borrowers, Agent and Lenders and the Notes executed by
Borrowers;

 

(b) Perfection Certificate; Financing Agreements. The Perfection Certificate and
the Financing Agreements, executed by Borrowers and such other Persons party
thereto, as applicable, in appropriate form for recording, where necessary,
together with:

 

(i) acknowledgment copies of all Uniform Commercial Code financing statements
filed, registered or recorded to perfect the security interests of Agent for the
benefit of itself and Lenders granted pursuant to the Collateral Documents, or
other evidence reasonably satisfactory to Agent that there has been filed,
registered or recorded all financing statements and other filings, registrations
and recordings reasonably necessary and advisable to perfect the Liens of Agent
for the benefit of itself and Lenders granted pursuant to the Collateral
Documents, in accordance with applicable law or, with respect to Uniform
Commercial Code financing statements, in the discretion of Agent, originals
thereof in proper form for filing, registration or recording to perfect the
security interests of Agent granted pursuant to the Collateral Documents;

 

(ii) Uniform Commercial Code financing statement, pending suit, fixture filing,
federal and state tax lien and judgment searches as Agent shall have reasonably
requested of Borrowers and their Subsidiaries, and such termination statements,
pay-off letters or other documents as may be reasonably necessary to confirm
that the Collateral is subject to no other Liens in favor of any Persons (other
than Permitted Liens);

 

(iii) evidence that all other actions reasonably necessary or, in the reasonable
opinion of Agent and Lenders, desirable to perfect and protect the Liens created
by the Collateral Documents have been taken;

 

(iv) funds sufficient to pay any filing or recording tax or fee in connection
with any and all Uniform Commercial Code financing statements, documentary stamp
or intangible taxes and recording fees payable in connection with the filing of
any Uniform Commercial Code financing statements (whether due on the Closing
Date or in the future) including sums due in connection with any future
advances; and

 

 

 

 

(v) such consents, estoppels, subordination agreements and other documents and
instruments executed by landlords, tenants and other Persons party to material
contracts relating to any Collateral as to which Agent shall be granted a Lien,
as reasonably requested by Agent;

 

(c) Officer’s Certificates; Resolutions; Incumbency. A certificate of an officer
of each Borrower certifying:

 

(i) the certificate of formation or articles of organization (or similar), as
applicable, and all amendments thereto, with a copy thereof attached to such
certificate;

 

(ii) the by-laws, the limited liability company agreement or agreement of
limited partnership (or similar), as applicable, and all amendments thereto,
with a copy thereof attached to such certificate;

 

(iii) the names and true signatures of the officers authorized to execute,
deliver and perform the Agreement and the other Financing Agreements; and

 

(iv) a copy of the resolutions of the board of managers or member (or similar
governing body), as applicable, approving and authorizing the execution,
delivery and performance of this Agreement and the other Financing Agreements to
be executed or delivered by it hereunder;

 

(d) Organization Documents and Good Standing. Each of the following documents:

 

(i) the certificate of formation or articles of organization (or similar), as
applicable, of each Borrower and all amendments thereto, certified, as of a
recent date by the Secretary of State of Minnesota, Missouri, Florida or
Delaware, as applicable; and

 

(ii) a good standing certificate, as of a recent date, for each Borrower from
the Secretary of State of Minnesota, Missouri, Florida or Delaware, as
applicable, and each state where the Borrower is qualified to do business as a
foreign entity;

 

(e) Legal Opinions. Such opinions of counsel to the Borrowers addressed to Agent
and Lenders in form and substance reasonably satisfactory to Agent and Lenders
as Agent and Lenders shall reasonably require;

 

(f) Insurance Policies. Standard lenders' loss payable endorsements in favor of
Agent with respect to the insurance policies or other instruments or documents
evidencing insurance coverage on the properties of the Borrowers and each of
their Subsidiaries, endorsements to all liability insurance policies naming
Agent as additional insured thereunder and copies of such insurance policies;

 

(g) Borrowing Base Certificate. A duly completed Borrowing Base Certificate
executed on behalf of Borrowers by a Responsible Officer of Borrower
Representative setting forth the Borrowing Base as of a date not more than three
(3) Business Days prior to the Closing Date;

 

 

 

 

(h) Money Transfer Instructions. Written money transfer instructions addressed
to Agent and executed by Borrower Representative, together with such other
related money transfer authorizations as Agent may have reasonably requested;

 

(i) Regulatory Information. All documentation and other information required by
bank regulatory authorities under applicable "know your customer" and anti-money
laundering rules and regulations, including the USA Patriot Act, as Agent shall
have reasonably requested;

 

(j) DirecTV Home Services Provider Agreement Amendment. The Second Amendment to
that certain Home Services Provider Agreement, dated as of October 15, 2012, by
and between DIRECTV, LLC and Multiband shall have been executed, in the form
substantially as presented to the Agent prior to the Closing Date; and

 

(k) Other Documents. Such other approvals, opinions, documents, agreement,
instruments or materials as Agent or Lenders may reasonably request.

 

2     Additional Conditions. The satisfaction of the following additional
conditions precedent on or before the Closing Date, in a manner, form and
substance reasonably satisfactory to Agent and Lenders:

 

(a) Payment of Fees. Borrowers shall have paid all accrued and unpaid fees,
costs and expenses to the extent then due and payable on the Closing Date,
together with attorneys’ fees of Agent;

 

(b) Use of Proceeds. Borrowers shall use the proceeds of the Loans solely for
the purposes set forth in Section 5.11;

 

(c) Minimum Availability. As of the Closing Date, the amount equal to (i) (A)
the lesser of (1) the Maximum Revolving Facility and (2) the Borrowing Base,
less (B) the sum of (i) the outstanding Revolving Loans and (ii) the outstanding
LC Obligations, plus (ii) the cash on hand of the Borrowers and their
Subsidiaries, shall be at least $5,000,000;

 

(d) Due Diligence. Evidence of completion to the satisfaction of Agent of such
investigations, reviews and audits with respect to the Borrowers and each of
their Subsidiaries and the transactions contemplated by the Financing Agreements
as Agent may deem appropriate;

 

(e) Projections. Agent shall have received satisfactory projections (including
balance sheets, cash flow statements and statements of forecasted profits and
losses) of Borrowers’ (and their Subsidiaries') consolidated and consolidating
financial performance for the Fiscal Year ending December 31, 2013 (prepared on
a month by month basis);

 

 

 

 

(f) Financial Statements; Capitalization. Agent shall have received and
approved, in its sole discretion, Borrowers’ audited financial statements for
the Fiscal Year ended December 31, 2011, confirmation of the capitalization and
equity structure of Borrowers, and all other financial and structural
information and materials as may have been requested by Agent;

 

(g) Collateral Value. The Collateral shall be sufficient in value and provide
Borrowers with sufficient working capital to enable Borrowers to profitably
operate its businesses; and

 

(h) Business Plan. Agent shall have received a business plan, in form and
substance satisfactory to the Agent.

 

3     Non-Waiver of Rights. By making the initial advance, Loan or issuance of
the initial Letter of Credit, Agent and Lenders do not thereby waive any breach
or misrepresentation of any representation or warranty made by any Borrower
under the Agreement or under any other Financing Agreement and any claims and
rights of Agent and Lenders resulting from any such breach or misrepresentation
by any Borrower or any of its Subsidiaries are specifically reserved by Agent
and Lenders.

 

 

 

 

EXHIBIT 5.2(a)
TO CREDIT AGREEMENT

 

FORM OF BORROWING BASE CERTIFICATE

 

MULTIBAND CORPORATION

 

Date: _____________, _______

 

 

This certificate is given by Multiband Corporation, a Minnesota corporation
("Borrower Representative"), on behalf of Borrowers, pursuant to Section 5.2(a)
of that certain Credit Agreement dated as of March 20, 2013 (as such agreement
may have been amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") by and among Borrowers, the financial institutions
from time to time party thereto ("Lenders") and Fifth Third Bank, an Ohio
banking corporation, as agent for Lenders ("Agent"). All capitalized terms used
herein, unless otherwise specifically defined, shall have the meanings ascribed
to them in the Credit Agreement.

 

(a)Exhibit A attached hereto sets forth the calculations made with respect to
the Borrowing Base as of the above date;

 

(b)Based on such Exhibit A, the Borrowing Base as the above date is:

 

$___________________

 

IN WITNESS WHEREOF, Borrower Representative has caused this Certificate to be
executed by one of its officers this _____ day of ____________, 20__.

 

 

  MULTIBAND CORPORATION               By:     Name:     Title:  

 

Exhibit 5.2(a) - Page 1

 

 

EXHIBIT 5.3(a)
TO CREDIT AGREEMENT

 

FORM OF COMPLIANCE CERTIFICATE

 

[Date]

 

Fifth Third Bank, as Agent
222 S. Riverside Plaza
30th Floor
Chicago, Illinois 60606

 

Ladies and Gentlemen:

 

The undersigned, Multiband Corporation, a Minnesota corporation ("Borrower
Representative"), pursuant to Section 5.3(a) of that certain Credit Agreement
dated as of March 20, 2013 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") by and among Borrower
Representative, Multiband Field Services, Incorporated, a Delaware corporation,
Multiband MDU Incorporated, a Delaware corporation, Multiband Engineering and
Wireless, Midwest, Inc., a Missouri corporation, Multiband Engineering and
Wireless, Southeast, Inc., a Florida corporation, Multiband Subscriber Services,
Inc., a Minnesota corporation, Minnesota Digital Universe, Inc., a Minnesota
corporation, and Multiband Special Purpose, LLC, a Minnesota limited liability
company, the financial institutions from time to time party thereto ("Lenders")
and Fifth Third Bank, an Ohio banking corporation, as agent for Lenders
("Agent"), hereby delivers this Compliance Certificate on behalf of Borrowers.
All capitalized terms used herein, unless otherwise specifically defined, shall
have the meanings ascribed to them in the Credit Agreement.

 

Borrower Representative hereby certifies and warrants on behalf of Borrowers to
Agent and Lenders that the following is a true and complete computation in all
material respects of the following ratios and/or financial restrictions
contained in Section 7 of the Credit Agreement (each of the line items to be
computed in accordance with the provisions more particularly set forth in
Section 7 of the Credit Agreement):

 

Exhibit 5.3(a) - Page 1

 

 

A     Section 7.1 – Fixed Charge Coverage Ratio as of the last day of the
Computation Period ending __________, 20__

 

  1     Free Cash Flow:       Net Income $__________     Plus: Interest Expense
$__________     Plus: Net income tax expense $__________     Plus: Depreciation
$__________     Plus: Amortization $__________     Equals: Adjusted EBITDA  
$__________   Less: Capital Expenditures (excluding those financed with the
proceeds of purchase money Indebtedness or Capital Leases to the extent
permitted under the Credit Agreement)   $__________   Less: Cash income tax
payments   $__________   Less: Cash dividends (including Permitted Preferred
Distributions)   $__________   Equals: Free Cash Flow   $__________  
2     Fixed Charges:       Cash Interest Expense $__________     Plus: Scheduled
payments of principal on all Indebtedness $__________     Plus: All scheduled
permanent revolving credit reductions on all Indebtedness $__________     Plus:
Scheduled payments on Capital Leases $__________     Equals: Fixed Charges  
$__________   3     Ratio of Free Cash Flow to Fixed Charges   ___ to 1.00  
4     Minimum Required   1.25 to 1.00  

 

Exhibit 5.3(a) - Page 2

 

 

B     Section 7.2 – Total Leverage Ratio as of the last day of the Computation
Period ending __________, 20__

 

  1      Total Funded Debt:       Indebtedness (as defined in Section 1.1 of the
Credit Agreement) for borrowed money (other than outstanding principal amounts
under Preferred Equity that is classified as Indebtedness) $__________     Plus:
Unpaid Preferred Return $__________     Equals: Total Funded Debt   $__________
  2     Adjusted EBITDA (see calculation in Section A) $__________    
3     Ratio of Total Funded Debt to Adjusted EBITDA   ___ to 1.00  
4     Maximum allowed   ____ to 1.00

 

C     Section 7.3 – Capital Expenditures

 

  1     Capital Expenditures from January 1, ____ to December 31, ____
$__________   2     Maximum permitted Capital Expenditures for Fiscal Year
$5,000,000

 

Borrower Representative further certifies on behalf of Borrowers to Agent and
Lenders that no Default or Event of Default has occurred and is continuing or,
if such a Default or Event of Default and occurred and is continuing, set forth
below is a description of the nature and period of existence of such Default or
an Event of Default and what action Borrowers have taken, is undertaking and
proposes to take with respect thereto:

 

                                  .

 

Exhibit 5.3(a) - Page 3

 

 

IN WITNESS WHEREOF, Borrower Representative has caused this Compliance
Certificate to be executed and delivered by its authorized officer on
_____________, 20__.

 

 

  MULTIBAND CORPORATION               By:     Name:     Title:  

 

Exhibit 5.3(a) - Page 4

 

 

EXHIBIT 5.7
TO CREDIT AGREEMENT

 

FORM OF LOSS PAYABLE ENDORSEMENT

 

 

Exhibit 5.7 - Page 1

 

 

EXHIBIT 11.7
TO CREDIT AGREEMENT

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

This Assignment and Acceptance Agreement (this "Agreement") is entered into as
of __________, 20__ by and between the Assignor named on the signature page
hereto ("Assignor") and the Assignee named on the signature page hereto
("Assignee"). Reference is made to that certain Credit Agreement dated as of
March 20, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement") by and among Multiband Corporation, a
Minnesota corporation, Multiband Field Services, Incorporated, a Delaware
corporation, Multiband MDU Incorporated, a Delaware corporation, Multiband
Engineering and Wireless, Midwest, Inc., a Missouri corporation, Multiband
Engineering and Wireless, Southeast, Inc., a Florida corporation, Multiband
Subscriber Services, Inc., a Minnesota corporation, Minnesota Digital Universe,
Inc., a Minnesota corporation, and Multiband Special Purpose, LLC, a Minnesota
limited liability company (collectively, "Borrowers"), the financial
institutions from time to time party thereto ("Lenders") and Fifth Third Bank,
an Ohio banking corporation, as agent for Lenders ("Agent"). All capitalized
terms used herein, unless otherwise specifically defined, shall have the
meanings ascribed to them in the Credit Agreement.

 

Assignor and Assignee agree as follows:

 

1     Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor the interests set forth on the schedule
attached hereto, in and to Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below). Such purchase and sale is
made without recourse, representation or warranty except as expressly set forth
herein.

 

2     Assignor (i) represents that as of the Effective Date, that it is the
legal and beneficial owner of the interests assigned hereunder free and clear of
any adverse claim, (ii) makes no other representation or warranty and assumes no
responsibility with respect to any statement, warranties or representations made
in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any Financing Agreements or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of each
Borrower, any Subsidiary of such Borrower, or any other Person or the
performance or observance by each Borrower or any Subsidiary of such Borrower of
its obligations under the Credit Agreement or the Financing Agreements or any
other instrument or document furnished pursuant thereto.

 

Exhibit 11.7 - Page 1

 

 

3     Assignee (i) represents and warrants that it is legally authorized to
enter into this Agreement; (ii) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant thereto and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Agreement; (iii) agrees that it will, independently and without reliance
upon Agent, 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 Credit Agreement;
(iv) appoints and authorizes Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as are delegated to Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) represents that on the date of this Agreement
it is not presently aware of any facts that would cause it to make a claim under
the Credit Agreement; and (vii) if organized under the laws of a jurisdiction
outside the United States, attaches the forms prescribed by the Internal Revenue
Service of the United States, which have been duly executed, certifying as to
Assignee's exemption from United States withholding taxes with respect to all
payments to be made to Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty.

 

4     The effective date for this Agreement shall be as set forth on the
schedule attached hereto (the "Effective Date"). Following the execution of this
Agreement, it will be delivered to Agent for acceptance and recording by Agent
pursuant to the Credit Agreement.

 

5     Upon such acceptance and recording, from and after the Effective Date,
(i) Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Agreement, have the rights and obligations of a Lender
thereunder and (ii) Assignor shall, to the extent provided in this Agreement,
relinquish its rights (other than indemnification rights pursuant to the Credit
Agreement) and be released from its obligations under the Credit Agreement.

 

6     Upon such acceptance and recording, from and after the Effective Date,
Agent shall make all payments in respect of the interest assigned hereby
(including payments of principal, interest, fees and other amounts) to Assignee.
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to the Effective Date with respect to the making of this
assignment directly between themselves.

 

7     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

 

[Signature Page Follows]

 

 

Exhibit 11.7 - Page 2

 

 

The parties hereto have caused this Agreement to be executed and delivered as of
the date first written above.

 

  ASSIGNOR:                           By:     Name:     Title:                
ASSIGNEE:                           By:     Name:     Title:                
Consented to:         FIFTH THIRD BANK, as Agent               By:     Name:    
Title:                 [MULTIBAND CORPORATION, a Minnesota corporation]1        
      By:       Name:       Title:   ]

 

 

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

 

1 To be included so long as no Event of Default is continuing.

 

Exhibit 11.7 - Page 3

 

 

Schedule to Assignment and Acceptance Agreement

 

 

Assignor:_________________________

 

Assignee:_________________________

 

Effective Date:_________________, 20__

 

Credit Agreement, dated as of March 20, 2013, by and among Multiband
Corporation, Multiband Field Services, Incorporated, Multiband MDU Incorporated,
Multiband Engineering and Wireless, Midwest, Inc., Multiband Engineering and
Wireless, Southeast, Inc., Multiband Subscriber Services, Inc., Minnesota
Digital Universe, Inc. and Multiband Special Purpose, LLC, as Borrowers, the
financial institutions party thereto from time to time, as Lenders, and Fifth
Third Bank, as Agent

 

Interests Assigned:

 

Commitment/Loan  Revolving
Commitment   Term Loan  Assignor Amounts  $    $   Amounts Assigned  $    $  
Assignee Amounts (post-assignment)  $    $  

 

Assignee Information:

 

Address for Notices:       Address for Payments:                     Bank:      
    ABA #:   Attention:       Account #:   Telephone:       Name of   Telecopy:
      Account:           For further           credit to:           Account#:  
        Reference:           Attention:  

 

Exhibit 11.7 - Page 4